Law360, New York (May 27, 2015, 10:14 AM EDT) -- Recently, the U.S. Department of Labor proposed a new regulation to define when financial advisers are considered "fiduciaries" under the Employee Retirement Income Security Act and the Internal Revenue Code. The proposed regulation also includes new prohibited transaction exemptions (PTEs), as well as revisions to, and elimination of, certain existing PTEs. The primary PTE available to most financial advisers, should the DOL's proposals become effective, is the proposed best interest contract prohibited transaction exemption (the "best interest contract PTE"). This PTE provides a broad prohibited transaction exemption (but not an exemption from the fiduciary rules) for financial advisers who agree to contracts that provide certain consumer protections for their customers. Those contracts would be enforceable in court by the customers. This article examines the likely litigation implications of lawsuits to enforce the "best interest" contracts....