The Labor Department has officially killed a Bush administration rule that would have cleared the way for mutual fund companies to offer direct one-on-one investment advice through their affiliates to defined contribution plan participants.
“The department decided to withdraw the (Bush administration) rule based on public comments that raised sufficient doubts as to whether the conditions of the final rule and the class exemption associated with the rule could adequately protect the interests of plan participants and beneficiaries,” the department's Employee Benefits Security Administration announced today in a news release.
The EBSA also said it planned to issue a new proposed regulation on investment advice.
Gloria Della, an EBSA spokeswoman, said it was unclear when the agency would publish a new investment advice proposal or adopt a new final regulation.
"We don't have a specific timeline set because it's going through the regulatory process," Ms. Della said.
Doug Halonen is a reporter with P&I, a sister publication to InvestmentNews