Labor Secretary Thomas Perez indicated Thursday that his department will not extend further the 75-day comment period for its redraft to amend the definition of fiduciary under the Employee Retirement Income Security Act.
When asked after his remarks at The Atlantic’s Summit on the Economy held Thursday in Washington if DOL would honor the Tuesday request by industry trade groups to extend the comment period another 45 days, Perez reiterated DOL’s previously stated comment guidelines.
“The comment period is 75 days, followed by a public hearing and publication of the transcript followed by another opportunity to comment on it; that’s all in the aftermath of 18 months of informal outreach,” Perez said. “That’s a long time that we’ve provided, and we’ll make sure we’ve heard people’s voices.”
A slew of industry trade groups including the Financial Services Roundtable, Financial Services Institute, the Securities Industry and Financial Markets Association, the Investment Company Institute, NAREIT and the U.S. Chamber of Commerce, asked DOL in a Tuesday letter to extend the comment period due to the proposal’s “breadth.”
In the groups’ letter, penned by Richard Foster, FSR’s senior vice president and senior counsel for legal and regulatory affairs, the groups state that the proposal comprises “a voluminous amount of information and, if adopted, would represent a watershed event touching many facets of the financial services industry.”
The plan, Foster wrote, also “contains detailed new rules, a new exemption that will subject IRA advisors to increased legal risk for violations of strict prudence requirements, and a host of detailed changes to existing and widely used exemptions.”
The industry, he continued, “will require time to assess its ability to comply with the conditions of the exemptions — which are fundamental to the ability of many financial services companies to continue to provide essential services to retirement investors, but which will require significant changes in policies and practices, as well as the production of expansive new disclosure.”
Foster noted that the groups applauded DOL’s decision to establish a 104-day comment period with respect to the original 2010 proposal, as well as holding a hearing and a post-hearing comment period in 2011. “In that context, the Associations are very concerned about the much shorter 75-day period provided with respect to a much longer and more complicated proposal,” Foster wrote.
For these reasons, he said, the groups are requesting a 45-day extension, adding that "a 120-day comment period would lead to more thoughtful and comprehensive input, which will ultimately increase the possibility for a more workable final rule that would benefit all parties.”
The comment period started April 20, the day the re-proposal was published in the Federal Register, and ends July 6, the next business day after July 4.
--- Check out Is the DOL’s New Proposal Really a New Broker Standard? by Bob Clark on ThinkAdvisor.