DOL’s New Fiduciary Rule & the SEC’s Best Interests Rule – Hopefully they will Intersect

Last March, almost 10 years after the “new” Fiduciary and Best Interest Contract (BIC) rules were first proposed, the Fifth Circuit of the U.S. Court of Appeals vacated the rules in their entirety. The Department of Labor (DOL) elected not to appeal to the Supreme Court.

Quickly following this, and to no one’s surprise, the Securities and Exchange Commission (SEC) issued a package of its own proposed advice standards. This includes a “Regulation of Best Interest.” Comments on these proposed standards were due to the SEC by Aug. 7th.

In October, the DOL released its regulatory agenda for the coming year. Notably, this agenda includes plans to issue a revised Fiduciary Rule in Sept. of 2019.

This announcement does not include any details regarding the upcoming re-worked rule. However, it seems likely this will be a significantly watered down version of the original rule.

The DOL’s timeframe is in line with the agenda the SEC released, which puts its regulation on track to be finalized by September of next year as well.

We hope the DOL and the SEC will collaborate and coordinate their efforts as they have not done to date. This will avoid these two agencies issuing conflicting and/or redundant standards.