RIP DOL Rule?

Regulation Best Interest
April 26, 2018
Frozen Ponzi Assets
May 9, 2018

RIP DOL Rule?

Is the Department of Labor’s Fiduciary Rule dead? Maybe.

Diana Britton recently reported in WealthManagement that the US Department of Labor (DOL) missed the deadline to file for a rehearing of its case in support of the fiduciary rule in the Fifth Circuit Court of Appeals. The Appeals Court had previously ruled to vacate the fiduciary rule and in missing the deadline, the move to vacate will stand.

Hostile environment

Given the current administration’s hostility towards the rule, the question remains whether the DOL was looking for an opportunity to exit quickly.

In anticipation of the DOL’s failure to file, AARP and the State Attorneys General of California, Oregon and New York have filed separate motions to intervene in the case, seeking a rehearing in front of the full court.

Opposition filings also have been made. In these, the appellants in the case maintain the new motions are too little too late, noting that those in opposition had ample opportunity to intervene in the multiple cases challenging the so-called ‘Fiduciary Rule’ in district courts around the country, in appeals in two other circuits courts, and in this appeal, which was decided by this Court more than a month ago. Moreover, the opposition stated, that the opposition has been on notice for more than a year that the government, under presidential direction, was reevaluating its approach to the Fiduciary Rule.

Despite their differing interests, AARP and the states seek a rehearing “en banc,” before all the Court’s judges. The Consumer Federation of America plans to file an amicus brief in the court case in conjunction with other advocacy groups this week, highlighting reasons it believes the case was wrongly decided.

At this point, the Court could grant either or both motions to intervene, or it could deny either or both motions. If the Court denies both motions, it still could decide to rehear the case on its own.

The DOL has until June 13 to take the case to the Supreme Court but is not expected to do so. In the meantime, the Securities and Exchange Commission (SEC) also recently voted to propose a rule package that would set a best interest standard for broker/dealers. So, the “fight” is not over.

 So be prepared.

While the DOL’s Fiduciary Rule remains in play, The SEC’s best interest standards have firmer footing. Which means, broker-dealer and investment advisers still will be shouldering an extra layer of burden and responsibility – especially the compliance professionals…like you.  That’s where Patrina can help. For more than 25 years, we’ve built a business on helping organizations stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective and comprehensive, 8-module compliance solution, and compliant data capture, file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered!

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