Recently, there have been a few regulatory and tax law updates which could have a minor impact on several different qualification exams. Some of these updates are changes to the current law, while others are additions.
STC has either already made the necessary updates to its courses or is in the process of doing so. From our experience, there can be a delay between the date of the announcement of a change and the date on which changes are made to the questions on a qualification exam.
Annual Gift Tax Exclusion and the Impact on 529 College Savings Plan Contributions
The annual gift tax exclusion has been increased from $15,000 to $16,000.
This change also influences the contribution limits to a 529 College Savings Plan since this limit is tied to the maximum gift tax limit.
Beginning in 2022, the maximum contribution that an individual can make to a 529 plan and avoid gift tax is $16,000 ($32,000 for a married couple). In addition, due to the five-year front-end loading option, an individual can contribute $80,000 to a plan and avoid gift tax ($160,000 for a married couple).
FINRA Rule 2165 (Financial Exploitation of Specified Adults)
FINRA has made the following two changes to this rule:
1) Previously, the rule permitted a firm to place a temporary hold on the disbursement of a specified adult’s funds or securities, but not to their transactions in securities.
The updated new rule now permits a firm to also place a temporary hold on securities transactions.
2) The second change is an extension to the rule. Currently, a temporary hold will expire by no later than 15 business days after the date that it was first placed on the account, unless it was otherwise terminated or extended by another authorized regulatory entity. If a member firm’s internal review of the facts and circumstances supports its reasonable belief that the financial exploitation of the specified adult has occurred, is occurring, has been attempted or will be attempted, the firm may extend the temporary hold for an additional 10 business days, unless otherwise terminated or extended by another authorized regulatory entity.
The extension of the rule allows for an additional 30-business day hold period, which is in addition to the previous 15-business day hold and the 10-business day hold (for a total of 55 business days).
Expanded Definition of an Accredited Investor
The SEC expanded the Accredited Investor definition to include:
Any investment adviser that’s registered with the SEC or a state
Any individual who has a current Series 7, Series 65, or Series 82 registration which is in good standing
Regarding the $300,000 annual gross income requirement in each of the last two years, the term spousal equivalent was added, which is defined as a cohabitant who occupies a relationship that’s similar to a spouse.
Note: For questions based on changes to previous regulations, please answer the question by selecting the BEST response (i.e., if $16,000 is not an available answer, choose $15,000).