Labor Department headquarters inWashington. (Photo: Mike Scarcella/ALM)
The Labor Department has sent its fiduciary rule to align with the Securitiesand Exchange Commission's Regulation Best Interest to the Office ofManagement and Budget for review.
|Preston Rutledge, assistant secretary of Labor for the EmployeeBenefits Security Administration, who was charged with spearheadinga new fiduciary rule to align with Reg BI, left his post at the endof May.
|Oral arguments were heard Tuesday by the U.S. Court of Appealsfor the 2nd Circuit in the case brought against Reg BI by XYPlanning Network, seven states and the District of Columbia.
|Reg BI's effective date is June 30.
|Fred Reish, partner at Faegre Drinker Biddle & Reath in LosAngeles, told ThinkAdvisor in a Tuesday email that word onthe street is that the Labor rule "is primarily a prohibitedtransaction exemption intended to replace the Best InterestContract Exemption, which was vacated by the 5th Circuit Court ofAppeals, and the temporary non-enforcement policy that providedrelief in light of the BICE being vacated."
|Reish has also heard that "the fiduciary regulation may bemodified to more clearly apply to advisors who are not covered bythe SEC's Regulation Best Interest or the RIA fiduciary standard.It's not clear how that will be done or what other changes will bemade to the ERISA fiduciary definition."
|Brad Campbell, former head of EBSA who's now a partner at FaegreDrinker, told ThinkAdvisor in a previous interview thatRutledge's departure won't result "in any additional delayto current outstanding projects at EBSA, given the strength of hisdeputy, Jeanne Wilson, and the importance of the agency's missionto current events."
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2023. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
