The big concern for advisors pre-BICE exemptions was DOL itself, which assures now that it'll turn a blind eye in 2017 -- even to issuing disclosures

March 13, 2017 — 7:50 PM UTC by Brooke Southall

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Brooke's Note: If all this DOL 'guidance' is leaving you feeling adrift, join the club. For those unprepared to meet the new rule's requirements, here is solace.

Not that there was much to worry about to begin with -- the aspects of the Department of Labor's fiduciary rule -- slated go into effect next month -- that would give plaintiffs lawyers leverage weren't scheduled to go into  effect until 2018.

But the guidance issued by the DOL on Friday says that the advice business gets a notable breather, according to Jason Roberts, CEO of the Pension Resource Institute LLC.

"It's significant given that the only enforcement mechanism that was supposed to be effective prior to Jan. 1, 2018 is DOL enforcement. Essentially, so long as the DOL isn't enforcing, there is no reason to comply." See: DOL rule-killers now on defense as legal failures add up, reinforcements don't make it to Washington and the clock ticks down.

Or, in the DOL's original, more multisyllabic, language:

In the event the Department issues a final rule after April 10 implementing a delay in the applicability date of the fiduciary duty rule and related [prohibited transaction exemptions], the Department will not initiate an enforcement action because an adviser or financial institution did not satisfy conditions of the rule or the PTEs during the “gap” period in which the rule becomes applicable before a delay is implemented, including a failure to provide retirement investors with disclosures or other documents intended to comply with provisions of the rule or the related [exemptions].

Here's what happens if the fiduciary rule stays on its original schedule:

In the event the Department decides not to issue a delay in the fiduciary duty rule and related PTEs, the Department will not initiate an enforcement action because an adviser or financial institution, as of the April 10 applicability date of the rule, failed to satisfy conditions of the rule or the PTEs provided that the adviser or financial institution satisfies the applicable conditions of the rule or PTEs, including sending out required disclosures or other documents to retirement investors, within a reasonable period after the publication of a decision not to delay the April 10 applicability date. See: A veteran of securities law killed his weekend reading all 1,000 pages of the DOL rule -- and has a takeaway to share.

For Wall Street firms for whom this relief is not enough, the DOL offered a final sentence of reassurance: "To the extent that circumstances surrounding the decision on the proposed delay of the April 10 applicability date give rise to the need for other temporary relief, including prohibited transaction relief, EBSA will consider taking such additional steps as necessary." See: The DOL rule is DOA -- and that's just the beginning, says RIA champion Brian Hamburger, law school chum of odds-on chief of staff Reince Priebus

Still, firms that will fall under the DOL rule can't consider this guidance a final at-ease, Roberts says.

"As soon as the final rule is published, the clock will begin to run again on what used to be the April compliance deadlines -- either by delaying the rule by 60 days as proposed or by saying there is no need for a delay, which would then require complaince within a reasonable time, according to FAB."


Mentioned in this article:

Pension Resource Institute, LLC
Compliance Expert
Top Executive: Jason C. Roberts

Retirement Law Group, PC
Regulatory Attorney
Top Executive: Jason C. Roberts



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Stephen Winks said:

March 13, 2017 — 10:23 PM UTC

Wall Street influence is undeniable, the question is , is it for the good or bad? So far there is little evidence for the good. SCW

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