The U.S. Court of Appeals for the D.C. Circuit on Nov. 14 granted the National Association for Fixed Annuities’ motion to delay the oral arguments in NAFA’s appeal against the Labor Department’s fiduciary rule until a decision is made in the U.S. Court of Appeals for the Fifth Circuit.
That case was brought by the nine plaintiffs in a Texas court against Labor’s fiduciary rule, and includes the Securities Industry and Financial Markets Association, the Financial Services Institute and the U.S. Chamber of Commerce.
Oral arguments in NAFA’s appeal had been scheduled for Dec. 8.
(Related: DOL Ready to Enforce Fiduciary Rule: Acosta )
“Postponing the oral argument date provides some much-needed breathing room to let some of the current unresolved issues related to the fiduciary rule play out,” Chip Anderson, NAFA’s executive director, told ThinkAdvisor.
Anderson listed the publication of Labor’s 18-month delay rule, which is currently awaiting approval by the Office of Management and Budget; the anticipated decision out of the Fifth Circuit in the U.S. Chamber appellate case; as well as the “ongoing review” of the rule by Labor as ordered by President Donald Trump in his Feb. 3 memorandum.
Pam Heinrich, NAFA’s general counsel, added that “Court watchers had anticipated a decision already” in the 5th Circuit Court of Appeals case, given that the oral arguments in that case took place on July 31. “A decision in that circuit could very well effect the issues before the D.C. Circuit.”
In the NAFA case, Anderson said the court has ordered NAFA to file “a joint status report with the Department on the earlier of either 10 days after the decision in the Fifth Circuit or 90 days after the date of the court’s order, which would be Feb. 14, 2018.”
NAFA, Anderson added, “welcomes the opportunity to meet in joint conference with the Department as ordered by the court.”
Labor Secretary Alexander Acosta told House lawmakers on Nov. 15 that the best-interest standard under the fiduciary rule is “in effect,” and that as long as firms are “proceeding to implement” those standards, Labor is in a “compliance assistance” mode. However, if firms are committing “willful violations,” Labor will use its enforcement authority.
Labor filed with the Office of Management and Budget a proposed rule to officially delay by 18-months its fiduciary rule on Nov. 2. The proposed rule is titled 18-Month Extension of Transition Period and Delay of Applicability Dates; Best Interest Contract Exemption; Class Exemption for Principal Transactions; PTE 84-24.
Acosta told a federal court on Nov. 6 that he anticipated OMB approval within three weeks of the filing. Industry officials see a quicker two-week turnaround.
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