Labor Department headquarters in Washington. (Photo: Mike Scarcella/ALM) Labor Department headquarters in Washington. (Photo: Mike Scarcella/ALM)

The Labor Department will issue a notice of proposed rulemaking regarding a new fiduciary rule in December, according to the department’s spring regulatory flexibility agenda.

Dates set out in reg flex agendas are traditionally placeholders, and may not reflect the actual date that a fiduciary plan would be released.

An earlier unveiling of a Labor fiduciary plan could be likely given that the Securities and Exchange Commission’s advice standards package, which includes Regulation Best Interest, is expected to come up for a vote before the commission the week after Memorial Day or the week of June 3.

Labor Secretary Alexander Acosta told lawmakers on May 1 that Labor is collaborating with the SEC as it works on its advice-standards package, and that “based on our collaborative work, we will be issuing new rules in this area.”

Fred Reish, a partner and head of Drinker Biddle’s ERISA Financial Services Group, told ThinkAdvisor in a Thursday email that the notice of proposed rulemaking as stated in the reg flex agenda “means that the DOL anticipates issuing proposals,” with a comment period to take place “before Labor goes to work on the final guidance.”

The SEC, Reish added, “has shared a version of the final [advice-standard] rules with the DOL” and Labor “is working on a proposed regulation defining fiduciary advice and a proposed prohibited transaction exemption.”

The proposed fiduciary rule “will be based on the ‘old’ regulation that has been in effect since the ‘70s, but will be updated for changes that have occurred since then, with the biggest change being the creation and growth of 401(k) plans,” Reish said.

The prohibited transaction exemption will, in effect, replace the vacated Best Interest Contract Exemption from the previous Labor fiduciary rule, which was vacated last year, and the current Temporary Nonenforcement Policy, Reish explained.

“Both [DOL] proposals will borrow from the SEC guidance with the goal of harmonizing the guidance by the SEC and the DOL to the extent possible,” as the SEC and Labor “are governed by statutes and interpretations that are, in some regards, quite different.”

— Related on ThinkAdvisor: