Fiduciary Duty

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The longstanding view of the Department of Labor (the “DOL”) has been that proxy voting and other shareholder rights held by an ERISA plan are subject to ERISA’s fiduciary duties of prudence and loyalty. Previously, this view was expressed by the DOL in sub-regulatory guidance, such as interpretive and field assistance bulletins. In September of 2020, the DOL published a proposed rule (the “Proposal”) regarding an ERISA fiduciary’s duties with respect to shareholder rights. On December 16, 2020, the Department of Labor published the final regulation (the “Regulation”). Much like the Proposal, the Regulation requires that when a fiduciary decides whether and when to exercise plan shareholder rights, it must act prudently and solely in the interests of participants and beneficiaries and for the exclusive purpose of providing them benefits and defraying the reasonable expenses of administering the plan. However, in the Regulation, the DOL took an approach that is less prescriptive and more principles-based than the Proposal.
Continue Reading Final ERISA Regulations Describe Fiduciary Duties Related to Plan Proxy Voting

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Business Continuity Plans (“BCPs”) continue to be a key component of an investment adviser’s risk management and compliance program, but have traditionally focused on emergency planning for certain external and internal disruptions (such as natural disasters, blackouts and occasional short-term market disruptions to normal operations).  The recent impact of COVID-19 however, has reminded the industry…

On January 7, 2020, the US Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) released its 2020 examination priorities.  While a number of the 2020 priorities are continuations from the prior year, OCIE made certain enhancements and/or additions to these exam priorities that are similar to themes highlighted in its risk…

Teamwork and integration concept

In April 2018, the SEC proposed an Interpretation Regarding Standard of Conduct for Investment Advisers.  In that proposal, the SEC has proposed to interpret the duty of loyalty (which, combined with the duty of care, constitutes fiduciary duty) as requiring advisers to put client interests ahead of their own and make full and fair disclosure of all material facts of the relationship.  More particularly, the SEC stated that advisers must seek to avoid conflicts of interest and make full and fair disclosure of material conflicts that could affect the relationship.  If you stopped reading the release at this point, you might think this is a clear articulation of what the duty means and how we practice in the area of conflicts.
Continue Reading A New Standard for Investment Adviser Fiduciary Duty?