3991 / What is the PTE that allows banks and brokers to offer no or low cost services based on account balances in IRAs and Keogh plans?

Administrative Exemption: 93-33 and 97-11

Prohibited Transaction Exemption 93-33¹ and Prohibited Transaction Exemption 97-11² allow banks and brokerages, respectively, to offer no or low cost services based on account balances in IRAs and Keogh plans, if certain requirements are met:

(1)  the services offered must be those that could be offered under applicable state and federal law and that are available in the ordinary course of business to other customers who do not maintain an IRA or Keogh plan;

(2)  the eligibility requirements, based on the account value or the amount of fees incurred, must be as favorable as any such requirements imposed on any other account included in determining eligibility to receive such services;