The U.S. Department of Labor (DOL), having released a request for comment which ended on September 15, 2017, announced an 18-month extension of full implementation of the Fiduciary Rule – pushing full implementation to July 1, 2019. On October 24, at the Securities Industry and Financial Markets Association annual conference Securities and Exchange Commission Chairman Jay Clayton, said that the SEC cannot supersede the DOL Fiduciary Rule. However, Mr. Clayton has stated that the SEC is drafting its own fiduciary rule. Progress for the rule will be interesting because in the nomination hearings for SEC Commissioner Nominees, neither Hester Pierce nor Robert Jackson included the fiduciary rule among their list of priorities.¹
While full implementation of the DOL fiduciary rule will be delayed until July 2019, there are four proposed pieces of legislation in development that will require broker dealers to meet a higher standard in some capacity. While it is unclear which entity will promulgate a new standard, it is highly likely that broker dealers will be required to comply with either a fiduciary standard or with an updated form of the “best interests” standard.
Proposed Legislation
H.R. 3857, PASS Act of 2017
Introduced by Representative Ann Wagner, the “Protecting Advice for Small Savers Act of 2017” or “PASS Act” repeals the final rule of the Department of Labor (DOL) titled “Definition of the Term ‘Fiduciary’ Conflict of Interest Rule—Retirement Investment Advice”. The bill also requires a Broker-Dealer to act in the retail customer’s best interest when providing a recommendation and requires increased disclosures including any material conflict of interest. It is speculated that the PASS Act will be approved by the House, but in order to pass the Senate proponents of the bill will need at least 8 Democrats supporting it to overcome a filibuster.
H.R. 2823 – Affordable Retirement Advice for Savers Act
Introduced by Representative David P. Roe, the “Affordable Retirement Advice for Savers Act” would repeal the regulations commonly referred to as the “Fiduciary Rule.” Additionally, the bill would amend the prohibited transaction rules under the Internal Revenue Code and ERISA:

• Add an “investment advice” definition to be used to determine when a fiduciary relationship exists.
• Add an additional statutory exemption related to investment advice a fiduciary can provide.
• Alter the disclosure requirements about potential compensation the fiduciary receives.²

The House Committee on Ways and Means Granted an extension for further consideration ending not later than Jan. 10, 2018.³
S. 1321 – Affordable Retirement Advice Protection Act (Bill related to H.R. 2823)
Introduced by Senator Johnny Isakson, the “Affordable Retirement Advice Protection Bill” would effectively repeal the regulations commonly referred to as the “Fiduciary Rule.” The bill would add a definition of "investment advice" and alter the definition of a “recommendation” under ERISA. Additionally, “the bill would add ‘prohibited transactions’ exemptions for: (i) advice for which no more than reasonable compensation is paid and for (ii) advice that is based on a limited range of investment options or may result in variable income to the investment advisor, if a notice is provided that similar investments may be available at other costs.”⁴
H.R. 3358 – Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2018
This bill is to establish funding for the 2018 fiscal year for the Departments of Labor, Health and Human Services, Education, and a few other related agencies. However, in Section 114 of the bill there is a rider stating that the fiduciary rule “shall have no force or effect,” effectively eliminating the rule.⁵ It appears that due to Congress’s approval of a bill to maintain current government funding levels until December 8^th that negotiations over the proposed funding bill, including the fate of the fiduciary rule rider, will be delayed until closer to this deadline. It appears that this rider has been included in previous years’ funding bills, but has always been struck down.⁶ Currently, what makes proponents of the Fiduciary Rule nervous is that the bill including the rider will likely make it through the House and these proponents will have to rely on the Senate to eliminate the rider before passing the funding bill.⁷
Latest Update: July 24, 2017 – Placed on the Union Calendar, Calendar No. 176.⁸

¹ SEC Nominees Say Fiduciary Rule Isn’t Top Priority, ThinkAdvisor, (Oct. 24, 2017).
² H.R. 2823, Affordable Retirement Advice for Savers Act: Summary, Congressional Budget Office, (July 19, 2017).
³ H.R. 2823, Affordable Retirement Advice for Savers Act: Actions, Congress.gov, (accessed Oct. 30, 2017).
⁴ Department of Labor Legislation, Dechert LLP, (accessed Oct. 30, 2017).
⁵ H.R. 3358, Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2018 (July 24, 2017).
⁶ Mark Shoeff Jr., Provision of House Spending Bill Would Kill DOL Fiduciary Rule, InvestmentNews (Sep. 13, 2017).
⁷ Id.
⁸ H.R. 3358 – Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2018, Congress.gov,  (accessed Oct. 30, 2017).