shall be construed to preclude the use of plan 
assets to pay for reasonable expenses in pro-
viding investment advice referred to in section 
3(21)(A)(ii). 
‘‘(6) DEFINITIONS.—For purposes of this sub-
section and subsection (b)(14)—
‘‘(A) FIDUCIARY ADVISER.—The term ‘fi-
duciary adviser’ means, with respect to a plan, 
a person who is a fiduciary of the plan by rea-
son of the provision of investment advice by the 
person to the plan or to a participant or bene-
ficiary and who is—
‘‘(i) registered as an investment ad-
viser under the Investment Advisers Act of 
1940 (15 U.S.C. 80b–1 et seq.) or under 
the laws of the State in which the fiduciary 
maintains its principal office and place of 
business, 
‘‘(ii) a bank or similar financial insti-
tution referred to in section 408(b)(4) or a 
savings association (as defined in section 
3(b)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1813(b)(1))), but only if 
the advice is provided through a trust de-
partment of the bank or similar financial
institution or savings association which is 
subject to periodic examination and review 
by Federal or State banking authorities, 
‘‘(iii) an insurance company qualified 
to do business under the laws of a State, 
‘‘(iv) a person registered as a broker 
or dealer under the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.), 
‘‘(v) an affiliate of a person described 
in any of clauses (i) through (iv), or 
‘‘(vi) an employee, agent, or registered 
representative of a person described in any 
of clauses (i) through (v) who satisfies the 
requirements 
of 
applicable 
insurance, 
banking, and securities laws relating to the 
provision of the advice. 
‘‘(B) AFFILIATE.—The term ‘affiliate’ of 
another entity means an affiliated person of the 
entity (as defined in section 2(a)(3) of the In-
vestment Company Act of 1940 (15 U.S.C. 
80a–2(a)(3))). 
‘‘(C) 
REGISTERED
REPRESENTATIVE.—
The term ‘registered representative’ of another 
entity means a person described in section 
3(a)(18) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)(18)) (substituting the 
entity for the broker or dealer referred to in 
such section) or a person described in section 
202(a)(17) of the Investment Advisers Act of 
1940 (15 U.S.C. 80b–2(a)(17)) (substituting 
the entity for the investment adviser referred to 
in such section).’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.—
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Subsection (d) of section 4975 of the In-
ternal Revenue Code of 1986 (relating to exemptions 
from tax on prohibited transactions) is amended—
(A) in paragraph (14), by striking ‘‘or’’ at 
the end; 
(B) in paragraph (15), by striking the pe-
riod at the end and inserting ‘‘; or’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(16) any transaction described in subsection 
(f)(7)(A) in connection with the provision of invest-
ment advice described in subsection (e)(3)(B)(i), in 
any case in which—
‘‘(A) the investment of assets of the plan 
is subject to the direction of plan participants 
or beneficiaries, 
‘‘(B) the advice is provided to the plan or 
a participant or beneficiary of the plan by a fi-
duciary adviser in connection with any sale, ac-
quisition, or holding of a security or other prop-
erty for purposes of investment of plan assets, 
and 
‘‘(C) 
the 
requirements 
of 
subsection 
(f)(7)(B) are met in connection with the provi-
sion of the advice.’’. 
(2) ALLOWED
TRANSACTIONS
AND
REQUIRE-
MENTS.—Subsection (f) of such section 4975 (relat-
ing to other definitions and special rules) is amended 
by adding at the end the following new paragraph: 
‘‘(7) PROVISIONS
RELATING
TO
INVESTMENT 
ADVICE PROVIDED BY FIDUCIARY ADVISERS.—
‘‘(A) TRANSACTIONS ALLOWABLE IN CON-
NECTION WITH INVESTMENT ADVICE PROVIDED 
BY FIDUCIARY ADVISERS.—The transactions re-
ferred to in subsection (d)(16), in connection 
with the provision of investment advice by a fi-
duciary adviser, are the following:
‘‘(i) the provision of the advice to the 
plan, participant, or beneficiary; 
‘‘(ii) the sale, acquisition, or holding 
of a security or other property (including 
any lending of money or other extension of 
credit associated with the sale, acquisition, 
or holding of a security or other property) 
pursuant to the advice; and 
‘‘(iii) the direct or indirect receipt of 
fees or other compensation by the fiduciary 
adviser or an affiliate thereof (or any em-
ployee, agent, or registered representative 
of the fiduciary adviser or affiliate) in con-
nection with the provision of the advice or 
in connection with a sale, acquisition, or 
holding of a security or other property pur-
suant to the advice. 
‘‘(B) REQUIREMENTS RELATING TO PROVI-
SION OF INVESTMENT ADVICE BY FIDUCIARY 
ADVISERS.—The requirements of this subpara-
graph (referred to in subsection (d)(16)(C)) are 
met in connection with the provision of invest-
ment advice referred to in subsection (e)(3)(B), 
provided to a plan or a participant or bene-
ficiary of a plan by a fiduciary adviser with re-