Experiential Wealth

Response to the 5th Circuit Appeal Court’s Decision

May 7, 2018 | Institutions, Regulations

In response to the 5th Circuit Appeal’s Court decision, Mabel Capolongo, Director of Enforcement Regional Directors at the DOL today issued “FIELD ASSISTANCE BULLETIN NO. 2018-02” which states:

For the period from June 9, 2017, until after regulations or exemptions or other administrative guidance has been issued, the Department will not pursue prohibited transactions claims against investment advice fiduciaries who are working diligently and in good faith to comply with the impartial conduct standards for transactions that would have been exempted in the BIC Exemption and Principal Transactions Exemption, or treat such fiduciaries as violating the applicable prohibited transaction rules. Of course, investment advice fiduciaries may also choose to rely upon other available exemptions to the extent applicable after the Fifth Circuit’s decision, but the Department will not treat an adviser’s failure to rely upon such other exemptions as resulting in a violation of the prohibited transaction rules if the adviser meets the terms of this enforcement policy.

The DOL is evaluating the need for other temporary or permanent prohibited transaction relief for investment advice fiduciaries, including possible prospective and retroactive prohibited transaction relief. The DOL will, of course, consider any applications for additional relief. This Bulletin is an expression of DOL’s temporary enforcement policy, and it does not address the rights or obligations of other parties.

Here is the Field Assistance Bulletin in its entirety.