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May 03, 2016 at 08:00 PM
SEC Chairwoman Mary Jo White has been the public spokesperson championing the agency moving ahead on its own uniform fiduciary rule for advisors and brokers, but David Grim and Stephen Luparello have been toiling behind the scenes to make it happen.
White said recently that the agency is “without doubt” working on its own fiduciary rule and that Grim, head of the SEC’s Division of Investment Management, and Luparello, head of the agency’s Division of Trading & Markets, and members of their staff are discussing the “parameters of recommendations” regarding such a rule with SEC Commissioners.
Grim reiterated to lawmakers in recent remarks White’s view that a fiduciary rule is a “priority” for the agency, and that Trading & Markets and IM “are hard at work making that happen.”
Luparello has told lawmakers that the agency continues to study whether the “benefit” of a fiduciary rulemaking can “stand up to the cost.”
But two former SEC executives have differing opinions about whether the SEC can actually pull it off. Bob Plaze, a partner at Stroock & Stroock & Lavan LLP in Washington, has said that the two divisions’ “different interests” regarding the rule’s outcome will stymie progress.
Former SEC Chairman Harvey Pitt told IA, however, that “Steve and David are excellent division directors.” Pitt said, “my sense is they will be in constant touch with the Chair and the other commissioners as they work out their differences.”
The challenge — and goal — for the divisions “is not to favor either” advisors or broker-dealers in a uniform fiduciary rulemaking, “but rather to tailor a common concept of fiduciary obligation to both professional groups, as viewed from the perspective of their customers,” Pitt said.
