President Trump Takes Initial Steps Aimed at Reshaping Financial Industry Regulation: Executive Order Requires Fundamental Reassessment of Existing Rules; Labor Department to Reexamine its “Fiduciary Rule”

Sullivan & Cromwell LLP - February 4, 2017

Yesterday, President Trump issued an executive order (the “Executive Order”) setting forth seven “Core Principles” to serve as the basis for the Administration’s financial services regulatory policy.  The Executive Order directs the Secretary of the Treasury to consult with the heads of other financial regulatory agencies to evaluate how existing laws, regulations and other aspects of the current financial regulatory framework promote or inhibit the Core Principles and what actions have been, and are being, taken to promote and support the Core Principles.  In a separate memorandum (the “Memorandum”) to the Secretary of Labor, President Trump expressed concern with the so-called “Fiduciary Rule” issued by the Department of Labor in April 2016.  The Memorandum directs the Labor Secretary to examine the Fiduciary Rule against specific standards and to update the Department of Labor’s economic and legal analysis accordingly.  Depending on the outcome of the examination, the Labor Secretary is directed, as appropriate, to propose revisions to the Rule or to rescind it altogether.