The Department of Labor (DOL) extended until July 1, 2019, the date for compliance with the full conditions in its new “investment
advice” fiduciary definition and related exemptions (Final Rule), which became generally applicable on June 9.  After considering the commentary it received, DOL has extended the Transition Period as proposed, without change. Thus, the same transition rules and standards in effect on June 9 will remain in effect until July 1, 2019.  Of particular note, the DOL explained that:
• It needs more time to “carefully and thoughtfully review” the commentary it has received and to honor the President’s directive, as well as to coordinate with the SEC, FINRA, NAIC and other regulators.
• It anticipates proposing a new streamlined class exemption in the near future, which presumably would address innovative products being developed in response to the Final Rule.
• It “sees no compelling reason” to further extend the “grandfathering exemption” (although it did solicit supplemental comments on this point going forward). The applicability date for determining whether a transaction may be grandfathered remains June 9, 2017.

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Additional contributor to this post:

W. Mark Smith, marksmith@eversheds-sutherland.com

While securities have long been a hot spot for unclaimed property issues, the past several years have seen a continued expansion of audit activity targeting broker-dealers, stock issuers, transfer agents, mutual funds, banks, and others in the financial services industry. Unclaimed property laws—and unclaimed property audits—can present a number of specific challenges in this space.

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Additional contributors to this post:

Holly H. Smith, hollysmith@eversheds-sutherland.com

Mary Jane Wilson-Bilik, mjwilson-bilik@eversheds-sutherland.com

On August 3, 2017, the Department of Labor released a fourth set of FAQs related to its new “investment advice” fiduciary definition and related exemptions, which became applicable on June 9. Like the May FAQs, the three new FAQs are positioned as transition period guidance, although their content is not so limited.

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Additional contributor to this post:

W. Mark Smith, marksmith@eversheds-sutherland.com

On June 29, 2017, the Department of Labor released a request for information, seeking public comments yet again on its new “investment advice” fiduciary definition and related exemptions which became applicable on June 9.

• This is the fifth request for public comments under the Administrative Procedure Act since DOL undertook this rulemaking in October 2010, and the second in the last four months.
• There could be a sixth iteration later this year, in connection with any proposed changes to the Final Rule and/or delay of the January 1, 2018, date for compliance with the full conditions of the Best Interest Contract Exemption, the Principal Transaction Exemption and PTE 84-24.
• In addition, on June 1, US Securities and Exchange Commission Chair Jay Clayton issued a statement requesting comments on the standard of conduct under the securities laws that should be applicable to investment advisers and broker-dealers serving retail investors, which includes retirement investors.

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Additional contributor to this post:

W. Mark Smith, marksmith@eversheds-sutherland.com