The Labor Department’s fiduciary prohibited transaction exemption to align with the Securities and Exchange Commission’s Regulation Best Interest has landed at the Office of Management and Budget for review.
Labor sent its fiduciary PTE, Improving Investment Advice for Workers & Retirees Exemption, to OMB on Tuesday.
Steve Saxon, partner at Groom Law Group in Washington, told ThinkAdvisor in a Wednesday morning interview that he expects OMB’s review of the fiduciary PTE to be “very short,” and completed within a matter of days. It could be “less than a week,” Saxon said.
Because the rule is designated as “economically significant, that could impact the overall [review] process” at OMB, Saxon added.
If the Biden administration “wants to do something with the exemption, he may just tweak it some, [and] Biden can revoke” it, Saxon said.
Brad Campbell, partner at Faegre Drinker in Washington, told ThinkAdvisor that the timing of the final rule landing at OMB “presents challenges for the Department.”
However, Campbell said, Labor’s proposal “was identified as a significant rule, which normally requires 60 days before it can become effective. That would put the effective date after Inauguration Day, providing opportunities for the incoming administration to try to delay or rescind the exemption.”
Either way, explained the former head of Labor’s Employee Benefits Security Administration, “we will all be waiting eagerly to see the final text once released, and given OMB’s recent history of moving DOL regulations very rapidly, that may happen within the next two weeks.”