1 A copy of the proposed exemption was previously provided. See Institute Memorandum to Pension Committee No. 22-00
and Ad Hoc Committee on Investment Advice, dated March 28, 2000.
2 See Institute Memorandum to Pension Committee No. 30-00 and Ad Hoc Committee on DOL Individual Exemption, dated
April 26, 2000.
3 See Institute Memorandum to Pension Committee No. 19-00 and Pension Operations Advisory Committee No. 18-00,
dated March 17, 2000, for the Institute’s testimony, and Institute Memorandum to Pension Committee No. 17-00 and Ad
Hoc Committee on Investment Advice, dated February 23, 2000, for the Institute’s legislative proposal on the provision of
investment advice to plan participants.
[11860]
May 5, 2000
TO: PENSION COMMITTEE No. 32-00
AD HOC COMMITTEE ON DOL INDIVIDUAL EXEMPTION
RE: ICI COMMENT LETTER ON DOL INDIVIDUAL EXEMPTION FOR
INVESTMENT ADVISORY SERVICE
______________________________________________________________________________
The Institute today filed the attached comment letter on the Department of Labor’s proposed
individual exemption regarding the provision of investment advisory services by Standard & Poor’s
Investment Advisory Services, an independent advice provider.1 The comment letter was developed
based on discussions from an April 13th conference call and member comments on a circulated draft.2
The letter makes the broad point that the Department’s approach to the provision of investment
advice in this and prior individual exemptions severely restricts the availability of such advice — to the
detriment of retirement plan participants. The letter also notes that the Department does not explain
why an exemption is necessary in this case, and that absent the identification of a prohibited transaction,
the exemption will have a chilling effect on advisory activities.
To expand the availability of advisory services to participants, the letter urges the Department to
adopt a disclosure-based approach to the provision of investment advice —
as described in the Institute’s recent testimony before the House Subcommittee on Employer-Employee
Relations.3 This approach would enable participants to obtain advisory services from a greater number
of financial institutions, including those already providing services to their plans.
Thomas T. Kim
Assistant Counsel
Attachment