SIFMA, FSI Statement on Order Vacating the DOL 2024 Fiduciary Rule and Related PTEs

The Securities Industry and Financial Markets Association (SIFMA) and Financial Services Institute (FSI), released the following statement today regarding the order and final judgment entered in American Council of Life Insurers, et al. v. U.S. Department of Labor by the U.S. District Court for the Northern District of Texas. The order vacates the Department of Labor's 2024 Definition of Investment Advice Fiduciary rule and related prohibited transaction exemptions, and grants plaintiffs' unopposed motion for entry of final judgment. SIFMA and FSI were Plaintiffs-Intervenors in the challenge to 2024 Rule.

"Today's decision rightly vacates and sets aside the 2024 Rule, which exceeded the DOL's statutory authority and was arbitrary and capricious. The order ensures that financial advisors can continue to provide the services best suited for each individual client. The 2024 rule was materially indistinguishable from a 2016 DOL rule that was struck down by the Fifth Circuit in 2018.

"As we explained in our complaint, '[l]ike the 2016 Rule, the 2024 Rule is inconsistent with the common law, contravenes the statutory text, and impermissibly attempts to regulate the provision of services to accounts over which the Labor Department has no regulatory authority. Indeed, the illegality of the 2024 Rule is even clearer today….' This decision is a win for investors because the unlawful expansion of the definition of a 'fiduciary' would have jeopardized investors' access to advice and education."

Specifically, the court order vacated the Retirement Security Rule: Definition of an Investment Advice Fiduciary as well as the Amendment to Prohibited Transaction Exemption 2020-02, Amendment to Prohibited Transaction Exemption 84-24, and Amendment to Prohibited Transaction Exemptions 75-1, 77-4, 80-83, 83-1, and 86-128.

Plaintiffs-Intervenors' complaint filed in this case, American Council of Life Insurers, et al. v. U.S. Department of Labor, can be found here.