Wednesday, 29 November 2017 08:57

SEC Makes New Fiduciary Rule a Top Priority

(Washington)

Just a day after the 18-month delay of the fiduciary rule became official, SEC Chairman Jay Clayton made an important announcement on the issue. Speaking yesterday, Clayton made clear that the SEC was going to do something about the fiduciary rule. He said “It’s a priority for me to address this space in light of the action that the Department of Labor took to step into this space”, continuing “I think we belong in this space … And we should try and produce a rule, that, when investors see it, they are happy with”.


FINSUM: These are important comments as over the last month there seemed to have been a loss of momentum at the SEC over whether it was really going to do anything regarding the rule.

Published in Wealth Management

(Washington)

Well, it took a while to happen, but the DOL delay of the fiduciary rule is now official. The rule will not be implemented until at least July 2019, 18 months later than its initially scheduled full implementation date. Importantly for advisors, the BICE will not come into force during that period, taking away the major risk of client lawsuits. While critics of the rule are rejoicing, proponents say the delay is effectively a repeal. The DOL will use the delay to consider how to either amend or get rid of the rule.


FINSUM: This has been on the horizon for some time, but it is good to see that it has actually come true. Here comes another round of legal battles to try to stop the DOL from modifying the rule. We think the SEC might back away from making a new rule, and the whole fiduciary push could dissolve.

Published in Wealth Management

(Washington)

The DOL has been inundated with legal challenges from all sides over the last year. At first it was opponents of the rule challenging the DOL’s authority, while much more recently it has been those opposed to the DOL’s delay of the implementation date. Well, the Department looks set to win one of the old challenges to its authority. Thrivent Financial has been pushing a case which tries to eliminate the rule, but the DOL is now requesting the courts to throw out or suspend the case, as the changes it already has and will put in place mean Thrivent’s criticisms are already being rectified.


FINSUM: It has been very interesting to see how much the DOL’s position has changed on the fiduciary rule since Trump’s team started to take the helm. This seems very likely to be tossed out.

Published in Wealth Management
Wednesday, 04 October 2017 10:30

Fiduciary Rule Delay May Be Thrown Out

(Washington)

While somewhat irked that it still exists at all, the industry seems to be pleasantly surprised at the recent move by the DOL to delay the full implementation date of the fiduciary rule to July 2019. The long timeline, and corresponding comfort that gave, however, may be in doubt, as a new court challenge may result in the delay getting thrown out. A consortium of consumer advocate groups will launch a legal challenge which questions the DOL’s right to delay the rule. The case will challenge whether the “delay” is really a “stay” of the rule in disguise, and it will question the DOL’s authority to do it in the first place.


FINSUM: Anything opposing the fiduciary rule has never done very well in the courts, so it is probable that this challenge could have legs.

Published in Wealth Management

(Washington)

Advisors look out, another big batch of fiduciary rule changes looks to be on the way. The DOL has dropped some significant hints lately about some big changes on the cards. The first is that parts of the rule—which parts unknown—look likely to be delayed beyond the July 2019 implementation date. Secondly, there could be substantial changes to key elements of the rule, such as the BICE. The DOL has indicated that the BICE might be streamlined and replaced with a new version. Speaking on the BICE, the DOL says it “anticipates it will propose in the near future a new and more streamlined class exemption built in large part on recent innovations in the financial services industry”.


FINSUM: A further delay would be good in a way, but also annoying, as most would hope to have a new rule in place that concludes this unending saga. A better BICE would surely be welcomed.

Published in Wealth Management
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