Published: Sat, March 04, 2017
Sci-tech | By Jackie Newman

Labor Dept. Seeks 60 Day Delay For New Fiduciary Rule

Labor Dept. Seeks 60 Day Delay For New Fiduciary Rule

As it considers the rule's fate, Mr. Trump's Labor Department is reopening the public-comment period, accepting feedback from consumers and players across the financial industry.

"This proposal to delay the fiduciary rule is clearly part of the administration's plan to undo it altogether", Lisa Donner, executive director of Americans for Financial Reform, said in a statement Wednesday.

"Delaying the rule is imperative to avoid further client confusion and market disruption, as firms approach the drop-dead date to notify tens of millions of customers of service changes to their accounts because of the rule, ultimately making retirement savings more hard for many investors".

"This proposed 60-day extension of the applicability date aims to guard against this risk", the Labor Department noted, going on to say that the extension makes it possible for them to take additional step - completing its examination, implementing any necessary additional extension (s) and proposing and implementing a revocation or revision of the rule - without the rule becoming applicable beforehand.

If the delay is approved, implementation would be pushed off until June 9.

"Additionally, the Department of Labor took six years, and employed numerous economists, in demonstrating the tremendous benefits of the rule to individual investors, plan sponsors, and to the USA economy in general".

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Without a delay, the fiduciary rule would take full effect April 10. The first Department of Labor frequently asked questions issued last October created even more questions and didn't address substantially more. By delaying the rule, the Labor Department is buying more time to comply with the president's request to look into whether the rule harms consumers by limiting their investment options.

After the rule was finalized previous year, it faced multiple court challenges from business groups seeking, unsuccessfully, to block the regulation.

The ruling was challenged in court by a group of organizations - including the U.S. Chamber of Commerce, Financial Services Institute, Financial Services Roundtable, Insured Retirement Institute and Securities Industry and Financial Markets Association (SIFMA) - but a Texas federal judge upheld the DOL rule earlier this month.

The Department of Labor is proposing to delay a rule that would require financial advisors to act in the best interest of investors.

Andrew Welsch is senior editor of On Wall Street.

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