The Department of Labor’s Employee Benefits Security Administration (EBSA) announced on September 19th that it was withdrawing, and would re-propose, its draft regulation defining a “fiduciary” for purposes of qualified plans and IRAs. The proposed regulation is in “turnaround” mode as a result of significant pressure from the financial services industry and members of Congress, who objected to the way the proposed regulation expanded the definition of a fiduciary, without articulating clear exceptions to fiduciary status for a number of common financial transactions including IRA rollovers and swap transactions. Most recently, on September 15, 2011, Rep. Barney Frank (D. Mass.), the ranking member of the House Financial Services Committee, sent a letter to Labor Secretary Hilda Solis urging that the Department revisit the regulation in light of these concerns.
It is expected that EBSA will release a re-proposed regulation early in 2012.