Nearly a year after the Dodd-Frank Wall Street Reform and Consumer Protection Act passed, less than 6 percent of its specific rules have been implemented and more than 30 deadlines have been missed.
The state of regulatory limbo has contributed to the slower pace of economic recovery, says John Taft, chairman of the Securities Industry and Financial Markets Association.
But going slow is better than unleashing unintended consequences, he said.
“Uncertainty is better than bad regulation,” said Taft, who was in Denver on Thursday to talk to local employees of RBC Wealth Management, the Minneapolis firm he heads.
The financial services industry realizes new rules are needed to prevent a future crisis from spiraling out of control.
At the debate’s core, however, is the balance between allowing for risk and growth, and ensuring safety and soundness.
“Regulatory reform is part of rebuilding trust,” Taft said.
One measure expected to help in that process is the replacement of “suitability” standards with “fiduciary” requirements on stock brokers and other financial product vendors.
Fiduciaries must place the interest of a client before their own versus the more lenient requirement that a product they sell be “suitable.”
The Securities and Exchange Commission is expected to start work on the stricter standards this summer.
“We will have a fiduciary standard,” Taft said. “The devil is in the details.”
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
