execution transactions involving IRAs. PTCE 86-128 also provides relief for certain agency crosstransactions (where the fiduciary acts as an agent both for the plan or IRA and for another party) if the conditions of the exemption are satisfied. The amendment requires all fiduciaries to comply with the impartial conduct standards of the best interest contract exemption, in addition to the existing conditions of the exemption. Further, regarding fiduciaries of IRAs that exercise discretion (rather than merely provide investment advice), the amended exemption requires all of the conditions of the exemption to be satisfied with respect to transactions involving IRAs. The exemption will no longer be available to fiduciaries of IRAs that provide investment advice (rather than exercising discretion); instead, investment advice fiduciaries to IRAs will have to rely on the best interest contract exemption for these transactions. Further, the exemption adds a new section that permits a broker-dealer fiduciary to use its authority to cause a plan or IRA to purchase mutual fund shares from the broker-dealer – acting as principal – and receive commissions, where the transactions are not excessive in amount or frequency and the other conditions of the exemption are satisfied.

The relief does not extend to the plan's or IRA's sales of mutual fund shares because the DOL does not believe that it is necessary for the sale to be in a principal transaction. The amendment makes certain additional changes including adding a definition of 'commission' and adding record-keeping requirements. Part I(b) of PTCE 75-1 provides relief for the effecting of securities transactions – including clearance, settlement or custodial functions – by parties that are not fiduciaries. Part I(c) of PTCE 7 5-1 provides relief for the furnishing of non-fiduciary advice regarding securities or other property to a plan or IRA. The amendment revokes these two parts of PTCE 75-1 because, according to the DOL, these exemptions are duplicative of statutory exemptions.

Specifically, the DOL has indicated that fiduciaries may rely on the necessary services exemption under Section 408(b)(2) of ERISA to exempt these transactions. Part II(2) of PTCE 75-1 contains an exemption for mutual fund share purchases between fiduciaries and plans or IRAs and requires that the fiduciary not be a principal underwriter for, or affiliated with, the mutual fund. The amendment also revokes this part of PTCE 75-1 because, as described above, the amendments to PTCE 86-128 include relief for these transactions. For further information on this topic please contact Beth J Dickstein at Sidley Austin LLP by telephone (+1 312 853 7000) or email (bdickstein@sidley.com). The Sidley Austin website can be accessed at www.sidley.com. The materials contained on this website are for general information purposes only and are subject to the disclaimer. .