The Employee Benefits Security Administration (EBSA) today issued Field Assistance Bulletin (FAB) No. 2018-02, which continues a temporary suspension of its enforcement policy for its rule defining who is a "fiduciary" and the associated prohibited transaction exemptions (PTEs).

The fiduciary rule took effect on June 9, 2017 but was delayed by the Department of Labor (DOL) to July 1, 2019 to consider possible changes or modifications to the fiduciary rule and PTEs. In addition, a federal appeals court recently vacated the fiduciary rule. In response to these developments, the DOL says it recognizes that stakeholders "may have questions regarding the investment advice fiduciary definition and related exemptive relief following the court's order." Further guidance on these issues will be forthcoming, DOL explains.

FAB No. 2018-02 states: 

[F]or the period from June 9, 2017, until after regulations or exemptions or other administrative guidance has been issued, the [DOL] will not pursue prohibited transactions claims against investment advice fiduciaries who are working diligently and in good faith to comply with the impartial conduct standards for transactions that would have been exempted in the BIC [Best Interest Contract] Exemption and Principal Transactions Exemption, or treat such fiduciaries as violating the applicable prohibited transaction rules. Of course, investment advice fiduciaries may also choose to rely upon other available exemptions to the extent applicable after the Fifth Circuit's decision, but the [DOL] will not treat an adviser’s failure to rely upon such other exemptions as resulting in a violation of the prohibited transaction rules if the adviser meets the terms of this enforcement policy.

The full text of FAB No. 2018-02 is posted here.

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