Compliance December 5, 2018

No Required Amendments on IRS’ Annual List for 2018

When the agency ended its determination letter program, it said it would publish a list of required amendments for individually designed retirement plans to maintain their qualified plan status after October 1 of each year.

Reported by

The IRS has issued Notice 2018-91 containing the Required Amendments (RA) List for 2018 for individually designed retirement plans to maintain their qualified plan status.

When the agency ended its determination letter program effective January 1, 2017, it said it would publish an RA List after October 1 of each year. Individually designed plan sponsors must adopt any item placed on the list by the end of the second calendar year following the year the list is published.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

There are no entries listing changes in qualification requirements on the 2018 RA List.   

The IRS reminds plan sponsors that an RA List does not include guidance issued or legislation enacted after the list has been prepared and also does not include:

  • Statutory changes in qualification requirements for which the Treasury Department and the IRS expect to issue guidance (which would be included on an RA List issued in a future year);
  • Changes in qualification requirements that permit (but do not require) optional plan provisions (in contrast to changes in the qualification requirements that cause existing plan provisions, which may include optional plan provisions previously adopted, to become disqualifying provisions); or
  • Changes in the tax laws affecting qualified plans that do not change the qualification requirements under Internal Revenue Code Section 401(a) (such as changes to the tax treatment of plan distributions, or changes to the funding requirements for qualified plans).
Compliance December 5, 2018

Complying With ‘FAIR Act,’ SEC Eases Fund Research Distribution Restrictions

The SEC says these changes are needed to reduce obstacles to providing research on investment funds, and to harmonize the treatment of such research with research on other public companies.

Reported by

The Securities and Exchange Commission has adopted rules and amendments designed to promote easier sharing of research on mutual funds, exchange‑traded funds, registered closed-end funds, business development companies, and similar covered investment funds.

According to SEC Chairman Jay Clayton, the changes reduce obstacles to providing research on investment funds by harmonizing the treatment of such research with research on other public companies. He adds that the Commission took this action “in furtherance of the mandate in the Fair Access to Investment Research Act of 2017 (FAIR Act).”

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“These rules will promote greater access to research for investors in funds,” Clayton says. “Our response to this legislation is crafted to facilitate more informed decisions, which in turn should improve the quality of a market that has become important to our Main Street investors.”

The rules and amendments “generally establish a safe harbor for a broker or dealer to publish or distribute research reports on investment funds under certain conditions.” According to an SEC synopsis, this safe harbor is established by the new Rule 139b and is “similar to a regulatory safe harbor that currently exists for research reports about public companies.”  

Under the final rule, if certain conditions for the safe harbor are satisfied, the publication or distribution of fund research in itself would be deemed not to be an offer for sale or offer to sell the covered investment fund’s securities for purposes of Sections 2(a)(10) and 5(c) of the Securities Act of 1933.

With respect to the Investment Company Act of 1940, SEC will now exclude a covered investment fund research report from the coverage of Section 24(b) of the Investment Company Act (or the rules and regulations thereunder), “except to the extent the research report is otherwise not subject to the content standards in self-regulatory organization rules related to research reports, including those contained in the rules governing communications with the public regarding investment companies or substantially similar standards.”

Another rule amendment made final by SEC would “permit distribution participants, such as brokers or dealers, to publish or disseminate any information, opinion, or recommendation relating to a covered security if the conditions of Rule 139b (or, alternatively, the conditions of Rule 1388 or Rule 139 under the Securities Act) are satisfied.” According to the SEC, this proposed conforming amendment is intended to align the treatment of research under proposed Rule 139b with the treatment of research under Rules 138 and 139 for purposes of Regulation M.

«