Please note: As of January 20, 2021, information in some news releases may be out of date or not reflect current policies.
News Release
Labor Department Adopts Amendment To Broker-Dealers Exemption
Archived News Release — Caution: Information may be out of date.
Washington, DC - The U.S. Department of Labor’s Pension and Welfare Benefits Administration today issued a technical amendment to an existing class exemption that allows employee benefit plan fiduciaries to use certain affiliated broker-dealers to execute securities transactions for plans.
The revised exemption is designed to address the consolidation in the financial services industry that has resulted in more trustees having an affiliation with broker-dealers. The amendment puts trustees on a level playing field with investment managers.
The exemption amends Prohibited Transaction Exemption (PTE) 86-128, which allows plan fiduciaries to receive a fee for executing securities transactions for plans. Prior to the amendment, PTE 86-128 generally did not allow the receipt of a fee by a plan trustee having discretionary authority over plan assets. The amendment was requested in an exemption application filed by the Securities Industry Association.
The amendment now permits such trustees of plans with at least $50 million in assets to receive a fee for the execution of securities transactions for plans. One protection afforded by the amendment is the provision of certain relevant information by the trustee to a plan fiduciary that is independent of the discretionary trustee.
The amendment is effective upon publication in the Federal Register. The amended exemption is scheduled for publication in the October 17, 2002 Federal Register.
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Archived News Release — Caution: Information may be out of date.