Labor Department seeks delay of Obama investment adviser rule

Labor Department seeks delay of Obama investment adviser rule
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The Labor Department is seeking an 18-month delay of an Obama-era rule for investment advisers, according to court documents filed Wednesday.

In response to a lawsuit over the rule, agency officials told the court they have asked the Office of Management and Budget (OMB) to delay implementing the rule until July 2019.

The rule places tougher standards on financial advisers, creating a legal requirement that they act in the best interests of their clients. The rule requires advisers to tell clients when they get a commission for selling certain investment products. It is intended to prevent advisers from hiding conflicts of interest that could hurt each client’s bottom line. The rule was set to go into effect in in January 2018.

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Business lobbying groups and the investment industry fiercely oppose the rule issued in 2016 under former President Obama, arguing it would drive up the cost of financial advice and push many Americans out of the investment market. They have challenged the rule in court.

But progressive lawmakers and consumer watchdogs have defended the rule, which is prized by Sen. Elizabeth WarrenElizabeth Ann WarrenWarren on family separation policy: Trump is ‘taking America to a dark and ugly place’ Overnight Defense: States pull National Guard troops over family separation policy | Senators question pick for Afghan commander | US leaves UN Human Rights Council On The Money — Sponsored by Prudential — Markets roiled by Trump's new tariff threat | Trump lashes out at Canada over trade | Warren looks to block Trump pick for consumer agency MORE (D-Mass.).

Labor Secretary Alexander AcostaRene (Alex) Alexander AcostaThere are now more job openings than unemployed workers in the US Flexible pay keeps opportunities open for disabled workers Dems demand end to waivers used to pay people with disabilities below minimum wage MORE oversaw a review of the rule but decided earlier this year that he had no legal basis to delay or amend the rule on his own.

Investment advisers had been bracing for the rule’s implementation but could get a reprieve from the OMB.