While the Securities and Exchange Commission’s uniform fiduciary proposal for brokers and advisors will include a “very deep economic analysis” to judge the rule’s impact on retail investors, the agency’s chairwoman, Mary Jo White, told House lawmakers Wednesday that she still couldn’t nail down a specific time for the fiduciary plan’s release.
However, the agency does plan to release within the next few months an “updated” accredited investor definition, White told members of the House Financial Services Committee during a hearing to assess the agency’s agenda.
Chairman Jeb Hensarling, R-Texas, probed White on whether the SEC has performed an “updated” economic analysis on the rule since the agency’s staff studied the issue in 2011.
Part of the fiduciary rulemaking “will be very deep economic analysis to judge impacts and all relevant baselines,” White said. “There will be economic analysis completed before there’s any proposal. There’s always economic analysis, as there should be, before you proceed with any adoption.”
Hensarling questioned White as to whether the economic analysis will be available to his committee as well as to the public before the rule is proposed. Unless the agency’s Division of Economic and Risk Analysis issues a paper on the topic, White responded, such information is “part of the proposal and made public” then.
“We would encourage you to do that,” Hensarling responded, suggesting that DERA issue such an analysis before a proposed rule.
Rep. David Scott, D-Ga., told White to “get more aggressive” in issuing a fiduciary rule.
“When we wrote Dodd-Frank, we gave exclusive authority to the SEC on the best interest standard on fiduciary,” Scott said. “Why is the SEC allowing DOL to take over your territory?”
White responded: “I don’t view it that way. I think, again, we are separate agencies,” and DOL “has authority in the ERISA space.”
Reiterating that a fiduciary rulemaking is “complex and not quick,” White said the agency is “working toward, in the very short term, most of the details of what the [fiduciary] proposal will be.”
As to a revamped accredited investor definition, White said that the agency is taking a “deep dive look” at the accredited investor criteria, “not just net worth and income,” and that SEC staff is “coming to a conclusion on their work.”
In updating the definition, the agency is “looking … beyond net worth and income [to] experience and other qualifications that should entitle you to be an accredited investor,” White said. “We’re looking quite broadly.”
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
