Violation in submitting trade requests to Bank?

[Guest crosseyetester]

I have posted this elsewhere but have not been able to get any response. I'm not sure how to figure this on out....

Is there a violation in submitting trade requests for a client to a Bank that holds a plan's assets?

Here is an example of our procedure:

Each payroll period, the company calculates the total 401(k) deferrals based on participant rates of deferral. They then write a check for the full amount to the Bank. The bank deposits the check and notifies us, the recordkeepers, that the check was deposited and sends us a listing of each participant's 401(k) amounts. We run the numbers through our recordkeeping system, which allocates the amounts based on each participant's investment elections. Our system then gives us the total amount that needs to be bought into each of the investment funds. We then send over a spreadsheet which lists the account number, cusip, fund, and dollar amount, and whether to Buy or Sell (for distributions) a certain amount.

Do we need some kind of license or certification to be sending that information?

Is there more information I should be providing to explain our procedure?

[Bill Presson]

I have posted this elsewhere but have not been able to get any response. I'm not sure how to figure this on out....

Is there a violation in submitting trade requests for a client to a Bank that holds a plan's assets?

Here is an example of our procedure:

Each payroll period, the company calculates the total 401(k) deferrals based on participant rates of deferral. They then write a check for the full amount to the Bank. The bank deposits the check and notifies us, the recordkeepers, that the check was deposited and sends us a listing of each participant's 401(k) amounts. We run the numbers through our recordkeeping system, which allocates the amounts based on each participant's investment elections. Our system then gives us the total amount that needs to be bought into each of the investment funds. We then send over a spreadsheet which lists the account number, cusip, fund, and dollar amount, and whether to Buy or Sell (for distributions) a certain amount.

Do we need some kind of license or certification to be sending that information?

Is there more information I should be providing to explain our procedure?

What you describe is very common for recordkeepers. I'm not aware of any special licensing, but you need to make sure you have all your local and state business licenses.