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ARTICLE · 07 NOVEMBER 2016

DOL Issues First Guidance On Fiduciary Rule

Morrison Foerster
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On October 27, 2016, the U.S. Department of Labor (DOL) issued initial guidance on its new fiduciary rules, which are scheduled to become effective on April 10, 2017.

United StatesFinance and Banking
Hillel Cohn
Hillel Cohn
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On October 27, 2016, the U.S. Department of Labor (DOL) issued initial guidance on its new fiduciary rules, which are scheduled to become effective on April 10, 2017.  The guidance was issued in the form of FAQs and is expected to be the first of three rounds of guidance to be published by DOL prior to the effective dates of the new rules.1

Perhaps not surprisingly, the FAQs address in large part a variety of compensation questions which are top of mind for both broker-dealer firms, and their financial advisers.

Background

In April 2016, the DOL greatly expanded the scope of persons who would be deemed fiduciaries under ERISA2 and Internal Revenue Code (the "Code") when dealing with retirement plans and IRAs.  As revised, any broker-dealer or financial intermediary ("Financial Institution") that makes any suggestions as to how or where a retirement investor should invest may be a fiduciary.  In addition, the individual financial advisers or registered

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