The Department of Labor Officially Delays the New Fiduciary Rule from April 10, 2017, to June 9, 2017
On April 7, 2017, the Department of Labor officially delayed, until June 9, 2017, the applicability date of regulations that would change the definition of an “advice fiduciary” for plans covered by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended. The new regulations, as currently drafted, would impact the fund industry.
As discussed in our previous newsletter dated March 9, 2017 (please click here for our previous newsletter), the Department of Labor (“DOL”) had proposed delaying the application of the new regulations in connection with President Trump’s February 3, 2017, presidential memorandum. The DOL has now finalized the delay.
The delay is effective as of April 10, 2017. Barring any further delay, the new fiduciary regulations will generally become applicable on June 9, 2017. Certain parts of the regulations, not as relevant to the fund industry, are not scheduled to be effective until January 1, 2018.
It is not clear whether the regulations will actually become effective on June 9, 2017, as scheduled (although funds might need to prepare for that), whether they will be further delayed, or whether they will be revised or withdrawn. We will continue to monitor any developments regarding the new regulations and how and when the fund industry should apply the regulations.