January 23, 2017

Did President Trump’s Executive Order Push Back the Fiduciary Rule?

 

On Jan. 20, President Trump signed a regulatory freeze pending review — but did that affect the timing of the fiduciary rule?

On Jan. 20, President Trump signed a regulatory freeze pending review — but did that affect the timing of the fiduciary rule?

In a memo to federal departments and agencies, White House Chief of Staff Reince Priebus said the freeze was designed to ensure President Donald Trump’s appointees or designees “have the opportunity to review any new or pending regulations.”

It’s not an unusual move as part of the change in administrations. In fact, the Obama administration made a similar move in January 2009 to freeze pending regulations from the Bush administration (which, as some will recall, included a regulation on investment advice that was, when finally issued, significantly modified).

While the request allows exceptions for emergency situations relating to health, safety, financial or national security matters, for regulations that have been finalized but have not taken effect, the order calls for temporarily postponing their effective date for 60 days.

The key word here as it relates to the fiduciary regulation is “effective date,” which is not the April 10, 2017 date on which the rule applies to investment recommendations, but rather June 7, 2016. Indeed, the whole point of having a June 2016 effective date was to insulate this regulation from this type of freeze.

Not that a delay in the implementation of the fiduciary regulation isn’t possible, even likely. But this doesn’t appear to be what makes that happen.