The Department of Labor announced on Monday that certain fiduciary rule provisions will be extended for 18 months until July 1, 2019. The provisions were slated to take effect on January 1, 2018.
The delay includes the special transition period for the best interest contract exemption (PTE 2016-01); the class exemption for principal transactions (PTE 2016-02); and certain amendments to the prohibited transaction exemption involving insurance agents and brokers (PTE 84-24).
The fiduciary rule seeks to eliminate conflicted retirement advice and is currently under review as ordered by President Trump earlier this year. Trump directed the DOL to examine the rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.
The DOL said that the extension gives the necessary time “to consider public comments submitted pursuant to the July request for information, and the criteria set forth in the presidential memorandum of Feb. 3, 2017, including whether possible changes and alternatives to exemptions would be appropriate in light of the current comment record and potential input from, and action by the Securities and Exchange Commission, state insurance commissioners and other regulators.”
The agency intends to complete its review under the presidential memorandum and decide whether to propose further changes.
“These fiduciary standards require advisers to adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation for their services, and refrain from making misleading statements,” the DOL said in a statement.
The DOL also extended the temporary enforcement policy to cover the 18-month extension period. From June 9, 2017 to July 1, 2019, the DOL will not pursue claims against fiduciaries working “diligently and in good faith” to comply with the fiduciary rule and the principal transactions exemptions.