SEC ‘Full-Out Focused’ on Fiduciary Proposal: White

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By Rob Tricchinelli

Nov. 10 — The Securities and Exchange Commission is “full-out focused” on crafting a uniform fiduciary standard for broker-dealers, but it won’t be a fast process, Chairman Mary Jo White said Nov. 10.

White didn’t say when a rule would be proposed but told reporters that “the staff is fully engaged in formulating a recommendation.”

In a comment similar to industry groups’ criticism of a related proposal by the Labor Department, White also warned that a rule shouldn’t prevent retail investors from getting access to “reliable, reasonably priced advice.”

Industry groups and some lawmakers have said the fiduciary standard, compared to the current “suitability” standard, would push up fees for retail investors.

The rule is “not a short-timer” and not “a quick fix by any means,” White warned.

“It's going to take time to do it right,” she told reporters during the Securities Industry and Financial Markets Association's annual capital markets meeting in Washington.


The Labor Department proposed in December to bring broker-dealers under a fiduciary standard when giving retirement advice, which has riled up trade groups and some lawmakers who also say the DOL lacks expertise to regulate investors and should leave that to the SEC.

Section 913 of the Dodd-Frank Act authorizes, but doesn't require, the SEC to write a rule imposing a “best interest” standard on “all brokers, dealers, and investment advisers, when providing personalized investment advice about securities to retail customers.”

The agency has been studying the matter since Dodd-Frank's 2010 enactment but hasn't made any proposals.

“I think [White] has a solid command of the complexity of the issue, why it’s important to get it right, and part of getting it right is preserving financial advice to investors at reasonable price points,” Ira Hammerman, SIFMA's executive vice president and general counsel, told Bloomberg BNA.

Slow It Down

Defenders of the DOL rule and proponents of a fiduciary standard counter the industry's comments by saying that attempts to slow the rule and involve solely the SEC are merely attempts to kill the rule and keep the current standard.

“It is long past time for the SEC to act, so we are delighted to hear they are ‘all-out focused’ on the issue,” Barbara Roper, the director of investor protection at the Consumer Federation of America, told Bloomberg BNA in an e-mail. “But the SEC is going to have to look past industry’s well-rehearsed talking points if it hopes to develop a rule that strengthens protections for investors.”

White was asked about how her comments on “reasonably priced advice” were similar to SIFMA and other groups' criticisms of the DOL rule. In response, she said, “people come from different perspectives for different reasons, including business reasons, so it's our job as a regulator to sort through those comments, those criticisms, to figure out what actually is likely to be the impact.”


Most of the lawmaker criticism has come from Republicans, although some House Democrats have begun to question the Labor Department's proposal and openly wonder why the SEC hasn't advanced a rulemaking.

“The Securities and Exchange Commission is not doing what they should be doing,” Rep. David Scott (D-Ga.) said at the SIFMA event.

He also faulted White for not sufficiently guarding the SEC's turf when it comes to broker-dealers. “She’s not aggressive,” Scott said. “I’m not going to say whether she’s competent or not.”

A fiduciary rule “could easily be done” by the SEC and Financial Industry Regulatory Authority, Rep. French Hill (R-Ark.), a former broker, said at the SIFMA event.

The House passed a bill in late October that would halt and defund the DOL's rule until the SEC makes its own.

“Whatever the SEC does, DOL needs to ignore the distraction and continue its work toward finalization of its rules,” Roper told Bloomberg BNA. “Indeed, the SEC would do well to follow the DOL’s lead in crafting its rules.”

To contact the reporter on this story: Rob Tricchinelli in Washington at

To contact the editor responsible for this story: Phyllis Diamond at


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