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Large IRAs and High-Income Retirement Savers Targeted by Amendment to Budget Reconciliation Bill

Last week, Richard Neal (D-Mass), chairman of the House Committee on Ways and Means, unveiled an amendment to help fund the $3.5 trillion budget reconciliation legislation that is currently under consideration in Congress. The Neal amendment would make dramatic changes to the rules governing retirement plans for certain high-income taxpayers by imposing new asset limitations and prohibitions. It would also require distributions and IRA contribution limitations for certain individuals with retirement savings over $10 million, require distributions of Roth balances in excess of $20 million and end the practice of so-called “back-door” Roth conversions. These changes aim to effectively prohibit mega IRAs, which were the subject of extensive press reports earlier this year following ProPublica’s revelation of multiple large IRAs, including Peter Thiel’s $5 billion mega-Roth IRA.

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Expiration of COVID-19 Relief for APs and Principals to Submit Fingerprint Cards

Practices: Asset Management, Derivatives & Commodities

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Coronavirus Landing Site

On September 29, 2020, the U.S. Commodity Futures Trading Commission (‘CFTC”) Division of Swap Dealer and Intermediary Oversight announced (available here) that it had declined to extend its April 2020 COVID-19 relief granted in Letter 20-16 and extended to September 30, 2020 in Letter 20-20 (available here) from the requirement that a fingerprint card be submitted to the NFA in connection with the listing of a principal or registration of an associated person (“AP”). As a result, effective October 1, all persons applying for AP registration or to be listed as a principal of a registrant must submit fingerprint cards to the NFA. Persons who have relied on Letter 20-20 must submit fingerprint cards to the NFA by November 2, 2020.

Similarly, the NFA, on October 6, 2020, issued a Notice to Members (available here) confirming the expiration of relief that it had granted previously from the fingerprinting requirements in NFA Registration Rules 204(a)(2)(A) and 206(a)(1)(A).

Importantly, the NFA’s COVID-19 relief for members allowing APs to work from home without registering additional branch offices (as further discussed here) remains in effect for firms that continue to operate under their business continuity plans.

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Please contact Deborah A. Monson, Jeremy A. Liabo, Lindsey Jones or the Ropes & Gray attorney who usually advises you with any questions you may have or if you would like additional information.

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