The Department of Labor on Thursday published a Request for Information (RFI) regarding its fiduciary rule.
Information gleaned from comments “could form the basis of new exemptions or changes/revisions” to the fiduciary rule and its associated prohibited transaction exemptions, or PTEs, Labor said, as well as the possibility of extending the Jan. 1 applicability date of certain provisions in the Best Interest Contract Exemption, the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs, and Prohibited Transaction Exemption 84-24, which deals with annuities.
There is a 15-day comment period regarding extending the Jan. 1, 2018, applicability date of certain aspects, and a 30-day comment period on all other issues raised in the RFI.
Both begin upon publication of the RFI in an upcoming edition of the Federal Register.
What Your Peers Are Reading
The RFI, which had been under review at the Office of Management and Budget, asks for feedback on 18 questions.
Labor has already been fielding comments as part of President Donald Trump’s Feb. 3 executive order that Labor review the rule.
Labor said Thursday that public input on the rule and PTEs has suggested that “it may be possible in some instances to build upon recent innovations in the financial services industry to create new and more streamlined exemptions and compliance mechanisms.”
For instance, one recent innovation is the possible development of mutual fund “clean shares.”
Many firms, the RFI states, “appear to be considering the use of such ‘clean shares’ as a long-term solution to the problem of mitigating conflicts of interest with respect to mutual funds,” but commenters have noted, however, “that funds will need more time to develop clean shares than contemplated” by the Jan. 1 deadlines.
Commenters also point to insurance companies’ potential development of fee-based annuities in response to the fiduciary rule, the RFI states, as well as firms developing new technology, and advisory and data services to help financial Institutions satisfy the supervisory requirements of the PTEs.