(Adds Dodd comments, details)
WASHINGTON, June 22 U.S. senators agreed on
Tuesday to require federal regulators to conduct a one-year study
on whether broker dealers should have fiduciary duties to act in
their clients' best interests.
If the federal securities regulator finds that brokers should
adhere to the higher standard, the regulator would be allowed to
write rules to that effect, said the senators, who are working on
a final regulation bill.
House negotiators still have to sign off on the Senate
The House and Senate hope to merge their bills this week so
they can send a final version of the regulatory overhaul to
President Barack Obama to sign into law by early July.
One of the most contentious issues is whether to force brokers
who provide financial advice to comply with the same standards as
The House bill contained such a provision. The Senate bill
only required a study. Senate negotiators on Tuesday backed the
latest proposal from Senator Tim Johnson.
But Christopher Dodd, who helped steer a broad financial
regulation bill through the Senate, said senators were going to do
more work on the issue.
"I think we're going to have to do better than the Johnson
proposal to get close enough to the House. So we're working on
where that land is," Dodd told reporters after the sides met to
hash out the bill.
Under Johnson's proposal, the Securities and Exchange
Commission's study would have to conclude that brokers should have
fiduciary duties in order to write those rules. The SEC study
would also have to detail whether the regulator could adopt such
rules for brokers or whether the regulator would need new
authority to do so.
(Reporting by Kim Dixon, Kevin Drawbaugh, Rachelle Younglai;
Editing by Phil Berlowitz)