House Passes Bill to Block SEC and DOL Fiduciary Regulations
As published in the National Center for Employee Ownership Employee Ownership Update, the U.S. House of Representatives passed a bill to block both the Securities and Exchange Commission and the Department of Labor from implementing new fiduciary rules for stockbrokers and other investment advisors. The SEC rules are being developed under the Dodd-Frank Act and are designed to ensure that brokers and certain other financial advisors are acting in their clients' interests, not their own. The DOL rules are not pursuant to any legislation but would require financial advisors to retirement plans to adhere to a much stricter set of fiduciary standards. The bill directs the SEC to conduct an additional study before issuing regulations and blocks the DOL from issuing its regulations until the SEC does.
The DOL regulations are of interest to the ESOP community because they would define appraisal firms for ESOPs as plan fiduciaries, raising concerns that some appraisers might stop doing ESOP work and those remaining would change more. The bill, though ESOP "postive" is unlikely to become law.