PLANADVISER - November/December 2022 - 8

compliance news //
rule in 2015, but renewed the public
comment period until
this June and
then finalized the rule on October 26.
In the
event an issuer has to
publish an accounting correction, it
must recover any executive incentive
pay from current and former executives
if that pay was predicated on
the incorrect accounting information.
Further, the firm must do so for the
three years prior to the date the issuer
was required to prepare the restatement.
The issuer must also disclose its
compensation recovery policy.
Exchanges must require a written
policy for recovering such incentive pay.
The SEC provides for three excepprovider
offered to drop its lawsuit
against the DOL, as long as the court
confirmed that the department's initial
guidance-found in Compliance Assistance
Release No. 2022-01-would not
be enforced. This would essentially
allow fiduciaries and plan sponsors to
provide cryptocurrency assets without
fear of regulation, ForUsAll said.
The DOL shot back in its defenForUsAll
response,
saying
as
provided by the Employee Retirement
Income Security Act and, in addition,
bypassed the proper comment
period. ForUsAll then, as previously
mentioned, reversed course.
The DOL response said ForUsAll
dants'
misrepresented the guidance to fit its
own purposes and that the court has
no jurisdiction over the enforcement of
" cryptocurrency investment offerings
for an indefinite period of time. "
" In short, the parties now all agree
ForUsAll originally sued the DOL
in June, saying that the guidance
... to use " extreme care " in considering
cryptocurrency in retirement
plans went beyond the DOL's
regulatory authority ...
tions to this rule: 1) if the direct
expenses of
that this case should not proceed
recovery would exceed
the amount to be recovered; 2) if the
recovery would violate the laws of
the firm's home country; and 3) if the
recovery would cause a retirement
plan to fail to meet its legal obligations
to the IRS. This rule will go into effect
60 days after it is published in the
Federal Register.
DOL Rejects ForUsAll's
'Tactical Retreat'
The Department of Labor is fighting
back against the latest move by retirement
provider ForUsAll in an ongoing
legal dispute over DOL guidance. In
March, the agency cautioned plan
fiduciaries and employers against
providing cryptocurrency as an investment
option within 401(k) plans.
The latest ForUsAll request came
in a motion for entry of order of
dismissal, filed with the District Court
of the District of Columbia. There,
on November 1, the retirement plan
further, " the DOL said in its response.
" The Court should grant Defendants'
[-i.e., the DOL's-]pending motion to
dismiss and reject ForUsAll's effort at
a tactical retreat. "
The battle between the department
and ForUsAll is taking place
even as the cryptocurrency market
faces increased scrutiny by regulators
after the collapse of multibilliondollar
exchange FTX on November 8.
According to retirement plan fiduciaries
and advisers, that case and the
related market crash of established
cryptocurrencies such as bitcoin have
the industry second-guessing recent
moves to give retirement plan participants
access to digital assets in their
401(k).
ForUsAll originally sued the DOL in
June, saying that the guidance calling
on fiduciaries and plan sponsors to use
" extreme care " in considering cryptocurrency
in retirement plans went
beyond the DOL's regulatory authority
misrepresented the initial guidance as
stating that to allow cryptocurrency
in retirement plans " does not violate
a fiduciary duty. " What the guidance
actually said, according to the department's
response, is that cryptocurrency
as an investment option may
comply with fiduciary duties and
prudence, depending " on the specific
circumstances in a given situation. "
Recordkeeper Fidelity Investments
and small-business plan-provider
ForUsAll currently have plan sponsor
clients providing participants with
access to cryptocurrency within their
401(k) accounts.
SEC Updates Rules on
Shareholder Reporting
And Fund Advertisements
The Securities and Exchange Commission
voted, October 26, to adopt significant
changes to its mutual fund and
exchange-traded fund advertisement
disclosure framework.
The new rule and form amendments
will require mutual funds and
ETFs to transmit " concise and visually
engaging shareholder reports " to
promote transparent and balanced
presentations of fees and expenses in
investment company advertisements.
According to the SEC, funds will
need to provide shareholder reports
that highlight key information, such
as fund expenses, performance, and
portfolio holdings. To make the reports
more effective, the use of graphics and
text features will be encouraged.
Funds must tag the information
in their reports in a structured data
format. The rule and amendments
also require funds to make available,
both online and for delivery free of
charge, certain in-depth information
that may be mainly relevant to investors
and financial professionals, the
SEC says. That information will no
longer appear in a fund's shareholder
reports but will remain available to
investors on a website identified in the
8 | planadviser.com November-December 2022
http://www.planadviser.com
PLANADVISER - November/December 2022

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