"Stop The Presses! The Fifth Circuit Vacates the DOL Fiduciary Rule" by Michael Manley, George Kostolampros, Lisa Tavares, Carol Calhoun, and Danna Brown was published in Corporate Compliance Insights on April 18, 2018. Here is an excerpt:
The Fiduciary Rule, enacted by the DOL, reinterpreted the "investment advice fiduciary" definition and the exemptions to provisions for a fiduciary in the Employee Retirement Income Security Act of 1974 (ERISA). The new rule was controversial because, among other reasons, it required broker-dealers and other financial professionals to adopt the "best interest" standard, which replaced the DOL's five-part test (and over 40 years of precedent) to determine whether one acted as a fiduciary. In addition, the Fiduciary Rule established the "Best Interest Contract Exemption," which provides a series of requirements to qualify for the exemption and avoid prohibited transaction penalties.
The Fiduciary Rule, enacted by the DOL, reinterpreted the "investment advice fiduciary" definition and the exemptions to provisions for a fiduciary in the Employee Retirement Income Security Act of 1974 (ERISA). The new rule was controversial because, among other reasons, it required broker-dealers and other financial professionals to adopt the "best interest" standard, which replaced the DOL's five-part test (and over 40 years of precedent) to determine whether one acted as a fiduciary. In addition, the Fiduciary Rule established the "Best Interest Contract Exemption," which provides a series of requirements to qualify for the exemption and avoid prohibited transaction penalties.