Regulations

Read the Department of Labor’s final regulations here, and read the DOL’s request for information on possible changes ahead here

Update: The Department of Labor has proposed new regulations that would delay the full implementation of its new fiduciary rule. The rule went into effect on June 9, 2017, and includes a transition period to phase in some of the rule’s effects. Under the DOL’s proposal, this transition period – originally scheduled to end on January 1, 2018 – would instead end 18 months later, on July 1, 2019. The delay would affect the Best Interest Contract Exemption (“BIC Exemption”), the Principal Transactions Exemption and certain amendments to the Prohibited Transaction Exemption 84-24. (You can read the current versions of these rules here, here, and here.)

The BIC Exemption in particular has been controversial, and the delay in implementation will likely be a relief to advisers. Under the exemption, in order to receive variable compensation advisers and institutions must, among other things, implement and disclose to retirement investors specific procedures to mitigate possible conflicts of interest, make more complete disclosures of compensation and fee information, and develop and enter into contracts with IRA investors. If the proposed delay is made final, advisers, financial institutions, and plans have until July 2019 to put all this into place.

Keep in mind, however, that even if the delay is finalized, advisers must still operate under the DOL’s “Impartial Conduct Standards,” which require that advisers provide advice in the investor’s best interest, receive no more than “reasonable” compensation, and make no materially misleading statements. 

Read the DOL’s proposed regulations here. You may submit comments to the agency on the proposed regulations on or before September 15, 2017.

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Our Guidance

Investments Must Be Monitored Regularly. Can a statute of limitations protect you against claims you’ve breached your fiduciary duty by selecting a high cost or otherwise unsuitable investment years ago? The answer may be no. Read more here