SIFMA is pleased to provide comments regarding the Department of Labor’s (“Department”) Proposed Best Interest Contract Exemption (“BIC Exemption”) 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 exemption, as written, can be accommodated into the broker-dealer model that exists today, or whether, as written, it will result in the loss of professional investment advice for small retirement accounts.

Although the preamble states that the proposed BIC Exemption “seeks to preserve beneficial business models by taking a standards-based approach that will broadly permit firms to continue to rely on common fee practices,” the exemption as currently proposed raises significant and in many respects insurmountable obstacles for broker-dealers, including the ability to offer commission-based advice.

SIFMA shares the Department’s interest in ensuring that investors receive appropriate, informed assistance with decisions concerning retirement. However, SIFMA respectfully believes that this proposed exemption, and the package of proposals accompanying it, are not the proper way of proceeding. SIFMA also does not believe that the Department may use a new definition of “fiduciary,” in combination with its exemptive authority, as a means of establishing a new regulatory and enforcement program for financial professionals, ERISA plans, and non-ERISA plans such as IRAs. SIFMA expresses this objection with regard to the BIC Exemption, and the other, related exemptive rules that have been proposed.

See Also:

United States Department of Labor: Conflict of Interest Proposed Rule

See Also:

• Executive Summary
• The Fiduciary Rule Itself
• Principal Transactions
• Prohibited Transaction Class Exemption (“PTCE”) 86-128
• 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