That is highly unlikely to happen, say industry insiders.

“At this point, I'd be surprised if they fail to release the proposal,” said Kevin Walsh, an attorney with The Groom Law Group. “Chairman Clayton has put a lot of pressure on the commission and on himself in particular by saying that he is targeting a second quarter release.  I can't imagine he would have been so public about timing if there was a real chance the proposal would get insufficient support from other commissioners.”

Michael Piwowar, one of two Republican commissioners, has been an outspoken critic of Labor's fiduciary rule. At an industry conference last year, before Chair Clayton was confirmed, Piwowar called Labor's rule “terrible” and suggested it was a politically orchestrated give-away to the plaintiffs' bar, according to reporting in Investment News.

Piwowar has also said the SEC would struggle to write a rule that reconciled the fiduciary standard required of investment advisers and the suitably standard required of broker-dealers. In a comment letter to the Labor Department, he criticized its fiduciary rule for not distinguishing brokers' selling activities from advisers' fiduciary roles.

Meantime, supporters of Labor's rule are counting on Commissioner Kara Stein, a Democrat with a reputation as a strong investor advocate, to assure the SEC promulgates an enforceable fiduciary standard, and not simply a watered-down alternative to Labor's rule that appeases broker-dealers.

Despite the political tension, the SEC can be expected to muster three votes to release a proposal, said Duane Thompson, senior policy analyst at Fi360, a fiduciary training and technology firm.

“This is destined to be a controversial proposal, but the commissioners recognize the importance of this rule-making,” said Thompson.

Once a vote is taken next Wednesday, the proposal will be open to public comment after it is published in the Federal Register.

“They all (the commissioners) may be a little grumpy with parts of the proposal but should put a positive face on the importance of getting it out to comment,” added Thompson.

According to a notice on SEC's website, next week's meeting will consider three options: whether to propose a new “brief” relationship summary between all investment professionals and retail investors; whether to propose a new standard of conduct for broker-dealer investment recommendations; and whether to propose new interpretations on fiduciary advisers' standard of conduct.

“A question that the notice raises is whether it will be one proposed rule or a handful of related rules,” said Walsh.

“If it more than a single rule, we'll be paying close attention to commissioner statements and other SEC signals to determine whether the commission would consider adopting only some of the proposed rules, or if it is all or nothing,” added Walsh.