Professor Lazaro was quoted by Law360 and BenefitsPRO on the recent announcement that the Department of Labor is seeking a further delay of its Fiduciary Duty Rule, currently set to be fully implemented on January 1, 2018. The DOL has requested a delay of 18 months, pushing back full implementation to July 1, 2019. 
On Law360, Professor Lazaro was quoted in Carmen Germaine’s article, “Further Delay Tees Up Fiduciary Rule For Major Changes.” Professor Lazaro discussed the review process, and potential revisions:
As the OMB considers the extension, stakeholders on both sides of the rule will have the opportunity to meet with office staff members, while the public at large can comment, St. John’s University School of Law Professor Christine Lazaro noted. Proponents of the rule may also bring a legal challenge if the extended delay does go into effect.
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“It’s difficult to say right now whether the BIC itself will ever come into being looking like it does now,” Lazaro said. “Most of the industry objection has been to the contract itself and the disclosure requirements, so if changes are going to be made that’s likely where it’s going to be made.”
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But Lazaro said that the contract remains an important part of the exemption even without the class action waiver ban, as arbitrators may be less likely to grant claims for breach of fiduciary duty without a written agreement. She added that brokers typically disclaim they had a fiduciary duty if the investor’s account is non-discretionary.
“If a broker or an investment adviser doesn’t act in the best interest of the investor, the investor needs to have some way to hold the person accountable for that, and a contract is one of the easiest ways to do it,” Lazaro said.
Professor Lazaro was also quoted in Nick Thornton’s article on BenefitsPRO, “Does Labor have justification to delay fiduciary rule?” discussing the rationale for the delay:
Christine Lazaro, director of the Securities Arbitration Clinic at St. John’s University School of Law and a board member of the Public Investors Arbitration Bar Association, does not think those potential justifications satisfy APA’s requirements.
“I haven’t seen evidence that industry needs more time to comply,” said Lazaro. PIABA is also advocating against a delay.
“True, development of new products will take time, but it appears the industry has had sufficient time to develop policies and procedures capable of complying with the rule,” she said.
To Lazaro, it appears Labor’s justification for a delay is that it needs more time to complete its review of the rule.
“But if Labor doesn’t have new information as to why the rule should not proceed, it should not delay for the sole purpose of reviewing the rule,” added Lazaro.
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