Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 8117 

1For purposes of this exemption, references to 

specific provisions of Title I of the Act, unless 

otherwise specified, refer also to the corresponding 

provisions of the Code. 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Prohibited Transaction Exemptions 

and Grant of Individual Exemptions 

involving: 2010–01; Deutsche Bank, 

AG (Deutsche Bank or the Applicant), 

D–11082 and D–11109; 2010–02, State 

Street Bank and Trust Company, D– 

11522; and 2010–03, The Bank of New 

York Mellon (BNY Mellon), D–11571 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Grant of Individual Exemptions. 

SUMMARY: This document contains 

exemptions issued by the Department of 

Labor (the Department) from certain of 

the prohibited transaction restrictions of 

the Employee Retirement Income 

Security Act of 1974 (ERISA or the Act) 

and/or the Internal Revenue Code of 

1986 (the Code). 

A notice was published in the Federal 

Register of the pendency before the 

Department of a proposal to grant such 

exemption. The notice set forth a 

summary of facts and representations 

contained in the application for 

exemption and referred interested 

persons to the application for a 

complete statement of the facts and 

representations. The application has 

been available for public inspection at 

the Department in Washington, DC. The 

notice also invited interested persons to 

submit comments on the requested 

exemption to the Department. In 

addition the notice stated that any 

interested person might submit a 

written request that a public hearing be 

held (where appropriate). The applicant 

has represented that it has complied 

with the requirements of the notification 

to interested persons. No requests for a 

hearing were received by the 

Department. Public comments were 

received by the Department as described 

in the granted exemption. 

The notice of proposed exemption 

was issued and the exemption is being 

granted solely by the Department 

because, effective December 31, 1978, 

section 102 of Reorganization Plan No. 

4 of 1978, 5 U.S.C. App. 1 (1996), 

transferred the authority of the Secretary 

of the Treasury to issue exemptions of 

the type proposed to the Secretary of 

Labor. 

Statutory Findings 

In accordance with section 408(a) of 

the Act and/or section 4975(c)(2) of the 

Code and the procedures set forth in 29 

CFR Part 2570, Subpart B (55 FR 32836, 

32847, August 10, 1990) and based upon 

the entire record, the Department makes 

the following findings: 

(a) The exemption is administratively 

feasible; 

(b) The exemption is in the interests 

of the plan and its participants and 

beneficiaries; and (c) The exemption is 

protective of the rights of the 

participants and beneficiaries of the 

plan. 

Deutsche Bank, AG (Deutsche Bank or 

the Applicant) Located in Germany, 

with Affiliates in New York, NY and 

Other Locations 

[Prohibited Transaction Exemption 

2010–01; Exemption Application Nos. 

D–11082 and D–11109.] 

Exemption 

Section I. Covered Transactions 

The restrictions of sections 

406(a)(1)(A) through (D) and 406(b)(1) 

and (b)(2) of the Act (or ERISA), and the 

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

of Code, by reason of section 

4975(c)(1)(A) through (E) of the Code,1

shall not apply, effective July 8, 2008, to 

the following foreign exchange 

transactions involving less developed 

currencies, that are executed by 

Deutsche Bank or a current or future 

affiliate (domestic or foreign) thereof 

that is a bank or broker-dealer, acting as 

a local subcustodian where Deutsche 

Bank or its affiliates, as asset managers, 

have determined to invest the assets of 

a client plan held in a separately 

managed account, an in-house plan 

whose assets are held in a separately 

managed account with Deutsche Bank 

or its affiliate, or a pooled fund, in 

foreign securities, if the conditions set 

forth in Sections II, III and IV below are 

met with respect to: 

(1) A trade-related currency 

conversion, or 

(2) An income item conversion. 

Section II. General Conditions 

(a) At the time the foreign exchange 

transaction is entered into, the terms of 

the transaction are not less favorable to 

the client plan, in-house plan or pooled 

fund than the terms generally available 

in a comparable arm’s length foreign 

exchange transaction between unrelated 

parties. 

(b) The exchange rate used for a 

particular foreign exchange transaction 

does not deviate by more than 3 percent 

(above or below) the interbank bid and 

asked rates for such currency at the time 

of the transaction as displayed on an 

independent, nationally-recognized 

service that reports rates of exchange in 

the foreign currency market for such 

currency. 

(c) The covered transactions are 

limited to those less developed 

currencies in which a transaction is 

executed with Deutsche Bank or its 

affiliate acting as local subcustodian at 

the direction of the global custodian 

because the global custodian either does 

not make a market in such currency, or 

otherwise determines to execute with 

the local subcustodian because of 

market conditions, market restrictions, 

illiquidity of the currency or similar 

exigencies. 

(d) Where a market is served by more 

than one subcustodian, Deutsche Bank 

or its affiliate, as asset manager, has no 

decision making authority or role, or 

otherwise makes no recommendations 

with respect to the global custodian’s 

selection of the subcustodian. 

(e) The foreign exchange transaction 

is executed by Deutsche Bank or its 

affiliate thereof acting as subcustodian 

at the direction of the global custodian 

in the ordinary course of its business as 

global custodian. 

(f) The decision to select Deutsche 

Bank or its affiliate as the subcustodian 

is made by an unrelated global 

custodian for the relevant account. 

(g) The selection of Deutsche Bank or 

its affiliate as subcustodian and any 

foreign exchange transactions executed 

by Deutsche Bank or its affiliate at the 

direction of the global custodian are not 

part of any agreement, arrangement or 

understanding, written or otherwise, 

designed to benefit Deutsche Bank, its 

affiliate or any other party in interest. 

(h) Deutsche Bank or its affiliate, as 

asset manager, appoints an independent 

fiduciary to receive, review and take 

appropriate action, if any, with respect 

to the report required by Section II(l)(3) 

and the notices in Section III(a) and (c) 

on behalf of (1) an in-house plan, or 

(2) plans investing in a restricted 

pooled fund. 

(i) The decision to select Deutsche 

Bank or its affiliate as asset manager is 

part of an investment strategy that is 

adopted by an independent fiduciary of 

a client plan whose assets are held in a 

separately managed account or the 

independent fiduciary of an unrelated 

pooled fund. 

(j) On an annual basis, determined as 

of December 31 of the relevant year, the 

percentage of assets of in-house plans 

and pooled funds in which client plans 

invest for which Deutsche Bank and/or 

its affiliates select the global custodian 

represent less than 20 percent of the 

total assets under custody by any such 

global custodian. 

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8118 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 

(k) Foreign affiliates of Deutsche Bank 

which engage in the covered 

transactions— 

(1) Agree to submit to the jurisdiction 

of the United States; 

(2) Agree to appoint an agent for 

service of process in the United States, 

which may be an affiliate (the Process 

Agent); 

(3) Consent to service of process on 

the Process Agent; 

(4) Agree that they may be sued in the 

United States Courts in connection with 

the covered transactions described in 

this exemption; 

(5) Agree that any judgment on behalf 

of a plan or pooled fund may be 

collected in the United States from 

Deutsche Bank; and 

(6) Agree to comply with, and be 

subject to, all relevant provisions of the 

Act. 

(l) With respect to the covered 

transactions— 

(1) Deutsche Bank or its affiliate as 

asset manager, designates an individual 

(the responsible reviewing individual) 

who is responsible for periodically (but 

no less frequently than on an annual 

basis) reviewing a sample of such 

foreign exchange transactions to 

determine whether the covered 

transactions have been executed in 

accordance with the terms of this 

exemption. Such sample must include a 

sufficient number of transactions to 

ensure that each affected currency is 

tested. 

(2) Deutsche Bank or its affiliate 

provides the responsible reviewing 

individual with the records (which may 

be provided electronically) described in 

Section IV(a)(1)–(7), on an annual basis. 

(3) The responsible reviewing 

individual notifies Deutsche Bank or its 

affiliate as asset manager, the 

independent fiduciary of each client 

plan whose assets are held in a 

separately managed account, the 

independent fiduciary of an in-house 

plan and any restricted pooled fund 

required under Section II(h), the 

independent fiduciary of an unrelated 

pooled fund, and the independent 

fiduciary of each plan investing in an 

unrestricted pooled fund, of its findings 

in a written report within 90 days after 

the period to which the periodic review 

relates. Such report describes the steps 

performed by such individual during 

the course of the review, the level of 

compliance by Deutsche Bank or its 

affiliate with the terms and conditions 

of the exemption, and any specific 

instances of non-compliance by 

Deutsche Bank or its affiliate with the 

terms and conditions of the exemption. 

Section III. Notice Requirements 

(a) At the time Deutsche Bank or its 

affiliate is retained as asset manager, or 

prior to the initial investment of the 

plan’s assets or pooled fund’s assets in 

any foreign investments that may 

require the execution of a foreign 

exchange transaction by Deutsche Bank 

or its affiliate as subcustodian, Deutsche 

Bank or its affiliate provides the 

independent fiduciary of each client 

plan whose assets are held in a 

separately managed account, the 

independent fiduciary of each in-house 

plan and restricted pooled fund as 

required under Section II(h), the 

independent fiduciary of each unrelated 

pooled fund, and the independent 

fiduciary of each plan investing in an 

unrestricted pooled fund, a written 

notice (which may be effected 

electronically) that includes the 

following: 

(1) The reasons why Deutsche Bank or 

its affiliate as asset manager, may 

consider a particular market to be an 

appropriate investment for the plan or 

pooled fund. 

(2) The factors considered by 

Deutsche Bank or its affiliate as asset 

manager, in its selection of a global 

custodian (if applicable) including: (i) 

The identity of the global custodian; and 

(ii) a summary of the global custodian’s 

policies and procedures regarding the 

handling of foreign exchange 

transactions for plans or pooled funds 

with respect to which Deutsche Bank or 

its affiliate is a fiduciary and the factors 

that the global custodian considers in its 

selection of a subcustodian. 

(3) Notice that such foreign exchange 

transaction may be executed by 

Deutsche Bank or its affiliate as 

subcustodian, at the direction of a global 

custodian. 

(4) A list of the markets in which 

plans or pooled funds may invest where 

Deutsche Bank or its affiliate serves as 

a subcustodian, where a foreign 

exchange transaction may be executed 

by Deutsche Bank or its affiliate as 

subcustodian at the direction of a global 

custodian. 

(5) A list of the markets where 

currency transactions are executed by 

Deutsche Bank or an affiliate, as 

subcustodian, to the extent known. 

(6) Notice that Deutsche Bank or its 

affiliate maintains records (described in 

Section IV), and that such records are 

reasonably available at their customary 

location for examination in the U.S., 

during normal business hours, by the 

responsible reviewing individual, the 

independent fiduciary of a client plan 

whose assets are held in a separate 

account, the independent fiduciary of 

an in-house plan or a restricted pooled 

fund, as required under Section II(h), 

the independent fiduciary of an 

unrelated pooled fund, the independent 

fiduciary of each plan investing in an 

unrestricted pooled fund, any 

participant or beneficiary of such plan 

or pooled fund, or any duly authorized 

employee or representative of such 

participant or beneficiary. 

(7) Copies of the notice of proposed 

exemption and the grant of final 

exemption with respect to the subject 

transactions. 

(8) Notice of the definition of the term 

‘‘independent’’ under this exemption as 

used in the term ‘‘independent 

fiduciary,’’ and a request that the 

independent fiduciary of a client plan 

notify Deutsche Bank or its affiliate 

asset manager if, at any time, such 

fiduciary is not independent of 

Deutsche Bank. 

(b) If the independent fiduciary fails 

to object in writing to Deutsche Bank or 

its affiliate within 30 days following 

receipt of the information described in 

Section III(a) by such fiduciary, then 

such fiduciary’s authorization of the 

arrangement contemplated under this 

exemption shall be presumed. 

(c) Deutsche Bank or its affiliate as 

asset manager shall provide notification 

of any changes to the information 

required by Section III, including, but 

not limited to, the situation where 

Deutsche Bank or its affiliate as asset 

manager, replaces the global custodian 

with another independent entity or 

where there are changes in the markets 

in which currency transactions are 

executed by the subcustodian. If the 

independent fiduciary fails to object in 

writing to Deutsche Bank or its affiliate 

as asset manager within 30 days 

following disclosure of such changes, 

such fiduciary’s approval of these 

changes shall be presumed. 

(d) With respect to pooled funds, in 

the event the independent fiduciary of 

a client plan submits a notice in writing 

to the person engaging in or proposing 

to engage in the covered transaction 

objecting to the implementation of, a 

material change in or continuation of 

the arrangement, the plan on whose 

behalf the objection was tendered is 

given the opportunity to terminate its 

investment in the pooled fund without 

penalty to the plan, within such time as 

may be necessary to effect the 

withdrawal in an orderly manner that is 

equitable to all withdrawing plans and 

to the non-withdrawing plans. In the 

case of a plan that elects to so withdraw, 

the withdrawal shall be effected prior to 

the implementation of a material change 

in the arrangement, but an existing 

arrangement need not be discontinued 

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Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 8119 

by reason of a plan electing to 

withdraw. 

Section IV. Recordkeeping 

Requirements 

(a) Deutsche Bank or its affiliate 

maintains, or causes to be maintained, 

for a period of six years from the date 

of the covered transactions, the 

following records, as well as any records 

necessary to enable the persons 

described in paragraph (c) of this 

Section IV, to determine whether the 

conditions of this exemption have been 

met: 

(1) The account name, 

(2) The foreign exchange transaction 

execution date, 

(3) The exchange rate, 

(4) The high and low on Reuters or 

similar independent service on the date 

of the transaction, 

(5) The identity of the foreign 

currency sold or purchased, 

(6) The amount of foreign currency 

sold or purchased, 

(7) The amount of U.S. dollars 

exchanged, where the exchange is 

between foreign currencies and U.S. 

dollars or the amount of foreign 

currency exchanged, where the 

exchange is between two foreign 

currencies, and 

(8) The annual report described in 

Section II(l). 

(b) The following are exceptions to 

paragraph (a) of this Section IV: 

(1) If the records necessary to enable 

the persons described in paragraph (c) 

to determine whether the conditions of 

the exemption have been met are lost or 

destroyed, due to circumstances beyond 

the control of Deutsche Bank, then no 

prohibited transaction will be 

considered to have occurred solely on 

the basis of the unavailability of those 

records; and 

(2) No party in interest, other than 

Deutsche Bank, shall be subject to the 

civil penalty that may be assessed under 

section 502(i) of the Act or to the taxes 

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

the Code if the records are not 

maintained or are not available for 

examination as required by paragraph 

(c) below. 

(c)(1) Except as provided in paragraph 

(c)(2) of this Section IV and 

notwithstanding the provisions of 

subsections (a)(2) and (b) of section 504 

of the Act, the records referred to above 

in paragraph (a) of this Section IV are 

unconditionally available for 

examination during normal business 

hours at their customary location to the 

following persons or an authorized 

representative thereof: 

(i) Any duly authorized employee or 

representative of the Department or the 

Internal Revenue Service; 

(ii) The independent fiduciary of a 

client plan whose assets are held in a 

separately managed account, the 

independent fiduciary of an in-house 

plan or restricted pooled fund required 

under Section II(h), the independent 

fiduciary of each unrelated pooled fund, 

or the independent fiduciary of each 

plan investing in an unrestricted pooled 

fund, or 

(iii) Any participant or beneficiary of 

such plans or pooled funds (described 

in paragraph (ii) above) or any duly 

authorized employee or representative 

of such participant or beneficiary. 

(2) None of the persons described 

above in paragraphs (ii) and (iii) of this 

paragraph (c)(1) of this Section IV shall 

be authorized to examine trade secrets 

of Deutsche Bank, or any commercial or 

financial information, which is 

privileged or confidential. 

(3) Should Deutsche Bank refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure, Deutsche Bank shall, by the 

close of the thirtieth (30th) day 

following the request, provide written 

notice advising that the person of the 

reason for the refusal and that the 

Department may request such 

information. 

Section V. Definitions 

For purposes of this exemption, 

(a) The term ‘‘Deutsche Bank’’ means 

Deutsche Bank AG. 

(b) An ‘‘affiliate’’ of Deutsche Bank 

means any domestic or foreign bank or 

broker-dealer that is, directly or 

indirectly, through one or more 

intermediaries, controlling, controlled 

by, or under common control with 

Deutsche Bank; 

(c) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

(d) The term ‘‘bank’’ means a bank as 

defined in section 202(a)(2) of the 

Investment Advisers Act of 1940 (the 

Investment Advisers Act), or an 

institution that has substantially similar 

powers to a bank defined in section 

202(a) of the Investment Advisers Act, 

and is— 

(1) Supervised by the United States or a 

State; 

(2) Supervised and examined by the 

German banking authorities, or monitored 

and controlled pursuant to the statutory and 

regulatory standards of German law; or 

(3) Subject to regulation and oversight by 

governmental entities that are substantially 

similar to the regulatory oversight of banks 

present in the United States. 

(e) The term ‘‘broker-dealer’’ means a 

broker-dealer registered under the 

Securities Exchange Act of 1934, or is 

engaged in the business of effecting 

transactions in securities for the account 

of others, and is— 

(1) Registered and regulated under the 

relevant securities laws of the United 

States; 

(2) Registered and regulated under the 

relevant securities laws of Germany; or 

(3) Registered and regulated under the 

relevant securities laws of a country 

with securities laws that are 

substantially similar to the securities 

laws governing broker-dealers in the 

United States. 

(f) The term ‘‘global custodian’’ means 

a bank or broker-dealer that is unrelated 

to Deutsche Bank or its affiliate, which 

is selected by (1) The independent 

fiduciary of a client plan in the case of 

a separately managed account; (2) the 

sponsor (other than Deutsche Bank or its 

affiliate) of an unrelated pooled fund; 

(3) Deutsche Bank or its affiliate as asset 

manager, in the case of an in-house 

plan; or (4) Deutsche Bank or its affiliate 

as asset manager in the case of a pooled 

fund established by Deutsche Bank or 

an affiliate, for the purpose of holding 

and safeguarding the assets of the client 

plan, in-house plan, or pooled fund, 

physically or through securities 

depositories, foreign clearing agencies 

or other entities which act as securities 

depositories, through its branches or 

through its subcustodian network. For 

purposes of Section V(f) only, the global 

custodian will be unrelated to Deutsche 

Bank or its affiliate if the global 

custodian is not controlling, controlled 

by under common control with 

Deutsche Bank, directly or indirectly 

through one or more intermediaries. 

(g) The term ‘‘subcustodian’’ means a 

bank or broker-dealer, selected by a 

global custodian, to hold and safekeep 

designated assets of the plan or pooled 

fund at securities depositories, foreign 

clearing agencies or other entities which 

act as securities depositories, and at the 

direction of the global custodian to 

execute foreign exchange transactions 

and income item conversions. A 

subcustodian has no contractual 

relationship with the global custodian’s 

clients for custodial or subcustodial 

services with respect to the assets 

involved in the covered transactions, 

but the subcustodian’s contractual 

relationship with respect to subcustody 

is only with the global custodian. 

(h) The term ‘‘responsible reviewing 

individual’’ means a senior official 

appointed by Deutsche Bank or its 

affiliate acting as asset manager, who 

has at least 10 years experience with the 

fiduciary responsibility provisions of 

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8120 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 

the Act, and appropriate compliance 

training. Such person is appointed by 

Deutsche Bank or its affiliate to review 

a sample of the covered transactions 

periodically, but no less frequently than 

on an annual basis, in order to ensure 

compliance with the terms of the 

exemption on behalf of a client plan 

whose assets are held in a separately 

managed account, an in-house plan, or 

a pooled fund. 

(i) The term ‘‘in-house plan’’ means an 

employee benefit plan as described in 

section 3(3) of the Act, or a plan as 

described in section 4975(e)(1) of the 

Code, that is sponsored by Deutsche 

Bank or any person that directly or 

indirectly, through one or more 

intermediaries, controls or is controlled 

by, or is under common control with, 

Deutsche Bank. 

(j) The term ‘‘client plan’’ means an 

employee benefit plan, as described in 

section 3(3) of the Act, or a plan, as 

described in section 4975(e)(1) of the 

Code, other than an in-house plan, with 

respect to which Deutsche Bank or its 

affiliate acts as a fiduciary with 

discretionary authority over the 

management of the assets involved in 

covered transactions (whether or not 

any such authority has been delegated 

to an unaffiliated sub-adviser). 

(k) The term ‘‘pooled fund’’ means a 

collective investment fund or a pooled 

arrangement: (1) That is deemed to hold 

‘‘plan assets’’ (within the meaning of 

section 3(42) of the Act and the 

regulations thereunder), (2) that holds 

assets of at least two or more unrelated 

employee benefit plans within the 

meaning of section 3(3) of the Act or 

plans within the meaning of section 

4975(e)(1) of the Code, and (3) for which 

Deutsche Bank or its affiliate acts as 

fiduciary with discretionary authority 

over the management of its assets 

(whether or not any such authority has 

been delegated to an unaffiliated subadviser). 

(l) The term ‘‘restricted pooled fund’’ 

refers to a pooled fund (1) that is 

sponsored and managed by Deutsche 

Bank or an affiliate, (2) in which the 

total invested assets of an in-house plan 

(or in-house plans), if aggregated 

(whether invested directly or indirectly 

through another pooled fund), represent 

20% or more (determined as of the last 

day of each month) of the total invested 

assets of such pooled fund, and (3) for 

which Deutsche Bank or an affiliate will 

appoint an independent fiduciary, as 

described in Section V(o) below, to 

represent the interests of all plans 

investing in such fund. 

(m) The term ‘‘unrestricted pooled 

fund’’ refers to a pooled fund that (1) is 

sponsored and managed by Deutsche 

Bank or an affiliate and (2) in which the 

total invested assets of an in-house plan 

(or in-house plans), if aggregated 

(whether invested directly or indirectly 

through another pooled fund), represent 

less than 20% (determined as of the last 

day of each month) of the total invested 

assets of such pooled fund. 

(n) The term ‘‘unrelated pooled fund’’ 

refers to a pooled fund that is not 

sponsored by Deutsche Bank or an 

affiliate, but is managed by either of 

these entities. 

(o) The term ‘‘independent’’ as used in 

the term ‘‘independent fiduciary’’ 

means— 

(1) In the case of a client plan whose 

assets are held in a separately managed 

account or an unrelated pooled fund, a 

plan fiduciary or the named fiduciary of 

a pooled fund, or a fiduciary appointed 

by the named fiduciary that is unrelated 

to, and independent of, Deutsche Bank 

and it affiliates. For purposes of this 

exemption, a plan fiduciary will be 

deemed to be unrelated to, and 

independent of, Deutsche Bank if 

neither such fiduciary, nor any 

individual responsible for the decision 

to authorize or terminate authorization 

for the transactions described in Section 

I, is an officer, director, or highly 

compensated employee (within the 

meaning of section 4975(e)(2)(H) of the 

Code) of Deutsche Bank and such 

fiduciary represents that it will advise 

Deutsche Bank or its affiliate if those 

facts change, or 

(2) In the case of the fiduciary 

required under Section II(h), in 

connection with an in-house plan or in 

connection with a restricted pooled 

fund, an individual or company is 

qualified and independent of Deutsche 

Bank and its affiliates if such individual 

or company: (i) Has at least 10 years 

experience in the financial services 

business and significant experience in 

foreign currency trading and pricing, 

and (ii) certifies that the gross income 

received from Deutsche Bank and its 

affiliates for the current year does not 

exceed 5% of such fiduciary’s gross 

income from all services for the prior 

fiscal year. The independent fiduciary 

shall represent to Deutsche Bank that 

such fiduciary is aware of its ERISA 

duties and responsibilities in acting as 

a fiduciary with respect to an in-house 

plan or a restricted pooled fund and the 

covered transactions. 

(3) In the case of an unrestricted 

pooled fund, the persons described in 

Section V(o)(1) or (2). 

(4) Notwithstanding anything to the 

contrary in this Section V(o), a plan 

fiduciary is not independent if— 

(i) Such fiduciary directly or 

indirectly controls, is controlled by, or 

is under common control with Deutsche 

Bank, other than described herein; 

(ii) Such fiduciary directly or 

indirectly receives any compensation or 

other consideration from Deutsche Bank 

for his own personal account in 

connection with any transaction 

described in this exemption in excess of 

the 5% gross income limitation set forth 

in Section V(o)(2)above; 

(iii) Any officer, director or highly 

compensated employee (within the 

meaning of section 4975(e)(2)(H) of the 

Code) of Deutsche Bank or an affiliate 

responsible for the transactions 

described in Section I is an officer, 

director or highly compensated 

employee (within the meaning of 

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

client plan sponsor, the sponsor of an 

unrelated pooled fund, or of the 

fiduciary responsible for the decision to 

authorize or terminate authorization for 

transactions described in Section I. 

However, if such individual is a director 

of the client plan sponsor, the sponsor 

of an unrelated pooled fund, or of the 

responsible fiduciary, and if he or she 

abstains from participation in (A) the 

choice of Deutsche Bank or an affiliate 

as the investment manager/adviser for 

the client plan or unrelated pooled fund 

and (B) the decision to authorize or 

terminate authorization for transactions 

described in Section I, then Section 

V(o)(4)(iii) shall not apply. 

(p) The term ‘‘officer’’ means a 

president, any vice president in charge 

of a principal business unit, division or 

function (such as sales, administration 

or finance), or any other officer who 

performs a policy-making function for 

the entity. 

(q) The term ‘‘foreign exchange’’ 

transaction means the exchange of the 

currency of one nation for the currency 

of another nation. 

(r) The term ‘‘less developed 

currencies’’ means those currencies in 

which the global custodian does not 

make a market at the time of the 

transaction and in which the global 

custodian determines to purchase from 

or sell to the plan’s or pooled fund’s 

local subcustodian on behalf of a plan 

or pooled fund because the currency is 

difficult to trade, undeveloped or the 

subject of local government restrictions, 

or because of the volatility or lack of 

liquidity in the market at the time of the 

transaction. The term ‘‘less developed 

currencies’’ does not include the 

following currencies: The Euro; the 

British pound; the Swiss franc, the 

Canadian dollar; or the Japanese yen. 

(s) The term ‘‘trade-related currency 

conversion’’ means the conversion of 

trade-related items (i.e., amounts 

necessary for purchases or proceeds 

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Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 8121 

2The clarifications discussed in this section are 

also meant to include modifications to the 

Summary of Facts and Representations of the 

proposal. 

from sales) into foreign currency or into 

U.S. dollars in order to permit purchase 

transactions to settle, and to permit 

proceeds of sales to be deployed in 

other investments or to be used to make 

distributions. 

(t) The term ‘‘income item 

conversions’’ means the conversion of 

income items (e.g., interest, dividends, 

tax reclaims or other distributions) 

denominated in a foreign currency into 

U.S. dollars or another foreign currency. 

Effective Date: This exemption is 

effective as of July 8, 2008. 

Written Comments 

The proposed exemption gave 

interested persons an opportunity to 

comment and to request a hearing. In 

this regard, all interested persons were 

invited to submit written comments 

and/or requests for a hearing on the 

pending exemption on or before August 

22, 2008. During the comment period, 

the Department received one written 

comment letter and no requests for a 

public hearing. The comment was 

submitted by the Applicant, and it is 

intended to clarify the operative 

language and the Summary of Facts and 

Representations of the proposed 

exemption in a number of areas or to 

confirm their validity. A discussion of 

the comments and the responses made 

by the Department is presented below. 

A. Clarifications to the Operative 

Language 2

1. Large Pooled Fund and Small 

Pooled Fund/Word Substitutions. 

Section II(h) of the proposed exemption 

states that Deutsche Bank or its affiliate 

will appoint an independent fiduciary 

to represent the interests of (a) an inhouse plan or (b) plans investing in a 

‘‘large pooled fund.’’ The Applicant 

explains that the term ‘‘large pooled 

fund’’ may be misleading since what is 

relevant is not the size of the fund but 

the level of in-house plan investment in 

such fund. Therefore, the Applicant 

requests that the Department change the 

term to ‘‘restricted pooled fund.’’ 

Similarly, the Applicant requests that 

the Department revise the term ‘‘small 

pooled fund’’ to ‘‘unrestricted pooled 

fund.’’ 

In response to this comment, the 

Department has substituted the terms 

‘‘restricted pooled fund’’ and 

‘‘unrestricted pooled fund’’ for the terms 

‘‘large pooled fund’’ and ‘‘small pooled 

fund’’ in the final exemption. 

2. Investment Decisions by 

Independent Fiduciary or Applicant. 

Section II(i) of the proposed exemption 

requires that the decision by an 

independent fiduciary of a client plan, 

an in-house plan, a large pooled fund 

(redesignated herein as a ‘‘restricted 

pooled fund’’) and unrelated pooled 

funds to invest in a given market and to 

select Deutsche Bank or an affiliate as 

asset manager is part of an investment 

strategy that is adopted by such 

fiduciary. The Applicant requests that 

the Department clarify that this 

condition requires nothing more than 

the authorization specified in Section 

III(b) of the proposal. The Applicant 

points out that in all instances, the 

decision to invest in a given market is 

made by Deutsche Bank or an affiliate, 

as asset manager, and not by the 

independent fiduciary. While a plan’s 

independent fiduciary decides on a 

general investment strategy (e.g., 

emerging markets debt), the Applicant 

points out that such fiduciary may or 

may not know the countries to which 

plan assets may be committed. The 

Applicant also explains that the 

decision to commit plan assets to a 

particular country and in what amounts 

are decisions made by the discretionary 

investment manager, which is Deutsche 

Bank or an affiliate. Further, in the 

context of an in-house plan or a 

restricted pooled fund, the Applicant 

states that the decision to appoint 

Deutsche Bank or an affiliate, as asset 

manager, is made by Deutsche Bank or 

an affiliate, and not by an independent 

fiduciary. 

In response to this comment, the 

Department has revised Section II(i) of 

the final exemption to clarify that the 

decision to select Deutsche Bank or an 

affiliate as asset manager is made by the 

independent fiduciary of a client plan 

whose assets are held in a separately 

managed account or the independent 

fiduciary of an unrelated pooled fund. 

3. Parties to Receive Notice from the 

Responsible Reviewing Individual/Word 

Substitutions. Section II(l)(3) of the 

proposal describes the parties that are to 

be notified by the responsible reviewing 

individual as to its determination 

whether the covered transactions have 

been executed in accordance with the 

terms and conditions of the exemption. 

Among the persons who are designated 

in the proposed exemption as recipients 

of periodic written reports from the 

responsible reviewing individual are 

‘‘Deutsche Bank or its affiliate, the 

independent fiduciary of a client plan 

whose assets are held in a separately 

managed account, the independent 

fiduciary of an in-house plan, the 

independent fiduciary of a large pooled 

fund, the independent fiduciary of an 

unrelated pooled fund, or the receiving 

fiduciary of a small pooled fund.’’ The 

Applicant requests that Section II(l)(3) 

of the proposed exemption be modified 

to reflect the substitution of the term 

‘‘large’’ with ‘‘restricted’’ and the term 

‘‘small’’ with ‘‘unrestricted,’’ as 

appropriate, in the context of the term 

‘‘pooled fund.’’ The Applicant also asks 

that the term ‘‘receiving fiduciary’’ for an 

unrestricted pooled fund, as defined in 

Section V(q) of the proposal and as used 

in Section II(l)(3) be stricken because 

the responsible reviewing individual 

will notify the independent fiduciary of 

each plan investing in an unrestricted 

pooled fund directly. 

In response to this comment, the 

Department has made the requested 

modifications to Section II(l)(3), and 

deleted Section V(q) of the proposal. 

The Department has also made 

corresponding revisions to Section III(a) 

and Section IV(c)(1)(ii) where these 

terms appear, as well. 

4. Written Disclosures Provided to the 

Independent Fiduciary. 

Section II(l)(3) of the proposal 

requires that the responsible reviewing 

individual notify Deutsche Bank, the 

independent fiduciary of each client 

plan whose assets are held in a 

separately managed account, the 

independent fiduciary of an in-house 

plan and any restricted pooled fund 

required under II(h), the independent 

fiduciary of unrelated pooled fund, and 

the independent fiduciary of each plan 

investing in an unrestricted pooled 

fund, of its findings in a written report 

within 90 days following the period to 

which the periodic review relates. Such 

report is to be completed annually. The 

Applicant states in the preamble to the 

proposed exemption (in the last 

paragraph of Representation 30) that 

within 90 days of a request by the 

independent fiduciary, Deutsche Bank 

must provide written compliance 

reports. The Applicant notes that the 

operative language does not contain this 

condition. The Applicant believes that 

such reports, would be duplicative of 

those required by Section II(l) and be 

overly burdensome. In response to this 

comment, the Department concurs with 

the Applicant, and notes that the 

exemption does not require additional 

reports other than those described in 

II(l)(3). 

In addition, Section III(a)(4) of the 

proposed exemption states that 

Deutsche Bank or an affiliate is required 

to provide written disclosure to an 

independent fiduciary of the list of 

markets in which plans or pooled funds 

invest where Deutsche Bank or its 

affiliate serves as a subcustodian. 

Representation 30(e) of the Summary of 

Facts and Representations adds that 

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8122 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 

disclosure must be provided as to 

whether a particular market is served by 

more than one subcustodian. The 

Applicant requests confirmation that 

this additional disclosure is not 

required because it will not have access 

to this information. 

The Department concurs with the 

Applicant’s comment and clarifies that 

disclosure of whether a particular 

market is served by more than one 

subcustodian is not required. 

5. Negative Consent by the 

Independent Fiduciary. As stated briefly 

above, Section III(b) of the proposed 

exemption states that if the independent 

fiduciary fails to object in writing to 

Deutsche Bank or its affiliate within 30 

days following the receipt of 

information concerning the investment 

of a plan or a pooled fund assets in 

foreign investments that may require the 

execution of foreign exchange 

transactions by Deutsche Bank or its 

affiliates as subcustodians, then such 

fiduciary’s authorization of the 

contemplated arrangement will be 

presumed. The Applicant suggests that 

at the end of Section III(b), in order to 

clarify what happens if an independent 

fiduciary objects, the following language 

should be inserted: 

The independent fiduciary required under 

Section II(h) shall not have any authority 

under this section. With respect to pooled 

funds, in the event the independent fiduciary 

submits a notice in writing to the person 

engaging in or proposing to engage in the 

covered transaction objecting to the 

implementation of, material change in or 

continuation of the arrangement, the plan on 

whose behalf the objection was tendered is 

given the opportunity to terminate its 

investment in the pooled fund, without 

penalty to the plan, within such time as may 

be necessary to effect the withdrawal in an 

orderly manner that is equitable to all 

withdrawing plans and to the nonwithdrawing plans. In the case of a plan that 

elects to so withdraw, the withdrawal shall 

be affected prior to the implementation of a 

material change in the arrangement, but an 

existing arrangement need not be 

discontinued by reason of a plan electing to 

withdraw. 

In response to this comment, the 

Department has determined to make 

some of the changes requested by the 

Applicant by adding a new condition 

designated as Section III(d). However, 

the Department has determined not to 

adopt the exclusionary language 

appearing in the first sentence of the 

above-referenced text, as suggested by 

the Applicant, which pertains to the 

independent fiduciary required under 

Section II(h) because of the independent 

fiduciary’s critical role in protecting an 

in-house plan or a restricted pooled 

fund by taking all actions that are 

necessary and proper on behalf of such 

plan or pooled fund. Section III(d) of the 

final exemption reads as follows: 

With respect to pooled funds, in the event 

the independent fiduciary of a client plan 

submits a notice in writing to the person 

engaging in or proposing to engage in the 

covered transaction objecting to the 

implementation of, a material change in or 

continuation of the arrangement, the plan on 

whose behalf the objection was tendered is 

given the opportunity to terminate its 

investment in the pooled fund without 

penalty to the plan, within such time as may 

be necessary to effect the withdrawal in an 

orderly manner that is equitable to all 

withdrawing plans and to the nonwithdrawing plans. In the case of a plan that 

elects to so withdraw, the withdrawal shall 

be effected prior to the implementation of a 

material change in the arrangement, but an 

existing arrangement need not be 

discontinued by reason of a plan electing to 

withdraw. 

6. Access to Records by Participants 

and Beneficiaries. Section IV(c)(1)(iii) of 

the proposed exemption permits any 

participant or beneficiary of a plan or a 

pooled fund, the assets of which are 

involved in foreign exchange 

transactions pursuant to the exemption 

to have access to the records that the 

exemption, requires Deutsche Bank to 

maintain. The Applicant has requested 

that the Department delete Section 

IV(c)(1)(iii) and the reference to such 

subsection in Section IV(c)(2) because 

the requirement is burdensome. The 

Department continues to believe that the 

participants and beneficiaries in plans 

or pooled funds should have access to 

the required records, and accordingly, 

has decided not to make the requested 

changes. 

7. Affiliate Definition. Section V(b) of 

the proposed exemption defines the 

term ‘‘affiliate’’ of Deutsche Bank as ‘‘any 

domestic or foreign bank or brokerdealer directly or indirectly through one 

or more intermediaries, controlling, 

controlled by, or under common control 

with Deutsche Bank.’’ The Applicant has 

requested that this definition be 

expanded to include: ‘‘any domestic or 

foreign investment adviser that is, 

directly or indirectly, through one or 

more intermediaries, controlling, 

controlled by, or under common control 

with Deutsche Bank.’’ According to the 

Applicant, this addition will ensure that 

the exemption is available where an 

affiliate of Deutsche Bank, which is a 

bank, broker-dealer or investment 

adviser, acts as asset manager, rather 

than Deutsche Bank, itself. 

The Department has determined not 

to make the Applicant’s requested 

change because it greatly expands the 

scope of the relief proposed without an 

opportunity for notice and comment by 

interested persons. 

8. Global Custodian Definition. 

Section V(f) of the proposed exemption 

defines the term ‘‘global custodian’’ as 

follows: 

The term ‘‘global custodian’’ means a bank 

or broker-dealer that is unrelated to Deutsche 

Bank or its affiliate, which is selected by (1) 

the named fiduciary of a client plan; (2) the 

sponsor (other than Deutsche Bank or its 

affiliate) of an unrelated pooled fund; (3) 

Deutsche Bank or its affiliate in the case of 

an in-house plan; or (4) Deutsche Bank or its 

affiliate in the case of a pooled fund 

established by Deutsche Bank or an affiliate, 

for the purpose of holding and safeguarding 

all assets of the client plan, in-house plan, or 

pooled fund, physically or through a 

depository, through its branches or through 

its subcustodian network. 

For clarity, the Applicant requests 

that Section V(f)(1) of the definition be 

modified by substituting the term 

‘‘named’’ with the term ‘‘independent’’ 

because Deutsche Bank will not know 

whether the plan fiduciary selecting the 

global custodian is actually a named 

fiduciary because such plan fiduciary 

may be the trustee or some other 

fiduciary to whom a named fiduciary 

has delegated appropriate authority. In 

response to this comment, the 

Department has made the requested 

change. 

In addition, the Applicant requests 

that, in the last clause of Section V(f), 

the word ‘‘all’’ be deleted because some 

plans or funds may have more than one 

global custodian. Further, the Applicant 

suggests that the last clause of Section 

V(f) the phrase ‘‘a depository’’ be 

substituted with the phrase ‘‘securities 

depositories, foreign clearing agencies 

or other entities which act as securities 

depositories.’’ According to the 

Applicant, this will ensure consistency 

with Section V(g) of the exemption 

which utilizes the latter language. The 

Department concurs with the 

Applicant’s suggested revisions and has 

made the changes in the final 

exemption. 

In addition, at the Applicant’s 

recommendation, the Department has 

modified Section V(f) of the final 

exemption by clarifying that the term 

‘‘unrelated,’’ as used therein, means that 

‘‘the global custodian will be unrelated 

to Deutsche Bank or its affiliates if the 

global custodian is not controlling, 

controlled by or under common control 

with Deutsche Bank, directly or 

indirectly through one or more 

intermediaries.’’ Thus, the revised 

definition of the term ‘‘global custodian’’ 

is set forth as follows: 

The term ‘‘global custodian’’ means a bank 

or broker-dealer that is unrelated to Deutsche 

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3For consistency in the formatting of the final 

exemption, the Department has also replaced the 

romanettes with numbers for the investment 

vehicles defined in Comments 11–13 above. 

Bank or its affiliate, which is selected by (1) 

the independent fiduciary of a client plan in 

the case of a separately managed account; (2) 

the sponsor (other than Deutsche Bank or its 

affiliate) of an unrelated pooled fund; (3) 

Deutsche Bank or its affiliate as asset 

manager in the case of an in-house plan; or 

(4) Deutsche Bank or its affiliate as asset 

manager in the case of a pooled fund 

established by Deutsche Bank or an affiliate, 

for the purpose of holding and safeguarding 

the assets of the client plan, in-house plan, 

or pooled fund, physically or through 

securities depositories, foreign clearing 

agencies or other entities which act as 

securities depositories, through its branches 

or through its subcustodian network. For 

purposes of Section V(f) only, the global 

custodian will be unrelated to Deutsche Bank 

or its affiliates if the global custodian is not 

controlling, controlled by or under common 

control with Deutsche Bank, directly or 

indirectly through one or more 

intermediaries. 

9. In-House Plan Definition. Section 

V(i) of the proposed exemption defines 

the term ‘‘in-house plan’’ as a ‘‘plan 

sponsored by Deutsche Bank or any 

person that directly or indirectly, 

through one or more intermediaries, 

controls or is controlled by, or is under 

common control with, Deutsche Bank.’’ 

The Applicant has requested that the 

Department adopt the following 

language as the new definition of ‘‘inhouse plan’’ in order to maintain 

consistency with the Class Exemption 

for Plan Asset Transactions Determined 

by In-House Asset Managers (PTE 96– 

23) (61 FR 15975, 15982 (April 10, 

1996): 

The term ‘‘in-house plan’’ means a plan 

sponsored by Deutsche Bank or any affiliate. 

For purposes of the foregoing only, ‘‘affiliate’’ 

means a member of either (1) a controlled 

group of corporations (as defined in section 

414(b) of the Code) of which Deutsche Bank 

is a member, or (2) a group of trades or 

businesses under common control (as 

defined in section 414(c) of the Code) of 

which Deutsche Bank is a member; provided 

that ‘‘50 percent’’ shall be substituted for ‘‘80 

percent’’ wherever ‘‘80 percent’’ appears in 

section 414(b) or 414(c) or the rules 

thereunder.’’ 

The Department notes that the 

Applicant’s suggested definition of ‘‘inhouse plan,’’ which is taken from PTE 

96–23 would limit certain plans from 

being considered ‘‘in-house plans’’ as 

these plans would not come within the 

proposed definition. Therefore, the 

Department has not adopted the 

requested change. Instead, the 

Department has modified the definition 

of ‘‘in-house plan’’ as follows: 

The term ‘‘in-house plan’’ means an 

employee benefit plan as described in section 

3(3) of the Act, or a plan as described in 

section 4975(e)(1) of the Code, that is 

sponsored by Deutsche Bank or any person 

that directly or indirectly, through one or 

more intermediaries, controls or is controlled 

by, or is under common control with, 

Deutsche Bank. 

10. Client Plan Definition. Section V(j) 

of the proposed exemption defines the 

term ‘‘client plan’’ as ‘‘an employee 

benefit plan, other than a plan 

sponsored by Deutsche Bank, as 

described in section 3(3) of the Act or 

section 4975(e)(1) of the Code with 

respect to which Deutsche Bank or its 

affiliate acts as a fiduciary having full 

investment discretion.’’ The Applicant 

has requested that the definition of 

‘‘client plan’’ be modified as follows: 

The term ‘‘client plan’’ means an employee 

benefit plan, as described in section 3(3) of 

the Act, or a plan, as described in section 

4975(e)(1) of the Code, other than an inhouse plan, with respect to which Deutsche 

Bank or its affiliate acts as a fiduciary with 

discretionary authority over the management 

of the assets involved in covered transactions 

(whether or not any such authority has been 

delegated to an unaffiliated sub-adviser). 

The Applicant states that the revised 

definition clarifies Deutsche Bank’s role 

with respect to plan assets because the 

meaning of the phrase ‘‘full investment 

discretion,’’ as used in the client plan 

definition, is unclear. In addition, the 

Applicant states that the modification 

ensures that separately managed 

accounts that are sub-advised by a third 

party are included within the scope of 

exemptive relief. 

In response to this comment, the 

Department has made the Applicant’s 

requested revision in the final 

exemption. 

11. Pooled Fund Definition. Section 

V(k) of the proposed exemption defines 

the term ‘‘pooled fund’’ as follows: 

The term ‘‘pooled fund’’ means a collective 

investment fund or a pooled arrangement 

established for investment on behalf of two 

or more unrelated employee benefit plans by 

Deutsche Bank or an affiliate or by a fund 

sponsor other than Deutsche Bank or an 

affiliate for which Deutsche Bank or its 

affiliate acts as fiduciary with full investment 

discretion. The assets of a pooled fund may 

include the assets of (i) client plans, (ii) inhouse plans of Deutsche Bank or an affiliate, 

(iii) other pooled funds in which Deutsche 

Bank or an affiliate is not the fund sponsor, 

and (iv) other pooled funds in which 

Deutsche Bank or an affiliate is the fund 

sponsor. 

The Applicant has suggested that this 

definition be deleted in its entirety and 

replaced with the following definition: 

The term ‘‘pooled fund’’ means a collective 

investment fund or a pooled arrangement— 

(1) that is deemed to hold ‘‘plan assets’’ 

(within the meaning of section 3(42) of Act 

and the regulations thereunder), (2) that 

holds assets of at least two or more unrelated 

employee benefit plans within the meaning 

of section 3(3) of Act or plans within the 

meaning of section 4975(e)(1) of the Code, 

and (3) for which Deutsche Bank or its 

affiliate acts as fiduciary with discretionary 

authority over the management of its assets 

(whether or not any such authority has been 

delegated to an unaffiliated sub-adviser). 

The Applicant believes that the 

requested change provides clarification 

that the exemption applies to pooled 

funds only when they are deemed to 

hold plan assets. Moreover, the 

Applicant states that the revised 

definition acknowledges that non-plan 

investors may be invested in pooled 

funds that hold plan assets. In response 

to this comment, the Department has 

made the requested change.3

12. Large Pooled Fund Redefined/ 

Word Substitution. Section V(l) of the 

proposed exemption defines the term 

‘‘large pooled fund’’ as follows: 

The term ‘‘large pooled fund’’ refers to a 

pooled fund that is sponsored and managed 

by Deutsche Bank or an affiliate. A large 

pooled fund may include the assets of (i) 

client plans, (ii) in-house plans of Deutsche 

Bank or an affiliate, (iii) other pooled funds 

in which Deutsche Bank or an affiliate is not 

the fund sponsor, and (iv) other pooled funds 

in which Deutsche Bank or an affiliate is the 

fund sponsor. In a large pooled fund, the 

total invested assets of an in-house plan (or 

in-house plans), if aggregated (whether 

invested directly or indirectly through 

another pooled fund), represent more than 

20% of the total invested assets of such fund. 

Also, in a large pooled fund, Deutsche Bank 

will appoint an independent fiduciary, as 

described in Section V(o) below, to represent 

the interests of all plans investing in such 

fund. 

The Applicant has requested that the 

term ‘‘large pooled fund’’ be changed to 

‘‘restricted pooled fund’’ as it appears 

throughout the proposed exemption and 

as defined in Section V(l). In the 

Applicant’s view, the modified language 

more accurately describes this term. 

In response to this comment, the 

Department has replaced the term ‘‘large 

pooled fund’’ with ‘‘restricted pooled 

fund’’ throughout the operative language 

of the final exemption. The Department 

also notes the corresponding changes to 

the Summary of Facts and 

Representations. 

In addition, the Applicant has 

requested that the definition of the term 

‘‘large pooled fund’’ be replaced with the 

following new definition: 

The term ‘‘restricted pooled fund’’ refers to 

a pooled fund (i) that is sponsored by 

Deutsche Bank or an affiliate, (ii) in which 

the total invested assets of an in-house plan 

(or in-house plans), if aggregated (whether 

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4Section 408(b)(18) of the Act is a statutory 

exemption that was enacted under the Pension 

Protection Act of 2006. This statutory exemption 

provides relief from section 406(a) of the Act and 

limited relief from section 406(b) of the Act for 

custodians or trustees with respect to foreign 

exchange transactions between a bank or brokerdealer (or an affiliate of either) and a plan with 

respect to which such bank or broker-dealer (or 

affiliate) is a trustee, custodian, fiduciary or other 

party in interest if,—(1) the transaction is in 

connection with the purchase, holding or sale of 

securities or other investment assets (other than a 

foreign exchange transaction unrelated to any other 

investment in securities or other investment assets); 

(2) at the time the foreign exchange transaction is 

entered into, the terms of the transaction are not 

less favorable to the plan than the terms generally 

available in comparable arm’s length foreign 

exchange transactions between unrelated parties, or 

the terms afforded by the bank or broker-dealer (or 

an affiliate of either) in comparable arm’s-length 

foreign exchange transactions involving unrelated 

parties; (3) the exchange rate used by such bank or 

broker-dealer (or affiliate) for a particular foreign 

exchange transaction does not deviate by more than 

3 percent from the interbank bid and asked rates for 

transactions of comparable size and maturity at the 

time of the transaction as displayed on an 

independent service that reports rates of exchange 

in the foreign currency market for such currency; 

and (4) the bank or broker-dealer (or any affiliate 

of either) does not have investment discretion or 

provide investment advice with respect to the 

transaction. 

invested directly or indirectly through 

another pooled fund), represent 20% or more 

(determined as of the last day of each month) 

of the total invested assets of such pooled 

fund, and (iii) for which Deutsche Bank or an 

affiliate will appoint an independent 

fiduciary, as described in Section V(o) below, 

to represent the interests of all plans 

investing in such fund. 

The Applicant states that the revised 

definition omits the reference to 

Deutsche Bank’s management because 

the revised definition of ‘‘pooled fund’’ 

already references Deutsche Bank’s 

management. In addition, the Applicant 

explains that the revised definition 

acknowledges that non-plan investors 

often invest in pooled funds that hold 

plan assets and requires monthly testing 

of the level of in-house plan investment. 

The Department concurs, in part, with 

the Applicant’s revised definition of the 

term ‘‘restricted pooled fund.’’ However, 

the Department has decided to leave the 

reference to Deutsche Bank’s or its 

affiliate’s management authority intact 

in the final exemption in order to 

emphasize that Deutsche Bank or its 

affiliate sponsors the restricted pooled 

fund and has discretion over the assets 

of such pooled fund. Therefore, the 

revised definition of the term restricted 

pooled fund reads as follows: 

The term ‘‘restricted pooled fund’’ refers to 

a pooled fund (1) that is sponsored and 

managed by Deutsche Bank or an affiliate, (2) 

in which the total invested assets of an inhouse plan (or in-house plans), if aggregated 

(whether invested directly or indirectly 

through another pooled fund), represent 20% 

or more (determined as of the last day of each 

month) of the total invested assets of such 

pooled fund, and (3) for which Deutsche 

Bank or an affiliate will appoint an 

independent fiduciary, as described in 

Section V(o) below, to represent the interests 

of all plans investing in such fund. 

13. Small Pooled Fund Redefined/ 

Word Substitution. Section V(m) of the 

proposed exemption defines the term 

‘‘small pooled fund’’ as follows: 

The term ‘‘small pooled fund’’ refers to a 

pooled fund that is sponsored and managed 

by Deutsche Bank or an affiliate. A small 

pooled fund may include the assets of (i) 

client plans, (ii) in-house plans of Deutsche 

Bank or an affiliate, (iii) other pooled funds 

in which Deutsche Bank or an affiliate is not 

the fund sponsor, and (iv) other pooled funds 

in which Deutsche Bank or an affiliate is the 

fund sponsor. In a small pooled fund, the 

total invested assets of an in-house plan (or 

in-house plans), if aggregated (whether 

invested directly or through another pooled 

fund), represent less than 20% of the total 

invested assets of such fund. 

The Applicant has requested that the 

term ‘‘small pooled fund’’ be changed to 

‘‘unrestricted pooled fund.’’ Also, for the 

same reasons expressed above by the 

Applicant for modifying the term ‘‘large 

pooled fund,’’ the Applicant requests 

that Section V(m) be revised to the 

following: 

The term ‘‘unrestricted pooled fund’’ refers 

to a pooled fund that (1) is sponsored by 

Deutsche Bank or an affiliate and (2) in 

which the total invested assets of an in-house 

plan (or in-house plans), if aggregated 

(whether invested directly or indirectly 

through another pooled fund), represent less 

than 20% (determined as of the last day of 

each month) of the total invested assets of 

such pooled fund. 

The Department concurs with the 

Applicant’s revised definition of the 

term ‘‘unrestricted pooled fund,’’ with 

the exception of deleting the reference 

to Deutsche Bank or its affiliate 

managing the fund, and has made 

appropriate changes in the final 

exemption. The revised definition reads 

as follows: 

The term ‘‘unrestricted pooled fund’’ refers 

to a pooled fund that (1) is sponsored and 

managed by Deutsche Bank or an affiliate and 

(2) in which the total invested assets of an 

in-house plan (or in-house plans), if 

aggregated (whether invested directly or 

indirectly through another pooled fund), 

represent less than 20% (determined as of the 

last day of each month) of the total invested 

assets of such pooled fund. 

B. Confirmations 

1. Fee Disclosures. The Applicant 

points out that in the proposed 

exemption, Representation 30(c) of the 

Summary of Facts and Representations 

provides for the disclosure of all fees 

Deutsche Bank or its affiliate may 

receive as a result of the covered 

transactions. However, the Applicant 

notes that there is no such requirement 

in the operative language of the 

proposal. The Applicant explains that 

the proposed exemption only requires 

that Deutsche Bank or its affiliate retain 

records that specify the price at which 

the transaction occurred, which is 

acceptable to the Applicant. Therefore, 

the Applicant requests that the final 

exemption reflect that the disclosure of 

‘‘all fees’’ should not be required, but 

that the rate and other market 

information should be required. 

The Department does not concur with 

the Applicant’s reasoning. To the extent 

Deutsche Bank or its affiliate are able to 

make appropriate fee disclosures to 

independent fiduciaries without undue 

burden, the Department would require 

Deutsche Bank or its affiliate to provide 

this information. 

2. Exemptive Relief for the Global 

Custodian. The Applicant has asked the 

Department to confirm that no 

exemptive relief is necessary if the 

global custodian makes a market in a 

particular currency and executes the 

foreign exchange transaction as 

principal. The Applicant explains that 

although a global custodian would be 

engaged in a principal transaction, it 

might receive a ticket charge, as it 

would for any transaction. However, the 

Applicant believes that it is very 

unlikely that the global custodian would 

receive a ticket charge given that the 

plan would be engaging in a foreign 

exchange transaction through the global 

custodian’s custody network. The 

Applicant also emphasizes that because 

it is unaware of the policies of each 

global custodian, it can only make 

generalized assertions about such 

policies. 

In response to this comment, the 

Department believes that this comment 

is beyond the scope of the exemption. 

The Department notes that exemptive 

relief may be available for the global 

custodian under section 408(b)(18) of 

the Act to the extent the conditions 

therein are satisfied.4

3. Application of Foreign Laws. The 

Applicant has requested the Department 

to confirm that Section II(k) does not 

preclude the application of foreign laws. 

Section II(k) of the exemption requires 

that: 

Foreign affiliates of Deutsche Bank which 

engage in the covered transactions— 

(1) Agree to submit to the jurisdiction of 

the United States; 

(2) Agree to appoint an agent for service of 

process in the United States, which may be 

an affiliate (the Process Agent); 

(3) Consent to service of process on the 

Process Agent; 

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(4) Agree that they may be sued in the 

United 

States Courts in connection with the 

covered transactions described in this 

proposed exemption; 

(5) Agree that any judgment on behalf of 

a plan or pooled fund may be collected in the 

United States from Deutsche Bank; and 

(6) Agree to comply with, and be subject 

to, all relevant provisions of the Act. 

In response, the Department notes 

that this section does not preclude the 

application of foreign laws, but rather 

provides a means for a plan to seek a 

judgment in the courts of the United 

States if a claim arises in connection 

with the covered transactions. In 

addition, to the extent those foreign 

laws preclude a foreign affiliate of 

Deutsche Bank from meeting the 

conditions of the exemption, such 

affiliate may not rely on the relief 

provided by this exemption. 

4. Development of Policies and 

Procedures by Global Custodian. The 

Applicant requests that the Department 

confirm that Section III(a) does not 

require the global custodian to develop 

any special policies and procedures 

regarding the handling of foreign 

exchange transactions for plans or 

pooled funds with respect to which 

Deutsche Bank or its affiliate is a 

fiduciary or disclose to Deutsche Bank 

the factors that the global custodian 

considers in its selection of a 

subcustodian. 

In response to this comment, the 

Department notes that the requirements 

of Section III(a) relate exclusively to the 

information that Deutsche Bank must 

provide to certain designated persons. 

For a complete statement of the facts 

and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption that was published 

in the Federal Register on July 8, 2008 

at 73 FR 39158. For further information 

regarding the Applicant’s comment 

letter or other matters discussed herein, 

interested persons are encouraged to 

obtain copies of the exemption 

application files (Exemption 

Application Nos. D–11082 and D– 

11109) the Department is maintaining in 

this case. The application files, as well 

as all supplemental submissions 

received by the Department, are made 

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. 

The Applicant’s comment letter may 

also be viewed online at http:// 

www.regulations.gov, at Docket ID 

Number: EBSA–2008–0006. 

Accordingly, after giving full 

consideration to the entire record, 

including the Applicant’s comment 

letters and supplements, the Department 

has decided to grant the exemption. 

For Further Information Contact: 

Allison Padams-Lavigne, U.S. 

Department of Labor, telephone (202) 

693–8564. (This is not a toll-free 

number.) 

State Street Bank and Trust Company; 

Located in Massachusetts 

[Prohibited Transaction Exemption 

No. 2010–02; Application No. D–11522.] 

Exemption 

The restrictions of sections 

406(a)(1)(A) and (D) and 406(b) of the 

Act and the sanctions resulting from the 

application of section 4975 of the Code, 

by reason of section 4975(c)(1)(A), (D), 

(E), and (F) of the Code, shall not apply 

as of October 24, 2008, to the cash sale 

of certain mortgage, mortgage-related, 

and other asset-backed securities for 

$2,447,381,010 (the Sale) by stable value 

commingled funds and separate 

accounts both holding assets of 

employee benefit plans (the Accounts) 

to State Street Bank and Trust Company 

(State Street), the investment manager 

and/or trustee for the Accounts, 

provided that the conditions set forth 

below are met. 

(a) The Sale was a one-time 

transaction for cash payment made on a 

delivery versus payment basis. 

(b) The Accounts did not bear any 

commissions or transaction costs in 

connection with the Sale. 

(c) The Accounts received as a 

purchase price for the securities an 

amount which, as of the effective date 

of the Sale, was equal to the fair market 

value of the securities, determined by 

reference to prices provided by 

independent third-party pricing sources 

consulted in accordance with pricing 

procedures used by the Accounts prior 

to the transaction. 

(d) In connection with the Sale, State 

Street transferred to and allocated 

among the Accounts cash in the amount 

of $450,000,000. 

(e) At the time of the transaction, 

State Street, as trustee of the Accounts, 

determined (except with respect to the 

State Street Salary Savings Program, an 

employee benefit plan maintained for 

employees of State Street and certain 

affiliates (the State Street Plan)) that the 

Sale was appropriate for and in the best 

interests of the Accounts and the 

employee benefit plans invested in the 

Accounts. An independent fiduciary 

determined at the time of the 

transaction that the Sale was 

appropriate for and in the best interest 

of the State Street Plan and its 

participants and beneficiaries. 

(f) An independent consultant 

reviewed, after the Sale, the 

reasonableness of the prices used to 

purchase the securities, and concluded 

that the pricing methodology used by 

State Street provided a reasonable basis 

for determining the fair market value of 

the securities and that the methodology 

was reasonably applied with only 

immaterial deviations. 

(g) In carrying out the Sale, State 

Street took all appropriate actions 

necessary to safeguard the interests of 

each Account and each employee 

benefit plan with a direct or indirect 

interest in an Account. 

(h) State Street and its affiliates, as 

applicable, will maintain, or cause to be 

maintained, for a period of six (6) years 

from the date of the Sale such records 

as are necessary to enable the persons 

described below in paragraph (i)(i) to 

determine whether the conditions of 

this exemption have been met, except 

that— 

(i) No party in interest with respect to 

a plan which engaged in the covered 

transaction, other than State Street and 

its affiliates, as applicable, shall be 

subject to a civil penalty under section 

502(i) of the Act or the taxes imposed 

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

if such records are not maintained or are 

not available for examination as 

required by paragraph (i) below; and 

(ii) A separate prohibited transaction 

shall not be considered to have occurred 

solely because due to circumstances 

beyond the control of State Street or its 

affiliate, as applicable, such records are 

lost or destroyed prior to the end of the 

six-year period. 

(i)(i) Except as provided below, in 

paragraph (ii), and notwithstanding any 

provisions of subsections (a)(2) and (b) 

of sections 504 of the Act, the records 

referred to in paragraph (h) above, are 

unconditionally available at their 

customary location for examination 

during normal business hours by— 

(A) Any duly authorized employee or 

representative of the Department, the 

Internal Revenue Service, the Securities 

and Exchange Commission or the 

Federal Reserve Board; 

(B) Any fiduciary of any plan that 

engaged in the covered transaction, or 

any duly authorized employee or 

representative of such fiduciary; 

(C) Any employer of participants and 

beneficiaries and any employee 

organization whose members are 

covered by a plan that engages in the 

covered transactions, or any authorized 

employee or representative of these 

entities; or 

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5The commenter identified two other matters that 

State Street had omitted from its application: First, 

that a partner in the law firm that represented State 

Street with respect to the exemption application, 

Ropes & Gray, was a member of State Street’s Board 

of Directors and was chairman of its Executive 

Committee during the relevant time period; and 

second, that State Street sought a regulatory 

exemption from the SEC in 2002 with respect to the 

types of securities that could be used as collateral 

in securities lending transactions. 

6Section 408(a) of ERISA provides that an 

exemption may not be granted unless the Secretary 

of Labor finds that the exemption is: ‘‘(1) 

administratively feasible, (2) in the interests of the 

plan and of its participants and beneficiaries, and 

(3) protective of the rights of participants and 

beneficiaries of such plan.’’ 

7The Department notes that the SEC Wells Notice 

was disclosed to the Department as stated by the 

Applicants. 

8The commenter suggested that the Department 

deny the exemption, thereby requiring State Street 

to pay an excise tax pursuant to section 4975 of the 

Internal Revenue Code, so that ‘‘State Street’s 

incumbent management will face intra-corporate 

measures to remove bad managers and executives.’’ 

The Department notes that if the exemption were 

denied, not only would State Street be required to 

pay an excise tax under section 4975 of the Code, 

it also would be required to ‘‘correct’’ the 

transaction, possibly by returning the Selected 

(D) Any participant or beneficiary of 

a plan that engages in the covered 

transactions, or duly authorized 

employee or representative of such 

participant or beneficiary; 

(ii) None of the persons described 

above in subparagraphs (B)–(D) of 

paragraph (i)(i) are authorized to 

examine the trade secrets of State Street 

or commercial or financial information 

that is privileged or confidential. 

(iii) Should State Street refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure, State Street shall, by the 

close of the thirtieth (30th) day 

following the request, provide written 

notice advising that person of the reason 

for the refusal and that the Department 

may request such information. 

The Department received one 

comment regarding the proposed 

exemption. At the Department’s request, 

State Street submitted a response to the 

comment. A discussion of the 

commenter’s assertions, State Street’s 

responses, and the Department’s views 

follows. 

The commenter first stated that State 

Street failed to disclose certain 

information to the Department. 

Specifically, the commenter cited 

several news items reporting on 

litigation involving State Street that the 

commenter believed to be relevant to 

the pending exemption. The commenter 

also asserted that State Street concealed 

certain matters from the Department, 

most notably, the fact that the SEC had 

issued a ‘‘Wells Notice’’ to State Street, 

indicating that the staff of the SEC is 

recommending enforcement action 

against the company for violations of 

the antifraud provisions of the federal 

securities laws, relating to the 

disclosure and management of State 

Street’s active fixed income strategies 

during 2007 and prior periods.5 Finally, 

the commenter stated that State Street 

had not provided all the information 

required by the Department’s 

regulations at 29 CFR 2570.34 and 35. 

The commenter indicated that the 

application did not include required 

contact information about individual 

plans affected by the exemption. 

In addition, the commenter took the 

position that the criteria established 

under section 408(a) of ERISA for the 

grant of an exemption would not be 

satisfied with respect to the pending 

exemption, in that the exemption would 

not serve the interests of the affected 

plans and their participants and 

beneficiaries.6 The commenter stated 

that the exemption would ‘‘paper[] over 

information that would enable the 

Named Plans and their respective 

participants and beneficiaries to pursue 

the fiduciary for additional underlying 

breaches.’’ Further, the commenter 

asserted that participants in the State 

Street Salary Savings Program who were 

invested in the State Street Company 

Stock Fund saw the value of their 

accounts decline as a result of actions 

taken by State Street management at the 

time of the transaction that is the subject 

of the proposed exemption. The 

commenter requested that the 

Department hold a public hearing, or, 

alternatively, require State Street to 

disclose all pending lawsuits filed by 

employee benefit plans, as well as the 

contact information and employer 

identification number for all plans 

invested in any fund cited in the 

application, as well as certain other 

State Street funds. 

In response, State Street stated that 

the news items identified by the 

commenter are not relevant to the 

transaction covered by the proposed 

exemption. In that regard, State Street 

pointed out that the news items did not 

involve funds affected by the proposed 

exemption, and pertain to events that 

occurred after the publication of the 

proposed exemption. State Street noted 

that the SEC Wells Notice was disclosed 

to the Department on July 8, 2009, and 

also was generally available as part of a 

public filing. State Street asserted that 

the other matters omitted from the 

application are not relevant to the 

Department’s consideration of the 

proposed exemption. State Street stated 

that it believes it satisfied the 

requirements of the Department’s 

regulations with respect to disclosures 

in its application. 

The Department has carefully 

considered the issues raised by the 

commenter and the Applicant’s 

responses. The Department does not 

believe that any of the news items or 

allegedly concealed or omitted matters 

would have materially affected the 

Department’s decision to propose, and 

ultimately, grant the exemption.7

With respect to plan contact 

information, the Department requested 

and the Applicant agreed to supplement 

its application with contact information 

for affected plans that were managed in 

separate accounts. As to plans invested 

in pooled funds, the Department’s 

regulations at 29 CFR 2570.35 require 

disclosure of information with respect 

to the pooled funds as opposed to 

individual investing plans. See 29 CFR 

2570.35(c)(2). State Street’s original 

application provided the employer 

identification number for the pooled 

funds. Because the pooled funds are 

sponsored by State Street, the 

Department does not believe it is 

necessary to have additional contact 

information on file for the pooled funds. 

Finally, the Department has 

determined that the exemption does 

satisfy the criteria established in section 

408(a) of ERISA, including the 

requirement that the exemption be in 

the interests of the affected plans and 

their participants and beneficiaries. The 

Department does not believe that the 

grant of the exemption will undermine 

any rights that a plan participant or 

beneficiary might have against State 

Street as fiduciary. The Department’s 

view is that by purchasing distressed 

securities (the Selected Assets) and 

making an additional cash infusion into 

the affected Accounts, State Street took 

actions designed to protect the interests 

of the plans invested in those Accounts. 

The Department believes that the 

Applicant was persuasive in arguing 

that it was necessary to remove the 

Selected Assets from the Accounts in 

order to reduce the likelihood that the 

wrap providers would terminate their 

contracts, thereby depriving the 

Accounts of ‘‘book value’’ treatment of 

plan investments. In this regard, the 

Department notes that the identification 

of the Selected Assets was confirmed by 

an independent consultant. In addition, 

the sale price of the Selected Assets was 

determined by independent third party 

pricing services and confirmed as 

reasonable by an independent 

consultant.8

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Assets to the Accounts. The Department does not 

believe that this would be a favorable result for the 

Accounts and their investing plans. 

The Department has determined not 

to hold a public hearing with respect to 

the proposed exemption. The 

Department’s regulations provide that a 

hearing will be held where necessary to 

fully explore material factual issues 

identified by the person requesting the 

hearing. See 29 CFR 2570.46. In this 

case, the Department concludes that the 

commenter has not identified any 

material factual issues that would 

require a hearing. 

With respect to the additional 

disclosure requested by the commenter, 

the Department’s regulations require 

disclosure of much of the information 

requested by the commenter, including 

lawsuits against the applicant 

concerning the applicant’s conduct as a 

fiduciary or party in interest with 

respect to any plan, as well as contact 

information/EIN for affected plans or 

pooled funds. The Department believes 

that the additional disclosure requested 

by the commenter regarding plans that 

are not affected by the exemption is 

beyond the scope of the Department’s 

exemption procedure regulation and 

this proceeding. 

Accordingly, after giving full 

consideration to the entire record, 

including the written comment, the 

Department has determined to grant the 

exemption. 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 

September 25, 2009, at 74 FR 49031. 

For Further Information Contact: 

Karen E. Lloyd of the Department, at 

(202) 693–8554. This is not a toll-free 

number. 

The Bank of New York Mellon (BNY 

Mellon or the Applicant) Located in 

New York, NY 

[Prohibited Transaction Exemption 

2010–03; Exemption Application No. D– 

11571.] 

Exemption 

The restrictions of sections 406(a) and 

406(b)(1) and 406(b)(2) of the Act and 

the sanctions resulting from the 

application of section 4975 of the Code, 

by reason of section 4975(c)(1)(A) 

through (E) of the Code, shall not apply 

as of February 20, 2009, to the cash sale 

of certain floating rate securities (the 

Securities) issued by Lehman Brothers 

Holdings, Inc. or its affiliates (together, 

Lehman) for an aggregate purchase price 

of $235,737,419.05 by the EB Temporary 

Investment Fund—Lehman (Liquidating 

Fund), the EB SMAM Short Term 

Investment Fund—Lehman (Liquidating 

Fund), the DF Temporary Investment 

Fund—Lehman (Liquidating Fund) and 

the Pooled Employee Daily Liquidity 

Fund—Lehman (Liquidating Fund) 

(collectively, the Liquidating Funds) to 

the Bank of New York Mellon 

Corporation (BNYMC), a party in 

interest with respect to employee 

benefit plans (the Plans) invested, 

directly or indirectly, in the Liquidating 

Funds. This exemption is subject to the 

following conditions: 

(a) The sale was a one-time 

transaction for cash; 

(b) The Liquidating Funds received an 

amount for the sale of the Securities, 

which was equal to the sum of (1) The 

par value of the Securities plus (2) 

accrued but unpaid interest through 

September 12, 2008, determined at the 

contract rate, plus (3) accrued and 

unpaid interest from September 15, 

2008 through the earlier of (i) the date 

of sale or (ii) the maturity date of the 

Securities, determined at the investment 

earnings rate of the collective fund from 

which the Securities were transferred to 

the Liquidating Fund for the period 

from September 15, 2008 to the earlier 

of the maturity date of the Security or 

February 20, 2009; 

(c) The Liquidating Funds did not 

bear any commissions, fees, transaction 

costs or other expenses in connection 

with the sale of the Securities; 

(d) BNY Mellon, as trustee of the 

Liquidating Funds, determined that the 

sale of the Securities was appropriate 

for and in the best interests of the 

Liquidating Funds, and the Plans 

invested, directly or indirectly, in the 

Liquidating Funds, at the time of the 

transaction; 

(e) BNY Mellon took all appropriate 

actions necessary to safeguard the 

interests of the Liquidating Funds, and 

the Plans invested, directly or 

indirectly, in the Liquidating Funds, in 

connection with the transaction; 

(f) If the exercise of any of BNYMC’s 

rights, claims or causes of action in 

connection with its ownership of the 

Securities results in BNYMC recovering 

from Lehman, the issuer of the 

Securities, or from any third party, an 

aggregate amount that is more than the 

sum of: 

(1) the purchase price paid for the 

Securities by BNYMC; and 

(2) interest on the par value of the 

Securities from and after the date 

BNYMC purchased the Securities from 

the Liquidating Funds, determined at 

the last-published interest rate on the 

Securities preceding the Lehman’s 

bankruptcy filing, BNYMC refunds such 

excess amount promptly to the 

Liquidating Funds (after deducting all 

reasonable expenses incurred in 

connection with the recovery); 

(g) BNY Mellon and its affiliates, as 

applicable, maintain, or cause to be 

maintained, for a period of six (6) years 

from the date of any covered transaction 

such records as are necessary to enable 

the person described below in 

paragraph (h)(1), to determine whether 

the conditions of this exemption have 

been met, except that— 

(1) No party in interest with respect 

to a Plan which engages in the covered 

transaction, other than BNY Mellon and 

its affiliates, as applicable, shall be 

subject to a civil penalty under section 

502(i) of the Act or the taxes imposed 

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

if such records are not maintained, or 

not available for examination, as 

required, below, by paragraph (h)(1); 

(2) A separate prohibited transaction 

shall not be considered to have occurred 

solely because due to circumstances 

beyond the control of BNY Mellon or its 

affiliates, as applicable, such records are 

lost or destroyed prior to the end of the 

six-year period; 

(h)(1) Except as provided, below, in 

paragraph (h)(2), and notwithstanding 

any provisions of subsections (a)(2) and 

(b) of section 504 of the Act, the records 

referred to, above, in paragraph (g) are 

unconditionally available at their 

customary location for examination 

during normal business hours by— 

(A) Any duly authorized employee or 

representative of the Department, the 

Internal Revenue Service, or the 

Securities and Exchange Commission; 

or 

(B) Any fiduciary of any Plan that 

engages in the covered transaction, or 

any duly authorized employee or 

representative of such fiduciary; or 

(C) Any employer of participants and 

beneficiaries and any employee 

organization whose members are 

covered by a Plan that engages in the 

covered transaction, or any authorized 

employee or representative of these 

entities; or 

(D) Any participant or beneficiary of 

a Plan that engages in the covered 

transaction, or duly authorized 

employee or representative of such 

participant or beneficiary; 

(2) None of the persons described 

above, in paragraph (h)(1)(B)–(D) shall 

be authorized to examine trade secrets 

of BNY Mellon or its affiliates, or 

commercial or financial information 

which is privileged or confidential; and 

(3) Should BNY Mellon refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure, BNY Mellon shall, by the 

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8128 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Notices 

close of the thirtieth (30th) day 

following the request, provide a written 

notice advising that person of the 

reasons for the refusal and that the 

Department may request such 

information. 

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 

November 16, 2009 at 74 FR 58992. 

For Further Information Contact: Mr. 

Anh-Viet Ly of the Department at (202) 

693–8648. (This is not a toll-free 

number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

4975(c)(2) of the Code does not relieve 

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which among other things 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(B) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) This exemption is supplemental to 

and not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transactional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(3) The availability of this exemption 

is subject to the express condition that 

the material facts and representations 

contained in the application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 16th day of 

February, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–3445 Filed 2–22–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Application Nos. and Proposed 

Exemptions; D–11514] 

Citigroup Inc. and Its Affiliates 

(Citigroup or the Applicant); Subaru of 

America, Inc. (Subaru); and The Bank 

of New York Mellon (BNY Mellon); et 

al.; Proposed Exemptions 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemptions. 

SUMMARY: This document contains 

notices of pendency before the 

Department of Labor (the Department) of 

proposed exemptions from certain of the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (ERISA or the Act) and/or 

the Internal Revenue Code of 1986 (the 

Code). 

Written Comments and Hearing 

Requests 

All interested persons are invited to 

submit written comments or requests for 

a hearing on the pending exemptions, 

unless otherwise stated in the Notice of 

Proposed Exemption, within 45 days 

from the date of publication of this 

Federal Register Notice. Comments and 

requests for a hearing should state: (1) 

the name, address, and telephone 

number of the person making the 

comment or request, and (2) the nature 

of the person’s interest in the exemption 

and the manner in which the person 

would be adversely affected by the 

exemption. A request for a hearing must 

also state the issues to be addressed and 

include a general description of the 

evidence to be presented at the hearing. 

ADDRESSES: All written comments and 

requests for a hearing (at least three 

copies) should be sent to the Employee 

Benefits Security Administration 

(EBSA), Office of Exemption 

Determinations, Room N–5700, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

Attention: Application No., lll, 

stated in each Notice of Proposed 

Exemption. Interested persons are also 

invited to submit comments and/or 

hearing requests to EBSA via e-mail or 

FAX. Any such comments or requests 

should be sent either by e-mail to: 

‘‘moffitt.betty@dol.gov’’, or by FAX to 

(202) 219–0204 by the end of the 

scheduled comment period. The 

applications for exemption and the 

comments received will be available for 

public inspection in the Public 

Documents Room of the Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Avenue, NW., 

Washington, DC 20210. 

Warning: If you submit written 

comments or hearing requests, do not 

include any personally-identifiable or 

confidential business information that 

you do not want to be publiclydisclosed. All comments and hearing 

requests are posted on the Internet 

exactly as they are received, and they 

can be retrieved by most Internet search 

engines. The Department will make no 

deletions, modifications or redactions to 

the comments or hearing requests 

received, as they are public records. 

Notice to Interested Persons 

Notice to Interested Persons 

Notice of the proposed exemptions 

will be provided to all interested 

persons in the manner agreed upon by 

the applicant and the Department 

within 15 days of the date of publication 

in the Federal Register. Such notice 

shall include a copy of the notice of 

proposed exemption as published in the 

Federal Register and shall inform 

interested persons of their right to 

comment and to request a hearing 

(where appropriate). 

SUPPLEMENTARY INFORMATION: The 

proposed exemptions were requested in 

applications filed pursuant to section 

408(a) of the Act and/or section 

4975(c)(2) of the Code, and in 

accordance with procedures set forth in 

29 CFR part 2570, subpart B (55 FR 

32836, 32847, August 10, 1990). 

Effective December 31, 1978, section 

102 of Reorganization Plan No. 4 of 

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

the authority of the Secretary of the 

Treasury to issue exemptions of the type 

requested to the Secretary of Labor. 

Therefore, these notices of proposed 

exemption are issued solely by the 

Department. 

The applications contain 

representations with regard to the 

proposed exemptions which are 

summarized below. Interested persons 

are referred to the applications on file 

with the Department for a complete 

statement of the facts and 

representations. 

Citigroup Inc. and Its Affiliates 

(Citigroup or the Applicant), Located in 

New York, New York 

[Application No. D–11514.] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act 

and section 4975(c)(2) of the Code, and 

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