Federal Register / Vol. 75, No. 128 / Tuesday, July 6, 2010 / Notices 38837 

1Section 102 of the Reorganization Plan No. 4 of 

1978, 5 U.S.C. App. 1 (1996), generally transferred 

the authority of the Secretary of Treasury to issue 

administrative exemptions under section 4975(c)(2) 

of the Code to the Secretary of Labor. 

For purposes of this exemption, references to 

specific provisions of Title I of the Act, unless 

Continued 

or disliked; what worked or didn’t work; 

whether it satisfied your need for 

information or if it didn’t, or anything 

else that you think is important for us 

to know. Your comments will be most 

helpful if you can be very specific in 

relating your experience. 

We value your comments, and would 

really like to hear from you. Please send 

any comments you have to Eileen 

Muirragui at muirragui.eileen@dol.gov 

or via mail to the U.S. Department of 

Labor, Office of Child Labor, Forced 

Labor, and Human Trafficking, Room 

S–5317, 200 Constitution Avenue, NW., 

Washington, DC 20210. 

Signed at Washington, DC, this 29th day of 

June 2010. 

Sandra Polaski, 

Deputy Undersecretary for International 

Affairs. 

[FR Doc. 2010–16219 Filed 7–2–10; 8:45 am] 

BILLING CODE 4510–28–P 

DEPARTMENT OF LABOR 

Occupational Safety and Health 

Administration 

Susan Harwood Training Grant 

Program, FY 2010 

AGENCY: Occupational Safety and Health 

Administration, Labor. 

ACTION: Notification of Funding 

Opportunity for Susan Harwood 

Training Grant Program, FY 2010. 

Funding Opportunity No.: SHTG–FY– 

10–02 

Catalog of Federal Domestic 

Assistance No.: 17.502 

SUMMARY: This notice announces grant 

availability of approximately $2.75 

million for the Susan Harwood Training 

Grant Program for Targeted Topic 

training grants. The complete Harwood 

solicitation for grant applications (SGA) 

for Targeted Topic training grants is 

available at: http://www.grants.gov. 

Targeted Topic training grants will 

support the development of quality 

safety and health training materials and/ 

or the conduct of training for workers 

and/or employers at multiple worksites 

addressing one or more of the 30 

occupational safety and health hazards 

OSHA has selected for this grant 

solicitation. The full list of selected 

training topics is listed in the 

solicitation for grant applications that is 

available on grants.gov. The Agency 

may award grants for some or all of the 

listed Targeted Topic training topics. 

Targeted Topic training grants will be 

awarded for a 12-month project 

performance period. The maximum 

funding that can be requested for the 12- 

month project performance period is 

$250,000. 

DATES: Targeted Topic training grant 

applications must be received 

electronically by the Grants.gov system 

no later than 4:30 p.m., E.T. on Friday 

August 6, 2010, the application deadline 

date. 

ADDRESSES: The complete Susan 

Harwood Training Grant Program 

solicitation for grant applications for 

Targeted Topic training grants and all 

information needed to apply for this 

funding opportunity are available at: 

http://www.grants.gov. 

FOR FURTHER INFORMATION CONTACT: Any 

questions regarding this solicitation for 

grant applications should be emailed to 

HarwoodGrants@dol.gov or directed to 

Kimberly Newell, Program Analyst, or 

Jim Barnes, Director, Office of Training 

and Educational Programs, at (847) 759– 

7700. To obtain further information on 

the Susan Harwood Training Grant 

Program of the U.S. Department of 

Labor, visit the OSHA Web site at: 

https://www.osha.gov, select ‘‘Training’’ 

under the Top Links section, and then 

select ‘‘Susan Harwood Training Grant 

Program’’. Please note that on the 

Harwood Web page, the ‘‘Applying for a 

Grant’’ section contains a PowerPoint 

program entitled ‘‘Helpful Tips for 

Improving Your Susan Harwood Grant 

Application.’’ 

Authority: The Occupational Safety and 

Health Act of 1970, (29 U.S.C. 670), Pub. L. 

111–117, and the 2010 Consolidated 

Appropriations Act. 

Signed at Washington, DC, this 28 day of 

June 2010. 

David Michaels, 

Assistant Secretary of Labor for Occupational 

Safety and Health. 

[FR Doc. 2010–16398 Filed 7–2–10; 8:45 am] 

BILLING CODE 4510–26–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

ZRIN 1210 ZA07 

[Application Number D–11270] 

Amendment to Prohibited Transaction 

Exemption (PTE) 84–14 for Plan Asset 

Transactions Determined by 

Independent Qualified Professional 

Asset Managers 

AGENCY: Employee Benefits Security 

Administration. 

ACTION: Adoption of amendment to PTE 

84–14. 

SUMMARY: This document amends PTE 

84–14, a class exemption that permits 

various parties that are related to 

employee benefit plans to engage in 

transactions involving plan assets if, 

among other conditions, the assets are 

managed by ‘‘qualified professional asset 

managers’’ (QPAMs), which are 

independent of the parties in interest 

and which meet specified financial 

standards. Additional exemptive relief 

is provided for employers to furnish 

limited amounts of goods and services 

to a managed fund in the ordinary 

course of business. Limited relief is also 

provided for leases of office or 

commercial space between managed 

funds and QPAMs or contributing 

employers. Finally, relief is provided for 

transactions involving places of public 

accommodation owned by a managed 

fund. The amendment permits a QPAM 

to manage an investment fund 

containing the assets of the QPAM’s 

own plan or the plan of an affiliate. 

The amendment affects participants 

and beneficiaries of employee benefit 

plans, the sponsoring employers of such 

plans, and other persons engaging in the 

described transactions. 

DATES: The amendment is effective 

November 3, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Motta, Office of Exemption 

Determinations, Employee Benefits 

Security Administration, U.S. 

Department of Labor, Room N–5700, 

200 Constitution Avenue, NW., 

Washington, DC 20210, (202) 693–8540 

(this is not a toll-free number). 

SUPPLEMENTARY INFORMATION: On August 

23, 2005, a notice was published in the 

Federal Register (70 FR 49312) of the 

pendency before the Department of 

Labor (the Department) of a proposed 

amendment to PTE 84–14 (49 FR 9494, 

March 13, 1984, as corrected at 50 FR 

41430, October 10, 1985, and amended 

at 70 FR 49305 (August 23, 2005)). PTE 

84–14 provides an exemption from 

certain of the restrictions of section 406 

of the Employee Retirement Income 

Security Act of 1974 (ERISA), and from 

certain of the taxes imposed by section 

4975(a) and (b) of the Code, by reason 

of section 4975(c)(1) of the Code. The 

Department proposed the amendment 

on its own motion pursuant to section 

408(a) of ERISA and section 4975(c)(2) 

of the Code, and in accordance with the 

procedures set forth in 29 CFR part 

2570, subpart B (55 FR 32836, 32847, 

August 10, 1990).1


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
38838 Federal Register / Vol. 75, No. 128 / Tuesday, July 6, 2010 / Notices 

otherwise specified, refer also to the corresponding 

provisions of the Code. 

2EBSA estimates of labor rates include wages, 

other benefits, and overhead based on the National 

Occupational Employment Survey (May 2008, 

Bureau of Labor Statistics) and the Employment 

Cost Index (June 2009, Bureau of Labor Statistics). 

Figures are projected forward to 2010. Legal 

professional wage and benefits estimates of $119.03 

are based on metropolitan wage rates for lawyers. 

The notice of pendency gave 

interested persons an opportunity to 

comment on the proposed exemption. 

The Department received five written 

comments, each of which raised several 

issues. Upon consideration of these 

comments, the Department has 

determined to grant the proposed 

amendment, subject to certain 

modifications. These modifications and 

the major comments are discussed 

below. 

Executive Order 12866 Statement 

Under Executive Order 12866 (58 FR 

51735), a ‘‘significant’’ regulatory action 

is subject to review by the Office of 

Management and Budget (OMB). 

Section 3(f) of the Executive Order 

defines a ‘‘significant regulatory action’’ 

as an action that is likely to result in a 

rule: (1) Having an annual effect on the 

economy of $100 million or more, or 

adversely and materially affecting a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local or 

tribal governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

When proposed, this amendment was 

determined to be a ‘‘significant 

regulatory action’’ and was reviewed by 

OMB. The finalization of the proposal 

has also been determined to be a 

‘‘significant regulatory action’’ under 

Executive Order 12866. 

Paperwork Reduction Act 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department of Labor 

conducts a preclearance consultation 

program to provide the general public 

and Federal agencies with an 

opportunity to comment on proposed 

and continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 (PRA 

95) (44 U.S.C. 3506(c)(2)(A)). This helps 

to ensure that the public understands 

the Department’s collection 

instructions, respondents can provide 

the requested data in the desired format, 

the reporting burden (time and financial 

resources) is minimized, and the 

Department can properly assess the 

impact of collection requirements on 

respondents. 

The Department requested public 

comments on the information collection 

requirements of the proposed 

amendments to PTE 84–14 in the notice 

published in the Federal Register (70 

FR 49312) of the pendency before the 

Department of the proposed amendment 

to PTE 84–14, described earlier in the 

preamble. No comments specifically 

addressing the Department’s paperwork 

burden estimates were received. 

Following the closing of the 60-day 

comment period, the Department 

submitted an Information Collection 

Request (ICR) to OMB, which approved 

the information collection requirements 

included in the proposed amendments 

under OMB Control Number 1210–0128 

in a Notice of Action dated October 18, 

2005. The approval was scheduled to 

expire October 31, 2008; therefore, on 

October 22, 2008, the Department filed 

with OMB a request to discontinue the 

control number on October 22, 2008, 

because it was clear that the proposed 

amendment would not be finalized 

before the ICR was scheduled to expire. 

OMB approved the Department’s 

request on the same day. The 

Department is hereby filing a request to 

reinstate the control number with the 

changes discussed below. 

The information collection 

requirements of this final amendment 

are essentially unchanged from the 

proposal and consist, in part, of the 

requirements that the QPAM develop 

written policies and procedures 

designed to ensure compliance with the 

conditions of the exemptions and have 

an independent auditor conduct an 

annual exemption audit and issue an 

audit report to each QPAM-sponsored 

plan managed by the QPAM. Although 

no program changes have been made 

that would require revision of the prior 

paperwork burden estimates, the 

Department is adjusting its estimates of 

the cost burden of this final amendment 

in two respects. First, the Department is 

revising its estimate of the number of 

respondents, based on more recent Form 

5500 data. Second, the Department is 

revising its estimate of the cost of the 

exemption audit and report, based on 

public comments on the substance of 

the proposed amendments. The 

Department will submit, 

contemporaneously with publication of 

this final amendment, a change 

worksheet to OMB for approval of these 

adjustments, which are described 

further below. 

In the proposed amendment, the 

Department estimated the total number 

of institutions (banks, savings 

institutions, insurance companies, and 

investment advisors) that might choose 

to act as QPAMs for their own plans at 

6,500. Based on more recent information 

from the 2007 Form 5500 filings, the 

Department now estimates that number 

at 4,400. Assuming that all eligible 

institutions would choose to take 

advantage of the exemption, the 

aggregate cost of developing written 

policies and procedures, assuming one 

hour of a legal professional’s time at 

$119 per hour, is estimated at 

$523,700.2 As explained in the 

preamble to the proposed amendment, 

the actual amount of time required, and 

the resulting cost burden, may be even 

lower because the Department has 

described the objective requirements of 

the exemption that are to be included in 

the policies and procedures. In future 

years, the Department is assuming that 

an additional one percent of the 

currently existing QPAMs, or 44 

institutions will annually establish new 

policies and procedures for managing 

their own plans, at an annual cost of 

approximately $5,200. 

In the paperwork burden estimates for 

the proposal, the Department assumed 

that the exemption audit report would 

not impose any additional paperwork 

burden on respondents because 

preparation of a written report is usual 

and customary for any independent 

audit. In several of the comments 

received in response to the proposed 

amendment, which are described 

further below, commenters asserted that 

the exemption audit as proposed would 

be substantially different in nature from 

other internal audits currently 

performed by QPAMs, but similar to the 

exemption audit currently required 

under PTE 96–23 (relating to the 

activities of in-house asset managers 

(INHAMs)). Two commenters estimated 

the cost of an INHAM exemption audit 

to be at least $20,000. The Department 

further obtained information from 

industry representatives describing 

INHAM exemption audits as ranging in 

cost from $10,000 to $25,000, depending 

on the asset size of the plan. In light of 

this information, the Department has 

decided to adjust its burden estimates to 

recognize the cost of preparing an 

annual exemption report. Because the 

asset size of QPAM-sponsored plans is 

likely to be smaller than the asset size 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
Federal Register / Vol. 75, No. 128 / Tuesday, July 6, 2010 / Notices 38839 

of plans whose assets are managed by 

INHAMs, the Department has assumed 

that the average cost of an exemption 

audit required under the amendment at 

$10,000, with an estimated additional 

annual cost burden of $44,000,000 

($10,000 * 4,400 QPAMs). 

Description of the Exemption 

PTE 84–14 consists of four separate 

parts. The General Exemption, set forth 

in Part I, permits an investment fund 

managed by a QPAM to engage in a 

wide variety of transactions described in 

ERISA section 406(a)(1)(A) through (D) 

with virtually all parties in interest 

except the QPAM which manages the 

assets involved in the transaction and 

those parties most likely to have the 

power to influence the QPAM. 

Part II of the exemption provides 

limited relief from both section 406(a) 

and (b) of ERISA for certain transactions 

involving those employers and certain 

of their affiliates which could not 

qualify for the General Exemption 

provided by Part I. 

Part III of the exemption provides 

limited relief from section 406(a) and (b) 

of ERISA for the leasing of office or 

commercial space by an investment 

fund to the QPAM, an affiliate of the 

QPAM, or a person who could not 

qualify for the General Exemption 

provided by Part I because it held the 

power of appointment, as such term is 

described in paragraph (a) of Part I. 

Part IV of the exemption provides 

limited relief from sections 406(a) and 

406(b)(1) and (2) of ERISA for the 

furnishing of services and facilities by a 

place of public accommodation owned 

by an investment fund managed by a 

QPAM, to all parties in interest, if the 

services and facilities are furnished on 

a comparable basis to the general public. 

In the notice published on August 23, 

2005, the Department proposed to 

amend PTE 84–14 to permit a QPAM to 

prospectively manage an investment 

fund that contains the assets of its own 

plan or the plan of an affiliate 

(retroactive and transitional relief in this 

regard is provided in the notice of final 

amendment to PTE 84–14 that was 

published on the same day (as cited 

above)). This prospective relief is 

described in Part V of the proposed 

amendment, which specifically 

provides relief for transactions 

described in Parts I, III and IV of PTE 

84–14 that involve a QPAM-managed 

fund containing the assets of a plan 

sponsored by such QPAM. Among other 

things, relief is contingent upon an 

‘‘independent auditor’’ conducting an 

annual ‘‘exemption audit’’ to determine 

whether the written procedures adopted 

by the QPAM are designed to assure 

compliance with the conditions of the 

exemption. The term ‘‘exemption audit’’ 

is defined in Part VI, the ‘‘Definitions’’ 

section of the proposed amendment. 

Written Comments 

Independent Audit Requirement 

Several of the commenters requested 

that the ‘‘exemption audit’’ requirement 

be eliminated. One commenter stated 

that the ‘‘exemption audit’’ is 

unnecessary given existing regulatory 

oversight and internal audit 

requirements. This commenter 

identified numerous regulators that 

oversee financial institutions that act as 

QPAMs. Additionally, the commenter 

noted that that QPAMs are subject to 

external examinations, internal audits, 

and reviews designed to assure 

compliance with the laws and 

regulations that affect the QPAMs’ 

activities. 

As noted in the preamble to the 

proposed amendment, PTE 84–14 was 

developed and granted based on the 

essential premise that broad relief could 

be afforded for all types of transactions 

in which a plan engages only if the 

commitments and the investments of 

plan assets and the negotiations leading 

thereto are the sole responsibility of an 

independent, discretionary, manager. 

The arrangement described in the 

proposed amendment diverges from the 

original premise of PTE 84–14 in that it 

involves the retention by a plan 

sponsor/QPAM of the discretion to 

invest the assets of plans sponsored by 

the QPAM in an investment fund 

managed by the QPAM. In order to 

address this lack of QPAM 

independence, the proposed 

amendment relies on the ‘‘exemption 

audit;’’ which is an annual audit 

designed to ensure that, among other 

things, the conditions of the exemption 

have been met. None of the regulatory 

oversight identified by the commenter 

similarly addresses this concern. 

Although financial institutions that act 

as QPAMs perform certain audits 

internally, this type of audit does not 

address the potential for the exercise of 

undue influence which may arise in the 

absence of an independent investment 

manager. 

One commenter stated that the 

‘‘exemption audit’’ is not necessary 

where a QPAM has a track record of 

ensuring that the conditions of the class 

exemption have been met (i.e., where 

the QPAM manages more than $100 

million in assets other than the assets of 

plans sponsored by the QPAM). The 

Department does not believe that a 

certain stated dollar amount of plan 

assets managed by a QPAM (other than 

the assets of a plan sponsored by the 

QPAM or an affiliate) is an adequate 

substitute for the lack of an independent 

fiduciary that would be responsible for 

monitoring the activities of the QPAM 

with respect to its own in-house plan. 

Two commenters argue that the 

Department should modify the 

‘‘exemption audit’’ if it determines not to 

eliminate it altogether. These 

commenters state that the cost of the 

audit is burdensome and/or unnecessary 

given the availability of different 

alternatives. One of these commenters 

recommends that the audit be 

performed less frequently (i.e., every 

five years); the other commenter 

recommends that the audit requirement 

be altered to consist of an in-house 

review or in-house ‘‘audit of exemption 

compliance,’’ together with the 

additional requirement that an 

independent firm conduct an exemption 

audit every five years. 

It is the view of the Department that 

performance of the ‘‘exemption audit’’ 

on a less than an annual basis will 

weaken an important plan protection. 

The Department believes that an annual 

review of, among other things, a 

QPAM’s written policies and 

procedures and a representative sample 

of plan transactions by an independent 

auditor is necessary to address the lack 

of QPAM independence. With regards to 

the costs associated with the ‘‘exemption 

audit,’’ the Department notes that a 

financial services entity is under no 

obligation to serve as a QPAM for its 

own plan under the amended 

exemption if it is determined not to be 

cost effective. 

Two commenters express the view 

that the ‘‘exemption audit’’ is 

unnecessary given that QPAMs are 

motivated to comply with the terms of 

the class exemption regardless of 

whether an ‘‘exemption audit’’ is 

performed. These commenters state that 

QPAMs are responsible for any losses 

resulting from any non-exempt 

transactions (i.e., losses that arise in 

connection with transactions that fail to 

comply with the terms of PTE 84–14) 

and, accordingly, are self-motivated to 

comply with the terms of the amended 

class exemption. 

The Department is not persuaded that 

a QPAM’s motivation to avoid losses 

from non-exempt transactions is an 

adequate substitute for the ‘‘exemption 

audit.’’ As noted in the preamble to the 

proposed amendment, the Department 

believes that the involvement of an 

independent party in overseeing 

compliance with the exemption would 

serve as a meaningful safeguard. In 

addition, the ‘‘exemption audit’’ protects 

plans by ensuring that an investment 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
38840 Federal Register / Vol. 75, No. 128 / Tuesday, July 6, 2010 / Notices 

3Part I(e) of PTE 84–14 provides that a QPAM 

may not enter into a transaction with a party in 

interest with respect to any plan whose assets 

managed by the QPAM, when combined with the 

assets of other plans established or maintained by 

the same employer or affiliates of the employer or 

by the same employee organization, and managed 

by the QPAM, represent more than 20 percent of 

the total clients assets managed by the QPAM at the 

time of the transaction. 

4 49 FR 9504. 

manager, who may not otherwise have 

experience managing ERISA plan assets, 

complies with the provisions of ERISA. 

Upon considering all the comments, 

the Department has determined not to 

modify the ‘‘exemption audit’’ 

requirement in the final QPAM class 

exemption. Although the proposed 

amendment provided only that the 

‘‘exemption audit’’ must be performed 

on an ‘‘annual basis,’’ it did not specify 

the date by which each year’s audit 

must be completed. To avoid any 

uncertainty on this issue, the final 

amendment specifies that the 

‘‘exemption audit’’ must be completed 

within six months following the end of 

the year to which it relates. 

Diverse Clientele Test 

Several commenters commented on 

section I(e) of the class exemption.3 Two 

of these commenters state that the 

Diverse Clientele Test is duplicative 

and/or unnecessary in light of the 

exemption audit and should be waived 

where a QPAM acts as a manager for its 

own plan or the plan of an affiliate. 

Another commenter states that the 

diverse clientele test should be stricter 

and recommends that the 20% 

limitation should be lowered to 10%. 

The Department notes that the Diverse 

Clientele Test, as it applies to the 

amended class exemption, ensures that 

the assets of plans sponsored by a 

QPAM or its affiliates do not constitute 

a significant percentage of the assets of 

an investment fund managed by the 

QPAM. In this regard, as stated in the 

preamble to PTE 84–14, the Department 

believes that the presence of 

independent business provides an 

important protection under the class 

exemption.4 Accordingly, the 

Department has determined not to 

eliminate the percentage limitation of 

the Diverse Clientele Test. However, in 

consideration of the nature of the 

transactions exempted and the 

additional protections embodied in the 

class exemption, the Department does 

not believe that it is necessary to reduce 

the current percentage to ten percent. 

Another commenter notes that PTE 

96–23, a class exemption which permits 

various transactions involving employee 

benefit plans whose assets are managed 

by in-house managers (INHAMs), does 

not contain a limitation that parallels 

the Diverse Clientele Test in PTE 84–14. 

This commenter notes that banks and 

insurance companies, which do not 

meet the definition of INHAM and 

therefore do not qualify for relief under 

that class exemption, will be subject to 

a limitation that is not otherwise 

applicable to financial institutions that 

qualify for relief under the INHAM class 

exemption. 

In this regard, the Department notes 

that this amendment of PTE 84–14 does 

not foreclose future consideration of 

additional exemptive relief under PTE 

96–23 for financial institutions that do 

not meet the Diverse Clientele Test and 

currently do not qualify as INHAMs, if 

the requisite findings under section 

408(a) of ERISA can be made. 

Scope of Relief 

One of the commenters stated that it 

is unclear whether the proposed 

amendment would permit a QPAM to 

manage an investment fund that 

contains the assets of a plan sponsored 

by an affiliate of the QPAM. The 

Department has revised Part V of the 

final amendment to clarify that relief is 

being granted for a QPAM to manage an 

investment fund that contains the assets 

of a plan sponsored by a QPAM and/or 

a plan sponsored by an affiliate thereof. 

Transitional Relief 

One commenter urged the Department 

to delay the effective date of the final 

amendment in order to give parties 

more time to comply with the changes. 

Specifically, the commenter requested 

that the amendment be effective 120 

days after publication in the Federal 

Register. The Department agrees that 

additional time may be needed for 

QPAMs to conform to the amended 

class exemption. Accordingly, the final 

amendment is effective 120 days 

following the date of publication of this 

amendment in the Federal Register. In 

the interim, a QPAM may continue to 

act as an investment manager for its 

own in-house plan in reliance on the 

transitional relief provided in the 

amendment to PTE 84–14 published on 

August 23, 2005. 

Definition of QPAM 

One commenter recommended that 

the amendment permit only financial 

institutions that are registered 

investment advisers (and not, for 

example, proprietary trading operations) 

to act as QPAMs for their own plans. In 

this regard, the Department notes that 

Part VI(a) of the amended class 

exemption defines the term ‘‘qualified 

professional asset manager’’ or ‘‘QPAM’’ 

to mean an independent fiduciary 

which is (1) A bank, as defined in 

section 202(a)(2) of the Investment 

Advisers Act of 1940, or (2) a savings 

and loan association, or (3) an insurance 

company which is qualified under the 

laws of more than one State to manage, 

acquire, or dispose of any assets of a 

plan, or (4) an investment adviser 

registered under the Investment 

Advisers Act of 1940. In light of the 

above, the Department believes that it is 

unnecessary to amend the definition of 

QPAM as requested. 

Additional Clarifications 

In the preamble to the proposed 

amendment, the Department noted that 

the exemption audit is substantially 

similar to the audit required under PTE 

96–23 (61 FR 15975 (Apr. 10, 1996)). 

However, following publication of the 

proposed amendment, the Department 

became aware of practitioner 

uncertainty regarding certain aspects of 

the audit requirement in PTE 96–23. 

Because of the similarity of the audit 

requirements in the proposed 

amendment to PTE 84–14 with the audit 

requirement in PTE 96–23, the 

Department is providing additional 

clarifying language in sections VI(p) and 

V(c) of PTE 84–14 as described below, 

and, further, is offering the following 

additional guidance. 

Section VI(p) of the proposed 

amendment requires, in part, an auditor 

to test a representative sample of a 

plan’s transactions covered by the 

exemption in order to make findings 

regarding whether the QPAM is in 

compliance with the QPAM’s policies 

and procedures, and with the objective 

requirements of the exemption. The 

Department notes, however, that in 

certain instances, an auditor may need 

to construct and test more than one set 

of transactions in order to have a 

reasonable basis for an opinion on the 

QPAM’s compliance with the 

exemption. For example, an auditor may 

initially believe that the most 

appropriate way to make the required 

findings is to construct a sample that 

represents the total universe of relevant 

transactions engaged in by the QPAM 

under the exemption. In testing the 

sample, however, the auditor should 

look for, and may find, patterns of 

compliance failures that indicate that 

certain types of transactions are more 

prone to compliance failures than 

others. If such patterns appear, the 

auditor may need to test additional 

transactions to more accurately assess 

the extent and causes of non-compliant 

transactions. Since, as noted in the 

preamble to the proposed amendment, 

the audit requirement is, among other 

things, intended to protect plans by 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
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ensuring that an investment manager 

complies with the requirements of the 

exemption, the sample should also be 

sufficient in size and nature for the 

auditor to render an overall opinion 

regarding whether the QPAM’s program 

complied with the objective 

requirements of the exemption, and 

with the QPAM’s own policies and 

procedures. 

Accordingly, the Department has 

clarified section VI(p)(2) of PTE 84–14 

in a manner that is consistent with the 

views expressed above. 

Section V(c) of the proposed 

amendment requires that an 

independent auditor conduct an 

exemption audit on an annual basis, and 

issue a written report to the plan 

presenting its specific findings 

regarding the level of compliance with 

the policies and procedures adopted by 

the QPAM. However, the proposed 

amendment does not specify the date by 

which each audit must be completed. 

To avoid any uncertainty on this issue, 

section V(c) of PTE 84–14 now 

expressly provides that the audit must 

be completed within six months 

following the end of the year to which 

it relates. For consistency with the 

changes to section VI(p)(2) described 

above, section V(c) also expressly 

provides that the written report must 

contain the specific findings required 

under section VI(p)(2), and an overall 

opinion regarding the level of 

compliance of the QPAM’s program 

with the policies and procedures 

adopted by the QPAM and the objective 

requirements of the exemption. 

The Department notes that relief is 

not available under PTE 84–14 for those 

transactions that did not satisfy its 

conditions. As a result, the Department 

anticipates that an auditor’s report will 

clearly identify each transaction 

examined by the auditor that does not 

comply with the QPAM’s policies and 

procedures or the exemption. In this 

regard, the report should identify the 

specific policies, procedures or 

exemption conditions that were not 

satisfied. The Department expects 

further that each written report will 

include a description of the steps, if 

any, taken by the QPAM to remedy 

transactions that did not comply with 

the objective requirements of the 

exemption. The report should also 

contain a description of the steps taken 

by the auditor to construct the sample(s) 

and an explanation as to why the 

auditor believes that the sample on 

which the required findings are based is 

an adequate representation of the total 

universe of transactions engaged in by 

the QPAM. 

The QPAM retains responsibility for 

reviewing the written report and taking 

any appropriate actions deemed 

necessary for assuring compliance with 

the exemption. The Department 

cautions that the failure of the QPAM to 

take appropriate steps to address any 

adverse findings or prohibited 

transactions in an audit would raise 

issues under the fiduciary responsibility 

provisions of section 404 of ERISA. 

For the sake of convenience, the 

entire text of PTE 84–14 has been 

reprinted with this notice. 

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 ERISA and section 4975(c)(2) 

of the Code does not relieve a fiduciary 

or other party in interest or disqualified 

person with respect to a plan from 

certain other provisions of ERISA and 

the Code, including any prohibited 

transaction provisions to which the 

exemption does not apply and the 

general fiduciary responsibility 

provisions of section 404 of ERISA 

which require, among other things, that 

a fiduciary discharge his or her duties 

respecting the plan solely in the 

interests of the participants and 

beneficiaries of the plan. Additionally, 

the fact that a transaction is the subject 

of an exemption does not 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) The Department finds that the 

amended exemption is administratively 

feasible, in the interests of the plan and 

of its participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The amended exemption is 

applicable to a particular transaction 

only if the transaction satisfies the 

conditions specified in the amendment; 

and 

(4) The amended exemption is 

supplemental to, and not in derogation 

of, any other provisions of ERISA and 

the Code, 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. 

Exemption 

Under 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 (55 

FR 32836, 32847, August 10, 1990), 

effective as noted, the Department 

amends PTE 84–14 as set forth below: 

Part I—General Exemption 

Effective as of August 23, 2005, the 

restrictions of ERISA section 

406(a)(1)(A) through (D) and the taxes 

imposed by Code section 4975(a) and 

(b), by reason of Code section 

4975(c)(1)(A) through (D), shall not 

apply to a transaction between a party 

in interest with respect to an employee 

benefit plan and an investment fund (as 

defined in section VI(b)) in which the 

plan has an interest, and which is 

managed by a qualified professional 

asset manager (QPAM) (as defined in 

section VI(a)), if the following 

conditions are satisfied: 

(a) At the time of the transaction (as 

defined in section VI(i)) the party in 

interest, or its affiliate (as defined in 

section VI(c)), does not have the 

authority to— 

(1) Appoint or terminate the QPAM as 

a manager of the plan assets involved in 

the transaction, or 

(2) Negotiate on behalf of the plan the 

terms of the management agreement 

with the QPAM (including renewals or 

modifications thereof) with respect to 

the plan assets involved in the 

transaction; 

Notwithstanding the foregoing, in the 

case of an investment fund in which 

two or more unrelated plans have an 

interest, a transaction with a party in 

interest with respect to an employee 

benefit plan will be deemed to satisfy 

the requirements of section I(a) if the 

assets of the plan managed by the 

QPAM in the investment fund, when 

combined with the assets of other plans 

established or maintained by the same 

employer (or affiliate thereof described 

in section VI(c)(1) of the exemption) or 

by the same employee organization, and 

managed in the same investment fund, 

represent less than 10 percent of the 

assets of the investment fund; 

(b) The transaction is not described 

in— 

(1) Prohibited Transaction Exemption 

2006–16 (71 FR 63786; October 31, 

2006) (relating to securities lending 

arrangements) (as amended or 

superseded), 

(2) Prohibited Transaction Exemption 

83–1 (48 FR 895; January 7, 1983) 

(relating to acquisitions by plans of 

interests in mortgage pools) (as 

amended or superseded), or 

(3) Prohibited Transaction Exemption 

82–87 (47 FR 21331; May 18, 1982) 

(relating to certain mortgage financing 

arrangements) (as amended or 

superseded); 


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(c) The terms of the transaction are 

negotiated on behalf of the investment 

fund by, or under the authority and 

general direction of, the QPAM, and 

either the QPAM, or (so long as the 

QPAM retains full fiduciary 

responsibility with respect to the 

transaction) a property manager acting 

in accordance with written guidelines 

established and administered by the 

QPAM, makes the decision on behalf of 

the investment fund to enter into the 

transaction, provided that the 

transaction is not part of an agreement, 

arrangement or understanding designed 

to benefit a party in interest; 

(d) The party in interest dealing with 

the investment fund is neither the 

QPAM nor a person related to the 

QPAM (within the meaning of section 

VI(h)); 

(e) The transaction is not entered into 

with a party in interest with respect to 

any plan whose assets managed by the 

QPAM, when combined with the assets 

of other plans established or maintained 

by the same employer (or affiliate 

thereof described in section VI(c)(1) of 

this exemption) or by the same 

employee organization, and managed by 

the QPAM, represent more than 20 

percent of the total client assets 

managed by the QPAM at the time of the 

transaction; 

(f) At the time the transaction is 

entered into, and at the time of any 

subsequent renewal or modification 

thereof that requires the consent of the 

QPAM, the terms of the transaction are 

at least as favorable to the investment 

fund as the terms generally available in 

arm’s length transactions between 

unrelated parties; 

(g) Neither the QPAM nor any affiliate 

thereof (as defined in section VI(d)), nor 

any owner, direct or indirect, of a 5 

percent or more interest in the QPAM is 

a person who within the 10 years 

immediately preceding the transaction 

has been either convicted or released 

from imprisonment, whichever is later, 

as a result of: Any felony involving 

abuse or misuse of such person’s 

employee benefit plan position or 

employment, or position or employment 

with a labor organization; any felony 

arising out of the conduct of the 

business of a broker, dealer, investment 

adviser, bank, insurance company or 

fiduciary; income tax evasion; any 

felony involving the larceny, theft, 

robbery, extortion, forgery, 

counterfeiting, fraudulent concealment, 

embezzlement, fraudulent conversion, 

or misappropriation of funds or 

securities; conspiracy or attempt to 

commit any such crimes or a crime in 

which any of the foregoing crimes is an 

element; or any other crime described in 

section 411 of ERISA. For purposes of 

this section (g), a person shall be 

deemed to have been ‘‘convicted’’ from 

the date of the judgment of the trial 

court, regardless of whether that 

judgment remains under appeal. 

Part II—Specific Exemption for 

Employers 

Effective as of August 23, 2005, the 

restrictions of sections 406(a), 406(b)(1) 

and 407(a) of ERISA and the taxes 

imposed by section 4975(a) and (b) of 

the Code, by reason of Code section 

4975(c)(1)(A) through (E), shall not 

apply to: 

(a) The sale, leasing, or servicing of 

goods (as defined in section VI(j)), or to 

the furnishing of services, to an 

investment fund managed by a QPAM 

by a party in interest with respect to a 

plan having an interest in the fund, if— 

(1) The party in interest is an 

employer any of whose employees are 

covered by the plan or is a person who 

is a party in interest by virtue of a 

relationship to such an employer 

described in section VI(c), 

(2) The transaction is necessary for 

the administration or management of 

the investment fund, 

(3) The transaction takes place in the 

ordinary course of a business engaged in 

by the party in interest with the general 

public, 

(4) Effective for taxable years of the 

party in interest furnishing goods and 

services after August 23, 2005, the 

amount attributable in any taxable year 

of the party in interest to transactions 

engaged in with an investment fund 

pursuant to section II(a) of this 

exemption does not exceed one (1) 

percent of the gross receipts derived 

from all sources for the prior taxable 

year of the party in interest, and 

(5) The requirements of sections I(c) 

through (g) are satisfied with respect to 

the transaction; 

(b) The leasing of office or commercial 

space by an investment fund maintained 

by a QPAM to a party in interest with 

respect to a plan having an interest in 

the investment fund, if— 

(1) The party in interest is an 

employer any of whose employees are 

covered by the plan or is a person who 

is a party in interest by virtue of a 

relationship to such an employer 

described in section VI(c), 

(2) No commission or other fee is paid 

by the investment fund to the QPAM or 

to the employer, or to an affiliate of the 

QPAM or employer (as defined in 

section VI(c)), in connection with the 

transaction, 

(3) Any unit of space leased to the 

party in interest by the investment fund 

is suitable (or adaptable without 

excessive cost) for use by different 

tenants, 

(4) The amount of space covered by 

the lease does not exceed fifteen (15) 

percent of the rentable space of the 

office building, integrated office park, or 

of the commercial center (if the lease 

does not pertain to office space), 

(5) In the case of a plan that is not an 

eligible individual account plan (as 

defined in section 407(d)(3) of ERISA), 

immediately after the transaction is 

entered into, the aggregate fair market 

value of employer real property and 

employer securities held by investment 

funds of the QPAM in which the plan 

has an interest does not exceed 10 

percent of the fair market value of the 

assets of the plan held in those 

investment funds. In determining the 

aggregate fair market value of employer 

real property and employer securities as 

described herein, a plan shall be 

considered to own the same 

proportionate undivided interest in each 

asset of the investment fund or funds as 

its proportionate interest in the total 

assets of the investment fund(s). For 

purposes of this requirement, the term 

‘‘employer real property’’ means real 

property leased to, and the term 

‘‘employer securities’’ means securities 

issued by, an employer any of whose 

employees are covered by the plan or a 

party in interest of the plan by reason 

of a relationship to the employer 

described in subparagraphs (E) or (G) of 

ERISA section 3(14), and 

(6) The requirements of sections I(c) 

through (g) are satisfied with respect to 

the transaction. 

Part III—Specific Lease Exemption for 

QPAMs 

Effective as of August 23, 2005, the 

restrictions of section 406(a)(1)(A) 

through (D) and 406(b)(1) and (2) of 

ERISA and the taxes imposed by Code 

section 4975(a) and (b), by reason of 

Code section 4975(c)(1)(A) through (E), 

shall not apply to the leasing of office 

or commercial space by an investment 

fund managed by a QPAM to the QPAM, 

a person who is a party in interest of a 

plan by virtue of a relationship to such 

QPAM described in subparagraphs (G), 

(H), or (I) of ERISA section 3(14) or a 

person not eligible for the General 

Exemption of Part I by reason of section 

I(a), if — 

(a) The amount of space covered by 

the lease does not exceed the greater of 

7500 square feet or one (1) percent of 

the rentable space of the office building, 

integrated office park or of the 

commercial center in which the 

investment fund has the investment, 

(b) The unit of space subject to the 

lease is suitable (or adaptable without 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
Federal Register / Vol. 75, No. 128 / Tuesday, July 6, 2010 / Notices 38843 

excessive cost) for use by different 

tenants, 

(c) At the time the transaction is 

entered into, and at the time of any 

subsequent renewal or modification 

thereof that requires the consent of the 

QPAM, the terms of the transaction are 

not more favorable to the lessee than the 

terms generally available in arm’s length 

transactions between unrelated parties, 

and 

(d) No commission or other fee is paid 

by the investment fund to the QPAM, 

any person possessing the disqualifying 

powers described in section I(a), or any 

affiliate of such persons (as defined in 

section VI(c)), in connection with the 

transaction. 

Part IV—Transactions Involving Places 

of Public Accommodation 

Effective as of August 23, 2005, the 

restrictions of section 406(a)(1)(A) 

through (D) and 406(b)(1) and (2) of 

ERISA and the taxes imposed by Code 

section 4975(a) and (b), by reason of 

Code section 4975(c)(1)(A) through (E), 

shall not apply to the furnishing of 

services and facilities (and goods 

incidental thereto) by a place of public 

accommodation owned by an 

investment fund managed by a QPAM to 

a party in interest with respect to a plan 

having an interest in the investment 

fund, if the services and facilities (and 

incidental goods) are furnished on a 

comparable basis to the general public. 

Part V—Specific Exemption Involving 

QPAM—Sponsored Plans 

Effective after November 3, 2010, the 

relief provided by Parts I, III or IV of 

PTE 84–14 from the applicable 

restrictions of ERISA section 406(a), 

section 406(b)(1) and (2), and the taxes 

imposed by Code section 4975(a) and 

(b), by reason of Code section 

4975(c)(1)(A) through (E), shall apply to 

a transaction involving the assets of a 

plan sponsored by the QPAM or an 

affiliate of the QPAM if: 

(a) The QPAM has discretionary 

authority or control with respect to the 

plan assets involved in the transaction; 

(b) The QPAM adopts written policies 

and procedures that are designed to 

assure compliance with the conditions 

of the exemption; 

(c) An independent auditor, who has 

appropriate technical training or 

experience and proficiency with 

ERISA’s fiduciary responsibility 

provisions and so represents in writing, 

conducts an exemption audit (as 

defined in section VI(p) on an annual 

basis. Following completion of the 

exemption audit, the auditor shall issue 

a written report to the plan presenting 

its specific findings regarding the level 

of compliance: (1) With the policies and 

procedures adopted by the QPAM in 

accordance with section V(b); and (2) 

with the objective requirements of the 

exemption. The written report shall also 

contain the auditor’s overall opinion 

regarding whether the QPAM’s program 

complied: (1) with the policies and 

procedures adopted by the QPAM; and 

(2) with the objective requirements of 

the exemption. The exemption audit 

and the written report must be 

completed within six months following 

the end of the year to which the audit 

relates; 

(d) The transaction meets the 

applicable requirements set forth in 

Parts I, III, or IV of the exemption. 

Part VI—Definitions and General Rules 

For purposes of this exemption: 

(a) The term ‘‘qualified professional 

asset manager’’ or ‘‘QPAM’’ means an 

independent fiduciary (as defined in 

section VI(o)) which is — 

(1) A bank, as defined in section 

202(a)(2) of the Investment Advisers Act 

of 1940 that has the power to manage, 

acquire or dispose of assets of a plan, 

which bank has, as of the last day of its 

most recent fiscal year, equity capital (as 

defined in section VI(k)) in excess of 

$1,000,000, or 

(2) A savings and loan association, the 

accounts of which are insured by the 

Federal Savings and Loan Insurance 

Corporation, that has made application 

for and been granted trust powers to 

manage, acquire or dispose of assets of 

a plan by a State or Federal authority 

having supervision over savings and 

loan associations, which savings and 

loan association has, as of the last day 

of its most recent fiscal year, equity 

capital (as defined in section VI(k)) or 

net worth (as defined in section VI(l)) in 

excess of $1,000,000, or 

(3) An insurance company which is 

qualified under the laws of more than 

one State to manage, acquire, or dispose 

of any assets of a plan, which company 

has, as of the last day of its most recent 

fiscal year, net worth (as defined in 

section VI(l)) in excess of $1,000,000 

and which is subject to supervision and 

examination by a State authority having 

supervision over insurance companies, 

or 

(4) An investment adviser registered 

under the Investment Advisers Act of 

1940 that has total client assets under its 

management and control in excess of 

$50,000,000 as of the last day of its most 

recent fiscal year, and either (A) 

shareholders’ or partners’ equity (as 

defined in section VI(m)) in excess of 

$750,000, or (B) payment of all of its 

liabilities including any liabilities that 

may arise by reason of a breach or 

violation of a duty described in sections 

404 and 406 of ERISA is 

unconditionally guaranteed by—(i) A 

person with a relationship to such 

investment adviser described in section 

VI(c)(1) if the investment adviser and 

such affiliate have shareholders’ or 

partners’ equity, in the aggregate, in 

excess of $750,000, or (ii) A person 

described in (a)(1), (a)(2) or (a)(3) of 

section VI above, or (iii) A broker-dealer 

registered under the Securities 

Exchange Act of 1934 that has, as of the 

last day of its most recent fiscal year, net 

worth in excess of $750,000; and (C) 

effective as of the last day of the first 

fiscal year of the investment adviser 

beginning on or after August 23, 2005, 

substitute ‘‘$85,000,000’’ for 

‘‘$50,000,000’’ and ‘‘$1,000,000’’ for 

‘‘$750,000’’ in (a)(4)(A) or (B) of section 

VI above; 

Provided that such bank, savings and 

loan association, insurance company or 

investment adviser has acknowledged in 

a written management agreement that it 

is a fiduciary with respect to each plan 

that has retained the QPAM. 

(b) An ‘‘investment fund’’ includes 

single customer and pooled separate 

accounts maintained by an insurance 

company, individual trusts and 

common, collective or group trusts 

maintained by a bank, and any other 

account or fund to the extent that the 

disposition of its assets (whether or not 

in the custody of the QPAM) is subject 

to the discretionary authority of the 

QPAM. 

(c) For purposes of section I(a) and 

Part II, an ‘‘affiliate’’ of a person means— 

(1) Any person directly or indirectly, 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with the person, 

(2) Any corporation, partnership, trust 

or unincorporated enterprise of which 

such person is an officer, director, 10 

percent or more partner (except with 

respect to Part II this figure shall be 5 

percent), or highly compensated 

employee as defined in section 

4975(e)(2)(H) of the Code (but only if the 

employer of such employee is the plan 

sponsor), and 

(3) Any director of the person or any 

employee of the person who is a highly 

compensated employee, as defined in 

section 4975(e)(2)(H) of the Code, or 

who has direct or indirect authority, 

responsibility or control regarding the 

custody, management or disposition of 

plan assets involved in the transaction. 

A named fiduciary (within the meaning 

of section 402(a)(2) of ERISA) of a plan 

with respect to the plan assets involved 

in the transaction and an employer any 

of whose employees are covered by the 


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plan will also be considered affiliates 

with respect to each other for purposes 

of section I(a) if such employer or an 

affiliate of such employer has the 

authority, alone or shared with others, 

to appoint or terminate the named 

fiduciary or otherwise negotiate the 

terms of the named fiduciary’s 

employment agreement. 

(d) For purposes of section I(g) an 

‘‘affiliate’’ of a person means— 

(1) Any person directly or indirectly 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with the person, 

(2) Any director of, relative of, or 

partner in, any such person, 

(3) Any corporation, partnership, trust 

or unincorporated enterprise of which 

such person is an officer, director, or a 

5 percent or more partner or owner, and 

(4) Any employee or officer of the 

person who— 

(A) Is a highly compensated employee 

(as defined in section 4975(e)(2)(H) of 

the Code) or officer (earning 10 percent 

or more of the yearly wages of such 

person), or 

(B) Has direct or indirect authority, 

responsibility or control regarding the 

custody, management or disposition of 

plan assets. 

(e) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

(f) The term ‘‘party in interest’’ means 

a person described in ERISA section 

3(14) and includes a ‘‘disqualified 

person,’’ as defined in Code section 

4975(e)(2). 

(g) The term ‘‘relative’’ means a 

relative as that term is defined in ERISA 

section 3(15), or a brother, a sister, or a 

spouse of a brother or sister. 

(h) A QPAM is ‘‘related’’ to a party in 

interest for purposes of section I(d) of 

this exemption if, as of the last day of 

its most recent calendar quarter: (i) The 

QPAM owns a ten percent or more 

interest in the party in interest; (ii) a 

person controlling, or controlled by, the 

QPAM owns a twenty percent or more 

interest in the party in interest; (iii) the 

party in interest owns a ten percent or 

more interest in the QPAM; or (iv) a 

person controlling, or controlled by, the 

party in interest owns a twenty percent 

or more interest in the QPAM. 

Notwithstanding the foregoing, a party 

in interest is ‘‘related’’ to a QPAM if: (i) 

A person controlling, or controlled by, 

the party in interest has an ownership 

interest that is less than twenty percent 

but greater than ten percent in the 

QPAM and such person exercises 

control over the management or policies 

of the QPAM by reason of its ownership 

interest; (ii) a person controlling, or 

controlled by, the QPAM has an 

ownership interest that is less than 

twenty percent but greater than ten 

percent in the party in interest and such 

person exercises control over the 

management or policies of the party in 

interest by reason of its ownership 

interest. For purposes of this definition: 

(1) The term ‘‘interest’’ means with 

respect to ownership of an entity— 

(A) The combined voting power of all 

classes of stock entitled to vote or the 

total value of the shares of all classes of 

stock of the entity if the entity is a 

corporation, 

(B) The capital interest or the profits 

interest of the entity if the entity is a 

partnership, or 

(C) The beneficial interest of the 

entity if the entity is a trust or 

unincorporated enterprise; and 

(2) A person is considered to own an 

interest if, other than in a fiduciary 

capacity, the person has or shares the 

authority— 

(A) To exercise any voting rights or to 

direct some other person to exercise the 

voting rights relating to such interest, or 

(B) To dispose or to direct the 

disposition of such interest. 

(i) The time as of which any 

transaction occurs is the date upon 

which the transaction is entered into. In 

addition, in the case of a transaction 

that is continuing, the transaction shall 

be deemed to occur until it is 

terminated. If any transaction is entered 

into on or after December 21, 1982, or 

a renewal that requires the consent of 

the QPAM occurs on or after December 

21, 1982 and the requirements of this 

exemption are satisfied at the time the 

transaction is entered into or renewed, 

respectively, the requirements will 

continue to be satisfied thereafter with 

respect to the transaction. 

Notwithstanding the foregoing, this 

exemption shall cease to apply to a 

transaction exempt by virtue of Part I or 

Part II at such time as the percentage 

requirement contained in section I(e) is 

exceeded, unless no portion of such 

excess results from an increase in the 

assets transferred for discretionary 

management to a QPAM. For this 

purpose, assets transferred do not 

include the reinvestment of earnings 

attributable to those plan assets already 

under the discretionary management of 

the QPAM. Nothing in this paragraph 

shall be construed as exempting a 

transaction entered into by an 

investment fund which becomes a 

transaction described in section 406 of 

ERISA or section 4975 of the Code while 

the transaction is continuing, unless the 

conditions of this exemption were met 

either at the time the transaction was 

entered into or at the time the 

transaction would have become 

prohibited but for this exemption. 

(j) The term ‘‘goods’’ includes all 

things which are movable or which are 

fixtures used by an investment fund but 

does not include securities, 

commodities, commodities futures, 

money, documents, instruments, 

accounts, chattel paper, contract rights 

and any other property, tangible or 

intangible, which, under the relevant 

facts and circumstances, is held 

primarily for investment. 

(k) For purposes of section VI(a)(1) 

and (2), the term ‘‘equity capital’’ means 

stock (common and preferred), surplus, 

undivided profits, contingency reserves 

and other capital reserves. 

(l) For purposes of section VI(a)(3), 

the term ‘‘net worth’’ means capital, 

paid-in and contributed surplus, 

unassigned surplus, contingency 

reserves, group contingency reserves, 

and special reserves. 

(m) For purposes of section VI(a)(4), 

the term ‘‘shareholders’ or partners’ 

equity’’ means the equity shown in the 

most recent balance sheet prepared 

within the two years immediately 

preceding a transaction undertaken 

pursuant to this exemption, in 

accordance with generally accepted 

accounting principles. 

(n) The terms ‘‘employee benefit plan’’ 

and ‘‘plan’’ refer to an employee benefit 

plan described in section 3(3) of ERISA 

and/or a plan described in section 

4975(e)(1) of the Code. 

(o) For purposes of section VI(a), the 

term ‘‘independent fiduciary’’ means a 

fiduciary managing the assets of a plan 

in an investment fund that is 

independent of and unrelated to the 

employer sponsoring such plan. For 

purposes of this exemption, the 

independent fiduciary will not be 

deemed to be independent of and 

unrelated to the employer sponsoring 

the plan if such fiduciary directly or 

indirectly controls, is controlled by, or 

is under common control with the 

employer sponsoring the plan. 

Notwithstanding the foregoing: (1) For 

the period from December 21, 1982, 

through November 3, 2010, a QPAM 

managing the assets of a plan in an 

investment fund will not fail to satisfy 

the requirements of this section solely 

because such fiduciary is the employer 

sponsoring the plan or directly or 

indirectly controls, is controlled by, or 

is under common control with the 

employer sponsoring the plan; and (2) 

effective after November 3, 2010 a 

QPAM acting as a manager for its own 

plan or the plan of an affiliate (as 

defined in section VI(c)(1)) will be 

deemed to satisfy the requirements of 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
Federal Register / Vol. 75, No. 128 / Tuesday, July 6, 2010 / Notices 38845 

this section if the requirements of Part 

V are met. 

(p) Exemption Audit. An ‘‘exemption 

audit’’ of a plan must consist of the 

following: 

(1) A review of the written policies 

and procedures adopted by the QPAM 

pursuant to section V(b) for consistency 

with each of the objective requirements 

of this exemption (as described in 

section VI(q)). 

(2) A test of a representative sample 

of the plan’s transactions during the 

audit period that is sufficient in size and 

nature to afford the auditor a reasonable 

basis: 

(A) To make specific findings 

regarding whether the QPAM is in 

compliance with (i) the written policies 

and procedures adopted by the QPAM 

pursuant to section VI(q) of the 

exemption and (ii) the objective 

requirements of the exemption; and 

(B) To render an overall opinion 

regarding the level of compliance of the 

INHAM’s program with section 

VI(p)(2)(A)(i) and (ii) of the exemption. 

(3) A determination as to whether the 

QPAM has satisfied the definition of an 

QPAM under the exemption; and 

(4) Issuance of a written report 

describing the steps performed by the 

auditor during the course of its review 

and the auditor’s findings. 

(q) For purposes of section VI(p), the 

written policies and procedures must 

describe the following objective 

requirements of the exemption and the 

steps adopted by the QPAM to assure 

compliance with each of these 

requirements: 

(1) The definition of a QPAM in 

section VI(a). 

(2) The requirement of sections V(a) 

and I(c) regarding the discretionary 

authority or control of the QPAM with 

respect to the plan assets involved in 

the transaction, in negotiating the terms 

of the transaction and with respect to 

the decision on behalf of the investment 

fund to enter into the transaction. 

(3) For a transaction described in Part 

I: 

(A) That the transaction is not entered 

into with any person who is excluded 

from relief under section I(a), section 

I(d), or section I(e), 

(B) that the transaction is not 

described in any of the class exemptions 

listed in section I(b), 

(4) If the transaction is described in 

section III: 

(A) That the amount of space covered 

by the lease does not exceed the 

limitations described in section III(a); 

and 

(B) That no commission or other fee 

is paid by the investment fund as 

described in section III(d). 

Signed at Washington, DC, this 29th day of 

June, 2010. 

Ivan L. Strasfeld 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–16302 Filed 7–2–10; 8:45 am] 

BILLING CODE 4510–29–P 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

[Notice: (10–073)] 

Notice of Information Collection 

AGENCY: National Aeronautics and 

Space Administration (NASA). 

ACTION: Notice of information collection. 

SUMMARY: The National Aeronautics and 

Space Administration, as part of its 

continuing effort to reduce paperwork 

and respondent burden, invites the 

general public and other Federal 

agencies to take this opportunity to 

comment on proposed and/or 

continuing information collections, as 

required by the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13, 44 U.S.C. 

3506(c)(2)(A)). 

DATES: All comments should be 

submitted within 60 calendar days from 

the date of this publication. 

ADDRESSES: All comments should be 

addressed to Brenda J. Maxwell, Office 

of the Chief Information Officer, Mail 

Suite 2S71, National Aeronautics and 

Space Administration, Washington, DC 

20546–0001. 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the information collection 

instrument(s) and instructions should 

be directed to Brenda J. Maxwell, Office 

of the Chief Information Officer, NASA 

Headquarters, 300 E Street, SW., Mail 

Suite 2S71, Washington, DC 20546, 

(202) 358–4616, 

brenda.maxwell@nasa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Abstract 

The NASA Office of Public Affairs 

wants an electronic method to provide 

scheduling and notification of NASA 

events that allow them to track and 

manage these requests for events. 

II. Method of Collection 

Electronic. 

III. Data 

Title: Special Events Guest System 

(SEGS). 

OMB Number: (2700–0073). 

Type of Review: Revision of a 

currently approved collection. 

Affected Public: Individuals or 

households. 

Estimated Number of Respondents: 

11,000. 

Estimated Time per Response: 

Voluntary. 

Estimated Total Annual Burden 

Hours: 1,100. 

Estimated Total Annual Cost: $0. 

IV. Requests for Comments 

Comments are invited on: (1) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of NASA, including 

whether the information collected has 

practical utility; (2) the accuracy of 

NASA’s estimate of the burden 

(including hours and cost) of the 

proposed collection of information; (3) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the collection of information 

on respondents, including automated 

collection techniques or the use of other 

forms of information technology. 

Brenda J. Maxwell, 

NASA PRA Clearance Officer. 

[FR Doc. 2010–16215 Filed 7–2–10; 8:45 am] 

BILLING CODE 7510–13–P 

NUCLEAR REGULATORY 

COMMISSION 

[Docket No. 50–289; NRC–2010–0221] 

Exelon Generation Company, LLC; 

Three Mile Island Nuclear Station, Unit 

No. 1; Exemption 

1.0 Background 

Exelon Generation Company, LLC 

(Exelon, the licensee) is the holder of 

Facility Operating License No. DPR–50 

which authorizes operation of the Three 

Mile Island Nuclear Station, Unit 1 

(TMI–1). The license provides, among 

other things, that the facility is subject 

to all rules, regulations, and orders of 

the U.S. Nuclear Regulatory 

Commission (NRC, the Commission) 

now or hereafter in effect. 

The facility consists of a pressurizedwater reactor (PWR) located in Dauphin 

County, Pennsylvania. 

2.0 Request/Action 

Title 10 of the Code of Federal 

Regulations (10 CFR) part 50, Section 

50.48, requires that nuclear power 

plants that were licensed before January 

1, 1979, must satisfy the requirements of 

10 CFR part 50, appendix R, section 

III.G, ‘‘Fire protection of safe shutdown 

capability.’’ TMI–1 was licensed to 

operate prior to January 1, 1979. As 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1