The Department of Labor (DOL) has issued the final version of its “investment advice” regulation (Final Rule), which is widely expected to impact significantly the financial services industry, including registered investment companies (funds) and their sponsors and intermediaries. The implications of the Final Rule have been emerging since its release, as the fund industry has studied its terms and considered its application to current distribution structures. The Final Rule expands the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974 (ERISA).
For a comprehensive overview of the Final Rule, please refer to Dechert’s May OnPoint, which provides an in-depth discussion of: (i) the basic structure of the Final Rule and “Best Interest Contract” Exemption (BIC Exemption); (ii) the definition of “recommendation” under the Final Rule; (iii) the activities excluded from this definition; (iv) the widespread impact of the Final Rule; and (v) the effective date of the Final Rule and certain grandfathering relief.
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