DOL to Hold Public Hearing on Proposed Fiduciary Rule

The Department of Labor’s (DOL) Employee Benefits Security Administration will hold a virtual public hearing on December 12 through December 13, 2023, on its proposed “Retirement Security Rule: Definition of an Investment Advice Fiduciary.” The proposed fiduciary rule, published in the Federal Register on November 3, 2023, would amend DOL’s current regulation defining who is a “fiduciary” of an employee benefit plan for purposes of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) as a result of providing investment advice to a plan. The updated definition of an investment advice fiduciary would apply when financial services providers give investment advice for a fee to retirement plan participants, individual retirement account owners, and others.

DOL has prepared an initial regulatory flexibility analysis for the rulemaking outlining the costs and impacts to small businesses. The analysis states that the rulemaking will affect many small businesses, including registered investment advisers, broker-dealers, robo-advisers, and insurance companies. Over 97 percent of broker-dealers and 99 percent of registered investment advisers are small businesses. DOL is requesting comments on the rule, and small businesses are encouraged to provide detailed information on the direct cost implications and whether there are any regulatory alternatives that would minimize the impact on small entities.

Written comments are due by January 2, 2024.