SEC’s White: Fiduciary Rule Important, but Dodd-Frank, JOBS Mandates Come First

Securities and Exchange Commission Chairwoman Mary Jo White said Tuesday that she has asked the SEC to place a “high priority” on its fiduciary rulemaking options list, and that the regulator continues to give “serious consideration” to input received from stakeholders regarding a fiduciary rulemaking.

However, White said several times during her testimony before the Senate Banking Committee at a hearing titled “Wall Street Reform: Assessing and Enhancing the Financial Regulatory System,” that the SEC is “very focused on our mandated rulemakings under Dodd-Frank” and the Jumpstart Our Business Startups (JOBS) Act.

While White has said that the agency will make a “threshold decision” this year on whether, and how, to move forward with a uniform fiduciary standard rule for brokers and advisors, such a rule is not mandated by Dodd-Frank.

Said White in her Tuesday testimony: Section 913 of Dodd-Frank granted the Commission “broad authority” to impose a uniform standard of conduct for broker-dealers and investment advisors when providing personalized investment advice, and “the question of whether and, if so, how to use this authority is very important to investors and the Commission.”

White also said that Commission staffers continue to provide “regulatory expertise” to the Department of Labor as it considers potential changes to the definition of fiduciary under the Employee Retirement Income Security Act. “The staff and I are committed to continuing these conversations” with the DOL, White said. Labor has pushed release of its fiduciary redraft to January.

The SEC is focusing the “balance of this year” on completing rulemakings under Title VII of Dodd-Frank, which requires creating a framework for the regulation of swap markets, as well as rules regarding executive compensation, White told the lawmakers.

Indeed, Sen. Jack Reed, D-R.I., noted the 18 remaining rules that the agency must still complete under Dodd-Frank related to swaps and derivatives, and asked White if she could ensure the SEC rules in this area would be completed soon. White responded: “I can assure you of that. It’s a very high, major priority of mine to get these done.”

White noted in her prepared remarks that while the SEC has made “significant progress” in implementing mandated rules under Dodd-Frank and the JOBS Act, “more remains to be done … and we must continue our work with intensity.”

The Commission, White said, has proposed or adopted rules with respect to approximately 90% of all of the provisions of the Dodd-Frank Act that mandate Commission rulemaking. Sen. Mark Warner, D-Va., urged White during the hearing to press ahead with rules on equity crowdfunding under the JOBS Act. “While we may not get [equity crowdfunding] 100% right, we have to try and use that tool, sooner rather than later,” Warner said.

White said earlier this year that final implementation of crowdfunding rules was an SEC priority for 2014.