![]() The methodology and results of the retrospective review must be reduced to a written report. The investment adviser must retain the report, certification and supporting data for six years and provide these documents to a DOL or Internal Revenue Service official within 10 business days of a request. A review covering calendar year 2022 must be completed by or before July 1, 2023. The retrospective review, report and certification must be completed at least annually and no later than six months following the end of the period covered by the review. Activities and Transactions CoveredĪdvisers’ recommended transactions that must be reviewed under the Retrospective Review include ensuring the investment adviser follows the best interest standard of care, receives only reasonable compensation and satisfying the SEC’s best execution standard, not making materially misleading statements related to recommendations, making required disclosures prior to engaging in a recommended transaction, establishing and enforcing policies and procedures, and completing the Retrospective Review Report. This ensures that the investment adviser, through an appropriate executive officer, is fully accountable for the retrospective review. Senior executive officers, such as the investment adviser’s Chief Compliance Officer should carefully review the report before making the required certifications, so that they can make the certifications with confidence. The DOL expects advisers to use the results of the review to find more effective ways to help ensure that investment professionals are providing investment advice in accordance with the Impartial Conduct Standards and to correct any deficiencies in existing policies and procedures. Self-correcting any violation within 90 days and furnishing notification to the DOL within thirty days of the correction.Seeking to obtain the best execution of the investment transaction reasonably available under the circumstances, as required by the federal securities laws, and.Avoiding materially misleading statements about the recommended investment transaction and other relevant matters,.Providing investment advice that is in the retirement investor’s best interest,.Compliance with the standards of the PTE is achieved by: The Retrospective Review (the “Review”) requirement of Prohibited Transaction Exemption 2020-02 (the “PTE”) is designed to assist in detecting and preventing violations of, and achieving compliance with, the Impartial Conduct Standards and the policies and procedures adopted for compliance with the PTE. For this reason, I asked our colleague, Joseph Antonakakis, to share his expertise. While we anticipate assisting many investment advisers with their completion of this new requirement, it is important to understand its purpose and components. The Department of Labor (“DOL”) rule requirement continues with the fast-approaching filing date for an investment adviser’s initial Retrospective Review. ![]()
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