Last week, with the introduction of the "Defined Contribution Fee Disclosure Act of 2009” (S. 401) by Senators Harkin and Kohl, we promised to take a look at the bill and give our analysis.
Now having had the time to look over the bill and reflect on its meaning, I find it difficult to devote too much time and attention to it, given that everyone is waiting with baited breath for the entire financial regulatory system to be overhauled. Once a new and (hopefully) improved regulatory structure is in place we should have a much clearer picture of how the new Administration and Congress plan to restore trust in financial services firms and the governmental entities that oversee them. It seems premature for S. 401 to zero in on fee disclosure at this time. It would make more sense for Congress (or a new super regulator) to address a more robust set of disclosures all at the same time rather than in a piece meal fashion. For example, disclosure of service providers’ affiliations, conflicts, and fiduciary status should also be required, as was going to be the case under the DOL’s proposed 408(b)(2) regulations. Unless and until it looks like S. 401 is going to gain some traction on the Hill, a detailed analysis of the bill would be premature. Stay tuned in with us for close coverage of what we expect will be a flurry of legal and regulatory developments over the coming months.
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