DOL Says a Summary Prospectus Can Be Used Instead of a Full Prospectus for Fiduciary Advisor Exception

The U.S. Department of Labor (“DOL”) has issued Advisory Opinion 2013-04A which modifies the requirements of Prohibited Transaction Exemption (“PTE”) 77-4 that apply when:

(1) employee benefit plans buy or sell mutual funds; and

(2) the investment advisor for the mutual fund (or its affiliate) is a plan fiduciary and not an employer of the employees covered by the plan (“fiduciary advisors”).

Among other requirements, PTE 77-4 requires fiduciary advisors to provide an independent plan fiduciary with a prospectus. In Advisory Opinion 2013-04A, the DOL indicated that independent plan fiduciaries can be provided with a “summary prospectus” instead of a mutual fund’s full prospectus.

The Advisory Opinion is available here.
ERIC members and trial members can read more here.