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Possible Delay for Investment Advice Fiduciary Regulations

Will the DOL Investment Advice Fiduciary Rules Face a Regulatory Freeze?

“I heard there was memorandum issued from the White House that will freeze the DOL’s new investment advice fiduciary rules.  Is that true?”

ERISA consultants at the Retirement Learning Center Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. We bring Case of the Week to you to highlight the most relevant topics affecting your business.

Highlights of Discussion

  • It is true that the Assistant to the President and Chief of Staff, Reince Priebus, issued a memorandum on January 20, 2017, regarding managing the Federal regulatory process at the outset of the new Administration, including the possibility of temporary postponements for new and pending regulations.  What is unclear, however, is whether the directive will affect the yet-to-apply fiduciary rules.
  • The memorandum is specific to regulations that have not yet been published in the Federal Register, or have been published, but have not yet gone into effect. Neither condition applies in this case. The investment advice fiduciary rules were published in the Federal Register on April 8, 2016, took effect June 7, 2016, and will become applicable on June 9, 2017. Therefore, a purely technical reading of the memorandum would lead one to conclude that the fiduciary rules would not be subject to a postponement—at least under this guidance.
  • However, it is possible other guidance from the Administration and/or the DOL may be forthcoming that could delay the applicability of the fiduciary regulations.  For example, the DOL could follow the established rulemaking process (A Guide to the Rulemaking Process) and issue a notice of interim final rule to delay the applicability date.  The interim final rule would take effect immediately upon publication, but would be subject to possible changes after a public comment period of 30-60 days.
  • Much more to come.

Conclusion

Time is running short before the DOL’s new investment advice fiduciary regulations become applicable (June 9, 2017). Any directives to effect a further delay would have to be issued in the very near future.

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