At the end of last week, on March 10, 2017, the U.S. Department of Labor (the "DOL") issued Field Assistance Bulletin 2017-01 (the "FAB"). The FAB relates to the DOL's proposal, which was published in the Federal Register on March 2, 2017, to delay for 60 days the applicability date of the DOL's new fiduciary "investment advice" rule under the Employee Retirement Income Security Act of 1974, currently set to begin becoming applicable on April 10, 2017. We previously discussed the proposed 60-day delay (to June 9, 2017) in our March 1, 2017 OnPoint.

We have noted at various times that any delay in the applicability date of the rule arguably jeopardizes the viability of the new fiduciary rule and the likelihood that it will ever become applicable. The rule's path is further clouded by the Trump Administration's general antagonism to complicated regulations, as well as specific hostility that has been directed at the rule by at least three senior people in or closely associated with the Administration.

While the DOL is expected to make its final decision regarding the rule's applicability date shortly, at this juncture it appears that, according to the DOL:

"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, or whether the Department may decide either before or after April 10 not to issue a delay . . . ."

As a result, the DOL, in recognition of, among other things, the transitional concerns it identified in the FAB, has now adopted a temporary enforcement policy. Under the FAB, the DOL will not initiate any enforcement action under the new fiduciary rule because of any gap-period noncompliance, if the April 10, 2017 applicability date of the rule is not extended by the DOL until after April 10. In addition, in the event that the DOL ultimately decides not to extend the applicability date of the rule at all (i.e., if the applicability date remains at April 10, 2017), then the DOL similarly will not initiate enforcement action, provided that there is compliance with the rule within a "reasonable period." Thus, the DOL has sought to allay apparent concerns in the market that, by April 10, 2017, the DOL might somehow not have finalized its proposed 60-day delay of the applicability date of the fiduciary rule.

The FAB should address any concerns among financial institutions that the DOL will not have acted by April 10, 2017 on its proposed delay in the applicability date of the new fiduciary rule. If you would like to discuss what the FAB means for the rule and those potentially subject to the rule, or if you have any other questions regarding the rule, please contact the Dechert attorney listed below or any Dechert attorney with whom you regularly work.