On June 29, the Department of Labor (DOL) issued a proposed prohibited transaction exemption, filling the void left when the Fifth Circuit vacated the Obama-era 2016 DOL regulation in 2018. While the new proposed rule is primarily a class exemption that harmonizes ERISA conditions for receiving commissions and other variable compensation with existing securities law standards, it also does a lot more. In this podcast episode, Faegre Drinker’s Jim Jorden and Brad Campbell discuss how an existing PTE — PTE 84-24 — may impact the future use of this proposed PTE.
In this recording, Jim and Brad provide context, insight and actionable advice for stakeholders on the following questions (and more) related to the proposed PTE.
- How might insurance companies and agents use the new proposed exemption?
- Would independent agents find the 84-24 exemption to be a more user-friendly and expedient exemption to use in most cases?
- What changes can DOL implement to make the proposed exemption a more useful resource?
- The prelude includes some ambiguities on how the “regular basis” component of the five-part test for the investment adviser definition can be met, particularly as it pertains to sales advice. What should the DOL be expected to clarify as it responds to public comments on this proposed rule?
In our next podcast, we will take a close look at litigation and enforcement issues that could emerge from this proposed PTE.