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Aug 31 2017

DOL Opens 15-Day Comment Period on Fiduciary Rule Delay

The Department of Labor has opened a 15-day comment period on its proposal to delay the remaining provisions of its fiduciary rule for 18 months, according to a proposed rule notice published in the Federal Register this morning.

The DOL is proposing to extend the transition period in the best interest contract exemption and principal transaction exemption until July 1, 2019, and to delay the applicability date of certain amendments to the prohibited transaction exemption involving insurance agents and brokers for the same period.

The rule’s initial implementation began taking effect on June 9th, and the same rules and standards in effect now would remain in effect throughout the duration of the extended transition period, if adopted. Specifically, financial institutions and advisors are required to give retirement advice that is in investors’ best interest, charge no more than reasonable compensation, and avoid misleading statements.



The DOL has yet to complete its examination of the rule as directed by the President earlier this year, and is continuing to review the comments already received from proponents and opponents of the rule that seeks to eliminate conflicted retirement investment advice. The agency said that it plans to propose “a new, more streamlined class exemption” built on “recent innovations” in the financial services industry.

“The primary purpose of the proposed amendments is to give the [DOL] the time necessary to consider possible changes and alternatives to these exemptions,” the agency wrote in the proposal. “The department is particularly concerned that, without a delay in the applicability dates, regulated parties may incur undue expense to comply with conditions or requirements that it ultimately determines to revise or repeal.”

The delay would also allow the DOL to coordinate with the Securities and Exchange Commission under the leadership of its new chairman, Jay Clayton. Clayton recently issued a request for public comment on a range of questions, including standards of conduct for investment advisers and broker-dealers.

Following the 15-day comment period, the DOL will propose a final rule which must be approved by the Office of Management and Budget.

Comments on the proposed delay can be submitted to the Federal eRulemaking Portal at regulations.gov at Docket ID number: EBSA- 2017-0004, or via email at EBSA.FiduciaryRuleExamination@dol.gov (Include the regulatory identification number: RIN 1210-AB82 in the subject line).

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Article by: The DI Wire


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