George Michael Gerstein

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

Live Blogging: New York

I am here at The Harvard Club discussing what plan fiduciaries should consider when evaluating potential exposure to China A-shares. Some of the key issues I am outlining are:

1 – Indicia of ownership issues, particularly for non-US managers (ERISA plans)

2-Prudence considerations in light of foreign investor restrictions (e.g., forced sales) and language barriers when examining public disclosures (ERISA and governmental plans)

3 – Adherence to plan documents, including, but not limited to, the plan’s ESG policies (if any) (ERISA and governmental plans)

4- Fiduciaries should remember that A-shares are traded in renminbi (ERISA and governmental plans)

 

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

George Michael Gerstein to discuss ESG with a panel from DOL, Wellington and Brown Advisory

Join Boston BASIC (Building A Sustainable Investment Community), a consortium of Boston area SRI professionals, on Thursday, October 11th for a practical discussion of the considerations fiduciaries should take into account when incorporating environmental, social and governance factors into their investment process. The event will take place in Boston.

The discussion is hosted by George Michael Gerstein, Co-Chair Fiduciary Governance at Stradley Ronon, and joined by:

Hillary Flynn, ESG Analyst at Wellington Management

Mary Gregory, Sustainable Investing Specialist at Brown Advisory

Colleen Brisport, U.S. Department of Labor

The event is closed to the press.

Register here.

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

New Jersey will propose its own fiduciary rule

Expected to apply to “all New Jersey investment professionals.” More to come.

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

Playback: Wider U.S. Retirement Investing in China on the Horizon?

In 2015, I spoke with planadviser on the Shanghai-Hong Kong Stock Connect and what it means for ERISA plan fiduciaries. Here is a link to the article.

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

ESG risk management is becoming more common

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

SEC rescinds two 15-year-old letters written by its staff concerning proxy advisers

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

Form CRS under microscope

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

All eyes on China

Wellington Management provides some interesting insights on the ascendancy of China A-Shares and how investors should be thinking about them. Fiduciaries may wish to consider my detailed ERISA analysis on the Shanghai-Hong Kong Stock Connect.

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

House unveils tax reform 2.0 with some retirement provisions

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.

International investing considerations for ERISA fiduciaries

Section 404(b) of ERISA provides that a fiduciary may not maintain the indicia of ownership of plan assets outside the jurisdiction of the U.S. district courts. But, clearly, investments in non-U.S. securities may be entirely reasonable and prudent for an ERISA plan’s participants and beneficiaries. The DOL’s regulation (29 CFR 2550.404b-1) sought to both ensure the U.S. district courts’ jurisdictional arm reached plan assets while expressly recognizing and preserving the importance of international investments, particularly for diversification purposes.

Fiduciaries have three decision-making points.

  1. Are the proposed investments qualifying assets (e.g., securities issued by a company that is neither organized in the United States nor has its place of business in the United States) under the DOL regulation?
  2. What are, in fact, the indicia of ownership of the international investments?
  3. Which pathway is the fiduciary taking to ensure that it complies with Section 404(b) of ERISA?

It is often not a straightforward decision as to what exactly are the plan’s indicia of ownership of particular non-U.S. investments. The most classic example would be stock and bond certificates. But in other types of investments, such as privately offered securities, subscription documents and limited partnership agreements may be enough. Still in other cases, trade confirmations or account statements may be the best indicia of the plan’s ownership in the investment. There is, unfortunately, not always a simple answer to what exactly are the indicia of ownership of a particular investment.

There are essentially four pathways for the fiduciary to satisfy its duties under Section 404(b) of ERISA under the DOL regulation, each of which are subject to myriad conditions. The first and most common method is where the fiduciary that has management and control over (i.e., decision-making authority to purchase, hold or dispose of) the non-U.S. plan assets is a U.S. bank, insurance company or investment adviser. A second pathway is where the indicia of ownership are maintained in a global custodial relationship. However, one key condition is that the U.S. bank-custodian needs to be liable to the plan as if it retained physical possession over the indicia of ownership in the U.S. Yet a third pathway is where the indicia of ownership are maintained by a broker-dealer registered under the Exchange Act and in the custody of a “satisfactory control location,” as defined under U.S. securities laws. The fourth and final pathway is where a US. Bank or broker-dealer registered under the Exchange Act physically possesses the indicia of ownership.

ERISA fiduciaries should consider the requirements under Section 404(b) as they apply to international investments. From a practical standpoint, investment managers, when negotiating their investment management agreements, should be on the lookout for attempts to impose upon them the duty to ensure compliance with Section 404(b) of ERISA, rather than the plan’s custodian, which may be the more appropriate party.

George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.