The nine plaintiffs that appealed a U.S. federal court decision to uphold the Department of Labor’s fiduciary rule late last month are now asking that same court for an emergency stay on the April 10 applicability date of the rule. The plaintiffs, which include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association (SIFMA), the Financial Services Institute, Financial Services Roundtable and Insured Retirement Institute, filed an injunction against the DOL on Friday.
Read the full injunction.
The motion argues that temporary relief is needed to allow the department to complete its review of the rule, ordered by President Trump, and give the court time to consider their appeal. The groups are asking the court to make a decision on the motion by March 20.
“With the Rule’s applicability date less than five weeks away, many industry participants must now commit to fundamental choices about how they will attempt to comply with the Rule,” the motion said. “And once those compliance decisions have been made, sunk costs and the risk of customer confusion will make it impracticable for many firms to revert to the status quo ante. There is now an even greater likelihood that all of these costs and disruptions will be incurred for naught.”
On March 2, the DOL proposed a rule that would delay the fiduciary rule implementation date (April 10) by 60 days. That will give the agency time to collect and consider information related to issues raised in the president’s memorandum on the rule. The public has until March 17 to comment on the proposal, and if passed, the 60-day delay would begin on the publication date of a final rule.
“The Department may be unable to finalize its rulemaking before the beginning of April,” the motion said. “In the meantime, industry participants will have no choice but to continue to sink extensive resources into developing their compliance capabilities—and continue to incur irreversible financial costs and operational disruptions. Moreover, a 60-day extension is unlikely to be long enough for this litigation to run its course.”
The department posted a field assistance bulletin Friday night, announcing a temporary enforcement policy meant to avoid confusion over a proposal to delay its fiduciary rule.