As we have previously reported (see our Client Alert), DOL regulations regarding who is considered a fiduciary under ERISA (the "Fiduciary Rule") went into effect on June 9, though full implementation of the Fiduciary Rule was scheduled for January 1, 2018. If the delay is approved by the OMB, the effectiveness of the provisions that are scheduled for implementation on January 1, 2018, would instead be delayed until July 1, 2019.
The primary impact of the proposal would be to delay until July 1, 2019, requirements that advisors provide IRA investors with written representations and warranties concerning the advisor's fiduciary role and meet other requirements of the "best interest contract (BIC) exemption" and "principal transaction exemption." It appears that the "impartial conduct standards" of these exemptions (which became effective June 9) would remain in effect. Those standards require advisors to (i) make recommendations that are in a customer's best interest, (ii) adhere to duties of prudence and loyalty, (iii) receive no more than reasonable compensation, and (iv) not make materially misleading statements.
The full text of the notice and proposed amendments have not yet been published, so the complete impact of the proposed delay is not yet clear. We will continue to keep a close watch on the developments and issue further alerts on this subject as circumstances warrant.