PPP SEC Registration - National Professional Planning Group, Inc.

The information on this page is relevant to all PEP stakeholders including companies contemplating becoming an adopting employer of a PEP.

What You Should Know

As a leading pooled plan provider (PPP), NPPG Plan Professionals provides both administrative fiduciary and investment fiduciary services. To meet its fiduciary obligations, NPPG has successfully registered as an investment adviser with the Securities and Exchange Commission (SEC).

Since the passage of the SECURE Act, dozens of entities have registered to become PPPs. However, NPPG is among the very few PPPs that are SEC-registered investment advisers, a distinction that has important implications for both service providers and participating employers.

Why This Matters to PEP Stakeholders

By registering as an investment adviser with the SEC, NPPG fulfills its fiduciary obligations with respect to the discharge of its duties as a PPP. Companies operating as a PPP without SEC registration leave clients unnecessarily exposed to additional fiduciary liability. As such, we believe SEC registration is not only a requirement but also a prudent best practice to protect client interests.

How NPPG Concluded SEC Registration is Required

NPPG conducted internal research and consulted with both trusted outside counsel and the SEC in determining registration with the SEC is required. Our conclusion is founded on the following information that we are pleased to share in an effort to raise awareness about this critical issue:

A legal opinion on SEC registration authored by SEC counsel, Ryan Walter, Esq, of RIA Lawyers
The SEC’s direct response declining NPPG’s request for a “No Action Letter” if a PPP were to operate without registration
A follow-up meeting with the SEC where NPPG presented typical facts and circumstances potentially warranting a “No Action Letter”. At the conclusion of this meeting, the SEC reiterated its stance and again declined NPPG’s request to affirm that SEC registration is not required for a PPP

The Short Analysis

As a PPP, NPPG requested the SEC affirm that it would not recommend enforcement action against NPPG under section 203 of the Investment Advisers Act of 1940 if NPPG did not register with the SEC as an investment adviser. Specifically, we requested the SEC issue a “No Action Letter” if investment fiduciary responsibilities are performed exclusively by another registered entity or by an adopting employer, rather than a PPP. After a prolonged period of time whereby the SEC reviewed the facts and circumstances, the SEC declined NPPG’s request. The parties subsequently met to discuss such scenarios in detail; however, the SEC again declined the request for a “No Action Letter” in the event the PPP is not registered. NPPG was forced to conclude that registration is required and that failure to do so exposes both the PPP and adopting employers at risk as plan investment fiduciaries.

While other organizations may not rely directly on this advice, we encourage others to pursue their own research on the matter. We further advocate others obtain their own independent final determination from the Securities and Exchange Commission by requesting a No Action Letter.