DOL Delays Fiduciary Rule For 60 Days


The Labor Department issued a final rule on April 4 postponing the applicable date for its fiduciary rule from April 10 to June 9.

The 60-day delay was preferable to “simply granting a flat delay of fiduciary status and all associated obligations for a protracted period,” the DOL said.

The delay was expected as the DOL ponders whether to change or keep the rule in response to a memorandum from President Trump to examine the rules’ impact on Americans’ ability to gain access to retirement information and financial advice.

The fiduciary rule requires that investment advisers put their clients’ best interests ahead of their own when recommending investments. A fiduciary subject to the rule is anyone who provides investment advice or recommendations for a fee or other compensation with respect to assets of a plan or individual retirement account.

The DOL is accepting public comment through April 17 on the examination and more general questions concerning the fiduciary rule.

PTEs Delayed Also

The final rule also delayed for 60 days the full implementation of various prohibited transaction exemptions issued in conjunction with the fiduciary rule in April 2016.  Subject to appropriate safeguards, those amended PTEs would allow investment advice fiduciaries under the rule to continue to receive compensation that would otherwise violate prohibited transaction rules, triggering excise taxes and civil liability.

Impartial conduct standards in two of those PTEs--the Best Interest Contract Exemption and Principal Transactions Exemption--will apply June 9, the DOL said. Compliance with the exemptions’ requirements to make specific disclosures and representations of fiduciary compliance in written communications with investors is not required until Jan. 1, 2018.

By that date, the DOL intends to complete it examination and analysis of the rule and the PTEs, it said.

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