The Pension Protection Act of 2006

 

PROHIBITED INVESTMENT ADVICE      Pension Protection Act of 2006
(6) DISCLOSURE- The requirements of this paragraph are met if--

`(A) the fiduciary adviser provides to a participant or a beneficiary before the initial provision of the investment advice with regard to any security or other property offered as an investment option, a written notification (which may consist of notification by means of electronic communication)--
`(i) of the role of any party that has a material affiliation or contractual relationship with the financial adviser in the development of the investment advice program and in the selection of investment options available under the plan,
`(ii) of the past performance and historical rates of return of the investment options available under the plan,
`(iii) of all fees or other compensation relating to the advice that the fiduciary adviser or any affiliate thereof is to receive (including compensation provided by any third party) in connection with the provision of the advice or in connection with the sale, acquisition, or holding of the security or other property,
`(iv) of any material affiliation or contractual relationship of the fiduciary adviser or affiliates thereof in the security or other property,
`(v) the manner, and under what circumstances, any participant or beneficiary information provided under the arrangement will be used or disclosed,
`(vi) of the types of services provided by the fiduciary adviser in connection with the provision of investment advice by the fiduciary adviser,
`(vii) that the adviser is acting as a fiduciary of the plan in connection with the provision of the advice, and
`(viii) that a recipient of the advice may separately arrange for the provision of advice by another adviser, that could have no material affiliation with and receive no fees or other compensation in connection with the security or other property, and
`(B) at all times during the provision of advisory services to the participant or beneficiary, the fiduciary adviser--
`(i) maintains the information described in subparagraph (A) in accurate form and in the manner described in paragraph (8),
`(ii) provides, without charge, accurate information to the recipient of the advice no less frequently than annually,
`(iii) provides, without charge, accurate information to the recipient of the advice upon request of the recipient, and
`(iv) provides, without charge, accurate information to the recipient of the advice concerning any material change to the information required to be provided to the recipient of the advice at a time reasonably contemporaneous to the change in information.
`(7) OTHER CONDITIONS- The requirements of this paragraph are met if--
`(A) the fiduciary adviser provides appropriate disclosure, in connection with the sale, acquisition, or holding of the security or other property, in accordance with all applicable securities laws,
`(B) the sale, acquisition, or holding occurs solely at the direction of the recipient of the advice,
`(C) the compensation received by the fiduciary adviser and affiliates thereof in connection with the sale, acquisition, or holding of the security or other property is reasonable, and
`(D) the terms of the sale, acquisition, or holding of the security or other property are at least as favorable to the plan as an arm's length transaction would be.