The Securities and Exchange Commission is putting the spotlight on the fiduciary standard, but advisers will have to wait until next fall for any new details.
The notice of proposed rulemaking for the Personalized Investment Advice Standard of Conduct is expected in October 2016, according to the SEC Office of Management and Budget's fall agenda, released last week.
A fiduciary standard rule from the SEC has been five years in the making, since the Dodd-Frank Act gave the agency authority to move forward with the rule. The SEC's latest agenda means that market participants should add yet another year to the wait, at the very least, said Duane Thompson, a senior policy analyst for FI360.
"The very fact that we've seen it listed by the SEC means it is a priority," Mr. Thompson said.
Whether the rule will come out on time, however, is up for debate.
"I wouldn't put any large bets on it," he said, noting the rule will probably be adopted later rather than sooner.
The SEC declined comment.
NOT FAST ENOUGH
For lawmakers with an eye on the industry, the rule isn't coming fast enough. In October, legislators showed dissatisfaction with how long the SEC was taking to prepare a proposed rule during a House Financial Services subcommittee.
SEC Chairwoman Mary Jo White said earlier this month at the Securities Industry and Financial Markets Association annual conference that the agency staff is "full-out" working on the proposal.
The delay, she said, is because the SEC wants to avoid any unintended consequences.
"We will move on it as expeditiously as we can," Ms. White said during the conference. "We must get it right and really take into account the complexities and impact. But we're very full-out focused on it."
The rule would require all brokers and advisers to provide financial advice in the best interests of the client. The SEC had requested to obtain further data in 2013 to determine whether or not to follow through on the potential rulemaking.
Waiting until October 2016 also will give the SEC time to see what happens with the Labor Department's proposed fiduciary standard rule, which is expected within the first few months of 2016.
Since President Obama directed the DOL to move forward with the fiduciary standard in February, the DOL has seen major backlashes. In response, it had extended its comments period to take in thousands of letters and arranged about 100 meetings with consumer and industry groups.
"I would assume the SEC staff, before recommending its draft proposal, would want to make sure that it is in sync with the DOL's rule given all the controversy surrounding the coordination between the two fiduciary standards," Mr. Thompson said.