The U.S. Fifth Circuit Court of Appeals has confirmed the 5th Circuit March 15 split-decision that vacated the fiduciary rule, on the basis that the Department of Labor “exceeded its authority in promulgating the rule”, which required that advisors act in their clients’ best interest when recommending retirement investments. The court also ruled that the DOL has to pay the “financial industry” plaintiffs the costs related to the appeal.
In April, the Trump Administration allowed a deadline for rehearing to pass with no action taken. California, New York, Oregon and AARP unsuccessfully tried to intervene to defend the rule after the Department of Justice, acting on behalf of the DOL, declined to appeal the March 15 decision. The last deadline passed on June 13th after the government declined to request the U.S. Supreme Court to reconsider the decision of the Appeals court.
The Securities and Exchange Commission is said to be considering its own version of the rule, “the best interest rule.”
www.news.bloomberglaw.com; June 14, 2018.
www.investmentnews.com; June 21, 2018.