Investment Advice Fiduciary Class Exemption Published
Appearing in the December 18, 2021 Federal Register was Department of Labor Employee Benefits Security Administration (EBSA) Prohibited Transaction Exemption (PTE) 2020-02, which will provide guidance to investment advisors who counsel retirement and other investors. This guidance completes a process that began with 2016 regulations and exemptions issued under the Obama administration. Those regulations and exemptions were subsequently vacated in 2018 by a federal appeals court.
PTE 2020-02 maintains the impartial conduct standard that has been in effect since 2018, under which those who advise retirement and retail investors are to adhere to several principles:
- receive only reasonable compensation;
- make no misleading statements in the course of their advising; and
- act in the client’s best interest.
With today’s publication of the guidance, PTE 2020-02 becomes effective February 16, 2021.
