IAA Alert: March 13, 2017 - DOL Issues Transition Relief on Fiduciary Rule


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DOL Issues Transition Relief on Fiduciary Rule

March 13, 2017: On Friday, the Department of Labor issued a Field Assistance Bulletin (FAB 2017-01) addressing notice and compliance issues under the DOL Fiduciary Rule, given the uncertainty surrounding the proposed delay of the rule’s April 10 applicability date. The FAB will permit advisers to retirement clients to avoid sending out notices and client communications prior to April 10, 2017. The FAB is available at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2017-01.

As previously reported, the DOL had issued a proposal on March 2 to extend the rule’s applicability date for 60 days. The DOL noted that the delay would allow it to review the rule – as required by the Trump Administration’s February 3 memo reopening the rule – although the notice suggests that a further delay might be necessary. In its FAB, the DOL stated it intends to issue a decision on the March 2 proposal prior to April 10, but noted concerns raised about the uncertainty created during this period, whether there may be a gap period if a delay is published after April 10, and whether the DOL may decide not to issue a delay.

Accordingly, the DOL stated it would not take enforcement action if an adviser does not satisfy conditions of the rule during a “gap” period. Moreover, if the DOL decides not to delay the applicability date, it will not initiate an enforcement action for failure to satisfy the rule’s conditions as long as the adviser complies within a reasonable period.

IAA members with questions should contact the IAA legal staff at iaaservices@investmentadviser.org or at (202) 293-4222.

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