DOL Releases Final Investment Advice Exemption

On December 18, 2020, the US Department of Labor (DOL) published in the Federal Register the final prohibited transaction class exemption for investment advice, Prohibited Transaction Exemption 2020-02 (Final Investment Advice Exemption). DOL had issued the proposed investment advice exemption (Proposed Exemption) on June 29, 2020, and we discussed it in our previous Advisory. As a recap, the Proposed Exemption and the Final Investment Advice Exemption will allow investment advice fiduciaries to IRAs and ERISA plans (and similar tax-favored accounts) to receive transaction-based and other variable compensation in connection with providing investment advice as a fiduciary, and to engage in certain principal transactions, without violating the prohibited transaction rules of ERISA and the Internal Revenue Code. The Final Investment Advice Exemption is substantially identical to the Proposed Exemption with only a few key changes, one of which will be of particular