SEC Clarifies Registration Issues For PEPs

On May 4, the Staff of the Securities and Exchange Commission (“SEC”) Division of Investment Management issued a “Staff Statement Regarding Pooled Employer Plans” (the “Statement”) permitting a pooled employer plan (“PEP”) to be treated as a “single employer” plan for purposes of certain registration exemptions under federal securities law. Most notably, the Statement removes a barrier to PEP investments in collective investment trusts (“CITs”) where self-employed individuals participate in the PEP. At the same time, the SEC Division of Corporate Finance issued Q&A 118.01 to clarify that PEPs generally may claim the exemption from registration under section 3(a)(2) of the Securities Act of 1933 unless an employer offers its own securities as an investment option under a participating plan.