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DOL to Introduce Fiduciary Rule in September 2019

The Department of Labor plans to introduce a revised final fiduciary rule in September 2019 after the previous version was vacated by the Fifth Circuit Court of Appeals earlier this year.

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The Department of Labor plans to introduce a revised final fiduciary rule in September 2019 after the previous version was vacated by the Fifth Circuit Court of Appeals earlier this year.

According to the Office of Information and Regulatory Affairs website, “the DOL is considering regulatory options in light of the Fifth Circuit opinion.” No further information was given on the content of the new rule or what it will entail.

Additionally, the SEC’s own broker advice rule, dubbed Regulation Best Interest, has the same September 2019 deadline, according to its regulatory agenda webpage, hinting that the two agencies may be working together to establish a coordinated regulation.

The fiduciary rule, which broadened the definition of investment advice fiduciary under the Employee Retirement Income Security Act of 1974, sought to eliminate conflicted retirement investment advice by placing certain restrictions on commission-based product recommendations.

After surviving multiple federal lawsuits, the fiduciary rule was vacated in its entirety by the Fifth Circuit Court of Appeals in a 2-1 split decision in March 2018, ruling that the DOL overstepped its authority in the investment advice arena.

Prior to being vacated by the court, the Trump Administration ordered a full review of the regulation and delayed its full implementation and enforcement until July 1, 2019.

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