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NAPPA Fiduciary and Plan Governance Section

New Fiduciaries: Dodd-Frank and DOL Expand the List of Usual Suspects…What Does it Mean for Your Fund?

Richard K. Matta

February 2, 2011

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Fiduciary Responsibilities in Flux Dodd-Frank Legislation

Myriad changes applicable to all financial entities SEC report to Congress January 17 – greater supervision of

investment advisers SEC report to Congress January 20 – new fiduciary rules for

broker-dealers Other legislative developments

Social investing Regulation of public plans

DOL proposed new fiduciary definition – most sweeping change in 35 years

DOL service-provider disclosure rules DOL rules for participant disclosures (DC plans) SEC “Pay to Play” rules

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Dodd-Frank Overview – Formal Citation

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203) enacted on July 21, 2010

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Dodd-Frank Overview – Important Links

Certified text of the Act is available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.

cgi?dbname=111_cong_bills&docid=f:h4173enr.txt.pdf or:

http://tinyurl.com/26zalzn SEC “Spotlight” page:

http://www.sec.gov/spotlight/dodd-frank.shtml CFTC Dodd-Frank page:

http://www.cftc.gov/LawRegulation/DoddFrankAct/index.htm

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Dodd-Frank Overview – Individual Titles

Title I – “Financial Stability Act of 2010” Title II – [Orderly Liquidation Authority] Title III – “Enhancing Financial Institution Safety and

Soundness Act of 2010” Title IV - ‘‘Private Fund Investment Advisers

Registration Act of 2010’’ Title V

‘‘Federal Insurance Office Act of 2010’’ ‘‘Nonadmitted and Reinsurance Reform Act of

2010’’

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Title VI - ‘‘Bank and Savings Association Holding Company and Depository Institution Regulatory Improvements Act of 2010’’

Title VII - ‘‘Wall Street Transparency and Accountability Act

Title VIII - ‘‘Payment, Clearing, and Settlement Supervision Act of 2010’’

Title IX - ‘‘Investor Protection and Securities Reform Act of 2010’’

Title X - ‘‘Consumer Financial Protection Act of 2010’’

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Title XI – [Federal Reserve Provisions] Title XII - ‘‘Improving Access to Mainstream Financial

Institutions Act of 2010’’ Title XIII - ‘‘Pay It Back Act’’ Title XIV - ‘‘Mortgage Reform and Anti-Predatory

Lending Act’’ Title XV – [Miscellaneous Provisions] Title XVI – [Section 1256 Contracts]

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Dodd-Frank Many Questions – Fewer Answers

What plans should know: Most advisers to hedge funds and private equity funds

will have to register with the SEC Advisers already registered will have to collect and

report more information New limits on bank investment and related activities New rules for will apply to interest rate swaps and other

derivatives Small victory: stable value contracts will not be

regulated as swaps (at least not yet) Lots of new regulations will be coming SEC Reports to Congress

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"Private Fund Investment Advisers Registration Act of 2010" (Dodd-Frank Title IV)

Repeals the "private fund" exemption from registration under the Investment Advisers Act for 15 or fewer clients

Most advisers to private funds (hedge, PE, real estate) must to register with the SEC or state regulators

Very limited exception for foreign advisers to US clients (venture capital exception to the exception)

Not relevant to bank collective trusts or insurance company pooled separate accounts

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"Private Fund Investment Advisers Registration Act of 2010" (Dodd-Frank Title IV)

New reporting requirements re: assets under management use of leverage counterparty credit-risk exposure trading and investment positions and practices valuation policies and practices types of assets held side letters any other information the SEC deems necessary

Essentially all records subject to SEC examination Advisers with custody of client assets must have

independent custody audit Proposed rules January 26, 2011

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New section 13 of the Bank Holding Company Act, i.e., the "Volcker Rule" (Dodd-Frank Title VI)

Banking Entities prohibited from engaging in “proprietary trading” (as counterparties) including transactions in stocks, bonds, options, commodities, derivatives or other financial instruments

Exceptions for customer-related trading and market making activities

Exception for insurance company general account investments

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New section 13 of the Bank Holding Company Act, i.e., the "Volcker Rule" (Dodd-Frank Title VI)

Banking Entities also prohibited from "sponsoring" or investing in a hedge fund or private equity fund (defined as any entity or fund exempt from registration under section 3(c)(1) or 3(c)(7) of the Investment Company Act or any similar fund)

Final version excludes from the definition of “sponsoring” bona fide fiduciary activities performed on behalf of customers

Limited-purpose trust companies also excepted

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"Wall Street Transparency and Accountability Act" (Dodd-Frank Title VII)

Imposes new regulatory framework on the derivatives market and substantial new regulation on transactions designated as "swaps" and on certain swap market participants

With limited exceptions, swaps will need to be standardized and settled through a registered clearinghouse

Swaps not settled through a clearinghouse will still be subject to reporting requirements

Some small investors prohibited from participating Persons acting as "swap dealers" and "major swap participants"

will be required to register with the CFTC and/or the SEC Swap dealers and major swap participants subject to substantial

new requirements regarding capital, margin deposits, disclosure (transparency), and conflicts

Future industry bailouts prohibited

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What “swaps” are covered?

Broad range of OTC "derivative" instruments commonly referred to as swaps, puts, caps, and collars relating to commodities, currencies, securities, securities indices and other financial instruments, "synthetic" contracts and financial or economic interests of any kind based on future performance or notional amounts

Does not apply to exchange-traded instruments

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Stable value contracts: Temporarily exempted from regulation as swaps Stable value contracts existing as of the date of enactment

grandfathered SEC and CFTC, in consultation with the Department of

Labor, the Treasury Department and state insurance regulators, must determine within 15 months of enactment whether stable value contracts fall within the definition of a "swap.“

If stable value contracts are determined to be swaps, the regulators must make a further determination of whether they should be exempted

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Direct regulation of plans? Employee benefits plans generally will be exempted from

the definition of "major swap participant" when engaging in swaps "for the primary purpose of hedging or mitigating any risk directly associated with the operation of the plan“

The scope of this exception is unclear; however, in proposed regulations, the regulators suggest that that this ERISA plan exclusion, “may be construed to mean that hedging by ERISA plans should be broadly excluded.”

Not clear whether the exception applies only to plans themselves, or also to entities holding "plan assets," including master trusts and group trusts, certain hedge funds – regulators requested further comment before deciding the scope.

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New requirements imposed on swap dealers and major swap participants who act as advisers to or counterparties to "Special Entities" (including ERISA plans, governmental plans and endowments)

As adviser must make reasonable efforts to determine that the swap is in the Special Entity's best interest

As counterparty must have a reasonable basis to believe that the Entity is represented by someone who: has sufficient knowledge to evaluate the risks of the transaction is not "disqualified" from representing the Entity is independent of the swap dealer has a (fiduciary) duty to act in the best interest of the Entity makes appropriate disclosures; (vi) makes a written determination

regarding fair pricing and appropriateness of the transaction; and in the case of an ERISA-governed plan, is a fiduciary.

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‘‘Investor Protection and Securities Reform Act of 2010’’ (Dodd-Frank Title IX)

As relevant to institutional investors: Includes fiduciary study requirements and gives

SEC authority to impose fiduciary duties on brokers

Adds provisions dealing with corporate governance and public company executive compensation

Imposes new rules on “municipal securities advisors” that may directly impact public plans

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Title IX SEC Fiduciary StudiesInvestment advisers

Section 914 of Title IX mandates that the SEC conduct a study to review and analyze the need for enhanced examination and enforcement resources for investment advisers

Report filed January 17

Options presented: User fees Comprehensive SRO oversight FINRA oversight of dual-registrants

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Title IX SEC Fiduciary StudiesBroker-dealers

Section 913 of Title IX requires the SEC to conduct a study to evaluate:

The effectiveness of existing legal or regulatory standards of care (imposed by the Commission, a national securities association, and other federal or state authorities) for providing personalized investment advice and recommendations about securities to retail customers; and

Whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for providing personalized investment advice about securities to retail customers that should be addressed by rule or statute.

Report filed January 20

Recommendation – uniform fiduciary standard for retail brokers

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Title IX Executive Compensation and Corporate

Governance – Key Requirements

Significant new changes affect executive compensation and shareholder rights

Many of changes become effective based on SEC guidance

Certain changes could apply for 2011 proxy season

But schedule recently announced by SEC indicates many of rules not issued until 2011

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Title IX Executive Compensation and Corporate Governance – Key Requirements

"Say on Pay" Public company shareholders given non-binding vote to approve compensation of

top-5 Vote must occur at least once every 3 years Vote at least once every 6 years on frequency of vote

Golden Parachute Say on Pay Requires disclosures and non-binding shareholder vote on golden parachute-type

compensation Applies in connection with any proxy involving shareholder vote on M&A activity

involving company Say on Pay rules proposed October 18; final rules January-March

2011 Would require institutional investment managers to annually file with the SEC their

votes on say-on-pay, frequency of say-on-pay votes, and "golden parachute" arrangements

Would generally apply to every institutional investment manager that manages certain equity securities having an aggregate fair market value of at least $100 million

The manager would be required to identify securities voted, describe the executive compensation matters voted on, disclose the number of shares over which the manager held voting power and the number of shares voted, and indicate how the manager voted

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Independence of compensation committee Each member of compensation committee must be

member of board and be independent SEC to issue rules on factors determining independence,

including source of director's compensation and any affiliation with company

Compensation consultant requirements Factors affecting compensation adviser independence Disclosure requirements regarding compensation

consultant conflicts Proposed rules expected October-December

2010; final rules April-July 2011

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Disclosure of Pay vs. Performance Requires information in annual proxy disclosures

showing relationship between executive compensation "actually paid" and financial performance of company

Must take into account any changes in value of company shares, dividends and distributions

Uncertainty as to what information must be disclosed Pay ratio disclosure

Criticism by shareholder activist groups regarding gaps in pay

Notion of internal pay equity Clawback policy

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Proxy access Gives SEC authority to issue rules dealing with proxy

access SEC already has proposed regs pursuant to which

certain shareholders with sufficient long-term interests would be entitled to have director nominees included in the company’s proxy materials

Separation of Chairman and CEO Disclosure requirement

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Title IX Executive Compensation and Corporate Governance – Pay Ratio Disclosure

SEC to amend executive compensation rules to require disclosure in any filing: Median annual total compensation of all employees

(except CEO) Annual total compensation of CEO Ratio of two amounts

Total compensation determined under proxy disclosure rules for top-5 Complicated rules Include detailed requirements regarding reporting of non-

cash compensation Requires use of rules in effect on July 20, 2010

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Title IX Executive Compensation and Corporate Governance – Pay Ratio Disclosure

Median compensation Compute compensation for each employee Rank them and determine mid-point

Which employees? Employees of subsidiaries and affiliates? Non-U.S. employees? Part-time and seasonal employees?

Commentators request flexibility, safe harbors Proposed rules expected April-July 2011

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Title IX Executive Compensation and Corporate Governance – Clawback Policy

Required to develop and implement clawback policy on incentive compensation received in case of accounting restatement due to material noncompliance with financial reporting requirements under securities laws

Must apply to all current and former executive officers who received incentive compensation during 3-year period preceding restatement

Incentive compensation includes stock options

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Title IX Executive Compensation and Corporate Governance – Clawback Policy

Recovery of amounts in excess of what would have been paid under restatement

Differs from other clawback requirements Section 304 of Sarbanes-Oxley Troubled Asset Relief Program (TARP)

Proposed rules expected April-July 2011

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Title IX Executive Compensation and Corporate Governance – Proxy Access

June 2009 SEC proposal, if adopted without revisions, would establish a right of access to the proxy statement that cannot be superseded by a company's bylaws.

Holders of between one and five percent of a company's outstanding shares, depending on the size of the company, would have the ability to nominate up to 25% of the company's directors.

Shareholders would be permitted to form groups in order to aggregate their shares for purposes of meeting the ownership threshold.

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Registration of Municipal Securities Advisors (Dodd-Frank Title IX)

SEC and Municipal Securities Rulemaking Board – expanded jurisdiction

Broad definitions of “municipal securities,” “municipal advisor” Potential reach to advice on plan assets,

regardless of whether they have anything to do with traditional municipal bond offerings?

Potential reach to persons advising public plans including board members, consultants?

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“Consumer Financial Protection Act of 2010” (Dodd-Frank Title X)

Creates new Bureau of Consumer Financial Protection to regulate certain providers of certain financial products and services to consumers

Exempts plans described in §§ 220, 223, 401(a), 403(a), 403(b), 408 408A, 529 or 530 of the Internal Revenue Code, or any employee benefit or compensation plan, including any plan subject to Title I of the Employee Retirement Income Security Act or any prepaid tuition program offered by a state

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SEC-CFTC Proposed Dodd-Frank Rules (as of early January)

12/23/2010 75 FR 80747 // PDF Version17 CFR Part 39 End-User Exception to Mandatory Clearing of SwapsComment File - Closing Date: 2/22/2011

12/22/2010 75 FR 80638 // PDF Version17 CFR Parts 23 and 155 Business Conduct Standards for Swap Dealers and Major Swap Participants With CounterpartiesComment File - Closing Date: 2/22/2011

12/21/2010 75 FR 80174 // PDF Version17 CFR Part 1 Securities and Exchange Commission 17 CFR Part 240 Further Definition of "Swap Dealer," "Security-Based Swap Dealer," "Major Swap Participant," "Major Security-Based Swap Participant" and "Eligible Contract Participant“ Comment File – Closing Date: 2/22/2011

11/23/201075 FR 71397 // PDF Version17 CFR Part 23 Regulations Establishing and Governing the Duties of Swap Dealers and Major Swap Participants Comment File - Closing Date: 1/24/2010

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11/23/201075 FR 71391 // PDF Version17 CFR Part 23 Implementation of Conflicts of Interest Policies and Procedures by Swap Dealers and Major Swap Participants Comment File - Closing Date: 1/24/2010

11/23/201075 FR 71379 // PDF Version17 CFR Parts 3, 23 and 170 Registration of Swap Dealers and Major Swap Participants Comment File - Closing Date: 1/24/2010

11/19/201075 FR 70881 // PDF Version17 CFR Part 3 Designation of a Chief Compliance Officer; Required Compliance Policies; and Annual Report of a Futures Commission Merchant, Swap Dealer, or Major Swap Participant Comment File - Closing Date: 1/18/2010

11/17/201075 FR 70152 // PDF Version17 CFR Part 1 Implementation of Conflicts of Interest Policies and Procedures by Futures Commission Merchants and Introducing Brokers Comment File - Closing Date: 1/18/2011

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11/03/2010 75 FR 67642 // PDF Version17 CFR Parts 1 and 30 Investment of Customer Funds and Funds Held in an Account for Foreign Futures and Foreign Options Transactions Comment File - Closing Date: 12/3/2010

11/03/2010 75 FR 67657 // PDF Version17 CFR Part 180 Prohibition of Market Manipulation Comment File - Closing Date: 1/3/2011

10/18/2010 75 FR 63732 // PDF Version 17 CFR Parts 1, 37, 38, 39, and 40 Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities Regarding the Mitigation of Conflicts of InterestComment File – Closing Date: 11/17/2010

8/20/2010 75 FR 51429 // PDF Version Commodity Futures Trading Commission 17 CFR Part 1 Securities and Exchange Commission 17 CFR Part 240 Definitions Contained in Title VII of Dodd-Frank Wall Street Reform and Consumer Protection Act Comment File - Closing Date: 9/20/2010

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Anticipated SEC Schedule for Selected Dodd-Frank Rules

January - March 2011 Derivatives

§719: Report to Congress, jointly with the CFTC, regarding a study regarding the feasibility of requiring the derivatives industry to adopt standardized computer-readable algorithmic descriptions

§765: Adopt rules regarding conflicts of interest for clearing agencies, execution facilities, and exchanges involved in security-based swaps

Oversight of Investment Advisers & Broker-Dealers §§404 and 406: Propose (jointly with the CFTC for dual-registered investment advisers) rules to implement

reporting obligations on investment advisers related to the assessment of systemic risk §418: Propose rules to adjust the threshold for "qualified client" §913: Report to Congress regarding the study of the obligations of brokers, dealers and investment advisers §914: Report to Congress regarding the need for enhanced resources for investment adviser examinations and

enforcement §919B: Complete study of ways to improve investor access to information about investment advisers and broker-

dealers

Asset-Backed Securities §943: Adopt rules regarding the use of representations and warranties in the asset-backed securities market §945: Adopt rules regarding asset-backed securities’ issuers’ responsibilities to conduct and disclose a review of

the assets

Corporate Governance & Disclosure §951: Adopt rules regarding shareholder votes on executive compensation, golden parachutes §951: Adopt rules regarding disclosure by institutional investment managers of votes on executive compensation

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Anticipated SEC Schedule for Selected Rules

April - July, 2011 Oversight of Investment Advisers

§§404 and 406: Adopt rules (jointly with the CFTC for dual-registered investment advisers) to implement reporting obligations on investment advisers related to the assessment of systemic risk

§404: Report to Congress on the use of data collected for the purpose of assessing systemic risk §§407 and 408: Adopt rules implementing the exemption from registration for advisers to venture capital firms and

to certain advisers to private funds §410: Adopt rules and form changes to implement the transition of mid-sized investment advisers (between $25

and $100 million in assets under management) from SEC to State regulation, as provided in the Act §418: Adopt rules to adjust the threshold for “qualified client” §417: Report to Congress on the study of the costs and benefits of real time reporting on short sale positions

Derivatives §712: Adopt rules, jointly with the CFTC, defining key terms used in the Act §763: Adopt anti-manipulation rules for security-based swaps §§763 & 766: Adopt rules on trade reporting, data elements, and real-time public reporting for security-based

swaps §763: Adopt rules regarding the registration and regulation of security-based swap data repositories, mandatory

clearing of security-based swaps, end-user exception, clearing agencies and the registration and regulation of security-based swap execution facilities

§764: Adopt rules regarding the registration and regulation of security-based swap dealers and major security-based swap participants

Clearing & Settlement §805: Adopt rules regarding standards for clearing agencies designated as systemically important §806: Adopt rules regarding the process to be used by designated clearing agencies to provide notice of

proposed changes §813: Report to Congress, jointly with the CFTC and the Federal Reserve Board, on improving the common

framework for designated clearing entity risk management

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Anticipated SEC Schedule for Selected Rules

April - July, 2011 Oversight of Investment Advisers & Broker-Dealers

§913: Propose rules as may be appropriate, based on §913 study conducted on the obligations of brokers, dealers and investment advisers

Credit Ratings §956: Adopt rules (jointly with others) regarding disclosure of, and prohibitions of certain, executive compensation

structures and arrangements

Asset-Backed Securities §621: Adopt rules prohibiting material conflicts of interests between certain parties involved in asset-backed

securities and investors in the transaction §941: Adopt rules (jointly with others) regarding risk retention by securitizers of asset-backed securities, and

implementing the exemption of qualified residential mortgages from this prohibition

Corporate Governance & Disclosure §952:Adopt exchange listing standards regarding compensation committee independence and factors affecting

compensation adviser independence; adopt disclosure rules regarding compensation consultant conflicts §§953 & 955: Propose rules regarding disclosure of pay-for-performance, pay ratios, and hedging by employees

and directors §954: Propose rules regarding recovery of executive compensation §957: Propose rules defining “other significant matters” for purposes of exchange standards regarding broker

voting of uninstructed shares

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Other Legislative Developments Sanctions legislation and regulations

Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010

Legislative proposals Transparency Municipal bankruptcy

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DOL Proposed Regulations underERISA Section 3(21) – Definition of “Fiduciary

Proposed October 2010 Potentially relevant to public plans by

analogy Potentially relevant as “best practices” Relevant to the extent that they modify

service provider practices

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Old rule – the “five-part test” (all five required):1. Render advice as to the value of securities or other

property, or make recommendations as to the advisability of investing in, purchasing, or selling securities or other property;

2. On a regular basis;

3. Pursuant to a mutual agreement, arrangement, or understanding, with the plan or a plan fiduciary; that

4. The advice will serve as a primary basis for investment decisions with respect to plan assets; and that

5. The advice will be individualized based on the particular needs of the plan.

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New rule – two-part test (far more complicated than the five-part test):

1. The person provides any of the following: advice or an appraisal or fairness opinion concerning the value of securities or other

property; or recommendations as to the advisability of investing in, purchasing, holding or selling

securities or other property; or advice or recommendations as to the management of securities or other property.

2. The person directly or indirectly does any of the following: represents or acknowledges (orally or in writing) that it is acting as a fiduciary within the

meaning of ERISA with respect to providing advice or making recommendations described in item 1 above; or

is a fiduciary by reason of having discretionary authority or control over plan assets; or is an investment adviser as defined in the Investment Advisers Act of 1940; or provides advice or makes recommendations described in item 1 above pursuant to an

agreement, arrangement or understanding, written or otherwise, between the person and the plan, a plan fiduciary, or a plan participant or beneficiary that the advice may be considered in connection with investment or management decisions about plan assets, and will be individualized to the needs of the plan, plan fiduciary or a participant or beneficiary.

Subject to certain exclusions

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Framework for Analyzing Investment Advice Fiduciary Status under DOL Proposed Regulations

Advice, an appraisal or fairness opinion about the value of securities or other property (including real estate)

Provide advice or make recommendations as to the management of securities or other property (including recommending investment managers)

Make recommendations about whether to invest in, purchase, or sell securities or other property

Does the person or entity provide any of the following categories of advice to a plan, a plan fiduciary or a participant or beneficiary?

Does person/entity have the following status or make any of the following representations, together or through an affiliate?

Represent or acknowledge fiduciary status

Exercise authority or control over the management or disposition of the plan’s or participant’s assets

Have discretionary authority or control over plan administration

Act as an “investment adviser” pursuant to Advisers Act

Have an agreement, arrangement or understanding with the plan, fiduciary or participant, that advice given:

• “may be considered” in connection with plan investments; and

•Will be individualized

+

or

or

or

or

or

Advice Category Status of Advisor Fee or other Compensation

Does the person, entity or an affiliate receive any fee or compensation for the advice from any source, including any fee or compensation incident to the transaction in which the investment advice has been rendered or will be rendered. Examples include: brokerage, mutual fund sales and insurance sales commissions, and fees and commissions based on multiple transactions involving different parties.

+

Person is providing investment advice for a fee unless a specific regulatory limitation applies

or

See page 2 for limitations

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The person or entity has not acknowledged fiduciarystatus, and can demonstrate that the person receiving theadvice knows or reasonably should know :(1) that the adviser is acting as a seller, agent or

appraiser for a seller with adverse interests to the plan; and

(2) the adviser is not undertaking to provide impartial investment advice.

The person is providing “investment education” within the meaning of IB 96-1.

The advice involves marketing or making available a platform of investment alternatives for a plan fiduciary to select from, which is not individualized to the needs of the plan, and the person providing the platform has disclosed in writing to the plan fiduciary that it is not undertaking to provide impartial investment advice.

The advice involves providing general financial information and data to assist in investment selection or monitoring, and the person providing the platform has disclosed in writing to the plan fiduciary that it is not undertaking to provide impartial investment advice.

A person will not be considered to be providing investment advice for a fee to any type of plan if:

A person will not be considered to be providing investment advice for a fee to an individual account, participant directed (IAPD) plan if:

Sellers / Appraisers Limitation – All PlansLimitations – IAPD Plans Only

A person is not providing investment advice for a fee merely by reason of an activity described in any of these limitations

Preparation of a general report or statement that merely reflects the value of an investment of a plan or a participant or beneficiary that is provided for purposes of compliance with the reporting and disclosure requirements of ERISA, the Code, and related regulations, forms and schedules is not “advice,” or an “appraisal or fairness opinion” unless such a report involves assets for which there is not a generally recognized market and it serves as a basis on which a plan may make distributions to participants and beneficiaries.

Framework for Analyzing Investment Advice Fiduciary Status under DOL Proposed Regulations

or

or

and

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Who is potentially most affected? Consultants Recordkeepers Appraisers Broker-dealers

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DOL Proposed Regulations underERISA Section 408(b)(2)

Not directly applicable to public plans Potentially relevant as “best practices” Relevant to the extent that they modify

service provider practices

Requires greater transparency in disclosure of all fees earned, direct and indirect, and of potential conflicts of interest

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DOL Participant Disclosure Regulations

Final regulations adopted October 2010

Relevant by analogy, as “best practices” – issued as requirement of basic fiduciary principles

Participant-directed DC plans only

DOL interprets ERISA fiduciary rules to require plan fiduciaries to ensure that participants and beneficiaries responsible for investing their account within the plan are provided with "sufficient information" to make informed investment decisions

Plan “administrator” is required to provide disclosure, but providers expect to support disclosure requirements

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DOL Participant Disclosure Regulations

Automatic disclosures – provided on or before the date participant may give investment instructions, and annually General Investment Information, Administrative Expense Information, Individual Expense Information, Information For Each Designated Alternative

Includes automatic, web site and on request categories.

Web site disclosures. On request disclosures.

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SEC “Pay to Play” Regulations In June 2010, SEC unanimously adopted

regulations severely limiting campaign contributions by vendors to board members and appointing authorities. Includes incumbent candidates Covers bundling

Regulations also bar use of placement agents by investment firms unless the third-party agent is an SEC registered investment adviser or broker-dealer subject to similar pay-to-play restrictions.