DOL Delays the Applicability Dates of the Fiduciary Rule
The Department of Labor (“DOL”) has delayed the applicability dates of the “Fiduciary Rule,” which treats persons who provide investment advice or recommendations for a fee or other compensation with respect to plan assets as fiduciaries in a wider array of advice relationships than was true in the prior regulatory definition. Citing a Presidential memorandum directing the DOL to analyze the impact of the Fiduciary Rule on investors and the need for a smooth transition to the new standards, the DOL announced the following applicability dates:
- June 9, 2017 – The new definition of a “fiduciary” applies, as well as the related prohibited transaction exemptions (“PTEs”); however, through December 31, 2017, fiduciaries relying on the PTEs for covered transactions are only required to adhere to the Impartial Conduct Standards (the “ICSs”) conditions of these exemptions. The ICSs generally require fiduciaries to make recommendations that are in the customer’s best interest, avoid misleading statements, and charge no more than reasonable compensation for services.
- January 1, 2018 – Fiduciaries must adhere to the ICSs as well as the remaining conditions that apply to the PTEs, which require advisors to make specific written disclosures and representations to investors regarding the advisors’ fiduciary status. The DOL retains the ability to further delay the January 1, 2018 applicability date or to grant additional interim relief.