What just happened?
On February 9 the DOL filed a request with the Office of Management and Budget (OMB) for a delay in the April 10 Applicability Date for the Fiduciary Rule. The text of the request is expected to appear in the Federal Register shortly after the OMB review is completed. Published sources are indicating that the proposal is for a 180-day delay, which would be consistent with the preliminary drafts of President Trump’s Memorandum of February 3.
In addition, Reuters is reporting that the DOL will propose another comment period on the Fiduciary Rule. Details are not available at the time of this writing.
What happens next?
The OMB will review the notice. According to published sources, the OMB is expected to approve the notice within the next two weeks. Following approval of the notice, the proposal will be published in the Federal Register, after which a comment period will follow. Attorneys interviewed by InsuranceNewsNet.com anticipate that the comment period would likely be approximately two weeks, after which the DOL could act to implement the delay. This would mean that if the DOL does issue a delay under this rule, it would not take effect until mid-March.
What should firms do now?
Until it is certain that a delay will be issued, NRS strongly recommends that firms should continue to develop plans for meeting the applicability date. Even if the dates are delayed, it is entirely possible that a modified version of the fiduciary rule will go into effect. Moreover, some of the requirements of the fiduciary rule are likely to be seen as best practices by FINRA and the SEC, and may find their way into the securities laws.
That said, firms should be careful about implementing the changes required by the fiduciary rule over the next few weeks, as delays or changes may happen rapidly.
NRS suggests that a good rule of thumb is to develop plans for meeting the requirements of the applicability date that can be put into place within 30 days. If the applicability date has not been delayed by March 10, and there is no clear indication that the applicability date will be delayed, then firms should begin implementing their plans. If the applicability date is delayed, firms that have made plans for the new rule will be able to implement them quickly and efficiently (and make any needed modifications) should a new applicability date be announced.