SIFMA, FSI Join Suit to Strike Down DOL Fiduciary Rule

FSI and SIFMA ask the court to vacate and “set aside the 2024 rule and declare it to be in excess of the DOL’s statutory authority, arbitrary and capricious, and otherwise not in accordance with law.”

If the 2024 rule goes into effect, “recommendations by a broker-dealer or other financial professional regarding assets in a retirement account, including sales recommendations, will once again be considered ‘fiduciary’ advice even in the absence of an ongoing, mutually recognized advice relationship,” FSI and SIFMA state. “Once again, transaction-based compensation in connection with such transactions will be presumptively unlawful.”

With the Securities and Exchange Commission’s Regulation Best Interest, ”the needs case for the Department’s unlawful regulation of broker-dealers vanished,” SIFMA and FSI said.

In Reg BI, moreover, “the SEC rejected the very thing that the Department — which is an employment regulator, not a broker-dealer regulator — boasts of having imposed here:  promulgation of ‘a uniform standard of conduct [for] all financial professionals regardless of how they engage with their retail customers’ as stated in the complaint,” the groups said in a statement.