The laborious process to delay the Department of Labor fiduciary rule until July 1, 2019, inched closer to conclusion Wednesday with the Office of Management and Budget receiving the final rule delay documents.
The delay becomes official when the final rule is published in the Federal Register, which often happens quickly. The key is whether the DOL made any changes from the tentative to final delay documents, a source said, which isn't likely.
When finalized, the action will delay the second phase of the fiduciary rule, which establishes restrictive exemptions to sell annuities and other products, along with a class action right to sue. The initial phase of the rule went into effect June 9.
That part of rule requires advisors and agents to act as fiduciaries, make no misleading statements and accept only “reasonable” compensation. Those are known as Impartial Conduct Standards and are already cutting off access to financial advice for small savers who need it most, industry executives say.
The final requirements of the rule were set to take effect Jan. 1, 2018.
The 18-month delay is a big win for the financial services industry, as the effective date of the most punitive measures in the rule is pushed into the horizon. The aspects of that rule might never take effect if the DOL, as expected, opts to make changes following more data collection in the coming months.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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