SEC Grants No-Action Relief from Form CRS Requirements on "Trump Accounts"
The SEC Division of Trading and Markets will not recommend enforcement against Robinhood Financial LLC and Robinhood Securities, LLC (“Robinhood,") the designated sole broker dealer of "Trump Accounts" for failing to deliver Form CRS to parents, legal guardians or individuals who open such accounts on behalf of eligible individuals.
In the no action letter, staff limited the relief to the period during which Robinhood serves as the sole broker-dealer and initial trustee for Trump accounts.
In its request for relief, Robinhood explained that Trump accounts are a special type of individual retirement account for the exclusive benefit of eligible individuals as defined in tax code at 26 U.S.C § 530A(b)(2) ("Trump Accounts"). Robinhood stated that Form CRS delivery as required by Exchange Act Rule 17a-14 ("Form CRS, for preparation, filing and delivery of Form CRS") was unnecessary because:
- there is no investor choice, as Robinhood was designated by Treasury as the sole broker-dealer and account holders do not select among competing firms;
- there are no account-level fees or commissions charged on Trump accounts; and
- conflicts of interest are largely absent - no proprietary products are offered, no recommendations are made, compensation does not vary by investment selection, and no cross-selling occurs.
Robinhood further stated that delivering Form CRS could be misleading, as it would imply the existence of fees and service alternatives where none exist. Robinhood also stated that the Trump account investments are also restricted to low-cost, broad-based index funds that do not use leverage and carry annual fees capped at 0.1 percent.
Robinhood committed to providing tailored disclosures explaining the account's limited investment scope, the absence of fees and advisory services, and a link to FINRA's BrokerCheck website. Individuals opening accounts must affirmatively acknowledge the account's investment restrictions during the account opening process.