Acknowledging opposition from industry and legislators, the Department of Labor’s Employee Benefits Security Administration has withdrawn and is re-proposing its rule redefining the term "fiduciary."

Seeking to ensure that potential conflicts-of-interest among broker-dealers would not compromise the quality of investment advice, the ESBA wanted to amend a 1975 regulation that defines when a person providing investment advice becomes a fiduciary under the Employee Retirement Income Security Act (ERISA). Industry associations protested that if the proposed rule was enacted advisors would lose their ability to be compensated through commissions on advice given to investors. In a letter to Labor Secretary Hilda Solis last week, House Financial Services Committee Ranking Member Barney Frank (D.-Mass.) asked the department to delay the rule and to better coordinate the rule-making with similar efforts underway at the Securities and Exchange Commission and the Commodities Futures Trading Commission.

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