More outside consultants are being called upon to comment on the fiduciary standards for how broker-dealers should handle their customers. As a result, a single standard of care is not likely to emerge until July or later.

This is according to Jennifer McHugh, special advisor to Securities and Exchange Commission (SEC) chair Mary Schapiro, who spoke from a videoconference panel appearance at the Investment Company Institute's 2011 Mutual Funds and Investment Management Conference.

According to McHugh, a cross-agency team from all quarters of the SEC — including SEC general counsel, Office of Compliance Inspections and Examinations (OCIE), and the Division of Investment Management — is still working on the fiduciary rulemaking. The initial timeframe for the rule was set for sometime in April-July 2011, but that timeline is being pushed back as the team gets reaction from outside groups on the alternatives presented in the report "rather than moving straight to the rulemaking," McHugh said.

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Additionally, Commissioners Troy A. Paredes and Kathleen L. Casey have identified a few areas for economic analysis that the team is looking into. The SEC received upwards of 3,500 comment letters on the issue, and many were from broker-dealers concerned about principal trading for broker-dealers if a fiduciary standard is extended to broker-dealers.

According to most broker-dealers who commented, the trade-by-trade disclosure and the disclosure of conflicts for each trade, as well as the trade-by-trade consent from the investor, which would be mandated by a fiduciary duty standard, would make principal transactions by broker-dealers impractical, McHugh said.

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