Earlier this month, the Department of Labor (DOL) proposed a 60-day delay of the April 10, 2017 effective date of its (much debated) fiduciary rule. The fiduciary rule – a vestige of the Obama Administration – was thought to be bound for the chopping block once President Trump took office. However, the proposed rule has only thus far been delayed, concerning many in the industry that: (1) there may be a gap period during which the fiduciary rule becomes law before a delay is published, or (2) the DOL could decide to simply leave the fiduciary rule in place.
Recognizing that “many financial service firms and advisers are concerned that, if the Department decides not to issue a delay, there may not be sufficient time to provide retirement investors before the April 10 applicability date with disclosures or other documents intended to comply with [the fiduciary rule]…,” the DOL issued Field Assistance Bulletin No. 2017-01 (FAB) to ease industry concerns. The FAB, released March 10, 2017, amounts to a temporary “no enforcement” policy for noncompliance during a gap period (if any) and gives industry professionals a reasonable period after the publication of a decision not to delay the fiduciary rule to come into compliance. The DOL also stated the 30-day cure period under the Best Interest Contract Exemption and the Principal Transaction Exemption is available to financial institutions that do not provide the required disclosures by the April 10 effective date.