The House Financial Services Committee on Wednesday approved a slew of bills that would slow the pace of regulatory proceedings to expand advisors' fiduciary responsibilities and relax registration requirements, among other measures.
For advisors, the most consequential
Some industry groups and members of Congress have warned that the twin rulemakings could create overlapping and confusing new regulations, and have urged closer coordination between the two agencies. For their part, Labor and SEC officials have insisted they are working closely together as they develop their fiduciary proposals.
In addition to the Labor Department provisions, the bill would also direct the SEC to conduct further study before moving forward with its proposal for a uniform fiduciary standard. Specifically, the commission would be required to determine if there is a specific consumer harm that stems from the current regulation of broker-dealers, and the SEC's chief economist would have to conduct a cost-benefit analysis to justify proposed rules.
Critics of the bill, including New York Democrat Carolyn Maloney, said the SEC is already doing its due diligence in analyzing the impact of its proposal, and that the additional reporting requirements would be "duplicative and unnecessary," essentially an effort to slow-walk the rulemaking process.
"The SEC already has an effective and multi-layered cost-benefits analysis," Maloney said. "This is just adding another layer, which is costly and will impede their ability to be responsive to the requirements that they already have to do."
New Jersey Republican Scott Garrett countered that recent court rulings and a report from the Government Accountability Office have indicated that the SEC's economic analysis has produced insufficient support for the agency's rulemakings.
"The SEC has been time and time again shown to be wanting in this area," Garrett said.
Garrett was the author of a separate bill that the House approved last month that would require the SEC generally to produce more rigorous economic analyses in all of its regulatory proceedings.
Another bill that the Financial Services Committee approved on Wednesday would exempt advisors to certain private equity funds from registering with the SEC.
The panel also voted out a bill that would bar the Public Company Accounting Oversight Board from requiring firms to use specific corporate auditors or periodically rotate auditors, and another measure that would repeal the portion of the Dodd-Frank Wall Street reform bill that calls for new disclosures about executive compensation.