All Eyes on Gensler to Define 'Best Interest' in SEC Rule

The SEC's best-interest rule "has introduced these fiduciary principles and yet we have this prohibited transaction on the DOL side that brings [together] the best interest, the impartial conduct standards and fiduciary responsibility," Aikin said. "So I think those things start to come into play."

Labor said in mid-June that it plans to issue a proposed rulemaking to update the definition of "fiduciary," according to its regulatory flexibility agenda filed with the Office of Management and Budget's Office of Information and Regulatory Affairs.

Phyllis Borzi, former head of Labor's Employee Benefits Securities Administration under the Obama administration, told ThinkAdvisor Monday in an email that Labor is likely "continuing to work on its proposal to revise the fiduciary definition (i.e., redoing the 5-part test [on who's a fiduciary]), but I suspect that right now, a higher priority is publishing further guidance on [its fiduciary] PTE 2020-02 and changes to the other exemptions."

According to Labor, its planned rulemaking would amend the regulatory definition of the term fiduciary "to more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code."