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NEW YORK The U.S. Labor Department is preparing
to delay its controversial Obama-era fiduciary rule on financial
advice for 180 days and seek public comment on the rule.
The agency has sent two separate documents to the Office of
Management and Budget for approval, according to sources
familiar with the agency’s actions. One document is a proposed
rulemaking that simply delays the regulation’s effective date –
now April 10 – for 180 days. That proposal has a comment period
as short as 15 days.
The second document would start another round of public
comment on the rule, which requires brokers and other financial
advisers to put their clients’ best interests first when
advising them about individual retirement accounts or 401(k)
The Labor Department proposed the rule in September 2010
under President Barack Obama but withdrew the proposal in
September 2011 after receiving criticism from the financial
services industry. The department re-proposed the rule in April
2015 and made it final on April 6, 2016.
Industry critics claim the rule limits their ability to
service clients who cannot afford to pay for financial advice
and must use products that carry commissions or other indirect
On Feb. 3, President Donald Trump ordered the Labor
Department to review the fiduciary rule – a move widely
interpreted as an effort to delay or kill the regulation.
On Wednesday, a U.S. District Court judge upheld the
legality of the rule.
The Trump administration could write a new rule to replace
or eliminate the Obama-era one. A spokesman from the Labor
Department declined to comment. (Additional reporting by Liz Dilts in New York)
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