On March 1, 2017, the Department of Labor’s (DOL) issued a proposed rule to extend the Fiduciary Rule applicability date by 60 days. The current applicability dates for the Fiduciary Duty Rule and prohibited transaction exemptions are set for April 10, 2017. The extension would move the applicability dates to June 9, 2017.
As mentioned in our previous blog post, “To Delay or Not to Delay (the Fiduciary Duty Rule), That is the Question,” the President has directed the DOL to review the new Fiduciary Duty Rule and to consider the issues raised in the President’s February 3, 2017 Memorandum (Memorandum).
The path forward appears to be that under the new proposed rule, there is a 15-day comment period from the date of the proposed rule’s publication in the Federal Register (March 2, 2017), which will end on March 17th. Further, the DOL announced a 45-day comment period attempting to address the concerns outlined in the Memorandum asking whether the Fiduciary Duty Rule, as currently drafted, adversely affects retirement investors.
In order to make sense of any of this, one must essentially make a decision-tree; however, we think there are four potential results that will occur at the conclusion of the 45-day comment period:
- the rule will go into effect on June 9th;
the rule will be further modified;
the rule will be extended out much further; or
the legislative process will take hold, and the rule will begin the process of being revoked.
We should note that there have been fiduciary rules in existence for over twenty years, and during this exhaustive implementation process such rules should be followed. We will continue to keep you up to date as the outcome of the Fiduciary Duty Rule remains unknown.