It looks like a two-month delay – initially at least – instead of a six-month delay for the applicability date of the Department of Labor’s controversial new fiduciary rule.
After President Trump on Feb. 3 ordered the agency to review the rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice, the DOL announced Wednesday a proposal to delay fiduciary rule implementation by just 60 days as opposed to the widely speculated six-month timeframe. But this shorter delay is likely just the first step toward additional delays as the Trump Administration seeks to rescind or significantly revise the rule in its current form.
The DOL proposal, likely to be published in the Federal Register on March 2, includes a 15-day comment period that would end on March 17. The original applicability date of April 10, 2017, would be moved to June 9, 2017.
The DOL will then be on a tight deadline to analyze all of the comments in order to have a new rule delaying the current rule published before the original April 10 compliance date.
“There are approximately 45 days until the applicability date of the final rule and the PTEs. The Department believes it may take more time than that to complete the examination mandated by the President’s Memorandum,” the DOL proposal states. “Additionally, absent an extension of the applicability date, if the examination prompts the Department to propose rescinding or revising the rule, affected advisers, retirement investors and other stakeholders might face two major changes in the regulatory environment rather than one. This could unnecessarily disrupt the marketplace, producing frictional costs that are not offset by commensurate benefits. This proposed 60-day extension of the applicability date aims to guard against this risk.”
The extension would make it possible for the DOL to take additional steps [such as completing its examination, implementing any necessary additional extension(s), and proposing and implementing a revocation or revision of the rule] without the rule becoming applicable beforehand, the statement goes on to say. “In this way, advisers, investors and other stakeholders would be spared the risk and expenses of facing two major changes in the regulatory environment. The negative consequence of avoiding this risk is the potential for retirement investor losses from delaying the application of fiduciary standards to their advisers.
• Thoughts or comments? Please visit this new thread: DOL Fiduciary Update – 60 Day Delay Proposed by DOL
• More coverage: Under President Trump’s Direction DOL Moves to Delay Fiduciary Rule