Prohibited Transaction Exemptions and Grant of Individual Exemptions Involving: D-11481, CitiGroup Inc. 2009-06; D-11484, Robert W. Baird & Co. Incorporated, 2009-07; D-11490 Raymond James & Associates, Inc., 2009-08; and Northwestern Mutual Investment Services, LLC, 8992-8997 [E9-4235]
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<![CDATA[
8992
Federal Register / Vol. 74, No. 38 / Friday, February 27, 2009 / Notices
4 of 1978, 5 U.S.C. App. 1 (1996),
transferred the authority of the Secretary
of the Treasury to issue exemptions of
the type proposed to the Secretary of
Labor.
https://www.regulations.gov under
docket number OSHA–2008–0049.
Darrin A. King,
Departmental Clearance Officer.
[FR Doc. E9–4234 Filed 2–26–09; 8:45 am]
Statutory Findings
BILLING CODE 4510–26–P
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
Prohibited Transaction Exemptions
and Grant of Individual Exemptions
Involving: D–11481, CitiGroup Inc.
2009–06; D–11484, Robert W. Baird &
Co. Incorporated, 2009–07; D–11490
Raymond James & Associates, Inc.,
2009–08; and Northwestern Mutual
Investment Services, LLC
AGENCY: Employee Benefits Security
Administration, Labor.
ACTION: Grant of Individual Exemptions.
This document contains
exemptions issued by the Department of
Labor (the Department) from certain of
the prohibited transaction restrictions of
the Employee Retirement Income
Security Act of 1974 (ERISA or the Act)
and/or the Internal Revenue Code of
1986 (the Code).
FOR FURTHER INFORMATION CONTACT:
Chris Motta of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
SUPPLEMENTARY INFORMATION: A notice
was published in the Federal Register of
the pendency before the Department of
a proposal to grant such exemption. The
notice set forth a summary of facts and
representations contained in the
application for exemption and referred
interested persons to the application for
a complete statement of the facts and
representations. The application has
been available for public inspection at
the Department in Washington, DC. The
notice also invited interested persons to
submit comments on the requested
exemption to the Department. In
addition the notice stated that any
interested person might submit a
written request that a public hearing be
held (where appropriate). The applicant
has represented that it has complied
with the requirements of the notification
to interested persons. No requests for a
hearing were received by the
Department. Public comments were
received by the Department as described
in the granted exemption.
The notice of proposed exemption
was issued and the exemption is being
granted solely by the Department
because, effective December 31, 1978,
section 102 of Reorganization Plan No.
rwilkins on PROD1PC63 with NOTICES2
SUMMARY:
VerDate Nov<24>2008
16:39 Feb 26, 2009
Jkt 217001
In accordance with section 408(a) of
the Act and/or section 4975(c)(2) of the
Code and the procedures set forth in 29
CFR Part 2570, Subpart B (55 FR 32836,
32847, August 10, 1990) and based upon
the entire record, the Department makes
the following findings:
(a) The exemption is administratively
feasible;
(b) The exemption is in the interests
of the plan and its participants and
beneficiaries; and
(c) The exemption is protective of the
rights of the participants and
beneficiaries of the plan.
Citigroup, Inc., Located in New York,
New York
[Prohibited Transaction Exemption 2009–06;
Exemption Application Number D–11481]
Exemption
Section I. Transactions Involving Plans
Described in Both Title I and Title II of
ERISA
The restrictions of section
406(a)(1)(A) through (D) and section
406(b) of ERISA, and the taxes imposed
by section 4975(a) and (b) of the Code,
by reason of section 4975(c)(1) of the
Code, shall not apply, effective February
1, 2008, to the following transactions, if
the conditions set forth in section III
have been met: 1
(a) The sale or exchange of an Auction
Rate Security (as defined in section IV
(b)) by a Plan (as defined in section
IV(h)) to the Sponsor (as defined in
section IV (g)) of such Plan; or
(b) A lending of money or other
extension of credit to a Plan in
connection with the holding of an
Auction Rate Security by the Plan, from:
(1) Citigroup, Inc. or an affiliate
(Citigroup); (2) an Introducing Broker
(as defined in section IV (f)); or (3) a
Clearing Broker (as defined in section IV
(d)); where the loan is: (i) repaid in
accordance with its terms; and (ii)
guaranteed by the Plan Sponsor.
II. Transactions Involving Plans
Described in Title II of ERISA Only
The sanctions resulting from the
application of section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1)
of the Code, shall not apply, effective
1 For purposes of this exemption, references to
section 406 of ERISA should be read to refer as well
to the corresponding provisions of section 4975 of
the Code.
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
February 1, 2008, to the following
transactions, if the conditions set forth
in section III have been met:
(a) The sale or exchange of an Auction
Rate Security by a Title II Only Plan (as
defined in section IV(i)) to the
Beneficial Owner (as defined in section
IV(c)) of such Plan; or
(b) A lending of money or other
extension of credit to a Title II Only
Plan in connection with the holding of
an Auction Rate Security by the Title II
Only Plan, from: (1) Citigroup; (2) an
Introducing Broker; or (3) a Clearing
Broker; where the loan is: (i) repaid in
accordance with its terms and; (ii)
guaranteed by the Beneficial Owner.
III. Conditions
(a) Citigroup acted as a broker or
dealer, non-bank custodian, or fiduciary
in connection with the acquisition or
holding of the Auction Rate Security
that is the subject of the transaction;
(b) For transactions involving a Plan
(including a Title II Only Plan) not
sponsored by Citigroup for its own
employees, the decision to enter into the
transaction is made by a Plan fiduciary
who is Independent (as defined in
section IV(e)) of Citigroup.
Notwithstanding the foregoing, an
employee of Citigroup who is the
Beneficial Owner of a Title II Only Plan
may direct such Plan to engage in a
transaction described in section II, if all
of the other conditions of this section III
have been met;
(c) The last auction for the Auction
Rate Security was unsuccessful;
(d) The Plan does not waive any rights
or claims in connection with the loan or
sale as a condition of engaging in the
above-described transaction;
(e) The Plan does not pay any fees or
commissions in connection with the
transaction;
(f) The transaction is not part of an
arrangement, agreement or
understanding designed to benefit a
party in interest;
(g) With respect to any sale described
in section I (a) or section II(a):
(1) The sale is for no consideration
other than cash payment against prompt
delivery of the Auction Rate Security;
and
(2) For purposes of the sale, the
Auction Rate Security is valued at par,
plus any accrued but unpaid interest; 2
2 This exemption does not address tax issues. The
Department has been informed by the Internal
Revenue Service and the Department of the
Treasury that they are considering providing
limited relief from the requirements of sections
72(t)(4), 401(a)(9), and 4974 of the Code with
respect to retirement plans that hold Auction Rate
Securities. The Department has also been informed
by the Internal Revenue Service that if Auction Rate
E:\FR\FM\27FEN1.SGM
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Federal Register / Vol. 74, No. 38 / Friday, February 27, 2009 / Notices
(h) With respect to an in-kind
exchange described in section (I)(a) or
section II(a), the exchange involves the
transfer by a Plan of an Auction Rate
Security in return for a Delivered
Security, as such term is defined in
section IV(j), where:
(1) The exchange is unconditional;
(2) For purposes of the exchange, the
Auction Rate Security is valued at par,
plus any accrued but unpaid interest;
(3) The Delivered Security is valued at
fair market value, as determined at the
time of the in-kind exchange by a third
party pricing service or other objective
source;
(4) The Delivered Security is
appropriate for the Plan and a security
that the Plan is otherwise permitted to
hold under applicable law; 3 and
(5) The total value of the Auction Rate
Security (i.e., par plus any accrued but
unpaid interest) is equal to the fair
market value of the Delivered Security;
(i) With respect to a loan described in
section I(b) or II(b):
(1) The loan is documented in a
written agreement containing all of the
material terms of the loan, including the
consequences of default;
(2) The Plan does not pay an interest
rate that exceeds one of the following
three rates as of the commencement of
the loan:
(A) The coupon rate for the Auction
Rate Security;
(B) The Federal Funds Rate; or
(C) The Prime Rate;
(3) The loan is unsecured; and
(4) The amount of the loan is not more
than the total par value of the Auction
Rate Securities held by the Plan.
rwilkins on PROD1PC63 with NOTICES2
IV. Definitions
(a) The term ‘‘affiliate’’ means: any
person directly or indirectly, through
one or more intermediaries, controlling,
Securities are purchased from a Plan in a
transaction described in sections I and II at a price
that exceeds the fair market value of those
securities, then the excess value would be treated
as a contribution for purposes of applying
applicable contribution and deduction limits under
sections 219, 404, 408, and 415 of the Code.
3 The Department notes that the Act’s general
standards of fiduciary conduct also would apply to
the transactions described herein. In this regard,
section 404 requires, among other things, that a
fiduciary discharge his duties respecting a plan
solely in the interest of the plan’s participants and
beneficiaries and in a prudent manner.
Accordingly, a plan fiduciary must act prudently
with respect to, among other things: (1) The
decision to exchange an Auction Rate Security for
a Delivered Security; and (2) the negotiation of the
terms of such exchange (or a cash sale or loan
described above), including the pricing of such
securities. The Department further emphasizes that
it expects plan fiduciaries, prior to entering into any
of the transactions, to fully understand the risks
associated with these types of transactions
following disclosure by Citigroup of all relevant
information.
VerDate Nov<24>2008
16:39 Feb 26, 2009
Jkt 217001
controlled by, or under common control
with such other person;
(b) The term ‘‘Auction Rate Security’’
or ‘‘ARS’’ means a security:
(1) That is either a debt instrument
(generally with a long-term nominal
maturity) or preferred stock; and
(2) With an interest rate or dividend
that is reset at specific intervals through
a Dutch auction process;
(c) The term ‘‘Beneficial Owner’’
means: the individual for whose benefit
the Title II Only Plan is established and
includes a relative or family trust with
respect to such individual;
(d) The term ‘‘Clearing Broker’’
means: a member of a securities
exchange that acts as a liaison between
an investor and a clearing corporation
and that helps to ensure that a trade is
settled appropriately, that the
transaction is successfully completed
and that is responsible for maintaining
the paper work associated with the
clearing and executing of a transaction;
(e) The term ‘‘Independent’’ means a
person who is: (1) not Citigroup or an
affiliate; and (2) not a relative (as
defined in ERISA section 3(15)) of the
party engaging in the transaction;
(f) The term ‘‘Introducing Broker’’
means: a registered broker that is able to
perform all the functions of a broker
except for the ability to accept money,
securities, or property from a customer;
(g) The term ‘‘Sponsor’’ means: a plan
sponsor as described in section 3(16)(B)
of the Act and any Affiliates;
(h) The term ‘‘Plan’’ means: any plan
described in section 3(3) of the Act and/
or section 4975(e)(1) of the Code;
(i) The term ‘‘Title II Only Plan’’
means: any plan described in section
4975(e)(1) of the Code which is not an
employee benefit plan covered by Title
I of ERISA;
(j) The term ‘‘Delivered Security
means a security that is: (1) Listed on a
national securities exchange (excluding
OTC Bulletin Board-eligible securities
and Pink Sheets-quoted securities); or
(2) a U.S. Treasury obligation; or (3) A
fixed income security that has a rating
at the time of the exchange that is in one
of the two highest generic rating
categories from an independent
nationally recognized statistical rating
organization (e.g., a highly rated
municipal bond or a highly rated
corporate bond); or (4) A certificate of
deposit insured by the Federal Deposit
Insurance Corporation. Notwithstanding
the above, the term ‘‘Delivered
Security’’ shall not include any Auction
Rate Security, or any related Auction
Rate Security, including derivatives or
securities materially comprised of
Auction Rate Securities or any illiquid
securities.
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
8993
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, refer to the Notice of
Proposed Exemption published in the
Federal Register on November 7, 2008
at 73 FR 66260.
FOR FURTHER INFORMATION CONTACT:
Chris Motta of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
Robert W. Baird & Co. Incorporated,
Located in Milwaukee, Wisconsin
[Prohibited Transaction Exemption 2009–07;
Exemption Application Number D–11484]
Exemption
Section I. Transactions Involving Plans
Described In Both Title I and Title II of
ERISA
The restrictions of section
406(a)(1)(A) through (D) and section
406(b) of ERISA, and the taxes imposed
by section 4975(a) and (b) of the Code,
by reason of section 4975(c)(1) of the
Code, shall not apply, effective February
1, 2008, to the following transactions, if
the conditions set forth in section III
have been met: 4
(a) The sale or exchange of an Auction
Rate Security (as defined in section
IV(b)) by a Plan (as defined in section
IV(h)) to the Sponsor (as defined in
section IV(g)) of such Plan; or
(b) A lending of money or other
extension of credit to a Plan in
connection with the Plan’s holding of an
Auction Rate Security, from: (1) Robert
W. Baird & Co. Incorporated or any of
its current or future affiliates or
subsidiaries (Baird); (2) an Introducing
Broker (as defined in section IV(f)); or
(3) a Clearing Broker (as defined in
section IV(d)); where the loan is: (i)
repaid in accordance with its terms; and
(ii) guaranteed by the Plan Sponsor.
II. Transactions Involving Plans
Described In Title II of ERISA Only
The sanctions resulting from the
application of section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1)
of the Code, shall not apply, effective
February 1, 2008, to the following
transactions, if the conditions set forth
in section III have been met:
(a) The sale or exchange of an Auction
Rate Security by a Title II Only Plan (as
defined in section IV(i)) to the
Beneficial Owner (as defined in section
IV(c)) of such Plan; or
(b) A lending of money or other
extension of credit to a Title II Only
4 For purposes of this exemption, references to
section 406 of ERISA should be read to refer as well
to the corresponding provisions of section 4975 of
the Code.
E:\FR\FM\27FEN1.SGM
27FEN1
8994
Federal Register / Vol. 74, No. 38 / Friday, February 27, 2009 / Notices
Plan in connection with the Plan’s
holding of an Auction Rate Security,
from: (1) Baird; (2) an Introducing
Broker; or (3) a Clearing Broker; where
the loan is: (i) repaid in accordance with
its terms and; (ii) guaranteed by the
Beneficial Owner.
rwilkins on PROD1PC63 with NOTICES2
III. Conditions
(a) Baird acted as a broker or dealer,
non-bank custodian, or fiduciary in
connection with the acquisition or
holding of the Auction Rate Security
that is the subject of the transaction;
(b) For transactions involving a Plan
(including a Title II Only Plan) not
sponsored by Baird for its own
employees, the decision to enter into the
transaction is made by a Plan fiduciary
who is Independent (as defined in
section IV (e)) of Baird. Notwithstanding
the foregoing, an employee of Baird who
is the Beneficial Owner of a Title II Only
Plan may direct such Plan to engage in
a transaction described in section II, if
all of the other conditions of this section
III have been met;
(c) The last auction for the Auction
Rate Security was unsuccessful;
(d) The Plan does not waive any rights
or claims in connection with the loan or
sale as a condition of engaging in the
transaction;
(e) The Plan does not pay any fees or
commissions in connection with the
transaction;
(f) The transaction is not part of an
arrangement, agreement or
understanding designed to benefit a
party in interest;
(g) With respect to any sale described
in section I (a) or section II (a):
(1) The sale is for no consideration
other than cash payment against prompt
delivery of the Auction Rate Security;
and
(2) For purposes of the sale, the
Auction Rate Security is valued at par,
plus any accrued but unpaid interest; 5
(h) With respect to an in-kind
exchange described in section (I)(a) or
section II(a), the exchange involves the
transfer by a Plan of an Auction Rate
Security in return for a Delivered
Security, as such term is defined in
section IV(j), where:
5 This exemption does not address tax issues. The
Department has been informed by the Internal
Revenue Service and the Department of the
Treasury that they are considering providing
limited relief from the requirements of sections
72(t)(4), 401(a)(9), and 4974 of the Code with
respect to retirement plans that hold Auction Rate
Securities. The Department has also been informed
by the Internal Revenue Service that if Auction Rate
Securities are purchased from a Plan in a
transaction described in sections I and II at a price
that exceeds the fair market value of those
securities, then the excess value would be treated
as a contribution for purposes of applying
applicable contribution and deduction limits under
sections 219, 404, 408, and 415 of the Code.
VerDate Nov<24>2008
16:39 Feb 26, 2009
Jkt 217001
(1) The exchange is unconditional;
(2) For purposes of the exchange, the
Auction Rate Security is valued at par,
plus any accrued but unpaid interest;
(3) The Delivered Security is valued at
fair market value, as determined at the
time of the in-kind exchange by a third
party pricing service or other objective
source;
(4) The Delivered Security is
appropriate for the Plan and a security
that the Plan is otherwise permitted to
hold under applicable law; 6 and
(5) The total value of the Auction Rate
Security (i.e., par plus any accrued but
unpaid interest) is equal to the fair
market value of the Delivered Security;
(i) With respect to a loan described in
section I(b) or II(b):
(1) The loan is documented in a
written agreement containing all of the
material terms of the loan, including the
consequences of default;
(2) The Plan does not pay an interest
rate that exceeds one of the following
three rates as of the commencement of
the loan:
(A) The coupon rate for the Auction
Rate Security;
(B) The Federal Funds Rate; or
(C) The Prime Rate;
(3) The loan is unsecured; and
(4) The amount of the loan is not more
than the total par value of the Auction
Rate Securities held by the Plan.
IV. Definitions
(a) The term ‘‘affiliate’’ means any
person directly or indirectly, through
one or more intermediaries, controlling,
controlled by, or under common control
with such other person;
(b) The term ‘‘Auction Rate Security’’
or ‘‘ARS’’ means a security:
(1) That is either a debt instrument
(generally with a long-term nominal
maturity) or preferred stock; and
(2) With an interest rate or dividend
that is reset at specific intervals through
a Dutch auction process;
(c) The term ‘‘Beneficial Owner’’
means: the individual for whose benefit
6 The Department notes that the Act’s general
standards of fiduciary conduct also would apply to
the transactions described herein. In this regard,
section 404 requires, among other things, that a
fiduciary discharge his duties respecting a plan
solely in the interest of the plan’s participants and
beneficiaries and in a prudent manner.
Accordingly, a plan fiduciary must act prudently
with respect to, among other things: (1) The
decision to exchange an Auction Rate Security for
a Delivered Security; and (2) the negotiation of the
terms of such exchange (or a cash sale or loan
described above), including the pricing of such
securities. The Department further emphasizes that
it expects plan fiduciaries, prior to entering into any
of the transactions, to fully understand the risks
associated with these types of transactions
following disclosure by Baird of all relevant
information.
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
the Title II Only Plan is established and
includes a relative or family trust with
respect to such individual;
(d) The term ‘‘Clearing Broker’’
means: a member of a securities
exchange that acts as a liaison between
an investor and a clearing corporation
and that helps to ensure that a trade is
settled appropriately, that the
transaction is successfully completed
and that is responsible for maintaining
the paperwork associated with the
clearing and executing of a transaction;
(e) The term ‘‘Independent’’ means a
person who is: (1) not Baird or an
affiliate; and (2) not a relative (as
defined in ERISA section 3(15)) of the
party engaging in the transaction;
(f) The term ‘‘Introducing Broker’’
means: a registered broker that is able to
perform all the functions of a broker
except for the ability to accept money,
securities, or property from a customer;
(g) The term ‘‘Sponsor’’ means: a plan
sponsor as described in section 3(16)(B)
of the Act and any Affiliates;
(h) The term ‘‘Plan’’ means: any plan
described in section 3(3) of the Act and/
or section 4975(e)(1) of the Code;
(i) The term ‘‘Title II Only Plan’’
means: any plan described in section
4975(e)(1) of the Code which is not an
employee benefit plan covered by Title
I of ERISA;
(j) The term ‘‘Delivered Security
means a security that is: (1) Listed on a
national securities exchange (excluding
OTC Bulletin Board-eligible securities
and Pink Sheets-quoted securities); or
(2) a U.S. Treasury obligation; or (3) A
fixed income security that has a rating
at the time of the exchange that is in one
of the two highest generic rating
categories from an independent
nationally recognized statistical rating
organization (e.g., a highly rated
municipal bond or a highly rated
corporate bond); or (4) A certificate of
deposit insured by the Federal Deposit
Insurance Corporation. Notwithstanding
the above, the term ‘‘Delivered
Security’’ shall not include any Auction
Rate Security, or any related Auction
Rate Security, including derivatives or
securities materially comprised of
Auction Rate Securities or any illiquid
securities.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, refer to the Notice of
Proposed Exemption published in the
Federal Register on November 7, 2008
at 73 FR 66263.
FOR FURTHER INFORMATION CONTACT:
Chris Motta of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
E:\FR\FM\27FEN1.SGM
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Federal Register / Vol. 74, No. 38 / Friday, February 27, 2009 / Notices
Raymond James & Associates, Inc.,
Located in St. Petersburg, Florida.
[Prohibited Transaction Exemption 2009–08;
Exemption Application Number D–11490]
Exemption
Section I. Transactions Involving Plans
Described In Both Title I and Title II of
ERISA
The restrictions of section
406(a)(1)(A) through (D) and section
406(b) of ERISA, and the sanctions
imposed by section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1)
of the Code, shall not apply, effective
February 1, 2008, to the following
transactions, if the conditions set forth
in section III have been met: 7
(a) The sale or exchange of an Auction
Rate Security (as defined in section IV
(b)) by a Plan (as defined in section
IV(h)) to the Sponsor (as defined in
section IV (g)) of such Plan; or
(b) A lending of money or other
extension of credit to a Plan in
connection with the Plan’s holding of an
Auction Rate Security, from: (1)
Raymond James & Associates, Inc. or
any of its current or future affiliates or
subsidiaries (Raymond James); (2) an
Introducing Broker (as defined in
section IV (f)); or (3) a Clearing Broker
(as defined in section IV (d)); where the
loan is: (i) repaid in accordance with its
terms; and (ii) guaranteed by the Plan
Sponsor.
rwilkins on PROD1PC63 with NOTICES2
II. Transactions Involving Plans
Described In Title II of ERISA Only
The sanctions resulting from the
application of section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1)
of the Code, shall not apply, effective
February 1, 2008, to the following
transactions, if the conditions set forth
in section III have been met:
(a) The sale or exchange of an Auction
Rate Security by a Title II Only Plan (as
defined in section IV(i)) to the
Beneficial Owner (as defined in section
IV(c)) of such Plan; or
(b) A lending of money or other
extension of credit to a Title II Only
Plan in connection with the Plan’s
holding of an Auction Rate Security,
from: (1) Raymond James; (2) an
Introducing Broker; or (3) a Clearing
Broker; where the loan is: (i) repaid in
accordance with its terms and; (ii)
guaranteed by the Beneficial Owner.
III. Conditions
(a) Raymond James acted as a broker
or dealer, non-bank custodian, or
7 For purposes of this exemption, references to
section 406 of ERISA should be read to refer as well
to the corresponding provisions of section 4975 of
the Code.
VerDate Nov<24>2008
16:39 Feb 26, 2009
Jkt 217001
fiduciary in connection with the
acquisition or holding of the Auction
Rate Security that is the subject of the
transaction;
(b) For transactions involving a Plan
(including a Title II Only Plan) not
sponsored by Raymond James for its
own employees, the decision to enter
into the transaction is made by a Plan
fiduciary who is Independent (as
defined in section IV(e)) of Raymond
James. Notwithstanding the foregoing,
an employee of Raymond James who is
the Beneficial Owner of a Title II Only
Plan may direct such Plan to engage in
a transaction described in section II, if
all of the other conditions of this section
III have been met;
(c) The last auction for the Auction
Rate Security was unsuccessful;
(d) The Plan does not waive any rights
or claims in connection with the loan or
sale as a condition of engaging in the
transaction;
(e) The Plan does not pay any fees or
commissions in connection with the
transaction;
(f) The transaction is not part of an
arrangement, agreement or
understanding designed to benefit a
party in interest;
(g) With respect to any sale described
in section I(a) or section II(a):
(1) The Sale is for no consideration
other than cash payment against prompt
delivery of the Auction Rate Security;
and
(2) For purposes of the sale, the
Auction Rate Security is valued at par,
plus any accrued but unpaid interest; 8
(h) With respect to an in-kind
exchange described in section (I)(a) or
section II(a), the exchange involves the
transfer by a Plan of an Auction Rate
Security in return for a Delivered
Security, as such term is defined in
section IV(j), where:
(1) The exchange is unconditional;
(2) For purposes of the exchange, the
Auction Rate Security is valued at par,
plus any accrued but unpaid interest;
(3) The Delivered Security is valued at
fair market value, as determined at the
time of the in-kind exchange by a third
party pricing service or other objective
source;
8 This exemption does not address tax issues. The
Department has been informed by the Internal
Revenue Service and the Department of the
Treasury that they are considering providing
limited relief from the requirements of sections
72(t)(4), 401(a)(9), and 4974 of the Code with
respect to retirement plans that hold Auction Rate
Securities. The Department has also been informed
by the Internal Revenue Service that if Auction Rate
Securities are purchased from a Plan in a
transaction described in sections I and II at a price
that exceeds the fair market value of those
securities, then the excess value would be treated
as a contribution for purposes of applying
applicable contribution and deduction limits under
sections 219, 404, 408, and 415 of the Code.
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
8995
(4) The Delivered Security is
appropriate for the Plan and a security
that the Plan is otherwise permitted to
hold under applicable law; 9 and
(5) The total value of the Auction Rate
Security (i.e., par plus any accrued but
unpaid interest) is equal to the fair
market value of the Delivered Security;
(i) With respect to a loan described in
section I(b) or II(b):
(1) The loan is documented in a
written agreement containing all of the
material terms of the loan, including the
consequences of default;
(2) The Plan does not pay an interest
rate that exceeds one of the following
three rates as of the commencement of
the loan:
(A) The coupon rate for the Auction
Rate Security;
(B) The Federal Funds Rate; or
(C) The Prime Rate;
(3) The loan is unsecured; and
(4) The amount of the loan is not more
than the total par value of the Auction
Rate Securities held by the Plan.
IV. Definitions
(a) The term ‘‘affiliate’’ means any
person directly or indirectly, through
one or more intermediaries, controlling,
controlled by, or under common control
with such other person;
(b) The term ‘‘Auction Rate Security’’
or ‘‘ARS’’ means a security:
(1) That is either a debt instrument
(generally with a long-term nominal
maturity) or preferred stock; and
(2) With an interest rate or dividend
that is reset at specific intervals through
a Dutch auction process;
(c) The term ‘‘Beneficial Owner’’
means: the individual for whose benefit
the Title II Only Plan is established and
includes a relative or family trust with
respect to such individual;
(d) The term ‘‘Clearing Broker’’
means: a member of a securities
exchange that acts as a liaison between
an investor and a clearing corporation
and that helps to ensure that a trade is
settled appropriately, that the
transaction is successfully completed
9 The Department notes that the Act’s general
standards of fiduciary conduct apply to the
transactions described herein. In this regard, section
404 requires, among other things, that a fiduciary
discharge his duties respecting a plan solely in the
interest of the plan’s participants and beneficiaries
and in a prudent manner. Accordingly, a plan
fiduciary must act prudently with respect to, among
other things: (1) The decision to exchange an
Auction Rate Security for a Delivered Security; and
(2) the negotiation of the terms of such exchange
(or a cash sale or loan described above), including
the pricing of such securities. The Department
further emphasizes that it expects plan fiduciaries,
prior to entering into any of the transactions, to
fully understand the risks associated with these
types of transactions following disclosure by
Raymond James of all relevant information.
E:\FR\FM\27FEN1.SGM
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8996
Federal Register / Vol. 74, No. 38 / Friday, February 27, 2009 / Notices
and that is responsible for maintaining
the paper work associated with the
clearing and executing of a transaction;
(e) The term ‘‘Independent’’ means a
person who is: (1) Not Raymond James
or an affiliate; and (2) not a relative (as
defined in ERISA section 3(15)) of the
party engaging in the transaction;
(f) The term ‘‘Introducing Broker’’
means: a registered broker that is able to
perform all the functions of a broker
except for the ability to accept money,
securities, or property from a customer;
(g) The term ‘‘Sponsor’’ means: a plan
sponsor as described in section 3(16)(B)
of the Act and any Affiliates;
(h) The term ‘‘Plan’’ means: any plan
described in section 3(3) of the Act and/
or section 4975(e)(1) of the Code;
(i) The term ‘‘Title II Only Plan’’
means: any plan described in section
4975(e)(1) of the Code which is not an
employee benefit plan covered by Title
I of ERISA;
(j) The term ‘‘Delivered Security’’
means a security that is: (1) Listed on a
national securities exchange (excluding
OTC Bulletin Board-eligible securities
and Pink Sheets-quoted securities); or
(2) a U.S. Treasury obligation; or (3) A
fixed income security that has a rating
at the time of the exchange that is in one
of the two highest generic rating
categories from an independent
nationally recognized statistical rating
organization (e.g., a highly rated
municipal bond or a highly rated
corporate bond); or (4) A certificate of
deposit insured by the Federal Deposit
Insurance Corporation. Notwithstanding
the above, the term ‘‘Delivered
Security’’ shall not include any Auction
Rate Security, or any related Auction
Rate Security, including derivatives or
securities materially comprised of
Auction Rate Securities or any illiquid
securities.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, refer to the Notice of
Proposed Exemption published in the
Federal Register on November 7, 2008
at 73 FR 66266.
FOR FURTHER INFORMATION CONTACT:
Chris Motta of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
rwilkins on PROD1PC63 with NOTICES2
Northwestern Mutual Investment
Services, LLC, Located in Milwaukee,
Wisconsin.
[Prohibited Transaction Exemption 2009–09;
Exemption Application Number D–11505]
Exemption
Section I. Transactions
The restrictions of section 406(a) of
the Act and the sanctions resulting from
VerDate Nov<24>2008
16:39 Feb 26, 2009
Jkt 217001
the application of section 4975 of the
Code, by reason of section 4975(c)(1)(A)
through (D) of the Code, shall not apply,
effective September 30, 2008, to the sale
(the Sale) by a Plan (as defined in
section II(d)) of an Auction Rate
Security (as defined in section II(b) to
Northwestern Mutual Investment
Services, LLC (NMIS), provided that the
following conditions are met: 10
(a) The Plan acquired the Auction
Rate Security (ARS) in connection with
brokerage services provided by NMIS;
(b) The last auction for the ARS was
unsuccessful;
(c) The Sale is made in connection
with a written offer by NMIS (the Offer)
containing all of the material terms of
the Sale;
(d) The Sale is for no consideration
other than cash payment against prompt
delivery of the ARS;
(e) The amount of the Sale is equal to
the greater of:
(1) The fair market value of the ARS
as of the date of the Sale, as determined
by a qualified, independent appraiser;
or
(2) The sum of the price paid by the
Plan for the ARS and any accrued but
unpaid interest; 11
(f) The Plan does not waive any rights
or claims in connection with the Sale;
(g) The decision to accept the Offer or
retain the ARS is made by a Plan
fiduciary or Plan participant or IRA
owner, who (in all cases) is Independent
(as defined in section II (c)) of NMIS; 12
(h) Neither NMIS nor any affiliate
exercises investment discretion or
renders investment advice [within the
meaning of 29 CFR 2510.3–21(c)] with
respect to the decision to accept the
Offer or retain the ARS;
(i) The Plan does not pay any
commissions or transaction costs with
respect to the Sale;
10 For purposes of this exemption, references to
section 406 of ERISA should be read to refer as well
to the corresponding provisions of section 4975 of
the Code.
11 In the event that the fair market value of an
ARS exceeds the sum of its par value plus any
accrued, but unpaid, interest as of the date of the
Sale, NMIS will credit the difference to the Plan,
with interest equal to the Federal Funds rate plus
125 basis points.
12 The Department notes that the Act’s general
standards of fiduciary conduct apply to the
transactions described herein. In this regard, section
404 requires, among other things, that a fiduciary
discharge his duties respecting a plan solely in the
interest of the plan’s participants and beneficiaries
and in a prudent manner. Accordingly, a plan
fiduciary must act prudently with respect to, among
other things, the decision to engage (or to not
engage) in a Sale. The Department further
emphasizes that it expects a plan fiduciary, prior to
entering into a Sale (or, alternately, prior to
deciding to retain an ARS), to fully understand the
risks associated with such a decision, following
disclosure by NMIS of all relevant information.
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
(j) The Sale is not part of an
arrangement, agreement or
understanding designed to benefit a
party in interest to the Plan;
(k) NMIS and its affiliates, as
applicable, maintain, or cause to be
maintained, for a period of six (6) years
from the date of the Sale such records
as are necessary to enable the persons
described below in paragraph (l)(i), to
determine whether the conditions of
this exemption have been met, except
that—
(i) No party in interest with respect to
a Plan which engages in a Sale, other
than NMIS and its affiliates, as
applicable, shall be subject to a civil
penalty under section 502(i) of the Act
or the taxes imposed by section 4975(a)
and (b) of the Code, if such records are
not maintained, or not available for
examination, as required, below, by
paragraph (l)(i); and
(ii) A separate prohibited transaction
shall not be considered to have occurred
solely because, due to circumstances
beyond the control of NMIS or its
affiliates, as applicable, such records are
lost or destroyed prior to the end of the
six-year period;
(l)(i) Except as provided below in
paragraph (l)(ii), and notwithstanding
any provisions of subsections (a)(2) an
(b) of section 504 of the Act, the records
referred to above in paragraph (k) are
unconditionally available at their
customary location for examination
during normal business hours by—
(A) Any duly authorized employee or
representative of the Department, the
Internal Revenue Service, or the U.S.
Securities and Exchange Commission;
or
(B) Any fiduciary of any Plan that
engages in a Sale, or any duly
authorized employee or representative
of such fiduciary; or
(C) Any employer of participants and
beneficiaries and any employee
organization whose members are
covered by a Plan that engages in the
Sale, or any authorized employee or
representative of these entities; or
(D) Any IRA owner, participant or
beneficiary of a Plan that engages in a
Sale, or duly authorized employee or
representative of such IRA owner,
participant or beneficiary;
(ii) None of the persons described
above in paragraph (l)(i)(B)–(D) shall be
authorized to examine trade secrets of
NMIS, or commercial or financial
information which is privileged or
confidential; and
(iii) Should NMIS refuse to disclose
information on the basis that such
information is exempt from disclosure,
NMIS shall, by the close of the thirtieth
(30th) day following the request,
E:\FR\FM\27FEN1.SGM
27FEN1
Federal Register / Vol. 74, No. 38 / Friday, February 27, 2009 / Notices
provide a written notice advising that
person of the reasons for the refusal and
that the Department may request such
information.
Section II. Definitions
(a) The term ‘‘affiliate’’ means: any
person directly or indirectly, through
one or more intermediaries, controlling,
controlled by, or under common control
with such other person;
(b) The term ‘‘Auction Rate Security’’
or ‘‘ARS’’ means a security:
(1) That is either a debt instrument
(generally with a long-term nominal
maturity) or preferred stock; and
(2) With an interest rate or dividend
that is reset at specific intervals through
a Dutch auction process;
(c) The term ‘‘Independent’’ means a
person who is: (1) not NMIS or an
affiliate; and (2) not a relative (as
defined in ERISA section 3(15)) of the
party engaging in the transaction; and
(d) The term ‘‘Plan’’ means: any plan
described in section 3(3) of the Act and/
or section 4975(e)(1) of the Code.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, refer to the Notice of
Proposed Exemption published in the
Federal Register on November 7, 2008
at 73 FR 66268.
FOR FURTHER INFORMATION CONTACT:
Chris Motta of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
General Information
The attention of interested persons is
directed to the following:
(1) The fact that a transaction is the
subject of an exemption under section
408(a) of the Act and/or section
4975(c)(2) of the Code does not relieve
a fiduciary or other party in interest or
disqualified person from certain other
provisions to which the exemption does
not apply and the general fiduciary
responsibility provisions of section 404
of the Act, which among other things
require a fiduciary to discharge his
duties respecting the plan solely in the
interest of the participants and
beneficiaries of the plan and in a
prudent fashion in accordance with
section 404(a)(1)(B) of the Act; nor does
it affect the requirement of section
401(a) of the Code that the plan must
operate for the exclusive benefit of the
employees of the employer maintaining
the plan and their beneficiaries;
(2) This exemption is supplemental to
and not in derogation of, any other
provisions of the Act and/or the Code,
including statutory or administrative
exemptions and transactional rules.
Furthermore, the fact that a transaction
is subject to an administrative or
statutory exemption is not dispositive of
whether the transaction is in fact a
prohibited transaction; and
(3) The availability of this exemption
is subject to the express condition that
the material facts and representations
contained in the application accurately
describes all material terms of the
8997
transaction which is the subject of the
exemption.
Signed at Washington, DC, this 24th day of
February 2009.
Ivan Strasfeld,
Director of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. E9–4235 Filed 2–26–09; 8:45 am]
BILLING CODE 4510–29–P
MILLENNIUM CHALLENGE
CORPORATION
[MCC 09–07]
Notice of Quarterly Report (October 1,
2008–December 31, 2008)
AGENCY: Millennium Challenge
Corporation.
ACTION: Notice.
SUMMARY: The Millennium Challenge
Corporation (MCC) is reporting for the
quarter October 1, 2008 through
December 31, 2008 respect to both
assistance provided under Section 605
of the Millennium Challenge Act of
2003 (Pub.L. 108–199, Division D (the
Act)), and transfers or allocations of
funds to other federal agencies pursuant
to Section 619(b) of the Act. The
following report shall be made available
to the public by means of publication in
the Federal Register and on the Internet
Website of the MCC (https://
www.mcc.gov) in accordance with
Section 612(b) of the Act.
ASSISTANCE PROVIDED UNDER SECTION 605
Projects
Obligated
Objectives
Cumulative
disbursements
Country: Madagascar
Year: 2009
Quarter 1
Entity to which the assistance is provided: MCA Madagascar
Total Obligation: $109,773,000
Total Quarterly Disbursement: $6,222,776
$36,028,000
Increase Land Titling and
Security.
$17,142,693
Finance Project .................
rwilkins on PROD1PC63 with NOTICES2
Land Tenure Project .........
$32,445,000
Increase Competition in
the Financial Sector.
$14,549,224
VerDate Nov<24>2008
16:39 Feb 26, 2009
Jkt 217001
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
Measures
Legislative proposal reflecting the National Land
Tenure Program submitted to Parliament and
passed.
Number of land disputes reported and resolved in
the target zones and sites of implementation.
Percentage of land documents inventoried, restored,
and/or digitized.
Average time and cost required to carry out property
transactions.
Percent of reported land conflicts resolved on titled
land in zone 3, 4, 5 during the title regularization
operations.
Percentage of land in the zones that is demarcated
and ready for titling.
The number of savings accounts and outstanding
value of accounts from primary banks.
Maximum check clearing delay.
Volume of funds in payment system and number of
transactions.
Increased public awareness of new financial instruments as measured by surveys within intervention
zones and large towns.
E:\FR\FM\27FEN1.SGM
27FEN1
]]>Agencies
[Federal Register Volume 74, Number 38 (Friday, February 27, 2009)]
[Notices]
[Pages 8992-8997]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4235]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employee Benefits Security Administration
Prohibited Transaction Exemptions and Grant of Individual
Exemptions Involving: D-11481, CitiGroup Inc. 2009-06; D-11484, Robert
W. Baird & Co. Incorporated, 2009-07; D-11490 Raymond James &
Associates, Inc., 2009-08; and Northwestern Mutual Investment Services,
LLC
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Grant of Individual Exemptions.
-----------------------------------------------------------------------
SUMMARY: This document contains exemptions issued by the Department of
Labor (the Department) from certain of the prohibited transaction
restrictions of the Employee Retirement Income Security Act of 1974
(ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code).
FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: A notice was published in the Federal
Register of the pendency before the Department of a proposal to grant
such exemption. The notice set forth a summary of facts and
representations contained in the application for exemption and referred
interested persons to the application for a complete statement of the
facts and representations. The application has been available for
public inspection at the Department in Washington, DC. The notice also
invited interested persons to submit comments on the requested
exemption to the Department. In addition the notice stated that any
interested person might submit a written request that a public hearing
be held (where appropriate). The applicant has represented that it has
complied with the requirements of the notification to interested
persons. No requests for a hearing were received by the Department.
Public comments were received by the Department as described in the
granted exemption.
The notice of proposed exemption was issued and the exemption is
being granted solely by the Department because, effective December 31,
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1
(1996), transferred the authority of the Secretary of the Treasury to
issue exemptions of the type proposed to the Secretary of Labor.
Statutory Findings
In accordance with section 408(a) of the Act and/or section
4975(c)(2) of the Code and the procedures set forth in 29 CFR Part
2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon
the entire record, the Department makes the following findings:
(a) The exemption is administratively feasible;
(b) The exemption is in the interests of the plan and its
participants and beneficiaries; and
(c) The exemption is protective of the rights of the participants
and beneficiaries of the plan.
Citigroup, Inc., Located in New York, New York
[Prohibited Transaction Exemption 2009-06; Exemption Application Number
D-11481]
Exemption
Section I. Transactions Involving Plans Described in Both Title I and
Title II of ERISA
The restrictions of section 406(a)(1)(A) through (D) and section
406(b) of ERISA, and the taxes imposed by section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1) of the Code, shall not apply,
effective February 1, 2008, to the following transactions, if the
conditions set forth in section III have been met: \1\
---------------------------------------------------------------------------
\1\ For purposes of this exemption, references to section 406 of
ERISA should be read to refer as well to the corresponding
provisions of section 4975 of the Code.
---------------------------------------------------------------------------
(a) The sale or exchange of an Auction Rate Security (as defined in
section IV (b)) by a Plan (as defined in section IV(h)) to the Sponsor
(as defined in section IV (g)) of such Plan; or
(b) A lending of money or other extension of credit to a Plan in
connection with the holding of an Auction Rate Security by the Plan,
from: (1) Citigroup, Inc. or an affiliate (Citigroup); (2) an
Introducing Broker (as defined in section IV (f)); or (3) a Clearing
Broker (as defined in section IV (d)); where the loan is: (i) repaid in
accordance with its terms; and (ii) guaranteed by the Plan Sponsor.
II. Transactions Involving Plans Described in Title II of ERISA Only
The sanctions resulting from the application of section 4975(a) and
(b) of the Code, by reason of section 4975(c)(1) of the Code, shall not
apply, effective February 1, 2008, to the following transactions, if
the conditions set forth in section III have been met:
(a) The sale or exchange of an Auction Rate Security by a Title II
Only Plan (as defined in section IV(i)) to the Beneficial Owner (as
defined in section IV(c)) of such Plan; or
(b) A lending of money or other extension of credit to a Title II
Only Plan in connection with the holding of an Auction Rate Security by
the Title II Only Plan, from: (1) Citigroup; (2) an Introducing Broker;
or (3) a Clearing Broker; where the loan is: (i) repaid in accordance
with its terms and; (ii) guaranteed by the Beneficial Owner.
III. Conditions
(a) Citigroup acted as a broker or dealer, non-bank custodian, or
fiduciary in connection with the acquisition or holding of the Auction
Rate Security that is the subject of the transaction;
(b) For transactions involving a Plan (including a Title II Only
Plan) not sponsored by Citigroup for its own employees, the decision to
enter into the transaction is made by a Plan fiduciary who is
Independent (as defined in section IV(e)) of Citigroup. Notwithstanding
the foregoing, an employee of Citigroup who is the Beneficial Owner of
a Title II Only Plan may direct such Plan to engage in a transaction
described in section II, if all of the other conditions of this section
III have been met;
(c) The last auction for the Auction Rate Security was
unsuccessful;
(d) The Plan does not waive any rights or claims in connection with
the loan or sale as a condition of engaging in the above-described
transaction;
(e) The Plan does not pay any fees or commissions in connection
with the transaction;
(f) The transaction is not part of an arrangement, agreement or
understanding designed to benefit a party in interest;
(g) With respect to any sale described in section I (a) or section
II(a):
(1) The sale is for no consideration other than cash payment
against prompt delivery of the Auction Rate Security; and
(2) For purposes of the sale, the Auction Rate Security is valued
at par, plus any accrued but unpaid interest; \2\
---------------------------------------------------------------------------
\2\ This exemption does not address tax issues. The Department
has been informed by the Internal Revenue Service and the Department
of the Treasury that they are considering providing limited relief
from the requirements of sections 72(t)(4), 401(a)(9), and 4974 of
the Code with respect to retirement plans that hold Auction Rate
Securities. The Department has also been informed by the Internal
Revenue Service that if Auction Rate Securities are purchased from a
Plan in a transaction described in sections I and II at a price that
exceeds the fair market value of those securities, then the excess
value would be treated as a contribution for purposes of applying
applicable contribution and deduction limits under sections 219,
404, 408, and 415 of the Code.
---------------------------------------------------------------------------
[[Page 8993]]
(h) With respect to an in-kind exchange described in section (I)(a)
or section II(a), the exchange involves the transfer by a Plan of an
Auction Rate Security in return for a Delivered Security, as such term
is defined in section IV(j), where:
(1) The exchange is unconditional;
(2) For purposes of the exchange, the Auction Rate Security is
valued at par, plus any accrued but unpaid interest;
(3) The Delivered Security is valued at fair market value, as
determined at the time of the in-kind exchange by a third party pricing
service or other objective source;
(4) The Delivered Security is appropriate for the Plan and a
security that the Plan is otherwise permitted to hold under applicable
law; \3\ and
---------------------------------------------------------------------------
\3\ The Department notes that the Act's general standards of
fiduciary conduct also would apply to the transactions described
herein. In this regard, section 404 requires, among other things,
that a fiduciary discharge his duties respecting a plan solely in
the interest of the plan's participants and beneficiaries and in a
prudent manner. Accordingly, a plan fiduciary must act prudently
with respect to, among other things: (1) The decision to exchange an
Auction Rate Security for a Delivered Security; and (2) the
negotiation of the terms of such exchange (or a cash sale or loan
described above), including the pricing of such securities. The
Department further emphasizes that it expects plan fiduciaries,
prior to entering into any of the transactions, to fully understand
the risks associated with these types of transactions following
disclosure by Citigroup of all relevant information.
---------------------------------------------------------------------------
(5) The total value of the Auction Rate Security (i.e., par plus
any accrued but unpaid interest) is equal to the fair market value of
the Delivered Security;
(i) With respect to a loan described in section I(b) or II(b):
(1) The loan is documented in a written agreement containing all of
the material terms of the loan, including the consequences of default;
(2) The Plan does not pay an interest rate that exceeds one of the
following three rates as of the commencement of the loan:
(A) The coupon rate for the Auction Rate Security;
(B) The Federal Funds Rate; or
(C) The Prime Rate;
(3) The loan is unsecured; and
(4) The amount of the loan is not more than the total par value of
the Auction Rate Securities held by the Plan.
IV. Definitions
(a) The term ``affiliate'' means: any person directly or
indirectly, through one or more intermediaries, controlling, controlled
by, or under common control with such other person;
(b) The term ``Auction Rate Security'' or ``ARS'' means a security:
(1) That is either a debt instrument (generally with a long-term
nominal maturity) or preferred stock; and
(2) With an interest rate or dividend that is reset at specific
intervals through a Dutch auction process;
(c) The term ``Beneficial Owner'' means: the individual for whose
benefit the Title II Only Plan is established and includes a relative
or family trust with respect to such individual;
(d) The term ``Clearing Broker'' means: a member of a securities
exchange that acts as a liaison between an investor and a clearing
corporation and that helps to ensure that a trade is settled
appropriately, that the transaction is successfully completed and that
is responsible for maintaining the paper work associated with the
clearing and executing of a transaction;
(e) The term ``Independent'' means a person who is: (1) not
Citigroup or an affiliate; and (2) not a relative (as defined in ERISA
section 3(15)) of the party engaging in the transaction;
(f) The term ``Introducing Broker'' means: a registered broker that
is able to perform all the functions of a broker except for the ability
to accept money, securities, or property from a customer;
(g) The term ``Sponsor'' means: a plan sponsor as described in
section 3(16)(B) of the Act and any Affiliates;
(h) The term ``Plan'' means: any plan described in section 3(3) of
the Act and/or section 4975(e)(1) of the Code;
(i) The term ``Title II Only Plan'' means: any plan described in
section 4975(e)(1) of the Code which is not an employee benefit plan
covered by Title I of ERISA;
(j) The term ``Delivered Security means a security that is: (1)
Listed on a national securities exchange (excluding OTC Bulletin Board-
eligible securities and Pink Sheets-quoted securities); or (2) a U.S.
Treasury obligation; or (3) A fixed income security that has a rating
at the time of the exchange that is in one of the two highest generic
rating categories from an independent nationally recognized statistical
rating organization (e.g., a highly rated municipal bond or a highly
rated corporate bond); or (4) A certificate of deposit insured by the
Federal Deposit Insurance Corporation. Notwithstanding the above, the
term ``Delivered Security'' shall not include any Auction Rate
Security, or any related Auction Rate Security, including derivatives
or securities materially comprised of Auction Rate Securities or any
illiquid securities.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the Notice of Proposed Exemption published in the Federal Register on
November 7, 2008 at 73 FR 66260.
FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
Robert W. Baird & Co. Incorporated, Located in Milwaukee, Wisconsin
[Prohibited Transaction Exemption 2009-07; Exemption Application Number
D-11484]
Exemption
Section I. Transactions Involving Plans Described In Both Title I and
Title II of ERISA
The restrictions of section 406(a)(1)(A) through (D) and section
406(b) of ERISA, and the taxes imposed by section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1) of the Code, shall not apply,
effective February 1, 2008, to the following transactions, if the
conditions set forth in section III have been met: \4\
---------------------------------------------------------------------------
\4\ For purposes of this exemption, references to section 406 of
ERISA should be read to refer as well to the corresponding
provisions of section 4975 of the Code.
---------------------------------------------------------------------------
(a) The sale or exchange of an Auction Rate Security (as defined in
section IV(b)) by a Plan (as defined in section IV(h)) to the Sponsor
(as defined in section IV(g)) of such Plan; or
(b) A lending of money or other extension of credit to a Plan in
connection with the Plan's holding of an Auction Rate Security, from:
(1) Robert W. Baird & Co. Incorporated or any of its current or future
affiliates or subsidiaries (Baird); (2) an Introducing Broker (as
defined in section IV(f)); or (3) a Clearing Broker (as defined in
section IV(d)); where the loan is: (i) repaid in accordance with its
terms; and (ii) guaranteed by the Plan Sponsor.
II. Transactions Involving Plans Described In Title II of ERISA Only
The sanctions resulting from the application of section 4975(a) and
(b) of the Code, by reason of section 4975(c)(1) of the Code, shall not
apply, effective February 1, 2008, to the following transactions, if
the conditions set forth in section III have been met:
(a) The sale or exchange of an Auction Rate Security by a Title II
Only Plan (as defined in section IV(i)) to the Beneficial Owner (as
defined in section IV(c)) of such Plan; or
(b) A lending of money or other extension of credit to a Title II
Only
[[Page 8994]]
Plan in connection with the Plan's holding of an Auction Rate Security,
from: (1) Baird; (2) an Introducing Broker; or (3) a Clearing Broker;
where the loan is: (i) repaid in accordance with its terms and; (ii)
guaranteed by the Beneficial Owner.
III. Conditions
(a) Baird acted as a broker or dealer, non-bank custodian, or
fiduciary in connection with the acquisition or holding of the Auction
Rate Security that is the subject of the transaction;
(b) For transactions involving a Plan (including a Title II Only
Plan) not sponsored by Baird for its own employees, the decision to
enter into the transaction is made by a Plan fiduciary who is
Independent (as defined in section IV (e)) of Baird. Notwithstanding
the foregoing, an employee of Baird who is the Beneficial Owner of a
Title II Only Plan may direct such Plan to engage in a transaction
described in section II, if all of the other conditions of this section
III have been met;
(c) The last auction for the Auction Rate Security was
unsuccessful;
(d) The Plan does not waive any rights or claims in connection with
the loan or sale as a condition of engaging in the transaction;
(e) The Plan does not pay any fees or commissions in connection
with the transaction;
(f) The transaction is not part of an arrangement, agreement or
understanding designed to benefit a party in interest;
(g) With respect to any sale described in section I (a) or section
II (a):
(1) The sale is for no consideration other than cash payment
against prompt delivery of the Auction Rate Security; and
(2) For purposes of the sale, the Auction Rate Security is valued
at par, plus any accrued but unpaid interest; \5\
---------------------------------------------------------------------------
\5\ This exemption does not address tax issues. The Department
has been informed by the Internal Revenue Service and the Department
of the Treasury that they are considering providing limited relief
from the requirements of sections 72(t)(4), 401(a)(9), and 4974 of
the Code with respect to retirement plans that hold Auction Rate
Securities. The Department has also been informed by the Internal
Revenue Service that if Auction Rate Securities are purchased from a
Plan in a transaction described in sections I and II at a price that
exceeds the fair market value of those securities, then the excess
value would be treated as a contribution for purposes of applying
applicable contribution and deduction limits under sections 219,
404, 408, and 415 of the Code.
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(h) With respect to an in-kind exchange described in section (I)(a)
or section II(a), the exchange involves the transfer by a Plan of an
Auction Rate Security in return for a Delivered Security, as such term
is defined in section IV(j), where:
(1) The exchange is unconditional;
(2) For purposes of the exchange, the Auction Rate Security is
valued at par, plus any accrued but unpaid interest;
(3) The Delivered Security is valued at fair market value, as
determined at the time of the in-kind exchange by a third party pricing
service or other objective source;
(4) The Delivered Security is appropriate for the Plan and a
security that the Plan is otherwise permitted to hold under applicable
law; \6\ and
---------------------------------------------------------------------------
\6\ The Department notes that the Act's general standards of
fiduciary conduct also would apply to the transactions described
herein. In this regard, section 404 requires, among other things,
that a fiduciary discharge his duties respecting a plan solely in
the interest of the plan's participants and beneficiaries and in a
prudent manner. Accordingly, a plan fiduciary must act prudently
with respect to, among other things: (1) The decision to exchange an
Auction Rate Security for a Delivered Security; and (2) the
negotiation of the terms of such exchange (or a cash sale or loan
described above), including the pricing of such securities. The
Department further emphasizes that it expects plan fiduciaries,
prior to entering into any of the transactions, to fully understand
the risks associated with these types of transactions following
disclosure by Baird of all relevant information.
---------------------------------------------------------------------------
(5) The total value of the Auction Rate Security (i.e., par plus
any accrued but unpaid interest) is equal to the fair market value of
the Delivered Security;
(i) With respect to a loan described in section I(b) or II(b):
(1) The loan is documented in a written agreement containing all of
the material terms of the loan, including the consequences of default;
(2) The Plan does not pay an interest rate that exceeds one of the
following three rates as of the commencement of the loan:
(A) The coupon rate for the Auction Rate Security;
(B) The Federal Funds Rate; or
(C) The Prime Rate;
(3) The loan is unsecured; and
(4) The amount of the loan is not more than the total par value of
the Auction Rate Securities held by the Plan.
IV. Definitions
(a) The term ``affiliate'' means any person directly or indirectly,
through one or more intermediaries, controlling, controlled by, or
under common control with such other person;
(b) The term ``Auction Rate Security'' or ``ARS'' means a security:
(1) That is either a debt instrument (generally with a long-term
nominal maturity) or preferred stock; and
(2) With an interest rate or dividend that is reset at specific
intervals through a Dutch auction process;
(c) The term ``Beneficial Owner'' means: the individual for whose
benefit the Title II Only Plan is established and includes a relative
or family trust with respect to such individual;
(d) The term ``Clearing Broker'' means: a member of a securities
exchange that acts as a liaison between an investor and a clearing
corporation and that helps to ensure that a trade is settled
appropriately, that the transaction is successfully completed and that
is responsible for maintaining the paperwork associated with the
clearing and executing of a transaction;
(e) The term ``Independent'' means a person who is: (1) not Baird
or an affiliate; and (2) not a relative (as defined in ERISA section
3(15)) of the party engaging in the transaction;
(f) The term ``Introducing Broker'' means: a registered broker that
is able to perform all the functions of a broker except for the ability
to accept money, securities, or property from a customer;
(g) The term ``Sponsor'' means: a plan sponsor as described in
section 3(16)(B) of the Act and any Affiliates;
(h) The term ``Plan'' means: any plan described in section 3(3) of
the Act and/or section 4975(e)(1) of the Code;
(i) The term ``Title II Only Plan'' means: any plan described in
section 4975(e)(1) of the Code which is not an employee benefit plan
covered by Title I of ERISA;
(j) The term ``Delivered Security means a security that is: (1)
Listed on a national securities exchange (excluding OTC Bulletin Board-
eligible securities and Pink Sheets-quoted securities); or (2) a U.S.
Treasury obligation; or (3) A fixed income security that has a rating
at the time of the exchange that is in one of the two highest generic
rating categories from an independent nationally recognized statistical
rating organization (e.g., a highly rated municipal bond or a highly
rated corporate bond); or (4) A certificate of deposit insured by the
Federal Deposit Insurance Corporation. Notwithstanding the above, the
term ``Delivered Security'' shall not include any Auction Rate
Security, or any related Auction Rate Security, including derivatives
or securities materially comprised of Auction Rate Securities or any
illiquid securities.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the Notice of Proposed Exemption published in the Federal Register on
November 7, 2008 at 73 FR 66263.
FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
[[Page 8995]]
Raymond James & Associates, Inc., Located in St. Petersburg, Florida.
[Prohibited Transaction Exemption 2009-08; Exemption Application Number
D-11490]
Exemption
Section I. Transactions Involving Plans Described In Both Title I and
Title II of ERISA
The restrictions of section 406(a)(1)(A) through (D) and section
406(b) of ERISA, and the sanctions imposed by section 4975(a) and (b)
of the Code, by reason of section 4975(c)(1) of the Code, shall not
apply, effective February 1, 2008, to the following transactions, if
the conditions set forth in section III have been met: \7\
---------------------------------------------------------------------------
\7\ For purposes of this exemption, references to section 406 of
ERISA should be read to refer as well to the corresponding
provisions of section 4975 of the Code.
---------------------------------------------------------------------------
(a) The sale or exchange of an Auction Rate Security (as defined in
section IV (b)) by a Plan (as defined in section IV(h)) to the Sponsor
(as defined in section IV (g)) of such Plan; or
(b) A lending of money or other extension of credit to a Plan in
connection with the Plan's holding of an Auction Rate Security, from:
(1) Raymond James & Associates, Inc. or any of its current or future
affiliates or subsidiaries (Raymond James); (2) an Introducing Broker
(as defined in section IV (f)); or (3) a Clearing Broker (as defined in
section IV (d)); where the loan is: (i) repaid in accordance with its
terms; and (ii) guaranteed by the Plan Sponsor.
II. Transactions Involving Plans Described In Title II of ERISA Only
The sanctions resulting from the application of section 4975(a) and
(b) of the Code, by reason of section 4975(c)(1) of the Code, shall not
apply, effective February 1, 2008, to the following transactions, if
the conditions set forth in section III have been met:
(a) The sale or exchange of an Auction Rate Security by a Title II
Only Plan (as defined in section IV(i)) to the Beneficial Owner (as
defined in section IV(c)) of such Plan; or
(b) A lending of money or other extension of credit to a Title II
Only Plan in connection with the Plan's holding of an Auction Rate
Security, from: (1) Raymond James; (2) an Introducing Broker; or (3) a
Clearing Broker; where the loan is: (i) repaid in accordance with its
terms and; (ii) guaranteed by the Beneficial Owner.
III. Conditions
(a) Raymond James acted as a broker or dealer, non-bank custodian,
or fiduciary in connection with the acquisition or holding of the
Auction Rate Security that is the subject of the transaction;
(b) For transactions involving a Plan (including a Title II Only
Plan) not sponsored by Raymond James for its own employees, the
decision to enter into the transaction is made by a Plan fiduciary who
is Independent (as defined in section IV(e)) of Raymond James.
Notwithstanding the foregoing, an employee of Raymond James who is the
Beneficial Owner of a Title II Only Plan may direct such Plan to engage
in a transaction described in section II, if all of the other
conditions of this section III have been met;
(c) The last auction for the Auction Rate Security was
unsuccessful;
(d) The Plan does not waive any rights or claims in connection with
the loan or sale as a condition of engaging in the transaction;
(e) The Plan does not pay any fees or commissions in connection
with the transaction;
(f) The transaction is not part of an arrangement, agreement or
understanding designed to benefit a party in interest;
(g) With respect to any sale described in section I(a) or section
II(a):
(1) The Sale is for no consideration other than cash payment
against prompt delivery of the Auction Rate Security; and
(2) For purposes of the sale, the Auction Rate Security is valued
at par, plus any accrued but unpaid interest; \8\
---------------------------------------------------------------------------
\8\ This exemption does not address tax issues. The Department
has been informed by the Internal Revenue Service and the Department
of the Treasury that they are considering providing limited relief
from the requirements of sections 72(t)(4), 401(a)(9), and 4974 of
the Code with respect to retirement plans that hold Auction Rate
Securities. The Department has also been informed by the Internal
Revenue Service that if Auction Rate Securities are purchased from a
Plan in a transaction described in sections I and II at a price that
exceeds the fair market value of those securities, then the excess
value would be treated as a contribution for purposes of applying
applicable contribution and deduction limits under sections 219,
404, 408, and 415 of the Code.
---------------------------------------------------------------------------
(h) With respect to an in-kind exchange described in section (I)(a)
or section II(a), the exchange involves the transfer by a Plan of an
Auction Rate Security in return for a Delivered Security, as such term
is defined in section IV(j), where:
(1) The exchange is unconditional;
(2) For purposes of the exchange, the Auction Rate Security is
valued at par, plus any accrued but unpaid interest;
(3) The Delivered Security is valued at fair market value, as
determined at the time of the in-kind exchange by a third party pricing
service or other objective source;
(4) The Delivered Security is appropriate for the Plan and a
security that the Plan is otherwise permitted to hold under applicable
law; \9\ and
---------------------------------------------------------------------------
\9\ The Department notes that the Act's general standards of
fiduciary conduct apply to the transactions described herein. In
this regard, section 404 requires, among other things, that a
fiduciary discharge his duties respecting a plan solely in the
interest of the plan's participants and beneficiaries and in a
prudent manner. Accordingly, a plan fiduciary must act prudently
with respect to, among other things: (1) The decision to exchange an
Auction Rate Security for a Delivered Security; and (2) the
negotiation of the terms of such exchange (or a cash sale or loan
described above), including the pricing of such securities. The
Department further emphasizes that it expects plan fiduciaries,
prior to entering into any of the transactions, to fully understand
the risks associated with these types of transactions following
disclosure by Raymond James of all relevant information.
---------------------------------------------------------------------------
(5) The total value of the Auction Rate Security (i.e., par plus
any accrued but unpaid interest) is equal to the fair market value of
the Delivered Security;
(i) With respect to a loan described in section I(b) or II(b):
(1) The loan is documented in a written agreement containing all of
the material terms of the loan, including the consequences of default;
(2) The Plan does not pay an interest rate that exceeds one of the
following three rates as of the commencement of the loan:
(A) The coupon rate for the Auction Rate Security;
(B) The Federal Funds Rate; or
(C) The Prime Rate;
(3) The loan is unsecured; and
(4) The amount of the loan is not more than the total par value of
the Auction Rate Securities held by the Plan.
IV. Definitions
(a) The term ``affiliate'' means any person directly or indirectly,
through one or more intermediaries, controlling, controlled by, or
under common control with such other person;
(b) The term ``Auction Rate Security'' or ``ARS'' means a security:
(1) That is either a debt instrument (generally with a long-term
nominal maturity) or preferred stock; and
(2) With an interest rate or dividend that is reset at specific
intervals through a Dutch auction process;
(c) The term ``Beneficial Owner'' means: the individual for whose
benefit the Title II Only Plan is established and includes a relative
or family trust with respect to such individual;
(d) The term ``Clearing Broker'' means: a member of a securities
exchange that acts as a liaison between an investor and a clearing
corporation and that helps to ensure that a trade is settled
appropriately, that the transaction is successfully completed
[[Page 8996]]
and that is responsible for maintaining the paper work associated with
the clearing and executing of a transaction;
(e) The term ``Independent'' means a person who is: (1) Not Raymond
James or an affiliate; and (2) not a relative (as defined in ERISA
section 3(15)) of the party engaging in the transaction;
(f) The term ``Introducing Broker'' means: a registered broker that
is able to perform all the functions of a broker except for the ability
to accept money, securities, or property from a customer;
(g) The term ``Sponsor'' means: a plan sponsor as described in
section 3(16)(B) of the Act and any Affiliates;
(h) The term ``Plan'' means: any plan described in section 3(3) of
the Act and/or section 4975(e)(1) of the Code;
(i) The term ``Title II Only Plan'' means: any plan described in
section 4975(e)(1) of the Code which is not an employee benefit plan
covered by Title I of ERISA;
(j) The term ``Delivered Security'' means a security that is: (1)
Listed on a national securities exchange (excluding OTC Bulletin Board-
eligible securities and Pink Sheets-quoted securities); or (2) a U.S.
Treasury obligation; or (3) A fixed income security that has a rating
at the time of the exchange that is in one of the two highest generic
rating categories from an independent nationally recognized statistical
rating organization (e.g., a highly rated municipal bond or a highly
rated corporate bond); or (4) A certificate of deposit insured by the
Federal Deposit Insurance Corporation. Notwithstanding the above, the
term ``Delivered Security'' shall not include any Auction Rate
Security, or any related Auction Rate Security, including derivatives
or securities materially comprised of Auction Rate Securities or any
illiquid securities.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the Notice of Proposed Exemption published in the Federal Register on
November 7, 2008 at 73 FR 66266.
FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
Northwestern Mutual Investment Services, LLC, Located in Milwaukee,
Wisconsin.
[Prohibited Transaction Exemption 2009-09; Exemption Application Number
D-11505]
Exemption
Section I. Transactions
The restrictions of section 406(a) of the Act and the sanctions
resulting from the application of section 4975 of the Code, by reason
of section 4975(c)(1)(A) through (D) of the Code, shall not apply,
effective September 30, 2008, to the sale (the Sale) by a Plan (as
defined in section II(d)) of an Auction Rate Security (as defined in
section II(b) to Northwestern Mutual Investment Services, LLC (NMIS),
provided that the following conditions are met: \10\
---------------------------------------------------------------------------
\10\ For purposes of this exemption, references to section 406
of ERISA should be read to refer as well to the corresponding
provisions of section 4975 of the Code.
---------------------------------------------------------------------------
(a) The Plan acquired the Auction Rate Security (ARS) in connection
with brokerage services provided by NMIS;
(b) The last auction for the ARS was unsuccessful;
(c) The Sale is made in connection with a written offer by NMIS
(the Offer) containing all of the material terms of the Sale;
(d) The Sale is for no consideration other than cash payment
against prompt delivery of the ARS;
(e) The amount of the Sale is equal to the greater of:
(1) The fair market value of the ARS as of the date of the Sale, as
determined by a qualified, independent appraiser; or
(2) The sum of the price paid by the Plan for the ARS and any
accrued but unpaid interest; \11\
---------------------------------------------------------------------------
\11\ In the event that the fair market value of an ARS exceeds
the sum of its par value plus any accrued, but unpaid, interest as
of the date of the Sale, NMIS will credit the difference to the
Plan, with interest equal to the Federal Funds rate plus 125 basis
points.
---------------------------------------------------------------------------
(f) The Plan does not waive any rights or claims in connection with
the Sale;
(g) The decision to accept the Offer or retain the ARS is made by a
Plan fiduciary or Plan participant or IRA owner, who (in all cases) is
Independent (as defined in section II (c)) of NMIS; \12\
---------------------------------------------------------------------------
\12\ The Department notes that the Act's general standards of
fiduciary conduct apply to the transactions described herein. In
this regard, section 404 requires, among other things, that a
fiduciary discharge his duties respecting a plan solely in the
interest of the plan's participants and beneficiaries and in a
prudent manner. Accordingly, a plan fiduciary must act prudently
with respect to, among other things, the decision to engage (or to
not engage) in a Sale. The Department further emphasizes that it
expects a plan fiduciary, prior to entering into a Sale (or,
alternately, prior to deciding to retain an ARS), to fully
understand the risks associated with such a decision, following
disclosure by NMIS of all relevant information.
---------------------------------------------------------------------------
(h) Neither NMIS nor any affiliate exercises investment discretion
or renders investment advice [within the meaning of 29 CFR 2510.3-
21(c)] with respect to the decision to accept the Offer or retain the
ARS;
(i) The Plan does not pay any commissions or transaction costs with
respect to the Sale;
(j) The Sale is not part of an arrangement, agreement or
understanding designed to benefit a party in interest to the Plan;
(k) NMIS and its affiliates, as applicable, maintain, or cause to
be maintained, for a period of six (6) years from the date of the Sale
such records as are necessary to enable the persons described below in
paragraph (l)(i), to determine whether the conditions of this exemption
have been met, except that--
(i) No party in interest with respect to a Plan which engages in a
Sale, other than NMIS and its affiliates, as applicable, shall be
subject to a civil penalty under section 502(i) of the Act or the taxes
imposed by section 4975(a) and (b) of the Code, if such records are not
maintained, or not available for examination, as required, below, by
paragraph (l)(i); and
(ii) A separate prohibited transaction shall not be considered to
have occurred solely because, due to circumstances beyond the control
of NMIS or its affiliates, as applicable, such records are lost or
destroyed prior to the end of the six-year period;
(l)(i) Except as provided below in paragraph (l)(ii), and
notwithstanding any provisions of subsections (a)(2) an (b) of section
504 of the Act, the records referred to above in paragraph (k) are
unconditionally available at their customary location for examination
during normal business hours by--
(A) Any duly authorized employee or representative of the
Department, the Internal Revenue Service, or the U.S. Securities and
Exchange Commission; or
(B) Any fiduciary of any Plan that engages in a Sale, or any duly
authorized employee or representative of such fiduciary; or
(C) Any employer of participants and beneficiaries and any employee
organization whose members are covered by a Plan that engages in the
Sale, or any authorized employee or representative of these entities;
or
(D) Any IRA owner, participant or beneficiary of a Plan that
engages in a Sale, or duly authorized employee or representative of
such IRA owner, participant or beneficiary;
(ii) None of the persons described above in paragraph (l)(i)(B)-(D)
shall be authorized to examine trade secrets of NMIS, or commercial or
financial information which is privileged or confidential; and
(iii) Should NMIS refuse to disclose information on the basis that
such information is exempt from disclosure, NMIS shall, by the close of
the thirtieth (30th) day following the request,
[[Page 8997]]
provide a written notice advising that person of the reasons for the
refusal and that the Department may request such information.
Section II. Definitions
(a) The term ``affiliate'' means: any person directly or
indirectly, through one or more intermediaries, controlling, controlled
by, or under common control with such other person;
(b) The term ``Auction Rate Security'' or ``ARS'' means a security:
(1) That is either a debt instrument (generally with a long-term
nominal maturity) or preferred stock; and
(2) With an interest rate or dividend that is reset at specific
intervals through a Dutch auction process;
(c) The term ``Independent'' means a person who is: (1) not NMIS or
an affiliate; and (2) not a relative (as defined in ERISA section
3(15)) of the party engaging in the transaction; and
(d) The term ``Plan'' means: any plan described in section 3(3) of
the Act and/or section 4975(e)(1) of the Code.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the Notice of Proposed Exemption published in the Federal Register on
November 7, 2008 at 73 FR 66268.
FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions to which the exemption does not
apply and the general fiduciary responsibility provisions of section
404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
requirement of section 401(a) of the Code that the plan must operate
for the exclusive benefit of the employees of the employer maintaining
the plan and their beneficiaries;
(2) This exemption is supplemental to and not in derogation of, any
other provisions of the Act and/or the Code, including statutory or
administrative exemptions and transactional rules. Furthermore, the
fact that a transaction is subject to an administrative or statutory
exemption is not dispositive of whether the transaction is in fact a
prohibited transaction; and
(3) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describes all material terms of the transaction
which is the subject of the exemption.
Signed at Washington, DC, this 24th day of February 2009.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. E9-4235 Filed 2-26-09; 8:45 am]
BILLING CODE 4510-29-P
