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Fiduciary Rule to Go Into Effect June 9

A controversial Obama-era rule for financial advisers will be implemented June 9.
May 23, 2017

The Labor Department will implement a controversial Obama-era rule for financial advisers on June 9, according to Secretary Alexander Acosta.  Acosta wrote that the Labor Department couldn’t find a legal basis to delay the “fiduciary” rule beyond June 9, the end date of a review designated by President Trump via executive order earlier this year.

“[We] have found no principled legal basis to change the June 9 date while we seek public input,” Acosta wrote. “Respect for the rule of law leads us to the conclusion that this date cannot be postponed.” The Labor Department will begin implementing the rule on June 9, reports the Wall Street Journal, though Acosta said it would continue to explore potential changes to the rule. Firms will be given until 2018 to comply with the rule without penalty.

The fiduciary rule, finalized by the Obama Labor Department in 2016, requires certain financial advisers to disclose potential conflicts of interest to clients. It also expands the types of advisers who are mandated by a “fiduciary” standard to act in their clients’ best interests, not their own. Business groups have opposed it and filed court challenges.

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