Despite industry trade groups’ insistence that the Department of Labor delay the implementation date of its fiduciary rule for years, ERISA attorneys continue to recommend that advisors and broker-dealers push ahead in their compliance steps.
The first deadline under a two-part request for information issued by Labor on June 29 expired Friday. The department sought comments on whether it should delay the fiduciary rule’s Jan. 1 compliance date. The the second part of the RFI, with a comment period ending Aug. 7, solicits feedback on 18 questions about the rule.
The Investment Company Institute said in its comment letter that Labor “must immediately” delay the January applicability date for the “remaining elements” of the fiduciary rule, including the conditions of the Best Interest Contract Exemption (BICE) and other exemptions.
The rule itself along with the Impartial Conduct Standards, which took effect on June 9, would continue to apply during the delay, wrote ICI Acting General Counsel Dorothy Donohue.
Postponing the January compliance date would “reduce harm to investors and provide certainty to the industry while the agency considers additional modifications to the rule and exemptions,” Donohue wrote. Delay, she continued, will also give Labor Secretary Alexander Acosta “the needed time to coordinate fiduciary rulemaking with Securities and Exchange Commission Chair Jay Clayton — which is the most desirable way to achieve a consistent approach that puts investors’ interests first.”
ICI’s letter urges Labor to issue an interim rule by Aug. 15 to delay the Jan. 1 BICE implementation date until Jan. 1, 2019.
The mutual fund trade group asked that the department “simultaneously announce” that it expects to finalize modifications to the rule and the relevant exemptions before the end of any delay period.
ICI also requested that Labor “declare now that these changes will not take effect until at least Jan. 1, 2020 — one year after they are finalized.”
The U.S. Chamber of Commerce also urged Labor in its comment letter to extend the transition period for at least 18 months, from Jan. 1, 2018 to June 30, 2019, or “a later date if needed.”