OMB Approves 18-Month Fiduciary Rule Delay, With ‘Change’

And firms are waiting eagerly for that approval.

"People need confirmation that the delay will go through so they can hold off on the buildout of their systems and software and the like, which is very expensive," Saxon said. "They don't want to do that if there are going to be changes to the rule … recordkeepers and other retirement service providers are desperate for confirming of the delay."

Labor Secretary Alexander Acosta told a Minnesota court on Aug. 9 that Labor had filed with OMB to delay the applicability date on three of the rule's exemptions from Jan. 1, 2018 to July 1, 2019.

Labor proposed amendments to three exemptions, which were all approved by OMB:

• The best-interest contract exemption, which opponents of the rule argued is the contract that would spark a slew of class-action lawsuits;
• Class exemption for principal transactions in certain assets between investment advice fiduciaries and employee benefit plans and IRAs; and
• Prohibited Transaction Exemption 84-24 for certain transactions involving insurance agents and brokers, pension consultants, insurance companies, and investment company principal underwriters.

"DOL is cognizant that the industry needs certainty on whether the deferred requirements will commence on Jan. 1," said George Michael Gerstein, a lawyer with Stradley Ronon, a law firm in Washington that helps financial firms deal with regulators, in an email. "At this point, clarity is paramount."

— Check out Another Sign DOL Rule Will Exclude Class-Action Provision on ThinkAdvisor.