View From Sidley: Potential Impact of Proposed DOL Guidance on Definition of Fiduciary
On April 14, 2015, the U.S. Department of Labor (‘‘DOL’’) issued a new proposed regulation defining ‘‘fiduciary,’’ which would expand the circumstances under which consultants, advisers, appraisers and others become fiduciaries for purposes of the Employee Retirement Income Security Act as a result of providing ‘‘investment advice.’’ In addition, the DOL issued a new proposed prohibited transaction class exemption, referred to as the ‘‘Best Interest Contract Exemption,’’ as well as other proposed guidance. In general, it appears that the DOL issued the proposed exemption and other proposed guidance in order to permit current business practices to continue even if certain parties who are not currently considered to be fiduciaries become fiduciaries as a result of the proposed regulation. However, the question is whether these proposals will really permit current business practices to continue.
Reproduced with permission from Pension & Benefits Daily, 113 PBD, 06/12/2015. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com