* Key mutual fund fee may not be addressed until 2012
* Wall St lobbying group gets more assertive in Washington
(Recasts to reflect SEC confirmation of rule-making plans)
By Joseph A. Giannone
NEW YORK, April 7 The Securities and Exchange
Commission said on Thursday it does not expect to complete
rules on a fiduciary standard for broker-dealers until later
Changes to 12(b)1 mutual fund fees paid to brokers likewise
may not be addressed until 2012, at the earliest, an agency
Earlier on Thursday, John Taft, chairman of the Securities
Industry and Financial Markets Association, said SIFMA
officials met Chairman Mary Schapiro earlier this week to
discuss the status of pending rules.
Taft, speaking at a conference hosted by the securities
industry trade group, reported Schapiro said the SEC's budget
and resource constraints meant some issues would be taken up
later than previously planned.
"The SEC will probably undertake rule-making for the
fiduciary standard later this year," Taft told an audience of
about 250 securities industry executives.
Schapiro "acknowledged the SEC has competing priorities and
a shortage of resources. They are triaging between the various
priorities," said Taft, who also heads the U.S. wealth
management division of the Royal Bank of Canada (RY.TO).
SEC spokesman John Nestor, asked to confirm Taft's
comments, said: "The (SEC's) staff expects to present a
proposal for the commission's consideration in the second half
Nestor also said the topic of the trailing mutual fund fees
would be addressed towards the end of 2012.
"The staff expects to turn back to 12(b)1 after the
one-year anniversary of Dodd-Frank and its required
rulemakings," Nestor said in an email statement.
These fund fees have been criticized for years because they
add to the cost of mutual funds. Brokers like these fees
because they generate income long after a fund has been sold to
The financial crisis of 2008 paved the way for the sweeping
Dodd-Frank financial regulatory reforms last summer. The law
provides a blueprint for regulatory agencies charged with
drafting hundreds of new rules and conducting dozens of
Some rules may not be written as soon as once thought.
Taft, on the sidelines of the SIFMA conference, told Reuters
that trailing 12b(1) fees for broker-sold mutual funds are
essentially "off the table" for now.
The SEC has appealed to the U.S. Congress for increased
funding, but the Republican majority in the House of
Representatives has been less than sympathetic as it searches
for ways to cut federal spending and ease some regulation.
Taft said SIFMA sees an opportunity to be more assertive in
Washington, calling on lawmakers and regulators to coordinate
when addressing overlapping rules and to address the myriad new
rules in a logical sequence.
"We want to make sure the regulators don't write poorly
crafted rules, that they do not restrict our clients' access to
a broad range of products and services, and that they do not
constrain what services they get and how they pay for those
services," Taft said in his presentation.
Taft later told Reuters that SIFMA, which lobbies on behalf
of Wall Street's brokerages and investment banks, is not asking
for and does not support repeal of Dodd-Frank.
His comments to the SIFMA conference represented a more
assertive tone by Wall Street since even six months ago, when
brokerages and investment banks put their support behind
Dodd-Frank, followed by behind-the-scenes lobbying of
Taft said SIFMA opposed applying a "retread" version of the
1940 investment advisers act to broker-dealers, who since the
Franklin Roosevelt administration have been held to an easier
"suitability" standard. Brokerages are concerned that a strict
fiduciary standard could block their sales of some
(Reporting by Joseph A. Giannone; editing by John Wallace and