On February 16, the DOL’s Prohibited Transaction Exemption (PTE) 2020-02, “Improving Investment Advice for Workers & Retirees”, became effective. It was expected that the Biden administration would delay and study this Trump era rule, but instead, the Department of Labor allowed it to go into effect, catching almost everyone off guard.

Despite the positive name of the new exemption—Improving Investment Advice, it immediately imposes new burdens on broker-dealers and registered investment advisers (which in the guidance are referred to “Financial Institutions” for the firms and “Investment Professionals” for the individual representatives of those firms). This article discusses the new guidance and its impact on investment professionals.

The views expressed here are those of Fred Reish. They should not be construed as investment advice or as the views of Hartford Funds or the employees of Hartford Funds. They are based on available information and are subject to change without notice. The information above is intended as general information and is not intended to provide, nor may it be construed as providing, tax, accounting or legal advice. As with all matters of a tax or legal nature, please consult with your tax or legal counsel for advice. This material and/or its contents are current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Fred Reish.

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