529 Plan Practice Profile

Mark Chapleau, a Partner at Masterman, Culbert & Tully LLP has been actively involved in the creation and development of many of the leading Section 529 college savings programs in the nation. Mr. Chapleau has extensive experience in the securities law, tax law, contracting, regulatory, and other legal requirements applicable to such programs. Masterman, Culbert & Tully has the requisite expertise to represent both financial services firms in their role as program managers of Section 529 college savings plans (including, investment management, marketing and distribution, administration and recordkeeping, and customer service), as well as the state sponsors of Section 529 programs responsible for the development and oversight of the programs.

529 Plans Overview

Section 529 college savings programs are an example of a successful public/private partnership that has worked for the benefit of families saving for college. According to the Financial Research Corporation, assets in 529 plans are expected to increase by 58% from $150 billion in mid-2011 to $237 billion by 2015. The vast majority of Section 529 programs are sponsored by a state per the requirements of federal tax law. Typically, state 529 enabling statutes place responsibility for the establishment and maintenance of the 529 program with a state agency, often a state treasurer or the agency charged with promoting higher education within the state. 529 college savings programs offered for sale to the public issue "municipal fund securities." Well-designed programs may use a number of exemptions from the securities laws for securities issued by state instrumentalities, including registration exemptions under the Securities Act of 1933 and the Investment Company Act of 1940. Municipal Advisors to state sponsors and broker-dealers of Section 529 program municipal fund securities must register with the Municipal Securities Rulemaking Board ("MSRB") and comply with its rules, which are enforced by the Financial Industry Regulatory Authority ("FINRA").

529 Experience

Mr. Chapleau is the former President and General Counsel of one of the leading Section 529 program managers in the nation. He has provided legal advice in connection with more than twenty (20) Section 529 college savings plans sponsored by more than twelve (12) states.

The Practice at Masterman, Culbert & Tully > Counsel to the 529 Community

Mr. Chapleau has assisted program managers, investment managers, and distributors in structuring Section 529 programs in a manner that meets applicable securities and tax law requirements. He has also drafted the required contracts between the state issuer and financial services organizations, as well as between the financial services organizations and third-party subcontractors, both for the original programs and for modifications of those programs after successful
re-bids. 529 program management agreements and subcontracts need to be customized to the relevant state statues, MSRB rules, individual state programs, participating investment managers and distributors, as well as to the applicable distribution channel (direct-sold or advisor-sold). Mr. Chapleau also has extensive experience with the drafting and review of Section 529 offering documents and marketing materials both in print and on the web.

Masterman, Culbert & Tully has the expertise, and more importantly, the judgment borne from experience to deliver sophisticated representation to 529 clients in the following areas:

Requests for Proposal
Negotiating contracts between the state sponsor and program manager
Negotiating contracts among investment adviser/broker-dealer/service company entities
Negotiating contracts between wholesale broker-dealer and third party broker-dealers/advisors
Negotiating contracts with third-party mutual funds
Negotiating contracts between program managers and "private label" distributors
Negotiating contracts with administrative and recordkeeping agents
Negotiating contracts with custodian banks
Preparation or review of program offering documents
Preparation or review of program marketing materials
Website review
MSRB registration, rules compliance programs, and compliance strategy (including Dodd-Frank implementation)
SEC no-action letters
SEC Rule 15c2-12 continuing disclosure agreements