The Department of Labor (DOL) is seeking once again to delay final implementation of the Fiduciary Duty Rule and the Best Interest Contract Exemption (BICE), leading to further speculation as to whether the full Fiduciary Duty Rule or BICE will ever see the light of day.
On August 9, 2017, the DOL submitted to the Office of Management and Budget (OMB) proposed amendments to the Fiduciary Duty Rule, the BICE, and other related rules (including PTE 84-24), which would delay the full applicability dates of those rules another 18 months — from January 1, 2018, to July 1, 2019.
Of course, the real question is whether this is yet another slow step towards full or significant repeal, especially for the BICE.
After all, much rejoicing was heard back on July 3, when the DOL appeared to concede before the Fifth Circuit Court of Appeals that the BICE’s prohibition on class action waivers violates the Federal Arbitration Act and admitted in its papers (here at p. 59) that “the government is no longer defending this specific condition.” However, the government maintained then that the “invalidation of the anti-arbitration condition does not justify invalidation of the BIC Exemption or of the fiduciary rule as a whole.” Brief at pp. 59-60.
But now, the DOL is hesitating on the Rule and the BICE again, this time for another 18 months. The text of the latest proposed delay rule does not yet appear to be publicly available, which is a shame. After all, the full text of the first delay rule, that initially extended the applicability 60 days, from April 10, 2017 until June 9, 2017, was 60+ pages long and contained a lot of very interesting clarification from the DOL.
Regardless, it seems clear, at least, that the DOL wants time to consider the comments submitted in response to its Request for Information (see our blog post here), complete the analysis demanded by President Trump in his Presidential Memorandum (see our blog post here), and perhaps even to cooperate with the SEC on a uniform standard to apply to all investor accounts.
The proposed delay rule is now up for review before the OMB.