This afternoon President Donald Trump issued a widely anticipated executive order directing a sweeping review of the Dodd-Frank Wall Street Reform and Consumer Protection Act regulations that, among other things, imposed burdensome rules on incentive compensation programs offered by financial institutions. Spokespersons were quoted as saying the administration is looking at making an immediate impact through administrative changes and personnel decisions.
President Trump also issued a separate memorandum directing the Department of Labor (DOL) to undertake a complete review of the new fiduciary rules applicable to financial advisors. Specifically, the president requested an examination of whether the rules would (i) reduce investor access to “certain retirement savings offerings,” (ii) result in “dislocations or disruptions within the retirement services industry,” and (iii) be “likely to cause an increase in litigation [and an] increase in prices that investors and retirees must pay to gain access to retirement services.” The order was generally expected to direct a postponement of the compliance date of the new DOL fiduciary rule, which is scheduled to become applicable beginning in April. It remains to be seen how the DOL will implement this directive and whether it will result in such a postponement. The DOL acting secretary has indicated that the DOL will now consider its legal options to delay the compliance date.
In the coming days, Morgan Lewis will provide a more in-depth analysis of the impact of these two directives. Stay tuned.