In a standard procedural step, the Department of Labor has sent its proposed rule for delaying implementation of its controversial fiduciary rule to the Office of Management and Budget.
The DOL has proposed postponing implementation – known as the rule’s applicability date – for 60 days. Without postponement, the rule would be slated to take effect on April 10. The postponement would officially allow the DOL to review the fiduciary rule as called for by President Trump on Feb. 3, and could lead to its revision or replacement.
Sending the rule to the OMB followed a 15-day public-comment period.
Now, if OMB approves the proposal it would return it to the DOL, which would then publish it in the Federal Register. The delay would push the implementation date back to June 9.
Meanwhile, the IRS has chimed in, saying it is temporarily waiving enforcement of excise taxes on violations of the fiduciary rule. For example, advisors who make transactions that are barred under the fiduciary rule would, if the rule were enforced, be hit with a 15% excise tax on the amount of the transaction. That excise tax could be boosted to up to 100% if the prohibited transaction is not remedied within a set period.
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