WASHINGTON May 19 (Reuters) - A U.S. Securities and Exchange Commission official publicly said what agency observers have long suspected: there may not be sufficient consensus among its five commissioners to write rules that would create a streamlined fiduciary rule for retail brokers and investment advisers.
"There may not a real coalescence of thought around it," said Stephen Luparello, director of the SEC's Division of Trading and Markets. The issue, however, remains "a live topic of conversation," said Luparello, speaking on Monday at the Financial Industry Regulatory Authority's (FINRA) annual conference in Washington.
The SEC has struggled for some time over how to tackle different standards of care that advisers and brokers owe to their customers.
Advisers are held to a higher fiduciary standard and must put their customers' interests ahead of their own. Brokers, by contrast, are only required to make investment recommendations that are "suitable" for their customers.
The 2010 Dodd-Frank Wall Street reform law required the SEC to study the issue and gave the SEC the authority to write rules but did not mandate any changes.
A resulting SEC study, released in 2011, called for creating a uniform standard that would still be flexible enough to accommodate different business models.
Brokers have embraced the concept, saying they are supportive of a new standard as long as they can continue selling products as they currently do. But advisers have said they fear the SEC's rule could water down the fiduciary standards they have long supported.
Republican SEC Commissioner Daniel Gallagher, in a recent speech, cautioned the agency against rushing to adopt a rule, saying the SEC should "get all the facts" first.
The SEC has requested, and received, input from the public and industry to help inform its efforts but has not acted on the issue.
SEC Chair Mary Jo White has described a harmonized fiduciary rule as a "major focus" of the agency, but there is still no time frame for drafting rules. The issue is on the SEC's 2014 agenda. Nonetheless, that is not a guarantee, Luparello said.
"Being on the agenda for 2014 and getting it done for 2014 are obviously two completely different things," Luparello said.
As the SEC continues its work on the issue, the U.S. Department of Labor is also working on a proposal that would impose fiduciary responsibilities on advisers serving workplace retirement plans and individual retirement accounts. (Reporting by Suzanne Barlyn; Additional reporting by Sarah N. Lynch; Editing by Steve Orlofsky)