(Washington)

We have some interesting new information about the recently re-drafted DOL fiduciary rule. Last week, the DOL sent what is largely considered to be its new fiduciary rule—entitled “Improving Investment Advice for Workers & Retirees Exemption”—to the OMB. The rule’s text has not been released, so to this point there has only been speculation about its contents. That said, a top industry lawyer familiar with the current process has said he expects the rule to have very close coordination with the SEC’s Reg BI. So much so, in fact that the lawyer—George Michael Gerstein, co-chair of the fiduciary governance group at Stradley Ronon Stevens & Young—expects if a firm is abiding by Reg BI it would likely be entirely exempt from the fiduciary rule. In his own words, “The DOL leadership under President [Donald] Trump has emphasized that they want the SEC to take the lead in terms of conflict of interest regulations, particularly when it comes to brokerage practices. It now seems likely that, if a broker/dealer [B/D] engages in actions that amount to providing investment advice under the Employee Retirement Income Security Act [ERISA], to the extent that the entity complies with Reg BI, that will be sufficient for meeting ERISA’s fiduciary duties.”

FINSUM: It sounds like Reg BI is going to be the dominant rule, and that anyone abiding by it may be exempt from DOL enforcement. This will likely be music to the ears of many in the industry.