SEC headquarters SEC headquarters in Washington. (Photo: Diego M. Radzinschi/ALM)

While the 35-day partial government shutdown “really slowed progress” at the Securities and Exchange Commission, the agency will issue its final advice-standards package, including the controversial Regulation Best Interest, likely in the 3rd quarter, according to Neil Simon, vice president of government relations at the Investment Adviser Association. “It’s going to happen.”

Speaking at the TD Ameritrade National LINC conference in San Diego Friday morning, Simon said that the Washington rumor mill also has House Financial Services Committee Chairwoman Maxine Waters, D-Calif., holding a March hearing to grill SEC Chairman Jay Clayton on the upcoming advice-standards plan.

Reg BI under the three-pronged SEC package is “pretty broker friendly” and “pretty ambiguous in spots,” Simon said, with the scope of Reg BI being “questionable” in that “it’s episodic when somebody is talking to a broker about investment advice then they would have to wear that Regulation BI hat, but when they’re not then they could put on their broker hat.”

The Reg BI plan also “doesn’t deal with dual registrants,” Simon said. “There are a lot of dual registrants out there; it really doesn’t deal with them cleanly.”

(Related: Maryland Introduces Fiduciary Rule as Part of a Broader Consumer Bill)

As for the plans’ Customer Relationship Summary disclosure form, or Form CRS, “it’s a mess,” Simon said. “I think there’s going to be a lot of negotiation” among the SEC Commissioners on CRS.

With the states now moving on their own fiduciary rules, with Maryland’s “ambitious” proposal being released Monday, the patchwork state plans “will make compliance very, very complicated,” Simon added.

In separate comments to ThinkAdvisor, Simon said that while “there certainly could be minor change on both Reg BI and on the Investment Adviser Act interpretive” language, he expects to see “much greater change on Form CRS.”

Skip Schweiss, TD Ameritrade Trust Company President and managing director of advisor advocacy, told ThinkAdvisor in commenting on Reg BI, that “while raising the standard of care for investors can’t be a bad thing,” his concern is that Reg BI has “the potential of making brokers and investment advisors look the same when they’re not. Or even further blur the line between brokers and investment advisors. We believe there should be brokers and investment advisors — they serve different purposes, they get compensated in different ways, and that’s all fine.”

That being said, “consumers should have a relatively easy way of telling the difference and making informed choice.”

Reg BI’s “proposed 4-page disclosure document – for brokers as well as investment advisors – has not been viewed by commenters as neither clear nor simplistic.”

Complicating passage of the SEC package is also the fact that Clayton needs three votes to get it on the books. Right now, it’s unclear where that third vote is going to come from among the four-person commission, Simon said.

There’s “not a lot of motivation” in the White House to fill the open democratic seat on the commission that was left vacant by the departure of SEC Commissioner Kara Stein in December, Simon said.

— Related: Maryland Introduces Fiduciary Rule as Part of a Broader Consumer Bill