EBSA to Re-Propose Fiduciary Rule

09.24.2011
HR & Safety

The DOL’s Employee Benefit Security Administration (EBSA) will re-propose its rule on the definition of a fiduciary. The decision is in part a response to requests from the public, including members of Congress, that the agency allow an opportunity for more input on the rule.

The agency is seeking to amend a 1975 regulation: which defines when a person providing investment advice becomes a fiduciary under the Employee Retirement Income Security Act: in order to adapt the rule to the current retirement marketplace. The proposal’s goal is to ensure that potential conflicts of interest among advisers are not allowed to compromise the quality of investment advice that American workers rely on in planning retirement.

Specifically, the agency anticipates revising provisions of the rule to clarify that fiduciary advice is limited to individualized advice directed to particular parties, responding to concerns about the application of the regulation to routine appraisals and clarifying the limits of the rule’s application to arm’s length commercial transactions, such as swap transactions.

Also anticipated are exemptions addressing concerns about the impact of the new regulation on the current fee practices of brokers and advisers, and clarifying the continued applicability of exemptions that have long been in existence that allow brokers to receive commission in connection with mutual funds, stocks, and insurance products.

The new proposed rule is expected to be issued in early 2012. For more information:

http://www.dol.gov/ebsa/regs/cmt-1210-AB32.html

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