Alert September 17, 2013

DOL Issues Advisory Opinion Regarding Use of a Mutual Fund “Summary Prospectus” under PTE 77-4

The Department of Labor (the “DOL”) recently issued Advisory Opinion 2013-04A clarifying mutual fund prospectus delivery requirements under section II(d) of Prohibited Transaction Class Exemption 77-4 (“PTE 77-4”).  PTE 77-4 provides relief from the application of ERISA’s prohibited transaction rules for the purchase or sale of shares of a mutual fund by an employee benefit plan when the investment adviser for the mutual fund or its affiliate is the relevant plan fiduciary if, among other conditions, a second fiduciary to the plan, who is independent and unrelated to the mutual fund’s adviser, receives a current prospectus for the mutual fund.  Advisory Opinion 2013-04A clarifies that the delivery of a mutual fund’s “summary prospectus” to the second fiduciary will satisfy this prospectus delivery requirement.