The Department of Labor will publish a request for comments on how to delay final implementation of its fiduciary rule.
The request is planned for publication in the Federal Register Thursday.
As previously reported, the DOL is proposing to extend the second phase of the rule’s implementation until July 1, 2019. The delay would hold off on the use of the best-interest contract exemption, a principal trading exemption, and an exemption for insurance sales. Compliance with the impartial conduct standard, now in effect, would remain.
The DOL wants comment on the proposed 18-month extension, as well as other ways the rule might be delayed.
“More time is needed to carefully and thoughtfully review the substantial commentary received in response to the March 2, 2017, solicitation for comments and to honor the President's directive to take a hard look at any potential undue burden,” the DOL notice says.
The department said it is still looking at “potential alternative exemptions or conditions that could reduce costs and increase benefits,” including a more “streamlined class exemption built in large part on recent innovations in the financial services industry.”
The reference to recent innovations is likely referring to the development of “clean” mutual fund shares, which the DOL has specifically mentioned in the past as a possible solution to the conflicts embedded in traditional brokerage.
Additionally, the notice says the DOL wants more time to coordinate with the SEC in the development of conduct standards.
The DOL said its objective is to complete its review pursuant to President Trump’s request, analyze comments and finalize any changes to the rule before July 1, 2019, so that the industry has “sufficient time to design and implement an orderly transition process.”