Fiduciary Rule Implementation Delay Approved by OMB
The Office of Management and Budget has approved a proposal by the Department of Labor to delay implementation of the remaining provisions of the agency’s fiduciary rule for 18 months until July 1, 2019. The rule’s initial implementation began on June 9th with the remaining provisions, including the controversial best interest contract exemption, scheduled to take effect on January 1, 2018.
The OMB concluded its review in less than one month, a process which typically takes up to 90 days to complete. The agency noted that its approval was “consistent with change,” the meaning of which is unclear at this time, although additional details are expected when the DOL releases the proposal for public comment, expected to occur sometime this week.
In addition to the 18-month delay, the DOL also submitted proposed amendments to three exemptions to the Office of Management and Budget. The exemptions include the best interest contract exemption (PTE 2016-01); the class exemption for principal transactions (PTE 2016-02); and the prohibited transaction exemption involving insurance agents and brokers (PTE 84-24).
The fiduciary rule expands the definition of investment advice fiduciary and is currently under review as ordered by President Trump. Labor Secretary Alexander Acosta and SEC Chairman Jay Clayton have pledged to worked together on a uniform standard of the rule.
In June, Clayton issued a request for public comment on a range of questions, including standards of conduct for investment advisers and broker-dealers.
The SEC created a webform and e-mail address where members of the public can submit comments that will be posted on the SEC website. If responding to a specific question, the SEC asks that it be identified in the submission.