The Department of Labor issued a bulletin Friday alerting the financial services industry that it will not pursue strong enforcement of its fiduciary rule in the short term.
“Financial services institutions have expressed concern about investor confusion and other marketplace disruption based on uncertainty about whether a final rule implementing any delay will be published before April 10, whether there may be a ‘gap’ period during which the fiduciary duty rule becomes applicable before a delay is published after April 10,” the bulletin reads.
The DOL’s “temporary enforcement policy” is as follows:
A. In the event the Department issues a final rule after April 10 implementing a delay in the applicability date of the fiduciary duty rule and related PTEs, the Department will not initiate an enforcement action because an adviser or financial institution did not satisfy conditions of the rule or the PTEs during the “gap” period.
B. In the event the Department decides not to issue a delay in the fiduciary duty rule and related PTEs, the Department will not initiate an enforcement action because an adviser or financial institution, as of the April 10 applicability date of the rule, failed to satisfy conditions of the rule or the PTEs provided that the adviser or financial institution satisfies the applicable conditions of the rule or PTEs, including sending out required disclosures or other documents to retirement investors, within a reasonable period after the publication of a decision not to delay the April 10 applicability date.
The DOL added that it will consider additional relief “as necessary,” but added that the bulletin “should not be read as expressing any view on any decision regarding a final rule on the (delay).”
President Donald J. Trump ordered the department to seek a delay in a Feb. 3 memorandum. Trump’s memo tasked the DOL with studying whether the rule will deprive Americans of retirement advice and/or add undo cost burdens.
Republicans control the White House, as well as both chambers of Congress, and are intent on killing the Obama administration regulation. The fiduciary rule requires anyone selling financial products with retirement dollars to adhere to a strict best-interest standard, or face class-action liability.
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].
© Entire contents copyright 2017 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.