DOL Proposes Rule to Address Conflicts of Interest

April 15, 2015 by rfg

The proposal would broaden the fiduciary definition, narrow exceptions, and substantially revise prohibited transaction exemptions applicable to current and newly covered fiduciaries. 

The US Department of Labor (DOL) yesterday released its proposed rule “Definition of the Term ‘Fiduciary’; Conflict of Interest Rule—Investment Advice,” which replaces its 2010 proposal. The proposal would change the definition of an investment advice fiduciary for the Employee Retirement Income Security Act (ERISA) standards of fiduciary conduct and the prohibited transaction rules under ERISA and section 4975 of the Internal Revenue Code (the Code). The proposal’s publication comes approximately 50 days after the Office of Management and Budget received the proposal for review on February 23. If adopted as proposed, we believe that the rule will profoundly affect how members of the financial services industry provide services to plans and Individual Retirement Accounts (IRAs).

The IRS Fact Sheet can be found here.

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