The Department
of Labor’s (DOL)’s Employee Benefit Security Administration (EBSA) has a number
of items on its regulatory agenda—for example, a
proposed rule on the definition of employer for multiple employer plans and an
interim final rule on the adoption of an amended and restated Voluntary
Fiduciary Correction Program (VFCP).
However, of
interest is the continuation of the final rule stage for Fiduciary Rule and
Prohibited Transaction Exemptions. The item notes that on April 8, 2016, the
DOL replaced the 1975 definition of fiduciary regulation with a new regulatory
definition. However, its new definition was vacated
by the 5th U.S. Circuit Court of Appeals.
The agency said
it is considering regulatory options in light of the 5th Circuit opinion, and
has on its timeline that a final rule will be issued
in September of 2019.
Meanwhile, a
look at the regulatory agenda for the Securities and Exchange
Commission (SEC) also shows a September 2019 date for a final action on its
Regulation Best Interest. In April, the Commissioners of the SEC voted by a
four-to-one majority to
propose a multi-pronged set of new impartial conduct standards and disclosure
requirements that will apply to both financial advisers and
broker/dealers serving “retail clients,” which in the eyes of the SEC includes
retirement plan participants.
The retirement
plan and adviser industry has long called for the DOL and SEC to work together
on a new fiduciary—or conflict-of-interest rule. Perhaps the corresponding
dates on their agendas signify this is happening.
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