DOL Fiduciary Rule Delayed for 60 Days
April 7, 2017
By Jessica Morgan
and Christopher Pallanch
Today, April 7, 2017, the Federal Register published the U.S. Department of Labor's (DOL) final rule extending the applicability date of the ERISA Fiduciary Rule from April 10, 2017 to June 9, 2017. A copy of the final rule is available here
Other delays included in the final rule affect (i) certain transitional requirements under the Best Interest Contract Exemption (BIC), and (ii) compliance with new and revised prohibited transaction exemptions. This means that advisors to retirement investors will be treated as fiduciaries and required to (i) adhere to a best interest standard, (ii) adhere to the duties of prudence and loyalty, (iii) receive no more than reasonable compensation, and (iv) avoid making materially misleading statements. Compliance with full BIC requirements has not been delayed and remains effective as of January 1, 2018.
The examination of the Fiduciary Rule is continuing pursuant to the presidential memorandum. The DOL will continue to receive comments on the Fiduciary Rule through April 17, 2017. This review process will have the effect of either revising or rescinding some or all of the exemptions under the Fiduciary Rule or cause the DOL to issue another delay in the applicability date.
We recommend that those businesses in the financial services industry continue to prepare for compliance with the Fiduciary Rule. However, the status of the applicability date of the Fiduciary Rule is uncertain, and financial professionals should stay informed of the situation.
This client alert is prepared for the general information of our clients and friends. It should not be regarded as legal advice. If you have any questions regarding this update, or for more information about this topic, please contact any of the attorneys in our Financial Services & Investment Management practice group, or the attorney with whom you normally consult.