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sions of section 306 of Public Law 107–204 (116 Stat. 
745 et seq.). 
TITLE VI—INVESTMENT ADVICE, 
PROHIBITED TRANSACTIONS, 
AND FIDUCIARY RULES 
Subtitle A—Investment Advice 
SEC. 601. PROHIBITED TRANSACTION EXEMPTION FOR 
PROVISION OF INVESTMENT ADVICE. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Section 408(b) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(14) Any transaction in connection with the 
provision of investment advice described in section 
3(21)(A)(ii) to a participant or beneficiary of an in-
dividual account plan that permits such participant 
or beneficiary to direct the investment of assets in 
their individual account, if—
‘‘(A) the transaction is—
‘‘(i) the provision of the investment 
advice to the participant or beneficiary of 
the plan with respect to a security or other
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property available as an investment under 
the plan, 
‘‘(ii) the acquisition, holding, or sale 
of a security or other property available as 
an investment under the plan pursuant to 
the investment advice, or 
‘‘(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 an acquisition, holding, 
or sale of a security or other property 
available as an investment under the plan 
pursuant to the investment advice; and 
‘‘(B) the requirements of subsection (g) 
are met.’’. 
(2) REQUIREMENTS.—Section 408 of such Act 
is amended further by adding at the end the fol-
lowing new subsection: 
‘‘(g) PROVISION OF INVESTMENT ADVICE TO PARTIC-
IPANT AND BENEFICIARIES.—
‘‘(1) IN GENERAL.—The prohibitions provided 
in section 406 shall not apply to transactions de-
475
scribed in subsection (b)(14) if the investment advice 
provided by a fiduciary adviser is provided under an 
eligible investment advice arrangement. 
‘‘(2) ELIGIBLE INVESTMENT ADVICE ARRANGE-
MENT.—For purposes of this subsection, the term 
‘eligible investment advice arrangement’ means an 
arrangement—
‘‘(A) which either—
‘‘(i) provides that any fees (including 
any commission or other compensation) re-
ceived by the fiduciary adviser for invest-
ment advice or with respect to the sale, 
holding, or acquisition of any security or 
other property for purposes of investment 
of plan assets do not vary depending on 
the basis of any investment option selected, 
or 
‘‘(ii) uses a computer model under an 
investment advice program meeting the re-
quirements of paragraph (3) in connection 
with the provision of investment advice by 
a fiduciary adviser to a participant or ben-
eficiary, and
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‘‘(B) with respect to which the require-
ments of paragraph (4), (5), (6), (7), (8), and 
(9) are met. 
‘‘(3) INVESTMENT
ADVICE
PROGRAM
USING 
COMPUTER MODEL.—
‘‘(A) IN GENERAL.—An investment advice 
program meets the requirements of this para-
graph if the requirements of subparagraphs 
(B), (C), and (D) are met. 
‘‘(B) COMPUTER
MODEL.—The require-
ments of this subparagraph are met if the in-
vestment advice provided under the investment 
advice program is provided pursuant to a com-
puter model that—
‘‘(i) applies generally accepted invest-
ment theories that take into account the 
historic returns of different asset classes 
over defined periods of time, 
‘‘(ii) 
utilizes 
relevant 
information 
about the participant, which may include 
age, life expectancy, retirement age, risk 
tolerance, other assets or sources of in-
come, and preferences as to certain types 
of investments,
477
‘‘(iii) utilizes prescribed objective cri-
teria to provide asset allocation portfolios 
comprised of investment options available 
under the plan, 
‘‘(iv) operates in a manner that is not 
biased in favor of investments offered by 
the fiduciary adviser or a person with a 
material affiliation or contractual relation-
ship with the fiduciary adviser, and 
‘‘(v) takes into account all investment 
options under the plan in specifying how a 
participant’s account balance should be in-
vested and is not inappropriately weighted 
with respect to any investment option. 
‘‘(C) CERTIFICATION.—
‘‘(i) IN GENERAL.—The requirements 
of this subparagraph are met with respect 
to any investment advice program if an eli-
gible investment expert certifies, prior to 
the utilization of the computer model and 
in accordance with rules prescribed by the 
Secretary, that the computer model meets 
the requirements of subparagraph (B). 
‘‘(ii) 
RENEWAL
OF
CERTIFI-
CATIONS.—If, as determined under regula-