The Employee Benefits Security Administration has released an advisory opinion that could affect a financial professional who serves as a broker for an individual retirement account and non-IRA accounts for the same client.

EBSA Advisory Opinion 2009-03A concerns a client who has run up debts related to the IRA.

The client has non-IRA accounts with the broker.

In the advisory opinion, an EBSA official looks at whether the IRA can grant the broker a security interest in the non-IRA accounts, to cover the debts related to the IRA, or if that transaction would result in a prohibited transaction.

“Granting such a security interest in the IRA’s assets would amount to an extension of credit by the IRA to the IRA owner, a fiduciary and a disqualified person, and cause a violation of [Section 4975(c)(1)(B) of the Internal Revenue Code],” Louis Campagna, a division chief in the EBSA Office of Regulations and Interpretations writes in the advisory opinion.

The transaction also would violate IRC Section 4975(c)(1)(D), which “prohibits the transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan,” Campagna writes. “

By granting the requested security interest in the IRA’s assets, the IRA owner would be using the IRA’s assets for his own benefit, in violation of that section, Campagna writes.

Another section prohibits a disqualified person who is a fiduciary from dealing with the income or assets of a plan in his own interest or for his own account, and the proposed transaction would also violate that rule, Campagna writes.

A copy of the opinion is available here.