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DOL Seeks Further Comment on Fiduciary Rule; May Soon Address “Mootness” of Anti-Arbitration Provision

The DOL has published its latest delay of the Fiduciary Rule and seeks comments on a number of issues that may result in a streamlined version of the rule. According to the Wall Street Journal, the DOL is working on a revision of the rule that could establish a more flexible compliance framework and exemption track and encourage innovative products that lower the possibility of conflicts of interest. The latest comment period ends September 15, 2017. In late August, the DOL suggested that it may undo the controversial provision of the rule that makes it easier for investors to bring class action lawsuits against brokers, and, according to media reports, DOL affirmed on August 30 that it would no longer enforce the provision. In a court filing related to a legal challenge to the rule, the DOL stated that the anti-arbitration provision of the rule “will likely be mooted in the future,” Bloomberg reported. The anti-arbitration provision of the Fiduciary Rule deprives fiduciaries of the benefits of the BIC Exemption if they enter into an arbitration agreement that prevents investors from participating in class-action lawsuits. 

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