Since October 2010, the financial services industry has been fighting the Department of Labor’s proposed update to Employee Retirement Income Security Act regulations. The change would be the first in 36 years, and was largely recommended due to shifts in retirement plan designs and the financial marketplace. Significantly, the new rule would cast a much wider net for the meaning of fiduciary.
In the months following the proposal, the DoL received more than 260 written public comments, held two days of hearings, and conducted more than three dozen individual meetings with interested parties.
A second, revised proposal is expected to take these concerns into account while remaining consistent with President Obama’s January 2011 executive order to improve regulation and regulatory review. The DoL expects these revisions to dictate that fiduciary advice is limited to individualized counsel provided to specific parties, address the availability of exemptions for existing fee practices, and address concerns about the rule’s application to routine appraisals and arm’s-length commercial transactions, like swap transactions.