Yesterday we reviewed the current IRC Section 401(a)(28) ESOP diversification rules and discussed the ESOP Update Phone Forum. The Government is Here to Help; No Really! provides another recap of the forum, splitting up the presentation into the following areas:
- Non-ESOP Diversification
- ESOP Diversification
- Mandatory Repurchase of Employer Securities under Section 409(h)(2)(B)(i)
- Rebalancing and Reshuffling of Employer Securities
- Some Additional Q &A
In the forum, Robert Gertner reiterated that the Final IRC Section 401(a)(35) Diversification Regulations are intended to clearly define publicly trade securities.
First, he made clear that the regulations are intended to create a bright-line test on the definition of publicly traded securities. Therefore, stocks that are quoted only in the Pink Sheets or in the OTCBB will not be treated as publicly traded, even if there is a relatively liquid market for the stock.