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The DOL issued a Field Assistance Bulletin setting forth a temporary enforcement policy applicable to investment advice fiduciaries. The DOL fiduciary duty rule (the "rule") was vacated in a recent decision by the U.S. Court of Appeals Fifth Circuit (the "Fifth Circuit").
In order to address uncertainty about fiduciary obligations and the scope of exemptive relief following the Fifth Circuit's decision, the DOL stated that it will not pursue prohibited transactions claims against investment advice fiduciaries "working diligently and in good faith" to follow the "impartial conduct standards for transactions that would have been exempted in the [Best Interest Contract] Exemption and Principal Transactions Exemption." The DOL also will not treat such fiduciaries as violating the applicable prohibited transaction rules. The DOL indicated that investment advice fiduciaries may continue to rely on other exemptions to the extent applicable. However, the DOL will not treat any failure to rely upon such exemptions as a violation of the prohibited transaction rules, provided the adviser meets the terms of the temporary enforcement policy.
The new temporary enforcement policy applies to the period from June 9, 2017, until the date on which the DOL issues new regulations, exemptions or administrative guidance.
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