On June 29, 2017, the Department of Labor (“DOL”) requested another round of public comment on its fiduciary rule—this time in the form of a Request (“RFI”) for Information.  The RFI seeks input on (a) whether to extend the January 1, 2018, applicability date for parts of the rule that are not yet in effect, and (b) changes to make the rule more workable.  The RFI expresses an openness to modifying existing exemptions and adopting new ones.

The RFI has two deadlines for submitting comments: 15 days for comments on whether to extend the January 1, 2018, applicability date, and 30 days for other comments. Days will be counted from when the RFI is published in the Federal Register, which we expect will occur during the week of July 3rd.

The RFI has 18 specific questions, all of which are aimed at collecting more information for the DOL’s review of whether and how the fiduciary rule affects retirement investors. The tone of the questions suggests that DOL is committed to the basic principle of protecting consumers from conflicts of interest, but open to constructive feedback to make the rule and its exemptions more workable.

The following are sample themes raised in the RFI:

  • DOL wants to know more about innovations in the industry to protect against conflicts of interest, such as technology-driven advice, “clean shares” in the mutual fund industry, and fee-based annuities.
  • There are questions about the best interest contract exemption, including whether the contract should be “eliminated or substantially altered” for IRAs. DOL is interested in cost-benefit analysis and proposals for alternative approaches.
  • DOL suggests the possibility of a “streamlined exemption” that is based on following model policies and procedures.
  • There are questions related to product sales and advice on contributions, including the possibility of exempting recommendations to make or increase contributions and the possibility of expanding the “seller’s” exception. (The existing seller’s exception is available only if the customer is represented by a sophisticated independent fiduciary.)
  • DOL is open to considering special rules for cash sweep services, bank deposit products, and health savings accounts.
  • The RFI asks for input on coordination with the SEC, self-regulatory bodies, and other regulators.