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May 22, 2020

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DOL Issues 60-Day Delay on Fiduciary Advice Rule and Exemptions

On April 4, the US Department of Labor (DOL) pushed the applicability date of what is commonly referred to as the "fiduciary rule" or the "fiduciary advice rule" (the "Rule") from April 10 to June 9, 2017. The full text of the extension is available via the Federal Register.

The DOL also delayed by 60 days the applicability date of certain prohibited transaction class exemptions, including the "best interest contract exemption."

Prior to the April 4 extension, the DOL published a request for comment on March 2 on the proposed 60-day extension. This request from the DOL was in response to the president's February 3 memorandum (the "Presidential Memorandum") directing the DOL to make certain findings with respect to the Rule, detailed in our "DOL Proposes to Delay Fiduciary Advice Rule, Requests Comments on Delay and on Costs, Benefits of the Rule" advisory.

In response to the DOL's March 2 request for comments, the DOL stated that it received approximately 193,000 comments expressing a wide range of views on whether to grant such a delay and the duration of any delay. After reviewing the comments, the DOL concluded that some delay in the full implementation of the Rule and the class exemptions is necessary to "conduct a careful and thoughtful process pursuant to the Presidential Memorandum." Although the DOL acknowledged that the 60-day period may not provide enough time to complete the analysis requested in the Presidential Memorandum, the DOL also highlighted its concern that a broad delay would be inappropriate and disregard the DOL's "previous findings of ongoing injury to retirement investors."

While the 60-day extension is welcome, it still creates a great deal of uncertainty surrounding compliance, particularly with Alexander Acosta's confirmation as Secretary of Labor still pending.

©2020 Katten Muchin Rosenman LLP


About this Author

 Gary W. Howell, Katten Muchin Law Firm, Financial Institutions Lawyer

Gary W. Howell focuses his practice in Employee Retirement Income Security Act (ERISA) fiduciary matters, tax-qualified retirement plans and ERISA litigation. A significant portion of Gary’s practice involves advising plans and investment managers on compliance with ERISA in managing plan assets. In this area, he provides advice on fee structures, fiduciary status, identification of plan assets, prohibited transactions and fiduciary duty. Gary has obtained prohibited transaction exemptions and advisory opinions under ERISA from the US Department of Labor. He works closely with other...

Austin S. Lilling, Katten New York, nonqualified deferred compensation attorney, welfare plans lawyer

Austin S. Lilling focuses his practice on issues relating to executive compensation arrangements and employee benefit plans, including defined benefit pensions, 401(k)s, nonqualified deferred compensation, welfare plans, executive employment agreements, severance agreements, and retention and change in control arrangements. He deals largely with private equity and hedge funds and the compensation arrangements established by them. Austin has experience in designing and negotiating compensation arrangements, both for senior executives and employers, including employment agreements, severance agreements, change in control agreements, and equity and phantom equity compensation arrangements. He also has significant experience handling compensation matters in a transactional setting, including as they relate to private and public mergers and acquisitions, financial restructurings, and investment fund acquisitions and dispositions.

Special Counsel

Gabriel Marinaro serves as special counsel in the Employee Benefits and Executive Compensation group. His practice focuses on all aspects of employee benefits and executive compensation. He regularly counsels publicly traded and privately held companies, tax-exempt organizations, and governmental entities on a variety of employee benefits and executive compensation matters.

Gabe regularly advises both employers and executives on a wide range of executive compensation matters, including drafting employment agreements, equity compensation...

Richard D. Marshall, Katten Muchin, SEC Representation Lawyer, Finance Attorney, New York,

Richard D. Marshall focuses his practice on the representation of financial institutions and employees subjected to investigations by the Securities and Exchange Commission, Department of Justice, Financial Industry Regulatory Authority and state securities regulators. Rick also counsels broker-dealers, investment companies and investment advisers on regulatory issues, particularly relating to SEC and FINRA regulations. He also frequently counsels clients on compliance and risk management issues and the handling of inspections.

Rick provides...