DOL Fiduciary Rule Delay Expected This Week

The DOL's delay, announced March 2, extends the applicability date for much of the fiduciary rule from April 10 to June 9 and pushes compliance with some disclosure and other requirements to January 1, 2018.

The DOL concluded that some delay is necessary to conduct "a careful and thoughtful process" in response to President Donald Trump's February 3 executive order calling for a review of the rule.

The rule would expand the definition of fiduciary, impacting financial advisers providing retirement savings advice by requiring them to put their clients' best interests first.

In the preamble to the April 4 rule, the DOL explained that it decided delaying full implementation of the Fiduciary Rule beyond a 60-day period would be inappropriate, after reviewing about 193,000 comments and letters in response to the proposal to delay the April 10, 2017 applicability date.

In addition to the 60-day delay, the department also said that other regulatory requirements in the rule for firms to provide disclosures and written representations of compliance to investors will not be mandated until January 1, 2018. The applicability date of the fiduciary regulation and the related "best interest contract" ("BIC") exemption is extended to June 9, 2017, as expected.

The relevant applicability dates are changed as follows: The department extends for 60 days the applicability date of the final regulation, published on April 8, 2016, defining who is a "fiduciary" under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986.

Financial industry opponents of the Department of Labor's fiduciary rule lost again in federal court on Wednesday. To what extent the DOL took those comments into account is unclear: the agency says it received 178,000 comments opposing the delay and 15,000 supporting it, according to Reuters. Well, it's until June 9, at least. The Impartial Standards Conduct also require that advisers charge no more than reasonable compensation. The department urges commenters to submit data, information and analyses responsive to the requests, so that it can complete its work pursuant to the memorandum as carefully, thoughtfully and expeditiously as possible. The Impartial Standards Conducts amendments to these exemptions, however, will be enforced during the transition period.

  • Larry Hoffman