The U.S. Department of Labor (“DoL”) recently confirmed that it would not seek to extend the Fiduciary Rule delay. Originally scheduled to go into effect on April 10, 2017, the DoL issued a rule delay earlier this year postponing the applicability date to June 9, 2017 pending a review of the rule ordered by U.S. President Donald Trump. Until this week, it was unclear whether the rule would go into effect on June 9 or be subject to further delay.
The June 9, 2017 applicability date pertains to the rule’s definition of fiduciary and the impartial conduct standards. Consequently, on June 9 investment advisers and others who give retirement advice within the meaning of the rule will be deemed fiduciaries and must comply with the impartial conduct standards set forth in the Best Interest Contract Exemption to the extent that such investment adviser firms are not levelized and relying upon BICE. Other provisions of the rule will not go into effect until January 1, 2018, as outlined in the original rule delay. Click here to read the original rule delay.
On Monday, U.S. Secretary of Labor Alexander Acosta acknowledged that the Fiduciary Rule has successfully weathered several court challenges, but noted that the rule may not align with the current administration’s deregulatory goals. The DoL will seek public input and continue to reassess the rule as directed by President Trump in an executive order on February 3, 2017. Despite the ongoing review, Acosta noted that the DoL “[has] found no principled legal basis to change the June 9 date while we seek public input.” Click here to read Secretary Acosta’s Monday op-ed in the Wall Street Journal discussing the Fiduciary Rule delay.
The DoL has released a “Conflicts of Interest FAQs” covering the transition period between June 9, 2017 and the full applicability date of January 1, 2018. Click here to view the DoL FAQ. According to the FAQs, the DoL review of the fiduciary rule is ongoing and further changes are possible. As noted in previous releases, the DoL intends to remain focused on compliance, not enforcement, within the transition period. Investment adviser firms are encouraged to reach out to the DoL with any questions or comments.
RIA Compliance Consultants, Inc. encourages investment advisers to prepare for the now fast-approaching June 9 applicability date. We have a recorded webinar from February 7, 2017 in which our Senior Compliance Consultants discuss strategies for investment advisers to comply with the DoL’s fiduciary rule. Click here to purchase this webinar. Additionally, RIA Compliance Consultants is hosting a live webinar on Wednesday, June 21, 2017 at 12:00 p.m. Central regarding the “Applicability Dates of the Best Interest Contract Exemption under DoL’s Fiduciary Rule”. You can purchase a seat by click here. Finally, RIA Compliance Consultants is also available for consultations about what your investment advisor can do to prepare for the implementation of the DoL fiduciary rule. Click here to schedule an introductory call to learn more about our DoL Rule services.
Posted by Grant Parr