DOL, SEC Both Have Fiduciary Conduct Standards Slated for Next Year

The Department of Labor’s (DOL)’s Employee Benefit Security Administration (EBSA) has a number of items on its regulatory agenda—for example, a proposed rule on the definition of employer for multiple employer plans and an interim final rule on the adoption of an amended and restated Voluntary Fiduciary Correction Program (VFCP).

However, of interest is the continuation of the final rule stage for Fiduciary Rule and Prohibited Transaction Exemptions. The item notes that on April 8, 2016, the DOL replaced the 1975 definition of fiduciary regulation with a new regulatory definition.  However, its new definition was vacated by the 5th U.S. Circuit Court of Appeals. 

The agency said it is considering regulatory options in light of the 5th Circuit opinion, and has on its timeline that a final rule will be issued in September of 2019.

Meanwhile, a look at the regulatory agenda for the Securities and Exchange Commission (SEC) also shows a September 2019 date for a final action on its Regulation Best Interest. In April, the Commissioners of the SEC voted by a four-to-one majority to propose a multi-pronged set of new impartial conduct standards and disclosure requirements that will apply to both financial advisers and broker/dealers serving “retail clients,” which in the eyes of the SEC includes retirement plan participants.

The retirement plan and adviser industry has long called for the DOL and SEC to work together on a new fiduciary—or conflict-of-interest rule. Perhaps the corresponding dates on their agendas signify this is happening.