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Dodd-Frank Overhaul Could Cause Fiduciary Rule Mess 

May 9, 2017

Kristen Ricaurte Knebel, Bloomberg BNA

A major overhaul of the Dodd-Frank Act that would also repeal the DOL’s fiduciary rule could cause a mess for the financial services industry if it is enacted after the rule’s June 9 applicability date.

One provision in the Financial Choice Act ( H.R. 10) would permanently put the brakes on the Labor Department rule that aims to reduce the allegedly conflicted investment advice given to retirement savers. In addition, it would prevent the department from going forward with any other fiduciary rule without the Securities and Exchange Commission developing and finalizing a rule first. The SEC had been working toward its own fiduciary rule that would harmonize the different legal standards applicable to professionals who give investment advice, but nothing has materialized yet.

If Congress wants a shot at stopping the fiduciary rule through legislation, they are racing the clock against the rule’s applicability date, Andrew L. Oringer, a partner with Dechert LLP in New York and co-chair of the firm’s ERISA and executive compensation group, told Bloomberg BNA. The problem is, it’s not clear the Senate feels a sense of urgency to pass the legislation before that date, he said.

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