DOL Fiduciary Rule Status

The Department of Labor (DOL) has proposed a delay in the applicability date of its Fiduciary Rule to June 9, 2017 in order to complete a review of the Rule which was ordered by President Trump.   On February 3, 2017, President Trump issued a memorandum asking the DOL to rescind or revise the Rule if it concluded that the Rule would adversely affect investors in any of the following three areas: 1) access to retirement products or advice, 2) dislocations or disruptions in the retirement services industry, or 3) increase in litigation and prices for retirement services.  Opponents of the Rule hope that the proposed delay will be followed by further moves to rescind or revise the Rule in response to the President’s memorandum.

The DOL’s delay proposal is subject to public comments due by March 17, 2017, while public comments raised by President Trump’s memorandum are due by April 17, 2017.

Due to the uncertainties associated with the delay, the DOL has issued a policy to grant relief to firms for compliance violations that may occur as a result of such uncertainties.  There are two instances for which with the DOL will grant temporary relief to firms under this policy:

  • If the DOL delays the Rule, but a final delay is not issued until after the April 10th applicability date, the DOL will not enforce violations that occurred during that “gap” period.
  • If the DOL does not delay the rule, the DOL will not initiate an enforcement action for failure to satisfy conditions of the Rule by April 10th provided that the firm complies with the Rule within a reasonable period after the publication of a decision not to delay the April 10th applicability date.

Considering the delay proposal, the low bar set for rescission/revision in the President’s memorandum, and the temporary enforcement relief discussed above, many investment advisers and broker-dealers are taking a “wait and see” approach until there is greater clarity regarding the status of the Rule.

NCS Regulatory Compliance over the past several months has developed disclosures, policies and procedures and forms to assist our clients in complying with the Rule.  If you would like assistance with DOL Fiduciary Rule compliance or have other compliance questions or concerns, NCS Regulatory Compliance is ready to help.  You can call us at  (800) 800-3204 or email us at info@ncsregcomp.com.

Kelli A. Haugh

Craig Moreshead