As you may remember, major components of the Department of Labor (DOL) fiduciary rule have been applicable to retirement advice since June 9, 2017. However, on November 2, 2017, the DOL sent a final rule that would extend the transition period of its fiduciary rule by 18 months to the Office of Management and Budget (OMB) for review. If approved by the OMB, the rule would extend the January 1 applicability date of the fiduciary rule to July 1, 2019.
The OMB has up to 90 days to complete its review. Upon review, if approved, the rule will be sent back to the DOL to be published in the Federal Register. The delay would affect the compliance deadlines for certain prohibited transaction exemptions under the rule. The three exemptions that would be affected by this delay include the Impartial Conduct Standards, which require certain standards when providing conflicted investment advice; various disclosure requirements for the Best Interest Contract Exemption (BICE); the class exemption for principal transactions and inclusion of variable and indexed annuities under BICE.
If you have any questions regarding the fiduciary rule or your obligation as fiduciaries, please do not hesitate to contact us. At Innovative, we are committed to ensuring that our clients are kept abreast of regulatory updates, as they become available.
