U.S. DOL Proposes Extension to Fiduciary Rule Applicability Date
The U.S. Department of Labor has announced a proposed extension of the applicability dates of the fiduciary rule and related exemptions, including the Best Interest Contract Exemption, from April 10 to June 9, 2017.
The announcement follows a presidential memorandum issued on Feb. 3, 2017, which directed the department to examine the fiduciary rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.
The final rule, titled Definition of the Term “Fiduciary;” Conflict of Interest Rule—Retirement Investment Advice, was published in the Federal Register on April 8, 2016, became effective on June 7, 2016, and has an applicability date of April 10, 2017.
The fiduciary rule would require financial advisors and money managers who sell financial products to investors for retirement accounts to act in the investors’ best interests—for example, by not recommending investments that pay the advisors high fees or commissions when a comparable, lower-cost product is available.
The proposed extension is intended to give the department time to collect and consider information related to the issues raised in the memorandum before the rule and exemptions become applicable.
The department will accept public comments on the proposed extension for 15 days following its publication, which was March 2, 2017.
Comments on issues raised in the presidential memorandum will be accepted for 45 days.
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