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The purpose of this paper is to provide an overview of how the Employee Retirement Income Security Act (“ERISA”) of 1974, as amended , applies to securities professionals such as registered investment advisers, registered broker‐dealers and individual registered representatives and financial planners who advise, manage, or trade for investment portfolios of private employee benefit plans and individual retirement accounts.

The paper is designed as a primer to familiarize securities professionals with the terminology, scope and subject‐matter of ERISA as it applies to benefit plan investment transactions. When appropriate, the regulatory framework of ERISA is compared and contrasted with the more familiar securities law regulatory scheme.

The various Federal laws loosely known as “ERISA” significantly impact securities professionals in connection with the marketing of financial products and services to employee benefit plans, including IRAs, and it is critical that securities professionals have a general overview of how they do so.

The research set out is only a broad summary, and covers an area of law that is rapidly developing. It should not be considered a definitive summary of the law but a starting‐point for further, in‐depth inquiry.

Any financial professional seeking to develop or market financial products and services to benefit plans can use the paper to become familiar with the framework and terminology of ERISA.

This is a reprint of a paper first published in 2004, with extensive revisions to reflect sweeping changes in the law and new developments in the financial marketplace, plus an overview of “hot topics”.

This article explores the implementation of infrastructure development projects funded by the Recovery Act’s Broadband Technology Opportunities Program (BTOP) in a southeastern state to provide high-quality Internet connectivity in un- or under-served areas to alleviate the conditions contributing to rural areas’ fiscal crises. This context affords a unique opportunity to view fiscal federalism’s operational dynamics in times of economic crisis and explore how various grant administrators in charge of similar federally funded public works projects define fiduciary responsibility. We find that these administrators comprehend “fiduciary responsibility“ narrowly in terms of complying with the accounting and reporting requirements of the federal grant. However, they have a broader and more nuanced understanding of their overall responsibility that includes working on behalf of their respective communities’ interests to meet local and regional needs.

Examines the use and misuse of the term fiduciary responsibility as it applies to trustees and officers of the corporation in universities and colleges. Through research on published applications of the term, reveals that the term is rarely defined yet frequently used as a justification for action or inaction by trustees and officers. Antagonists of decisions sometimes use the term as a rationalization for suggesting action or decisions that should be made by trustees or officers in higher education. Concludes with a proposed definition of fiduciary responsibility that could be useful for trustees and officers and others interested in the concept of fiduciary responsibility.

The following is an overview of how the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), applies to securities professionals such as registered investment advisers (“RIAs”) and registered broker‐dealers who advise, manage, or trade for investment portfolios of employee benefit plans subject to ERISA. The principal focus of this outline is on securities registered under the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934 (the “1934 Act”), and securities of investment companies registered under the Investment Company Act of 1940. Many of these principles also will apply directly to unregistered securities, as well as to other investments offered by banks, insurance companies, commodity trading advisers and real estate advisers, though there may be some variation.

Explains the US Department of Labor’s newly proposed “Conflicts of Interest” rule and provides a critical analysis of its impact should it be adopted as proposed.

Explains the DOL’s proposed Conflict of Interest rule and discusses how it changes the current fiduciary standards of care under ERISA. The article then probes more deeply into the practical matters involved in implementing the rule, and into the realities of how it would impact fiduciary standards generally, investors, the financial services industry and securities arbitrations. Reactions to the proposed rule are then explained against the backdrop of the practical implications thereof.

This article concludes that the DOL’s proposed Conflict of Interest rule, albeit well-intended, is not reasonably designed to achieve its stated goal and would instead likely harm those whom it purports to help. Ironically, it also potentially waters down the existing high standards of current fiduciaries. The article supports the DOL’s goal of greater responsibility for financial service professionals and proffers an alternative solution that could achieve the desired result more effectively.

This article offers valuable insight on the realities of the proposed law and practical guidance on its implications to the investing public, the financial services industry and securities attorneys.

Andrew Williams and I have argued since the early 1990s that not only have equity (and subsequently most other assets classes) come to be dominated by institutional ownership of various types, an observation that many have made and documented at length, but that the majority of those institutions are fiduciary ones (primarily pension and mutual funds in the United States). More recently pension and mutual funds have been the source of the majority of funds for many ‘alternative’ investments, such as hedge funds, private equity and commodity funds. In the last two decades there have been parallel developments in other countries, although the form of the institutional investors vary widely, from fiduciary ones mostly in common law countries to fiduciary-like ones in many civil law jurisdictions (e.g. the Netherlands), to some sovereign wealth funds (e.g. Norway and Australia and some others) which do not have fiduciary obligations as such, but in their legal mandates and practices are structured much like those that are fiduciary or fiduciary like. As discussed below, all these (in addition to some other large institutional owners) are universal owners, that is, they own a representative cross section of their investment universe (which increasingly is a global universe). Given their ownership structure characterised by a large degree of diversification, universal owners' long-term interests to a large degree coincide with the economy as a whole.

Making law in America is not a simple task. It can be legislated by Congress, enforced by the executive, interpreted by the courts, and augmented by a massive body of rules created by administrative agencies such as the Securities and Exchange Commission (SEC). The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) (Dodd-Frank was passed) with an eye to preventing future financial crises. Four years later, many details of Dodd-Frank have yet to be finalized as the SEC is still in the process of developing the regulations that the legislation required them to create. Even once the regulations are finalized by the SEC, the regulations will be challenged by various parties in the courts. The regulations will be either upheld or rejected. Those that are upheld will then face numerous challenges when applied in specific cases, while those rejected will have to be redone all over again. The process of developing these regulations is cumbersome and attracts many of the special interests that were present in the legislative phase of Dodd-Frank and who will also be present in the litigation phases of testing Dodd-Frank in the courts. This paper focuses on the requirement that investment advisors and broker-dealers be deemed as owing fiduciary duties to their clients as a case study for the entangled political economy theory. The paper shows how the development of a simple rule such as whether these fiduciary duties should be owed or not requires years of back and forth between the legislative, executive, administrative, and judicial branches.

The purpose of this paper is to describe interpretive and compliance issues arising under the Labor Department's interim final regulations under the statutory exemption for the provision of services provided by Section 408(b)(2) of ERISA, which will become effective on January 1, 2012.

The paper analyzes the published interim final regulations and considers significant comments filed in response to the proposed regulations.

Effective January 1, 2012, covered service providers who rely on the statutory exemption for the provision of services provided by Section 408(b)(2) must begin complying with the interim final amendments to the regulations under Section 408(b)(2) (the “Regulation”). Among other changes, the Regulation will require service providers to provide additional disclosures of direct and indirect compensation and to identify whether they expect that they will be providing services as a fiduciary or as a registered investment adviser. The primary purpose of the Regulation is to assist plan sponsors in evaluating service provider relationships, including total compensation that will be received by the service provider and conflicts of interests to which the service provider may be subject. The Regulation will apply to both new and existing service provider arrangements on January 1, 2012. Failure to comply with the Regulation may result in the assessment of excise taxes under Section 4975 of the Internal Revenue Code unless other exemptive relief is available. Service provider arrangements may be eligible for exemptive relief under certain other statutory and administrative exemptions.

The paper describes possible compliance issues that may arise under the Regulation and identifies and evaluates interpretive and compliance issues that have been noted since the proposed amendments were published.

Identifies fundamental errors, both mathematical and methodological, in the purported $17 billion annual benefit from the U.S. Department of Labor’s Conflict of Interest Rule, commonly known as the Fiduciary Rule.

Examines the methodologies and data used by the Council of Economic Advisers (CEA) in calculating the estimated $17 billion benefit of the Fiduciary Rule, and then recalculates the benefit according to the CEA’s stated methodologies and data descriptions. The approach is non-partisan, the review apolitical.

The article concludes that the estimated $17 benefit from the DOL’s Fiduciary Rule was grossly exaggerated and that other data suggests the Rule may not provide meaningful new protections for investors.

From the perspective of staunch fiduciary advocates, the calculation of the benefit to IRA investors from the DOL’s Fiduciary Rule is examined. The current measures that protect individual investors are also noted. The information may provide a turning point in the discussion of the Rule’s delay and potential rescission. It may also provide relevant points for the DOL to consider as it carries out its task of re-evaluating the Rule.

To describe the main provisions of the US Department of Labor’s final “fiduciary” rule and its related prohibited transaction exemptions and the key challenges the rule poses for financial advisers.

This article describes the impact of the new “fiduciary” rule on broker-dealers, banks and other financial organizations who will, for the first time since the passage of ERISA, be subject to ERISA’s fiduciary standards and remedies when providing investment and asset management recommendations to individual retirement accounts and other retail retirement clients.

The most immediate impact of the rule will be on the compensation practices at broker-dealers and other financial institutions and on the fee and revenue sharing arrangements among funds, fund sponsors and the financial institutions that offer investment advice to retail retirement clients. Although the new rule responds to many of the concerns raised by the financial services industry, compliance with the rule will require the restructuring of pay and compliance policies at financial institutions servicing retail clients.

Practical guidance from experienced ERISA lawyers.