Almost 200,000 commenters chimed in on whether the DOL should delay the April 10 implementation of the Obama Administration’s landmark fiduciary rule meant to protect retirement investors from conflicted advice. The verdict: it’s official, as of today, that the DOL will delay implementation of the fiduciary rule until June 9, at least.
Here’s the 63-page delay document “Final rule, extension of applicability date,” as published in the Federal Register.
The DOL concluded that some delay is necessary to conduct “a careful and thoughtful process” in response to President Trump’s Feb. 3 executive order calling for a review of the rule. It states that: “any such review is likely to take more time to complete than a 60-day extension would afford,” but adds that it “would be inappropriate to broadly delay” the rule for an extended period.
So how long is the delay? Well, it’s until June 9, at least.
“The DOL is clearly leaving the door open for additional delay as it sifts through the substantive comments,” says Erin Sweeney, an employee benefits lawyer with Miller & Chevalier in Washington, D.C.
The DOL also clarifies that transition relief for related exemptions to the rule (allowing contracts to disclose certain compensation arrangements) is still in place through Jan. 1, 2018—the date disclosures and other conditions must be satisfied “unless revised or withdrawn" in the future. In that sense, “this final rule does not provide the financial services industry with any more clarity than the proposed regulation,” Sweeney says.
Approximately 15,000 commenters and petitioners supported a delay of 60 days or longer, with some requesting at least 180 days and some up to 240 days or a year or longer (including an indefinite delay or repeal); and 178,000 commenters and petitioners opposed any delay whatsoever.
The comment period on the delay ended March 17, but a separate comment period on issues raised by President Trump is open until April 17.
The DOL notice today says that it’s still getting a high volume of comments and petition letters on a daily basis, both on the delay and the more substantive issues.
The question remains how long it will take for the DOL to conduct the Trump-mandated review of the rule.
Opponents of the rule, who want the whole thing thrown out, say more time is needed to answer issues raised in Trump's executive order.
They say a series of short extensions would mean protracted uncertainty and wasted compliance expenses for advisers and financial institutions.
Proponents of the rule argue that investors lose billions of dollars each year as a result of conflicts of interest, and any delay would compound these losses.
The DOL concluded in the delay notice that: “Losses arising from a delay of longer than 60 days would quickly overshadow any additional compliance cost savings.”
For more on the rule’s convoluted history (it was first proposed in 2010), check out this fiduciary rule timeline.