Fate of the Fiduciary Rule: Appellate Courts Have Spoken, but What Comes Next?

The Investment Lawyer

Vol. 25, No. 6 | June 2018

In this article, Nicholas Wamsley and Yongo Ding discuss two decisions from the federal appellate courts regarding the Department of Labor's (DOL's) new fiduciary definition and final conflict of interest regulation (the Fiduciary Rule), and lay out potential routes the Fiduciary Rule could take going forward. "Because the Fifth Circuit vacated the Fiduciary Rule 'in toto,' while the Tenth Circuit, on narrower grounds, upheld the restrictions placed on FIAs [fixed indexed annuities], there is some question whether an actual conflict exists between the two circuits," Wamsley and Ding wrote. "For now, however, there is a chance that an individual selling in a state within the Fifth Circuit (Texas, Louisiana, and Mississippi) would be subject to different rules than in Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming, which are within the jurisdiction of the Tenth Circuit." The future of the Fiduciary Rule could also play out in Congress, at the state level, or in the Securities and Exchange Commission's (SEC's) proposed rule, which was released on April 18, 2018, and contains many elements similar to DOL's Fiduciary Rule. "Though difficult to predict DOL’s ultimate course of action, it appears to have put the entire Fiduciary Rule into suspense on a nationwide basis for the time being," the authors wrote.