“While many of the DOL’s regulations affect the financial industry, maybe the most pressing and unknown regulation is the DOL Prohibited Transaction Exemption (PTE), namely the Annual Retrospective Review.
Acting as a fiduciary is just one of the key aspects to qualify for the Prohibited Transaction Exemption (PTE). Most financial industry regulators are very focused on ensuring the recommendations made to retirement investors are in the client’s best interest.
The SEC and FINRA began prioritizing examinations of broker-dealers and investment advisers who advise retirement plans and IRAs focusing on rollover recommendation being in the client’s best interest, known as Reg BI. On February 16, 2021, the DOL adopted PTE 2020-02, a new prohibited transaction exemption which allows financial institutions to receive compensation from an otherwise prohibited transaction. The DOL PTE 2020-02 provisions require certain documentation that must be completed in order to avail the firm of the exemption.”
– Kelly Igoe, COMPLY Compliance Director
