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Trump administration could stymie DOL fiduciary rule by dropping legal defense

November 21, 2016

Trump administration could stymie DOL fiduciary rule by dropping legal defense

Instead of proposing new regulations or legislation to kill it, the new administration could simply stand down from lawsuits against the measure

Nov 18, 2016 @ 1:30 pm | By Mark Schoeff Jr. | Investment News

Many of the options for the incoming Trump administration to stop a Labor Department investment advice rule entail significant effort.

Rescinding the regulation would have to be done through another rulemaking process. Legislation to repeal the rule would have to overcome likely opposition from Senate Democrats.

But one approach would require the new administration to do virtually nothing.

The Trump administration could undermine the rule simply by dropping its defense of the regulation in several lawsuits that are under way.

“It’s something the administration could do right away without jumping through rulemaking hoops,” said Norm Champ, a partner at Kirkland & Ellis and a former Securities and Exchange Commission official. “If you think about it from a political capital perspective, you could do a few things like that that don’t cost much.”

If the Trump Department of Justice backs away from the DOL rule, it would leave the playing field to the plaintiffs.

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Second Annual Blue Vault Broker Dealer Educational Summit 2016
Broker Dealer Educational Summit 2016
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The Blue Vault Summit could not have been more perfectly timed. This gathering of the Broker Dealer and Sponsor communities provided insightful and open discussion from several vantage points. These conversations are paramount, especially in a time of significant regulatory change.