Taking into account this delay, the Fiduciary Rule, the BIC Exemption, and the Principal Transactions Exemption will apply as of June 9, 2017, but will initially require fiduciaries only to meet the Impartial Conduct Standards, but not the documentation, disclosure, and other conditions of the PTEs. The Impartial Conduct Standards include providing advice in the investor’s best interest, charging no more than reasonable compensation, and avoiding misleading statements. Beginning January 1, 2018, all remaining conditions in the fiduciary guidance published April 8, 2016 will apply, unless subsequent revisions are announced. The conditions effective January 1, 2018, include specific disclosure requirements, representations and warranties of fiduciary compliance in communications with investors, and, in the case of the BIC Exemption, entering into written contracts with IRA investors.
Reed Smith Client Alerts
On April 4, 2017, less than a week before the scheduled applicability date, the Department of Labor (the “DOL”) announced a 60-day extension of its fiduciary guidance published April 8, 2016: the revised definition of a fiduciary under the Employee Retirement Income Security Act (“ERISA”) (the “Fiduciary Rule”), the new Best Interest Contract Exemption (“BIC Exemption”), and Principal Transactions Exemption and revisions to PTE 84-24, PTE 86-128, and other previously granted exemptions affected by the Fiduciary Rule.
Reverting to old fiduciary guidance raises new questions for recommendations
31 July 2018