On March 10, 2017, the DOL released Field Assistance Bulletin (FAB) No. 2017-01. This FAB announces a temporary enforcement policy related to the DOL’s Conflict of Interest Rule (the Rule). As background, the DOL recently proposed a 60-day delay of the Rule’s applicability date after Pres. Trump instructed the DOL to conduct additional analysis of the Rule and its impact on American Investors.
This FAB addresses the possible compliance gap that could occur should the Rule become applicable before the DOL is able to issue a decision on the proposal for delay. Specifically, on March 2, 2017, the DOL requested a 60-day delay of the Rule, as the original applicability date of the Rule was approaching on April 10, 2017. Although the DOL intends to make a decision on the delay before the original applicability date, they issued this FAB to address investor confusion and to avoid marketplace disruption.
Essentially, according to the FAB, should the DOL issue a final rule delaying the Rule after April 10, 2017, the DOL will not initiate any enforcement action on an adviser or financial institution that did not satisfy the conditions of the Rule during the gap period in which the Rule becomes applicable before a delay is implemented. Additionally, should the DOL not delay the Rule, the DOL will not initiate any enforcement action on any adviser or financial institution that failed to satisfy the conditions of the Rule before the applicability date, as long as the adviser or financial institution satisfies the conditions of the Rule within a reasonable period of time after the publication of the decision not to delay.
While this temporary enforcement policy will not directly affect employer plan sponsors, it may affect whether or not those plan sponsors receive certain communications from their advisers and financial institutions. We will continue to follow any developments and provide updates in Compliance Corner.
FAB No. 2017-01 »