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Broker-dealer discretion under interim exemption
Summary DOL answered a request about a then interim securities-industry exemption. Merely giving advice did not by itself make a broker-dealer a discretionary adviser or controller. Actual discretionary control over plan assets in a transaction, such as managing a discretionary account, fell outside the interim exemption; IRS concurred.
Document
Federal opinion letter
Agency
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Document number
P/OPINION 75-106
Date issued
February 25, 1975
Status
Unknown
EBSA's index does not mark withdrawn or superseded opinions; still posted on dol.gov as of 2026-10-26.
Status last verified October 26, 2026
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About this page: The full text below is the official document from U.S. Department of Labor, Employee Benefits Security Administration (EBSA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
P/OPINION 75-106
408
February 25, 1975
Dear :
has referred your letter of February 10, 1975 to
me for response.
The Department of Labor interprets paragraph (b)(1)
of the interim exemption for the securities industry
(published at 40 F.R. 5201, February 4, 1975) as
stating that the rendering of mere advice by a broker-
dealer to a plan in the situation described in paragraph (b)(1)
would not, by itself, cause the broker-dealer to be considered
an investment adviser or to be a person exercising discretionary
authority or discretionary control over plan assets. However,
it is the opinion of the Labor Department that if the broker-
dealer actually exercises such discretionary authority or
control over plan assets in connection with a transaction
(as a broker-dealer who manages a discretionary account
does), the transaction would not meet the requirements of
the exemption.
Paragraph (b)(4) was deliberately included in the interim
exemption to circumscribe the limited discretion that a
broker-dealer may exercise under the exemption in executing
an order on the part of a plan. Your interpretation of
paragraph (b)(1) would render paragraph (b)(4) virtually
nugatory and is, in our opinion, inconsistent with both
the letter and the spirit of the exemption.
We have been informed by the Office of the Chief Counsel
of the Internal Revenue Service that they concur in our
interpretation.
Sincerely,
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