DOL made the announcement that its proposed rulemaking under its Conflict of Interest Rule would be delayed under a change to its regulatory agenda.
Labor Secretary Thomas Perez told a Senate Appropriations subcommittee in mid-April that the redrafting of the fiduciary proposal “has been slowed down at my direction significantly because we wanted to take a step back [to] listen and learn from everyone.”
Perez noted, “We’ve been engaged in a significant amount of outreach, and I’ve met with a number of senators and congressmen on both sides of the aisle, and we’re going to continue to do that.”
Phyllis Borzi, assistant secretary of labor for DOL’s Employee Benefits Security Administration, said in mid-March that release of a fiduciary redraft could come sooner or later than the arbitrary August deadline that was in the original regulatory agenda.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said in reaction to the extended timeline: “From day one, this has been a troubled proposal by DOL that will harm the ability of everyday American investors and small business owners to save for retirement.”
While Bentsen said in the statement that the extended timeline “provides a temporary delay,” SIFMA believes that it is “the responsibility of the SEC to act,” to issue its own fiduciary rule under the authority provided to the agency by the Dodd-Frank Act, as “premature actions by the DOL, whether now or in January, could undermine the SEC’s work to improve upon the standard of conduct owed by broker-dealers and investment advisors to retail clients.”
Chris Paulitz, senior vice president of membership and marketing for the Financial Services Institute, said in reaction to the delay that FSI’s “main goal is that they [DOL] get the rule right, not get it out fast.”
FSI “remains eager to be helpful to the Department to ensure small investors can continue to have access to affordable, objective financial advice.”