On June 29, 2020, the day before Reg BI became effective, the
Department of Labor ("DOL") announced
1 its
new approach to the standards for financial institutions and
investment professionals who provide investment advice on a
nondiscretionary basis to 401(k) plans, pension plans, or other
plans covered by ERISA or to IRAs (collectively, "Retirement
Plans") after its prior 2016 regulations (the "2016
Fiduciary Rule") were struck down by the Fifth Circuit in June
2018.
The DOL
released final regulations that reinstate its definition of who
is a fiduciary by reason of providing investment advice to
Retirement Plans, which reflect the "5-Part Test" that
was in effect from 1975 until its modification by the 2016
Fiduciary Rule, along with adding several new interpretations and
clarifications to the longstanding 5-Part Test.
2 The DOL also proposed a new prohibited transaction
exemption ("PTE") that, if finalized as proposed,
will provide rules for financial
