DOL Files for Delay in Fiduciary Rule Applicability Date
It looks like that much-anticipated delay in the applicability date of the Department of Labor’s (DOL) fiduciary regulation might be a reality, or at least on its way to becoming one.
Late Thursday evening, Feb. 9, Reuters reported
that the DOL’s Employee Benefit Security Administration (EBSA) had sent documents to the Office of Management and Budget (OMB) for approval, citing sources familiar with the agency’s actions.
According to the report, one document is a proposed rulemaking that delays the fiduciary regulation’s April 10 applicability for 180 days. And in fact, there is a document filed Feb. 9 on the OMB site titled “Definition of the Term ‘Fiduciary’ – Delay of Applicability Date
.” Of course, the notice to delay must include public notice and public comment steps before it becomes official, although the Reuters report says that proposal has a comment period as short as 15 days.
Reuters reports that a second document was also filed, one that would start another round of public comment on the rule.
While some delay in the applicability date of the fiduciary rule has long been anticipated, there have been some false signs over the past several weeks. First came President Trump’s regulatory freeze pending review signing that some reported as delaying the fiduciary regulation. However, that applied only to regulations that had been finalized but had not taken effect — and the “effective” date of the fiduciary regulation was June 7, 2016. April 10, which is the date the industry has been focused on, is the applicability date.
Then on Feb. 3 a draft of an Executive Memorandum from President Trump circulated that directed the Labor Department to essentially reconsider the impact of the fiduciary regulation on investors, retirees, the industry, advice access, pricing and litigation. The draft memo also included a direction to delay the applicability date for 180 days (presumably until that review could be completed). However, the final version
of that Executive Memorandum
contained no mention of a delay in applicability. Nevertheless, soon after the final draft of the memo was released, the Acting Secretary of Labor announced, “The Department of Labor will now consider its legal options to delay the applicability date as we comply with the President’s memorandum.” It would appear the filing at OMB is the result of that review process.
Needless to say, caution should be the order of the day. And that pending delay — if, in fact, it is pending — won’t be official until the notice and comment period have passed.