The U.S. Department of Labor (the "DOL") has today, on March 1, 2017, proposed a 60-day delay in the applicability date (i.e., to June 9, 2017) of its new fiduciary "investment advice" rule under the Employee Retirement Income Security Act of 1974 (and related new and amended exemptions), currently set to begin becoming applicable on April 10, 2017. The proposal, to be published in the Federal Register on March 2, 2017, is on a fast track, as the notice-and-comment period provided by the DOL is 15 days.
The DOL has expressly invited comments not only on the delay, but also on various considerations relating to the rule itself. The comment period for the broader purpose of examining the final rule (and related exemptions) ends 45 days after the upcoming publication of the extension proposal in the Federal Register.
This action follows (i) the February 3, 2017 Memorandum from the Trump Administration that had directed the DOL to conduct an economic and legal analysis of the rule and to propose rescinding the rule, if, among other things, it is inconsistent with the Administration's priorities, and (ii) the coordinated February 3, 2017 Press Release of the DOL relating to a possible delay in the rule's applicability date.
In Dechert's February 3, 2017 OnPoint on the Administration's February 3 Memorandum, we noted that a delay in the rule's applicability calls into increased question the viability of the rule. In this regard, it is noted that multiple news services have quoted officials in the Trump Administration as making statements that are openly hostile to the rule. Now, we have the official proposal by the DOL of a 60-day delay in the rule's applicability.