The U.S. Department of Labor is looking to delay the full rollout of its Conflict of Interest Rule to July 1, 2019, from Jan. 1, 2018, according to a brief filed Aug. 9 as part of a lawsuit in the U.S. District Court for the District of Minnesota.
An 18-month delay of the full applicability date would include the fiduciary rule's hotly contested best interest contract exemption, which requires brokers to sign a legally binding agreement stating that they put their clients' best interests ahead of their own.
The news comes two weeks after Timothy Hauser, deputy assistant secretary for program operations of the Employee Benefits Security Administration, indicated that the Labor Department may be considering delaying some of the rule's provisions beyond the Jan. 1, 2018, date.
The proposal has been submitted to the Office of Management and Budget, which must review and approve it before it can be enacted.
The Labor Department's fiduciary rule went into partial effect June 9. Many industry participants have continued to argue that the best interest contract exemption could have unintended consequences and have advocated for changes to the rule, including making the Securities and Exchange Commission the regulator in charge of a fiduciary rule rather than the Labor Department.
"The fiduciary rule will have significant, unintended consequences for the broader relationship between the consumers and the providers of financial services," wrote SEC Commissioner Michael Piwowar in a July letter to Hauser.
A DOL spokesperson was not immediately available to comment.