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DOL Fiduciary News: November 2, 2017

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FSI Offers Disclosure Alternative to BICE

ThinkAdvisor; October 30, 2017

A uniform fiduciary rule issued by the Securities and Exchange Commission should include a “two-tier client disclosure regime” as an alternative to the best-interest contract exemption set out in the Labor Department’s fiduciary rule, the Financial Services Institute told the securities regulator Monday.

David Bellaire, FSI’s general counsel, told the SEC in FSI’s comment letter that a two-tier client disclosure regime should consist of a “concise point-of-sale disclosure document at the time a formal engagement is entered into for new accounts that would be supplemented with more detailed disclosures posted to the financial institution’s website.”

The SEC started taking comments on the development of a fiduciary rule of its own in June.

The possible fate of the Department of Labor’s Fiduciary Rule

Lexology; November 1 2017

In April 2016, the Department of Labor issued a final rule that amends the definition of fiduciary that’s been in place for decades under ERISA. To say the least, this rule has been very controversial. President Obama and then-Secretary of Labor, Tom Perez, were strong supporters of the rule. But President Trump and his new Secretary of Labor, Alex Acosta, have criticized it. This change in administrations has raised questions about the ultimate fate of the rule.

On the legislative front, Congress clearly has authority to pass legislation to change the DOL rule. Republicans have majorities in both the House and the Senate, and many of those Republicans are opposed to the rule. But the primary hurdle to any legislation is that Senate rules generally require 60 votes to end debate and that’s a very unlikely outcome, considering that eight Democrats would have to join all 52 Republicans in the Senate.

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