DOL Fiduciary Rule Delay is Now Official
The Department of Labor has taken the final step to officially delay the implementation deadline of its fiduciary rule by 18 months, according to a draft document of the delay, which will be published in the Federal Register Nov. 29.
The Obama-era rule, which purports to force retirement account advisors to put clients’ interests first, went into partial effect in June after a 60-day delay. The DOL has now moved the final implementation date from Jan. 1, 2018 to July 1, 2019, the DOL says.
Among the provisions affected by the delay are the applicability of certain prohibited transaction exemptions and the applicability of the best interest contract exemption, which lets retirement account advisors sell some commission-based investment products after signing a best interest contract with their clients.
The DOL says it needs the 18-month delay to review public comments on the rule as directed by president Donald Trump in February. The majority of the 145 comment letters the agency has received about its proposed delay supported pushing back the final implementation date by 18 months, although some commenters opposed any delay while others wanted a longer one, the DOL says. The review will consider possible alternatives to the rule’s exemptions as well as input from the SEC and state insurance commissioners, according to the draft document.
The SEC is currently mulling its own version of a best-interest standard that would be applicable to all advisors and not just those dealing with retirement accounts.
SEC chairman Jay Clayton, however, said last month that the commission doesn’t intend to “supplant” the DOL’s fiduciary rule.
The DOL’s rule still faces opposition in the courts from industry groups, as well as from GOP lawmakers. A House panel passed a bill to replace the DOL’s fiduciary rule last month.