RegAlert2015-10-02
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SEC Division of Investment Management staff letter: North American Division of Seventh-Day Adventists
The North American Division of Seventh-Day Adventists requests no-action assurances from the SEC staff regarding the investment of church plan assets into bank collective trusts that, in turn, invest in insurance company separate accounts. The request addresses whether such investments violate Section 3(c)(11) of the Investment Company Act of 1940, specifically concerning the ability of separate accounts to hold assets derived from church plans despite statutory amendments. The Adventists argue that legislative history and functional equivalence to 401(k) plans support the continuation of prior no-action relief, allowing these structures to maintain their exclusion from the definition of an investment company.
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Associate Director and Chief Counsel
Division of Investment Management
United States Securities and Exchange Commission 100 F Street, N.E.
Washington, DC 20549
Dear Mr. Scheidt:
1940 Act - Section 3(c)(ll)
Section 7
We represent the North American Division of Seventh-Day Adventists (the "Adventists"). As described in greater detail below, we are writing on behalf of the Adventists to request that the staff provide its assurances that it will not recommend enforcement action to the U.S. Securities and Exchange Commission (the "Commission") under Section 7 of the Investment Company Act of 1940 (the "1940 Act") against certain bank collective trusts (each, a "BCT" or "bank collective trust") or any insurance company separate account in which a BCT invests ("Separate Account") if a Separate Account that relies on the exclusion from the definition of "investment company" contained in section 3(c)(1 1) of the 1940 Act continues to rely on that exclusion, notwithstanding the fact that certain BCTs holding church plan1 assets in accordance with section 3(c)(l1) invest a portion of their assets in such Separate Account. Background The North American Division of Seventh-Day Adventists is one of thirteen divisions of the General Conference of Seventh-Day Adventists world-wide, and is the organization that oversees all Seventh Day Adventist churches in the United States. The Adventists are a church that is exempt from taxation under Section 501 of the Internal Revenue Code of 1986, as amended (the "Code").2 As an adjunct to their religious and charitable activities, the Adventists maintain a plan providing defined contribution retirement income accounts (the "Plan") as described in 1 As noted more fully below, these church plans would satisfy the requirements of Section 3(c)(14) of the 1940 Act and Section 403(b)(9) of the Internal Revenue Code of 1986, as amended (the "Code"). 2 26 U.S.C.A. §501 (2013). DC-9903839 v5 klgates.com
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