The Department of Labor announced on Monday night that the fiduciary rule will become applicable on June 9th while the agency seeks additional public comment on the controversial regulation that redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974.
“We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” said Labor Secretary Alexander Acosta in an op-ed published in the Wall Street Journal. “Respect for the rule of law leads us to the conclusion that this date cannot be postponed. Trust in Americans’ ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule.”
Acosta also noted that he hopes that the Securities and Exchange Commission will participate in the rule making process in the future – as it has “critical expertise” in that area.
According to a field assistance bulletin released by the DOL, there will be a phased implementation period from June 9, 2017 until January 1, 2018, where the fiduciary rule and impartial conduct standards will become applicable.
Certain provisions, such as the prohibited transaction exemption 84–24, will be delayed until January 1, 2018 while the DOL conducts its ongoing examination of the rule as directed by President Donald Trump in his February 3rd memo.
During the phased implementation period, the DOL said that “it will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary rule and exemptions.”
The DOL also published a list of frequently asked questions with additional information on the transition period from June 9, 2017 to January 1, 2018.