Today, the Department of Labor (DOL) issued a Field Assistance Bulletin (FAB) concerning the fiduciary — or conflict of interest — rule vacated by the 5th U.S. Circuit Court of Appeals in March and becoming effective this week.

dol-reissues-flsa-opinion-lettersThe department had previously announced a grace field for enforcement dating from the implementation of the rule in June 2017 through July 1, 2019, and today’s FAB further solidifies that policy:

… [F]or the period from June 9, 2017, until after regulations or exemptions or other administrative guidance has been issued, the Department will not pursue prohibited transactions claims against investment advice fiduciaries who are working diligently and in good faith to comply with the impartial conduct standards for transactions” spelled forth in the original DOL fiduciary rule.

The DOL had until April 30 to appeal the decision but declined to do so, meaning that today the U.S. Court of Appeals for the 5th Circuit is expected to issue a mandate “effectuating its opinion vacating the entire fiduciary rule, the [best-interest contract] exemption, the principal transactions exemption (PTE), and related amendments to existing PTEs,” according to the Employee Benefits Security Administration (EBSA) wing of the department.

Meanwhile, the Securities and Exchange Commission (SEC) has its own “best interest” rule undergoing a public commentary period, a rule that would affect not only retirement advisors but others who market taxable plans as well.

Said the DOL in announcing is lax policy:

[T]he Department has concluded that financial institutions should be permitted to continue to rely upon the temporary enforcement policy, pending the Department’s issuance of additional guidance. The Department is convinced that this temporary enforcement relief is appropriate and in the interest of plans, plan fiduciaries, plan participants and beneficiaries, IRAs, and IRA owners.