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Rule Change Updates

ABLE Accounts and MSRB Rules

The MSRB has recently determined that certain ABLE Accounts are subject to MSRB regulation because of their similarity to Section 529 Plans.  Dealers and representatives that effect transactions in municipal fund securities, as in the sale of Section 529 Plans, must comply with MSRB Rules. The same requirements will apply to the sale of state-implemented ABLE accounts.

What are ABLE accounts?

ABLE Accounts were created by the ABLE (“Achieving a Better Life Experience”) Act of 2014. The Act helps ease the financial strain of individuals with disabilities by permitting the opening of tax-free savings accounts that can cover qualified expenses such as education, housing, transportation, employment support and training, certain technology expenses, and health prevention and wellness services. These savings accounts can supplement benefits provided through private insurances, social programs and other sources.

ABLE Accounts are available in all states like Section 529 Plans, and share similar contribution limits, tax treatment and reporting requirements.  Beneficiaries may have either an ABLE account or a traditional 529 qualified tuition program.  Rollovers from an ABLE account may be made to a traditional 529 plan if a beneficiary is no longer deemed disabled, or to the traditional 529 plan of a family member if the funds are not used.

Series Exam Impact

Series 7, 9/10, 24, 52, 53, 65 and 66 exams may include questions on these accounts. For more detail see MSRB Rule D-12 Notice and Interpretations.

Check back for regular updates from Knopman Marks to keep you up-to-date with the latest rule changes.

Marcia Larson is Vice President, Faculty, at Knopman Marks Financial Training, New York, NY. She has extensive experience in financial licensing and regulatory training, having authored, developed and presented courseware for numerous securities and insurance exam preparation and continuing education and compliance programs. Before joining Knopman Marks, Marcia was Director of Annuity Products and Business Development at CUNA Mutual Group, where she developed and marketed industry-leading annuity products and retirement solutions and implemented distribution relationships. She was previously VP, Securities Products for Kaplan Financial, managing securities training products and subsequently, international training and businesses development. Marcia has trained thousands of financial industry exam candidates throughout their careers, and also college students as an adjunct professor. Marcia was a summa cum laude graduate of Wartburg College with degrees in Business Administration and Piano Performance. Marcia also holds the designations of Chartered Financial Consultant® (ChFC®), Chartered Life Underwriter (CLU®), Certified Employee Benefit Specialist (CEBS), and Fellow Life Management Institute™ (FLMI®). She currently teaches the SIE, Series 6, 7, 24, 50, 52, 63, 65, and 66 exams.