Fiduciary Rule Proposal – Prohibited Transaction Class Exemption (“PTCE”) 86-128

SIFMA is pleased to provide comments regarding the Department of Labor’s (“Department”) proposal to amend and partially revoke Prohibited Transaction Class Exemption (“PTCE”) 86-128 and to amend and partially revoke PTCE 75-1 under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). We appreciate the opportunity to comment and hope that our comments are helpful to the Department as it assesses whether the proposal, as written, will continue to permit plans to achieve best execution for securities transactions or whether they will be relegated to a second class citizens in the market.

SIFMA disagrees with most changes to PTCE 86-128, particularly the exclusion of advised IRAs. We believe that the changes are unnecessary and that they reflect a lack of consideration of other more cost effective approaches.

SIFMA is concerned that the Department proposes to increase safeguards and, thus, the costs and difficulty of complying with the exemption conditions without offering any evidence that the existing safeguards, which have been in place for almost 30 years, have failed to protect plans or IRAs. SIFMA is also concerned that the increased costs and difficulty of moving all advised IRAs out of this exemption and into the BIC exemption, will result only in diminished opportunities for best execution and diminished choices for IRA owners.

See Also:

United States Department of Labor: Conflict of Interest Proposed Rule

See Also:

• Executive Summary
• The Fiduciary Rule Itself
• Best Interest Contract Exemption (BIC exemption)
• Principal Transactions
• Prohibited Transaction Class Exemption (“PTCE”) 84-24
• Prohibited Transaction Class Exemption (“PTCE”) 75-1, Part V
• Additional Exemptions
• Asset Management Group
• NERA Analysis: Comment on the Department of Labor Proposal and Regulatory Impact Analysis
• Deloitte Report on the Anticipated Operational Impacts to Broker-Dealers of the Department of Labor’s Proposed Conflicts of Interest Rule Package