by Steve Leroux, Compliance Analyst, Tax Advantaged Accounts, Wolters Kluwer
The April 10, 2017 compliance (applicability) date for the fiduciary and conflict of interest rules is looming (click here to read a previously posted article on this topic). The following is an update of the recent developments and current status relating to these rules.
As you are likely aware, at the beginning of February, the President signed an executive memorandum for the U.S. Department of Labor (DOL) to further analyze the fiduciary rule regulation, its exemptions, requirements, and its merits. In response, on March 2, 2017 the DOL published a proposal to extend the applicability date by 60 days (i.e., to June 9). The DOL requested comments from all interested parties by March 17 regarding the proposed extension. Moreover, the DOL requested comments within 45 days on issues raised in a presidential memorandum regarding whether the fiduciary rule may adversely affect the ability of Americans to gain access to retirement information and financial advice. Following the comment period, the DOL will review the comments and if warranted, delay the applicability date of the rule until June 9. Also being reviewed is the rescission and revision of the rule.
On March 10, the DOL published Field Assistance Bulletin (FAB) No. 2017-01. This FAB states that the DOL intends to issue a decision before April 10 about whether to extend the applicability date to June 9. However, the DOL is concerned with communication and the ability to timely provide disclosures and documents between parties including financial services firms, advisers, retirement investor clients, and individual retirement account (IRA) customers with the uncertainty during this condensed action period. Since the DOL wants the fiduciary duty rule and exemptions implemented in an efficient and effective manner, they are providing temporary enforcement relief.
Each financial services institution/organization must determine the effect of the provisions of the fiduciary and conflict of interest rules and exemptions with their own legal counsel and determine what, if any, documents and disclosures need be provided and/or policies that are to be implemented. This article has been an update of the latest information released by the DOL regarding the April 10 applicability date, its potential delay and commentary that may be provided, as well as the temporary enforcement relief.
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