SEC official: Fiduciary rule to be delayed

Apr 3, 2011 @ 12:01 am

By Mark Schoeff Jr.

The Securities and Exchange Commission staff member who coordinated its study of a universal fiduciary duty for retail investment advice said last Monday that a follow-up regulation won't come until later in the year.

The fiduciary study, mandated by the Dodd-Frank law, was delivered to Congress in January. The staff report called for SEC commissioners to extend the fiduciary-duty requirement to broker-dealers to protect investors, who it says are confused by differing standards that investment advisers and brokers must meet.

The study, however, has run into resistance from the two Republican SEC commissioners, Kathleen Casey and Troy Paredes, who dissented when it was transmitted to Capitol Hill. They argued that the study's conclusion wasn't backed up by rigorous economic analysis.

LETTER TO SCHAPIRO

Congressional Republicans recently sent a letter to SEC Chairman Mary Schapiro urging her not to proceed with rulemaking, citing the same concerns expressed by Ms. Casey and Mr. Paredes.

A Dodd-Frank timeline on the SEC website says that the commission will promulgate a fiduciary-duty regulation sometime between April and June. Dodd-Frank authorizes the SEC to proceed with the rulemaking.

But Jennifer McHugh, a senior adviser to Ms. Schapiro and coordinator of the fiduciary study, told an audience at the Investment Company Institute's Mutual Funds and Investment Management Conference last week in Palm Desert, Calif., that SEC action will “likely occur later in the year.”

The SEC hasn't formed a “rulemaking team” and is “meeting with outsiders to get their reaction rather than moving straight to rulemaking,” Ms. McHugh said.

“We've been focused on practical, real-world implications” of imposing a universal standard of care, she said.

E-mail Mark Schoeff Jr. at mschoeff@investmentnews.com.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Envestnet Tamarac's Anderson: What's next for fintech?

Envestnet Tamarac is focused on broadening its offerings so it can gather more marketshare and craft more partnerships. Check out what Andina Anderson is examining so the company can do more for advisers.

Latest news & opinion

6 tax strategies for year-end planning

How to help clients maximize their wealth using specific tax strategies before the end of the year.

Ohio National offers buyouts, ends commission trails amid jumbled regulatory oversight of VAs

Jurisdiction is shared between the SEC, Finra and state insurance commissioners. Will any of them step in?

6 mistakes advisers make when onboarding new clients

Starting a new relationship with a client is harder than it looks.

TCA by E*Trade lures Edelman Financial Engines with promise of client referrals

Access to clients through E*Trade's 30 branch offices drew the attention of RIA Edelman Financial Engines.

10 states with lowest overall tax burden

Here's a list of the states with the lowest total tax burden from Wallet Hub.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print