DOL releases first batch of FAQs on fiduciary rule

The Labor Department issued its first set of answers to frequently asked questions about the fiduciary rule Thursday.
The FAQs, based on input received from financial services firms and other stakeholders, are “an important part of the regulatory process as they allow the department to clarify important parts of the rule and head off misunderstandings that could lead to bad results for retirement savers, or financial services professionals,” Phyllis Borzi, the rule’s main architect, said in a blog post Thursday.
In total, there are 34 questions and answers in the first wave of FAQs.
(More: A comprehensive, searchable database of advisers’ fiduciary FAQs)
Ms. Borzi, who is assistant secretary of labor at the department’s Employee Benefits Security Administration, said Tuesday the agency is aiming to release three sets of FAQs, with the first related to the rule’s exemptions, such as the best-interest contract exemption and prohibited-transaction exemption.
These exemptions outline how brokers are able to continue selling certain investment products while receiving variable compensation such as commission and 12b-1 fees.
The brokerage industry, which has been struggling to determine a course of action relative to compliance under the complex rule, has been eagerly anticipating such guidance.
The second round of FAQs is expected to come soon after the first, Ms. Borzi said earlier this week.