The Bush administration’s investment advice rule was published in the Federal Register on Tuesday, January 20, but it isn’t scheduled to go into effect until March 23.
Emanuel’s memo on Tuesday asks agencies to consider putting off the effective date of last-minute regulations for an additional 60 days to give Obama administration executives an opportunity to review the rules.
The investment advice rule has the support of House Minority Leader John Boehner, R-Ohio, but it is vehemently opposed by House Education and Labor Committee Chairman George Miller, D-California. In a January 16 joint statement, Miller and Rep. Rob Andrews, D-New Jersey, vowed to “use every tool at our disposal to block implementation of this harmful regulation.”
“In light of Miller’s criticisms, there’s a good chance that the effective date of the regulation will be deferred,” said Donald Myers, an ERISA attorney with the law firm of Reed Smith.
“It will be a while before we see where this is going to go, but I don’t think this regulation is going to see the light of day,” added Jason Bortz, an ERISA attorney for the law firm of Davis & Harman.
Travis Larson, a spokesman for the Securities Industry and Financial Markets Association—a proponent of the Bush administration rule—said it was too early to predict what would happen.
“Based on our reading, the memo from Chief of Staff Emanuel does not mandate a 60-day delay but leaves that to the discretion of the agency head,” Larson said. “At this time, it is still unclear what [Labor] Secretary-designate [Hilda] Solis’ view is on this particular rule.”
The investment advice rule would allow mutual funds and other investment companies to offer investment advice directly to plan participants, as long as the employee’s compensation doesn’t depend on the investment options selected by the participant and the advice meets other key conditions.