The Labor Department’s fiduciary rule is still effective until the U.S. Court of Appeals for the 5th Circuit issues its mandate to vacate the rule, David Kaleda, principal at Groom Law Group, said Thursday.
“Yes, the [Labor Department’s] rule is still in effect until the mandate is issued,” Kaleda said at the Practising Law Institute’s Fiduciary Investment Advice 2018 event in New York.
“Conceptually, you should be doing what you have been doing” to comply with the Labor Department fiduciary rule that became effective in 2016, Kaleda said. “Why hasn’t the [5th Circuit] mandate been issued? Fair question.”
Inquiries made by Groom to the court, he said, have provided little explanation “other than they haven’t gotten to it yet,” adding that Groom has “no reason to believe” that the court will fail to issue the mandate. “Sooner or later what’s going to happen is this [Labor fiduciary] rule is going away.”
The 5th Circuit had yet to issue its mandate to vacate Labor’s rule, which was supposed to occur on May 7, by press time Thursday afternoon.
Two former Securities and Exchange Commission officials also explained during the PLI event why they believe the SEC did not pursue a “uniform” fiduciary standard in the agency’s newly released standard of conduct proposal.
Andrew “Buddy” Donohue, a lawyer at Shearman & Sterling in New York — who was chief of staff to former SEC Chairwoman Mary Jo White — explained that the challenge in pursuing a uniform duty, which was championed by White, is to “keep it uniform.”