On December 15, 2020, the U.S. Department of Labor (DOL) issued the final version of a reproposed fiduciary rule to regulate “investment advice fiduciaries” under the Employee Retirement Income Security Act of 1974, as amended (ERISA). The rule is meant to replace the DOL’s previous rule on this topic, which was promulgated in 2016 but vacated in 2018 by the U.S. Court of Appeals for the Fifth Circuit.
The final rule, which closely resembles the version initially proposed during summer 2020, officially confirms the reinstatement of the five-part test for determining whether a person renders investment advice for purposes of ERISA and sets forth a new prohibited transaction class exemption for investment advice fiduciaries that is based on the “impartial conduct standards,” which were generally adopted as a temporary policy after the prior iteration of the fiduciary rule was vacated.
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