Income drawdown will not become a permitted activity but training and competence requirements are set to be tightened by the PIA.
Money Marketing understands senior regulators are "relaxed" about the controversial product and have received almost no complaints from consumers.
The PIA revealed in January that it was investigating the drawdown market and warned that it would send hit squads to swoop on IFAs to monitor compliance.
Professional indemnity insurers have also joined the debate, warning that cover could be withdrawn if PIA visits reveal drawdown advice problems.
But despite pressure from life offices such as Winterthur Life, drawdown is highly unlikely to be made a permitted activity and drastic action to step up regulation of the product is also unlikely.
According to a senior regulator: "The only reason that people want to make income drawdown a permitted activity is so other people can't do it."
But action could be taken on training and competence.
PIA head of press Sarah Modlock says the regulator is "asking for information" from IFAs on drawdown. No action will be taken until the regulator's investigations are complete and it will not give any timescale.
The moves follow a warning from PIA chairman Joe Palmer that high commission levels available on drawdown products could lead to biased advice.
Winterthur Life structured products manager Laurie Fulton says: "The reason that we want drawdown to be permitted is we believe that people advising on this should be qualified. This is not a protectionist stance. We are merely trying to protect the consumer. We do not want to see another scandal."
But Scottish Equitable director of pensions development Stewart Ritchie says: "Virtually everybody needs retirement advice but if someone is not permitted to advise on drawdown, then I would argue strongly that that person should not be permitted to advise on annuities."