DOL PTE Proposal on Investment Advice


SIFMA provides comments to the Employee Benefit Security Administration (EBSA) regarding the Department of Labor (DOL) proposal in regards to a prohibited transaction exemption (PTE) to allow investment advice fiduciaries under ERISA to receive compensation.



Submitted To


Submitted By







August 6, 2020

Submitted via www.regulations.gov

Assistant Secretary Jeanne Wilson
Employee Benefit Security Administration
Department of Labor
200 Constitution Ave., NW
Washington, DC 20210

Re: ZRIN 1210-ZA29
RIN 1210 AB 96

Dear Secretary Wilson:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the Department of Labor’s proposed class exemption for the receipt of fees in connection with the provision of investment advice and its notice of Court vacatur of the 2016 rule relating to investment advice and several class exemptions issued or amended in conjunction with the 2016 investment advice rule. We strongly support the Department amending the Code of Federal Regulations to replace the vacated 2016 rule and re-implementing the original five-part test, reinstating Interpretive Bulletin 96-1, and reinstating the class exemptions that were part of the same 2016 initiative, as they existed prior to 2016. We also appreciate the Department’s revising its website to reflect current law. In addition, SIFMA strongly supports a class exemption that will permit financial professionals to provide investment advice in a flexible fashion.2

While we have a number of comments on the proposed exemption, we nevertheless believe it represents an improvement over the approach taken in 2016. The exemption’s intent is sound, constructive, and if finalized with the changes we suggest, will facilitate more investment advice for participants and IRAs, and more flexible methods of delivering that advice. In general, the exemption is a positive departure from the now vacated class exemptions, which were overly prescriptive and administratively burdensome. The tremendous complexity and other concerns with the 2016 rule and exemptions had negatively impacted IRAs and other retail retirement savers by causing them to lose access to important retirement products and services they had previously been able to select.

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1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
2 U.S. Department of Labor, Employee Benefits Security Administration, Notification of Proposed Class Exemption, Improving Investment Advice for Workers & Retirees, 85 FR 40834 (July 7, 2020) (“Proposal”).