Bill to Kill Fiduciary Rules by SEC, DOL Heads for House Vote

The coalition – composed of the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors — said that it "views H.R. 2374 as a 'back-door' attempt to undermine investor protection provisions in Dodd-Frank and to prevent the SEC and DOL from proceeding with investor protection rulemakings consistent with appropriate cost-benefit analyses and routine interagency coordination."

Dodd-Frank authorized the SEC to establish a uniform fiduciary standard of conduct for both broker-dealers and investment advisors, the coalition said, and the passage of H.R. 2374 "would substantially impede or completely prevent the SEC from proceeding with a congressionally authorized and long-needed rulemaking that would allow all investors to receive investment advice that is based on their best interests."

SEC Chairwoman Mary Jo White is against the bill. She told House Financial Services Committee Chairman Job Hensarling, R-Texas, and ranking member Maxine Waters, D-Calif., in a June 18 letter that Wagner's bill places "new restrictions on the commission's authority that would … make it difficult for the commission to adopt such a [fiduciary] rule should it determine to do so."

Section 913 of the Dodd-Frank Act, White told the lawmakers, "added new express authority for the commission to adopt a uniform fiduciary standard of conduct and to consider other potential options for the harmonization of the regulation of broker-dealers and investment advisers." Although there are differing views on this issue, she said, "many investor advocates and industry participants support the establishment of a uniform fiduciary standard of conduct."

Phyllis Borzi, assistant secretary of Labor for the Employee Benefits Security Administration, said in early September that the planned October release of DOL's rule to amend the definition of fiduciary under the Employee Retirement Income Security Act would suffer yet another delay. Release of the revised plan won't come in October "because we are not finished," Borzi told attendees at the Financial Services Institute's advisor conference.

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Check out Industry Groups Fear Wagner Bill Will Stop SEC, DOL Fiduciary Rules in Their Tracks on ThinkAdvisor.