Los Angeles partner Fred Reish was quoted in two ThinkAdvisor articles discussing the DOL’s proposal to extend the applicability date of its fiduciary rule from April 10 to June 9. The proposal includes a 15-day comment period and welcomes comments on the proposal to extend the applicability date of the final rule, as well as the prohibited transaction examples and Best Interest Contract Exemption (BICE).
In “DOL Proposes 60-Day Fiduciary Rule Delay,” Fred notes that many expected a 6-month delay. The DOL will take comments for 15 days on whether the proposed rule should be finalized and will take comments for 45 days on a list of questions about the impact of the fiduciary regulation and exemptions.
After the comments are received and reviewed, the DOL will issue a final rule extending the applicability date. In an article titled, ”Industry Weighs In on DOL Plan to Delay Fiduciary Rule,” Fred stated the DOL’s 60-day delay plan is setting the stage to make the final rule effective immediately.
“…If the DOL, after receiving comments, writes a final regulation delaying the applicability date — which is probable — that will be sent to the Office of Management and Budget for approval, it will probably be reviewed and released by the OMB in the two weeks preceding the April 10 applicability date,” Fred said.
Ordinarily final regulations have a deferred effective date, but if deferred—the April 10 date wouldn’t be effectively delayed until after the April 10 compliance date, creating further difficulty.
“As a result, I believe the DOL will assert that the final rule should be effective immediately and before April 10, and the statements in the preamble are to set the stage for that,” Fred said.