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DOL Fiduciary News: November 7, 2017

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DOL Rule Delay Will Likely Be Final in 3 Weeks: Acosta

ThinkAdvisor; November 6, 2017

The Labor Department will likely be cleared in three weeks to officially delay the full implementation of its fiduciary rule, Labor Secretary Alexander Acosta told a federal court in Minnesota on Thursday in a court filing.

“Typically administrative actions such as these take three weeks from the time of review by [the Office of Management and Budget] to be published as final,” Labor told the court handling Thrivent Financial for Lutherans' case against the Labor Department over the fiduciary rule.

Meanwhile, the National Association of Fixed Annuities asked the U.S. Court of Appeals for the D.C. Circuit on Monday to delay the Dec. 8 oral arguments in NAFA’s appeal over a federal court’s denial of its bid to block the fiduciary rule.

On Wednesday, Labor filed with the OMB the official 18-month delay of its fiduciary rule.

Judge grants injunction against DOL fiduciary rule in Thrivent lawsuit, halts case

InvestmentNews; Nov 6, 2017 @ 5:21 pm

A Minnesota federal judge has issued a preliminary injunction against the Labor Department's fiduciary rule, but also has granted a stay in the case.

In a Nov. 3 decision, U.S. District Judge Susan Richard Nelson held that Thrivent Financial for Lutherans had demonstrated that it would suffer irreparable harm under the provision of the DOL fiduciary rule that allows class-action lawsuits by investors.

Thrivent argued in its suit, which was filed in September 2016, that it could be penalized by the DOL for offering its current line of insurance products because its contracts with clients prevent them from joining class actions. Ms. Nelson ruled that the class-action provision of the DOL rule could not be enforced against Thrivent until the conclusion of the litigation.

At the same time, she granted a stay in the case that the DOL requested. The agency is reviewing the rule, which requires brokers to act in the best interests of their clients in retirement accounts. The reassessment of the rule, ordered by President Donald J. Trump, could lead to major revisions in its enforcement mechanisms, including the class-action piece. In fact, DOL signaled in August that it would no longer defend the class-action provision.

"Staying this matter will allow the administrative process to fully develop, possibly resolving this dispute, and thereby promoting judicial economy," Ms. Nelson wrote in her opinion. "Moreover, in light of Thrivent's injunctive relief, Thrivent will not be prejudiced by the entry of a stay at this time." 

SEC and DOL Face Hurdles in Fiduciary Collaboration

PLANADVISER | November 06, 2017

Larry Stadulis is a partner at Stradley and Ronon; he has been with the firm for 13 years after working previously for Morgan, Lewis & Bockius. Fresh out of law school he worked more than four years at the Securities and Exchange Commission (SEC).

Today, Stadulis’ practice involves mainly representing investment advisers and broker/dealers, as well as pooled fund vehicles. Primarily he focuses on “the areas that involve the interstices of regulation between advisers, brokers, retirement plans and others types of products and services that involve fiduciary and suitability issues.”

It’s quite a relevant background in the current investment industry environment, wherein, as Stadulis explains, “it is very easy to imagine how complicating, shifting, overlapping regulatory issues can fall between the cracks.” When it comes to the possibility of a uniform advice standard for advisers and brokers coming out from the SEC in the near term, he “feels things are still very much in a wait-and-see mode,” despite increased chatter about the possibility among lobbying organizations and in the financial trade media. Much of the conversation has centered on mere speculation following the appointment of Jay Clayton as SEC chair by the Trump administration, Stadulis argues. 

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