Regulation and Compliance State Regulation

New DOL Fiduciary Rule Coming Next Fall

News October 18, 2018 at 01:28 PM
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DOL headquarters in Washington (Photo: Mike Scarcella/ALM)

The Labor Department plans to issue in September 2019 a revised final fiduciary rule package to replace the one vacated this spring by the U.S. Court of Appeals for the 5th Circuit, according to Labor's fall regulatory agenda.

That's likely one reason why the Securities and Exchange Commission's final advice standards package "is taking longer than many expected," Steve Saxon, principal at Groom Law Group, told ThinkAdvisor on Thursday.

The reg agenda states that Labor in 1975 issued a regulation defining who is "fiduciary" under section 3(21)(A)(ii) of the Employee Retirement Income Security Act (ERISA) as a result of giving investment advice for a fee or other compensation.

On April 8, 2016, Labor replaced the 1975 regulation with a new regulatory definition under its fiduciary rule, which was vacated "in toto in Chamber of Commerce v. Department of Labor."

"The department is considering regulatory options in light of the 5th Circuit opinion," the reg agenda states.

The SEC announced in its fall 2018 reg agenda that the agency's final advice standards package for advisors and brokers is coming next Spetember. "The SEC is taking its time to evaluate the comments it received on Regulation BI and Form CRS," Saxon said.

"This and the turnover in commissioners suggest that it is likely that we will see areas where the final rules are not identical to the proposed rules."

Added Saxon: "With both DOL and the SEC working on investor protection rules (and with both agencies targeting the same deadline), this hints that the two agencies may be working together to develop coordinated rules to protect American savers."

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