The US Department of Labor (the “DOL”) has proposed highly anticipated amended regulations relating to when a service provider to an employee benefit plan is a fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”). The amendments would change the rules governing when services involve “investment advice” so as to constitute fiduciary services. Generally, under ERISA, a party can be a fiduciary to a plan by providing certain discretionary services regarding plan investment or administration, or by providing investment advice. There have been indications that the DOL has become increasingly concerned that the existing regulatory definition is too narrow, thus allowing various consulting and other services to escape characterization as fiduciary services where the application of ERISA's fiduciary rules might be appropriate. Recently, the DOL and the SEC have coordinated efforts regarding these matters. Then, over the summer of 2010, the DOL indicated that it would reexamine the investment-advice regulations, with an eye towards amending them. The DOL has now proposed those amendments.

The proposed rules would broaden the types of advice that could be fiduciary advice substantially, and those who provide management, advice, valuation, appraisal and fairness-opinion services are among those who may want to examine the proposal carefully. It remains to be seen how the financial community, plan representatives and other interested parties will react, and the DOL has requested comments in connection with its efforts to finalize these important regulations.