On June 1, the Labor Department sent its fiduciary rule to align with the Securities and Exchange Commission’s Regulation Best Interest to the Office of Management and Budget for review. In its coverage of the new labor rule, ThinkAdvisor turned to partners Brad Campbell and Fred Reish for industry insight on the proposal.
In the article “DOL Fiduciary Rule Reboot Lands at OMB,” the publication noted that oral arguments were heard June 2 by the U.S. Court of Appeals for the 2nd Circuit in the case brought against Reg BI by XY Planning Network, seven states and the District of Columbia. Preston Rutledge, assistant secretary of labor for the Employee Benefits Security Administration (EBSA), who was charged with spearheading a new fiduciary rule to align with Reg BI, left his post at the end of May.
Reish told ThinkAdvisor that word on the street is that the labor rule “is primarily a prohibited transaction exemption intended to replace the Best Interest Contract Exemption, which was vacated by the 5th Circuit Court of Appeals, and the temporary non-enforcement policy that provided relief in light of the BICE being vacated.”
Reish has also heard that “the fiduciary regulation may be modified to more clearly apply to advisors who are not covered by the SEC’s Regulation Best Interest or the RIA fiduciary standard. It’s not clear how that will be done or what other changes will be made to the ERISA fiduciary definition.”
Campbell told ThinkAdvisor in a previous interview that Rutledge’s departure won’t result “in any additional delay to current outstanding projects at EBSA, given the strength of his deputy, Jeanne Wilson, and the importance of the agency’s mission to current events.”