On
February 3, 2017, President Trump signed a presidential memorandum directing
the U.S. Department of Labor (the “DOL”) to examine its new fiduciary rule.
(For details on the fiduciary rule, see our prior Alert,
and, for details on the related DOL-issued FAQs, see our prior Alert on the First FAQ and Alert on the Second FAQ.) Contrary to initial reports based on a leaked draft memorandum, the
final memorandum does not delay the applicability date of the rule (April 10,
2017). However, following the signing of the memorandum, the acting U.S.
Secretary of Labor issued a statement that the DOL will consider its legal
options for delay. Ropes & Gray is continuing to monitor developments on
the rule and its status.
The text of the presidential memorandum
requires the DOL to examine the rule to determine whether it may adversely
affect access to retirement information and financial advice, and, as part of
that examination, to prepare an updated economic and legal analysis on the
rule. This analysis is required to consider, among other things, (i) the
potential harm to investors due to a reduction in access to certain products
and information, (ii) whether the retirement services industry’s actions in
preparation for the rule may adversely affect retirement investors or retirees
and (iii) whether the rule is likely to increase litigation and the price to
gain access to retirement services. If the DOL determines that the rule would
result in any of these enumerated harms or otherwise be inconsistent with the
goal of permitting retirement investors to make their own financial decisions
to save for retirement and build the individual wealth necessary to afford
typical lifetime expenses, then it is required to publish for notice and
comment a proposed rule rescinding or revising the fiduciary rule.
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