Fiduciary Duties

A Department of Labor rule that would raise investment advice standards for retirement accounts reached one step closer to being finalized last night. The DOL sent the measure to the Office of Management and Budget, who noted its receipt today on its website. The OMB will have 90 days to review the rule, but it will probably expedite the process. The OMB looks at all proposed and final rules, particularly examining their economic consequences. If the rule is cleared by the office, the DOL will release the final rule publicly, possibly by March. The OMB was asked to perform a detailed cost-benefit analysis of the final rule by a major financial industry trade association. “The OMB has a statutory mandate to get this right,” said Kenneth E. Bentsen Jr., president and CEO of the Securities Industry and Financial Markets Association. “To do so, it must fully assess the impact of the DOL’s rule to ensure it serves the best interest [...]

The Department of Labor is ready to advance as soon as the end of the month a final rule that would raise investment advice standards for retirement accounts. The department is trying to get the rule to the Office of Management and Budget ("OMB") for review by January 31, according to a report published by Politico. The review could take up to 90 days, but could be expedited and finished within four to six weeks. Once the office has approved the rule, it would be sent back to the Labor Department, which would then publicly release the final rule in the spring. “The rumor mill is very active,” says Fred Reish, a partner at Drinker Biddle & Reath. “The prevailing thinking is that the final package of the regulation and exemptions will go to OMB in the next three weeks and could go any day now. The tea leaves say that the fiduciary package will be … published in the Federal [...]