GOP: SEC Lacks ‘Solid Basis’ for Fiduciary Rule Making

 Econintersect:  GOP members of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises sent a letter to Mary Shapiro, the SEC (Securities Exchange Commission), on March 17.  The bottom line of the letter:  Stop rulemaking activities to regulate fiduciary responsibility in the financial industry.  The committee chairman is Steve Garrett, R-NJ.

Photo:  Mary Schapiro (2010), from Advisor One.

The bottom line of the letter is that the congressmen charge the SEC doesn’t know what it is doing.  From an article by Melanie Waddell at Advisor One:

Rep. Steve Garrett, R-N.J., chairman of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, along with other Republican members of the committee, told Securities and Exchange Commission (SEC) chairman Mary Schapiro in a March 17 letter to not move forward with a fiduciary duty rule as “the Commission has not identified and defined clear problems that would justify a rulemaking and does not have a solid basis upon which to move forward.”

Garrett and other members of the committee said that while Section 913 of Dodd-Frank gives the securities regulator the “discretion to adopt a fiduciary duty rule” for brokers, “it does not mandate it, and in no way suggests a congressional intent that the Commission move forward on such a rulemaking without sufficient basis.”

The Subcommittee plans to hold a hearing in the “coming weeks,” Garrett told Schapiro, on not only the fiduciary duty rulemaking but also on the SEC’s study mandated under Section 914 of Dodd-Frank, commonly referred to as the self-regulatory organization (SRO) study. Garrett said that “the oversight, examination and enforcement programs that different financial services providers are subject to must be considered concurrently” with a fiduciary duty for brokers.

Before pressing ahead, the SEC should conduct a “thorough cost-benefit analysis,” Garrett says as requested by the two Republican Commissioners, Kathleen Casey and Troy Paredes.

Source:  Advisor One