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November 10, 2015 at 05:33 AM
Securities and Exchange Commission Chairwoman Mary Jo White said Tuesday that while SEC staffers are “fully engaged” in formulating a uniform fiduciary rule for brokers and advisors, she couldn’t say when such a rule would be proposed, as “it’s not a short, quick, uncomplicated” rulemaking.
Speaking during a question-and-answer session at the Securities Industry and Financial Markets Association’s annual conference in Washington, White stated that SEC staff is “full-on focused on” drafting a fiduciary rule, as well as a third-party exam rule for advisors.
However, White noted the agency must “calibrate [a fiduciary rule] very carefully” so that it “raises the bar of compliance [but] does not have unintended consequences.”
White declined to tell reporters on the sidelines of the SIFMA meeting after the Q&A whether a fiduciary rule would be out before the end of the Obama administration, but stated that the SEC is “flat-out doing” such a rulemaking.
But Rep. David Scott, D-Ga., stated during an afternoon panel discussion that the ”SEC is not doing what they should be doing” in terms of proposing a fiduciary rulemaking, adding that lawmakers “clearly stated’ in Section 913 of Dodd-Frank that redefining fiduciary should be dealt with at the SEC. Because of ERISA, DOL “squeezes in through the back door.”
DOL, Scott stated, is “wrong in terms of the approach” it’s taking in its rulemaking, which he said will have “unintended consequences” for low- and moderate-income savers.
“What sense does it make to have two fiduciary definitions?” Scott asked.
Rep. French Hill, R-Arkansas, stated on the panel with Scott that ”the existing rules are in place” at the SEC and the Financial Industry Regulatory Authority ”to handle this [fiduciary] issue.” The SEC and FINRA, Hill said, “could create a best interest standard. The commission should be doing this [fiduciary rulemaking] with FINRA.”
Both Hill and Scott told reporters after the panel that they would recommend that language to defund DOL’s rulemaking be included in the conferees report on the omnibus spending bill to be debated on Dec. 11.
