Allison H. Lee may not join the Securities and Exchange Commission in time to influence the agency's final investment advice reform rule.
Ms. Lee, a former SEC enforcement official, was nominated by the Trump administration Tuesday to replace Democratic SEC member Kara M. Stein, whose term ended in December. Ms. Lee also is a former counsel to Ms. Stein.
If confirmed by the Senate, Ms. Lee would restore the SEC to full strength with five commissioners — three of whom were selected by Republicans (including SEC chairman Jay Clayton) and two of whom were selected by Democrats.
Ms. Lee could arrive just as the SEC is finishing the advice reform rule package, which revolves around so-called Regulation Best Interest to raise the standard of conduct for brokers. Most observers expect a final rule to be released this summer.
But she may not have obtained Senate confirmation by then. The Senate Banking Committee would have to hold a hearing and advance Ms. Lee's nomination to the Senate floor, where the full chamber would vote on her. That process could take several weeks.
A committee spokeswoman said the panel tries to move nominees quickly, but the timing depends on when Ms. Lee's paperwork is filed as well as the Senate schedule.
The Securities Industry and Financial Markets Association, which supports Regulation Best Interest, said the nomination should not influence the timing of the advice rule.
"We hope the SEC presses forward with the final rules," said Kevin Carroll, SIFMA managing director and associate general counsel. Ms. Lee "won't affect the final vote. You're going to need the three Republican votes to pass it. There wouldn't be a need to delay Reg BI."
Mr. Clayton has emphasized that advice reform is one of his top priorities.
"If he thinks he has the three votes with his Republican colleagues; he may not be willing to slow down," said Barbara Roper, director of investor protection at the Consumer Federation of America, which opposes Regulation Best Interest. "We don't see much evidence that Chairman Clayton is looking for a compromise that can win bipartisan support. I hope I'm wrong on that."
A commission vote doesn't appear imminent.
Republican SEC commissioner Elad Roisman said Tuesday he has not made up his mind and hasn't reviewed a final rule.
"I haven't seen what it is," he told reporters on the sidelines of a U.S. Chamber of Commerce event.
Karen Barr, president and chief executive of the Investment Adviser Association, said she hopes Ms. Lee will be confirmed quickly and participate in finalizing advice reform.
"It's ideal to have the full commission vote on a rulemaking as important to investor protection as this one," Ms. Barr said.
Ms. Stein voted against releasing the advice reform package for public comment in April 2018. It's not clear whether Ms. Lee also would have strong objections. She was not working for Ms. Stein at the time, but instead was a senior counsel in the Complex Financial Instruments Unit of the SEC's enforcement division.
In addition to working at the SEC from 2005 to 2018, Ms. Lee has served as a special assistant U.S. Attorney and as a litigation partner at Sherman & Howard in Denver, according to a bio released by the White House.
"She's incredibly smart and knowledgeable," Ms. Roper said. "She's an ideal appointment."