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DOL Finalizes 18 Month Fiduciary Rules Extension

Posted by James M. Carlson
Nov 01 2017

On November 27, 2017 the U.S. Department of Labor announced an 18-month extension from January 1, 2018 to July 1, 2019, of the special transition period for the Fiduciary Rule’s Best Interest Contract Exemption, the Principal Transactions Exemption and of the applicability of certain amendments to the Prohibited Transaction Exemption 84-24.

On August 31, 2017 the EBSA/DOL had issued a proposed rule extending the transition period. Such rule is now final.

During this transition period the DOL will continue its review under the Presidential Memorandum of February 3, 2017, to review public comments, and decide whether to propose further changes. During this transition period, a fiduciary advisor who makes an investment recommendation has the duty to give advice that conforms to “impartial conduct standards.” There is no requirement that an IRA custodian or trustee must furnish an investment recommendation. An advisor must adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation and not make any misleading statements. The DOL has stated it is extending its temporary enforcement policy set forth in Field Assistance Bulletin 2017-02. The DOL will treat a fiduciary as being in compliance during this transition period as long as the fiduciary is working diligently and in good faith to comply with the transition rules. Unless modified, the exemptions’ remaining requirements will be come effective on July 1, 2019.

One of the main reasons to furnish 2017-2018 IRA Amendments is to discuss the Fiduciary rule and the transition rules.

Categories: Traditional IRAs