The fate of the Department of Labor (DOL) fiduciary rules is clouded in uncertainty because of the presidential election win by Donald Trump. The new rules will become applicable — or as a practical matter, effective — on April 10, 2017. However, Mr. Trump will become President on January 20, 2017, and there are many who believe that the incoming administration will repeal, modify or delay the new rules. Without a clear statement from Mr. Trump, most industry professionals advise the regulated community to proceed as if the rule will apply as originally expected on April 10. But are there ways to minimize certain compliance costs under the Best Interest Contract (BIC) exemption while the uncertainty is sorted out?
The short answer is yes. Fortunately, the DOL staggered the applicability dates of many of the more onerous provisions of the BIC exemption in the final rules. The more cumbersome requirements are not applicable until January 1, 2018. Consequently, investment fiduciaries could focus their compliance efforts on the April requirements and defer compliance with the others until April when more may be known about the fate of the rules and who will lead the Employee Benefits Security Administration.
BIC Exemption Requirements Applicable on April 10, 2017
BIC Exemption Requirements Applicable on January 1, 2018
As noted above, the January 1, 2018 requirements are among the most complex and potentially costly to implement. The additional time to comply originally provided by the DOL gives financial institutions the opportunity to prioritize their compliance efforts.
Learn how FIS’ portfolio of banking, wealth and retirement assets can address your unique priorities and business challenges.Contact us