House Passes Bill to Block SEC and DOL Fiduciary Regulations
Executive Director
By a vote of 254-166, the House has 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 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 attracted 30 Democratic votes, but has little if any chance on the Senate and, in any event, would be vetoed by the President.