Bill Presson Posted June 19, 2013 Share Posted June 19, 2013 I really hate trying to wade through the prohibited transaction issues. Just so you know. Not looking for chapter and verse here, just whether I'm headed in the right direction. Is a trustee/director of a mutual fund allowed to purchase that fund using assets of his self directed 401(k) account? I can't decide if it's really a retirement plan potential prohibited transaction or an issue that would cause a problem for the director regarding his independence on the board. Thanks. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
PensionPro Posted June 19, 2013 Share Posted June 19, 2013 You may want to check if there is a PTCE, perhaps PTE 77-3 or 79-13 ... PensionPro, CPC, TGPC Link to comment Share on other sites More sharing options...
Peter Gulia Posted June 20, 2013 Share Posted June 20, 2013 Mr. Presson, if your query is about an "outside" director - one who is not associated with the fund's manager, and who otherwise qualifies as independent under the Investment Company Act of 1940 and other law, such an individual's investment only for herself in those open-end registered investment company shares usually does not involve a prohibited transaction that needs an exemption. If such an open-end RIC fund's manager, as the employer of the manager's employees, wants to include a "house-brand" fund as a participant-directed investment alternative of that employer's retirement plan for only the manager's employees, class exemption 77-3, if all of its conditions are met, exempts a buy or a sell of the fund's shares from ERISA section 406. About independence, the typical desire is for an "outside" director to be independent of each fund's manager; but ordinarily there is no need (or desire) for a director to be independent of the fund itself. PTCE 77-3.pdf Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
Bill Presson Posted June 20, 2013 Author Share Posted June 20, 2013 Thanks to both for getting me down the right road and for the attachment! edited to add: this is for an outside, independent director. Mr. Gulia, please call me Bill. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
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