In our comment letter on the original rule proposal, we highlighted a number of concerns with the rule as proposed, few of which we addressed in the final rule. Among other comments, we expressed concern that enforcement by private litigation will have unintended consequences, and work against, rather than promote, investors' interests, that the best interest contract exemption should be replaced by a "customer's Bill of Rights" and that historical carve-outs for education communications should be retained to ensure investors continue to have access to information relating to their investments. We will not repeat these or other substantive comments in full in this letter, which is focused only on the proposed implementation delay. We raise them to highlight the extent of the concerns we expect to be raised during the public comment period on the fiduciary rule, and the need to delay implementation long enough to give the department time to conduct a thorough and balanced review.
Wells Fargo (signed by David Carroll, head of wealth and investment management)
…we fully support, at a minimum, a 60-day delay of the rule’s applicability date. Furthermore, we respectfully request that the department find good cause to issue a final rule effectuating the delay by no later than April 10, 2017. To do otherwise could create legal uncertainty with respect to the Rule’s implementation. Moreover, we believe a longer extension is warranted and respectfully request that the department extend the applicability date of the rule by 180 days.
North American Securities Administrators Association
The final rule, adopted in April 2016 and with a first effective date of April 10, 2017, represents an in-depth, multi-year, deliberate and thoughtful rulemaking exercise. It also represents the benefits of the administrative rulemaking process – one that is careful and considered, not rushed. The rulemaking is already changing industry practices for the better. Press reports show that in direct response to the rule, major broker-dealers have announced and undertaken significant changes to sales practices that benefit investors, including by lowering commissions, reducing certain conflicts of interest, and improving disclosure.
In short, the department’s fiduciary duty rule and the process by which it was promulgated is sound.
Minnesota Commissioner of Commerce