Staff Statement on Trump Accounts

[*] On July 4, 2025, the law commonly referred to as the One Big Beautiful Bill Act (the "OBBBA") was signed into law.[1] Among other provisions, the OBBBA added new section 530A to the Internal Revenue Code of 1986, as amended (the "Code"). Section 530A provides for the establishment of a Trump account for an Eligible Individual[2] (each, a "Trump Account") and authorizes the U.S. Department of the Treasury ("Treasury") to prescribe rules for such accounts. A Trump Account is an individual retirement account (an "IRA") subject to special rules on contributions, investments, distributions, and reporting during the period that begins when the initial Trump Account is established and ends on December 31 of the calendar year in which the account beneficiary attains age 17 (the "growth period"). After the growth period, most of the special rules no longer apply and the rules under Code section 408 applicable to traditional IRAs generally apply.

Section 530A also provides that an Eligible Individual's initial Trump Account must be created or organized by the Secretary of the U.S. Treasury (the "Secretary"), and permits the Secretary to make the election, on behalf of an Eligible Individual, to establish initial Trump Accounts.[3] The Secretary has determined that it is in the interests of all Eligible Individuals to auto-enroll them in Trump Accounts so that they may participate and be eligible to receive certain contributions prior to affirmative action by another person. Therefore, on or about October 1, 2026, the Secretary will make elections for individuals satisfying the age and social security number requirements for whom no prior non-Secretary election has been made, and will establish an "Auto Account" for each Eligible Individual who does not already have a Trump Account (each, an "Auto Account Beneficiary").

Treasury has designated The Bank of New York Mellon ("BNY") as a financial agent of the U.S. government to support implementation of the new Trump Accounts program, including by managing and serving as trustee for each Auto Account.[4] In addition, Treasury has established a master trust (the "Master Trust") for the exclusive benefit of each Auto Account Beneficiary and for the purpose of, among others, holding investments of those Auto Accounts.[5] Treasury has appointed BNY as trustee of the Master Trust.

The Master Trust exists to pool assets of the Auto Accounts and invest them collectively.[6] Participation in the Master Trust is limited to Auto Accounts, each of which must adopt and incorporate by reference the governing instruments of the Master Trust. In connection with the collective investment of Auto Account assets by the Master Trust, the Master Trust will issue to the Auto Accounts book-entry units (the "Trust Interests") in certain subtrusts established pursuant to the terms of the Declaration of Trust. The Trust Interests will represent the Auto Account's proportionate beneficial interest in the assets, income, gains, losses, expenses, and liabilities of each relevant subtrust. Auto Accounts and Auto Account Beneficiaries may not assign, sell, pledge, mortgage, or otherwise transfer or encumber all or any part of the Trust Interests. Accordingly, the investment structure of the Auto Accounts and the Master Trust could be deemed to raise issues under the Investment Company Act of 1940, as amended (the "Investment Company Act"), the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Section 2(b) of the Investment Company Act provides that, unless otherwise specified, the provisions of the Act shall not apply to, among others, the United States, any agency, authority or instrumentality of the United States, or any officer, agent, or employee of any of the foregoing acting as such in the course of his or her official duty.

Treasury establishes the Master Trust, identifies and makes the default investment selection, approves the establishment and terms of each subtrust, and provides directions under the governing instruments. Treasury controls eligibility and contribution determinations and investment-related matters, except as expressly assigned by Treasury to BNY under the governing instruments. In contrast, BNY's role is expressly limited by the governing instruments: it does not select the investments permitted for a subtrust or make the substantive eligibility, contribution, or other investment determinations assigned to Treasury, and retains only the trustee responsibilities assigned to it by Treasury. In addition, because BNY is performing its duties as the trustee of the Master Trust in its capacity as financial agent, Treasury has substantial oversight authority and has the power to replace the trustee of the Master Trust at any time.

Accordingly, the staff of the Division of Investment Management would not recommend enforcement action to the Commission under the Investment Company Act if the Master Trust operates in reliance on Section 2(b).[7]

Section 3(a)(2) of the Securities Act provides that, except as expressly provided, the provisions of the Securities Act shall not apply to, among others, "[a]ny security issued or guaranteed by the United States . . . or by any person controlled or supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States." The staff of the Division of Corporation Finance would not recommend enforcement action to the Commission if the Master Trust, in reliance on the exemption from registration afforded by Section 3(a)(2) of the Securities Act, issues Trust Interests to Auto Accounts without registration under the Securities Act. In addition, to the extent that the Trust Interests may be considered equity securities within the meaning of Section 3(a)(11) of the Exchange Act and Rule 3a11-1 thereunder, the staff of the Division of Corporation Finance would not recommend enforcement action to the Commission if the Trust Interests are not registered pursuant to Section 12(g) of the Exchange Act. In this regard, we note in particular that the Trust Interests may not be transferred by the Auto Accounts or Auto Account Beneficiaries.