Legislation the House Financial Services Committee is considering today "would make it difficult" for the agency to craft a rule imposing a uniform fiduciary standard it has been considering for several years, the chairman of the SEC said in a letter to the committee sent last night.
The bill is H.R. 2374. It is sponsored by Rep. Ann Wagner, R-Mo., and strongly supported by insurance and financial advisors, who contend that the existing standards are appropriate for insurance agents who sell only a limited number of investment products.
In addition to existing provisions, it would require the SEC in its economic analysis justifying a uniform standard to "find that the status quo demonstrates economic harm to investors and that the new rule will remedy this economic harm," to say that "customers are being systematically harmed or disadvantaged."
The letter was written by Mary Jo White, new chairman of the SEC. It was sent to Rep. Jeb Hensarling, R-Texas, chairman of the panel, and Rep. Maxine Waters, D-Calif., ranking minority member.
White cited the multiple layers and lengthy process the agency has applied in crafting a uniform fiduciary standard since agency authority was granted through a provision of the Dodd-Frank financial services reform law, enacted in 2010.
