SEC Chair: No SEC Fiduciary Rule Anytime Soon

By ASPPA Net Staff • June 16, 2016 • 0 Comments
Securities and Exchange Commission Chair Mary Jo White told the Senate Committee on Banking, Housing, and Urban Affairs on June 14 that her agency is indeed working on a fiduciary rule of its own, but will not be issuing it anytime soon. She made her remarks in testimony to the committee as part of its oversight of the SEC.

“As I have stated previously, my evaluation of the differences in the standards that apply to advice under the federal securities laws has led me to conclude that broker-dealers and investment advisers should be subject to a uniform fiduciary standard of conduct when providing personalized investment advice about securities to retail investors,” said White. She also noted that this will not be easy, telling the committee, “I recognize that this is a complex issue, and that there are significant challenges that will need to be addressed in proposing a uniform fiduciary standard, including how to define the standard, how it would affect current business practices, and the nature of the potential effects on investors, particularly retail investors.”

The SEC has been working on a rule of its own, White reported, saying, “SEC staff has developed a framework for this rulemaking that has been provided to the commission for its consideration,” and noting that the SEC staff is considering:

  • its 2011 study under Section 913 of the Dodd-Frank Act;

  • the response to the committee’s March 2013 request for information;

  • the additional views of investors and other interested market participants; and

  • the potential economic and market impacts.

“Ultimately, of course, the commission as a whole will decide whether to proceed with a rulemaking to implement a uniform fiduciary standard and its parameters. And I will continue to discuss all aspects of this issue with my fellow Commissioners as we proceed,” said White.

Committee members were not content to take White’s remarks on the matter at face value, however. ThinkAdvisor reports that Sen. Jon Tester pressed White to be more specific on when the SEC will issue its rule and whether it would happen before President Obama leaves office, but White would have none of it, responding, “I’m committed to moving it [a fiduciary rule] as fast and as well as I can, but I can’t give you that commitment; it’s a longer route than that.”

But White was definitive in response to further questioning by Tester regarding whether the SEC would enforce the fiduciary rule the Department of Labor (DOL) issued earlier this year, telling the senator, “We do not enforce the DOL rule” and that the “DOL will enforce the rule.” She added that her agency and the DOL “are independent agencies [with] independent rules; we’ve had rules before that overlap. We will watch this and if issues arise we will coordinate if a conflict develops.”