After much anticipation, the US Court of Appeals for the Fifth Circuit on Thursday confirmed its earlier decision to vacate the Department of Labor’s “fiduciary advice rule.”
The controversial rule became effective June 2017 and significantly expanded the universe of broker-dealers and other financial advisers subject to ERISA’s fiduciary standards. In March of this year, however, in Chamber of Commerce of the USA vs. US Dep’t of Labor the Fifth Circuit determined that the DOL exceeded its authority in implementing the rule and ordered its vacatur. Following the unsuccessful attempt by various parties to intervene in the litigation and expiration of the parties’ right to appeal the decision to the US Supreme Court, the Fifth Circuit gave effect to its earlier decision by issuing its mandate — officially vacating the rule.