The proposed delay of the fiduciary rule might be too little, too late, says at least one industry player.
The U.S. Department of Labor announced on Wednesday that it will attempt to impose a 60-day delay on the enforcement of its fiduciary rule for advisors aiding retirement plans, originally set for April 10. But the delay may not allow regulators enough time to further postpone the rule or repeal it before it becomes applicable, says Skip Schweiss, TD Ameritrade’s managing director for retirement plan services and advisor advocacy.
“A lot has to happen before we get to a 60-day delay, but I’m already seeing headlines that there is a 60-day delay,” Schweiss says. “That’s not the case; this is a proposed rule to delay a rule already in force.”
The DOL rule is neither an act of Congress, nor is it an executive order, but instead it is an interpretation of established law. Any attempt to repeal or postpone the rule must take the form of a new rule, requiring processes of review and comment before taking effect.
According to Schweiss, the next step will be for the proposed delay to be published within the federal register, at which time a comment period would begin.
In its Wednesday proposal, the DOL floated the idea of an expedited 15-day review of the delay in hopes of passing the proposal before April 10.
“That pushed us out to March 16, 17 or 18 at the earliest,” Schweiss says. “After that, the DOL has to digest all of the comments it receives, then submit a final proposal to the OMB.”
On Tuesday, the Office of Management and Budget responded to the DOL’s request to review a potential six-month delay in the rule’s applicability by deeming the proposal’s impact as “economically significant,” requiring the DOL to submit an economic impact analysis of any delay, and also a lengthy process of review and comment before the measure to delay is finalized.
“This delay is a revision itself, but a smaller revision,” says Schweiss. “It is a bigger revision to try to kill the rule, make major changes or impose a longer delay.”
The OMB also deemed the delay of the fiduciary rule’s applicability date a “major” regulation requiring a 60-day window between the finalization of any measure to delay or postpone the rule and its applicability.