Key provisions of the fiduciary rule will be extended for 18 months, the Department of Labor announced Monday.
Provisions covering exemptions for best-interest contracts and principal transactions will now go into effect July 1, 2019, along with some amendments to prohibited transaction exemptions.
DOL officials said in a release that the extension, first proposed in August, "gives the department the time necessary to consider public comments" following a request for information made in July and a Feb. 3 memorandum from President Donald Trump ordering The Department of Labor to analyze the rule's impact on access to retirement information and financial advice.
During the review period, DOL officials will consider "whether possible changes and alternatives to exemptions would be appropriate in light of the current comment record and potential input from, and action by the Securities and Exchange Commission, state insurance commissioners and other regulators," the statement said.
Dale Brown, president and CEO of the Financial Services Institute, said in a statement that the delay will allow a thorough review "to ensure investor choice and access to retirement savings advice." Mr. Brown said he was also encouraged that the DOL will coordinate with the SEC and other regulators "to simplify and streamline the rule."
Save Our Retirement, a coalition representing the Pension Rights Center, AFL-CIO, AFSCME, Americans for Financial Reform, Better Markets, Consumer Federation of America and the Economic Policy Institute, called the 18-month extension "effectively a repeal of the fiduciary rule's most critical provisions.
"By stripping out the rule's private enforcement mechanism, and by stating that the department won't enforce the rule, the DOL has rendered the rule toothless," the coalition said in a statement.
