Will the SEC move on it this year? The uniform fiduciary standard remains under active consideration within the agency, but a lot depends on how quickly the White House nominates a new SEC commissioner. With outgoing chairwoman Mary Schapiro stepping down, the agency will be led by existing commissioner Elisse Walter on an interim basis -- leaving the commission with just four members, two from each party. A partisan majority is often needed to press ahead with thorny regulatory proceedings.
"I do expect that once a majority vote can be mustered, [the uniform fiduciary standard] will move forward," Simon said. "It's not clear how easily the SEC will be able to act on issues of controversy. It will not be a five-person commission for some time but a four-person commission. That makes getting a majority that much more difficult."
REFORM FOR MONEY MARKET FUNDS?
In 2012, the SEC seemed close to enacting a reform of money market mutual funds to shore up the sector and prevent another destabilization like the one that jolted the $62 billion Reserve Primary Fund in 2008. Before announcing her departure, Schapiro had been backing a proposal to float the net asset value (NAV) of funds by tracking their share prices more closely with the value of the funds' underlying assets.
But in August, unable to secure the votes to pass the floating NAV proposal, Schapiro tabled the matter.
Money market fund reform has since been taken up by the Financial Stability Oversight Committee, or FSOC, under the Treasury Department. FSOC initiated a rulemaking proceeding in November, calling for public comment on a variety of reform proposals, including the floating NAV, as well as a requirement that funds maintain a baseline capital buffer.
The FSOC's proceeding enters the new year still in a preliminary stage, although it seems likely that some reforms aimed at stabilizing money market mutual funds will emerge in 2013. The floating NAV proposal, however, looks increasingly like a long shot, said Marc Pfeffer, a senior fund manager at CLS Investments. "I expect some market reforms to take place in 2013 but to leave the stable NAV of $1 intact," Pfeffer said.