DOL Fiduciary Rule Release Set for December

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."

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