The Securities and Exchange Commission and the Labor Departmentwill likely release simultaneously in the fall their fiduciary ruleproposals, prominent ERISA attorneys say.

Fall “is a reasonable estimate,” said Brad Campbell, former headof Labor's Employee Benefits Security Administration, who's nowcounsel with Drinker Biddle & Reath, during the firm's recentInside the Beltway webcast.

“If you assume that they [Labor] needs to complete their changesby July 2019, which is when the deferred provisions of the currentexemptions – the most onerous parts” of Labor's fiduciary rule takeeffect, fall “really is the deadline for action by DOL.”

In fact, both Labor and the SEC “need to have their new plans inplace and moving by that timeframe to avoid further conflict andproblems in how their rules work,” Campbell argued.

DOL would need to put out a proposal by the fall detailing“changes it wants to make in order to provideenough time for the comment period, which would be at least 60days, [and] to then work through the comments and come up with afinal rule and publish them by roughly July.”

Fred Reish, partner at Drinker Biddle & Reath in LosAngeles, agreed that he sees Labor acting in “coordination” withthe SEC. “As a result, the timing of the releases of new proposalsmay be the same for each.”

Labor announced last November theofficial 18-month extension for the start of keyprovisions of the fiduciary rule, stating that the transitionperiod for the rule's Best Interest Contract Exemption and thePrincipal Transactions Exemption, and of the applicability ofcertain amendments to Prohibited Transaction Exemption 84-24(PTEs), would move from the previous Jan. 1, 2018, compliance dateto July 1, 2019.

With the new head of Labor's EBSA, Preston Rutledge, nowconfirmed, revising Labor's fiduciary rule “can begin in earnest,”Reish said.

The importance of Rutledge “as political appointee and providingpolitical leadership to EBSA cannot be overstated,” Reish said.“Without political leadership, really nothing could proceed interms of revising the fiduciary regulation and the prohibitedtransaction exemptions.”

Rutledge can now “provide that political leadership at thegranular level.”

Rutledge has “been able to hit the ground running by virtue ofhis experience in employee benefits,” Campbell added. “He'sfamiliar with the issue.”

That's being said, Rutledge has “a lot he needs to dealwith.”

In 2017, the talk surrounding Labor'sfiduciary rule was “about timing — when would the rule go intoeffect, which parts?” Campbell continued. In 2018, it's “going tobe about sorting through the actual content, and that is going totake them [DOL] a while to do because there's just a lot there thatwe've not really had discussions with the department on andwouldn't have been really until now — with politicalleadership — to start engaging on those issues.”

While the rule became law under the Obama administration, “thisadministration is ultimately going to make the policy decisionsthat go into what the new rule, or the new reformed rule, will looklike. So some of these conversations have to be had anew,” Campbelladded.

Indeed, with a full commission at the SEC, “better coordinationinternally and better coordination with DOL” will ensue, addedJames Lundy, a partner in Drinker Biddle's SEC &Regulatory Enforcement Team. Any SEC fiduciary rule will “becrafted in such a way to attempt to avoid any challenge by anyoutside party vis-a-vis a judicial proceeding that would overrulethe rule.”

As to new fiduciary rules issued by the states, Campbell saidthat “there's a question about how some of these state statutesmight be pre-empted. In particular, there's some decent pre-emptionin the securities area. So there's a question about how much statescould do in securities regulation that might be preempted byfederal law.”

In 2018, Campbell said that he'll be watching howdevelopments and outcomes “in the fiduciary regulatory fights atthe SEC, at DOL and the resolution of court cases challenging theDOL rule as being invalid” will “encourage states to take action ordiscourage them.”