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COLLECTED WISDOM™ on the DOL and SEC Fiduciary Rules

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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Other topical areas you may find of interest include Fiduciary Responsibility and Liability Issues and Fiduciary Related News and Intelligence.

Fred Reish: Novel Compliance Approach to 401k Fiduciary Standard

Abstract: This article discusses a novel approach for compliance with the fiduciary standard for the selection of investments for 401k plans. All the more interesting, the approach was part of an opinion of the U.S. First Circuit Court of Appeals.

Source: 401kspecialistmag.com, February 2019

Nevada Proposes Sweeping Fiduciary Regulation

Abstract: On January 18, the Nevada Securities Division released its long-awaited proposed draft regulation. Under the proposed regulation, a broker-dealer and sales representative are presumed to owe a fiduciary duty to the client.

Source: Fiduciarygovernanceblog.com, January 2019

Advice Standards Packages From the SEC and DOL Expected by September 2019

Abstract: The Securities and Exchange Commission's advice standards package and the Labor Department's revised fiduciary rule are both expected to be finalized by September 2019, ThinkAdvisor writes. As part of the SEC package, there will be changes to Regulation Best Interest and the Customer Relationship Summary, according to SEC Chairman Jay Clayton, the publication writes.

Source: Thewealthadvisor.com, December 2018

How the DOL Fiduciary Rule Proposal Affected Fund Flows

Abstract: When the Labor Department proposed its fiduciary rule in 2015, its key objective was to reduce the effect of conflicts of interest on the advice investors rely on to save for retirement. When we examine the data, we see that the DOL fiduciary rule proposal was successful in mitigating lower returns resulting from conflicted advice in the two years after the rule was proposed. Now as the Labor Department rule has been struck down by the courts, the question is, will the SEC turn its Regulation Best Interest proposal into a workable regulation that maintains these positive trends for investors?

Source: Morningstar.com, December 2018

SEC Investor Advisory Committee Calls for Stronger Best Interest Regulations

Abstract: The committee says the SEC should explicitly explain that Regulation Best Interest is a fiduciary duty shared equally by advisers and broker/dealer to act in their customers' best interest.

Source: Planadviser.com, November 2018

Broker-Dealers as Fiduciaries After the DOL Rule Vacatur

Abstract: The purpose of this 14-page article is to explain a broker-dealer's obligation when it provides recommendations to accounts subject to ERISA and the Code post-vacatur. Additionally, it looks at where broker-dealer activities may be headed considering the SEC's proposed Regulation Best Interest and compare that to what is required under ERISA and the Code. Many broker-dealers, particularly if they provide investment advice, will find complying with an SEC "best interest" standard and the fiduciary and prohibited transactions of ERISA and the Code quite challenging.

Source: Groom.com, October 2018

DOL to Introduce New Fiduciary Rule

Abstract: The never-ending story of the Department of Labor's efforts to implement and enforce a fiduciary rule could soon roar back to life, with the DOL signaling September 2019 as the target. Appearing on the Office of Information and Regulatory Affairs website, the department says it's considering regulatory options in light of the Fifth Circuit opinion, which vacated the DOL's new regulatory definition of a fiduciary.

Source: 401kspecialistmag.com, October 2018

DOL Likely to Address Fiduciary Rule Again Next Year

Abstract: The agency released a regulatory agenda on Thursday that indicates that it will consider "regulatory options" to respond to the U.S. Fifth Circuit Court of Appeals decision in March to vacate the rule, which would have required brokers in retirement accounts to act in the best interests of their clients. The deadline for a proposal is September 2019.

Source: Investmentnews.com (registration may be required), October 2018

Standards of Conduct for Investment Professionals - Overlapping Protections for Broker-Dealer Retirement Customers

Abstract: The legal standards for broker-dealer firms and their representatives, particularly in the retirement market, continue to be in flux. BDs were among those most affected by the promulgation in 2016 of the DOL fiduciary rule under ERISA, which undertook to switch their legal status in the retirement market from securities selling firms to unconflicted fiduciary advisers. Thus, BDs are among those most affected by the vacatur of that rule. With the SEC "best interest" standard of care proposal, however, the regulatory environment continues to evolve. Article looks at the overlapping layers of regulation to which BDs could be subject in the retirement market.

Source: Eversheds-sutherland.com, October 2018

Why the SEC Will Never Enact a Meaningful Fiduciary Standard

Abstract: The author writes in this opinion piece, "I continue to enjoy reading analyses on the SEC's BI proposal. These are analyses from industry leaders, people who I greatly admire and respect. When people ask my opinion, I just tell them it is all just a cruel game, that the SEC has never intended to protect the public with a meaningful universal fiduciary standard, that the SEC will never do so, as it would jeopardize their own careers and risk incurring the wrath of Wall Street."

Source: Iainsight.wordpress.com, October 2018

Understanding the Unwinding of DOL's Fiduciary Rule

Abstract: This 14-page article discusses the implications of the Fifth Circuit's vacatur of the U.S. Department of Labor's fiduciary rule, best interest contract and principal transactions exemptions, and related amendments to other prohibited transaction exemptions, or PTEs, in Chamber of Commerce of the United States v. United States Department of Labor.

Source: Groom.com, September 2018

DOL Fiduciary Rule Post-Mortem: How Long Will the Taste Linger?

Abstract: The DOL's Fiduciary Rule has been vacated. In its stead we now have the SEC's "Best Interest" proposal. This is the first in a three-part series that will reflect on the past, present, and future of the fiduciary standard.

Source: Fiduciarynews.com, August 2018

Why You Should Still Take the Fiduciary High Ground on 401k Rollovers

Abstract: The Fifth Circuit Court of Appeals issued its mandate to vacate the Department of Labor fiduciary rule in June, but guidance issued by the DOL the month prior allows at least part of the rule to continue to apply. This anomaly has some profound ramifications for retirement advisers dispensing rollover advice.

Source: Investmentnews.com (registration may be required), August 2018

SEC Best Interest Proposals: What They Mean for Investment Advisors

Abstract: This 16-page paper focuses on the RIA Interpretation and its impact on investment advisors. In addition, it briefly discusses the proposed Form CRS relationship summaries and highlights some of the provisions that impact RIAs.

Source: Tdainstitutional.com, August 2018

Groups Say SEC's Best Interest Proposal Fails to Provide Uniform Fiduciary Standard

Abstract: Comments on the SEC's proposed best interest standards express concern that the standards fail to impose a uniform fiduciary standard or define key terms, most notably, what is a "best interest" standard.

Source: Planadviser.com, August 2018

DOL Fiduciary Rule Can Cause Litigation Risk From Beyond the Grave

Abstract: Although the Labor Department's fiduciary rule died in court in June, it can still cause litigation risk for firms that changed their policies to comply with the measure. If you adopted policies and procedures, you need to make sure you're following them, or, if you decide it is appropriate, change them back.

Source: Investmentnews.com (registration may be required), July 2018

States Start Knitting a Patchwork of Best Interest Fiduciary Regulations

Abstract: With the judicial defeat of the Obama-era DOL fiduciary rule hanging in the air, individual states are moving to establish their own best interest regulations for the sale and service of investment products; attorneys warn that more piecemeal regulation is likely, as are lawsuits to test some complex ERISA preemption issues.

Source: Planadviser.com, July 2018

How the DOL Fiduciary Rule Changed Norms

Abstract: The Department of Labor fiduciary rule might be history, but many financial professionals will continue to feel the effects of its rules for some time to come. They will feel that impact in two ways: from the changing norms fueled by the three-year interaction with the DOL rule; and from lingering department guidance that lives on.

Source: Insurancenewsnet.com, July 2018

State Enforcement Remains Risk in Wake of DOL Fiduciary Rule Sunset

Abstract: Massachusetts Securities Regulator Galvin wants the SEC "to re-draft its Regulation Best Interest for brokers and mandate a true fiduciary standard that investors deserve."

Source: Fiduciarygovernanceblog.com, June 2018

DOL Fiduciary Rule is Officially Vacated, Focus Shifts to SEC

Abstract: After nearly a decade in the making, the Department of Labor's fiduciary rule appears to be officially dead. Meanwhile, the SEC published proposed conflict of interest rules for broker-dealers and investment advisers.

Source: Erisapracticecenter.com, June 2018

The End of the DOL's Fiduciary Rule

Abstract: On June 21, 2018, the Fifth Circuit Court of Appeals issued a mandate vacating the controversial fiduciary rule issued by the U.S. Department of Labor in 2016. The mandate follows the court's opinion issued on March 15, 2018, which invalidated the rule. As a result of the mandate, the fiduciary rule is no longer effective nationwide.

Source: Bradley.com, June 2018

Lessons 401k Advisers Learned From the DOL Fiduciary Rule Saga

Abstract: Retirement plan advisers, especially specialists, used to complain that their broker-dealers and the public ignored them, or, worse, didn't realize they existed. All that has changed now that retirement has become a key political issue and retirement advisers have a target on their backs.

Source: Investmentnews.com (registration may be required), June 2018

Fifth Circuit Issues Mandate Vacating Fiduciary Rule

Abstract: On June 21, 2018, the United States Court of Appeals for the Fifth Circuit issued its mandate officially vacating in toto the DOL's 2016 Fiduciary Rule, including the Best Interest Contract, and the DOL's other related 2016 prohibited transaction exemptions. The mandate is the final step following the Fifth Circuit's March 15, 2018 judgement in U.S. Chamber of Commerce v. DOL, where the court held that the Fiduciary Rule was invalidly promulgated.

Source: Groom.com, June 2018

Why Fiduciary Status Still Matters in a Post-Fiduciary Rule World

Abstract: Previous industry assumptions that brokers and other "sellers" of investments generally were not fiduciaries under the 1975 regulation should no longer be relied upon. This article examines how the Fiduciary Rule's impending demise will affect prohibited transaction and compensation issues for broker-dealers in light of their likely continuing status as fiduciaries.

Source: Brokerdealerlawblog.com, June 2018

SEC Best-Interest Proposal Doesn't Affect 401k Brokers

Abstract: While the SEC has proposed to impose a limited, or transaction-based, best-interest standard on broker-dealers, that only applies to investment recommendations made to "retail customers." Based on the SEC's definitions, it does not appear that, for the court, retirement plans are retail customers. As a result, broker-dealer investment recommendations to retirement plans would not be covered by the best-interest standard.

Source: Investmentnews.com (registration may be required), June 2018

It's Official: U.S. Rule to Protect Retirement Savers Is Dead

Abstract: The last deadline for resuscitating the fiduciary rule passed when the government declined to ask the U.S. Supreme court to reconsider the appeals court’s decision. The prospect of holding advisers accountable to retirement savers hasn't disappeared entirely, though. The SEC is considering its own version of the fiduciary rule, known as the best-interest rule.

Source: Bloomberg.com, June 2018

Plaintiffs Press for Fiduciary Rule 'Closure'

Abstract: The victorious plaintiffs in litigation vacating the Labor Department's fiduciary rule would like the U.S. Court of Appeals for the 5th Circuit to put the rule -- and the financial services industry at large -- out of its collective "misery."

Source: Asppa.org, June 2018

SEC's Regulation Best Interest Falls Short of Making Broker-dealers Fiduciaries

Abstract: The big takeaway is that the proposed SEC rules probably don't apply to advice given to retirement plan sponsors but would apply to advice given to participants in a workplace plan, especially as it pertains to rolling over their retirement accounts into an individual retirement account.

Source: Benefitnews.com, June 2018

The Legacy of the DOL Fiduciary Rule

Abstract: Even as the DOL's? fiduciary rule teeters on the edge of demise, its legacy will continue to profoundly influence how advice is delivered. Having caused significant shifts among advisers, firms and consumers, can the push for a higher investment-advice standard really be erased by one court's decision?

Source: Investmentnews.com (registration may be required), June 2018

States Ask 5th Circuit to Reconsider Fiduciary Ruling

Abstract: In a filing on May 16, the states explain that since the federal government "is no longer pursuing this appeal... the exceptional importance of the issues, and the grave harm the States will suffer as a result of the panel opinion -- billions of dollars in lost retirement income to their residents and tens of millions of dollars in lost tax revenue -- the States respectfully request that the Court reconsider its decision."

Source: Ntsa-net.org, May 2018

DOL Issues Temporary Enforcement Policy with Respect to Investment Advice Fiduciaries

Abstract: The FAB states that during the period from June 9, 2017 until after regulations or prohibited transaction exemptions or other administrative guidance have been issued, neither the DOL nor IRS will pursue prohibited transactions against investment advice fiduciaries who are working diligently and in good faith to comply with the impartial conduct standards for transactions that would have been exempted in the Best Interest Contract and Principal Transactions Exemptions, or treat such fiduciaries as violating the applicable prohibited transaction rules.

Source: Wagnerlawgroup.com, May 2018

DOL Announces Temporary Enforcement Policy in Response to Fifth Circuit Decision

Abstract: Under the FAB, DOL states that it "will not pursue prohibited transaction claims against investment advice fiduciaries who are working diligently and in good faith to comply with the impartial conduct standards for transactions that would have been exempted in the BIC Exemption and Principal Transactions Exemption, or treat such fiduciaries as violating the applicable prohibited transaction rules."

Source: Groom.com, May 2018

SEC Proposes New Interpretation of Fiduciary Duty

Abstract: The Proposed Interpretation sets forth the SEC's views of investment advisers' fiduciary duties under the Advisers Act, including the duties of care and loyalty, and the SEC's views on an investment adviser's ability to vary or modify the fiduciary duty. Such an interpretive proposal of an existing obligation, unlike a rule or form proposal, could have some legal effect from the date of its publication and could be cited in SEC enforcement proceedings.

Source: Akingump.com, May 2018

Legal Experts See Long Road Ahead for SEC Proposals

Abstract: A company 401k plan can be a great asset for an employer, with the three Rs resulting when the plan is thoughtfully designed and managed. Consulting with knowledgeable service providers, plan sponsors can construct a plan that will Recruit, Retain and Retire. The beneficiaries will be employer and employee alike.

Source: Asppa.org, May 2018

SEC Best Interest Standard is Major Departure From DOL Fiduciary Guidance

Abstract: A company 401k plan can be a great asset for an employer, with the three Rs resulting when the plan is thoughtfully designed and managed. Consulting with knowledgeable service providers, plan sponsors can construct a plan that will Recruit, Retain and Retire. The beneficiaries will be employer and employee alike.

Source: Ascensus.com, May 2018

The Fate of the Fiduciary Rule: What is Not Affected

Abstract: While we won't know until the end of the month whether the DOL fiduciary rule will survive beyond May 7, there are some activities that won't be affected, regardless of what happens. This article reviews four of these activities.

Source: Brokerdealerlawblog.com, April 2018

Fiduciary Proposal: Revenge of the SEC

Abstract: This article provides an overview of the core provisions of the SEC's Best Interest Package, as well as high-level observations on how it tracks or departs from the DOL's Fiduciary Rule.

Source: Groom.com, April 2018

SEC's Fiduciary Rule Could Erase Question of Labor Dept. Appeal

Abstract: The SEC unveiled its take on a fiduciary rule late April 18, and the proposed rule includes elements that echo the DOL's embattled fiduciary rule. That could make it easier for the DOL to walk away from its own fiduciary rule and not appeal a recent court decision that vacated it, sources told Bloomberg Law.

Source: Bna.com (registration may be required), April 2018

It's Not Deja Vu, It's a Brand New Best Interest Rule Making Debate

Abstract: The release of a thousand-page "best interest" rule making package by the SEC applying to all brokers and investment advisers is being hailed as a victory by some and a deep disappointment by others; either way, it's the start of another long chapter in the epic industry battle over federal conflict of interest regulations.

Source: Planadviser.com, April 2018

SEC Proposes Revised Conflict of Interest Standards for Brokers and Advisers

Abstract: It will take time for the fully detailed picture to emerge, but the SEC voted late Wednesday to propose new conflict of interest standards for how broker/dealers and financial advisers label themselves and sell products under various fee structures to retail clients.

Source: Planadviser.com, April 2018

SEC Rolls Out Best Interest, Fiduciary Proposal

Abstract: The SEC release for public comment a set of proposals to enhance the quality and transparency of investors' relationships with investment advisers and broker-dealers while preserving access to a variety of types of advice relationships and investment products.

Source: Ntsa-net.org, April 2018

SEC Fact Sheet on Proposed Best Interest Standard

Abstract: Under proposed Regulation Best Interest, a broker-dealer would be required to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. In addition to its proposed regulation, the SEC also issued this Fact Sheet on its proposed best interest regulation.

Source: Benefitsforward.com, April 2018

SEC Proposed Interpretation of Best Interest Standard of Conduct

Abstract: Along with the issuance of its proposed regulations, the SEC is also publishing a proposed interpretation of the standard of conduct and request for comments.

Source: Benefitsforward.com, April 2018

SEC Proposed Rule on Best Interest Standard

Abstract: The SEC has issued a proposed regulation establishing a standard of conduct for broker-dealers and those associated with broker-dealers when making recommendations of securities transactions or investment strategies involving securities to retail customers.

Source: Benefitsforward.com, April 2018

The Future of the ERISA Fiduciary Rule

Abstract: The future of the Fiduciary rule is uncertain, particularly considering the Fifth Circuit's decision vacating the rule. Although recent developments do not require action at this time, plan fiduciaries should continue to keep apprised of the necessity of complying with the Fiduciary rule and, accordingly, continue to monitor the efforts of their service providers who provide investment advice to their retirement plans and plan participants.

Source: Pillsburylaw.com, April 2018

SEC Announces Open Meeting on Fiduciary Issues

Abstract: Tontine is a fancy word for betting on how long you'll live, in a good way. Here's the concept in a nutshell: many people pool their money in return for guaranteed regular payouts for life, similar to an annuity. This 6-page paper takes a close look at an idea that is tossed around among finance experts: modifying tontines to use them as a source of retirement income.

Source: Bc.edu, April 2018

A Closer Look at the 5th Circuit Decision Vacating the Fiduciary Rule

Abstract: After the Fifth Circuit's ruling, a number of US law firms issued client advisories concerning the impact of the Fifth Circuit's decision on the rule. There has been some confusion as to whether the Fifth Circuit's ruling had a nationwide effect or, in light of the decisions upholding the rule, was limited to the jurisdiction of the Fifth Circuit.

Source: Kattenlaw.com, April 2018


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