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On July 25, 2024, the U.S. District Court for the Eastern District of Texas halted the effective date of the Department of Labor’s (DOL) 2024 Fiduciary Rule and its amendment to Prohibited Transaction Exemption (PTE) 84-24. The following day, the U.S. District Court for the Northern District of Texas issued its own stay on the 2024 Fiduciary Rule and all related exemptions. As a result, the 2024 Fiduciary Rule will not take effect as scheduled in September, providing temporary relief for retirement advisers. The rule, aimed at redefining "investment advice fiduciary," had significant changes that would impact compliance costs and market dynamics.
Both courts found issues with the rule's consistency with ERISA and the Administrative Procedure Act. The DOL may appeal these decisions, and further legal and legislative developments are expected. In the meantime, advisers should stay informed and consider potential impacts on their practices. |
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