The U.S. Department of Labor is considering scrapping much of the fiduciary rule’s best-interests contract (BIC) and extending the Jan. 1, 2018 implementation date.
 
In a request for comment released yesterday, the DOL asked about the implications of streamlining or eliminating key provisions in the BIC. The contract, as proposed, would allow the use of brokerage products in IRAs.
 
Given the concerns about “negative implications for investor costs and access to advice” with the BIC, “the Department is interested in the possibility of regulatory changes that could alter or eliminate contractual and warranty requirements” contained in the BIC, the request for comment said. 
 
The DOL said it was “particularly interested” in how the development and implementation of “clean” mutual fund share classes and fee-based annuities could facilitate changes in the BIC exemption.
 
And, the DOL asked, if the contract and warranty requirements were ditched how would the rule’s conduct standards be enforced? (The current rule relies largely on the threat of class-action claims for enforcement—a major bone of contention for the industry.)
 
The request for comment also inquires about using a “model set of policies and procedures” suggested by some industry commenters as a way to streamline the BIC.
 
Similarly, the request asks if existing SEC and Finra rules could be incorporated into exemptions and, separately, if the SEC came up with its own fiduciary standard “could a streamlined exemption or other change be developed for advisers that comply with or are subject to those [SEC] standards?”
 
The request also asks about amending other exemptions for insurance and principal transactions.
 

First « 1 2 3 » Next