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October 27, 2021

DOL Extends Compliance Deadline for the Investment Advice Exemption


In welcome news for financial institutions, on October 25, 2021, the Department of Labor (DOL) announced an extended transition period for compliance with the Investment Advice Exemption (PTE 2020-02). As discussed in our prior advisories here and here, the current transition compliance period for the Investment Advice Exemption was scheduled to expire on December 20, 2021, meaning that full compliance with the exemption after that date would have been required to engage in a conflict of interest transaction in reliance on the exemption, including many rollover transactions.  In response to requests from the financial services industry to extend the transition period, DOL in FAB 2021-02 extended the existing transition period from December 20, 2021 through January 31, 2022. During this extended transition period, as is the case during the current transition period, investment advice fiduciaries may obtain prohibited transaction relief if they are “working in good faith to comply with the Impartial Conducts Standard.” Although the full transition relief will now expire on January 31, 2022, DOL also provided limited further relief for rollover transactions during the period from February 1, 2022 through June 30, 2022. During this period, DOL will not enforce the special disclosure and documentation requirements generally applicable to rollover transactions under the exemption. However, all other conditions of the exemption will be in force.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.