Opponents of the Department of Labor’s redraft of its rule toamend the definition of fiduciary for retirementadvice wasted no time filing comment letters as well as studieschallenging numerous aspects of the plan.
|With the comment period on the redraft expiring Tuesday, theSecurities Industry and Financial MarketsAssociation and the U.S. Chamber of Commerce submittedseveral iterations of their objections to the redraft.
|Read: Few advisors neutral on fiduciaryrule
|The Senate Committee of Health Education Labor and Pensionsplans to hold a hearing on DOL’s plan Tuesday as well.
|SIFMA submitted eight comment letters on DOL’s proposed rule to redefinefiduciary under the Employee Retirement IncomeSecurity Act that not only address the fiduciary rule itself butalso the controversial best interest contract exemption and otherprohibited transaction exemptions. The Wall Street trade group alsosubmitted two studies highlighting the plan’s operational andeconomic challenges.
|The U.S. Chamber of Commerce submitted four separate commentletters on DOL’s plan as well as its related prohibited transactionexemptions along with an economic impact analysis.
|As of Monday, DOL had received 300 comment letters regarding its redraft as well aspetitions.
|Ken Bentsen, SIFMA’s president and CEO, reiterated on a callwith reporters SIFMA’s position that the securities regulators —the Securities and Exchange Commission and the Financial IndustryRegulatory Authority — should lead a best interest standardrulemaking.
|“I’m concerned we’ll end up with multiple standards that willconfuse clients,” Bentsen said. “We believe DOL is the wrongregulator to be in the lead here, and the rule as writtencompletely misses the mark.”
|On a separate call held by the Chamber of Commerce, BradCampbell, former head of DOL’s Employee Benefits SecurityAdministration, who’s now a lawyer with Drinker Biddle & Reathin Washington, said that while DOL intends its fiduciary rule tohelp IRA owners get better advice, “it undercuts all of thoseefforts; it will go the other direction and make it more difficultfor IRA owners and small businesses to get advice.”
|Calling DOL’s plan the “most sweeping” rule since ERISA,Campbell said, the redraft “is technically flawed,”adding that “the way it has been proposed it cannot work inpractice; it conflicts with other securities regulation.”
|SIFMA’s Bentsen noted that while it was “premature” to saywhether SIFMA would challenge DOL’s rule in court, SIFMA has askedDOL in its comment to extend its “extremely aggressive” 60-dayimplementation and eight-month “applicability” timeline. Theoriginal ERISA rule’s 36-month implementation deadline, Bentsensaid, is what SIFMA has requested “if [DOL] goes to a finalrule.”
|The Chamber wants a "negotiated rulemaking," said Alice Joe,managing director of the Chamber's Center for Capital MarketsCompetitiveness.
|"There will still be more questions if there's a final rule,"added Aliya Wong, executive director of Chamber's retirementpolicy.
|--- Related reading at ThinkAdvisor:
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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.
