[ by Melanie Gretchen ]

The SEC's next chairman designate, Elisse Walter, is creating a new precedent when she assumes her role on 12/14.   Ms. Walter is currently SEC commissioner, and can stay until December 2013 without U.S. Senate confirmation.  The White House is looking for other replacements; in the meantime, Ms. Walter, 62, has some investment advisers asking some big questions.

Permanence. At the top of everyone's minds is whether Obama will re-nominate Walter to serve longer, or, if she is not confirmed, who may follow her.  Potential candidates include:

• Mary John Miller, the Treasury Department's under secretary for domestic finance
• Sallie Krawcheck, former president of global wealth and investment management for Bank of America Corp
• Richard Ketchum, FINRA's current CEO

Rule Changes. Whether Ms. Walters is in for a penny or in for a pound, the head of the SEC will leave a legacy.  Some of the issues she is likely to weigh in on include:

Fiduciary Standard. Right now, SEC-registered advisers must act as "fiduciaries" and recommend securities that are in their clients' best interests.  Brokers, who are licensed through FINRA must recommend "suitable" products for clients based on factors such as risk tolerance and age.

What could change: all brokers would be held to the fiduciary standard, to accommodate certain business practices, such as selling company-branded securities, which can pay brokers bigger commissions. 

Jurisdiction. The SEC and FINRA have long argued over which regulator should oversee registered investment advisers.  In 2011, Walter herself wrote in her support for a self-regulatory organization (SRO) to oversee investment advisers, who are now examined by the SEC about once every 11 years.

Two years before that, she outlined her concerns about different regulations for securities brokers and registered investment advisers in a 2009 speech, thus she may very well make an impact during her leadership, however brief.

"It's the great unknown." -- Knut Rostad, president of the Institute for the Fiduciary Standard, an advocacy group.

For further details, go to [Reuters, 11/28/12].