The US Department of Labor today proposed a 60-day extension (through June 9) for the effective date of its Fiduciary Duty Rule and related exemptions.
The extension would give DOL some time to complete the re-analyses directed in the President’s February 3 Memo. The Memo directs DOL to examine whether the Rule “may adversely affect access to retirement advice and requires an updated economic and legal impact analysis. We discussed that Memo here: http://www.burr.com/2017/02/09/dol-fiduciary-rule-still-april-10-implementation/
The Department will collect public comment on the proposed extension through March 17, after which it could decide to extend the Rule’s effective date as proposed. DOL will accept comment on the “merits” of the issues identified in the Presidential Memo through April 16.
For many firms, any delay comes too late, given their sunk compliance costs to prepare for next month’s effective date – especially because the structure of the Rule makes its “transitional period” (through January 1, 2018) illusory. In that respect, many of the changes wrought by the Rule are likely to remain, notwithstanding the ultimate fate of the Rule.
The DOL proposal notes that the Rule is subject to the Congressional Review Act (Release at 4), so even a delay in the effective date may re-start the clock under the Act and subject the Rule anew to post-final Congressional action.
In the meantime, several federal trial courts have upheld the Rule against various administrative-law and constitutional challenges, but opponents have filed appeals.
DOL’s Release (RIN 1210-AB79) is here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-04096.pdf
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