ERISA Exemptions

ERISA prohibited transactions exemptions

The U.S. Department of Labor has, under authority granted by ERISA, issued a series of exemptions from ERISA 's prohibited transaction rules which allow plans and broker/dealers to engage in some but not all types of securities transactions.

These ERISA exemptions also generally apply to IRA retirement plans and Keoghs. The range of permissible transactions varies depending upon whether the broker/dealer is a fiduciary with respect to the plan.
 

Fiduciary ERISA Account Prohibited Transactions

If the financial institution or its financial advisors are fiduciaries with respect to a retirement plan, ERISA and/or Company policy prohibit ERISA covered accounts, IRA, and Keoghs from engaging in the following:

• principal transactions (all transactions must be agency only);
• syndicate issues;
• margin trading;

   

• commodity transactions (except for certain financial futures used as part of a fully disclosed investment strategy approved investment manager);

   

• agency crosses;

   

• transactions for which the financial institution is a market-maker unless all of the following conditions apply:
• • there is at least one other market-maker;
  • The financial institution offers the plan the best price available;

     

  • the transaction involves securities of established issuers including the United States government or its agencies; and

     

  • the transaction does not cause the plan to exceed certain percentage limitations on holding "market-maker" securities.

   

If there are any questions regarding a specific transaction or series of transactions, contact you must sort out the issue with the Compliance Department before effecting the transaction(s).