Core Principles for Regulating the United States Financial System…

President Donald J. Trump signed (i) an Executive Order setting forth “Core Principles for Regulating the United States Financial System” and (ii) a memorandum regarding the Department of Labor’s fiduciary rulemaking.

The Executive Order directs the Secretary of the Treasury, along with the heads of the FSOC member agencies (i.e., the Federal Reserve, the FDIC, the OCC, the CFPB, the SEC, the CFTC, the NCUA, and the FHFA) to issue a report within 120 days, and periodically thereafter, to address whether existing laws, regulations, and similar requirements are consistent with the Core Principles.

In a presidential memorandum, President Trump directed the Secretary of Labor to “prepare an updated economic and legal analysis” of the fiduciary rule. The rule was set to go into effect in April. The Secretary of Labor was instructed to review whether the rule: (i) has “harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice”; (ii) has resulted in dislocations or disruptions within the retirement services industry, and (iii) is “likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.” After such review, if the Secretary affirms any of the negative effects listed above, or if it determines that the Fiduciary Rule is otherwise inconsistent with any of the stated priorities in the presidential memorandum, then he is directed to propose a rule that rescinds or revises the Fiduciary Rule.

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