As noted in our April Client Alert, the U.S. Department of Labor (the “DOL”) proposed a regulation expanding the definition of who is a “fiduciary” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”). After receiving more than 800 comments from the public, the comment period has closed. Most of the substantive comments were provided by the broker-dealer and insurance industries whose activities are the target of the Fiduciary Proposal.

We agree with Commissioner Gallagher’s comments in his letter to the DOL, “that the DOL rulemaking is a fait accompli and that the comment process is merely perfunctory.” Nevertheless, in the hope that some of the unintended consequences of the Fiduciary Proposal on private investment funds could be mitigated in any final regulation, we felt compelled to submit a comment letter. Our comment letter, and that of the MFA, focuses on the collateral effects the Fiduciary Proposal could have on private investment funds and offers technical suggestions that would mitigate the deleterious effects of the Fiduciary Proposal on investment managers and their pension plan and IRA investors.

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If you have any questions regarding our comment letter or are concerned how these proposed rules might affect your particular circumstance, please do not hesitate to contact John Ryan (212) 574-1679 or Michael O’Brien (212) 574-1505.