Today the Senate pushed financial regulatory reform past it's final hurdle by first voting for cloture (60-38) and then just a few hours later approving (60-39) the Dodd-Frank conference report. Now that the conference report has gained both House and Senate approval, the Dodd-Frank Wall Street Reform and Consumer Protection Act will be sent to President Obama for his signature in a matter of days. And once the ink of the president's signature dries, the clock will start ticking for federal agencies who will be required to complete numerous studies and rulemakings within the next few years under timetables set by the new legislation. This means that while Congress heads into its August recess, federal agencies that are accustomed to a quiet August, will be kicking into high gear to meet their new obligations.
The SEC, in particular, will have its work cut out for it as it scrambles to complete approximately 20 studies and 95 new rules and coordinate with other agencies on several other studies and rules. While most studies have a time line of one to three years, in the next six months, the agency must study and report back to Congress on (1) the effectiveness of standards of care for broker-dealers and investment advisers, (2) the need for enhanced examination and enforcement resources for investment advisers (including whether an SRO is needed), and (3) how to improve investor access to information on broker-dealers and investment advisers.
Meanwhile, the DOL appears to be set for a flurry of activity of its own. The DOL's Employment Benefits Security Administration released on its website earlier today the soon to be published ERISA 408(b)(2) regulation. These long-awaited rules will finalize requirements for disclosures by service providers to defined contribution and defined benefit plans and will go into effect July 16, 2011. Although the final rules differ in some respects from the proposed rules, they will put into place strong disclosure requirements. In particular, service providers will be required to disclose their services and compensation, including whether they are providing any services as a fiduciary to the plan.
In addition to the release of the 408(b)(2) rules, DOL is also expected to release a proposal later this year that will address disclosures to participants under 404(a)(5), and a separate proposal that will clarify and expand the definition of "fiduciary" under ERISA. Additional guidance on target date funds is also expected as well as a proposed amendment to 404(c)(5) concerning qualified default investment alternatives.
Kristina -- We're assisting our plan sponsor clients with the collection of required data from their service providers. What tools (including benchmarking) are available to help us and our clients make sense of the data?
Posted by: Karen Matingou | February 01, 2011 at 03:06 PM