What Does the Future Hold for the Fiduciary Rule?

The U.S. Labor Department’s so-called fiduciary rule, proposed during the Obama administration, would change the status of some financial professionals under the Employee Retirement Income Security Act (ERISA). It was originally supposed to be implemented in phases earlier this year but ran into delays and reviews. Now, Rep. Ann Wagner, a Republican from Missouri, has introduced a bill that would make some changes to the latest ruling, including giving the Securities and Exchange Commission the lead on fiduciary regulation, in place of the DOL. “The fiduciary rule in its current form renders all investment professionals who work with retirement plans or advise retirement plans [as] fiduciaries under the ERISA definition,” says Raphael Katz, a partner at the law firm Sadowski Katz. This results in a strict standard against self-dealing, he says — but that could change. Here’s what you need to know. The Proposed Change Wagner and financial industry proponents …

CONTINUE READING

What’s Next for Dodd-Frank?

The Treasury Department recently issued a proposal outlining changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank regulations were put into place after the 2008 financial crisis, and they changed existing regulatory structures in an attempt to streamline and strengthen them. The law led to stronger regulatory standards and rules about a wide range of financial interactions, such as credit card transaction fees and requiring smaller investment advisers to register with the SEC. The act established sweeping new regulatory rules but came to be seen as too heavy-handed. The House of Representatives recently passed the Financial CHOICE Act in an effort to weaken it, but passage by the Senate isn’t a given. “Many Democrats acknowledge that Dodd-Frank needs to be revisited, and Republicans certainly have enough votes to make sure that it is, but not enough votes to gut it completely,” says David Reiss, a professor at …

CONTINUE READING

SEC Power to Recoup Illegal Profits Curbed by U.S. Supreme Court

SEC Power to Recoup Illegal Profits Curbed by U.S. Supreme Court

In early June, a unanimous Supreme Court handed down its ruling on whether “disgorgement,” or the repayment of ill-gotten gains, is subject to a statute of limitations. The court ruled that it is, and this has broad implications for any person or organization investigated by the Securities and Exchange Commission, experts say. “This will be more advantageous to all proposed SEC defendants, including Wall Street,” says Marc Powers, leader of BakerHostetler‘s securities litigation and regulatory enforcement practice and its hedge fund industry practice. “They will be able to sleep at night, not fearing the SEC and forever looking over their shoulders for their questionable conduct in the securities markets.” Here’s what you need to know about the ruling. The Case Charles Kokesh was found to have misappropriated funds from four investment companies. He was ordered to pay a civil penalty and disgorgement, dating back to 1995. Kokesh argued that the …

CONTINUE READING

Challenges in Managing Worker’s Comp EDI

Worker’s compensation reporting requires massive coordination between health plans, state jurisdictions, health care providers and other stakeholders. Regulations, health and data privacy laws, and lack of consistent standards across jurisdictions can make reporting a hassle; that increases costs to the system while making it difficult for people to get the help they need. Worker’s comp electronic data interchange (EDI) provides a standard to keep all the information in the same format and flowing smoothly. “It’s an invaluable resource to have the ability to compare data nationwide and be able to understand how we can be more efficient and effective with the worker’s comp system,” says Gregg Lutz, director of standards development and outreach for the International Association of Industrial Accident Boards and Commissions, which looks for ways to increase standardization of worker’s comp EDI across jurisdictions while maintaining data privacy under the law. Here’s Lutz’s take on the challenges in …

CONTINUE READING

What the DOL’s Fiduciary Rule Means for Financial Professionals Now

What the DOL’s Fiduciary Rule Means for Financial Professionals Now

The U.S. Labor Department’s so-called fiduciary rule has a long history, and it appears it’s not over. Proposed under the Obama administration, the rule would change the status of some financial professionals under the Employee Retirement Income Security Act (ERISA). It was originally supposed to be phased in in April but has been delayed until June, with a transition period for some exemptions extending through Jan. 1, 2018. In addition, the Trump administration may want to make more changes. For financial professionals, it’s vital to stay up-to-date on the changes. “Good faith is not enough,” says Ronald Surz, president of PPCA. Here’s what financial advisers, especially those who work on commission, need to know. It Establishes Broader Fiduciary Responsibility Under the rule, all financial professionals who work with retirement plans, ESOPs, IRAs and so on, or who provide advice about retirement plans, will have to act in a fiduciary capacity. …

CONTINUE READING