Grant of Individual Exemption Involving UBS AG (UBS or the Applicant); Located in Zurich, Switzerland, 56740-56742 [2013-22314]
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56740
Federal Register / Vol. 78, No. 178 / Friday, September 13, 2013 / Notices
Employee Benefits Security
Administration, U.S. Department of
Labor.
ACTION: Grant of individual exemption.
of which plan are managed by a UBS
QPAM.
DATES: Effective Date: This exemption is
effective as of the date a judgment of
conviction against UBS Securities Japan
for wire fraud is entered in the District
Court of Connecticut in Case Number
3:12-cr-00268–RNC.
FOR FURTHER INFORMATION CONTACT: Mr.
Erin S. Hesse of the Department,
telephone (202) 693–8546. (This is not
a toll-free number.)
SUPPLEMENTARY INFORMATION: On July 9,
2013, the Department of Labor (the
Department) published a notice of
proposed individual exemption in the
Federal Register at 78 FR 41105, such
that entities within UBS’s Global Asset
Management and Wealth Management
Americas divisions that function as
QPAMs, would not be precluded from
relying on the relief provided by PTE
84–14, solely due to the failure to satisfy
the condition in section I(g) of PTE 84–
14 as a result of their affiliation with
UBS Securities Japan Co. Ltd., against
whom a judgment of conviction for one
count of wire fraud is scheduled to be
entered in the District Court of
Connecticut in Case Number 3:12–cr–
00268–RNC. The proposed exemption
was requested by UBS pursuant to
section 408(a) of the Act and section
4975(c)(2) of the Code, and in
accordance with the procedures set
forth in 29 CFR Part 2570, Subpart B (76
FR 66637, October 27, 2011).2 Effective
December 31, 1978, section 102 of the
Reorganization Plan No. 4 of 1978, (5
USC App. 1 (1996)) transferred the
authority of the Secretary of the
Treasury to issue exemptions of the type
requested to the Secretary of Labor.
Accordingly, this final individual
exemption is being issued solely by the
Department.
This document contains an
individual exemption from certain
prohibited transaction restrictions of the
Employee Retirement Income Security
Act of 1974, as amended (ERISA or the
Act) and the Internal Revenue Code of
1986, as amended (the Code). The
transactions involve UBS, and certain
entities within UBS’s Global Asset
Management and Wealth Management
Americas divisions that function as
‘‘qualified professional asset managers’’
(QPAMs) under Prohibited Transaction
Class Exemption 84–14 (PTE 84–14).1
The individual exemption affects UBS
QPAMS, and participants and
beneficiaries of ERISA plans the assets
Written Comments
The Department invited all interested
persons to submit written comments
and/or requests for a public hearing
with respect to the notice of proposed
exemption. All comments and requests
for hearing were due by August 11,
2013. During the comment period, the
Department received no comments and
no requests for a hearing from interested
persons. Accordingly, after giving full
consideration to the entire record, the
Department has decided to grant the
exemption. The complete application
file (Application No. D–11772),
including all supplemental submissions
received by the Department, is available
1 49 FR 9494 (March 13, 1984), as corrected at 50
FR 41430 (October 10, 1985), as amended at 70 FR
49305 (August 23, 2005), and as amended at 75 FR
38837 (July 6, 2010).
2 For purposes of this exemption, references to
the provisions of Title I of the Act, unless otherwise
specified, refer also to the corresponding provisions
of the Code.
An individual who is the subject of a
record in this system may seek
amendment of those records that are not
exempt. A determination whether a
record may be amended will be made at
the time a request is received.
RECORD SOURCE CATEGORIES:
Sources of information contained in
this system include federal, state, local,
tribal, territorial, and foreign law
enforcement agencies, informants,
members of the public, the public
media, and the private sector, including
commercial data brokers.
EXEMPTIONS CLAIMED FOR THE SYSTEM:
The Attorney General has exempted
this system from subsections (c)(3) and
(4); (d)(1), (2), (3), and (4); (e)(1), (2), and
(3), (4)(G), (H), and (I), (5), and (8); (f);
and (g) of the Privacy Act pursuant to
5 U.S.C. 552a(j) and (k). Rules have been
promulgated in accordance with the
requirements of 5 U.S.C. 553(b), (c), and
(e) and have been published in today’s
Federal Register.
[FR Doc. 2013–22374 Filed 9–12–13; 8:45 am]
BILLING CODE 4410–CW–P
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
[Prohibited Transaction Exemption 2013–
09; Application No. D–11772]
Grant of Individual Exemption
Involving UBS AG (UBS or the
Applicant); Located in Zurich,
Switzerland
AGENCY:
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SUMMARY:
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for public inspection in the Public
Disclosure Room of the Employee
Benefits Security Administration, Room
N–1513, U.S. Department of Labor, 200
Constitution Avenue NW., Washington,
DC 20210.
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 on July
9, 2013, at 78 FR 41105.
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 of the Act and/or the Code,
including any prohibited transaction
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) In accordance with section 408(a)
of ERISA and/or section 4975(c)(2) of
the Code, the Department makes the
following determinations: the
exemption is administratively feasible,
the exemption is in the interests of the
plan and of its participants and
beneficiaries, and the exemption is
protective of the rights of participants
and beneficiaries of the plan;
(3) The exemption is supplemental to,
and not in derogation of, any other
provisions of ERISA, including statutory
or administrative exemptions and
transitional 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
(4) The availability of this exemption
is subject to the express condition that
the material facts and representations
contained in the application accurately
describe all material terms of the
transaction which is the subject of the
exemption.
Accordingly, the following exemption
is granted under the authority of section
408(a) of ERISA and section 4975(c)(2)
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Federal Register / Vol. 78, No. 178 / Friday, September 13, 2013 / Notices
of the Code and in accordance with the
procedures set forth in 29 CFR Part
2570, Subpart B (76 FR 66637, 66644,
October 27, 2011):
tkelley on DSK3SPTVN1PROD with NOTICES
Exemption
Entities within UBS’s Global Asset
Management and Wealth Management
Americas divisions that function as
‘‘qualified professional asset managers’’
(QPAMs), shall not be precluded from
relying on the relief provided by
Prohibited Transaction Exemption 84–
14 (PTE 84–14),3 solely due to the
failure to satisfy the condition in section
I(g) of PTE 84–14 as a result of their
affiliation with UBS Securities Japan Co.
Ltd. (UBS Securities Japan), against
whom a judgment of conviction for one
count of wire fraud (the Conviction) is
scheduled to be entered in the District
Court of Connecticut in Case Number
3:12-cr-00268–RNC, provided the
following conditions are satisfied:
(a) No ERISA-covered assets were
involved in, or directly affected by, the
conduct of UBS Securities Japan that is
the subject of the Conviction. For
purposes of this paragraph, ERISAcovered assets are not considered
directly affected solely because an
ERISA plan held an economic interest
in a security or investment product, the
value of which was tied to one of the
benchmark interest rates manipulated in
connection with conduct by certain UBS
personnel;
(b) The entities acting as QPAMs
within UBS’s Global Asset Management
and Wealth Management Americas
divisions (UBS QPAMs) did not know
of, have reason to know of, participate
in, or directly receive compensation in
connection with, the conduct by certain
UBS personnel that gave rise to the
manipulation of certain benchmark
interest rates;
(c) UBS Securities Japan did not
provide any fiduciary services to, or act
as a QPAM for, ERISA plans or
otherwise exercise any discretionary
control over ERISA-covered assets;
(d) UBS Securities Japan will not
enter into any transactions with funds
managed by UBS QPAMs or provide any
services to UBS QPAMs;
(e) UBS QPAMs were insulated from
UBS Securities Japan due to: (1) The
independent business operations of the
Wealth Management Americas and
Global Asset Management divisions
from UBS’s other divisions, and (2)
Written policies and procedures which
created information barriers that were in
3 49 FR 9494 (March 13, 1984), as corrected at 50
FR 41430 (October 10, 1985), as amended at 70 FR
49305 (August 23, 2005), and as amended at 75 FR
38837 (July 6, 2010).
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18:23 Sep 12, 2013
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place to ensure that the UBS QPAMs,
and the ERISA-covered assets they
manage, were not affected by the
business activities of UBS affiliates
within the Investment Bank division,
such as UBS Securities Japan;
(f) UBS maintains and follows written
policies and procedures that create
information barriers designed to ensure
UBS QPAMs, and the ERISA-covered
assets they manage, are not affected by
the business activities of UBS affiliates
within the Investment Bank division,
such as UBS Securities Japan. UBS also
develops and implements a program of
training for UBS personnel regarding
such written policies and procedures;
(g) UBS submits to an annual audit
which meets the following
requirements:
(1) An independent auditor, who has
appropriate technical training and
proficiency with Title I of ERISA, shall
conduct an annual written audit;
(2) The audit shall specifically require
the auditor to determine whether UBS
has continued to maintain and follow,
and developed and implemented a
training program with respect to,
written policies and procedures that
create information barriers designed to
ensure that the UBS QPAMs, and the
ERISA-covered assets they manage, are
not improperly influenced or affected by
the business activities of UBS affiliates
within the Investment Bank division,
such as UBS Securities Japan;
(3) The audit shall test operational
compliance with the training
requirements and written policies and
procedures requirements described in
paragraph (f);
(4) The auditor shall issue a written
report (the Audit Report) describing the
steps performed by the auditor during
the course of its examination. The Audit
Report shall include the auditor’s
specific determinations regarding the
adequacy of the training requirements
and written policies and procedures
requirements described in paragraph (f),
the auditor’s recommendations (if any)
with respect to strengthening such
training requirements and policies and
procedures, and any instances of UBS’s
noncompliance with developing and
implementing such training
requirements and policies and
procedures. Any determinations made
by the auditor as a result of the audit
regarding the adequacy of the training
requirements and written policies and
procedures requirements described in
paragraph (f) and the auditor’s
recommendations (if any) with respect
to strengthening such training
requirements and policies and
procedures shall be promptly addressed
by UBS, and any actions taken by UBS
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56741
to address such recommendations
should be included in an addendum to
the Audit Report. Any determinations
by the auditor that UBS has developed
and maintained sufficient written
policies and procedures, and developed
and maintained a training program
regarding such policies and procedures,
shall not be based solely or in
substantial part on an absence of
evidence indicating noncompliance;
(5) UBS shall provide notice to the
Department’s Office of Exemption
Determinations (OED) of any instances
of UBS’s noncompliance reviewed by
the auditor within ten (10) business
days after such noncompliance is
determined by the auditor, regardless of
whether the audit has been completed
as of that date. Upon request, the
auditor shall provide OED with all of
the relevant workpapers reflecting the
instances of noncompliance. The
workpapers should identify whether
and to what extent the assets of ERISA
plans were involved in the instance(s) of
noncompliance and an explanation of
any corrective actions taken by UBS;
(6) The yearly Audit Report will be
provided to OED no later than 90 days
following the 12-month period to which
it relates and will be unconditionally
available for examination by any duly
authorized employee or representative
of the Department, Internal Revenue
Service, U.S. Commodity Futures
Trading Commission, U.S. Department
of Justice, Japanese Financial Services
Authority, other relevant regulators, and
any fiduciary of an ERISA plan the
assets of which plan are managed by a
UBS QPAM;
(7) This audit requirement in
paragraph (g) herein shall continue to be
applicable for five (5) years from the
date of Conviction;
(h) Notwithstanding the Conviction,
UBS complies with each condition of
PTE 84–14, as amended;
(i) UBS imposes its internal
procedures, controls, and protocols on
UBS Securities Japan to: (1) Reduce the
likelihood of any recurrence of conduct
that is the subject of the Conviction, and
(2) Comply in all material respects with
the Business Improvement Order, dated
December 16, 2011, issued by the
Japanese Financial Services Authority;
(j) UBS complies in all material
respects with the audit and monitoring
procedures imposed on UBS by the
United States Commodity Futures
Trading Commission Order, dated
December 19, 2012;
(k) UBS maintains records necessary
to demonstrate that the conditions of
this exemption have been met for six (6)
years following the completion date of
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56742
Federal Register / Vol. 78, No. 178 / Friday, September 13, 2013 / Notices
the last audit conducted in accordance
with paragraph (g); and
(l) Each sponsor of an ERISA plan the
assets of which plan are managed by a
UBS QPAM receives: Notice of the
proposed exemption with a copy of the
summary of facts that led to the
Conviction, which was submitted to the
Department; and a prominently
displayed statement that the Conviction
results in a failure to meet a condition
in PTE 84–14.
Effective Date: This exemption is
effective as of the date a judgment of
conviction against UBS Securities Japan
for wire fraud is entered in the District
Court of Connecticut in Case Number
3:12–cr–00268–RNC.
Signed at Washington, DC, this 9th day of
September, 2013.
Lyssa E. Hall,
Director, Office of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. 2013–22314 Filed 9–12–13; 8:45 am]
BILLING CODE 4510–29–P
DEPARTMENT OF LABOR
Occupational Safety and Health
Administration
[Docket No. OSHA–2013–0021]
Revision of Approved Information
Collection (Paperwork) Requirements
for Office of Management and Budget
(OMB) Approval; Cranes and Derricks
in Construction
Occupational Safety and Health
Administration (OSHA), Labor.
ACTION: Request for public comments.
AGENCY:
OSHA solicits public
comments concerning its proposal to
revise OMB’s approval of the
information collection requirements
contained in the Cranes and Derricks in
Construction Standard (29 CFR part
1926, Subpart CC). Employers and
workers use these requirements to help
ensure the safe operation of equipment
covered by the standard. In addition,
OSHA compliance safety and health
officers use the information to
determine, during an inspection,
whether employers are complying with
the requirements. In May 2013, OSHA
published a final rule that broadened
the exemption for digger derricks in the
Cranes and Derricks Standard in
Construction Subpart CC. As a result,
OSHA is revising the Cranes and
Derricks Standard in Construction
paperwork analysis by reducing the
number of entities that are required to
comply with these information
collection requirements.
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SUMMARY:
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Comments must be submitted
(postmarked, sent, or received) by
November 12, 2013.
ADDRESSES:
Electronically: You may submit
comments and attachments
electronically at https://
www.regulations.gov, which is the
Federal eRulemaking Portal. Follow the
instructions online for submitting
comments.
Facsimile: If your comments,
including attachments, are not longer
than 10 pages you may fax them to the
OSHA Docket Office at (202) 693–1648.
Mail, hand delivery, express mail,
messenger, or courier service: When
using this method, you must submit a
copy of your comments and attachments
to the OSHA Docket Office, Docket No.
OSHA–2013–0021, U.S. Department of
Labor, Occupational Safety and Health
Administration, Room N–2625, 200
Constitution Avenue NW., Washington,
DC 20210. Deliveries (hand, express
mail, messenger, and courier service)
are accepted during the Department of
Labor’s and Docket Office’s normal
business hours, 8:15 a.m. to 4:45 p.m.,
e.t.
Instructions: All submissions must
include the Agency name and OSHA
docket number for the Information
Collection Request (ICR) (OSHA–2013–
0021). All comments, including any
personal information you provide, are
placed in the public docket without
change, and may be made available
online at https://www.regulations.gov.
For further information on submitting
comments see the ‘‘Public
Participation’’ heading in the section of
this notice titled SUPPLEMENTARY
INFORMATION.
Docket: To read or download
comments or other material in the
docket, go to https://www.regulations.gov
or the OSHA Docket Office at the
address above. All documents in the
docket (including this Federal Register
notice) are listed in the https://
www.regulations.gov index; however,
some information (e.g., copyrighted
material) is not publicly available to
read or download through the Web site.
All submissions, including copyrighted
material, are available for inspection
and copying at the OSHA Docket Office.
You may also contact Theda Kenney at
the address below to obtain a copy of
the ICR.
FOR FURTHER INFORMATION CONTACT:
Todd Owen or Theda Kenney,
Directorate of Standards and Guidance,
OSHA, U.S. Department of Labor, Room
N–3609, 200 Constitution Avenue NW.,
Washington, DC 20210; telephone (202)
693–2222.
DATES:
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SUPPLEMENTARY INFORMATION:
I. Background
The Department of Labor, as part of its
continuing effort to reduce paperwork
and respondent (i.e., employer) burden,
conducts a preclearance consultation
program to provide the public with an
opportunity to comment on proposed
and continuing information collection
requirements in accord with the
Paperwork Reduction Act of 1995
(PRA–95) (44 U.S.C. 3506(c)(2)(A)). This
program ensures that information is in
the desired format, reporting burden
(time and costs) is minimal, collection
instruments are clearly understood, and
OSHA’s estimate of the information
collection burden is accurate. The
Occupational Safety and Health Act of
1970 (the OSH Act) (29 U.S.C. 651 et
seq.) authorizes information collection
by employers as necessary or
appropriate for enforcement of the OSH
Act or for developing information
regarding the causes and prevention of
occupational injuries, illnesses, and
accidents (29 U.S.C. 657). The OSH Act
also requires that OSHA obtain such
information with minimum burden
upon employers, especially those
operating small businesses, and to
reduce to the maximum extent feasible
unnecessary duplication of efforts in
obtaining information (29 U.S.C. 657).
The Cranes and Derricks standard’s
information collection requirements
impose a duty on employers to produce
and maintain records that implement
controls and take other measures to
protect workers from hazards related to
cranes and derricks used in
construction. Accordingly, construction
businesses with workers who operate or
work in the vicinity of cranes and
derricks must have, as applicable, the
following documents on file and
available at the job site: Equipment
ratings, employee training records,
written authorizations from qualified
individuals, and qualification program
audits. During an inspection, OSHA will
have access to the records to determine
compliance under conditions specified
by the standard. An employer’s failure
to generate and disclose the information
required in this standard will affect
significantly the Agency’s effort to
control and reduce injuries and fatalities
related to the use of cranes and derricks
in construction.
On May 29, 2013, OSHA published a
final rule expanding the existing diggerderrick exemption to include all digger
derricks used in construction work
subject to 29 CFR part 1926 subpart V.
OSHA revised the exemption in existing
29 CFR 1926.1400(c)(4) to include
within the exemption the phrase ‘‘any
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]]>Agencies
[Federal Register Volume 78, Number 178 (Friday, September 13, 2013)]
[Notices]
[Pages 56740-56742]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22314]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2013-09; Application No. D-11772]
Grant of Individual Exemption Involving UBS AG (UBS or the
Applicant); Located in Zurich, Switzerland
AGENCY: Employee Benefits Security Administration, U.S. Department of
Labor.
ACTION: Grant of individual exemption.
-----------------------------------------------------------------------
SUMMARY: This document contains an individual exemption from certain
prohibited transaction restrictions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA or the Act) and the Internal
Revenue Code of 1986, as amended (the Code). The transactions involve
UBS, and certain entities within UBS's Global Asset Management and
Wealth Management Americas divisions that function as ``qualified
professional asset managers'' (QPAMs) under Prohibited Transaction
Class Exemption 84-14 (PTE 84-14).\1\ The individual exemption affects
UBS QPAMS, and participants and beneficiaries of ERISA plans the assets
of which plan are managed by a UBS QPAM.
---------------------------------------------------------------------------
\1\ 49 FR 9494 (March 13, 1984), as corrected at 50 FR 41430
(October 10, 1985), as amended at 70 FR 49305 (August 23, 2005), and
as amended at 75 FR 38837 (July 6, 2010).
DATES: Effective Date: This exemption is effective as of the date a
judgment of conviction against UBS Securities Japan for wire fraud is
entered in the District Court of Connecticut in Case Number 3:12-cr-
---------------------------------------------------------------------------
00268-RNC.
FOR FURTHER INFORMATION CONTACT: Mr. Erin S. Hesse of the Department,
telephone (202) 693-8546. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On July 9, 2013, the Department of Labor
(the Department) published a notice of proposed individual exemption in
the Federal Register at 78 FR 41105, such that entities within UBS's
Global Asset Management and Wealth Management Americas divisions that
function as QPAMs, would not be precluded from relying on the relief
provided by PTE 84-14, solely due to the failure to satisfy the
condition in section I(g) of PTE 84-14 as a result of their affiliation
with UBS Securities Japan Co. Ltd., against whom a judgment of
conviction for one count of wire fraud is scheduled to be entered in
the District Court of Connecticut in Case Number 3:12-cr-00268-RNC. The
proposed exemption was requested by UBS pursuant to section 408(a) of
the Act and section 4975(c)(2) of the Code, and in accordance with the
procedures set forth in 29 CFR Part 2570, Subpart B (76 FR 66637,
October 27, 2011).\2\ Effective December 31, 1978, section 102 of the
Reorganization Plan No. 4 of 1978, (5 USC App. 1 (1996)) transferred
the authority of the Secretary of the Treasury to issue exemptions of
the type requested to the Secretary of Labor. Accordingly, this final
individual exemption is being issued solely by the Department.
---------------------------------------------------------------------------
\2\ For purposes of this exemption, references to the provisions
of Title I of the Act, unless otherwise specified, refer also to the
corresponding provisions of the Code.
---------------------------------------------------------------------------
Written Comments
The Department invited all interested persons to submit written
comments and/or requests for a public hearing with respect to the
notice of proposed exemption. All comments and requests for hearing
were due by August 11, 2013. During the comment period, the Department
received no comments and no requests for a hearing from interested
persons. Accordingly, after giving full consideration to the entire
record, the Department has decided to grant the exemption. The complete
application file (Application No. D-11772), including all supplemental
submissions received by the Department, is available for public
inspection in the Public Disclosure Room of the Employee Benefits
Security Administration, Room N-1513, U.S. Department of Labor, 200
Constitution Avenue NW., Washington, DC 20210.
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 on July 9, 2013, at 78 FR
41105.
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 of the Act and/or the Code,
including any prohibited transaction 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) In accordance with section 408(a) of ERISA and/or section
4975(c)(2) of the Code, the Department makes the following
determinations: the exemption is administratively feasible, the
exemption is in the interests of the plan and of its participants and
beneficiaries, and the exemption is protective of the rights of
participants and beneficiaries of the plan;
(3) The exemption is supplemental to, and not in derogation of, any
other provisions of ERISA, including statutory or administrative
exemptions and transitional 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
(4) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describe all material terms of the transaction
which is the subject of the exemption.
Accordingly, the following exemption is granted under the authority
of section 408(a) of ERISA and section 4975(c)(2)
[[Page 56741]]
of the Code and in accordance with the procedures set forth in 29 CFR
Part 2570, Subpart B (76 FR 66637, 66644, October 27, 2011):
Exemption
Entities within UBS's Global Asset Management and Wealth Management
Americas divisions that function as ``qualified professional asset
managers'' (QPAMs), shall not be precluded from relying on the relief
provided by Prohibited Transaction Exemption 84-14 (PTE 84-14),\3\
solely due to the failure to satisfy the condition in section I(g) of
PTE 84-14 as a result of their affiliation with UBS Securities Japan
Co. Ltd. (UBS Securities Japan), against whom a judgment of conviction
for one count of wire fraud (the Conviction) is scheduled to be entered
in the District Court of Connecticut in Case Number 3:12-cr-00268-RNC,
provided the following conditions are satisfied:
---------------------------------------------------------------------------
\3\ 49 FR 9494 (March 13, 1984), as corrected at 50 FR 41430
(October 10, 1985), as amended at 70 FR 49305 (August 23, 2005), and
as amended at 75 FR 38837 (July 6, 2010).
---------------------------------------------------------------------------
(a) No ERISA-covered assets were involved in, or directly affected
by, the conduct of UBS Securities Japan that is the subject of the
Conviction. For purposes of this paragraph, ERISA-covered assets are
not considered directly affected solely because an ERISA plan held an
economic interest in a security or investment product, the value of
which was tied to one of the benchmark interest rates manipulated in
connection with conduct by certain UBS personnel;
(b) The entities acting as QPAMs within UBS's Global Asset
Management and Wealth Management Americas divisions (UBS QPAMs) did not
know of, have reason to know of, participate in, or directly receive
compensation in connection with, the conduct by certain UBS personnel
that gave rise to the manipulation of certain benchmark interest rates;
(c) UBS Securities Japan did not provide any fiduciary services to,
or act as a QPAM for, ERISA plans or otherwise exercise any
discretionary control over ERISA-covered assets;
(d) UBS Securities Japan will not enter into any transactions with
funds managed by UBS QPAMs or provide any services to UBS QPAMs;
(e) UBS QPAMs were insulated from UBS Securities Japan due to: (1)
The independent business operations of the Wealth Management Americas
and Global Asset Management divisions from UBS's other divisions, and
(2) Written policies and procedures which created information barriers
that were in place to ensure that the UBS QPAMs, and the ERISA-covered
assets they manage, were not affected by the business activities of UBS
affiliates within the Investment Bank division, such as UBS Securities
Japan;
(f) UBS maintains and follows written policies and procedures that
create information barriers designed to ensure UBS QPAMs, and the
ERISA-covered assets they manage, are not affected by the business
activities of UBS affiliates within the Investment Bank division, such
as UBS Securities Japan. UBS also develops and implements a program of
training for UBS personnel regarding such written policies and
procedures;
(g) UBS submits to an annual audit which meets the following
requirements:
(1) An independent auditor, who has appropriate technical training
and proficiency with Title I of ERISA, shall conduct an annual written
audit;
(2) The audit shall specifically require the auditor to determine
whether UBS has continued to maintain and follow, and developed and
implemented a training program with respect to, written policies and
procedures that create information barriers designed to ensure that the
UBS QPAMs, and the ERISA-covered assets they manage, are not improperly
influenced or affected by the business activities of UBS affiliates
within the Investment Bank division, such as UBS Securities Japan;
(3) The audit shall test operational compliance with the training
requirements and written policies and procedures requirements described
in paragraph (f);
(4) The auditor shall issue a written report (the Audit Report)
describing the steps performed by the auditor during the course of its
examination. The Audit Report shall include the auditor's specific
determinations regarding the adequacy of the training requirements and
written policies and procedures requirements described in paragraph
(f), the auditor's recommendations (if any) with respect to
strengthening such training requirements and policies and procedures,
and any instances of UBS's noncompliance with developing and
implementing such training requirements and policies and procedures.
Any determinations made by the auditor as a result of the audit
regarding the adequacy of the training requirements and written
policies and procedures requirements described in paragraph (f) and the
auditor's recommendations (if any) with respect to strengthening such
training requirements and policies and procedures shall be promptly
addressed by UBS, and any actions taken by UBS to address such
recommendations should be included in an addendum to the Audit Report.
Any determinations by the auditor that UBS has developed and maintained
sufficient written policies and procedures, and developed and
maintained a training program regarding such policies and procedures,
shall not be based solely or in substantial part on an absence of
evidence indicating noncompliance;
(5) UBS shall provide notice to the Department's Office of
Exemption Determinations (OED) of any instances of UBS's noncompliance
reviewed by the auditor within ten (10) business days after such
noncompliance is determined by the auditor, regardless of whether the
audit has been completed as of that date. Upon request, the auditor
shall provide OED with all of the relevant workpapers reflecting the
instances of noncompliance. The workpapers should identify whether and
to what extent the assets of ERISA plans were involved in the
instance(s) of noncompliance and an explanation of any corrective
actions taken by UBS;
(6) The yearly Audit Report will be provided to OED no later than
90 days following the 12-month period to which it relates and will be
unconditionally available for examination by any duly authorized
employee or representative of the Department, Internal Revenue Service,
U.S. Commodity Futures Trading Commission, U.S. Department of Justice,
Japanese Financial Services Authority, other relevant regulators, and
any fiduciary of an ERISA plan the assets of which plan are managed by
a UBS QPAM;
(7) This audit requirement in paragraph (g) herein shall continue
to be applicable for five (5) years from the date of Conviction;
(h) Notwithstanding the Conviction, UBS complies with each
condition of PTE 84-14, as amended;
(i) UBS imposes its internal procedures, controls, and protocols on
UBS Securities Japan to: (1) Reduce the likelihood of any recurrence of
conduct that is the subject of the Conviction, and (2) Comply in all
material respects with the Business Improvement Order, dated December
16, 2011, issued by the Japanese Financial Services Authority;
(j) UBS complies in all material respects with the audit and
monitoring procedures imposed on UBS by the United States Commodity
Futures Trading Commission Order, dated December 19, 2012;
(k) UBS maintains records necessary to demonstrate that the
conditions of this exemption have been met for six (6) years following
the completion date of
[[Page 56742]]
the last audit conducted in accordance with paragraph (g); and
(l) Each sponsor of an ERISA plan the assets of which plan are
managed by a UBS QPAM receives: Notice of the proposed exemption with a
copy of the summary of facts that led to the Conviction, which was
submitted to the Department; and a prominently displayed statement that
the Conviction results in a failure to meet a condition in PTE 84-14.
Effective Date: This exemption is effective as of the date a
judgment of conviction against UBS Securities Japan for wire fraud is
entered in the District Court of Connecticut in Case Number 3:12-cr-
00268-RNC.
Signed at Washington, DC, this 9th day of September, 2013.
Lyssa E. Hall,
Director, Office of Exemption Determinations, Employee Benefits
Security Administration, U.S. Department of Labor.
[FR Doc. 2013-22314 Filed 9-12-13; 8:45 am]
BILLING CODE 4510-29-P
