Submitted by lushenejj on
RE:
- IRA's and Keoghs as "Pension Trusts"
- RCW 21.20.320(8)- Exempt Transactions
- RCW 21.20.005(3)(b) - Defining "Broker-Dealer"
- RCW 21.20.005(6)(g)(i) -Defining "Investment Adviser"
Question presented:
Is a self-directed pension plan, such as an Individual Retirement Account (IRA) or Keogh account, a "pension trust" within the meaning of the above-referenced statutes?
Statutes and Regulation:
RCW 21.20.320(8) exempts from registration offers and sales to "pension or profit-sharing trusts. . . ."
RCW 21.20.005(3)(b) excludes from the definition of "broker-dealer" "a person having no place of business in this state if the person effects transactions . . . exclusively with . . . pension or profit-sharing trusts. . . ."
RCW 21.20.005(6)(g)(i) provides a similar exclusion from the definition of "investment adviser" for a person whose clients consist exclusively of pension trusts and other institutions.
Discussion:
The Administrator finds that self-directed pension plans such as IRA's and Keoghs were not envisioned when the Securities Act was enacted in 1959. The draftsmen's commentary to §402(b)(8) of the Uniform Securities Act, which is the corresponding section to RCW 21.20.320(8), indicates that the exemption is premised upon the "sophistication" of the listed institutions. IRA's and Keoghs are typically either directed by the individual taxpayer or by an entity over which the taxpayer retains the right to such direction.
Conclusion:
IRA and Keogh accounts are not "pension or profit sharing trusts" within the meaning of the above-referenced statutes and regulation.
Adopted: January 1, 1991.
Replaces: Statement of Policy 83-38
Jack L. Beyers, Securities Administration