SEC Defers to Labor Department on 401(k) Fee-Disclosure Actions

Information provided by 401(k) plan sponsors to participants that satisfies Department of Labor fee-disclosure rules will also satisfy the SEC’s advertising rules, the Labor Department announced.

The ruling came in a “no-action” letter from SEC that had been requested by DOL’s Employee Benefits Security Administration.

The SEC polices advertising by registered investment companies to ensure that their performance information is accurate and relevant to current performance. The “no-action” letter agreed to treat information from those companies “as if it were a communication that satisfies” SEC rules if it meets DOL disclosure rules, the letter states.

“It’s great to have it because it makes clear that providers don’t have to worry about SEC issues as they comply with DOL fee-disclosure rules,” Brian Graff, executive director and CEO of the American Society of Pension Professionals & Actuaries, said in an interview. “It’s just an added level of comfort for compliance folks who were worried. Now they’re warm and fuzzy about it.”

Source: http://www.pionline.com/article/20111028/DAILYREG/111029881/sec-defers-to-labor-department-on-401k-fee-disclosure-actions