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The DOL Finalizes the Prohibited Transaction Exemption Covering Investment Advice Fiduciaries

The DOL recently finalized Prohibited Transaction Exemption 2020-02 – Improving Investment Advice for Workers & Retirees (“PTE 2020-02”) for investment advice fiduciaries.  PTE 2020-02 finalizes the proposed exemption which we previously reported on here.  This guidance for investment advice fiduciaries completes the regulatory process that began in 2016 with the new fiduciary regulations and exemptions issued under the Obama administration, which were vacated in 2018, and the reinstatement of prior regulations and the issuance of new exemption guidance earlier this year.  While PTE 2020-02 makes some changes to the proposed exemption, it largely retains the proposed exemption’s protective framework, including the “Impartial Conduct Standards” (under which investment advice fiduciaries must provide advice that is in the retirement investor’s “best interest”), required disclosures, implementation of policies and procedures to comply with the standards and mitigate conflicts of interest, and retrospective compliance review.  The final exemption also includes a self-correction mechanism for… Continue Reading

December 2020
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