Dechert Submits Comment on ERISA's Fiduciary Rule

The amended "investment advice" regulations of the U.S. Department of Labor‎ (the "DOL") under the fiduciary provisions of the Employee Retirement Income Security Act of 1974, and the related "prohibited transaction" exemptions (collectively, the "Fiduciary Rule") have been extremely controversial. Dechert has issued a number of alerts regarding the Fiduciary Rule, which can be found here.

Surprisingly to some, the Fiduciary Rule generally became applicable on June 9, 2017. One of the aspects of the Fiduciary Rule ‎that became fully applicable on June 9 is the exception that allows fiduciary status to be avoided, known as the "independent fiduciary exception" (the "IFE"). The manner in which the IFE operates has given rise to, among other things, (i) a proliferation of new documentary provisions, and even entirely new documentation, in the market, and (ii) an unwillingness on the part of a number of financial institutions to continue to deal with individual retirement accounts in a number of investment contexts.

Dechert identified certain potential fixes regarding the foregoing two points, and, on October 26, 2017, submitted a comment letter to the DOL setting forth and discussing those fixes. If you have any questions regarding the Fiduciary Rule, please contact the Dechert attorney listed below or any Dechert attorney with whom you regularly work.