The SEC could be voting on a proposal for its own version of the fiduciary rule by the second quarter this year, people familiar with the matter tell the Wall Street Journal.

The regulator is accelerating its work on a version of the best-interest standard that would apply to all brokers, unlike the Department of Labor’s fiduciary rule, delayed until July 2019, which only applies to retirement account advisors, the Journal writes. In recent weeks SEC staff have been meeting with brokerages, including Charles Schwab and Wells Fargo Advisors, and trade groups, including Sifma and the Financial Services Roundtable, both of which have called for an SEC standard in their opposition to the DOL’s rule, according to regulatory filings and people familiar with the matter who spoke to the paper. The vote to propose the rule would be the first step to an actual best-interest standard, according to the Journal.

But the fate of an SEC rule could be just as uncertain as that of the DOL’s rule. Consumer groups that supported the DOL’s rule, which purports to force retirement account advisors to put clients’ interest first and went into partial effect in June, are likely to oppose the SEC’s proposal, the Journal writes.

“It’s difficult to see how they can come up with a solution that does not land them in court,” Barbara Roper, director of investor protection for the Consumer Federation of America, tells the paper. “If they propose a rule we like, industry will sue them. If they give industry a disclosure-based best interest standard that they want, we’ll sue them.”

Some major brokerages, including Fidelity Investments, believe the SEC’s current rules on broker conduct are sufficient, the Journal writes. Fidelity believes changes to current regulations should instead steer toward disclosure of conflicts of interest, according to a recent letter from the firm to SEC Chairman Jay Clayton cited by the paper. Consumer advocacy groups argue disclosures aren’t sufficient, according to the Journal.


Even the SEC vote expected this spring could be pushed back, since the regulator is bringing on two new commissioners, the paper writes. The new commissioners, Robert Jackson and Hester Peirce, may want time to review the proposal, according to the Journal.