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OMB Responds to DOL Request on Fiduciary Rule Extension

The Office of Management and Budget (OMB) has made a quick response to the Labor Department’s request for a delay in the full BIC applicability date.

In an update posted on the OMB site on August 28, the concluded action is noted as “Consistent With Change.” The OMB review, which frequently takes as long as 90 days, was concluded in less than a month.

OMB Filing

The Labor Department submitted a proposal to the OMB on Aug. 9 to extend the transition period and full BIC applicability date of the fiduciary regulation. The first inkling of that request came in the form of a “notice of administrative action” submitted in the U.S. District Court for the District of Minnesota, where litigation regarding the fiduciary regulation brought by Thrivent Financial for Lutherans is still pending. That notice indicated that the defendants in the case — the Department of Labor and Secretary of Labor R. Alexander Acosta — are notifying the court that on Aug. 9, 2017, the department submitted to the OMB proposed amendments to three exemptions, entitled:

  • Extension of Transition Period and Delay of Applicability Dates From January 1, 2018, to July 1, 2019; Best Interest Contract Exemption (PTE 2016-01);

  • Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (PTE 2016-02); and

  • Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters (PTE 84-24).

Initial Delay

In February, the Labor Department filed a similar proposal with OMB, subsequently proposing to extend the applicability date 60 days beyond its original April target. Just ahead of that original date, the Labor Department pushed the April 10 applicability date of the fiduciary rule back the widely anticipated 60 days to June 9 — at the same time providing some additional compliance space (the transition period) on the Best Interest Contract Exemption. What the “change” referred to in OMB’s review conclusion is not yet clear.

Stay tuned.