DOL Publishes Delay Proposal – ADISA Call to Action

Mar 03, 2017

Yesterday, the Department of Labor published in the Federal Register its proposed rule to extend the applicability date of the DOL’s fiduciary rule, which is currently scheduled for implementation on April 10. The DOL is proposing to delay the applicability date of the final fiduciary rule and prohibited transaction exemptions for 60 days. Currently, there are approximately 40 days until the fiduciary rule’s April 10 applicability date.

Within its proposal for a delay, the DOL states that it believes it may take more time than that to complete the examination mandated by President Trump’s Feb. 3 memorandum. Stating its case, the DOL notes that without an extension, if the presidentially required examination prompts a proposal to rescind or revise the rule, all affected might face additional changes and confusion in the regulatory environment. This would cause an unnecessary disruption to the marketplace, producing frictional costs that are not offset by commensurate benefits.

“Practically speaking, what this means for ADISA members and others in the finance sector is that they must continue for the time being to prepare for the April 10 implementation,” said Thomas Rosenfield of Hillstaffer, ADISA’s government relations resource. “There will likely not be an answer on the delay until the first week of April, given that it'll take DOL at least a week or more to process the incoming comments,” Rosenfield continued.

The DOL is now examining the fiduciary duty rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of the examination, the Labor Department will prepare an updated economic and legal analysis concerning the likely impacts of the rule.

The DOL has invited comments on the proposed 60-day delay of the applicability date, questions raised in the presidential memorandum, and generally on questions of law and policy concerning the final rule and prohibited transaction exemptions.

“It’s a shame, but perhaps unavoidable that there has been so much confusion on the issue,” said ADISA Executive Director/CEO John Harrison. “Ultimately, the next couple of weeks will determine whether or not there will be a delay, and then – if there is – the debate and further analysis of the effect of the Rule will continue.”

Catherine Bowman, chair of ADISA’s Legislative and Regulatory Committee, notes that ADISA will comment directly to the DOL in response to questions included in its proposed rule. “ADISA, along with other associations in the financial services industry, will support a delay in order that this important issue may be fully vetted and its implications understood,” said Ms. Bowman.

ADISA President John Grady (DLA Piper) further emphasized the need to interpret the situation to assist finance industry professionals. “We will work hard to fully understand this unfolding situation and promise to give ADISA members as much clarity and help as possible,” he said. 

ADISA has now posted a Call to Action sample letter for members to tailor and send with a click to the DOL to support the delay of implementing the Fiduciary Rule. Click here to view the Call to Action.

Members of the industry can get an in-depth update on the rule’s status and receive a full legislative and regulatory update at ADISA’s 2017 Spring Conference, April 3-5, 2017 in New Orleans. Click here to register.

Read the DOL’s proposed rule here.