// Add the new slick-theme.css if you want the default styling
Department of Labor (“DOL”) recently submitted a proposal to delay
implementation of the remaining parts of its fiduciary rule from January 1,
2018 until July 1, 2019. Two provisions
of the rule, which greatly expands the definition of who counts as a fiduciary
under the Employee Retirement Income Security Act and the Internal Revenue
Code, took effect on June 9, 2017. One
remaining provision includes the best interest contract exemption, which allows
brokers to charge variable compensation for products as long as they sign a legally
binding agreement to put their clients’ interests ahead of their own. The other exemptions include those for
principal transactions and for insurance agents and brokers.
postponement of the rule’s remaining exemptions is commensurate with the delays
sought by financial industry opponents of the rule. These opponents continue to express concern
that the rule remains flawed in several critical areas. The DOL continued to receive comments into
late July asking for an extension of the January 1, 2018 compliance date and
requesting the DOL act expeditiously so that brokers and banks could optimize
the implementation of their compliance strategies and resources.
The delay is an important step in
ensuring that the DOL coordinates with regulators to simplify and streamline
the rule. The Office of Management and
Budget must review and approve the proposal before it can go into effect.