41090 Federal Register / Vol. 78, No. 131 / Tuesday, July 9, 2013 / Notices 

budget narrative explaining projected 

costs. Applicants may submit a 

description of the project teams’ 

qualifications and expertise relevant to 

the project, but should not attach 

lengthy resumes. Attachments to the 

proposal describing your organization or 

examples of other past work beyond 

those specifically requested above are 

discouraged. These attachments should 

not exceed 5MB. 

The following forms must also be 

included: OMB Standard Form 424, 

Application for Federal Assistance; 

OMB Standard Form 424A, Budget 

information—Non-Construction 

Programs; OMB Standard Form 424B, 

Assurances—Non-Construction 

Programs (these forms are available at 

http://www.grants.gov) and DOJ/NIC 

Certification Regarding Lobbying; 

Debarment, Suspension and Other 

Responsibility Matters; and the DrugFree Workplace Requirements (available 

at http://nicic.gov/Downloads/General/ 

certif-frm.pdf. Failure to supply all 

required forms with the application 

package may result in disqualification of 

the application from consideration. 

Note: NIC will not award a cooperative 

agreement to an applicant who does not have 

a Dun and Bradstreet Database Universal 

Number (DUNS) and is not registered in the 

Central Contractor Registry (CCR). 

A DUNS number can be received at no cost 

by calling the dedicated toll-free DUNS 

number request line at 1–800–333–0505 (if 

you are a sole proprietor, you would dial 1– 

866–705–5711 and select option 1). 

Registration in the CCR can be done 

online at the CCR Web site: http:// 

www.bpn.gov/ccr. A CCR Handbook and 

worksheet can also be reviewed at the 

Web site. 

Review Considerations: Applications 

received under this announcement will 

be subject to the NIC Review Process. 

Proposals which fail to provide 

sufficient information to allow 

evaluation under the criteria below may 

be judged non-responsive and 

disqualified. The criteria for the 

evaluation of each application will be as 

follows: 

Programmatic (40%) 

Are all of the project tasks adequately 

discussed? Is there a clear statement of 

how each task will be accomplished, to 

include the overall project goal(s), major 

tasks to achieve the goal(s), the 

strategies to be employed in completing 

the tasks, required staffing, and other 

required resources? Are there any 

approaches, techniques, or design 

aspects proposed that are new to NIC 

and will enhance the project? 

Organizational (35%) 

Do the proposed project staff members 

possess the skills, knowledge, and 

expertise necessary to complete the 

tasks listed under the scope of work? 

Does the applicant organization, group, 

or individual have the organizational 

capacity to complete all project tasks? 

Does the proposal contain project 

management and staffing plans that are 

realistic and sufficient to complete the 

project within the project time frame? 

Project Management/Administration 

(25%) 

Does the applicant identify reasonable 

objectives and/or milestones that reflect 

the key tasks, and measures to track 

progress? If consultants and/or 

partnerships are proposed, is there a 

reasonable justification for their 

inclusion in the project, and a clear 

structure to ensure effective 

coordination? Is the proposed budget 

realistic, does it provide a sufficient cost 

detail/narrative, and does it represent 

good value relative to the anticipated 

results? 

Specific Requirements: Documents or 

other media that are produced under 

this award must follow these guidelines: 

Prior to the preparation of the final draft 

of any document or other media, the 

awardee must consult with NIC’s 

Writer/Editor concerning the acceptable 

formats for manuscript submissions and 

the technical specifications for 

electronic media. For all awards in 

which a document will be a deliverable, 

the awardee must follow the guidelines 

listed herein, as well as follow the 

Guidelines for Preparing and Submitting 

Manuscripts for Publication as found in 

the ‘‘General Guidelines for Cooperative 

Agreements,’’ which can be found on 

our Web site at www.nicic.gov/ 

cooperativeagreements. 

All final documents and other 

materials submitted under this project 

must meet the federal government’s 

requirement for Section 508 

accessibility, including those provisions 

outlined in 1194 Subpart B, Technical 

Provisions, Subpart C, Functional 

Performance Criteria; and Subpart D, 

Documentation and Support, NIC’s 

government product accessibility 

template (see www.nicic.gov/section508) 

outlines the agency’s minimum criteria 

for meeting this requirement; a 

completed form attesting to the 

accessibility of project deliverables 

should accompany all submissions. 

Note Concerning Catalog of Federal 

Domestic Assistance Number: The Catalog of 

Federal Domestic Assistance (CFDA) should 

be entered into box 10 of the SF 424. The 

CFDA number for this solicitation is 16.601, 

Training and Staff Development. You are not 

subject to Executive Order 12372 and should 

check box b under section 16. 

Robert M. Brown, Jr., 

Acting Director, National Institute of 

Corrections. 

[FR Doc. 2013–16475 Filed 7–8–13; 8:45 am] 

BILLING CODE 4410–36–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Exemption From Certain Prohibited 

Transaction Restrictions 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Grant of individual exemption. 

SUMMARY: This document contains an 

exemption 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). This notice includes 

the following: 2013–08, Amendment to 

Prohibited Transaction Exemption 

2007–05, 72 FR 13130 (March 20, 2007), 

Involving Prudential Securities 

Incorporated, et al., To Amend the 

Definition of ‘‘Rating Agency’’, D– 

11718. 

SUPPLEMENTARY INFORMATION: A notice 

was published in the Federal Register of 

the pendency before the Department of 

a proposal to grant such exemption. The 

notice set forth a summary of facts and 

representations contained in the 

application for exemption and referred 

interested persons to the application for 

a complete statement of the facts and 

representations. The application has 

been available for public inspection at 

the Department in Washington, DC. The 

notice also invited interested persons to 

submit comments on the requested 

exemption to the Department. In 

addition, the notice stated that any 

interested person might submit a 

written request that a public hearing be 

held (where appropriate). The applicant 

has represented that it has complied 

with the requirements of the notification 

to interested persons. No requests for a 

hearing were received by the 

Department. Public comments were 

received by the Department as described 

in the granted exemption. 

The notice of proposed exemption 

was issued and the exemption is being 

granted solely by the Department 

because, effective December 31, 1978, 

section 102 of Reorganization Plan No. 

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Federal Register / Vol. 78, No. 131 / Tuesday, July 9, 2013 / Notices 41091 

1The Department has considered exemption 

applications received prior to December 27, 2011 

under the exemption procedures set forth in 29 CFR 

part 2570, subpart B (55 FR 32836, 32847, August 

10, 1990). 

2Section I.A. provides no relief from sections 

406(a)(1)(E), 406(a)(2) and 407 of the Act for any 

person rendering investment advice to an Excluded 

Plan within the meaning of section 3(21)(A)(ii) of 

the Act, and regulation 29 CFR 2510.3–21(c). 

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 (76 FR 66637, 

66644, October 27, 2011) 1 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. 

Amendment to Prohibited Transaction 

Exemption 2007–05, 72 FR 13130 

(March 20, 2007), Involving Prudential 

Securities Incorporated, et al., To 

Amend the Definition of ‘‘Rating 

Agency’’ [Prohibited Transaction 

Exemption 2013–08; Exemption 

Application No. D–11718] 

Exemption 

In accordance with section 408(a) of 

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

Code and the procedures set forth in 29 

CFR Part 2570, Subpart B (76 FR 66637, 

66644, October 27, 2011) and based 

upon the entire record, the Department 

amends the following individual 

Prohibited Transaction Exemptions 

(PTEs), as set forth below: PTE 89–88, 

54 FR 42582 (October 17, 1989); PTE 

89–89, 54 FR 42569 (October 17, 1989); 

PTE 89–90, 54 FR 42597 (October 17, 

1989); PTE 90–22, 55 FR 20542 (May 17, 

1990); PTE 90–23, 55 FR 23144 (June 6, 

1990); PTE 90–24, 55 FR 20548 (May 17, 

1990); PTE 90–28, 55 FR 21456 (May 24, 

1990); PTE 90–29, 55 FR 21459 (May 24, 

1990); PTE 90–30, 55 FR 21461 (May 24, 

1990); PTE 90–31, 55 FR 23144 (June 

6,1990); PTE 90–32, 55 FR 23147 (June 

6, 1990); PTE 90–33, 55 FR 23151 (June 

6, 1990); PTE 90–36, 55 FR 25903 (June 

25, 1990); PTE 90–39, 55 FR 27713 (July 

5, 1990); PTE 90–59, 55 FR 36724 

(September 6, 1990); PTE 90–83, 55 FR 

50250 (December 5, 1990); PTE 90–84, 

55 FR 50252 (December 5, 1990); PTE 

90–88, 55 FR 52899 (December 24, 

1990); PTE 91–14, 56 FR 7413 (February 

22, 1991); PTE 91–22, 56 FR 03277 

(April 18, 1991); PTE 91–23, 56 FR 

15936 (April 18, 1991); PTE 91–30, 56 

FR 22452 (May 15, 1991); PTE 91–62, 56 

FR 51406 (October 11, 1991); PTE 93– 

31, 58 FR 28620 (May 5, 1993); PTE 93– 

32, 58 FR 28623 (May 14, 1993); PTE 

94–29, 59 FR 14675 (March 29, 1994); 

PTE 94–64, 59 FR 42312 (August 17, 

1994); PTE 94–70, 59 FR 50014 

(September 30, 1994); PTE 94–73, 59 FR 

51213 (October 7, 1994); PTE 94–84, 59 

FR 65400 (December 19, 1994); 95–26, 

60 FR 17586 (April 6, 1995); PTE 95–59, 

60 FR 35938 (July 12, 1995); PTE 95–89, 

60 FR 49011 (September 21, 1995); PTE 

96–22, 61 FR 14828 (April 3, 1996); PTE 

96–84, 61 FR 58234 (November 13, 

1996); PTE 96–92, 61 FR 66334 

(December 17, 1996); PTE 96–94, 61 FR 

68787 (December 30, 1996); PTE 97–05, 

62 FR 1926 (January 14, 1997); PTE 97– 

28, 62 FR 28515 (May 23, 1997); PTE 

97–34, 62 FR 39021 (July 21, 1997); PTE 

98–08, 63 FR 8498 (February 19, 1998); 

PTE 99–11, 64 FR 11046 (March 8, 

1999); PTE 2000–19, 65 FR 25950 (May 

4, 2000); PTE 2000–33, 65 FR 37171 

(June 13, 2000); PTE 2000–41, 65 FR 

51039 (August 22, 2000); PTE 2000–55, 

65 FR 37171 (November 13, 2000); PTE 

2002–19, 67 FR 14979 (March 28, 2002); 

PTE 2003–31, 68 FR 59202 (October 14, 

2003); PTE 2006–07, 71 FR 32134 (June 

2, 2006); PTE 2008–08, 73 FR 27570 

(May 13, 2008); PTE 2009–16, 74 FR 

30623 (June 26, 2009); and PTE 2009– 

31, 74 FR 59003 (November 16, 2009), 

each as subsequently amended by PTE 

97–34, 62 FR 39021 (July 21, 1997) and 

PTE 2000–58, 65 FR 67765 (November 

13, 2000) and for certain of the 

exemptions, amended by PTE 2002–41, 

67 FR 5487 (August 22, 2002) 

(collectively, the Underwriter 

Exemptions). 

In addition, the Department also notes 

that it is granting individual exemptive 

relief for: Deutsche Bank AG, New York 

Branch and Deutsche Morgan Grenfell/ 

C.J. Lawrence Inc., Final Authorization 

Number (FAN) 97–03E (December 9, 

1996); Credit Lyonnais Securities (USA) 

Inc., FAN 97–21E (September 10, 1997); 

ABN AMRO Inc., FAN 98–08E (April 

27, 1998); Ironwood Capital Capital 

Partners Ltd., FAN 99–31E (December 

20, 1999) (supersedes FAN 97–02E 

(November 25, 1996)); William J. Mayer 

Securities LLC, FAN 01–25E (October 

15, 2001); Raymond James & Associates 

Inc. & Raymond James Financial Inc. 

FAN 03–07E (June 14, 2003); WAMU 

Capital Corporation, FAN 03–14E 

(August 24, 2003); Barclays Bank PLC & 

Barclays Capital Inc., FAN 04–03E 

(February 4, 2004); Terwin Capital LLC, 

FAN 04–16E (August 18, 2004); BNP 

Paribas Securities Corporation, FAN 07– 

06E (July 7, 2007); SunTrust Robinson 

Humphrey, Inc., FAN 08–03E (March 

10, 2008); Jefferies & Company Inc., 

FAN 09–03E (March 9, 2009); NatCity 

Investments, Inc., FAN 09–06E (March 

28, 2009); Amherst Securities Group, 

LLC, FAN 09–12E (September 14, 2009); 

Cantor Fitzgerald & Company, FAN 11– 

05E (June 6, 2011); and Cortview Capital 

Securities LLC, FAN 11–08E (October 

10, 2011); which received the approval 

of the Department to engage in 

transactions substantially similar to the 

transactions described in the 

Underwriter Exemptions pursuant to 

PTE 96–62, 67 FR 44622 (July 3, 2002). 

I. Transactions 

A. Effective for transactions occurring 

on or after April 5, 2006, the restrictions 

of sections 406(a) and 407(a) of the Act, 

and the taxes imposed by sections 

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

of section 4975(c)(1)(A) through (D) of 

the Code shall not apply to the 

following transactions involving Issuers 

and Securities evidencing interests 

therein: 

(1) The direct or indirect sale, 

exchange or transfer of Securities in the 

initial issuance of Securities between 

the Sponsor or Underwriter and an 

employee benefit plan when the 

Sponsor, Servicer, Trustee or Insurer of 

an Issuer, the Underwriter of the 

Securities representing an interest in the 

Issuer, or an Obligor is a party in 

interest with respect to such plan; 

(2) The direct or indirect acquisition 

or disposition of Securities by a plan in 

the secondary market for such 

Securities; and 

(3) The continued holding of 

Securities acquired by a plan pursuant 

to subsection I.A.(1) or (2). 

Notwithstanding the foregoing, 

section I.A. does not provide an 

exemption from the restrictions of 

sections 406(a)(1)(E), 406(a)(2) and 407 

of the Act for the acquisition or holding 

of a Security on behalf of an Excluded 

Plan by any person who has 

discretionary authority or renders 

investment advice with respect to the 

assets of that Excluded Plan.2

B. Effective for transactions occurring 

on or after April 5, 2006, the restrictions 

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

Act and the taxes imposed by sections 

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

of section 4975(c)(1)(E) of the Code, 

shall not apply to: 

(1) The direct or indirect sale, 

exchange or transfer of Securities in the 

initial issuance of Securities between 

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41092 Federal Register / Vol. 78, No. 131 / Tuesday, July 9, 2013 / Notices 

3For purposes of this Underwriter Exemption, 

each plan participating in a commingled fund (such 

as a bank collective trust fund or insurance 

company pooled separate account) shall be 

considered to own the same proportionate 

undivided interest in each asset of the commingled 

fund as its proportionate interest in the total assets 

of the commingled fund as calculated on the most 

recent preceding valuation date of the fund. 

4 In the case of a private placement memorandum, 

such memorandum must contain substantially the 

same information that would be disclosed in a 

prospectus if the offering of the securities were 

made in a registered public offering under the 

Securities Act of 1933. In the Department’s view, 

the private placement memorandum must contain 

sufficient information to permit plan fiduciaries to 

make informed investment decisions. For purposes 

of this exemption, references to ‘‘prospectus’’ 

include any related prospectus supplement thereto, 

pursuant to which Securities are offered to 

investors. 

the Sponsor or Underwriter and a plan 

when the person who has discretionary 

authority or renders investment advice 

with respect to the investment of plan 

assets in the Securities is (a) an Obligor 

with respect to 5 percent or less of the 

fair market value of obligations or 

receivables contained in the Issuer, or 

(b) an Affiliate of a person described in 

(a); if: 

(i) The plan is not an Excluded Plan; 

(ii) Solely in the case of an acquisition 

of Securities in connection with the 

initial issuance of the Securities, at least 

50 percent of each class of Securities in 

which plans have invested is acquired 

by persons independent of the members 

of the Restricted Group and at least 50 

percent of the aggregate interest in the 

Issuer is acquired by persons 

independent of the Restricted Group; 

(iii) A plan’s investment in each class 

of Securities does not exceed 25 percent 

of all of the Securities of that class 

outstanding at the time of the 

acquisition; and 

(iv) Immediately after the acquisition 

of the Securities, no more than 25 

percent of the assets of a plan with 

respect to which the person has 

discretionary authority or renders 

investment advice are invested in 

Securities representing an interest in an 

Issuer containing assets sold or serviced 

by the same entity.3 For purposes of this 

paragraph (iv) only, an entity will not be 

considered to service assets contained 

in an Issuer if it is merely a Subservicer 

of that Issuer; 

(2) The direct or indirect acquisition 

or disposition of Securities by a plan in 

the secondary market for such 

Securities, provided that the conditions 

set forth in paragraphs (i), (iii) and (iv) 

of subsection I.B.(1) are met; and 

(3) The continued holding of 

Securities acquired by a plan pursuant 

to subsection I.B.(1) or (2). 

C. Effective for transactions occurring 

on or after April 5, 2006, the restrictions 

of sections 406(a), 406(b) and 407(a) of 

the Act, and the taxes imposed by 

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

reason of section 4975(c) of the Code, 

shall not apply to transactions in 

connection with the servicing, 

management and operation of an Issuer, 

including the use of any Eligible Swap 

transaction; or the defeasance of a 

mortgage obligation held as an asset of 

the Issuer through the substitution of a 

new mortgage obligation in a 

commercial mortgage- backed 

Designated Transaction, provided: 

(1) Such transactions are carried out 

in accordance with the terms of a 

binding Pooling and Servicing 

Agreement; 

(2) The Pooling and Servicing 

Agreement is provided to, or described 

in all material respects in the prospectus 

or private placement memorandum 

provided to, investing plans before they 

purchase Securities issued by the 

Issuer; 4 and 

(3) The defeasance of a mortgage 

obligation and the substitution of a new 

mortgage obligation in a commercial 

mortgage-backed Designated 

Transaction meet the terms and 

conditions for such defeasance and 

substitution as are described in the 

prospectus or private placement 

memorandum for such Securities, 

which terms and conditions have been 

approved by a Rating Agency and does 

not result in the Securities receiving a 

lower credit rating from the Rating 

Agency than the current rating of the 

Securities. 

Notwithstanding the foregoing, section 

I.C. does not provide an exemption from 

the restrictions of section 406(b) of the 

Act or from the taxes imposed by reason 

of section 4975(c) of the Code for the 

receipt of a fee by a Servicer of the 

Issuer from a person other than the 

Trustee or Sponsor, unless such fee 

constitutes a Qualified Administrative 

Fee. 

D. Effective for transactions occurring 

on or after April 5, 2006, the restrictions 

of sections 406(a) and 407(a) of the Act, 

and the taxes imposed by section 

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

section 4975(c)(1)(A) through (D) of the 

Code, shall not apply to any 

transactions to which those restrictions 

or taxes would otherwise apply merely 

because a person is deemed to be a party 

in interest or disqualified person 

(including a fiduciary) with respect to a 

plan by virtue of providing services to 

the plan (or by virtue of having a 

relationship to such service provider 

described in section 3(14)(F), (G), (H) or 

(I) of the Act or section 4975(e)(2)(F), 

(G), (H) or (I) of the Code), solely 

because of the plan’s ownership of 

Securities. 

II. General Conditions 

A. The relief provided under section 

I. is available only if the following 

conditions are met: 

(1) The acquisition of Securities by a 

plan is on terms (including the Security 

price) that are at least as favorable to the 

plan as they would be in an arm’slength transaction with an unrelated 

party; 

(2) The rights and interests evidenced 

by the Securities are not subordinated to 

the rights and interests evidenced by 

other Securities of the same Issuer, 

unless the Securities are issued in a 

Designated Transaction; 

(3) The Securities acquired by the 

plan have received a rating from a 

Rating Agency at the time of such 

acquisition that is in one of the three (or 

in the case of Designated Transactions, 

four) highest generic rating categories; 

(4) The Trustee is not an Affiliate of 

any member of the Restricted Group, 

other than an Underwriter. For purposes 

of this requirement; 

(a) The Trustee shall not be 

considered to be an Affiliate of a 

Servicer solely because the Trustee has 

succeeded to the rights and 

responsibilities of the Servicer pursuant 

to the terms of a Pooling and Servicing 

Agreement providing for such 

succession upon the occurrence of one 

or more events of default by the 

Servicer; and 

(b) Subsection II.A.(4) will be deemed 

satisfied notwithstanding a Servicer 

becoming an Affiliate of the Trustee as 

the result of a merger or acquisition 

involving the Trustee, such Servicer 

and/or their Affiliates which occurs 

after the initial issuance of the 

Securities, provided that: 

(i) Such Servicer ceases to be an 

Affiliate of the Trustee no later than six 

months after the date such Servicer 

became an Affiliate of the Trustee; and 

(ii) Such Servicer did not breach any 

of its obligations under the Pooling and 

Servicing Agreement, unless such 

breach was immaterial and timely cured 

in accordance with the terms of such 

agreement, during the period from the 

closing date of such merger or 

acquisition transaction through the date 

the Servicer ceased to be an Affiliate of 

the Trustee; 

(5) The sum of all payments made to 

and retained by the Underwriters in 

connection with the distribution or 

placement of Securities represents not 

more than Reasonable Compensation for 

underwriting or placing the Securities; 

the sum of all payments made to and 

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Federal Register / Vol. 78, No. 131 / Tuesday, July 9, 2013 / Notices 41093 

retained by the Sponsor pursuant to the 

assignment of obligations (or interests 

therein) to the Issuer represents not 

more than the fair market value of such 

obligations (or interests); and the sum of 

all payments made to and retained by 

the Servicer represents not more than 

Reasonable Compensation for the 

Servicer’s services under the Pooling 

and Servicing Agreement and 

reimbursement of the Servicer’s 

reasonable expenses in connection 

therewith; 

(6) The plan investing in such 

Securities is an ‘‘accredited investor’’ as 

defined in Rule 501(a)(1) of Regulation 

D of the Securities and Exchange 

Commission under the Securities Act of 

1933; and 

(7) In the event that the obligations 

used to fund an Issuer have not all been 

transferred to the Issuer on the Closing 

Date, additional obligations of the types 

specified in subsection III.B.(1) may be 

transferred to the Issuer during the PreFunding Period in exchange for 

amounts credited to the Pre-Funding 

Account, provided that: 

(a) The Pre-Funding Limit is not 

exceeded; 

(b) All such additional obligations 

meet the same terms and conditions for 

determining the eligibility of the 

original obligations used to create the 

Issuer (as described in the prospectus or 

private placement memorandum and/or 

Pooling and Servicing Agreement for 

such Securities), which terms and 

conditions have been approved by a 

Rating Agency. 

Notwithstanding the foregoing, the 

terms and conditions for determining 

the eligibility of an obligation may be 

changed if such changes receive prior 

approval either by a majority vote of the 

outstanding securityholders or by a 

Rating Agency; 

(c) The transfer of such additional 

obligations to the Issuer during the PreFunding Period does not result in the 

Securities receiving a lower credit rating 

from a Rating Agency upon termination 

of the Pre-Funding Period than the 

rating that was obtained at the time of 

the initial issuance of the Securities by 

the Issuer; 

(d) The weighted average annual 

percentage interest rate (the average 

interest rate) for all of the obligations 

held by the Issuer at the end of the PreFunding Period will not be more than 

100 basis points lower than the average 

interest rate for the obligations which 

were transferred to the Issuer on the 

Closing Date; 

(e) In order to ensure that the 

characteristics of the receivables 

actually acquired during the PreFunding Period are substantially similar 

to those which were acquired as of the 

Closing Date, the characteristics of the 

additional obligations will either be 

monitored by a credit support provider 

or other insurance provider which is 

independent of the Sponsor or an 

independent accountant retained by the 

Sponsor will provide the Sponsor with 

a letter (with copies provided to the 

Rating Agency, the Underwriter and the 

Trustee) stating whether or not the 

characteristics of the additional 

obligations conform to the 

characteristics of such obligations 

described in the prospectus, private 

placement memorandum and/or Pooling 

and Servicing Agreement. In preparing 

such letter, the independent accountant 

will use the same type of procedures as 

were applicable to the obligations which 

were transferred as of the Closing Date; 

(f) The Pre-Funding Period shall be 

described in the prospectus or private 

placement memorandum provided to 

investing plans; and 

(g) The Trustee of the Trust (or any 

agent with which the Trustee contracts 

to provide Trust services) will be a 

substantial financial institution or trust 

company experienced in trust activities 

and familiar with its duties, 

responsibilities and liabilities as a 

fiduciary under the Act. The Trustee, as 

the legal owner of the obligations in the 

Trust or the holder of a security interest 

in the obligations held by the Issuer, 

will enforce all the rights created in 

favor of securityholders of the Issuer, 

including employee benefit plans 

subject to the Act; 

(8) In order to insure that the assets 

of the Issuer may not be reached by 

creditors of the Sponsor in the event of 

bankruptcy or other insolvency of the 

Sponsor: 

(a) The legal documents establishing 

the Issuer will contain: 

(i) Restrictions on the Issuer’s ability 

to borrow money or issue debt other 

than in connection with the 

securitization; 

(ii) Restrictions on the Issuer merging 

with another entity, reorganizing, 

liquidating or selling assets (other than 

in connection with the securitization); 

(iii) Restrictions limiting the 

authorized activities of the Issuer to 

activities relating to the securitization; 

(iv) If the Issuer is not a Trust, 

provisions for the election of at least one 

independent director/partner/member 

whose affirmative consent is required 

before a voluntary bankruptcy petition 

can be filed by the Issuer; and 

(v) If the Issuer is not a Trust, 

requirements that each independent 

director/partner/member must be an 

individual that does not have a 

significant interest in, or other 

relationships with, the Sponsor or any 

of its Affiliates; and 

(b) The Pooling and Servicing 

Agreement and/or other agreements 

establishing the contractual 

relationships between the parties to the 

securitization transaction will contain 

covenants prohibiting all parties thereto 

from filing an involuntary bankruptcy 

petition against the Issuer or initiating 

any other form of insolvency proceeding 

until after the Securities have been paid; 

and 

(c) Prior to the issuance by the Issuer 

of any Securities, a legal opinion is 

received which states that either: 

(i) A ‘‘true sale’’ of the assets being 

transferred to the Issuer by the Sponsor 

has occurred and that such transfer is 

not being made pursuant to a financing 

of the assets by the Sponsor; or 

(ii) In the event of insolvency or 

receivership of the Sponsor, the assets 

transferred to the Issuer will not be part 

of the estate of the Sponsor; 

(9) If a particular class of Securities 

held by any plan involves a Ratings 

Dependent or Non-Ratings Dependent 

Swap entered into by the Issuer, then 

each particular swap transaction 

relating to such Securities: 

(a) Shall be an Eligible Swap; 

(b) Shall be with an Eligible Swap 

Counterparty; 

(c) In the case of a Ratings Dependent 

Swap, shall provide that if the credit 

rating of the counterparty is withdrawn 

or reduced by any Rating Agency below 

a level specified by the Rating Agency, 

the Servicer (as agent for the Trustee) 

shall, within the period specified under 

the Pooling and Servicing Agreement: 

(i) Obtain a replacement swap 

agreement with an Eligible Swap 

Counterparty which is acceptable to the 

Rating Agency and the terms of which 

are substantially the same as the current 

swap agreement (at which time the 

earlier swap agreement shall terminate); 

or 

(ii) Cause the swap counterparty to 

establish any collateralization or other 

arrangement satisfactory to the Rating 

Agency such that the then current rating 

by the Rating Agency of the particular 

class of Securities will not be 

withdrawn or reduced. 

In the event that the Servicer fails to 

meet its obligations under this 

subsection II.A.(9)(c), plan 

securityholders will be notified in the 

immediately following Trustee’s 

periodic report which is provided to 

securityholders, and sixty days after the 

receipt of such report, the exemptive 

relief provided under section I.C. will 

prospectively cease to be applicable to 

any class of Securities held by a plan 

which involves such Ratings Dependent 

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Swap; provided that in no event will 

such plan securityholders be notified 

any later than the end of the second 

month that begins after the date on 

which such failure occurs. 

(d) In the case of a Non-Ratings 

Dependent Swap, shall provide that, if 

the credit rating of the counterparty is 

withdrawn or reduced below the lowest 

level specified in section III.GG., the 

Servicer (as agent for the Trustee) shall 

within a specified period after such 

rating withdrawal or reduction: 

(i) Obtain a replacement swap 

agreement with an Eligible Swap 

Counterparty, the terms of which are 

substantially the same as the current 

swap agreement (at which time the 

earlier swap agreement shall terminate); 

or 

(ii) Cause the swap counterparty to 

post collateral with the Trustee in an 

amount equal to all payments owed by 

the counterparty if the swap transaction 

were terminated; or 

(iii) Terminate the swap agreement in 

accordance with its terms; and 

(e) Shall not require the Issuer to 

make any termination payments to the 

counterparty (other than a currently 

scheduled payment under the swap 

agreement) except from Excess Spread 

or other amounts that would otherwise 

be payable to the Servicer or the 

Sponsor; 

(10) Any class of Securities, to which 

one or more swap agreements entered 

into by the Issuer applies, may be 

acquired or held in reliance upon this 

Underwriter Exemption only by 

Qualified Plan Investors; and 

(11) Prior to the issuance of any debt 

securities, a legal opinion is received 

which states that the debt holders have 

a perfected security interest in the 

Issuer’s assets. 

B. Neither any Underwriter, Sponsor, 

Trustee, Servicer, Insurer or any 

Obligor, unless it or any of its Affiliates 

has discretionary authority or renders 

investment advice with respect to the 

plan assets used by a plan to acquire 

Securities, shall be denied the relief 

provided under section I., if the 

provision of subsection II.A.(6) is not 

satisfied with respect to acquisition or 

holding by a plan of such Securities, 

provided that (1) such condition is 

disclosed in the prospectus or private 

placement memorandum; and (2) in the 

case of a private placement of 

Securities, the Trustee obtains a 

representation from each initial 

purchaser which is a plan that it is in 

compliance with such condition, and 

obtains a covenant from each initial 

purchaser to the effect that, so long as 

such initial purchaser (or any transferee 

of such initial purchaser’s Securities) is 

required to obtain from its transferee a 

representation regarding compliance 

with the Securities Act of 1933, any 

such transferees will be required to 

make a written representation regarding 

compliance with the condition set forth 

in subsection II.A.(6). 

III. Definitions 

For purposes of this exemption: 

A. ‘‘Security’’ means: 

(1) A pass-through certificate or trust 

certificate that represents a beneficial 

ownership interest in the assets of an 

Issuer which is a Trust and which 

entitles the holder to payments of 

principal, interest and/or other 

payments made with respect to the 

assets of such Trust; or 

(2) A security which is denominated 

as a debt instrument that is issued by, 

and is an obligation of, an Issuer; with 

respect to which the Underwriter is 

either (i) the sole underwriter or the 

manager or co-manager of the 

underwriting syndicate, or (ii) a selling 

or placement agent. 

B. ‘‘Issuer’’ means an investment pool, 

the corpus or assets of which are held 

in trust (including a grantor or owner 

Trust) or whose assets are held by a 

partnership, special purpose 

corporation or limited liability company 

(which Issuer may be a Real Estate 

Mortgage Investment Conduit (REMIC) 

or a Financial Asset Securitization 

Investment Trust (FASIT) within the 

meaning of section 860D(a) or section 

860L, respectively, of the Code); and the 

corpus or assets of which consist solely 

of: 

(1)(a) Secured consumer receivables 

that bear interest or are purchased at a 

discount (including, but not limited to, 

home equity loans and obligations 

secured by shares issued by a 

cooperative housing association); and/or 

(b) Secured credit instruments that 

bear interest or are purchased at a 

discount in transactions by or between 

business entities (including, but not 

limited to, Qualified Equipment Notes 

Secured by Leases); and/or 

(c) Obligations that bear interest or are 

purchased at a discount and which are 

secured by single-family residential, 

multi-family residential and/or 

commercial real property (including 

obligations secured by leasehold 

interests on residential or commercial 

real property); and/or 

(d) Obligations that bear interest or 

are purchased at a discount and which 

are secured by motor vehicles or 

equipment, or Qualified Motor Vehicle 

Leases; and/or 

(e) Guaranteed governmental 

mortgage pool certificates, as defined in 

29 CFR 2510.3–101(i)(2); and/or 

(f) Fractional undivided interests in 

any of the obligations described in 

clauses (a)–(e) of this subsection B.(1). 

(1) Notwithstanding the foregoing, 

residential and home equity loan 

receivables issued in Designated 

Transactions may be less than fully 

secured, provided that: (i) The rights 

and interests evidenced by the 

Securities issued in such Designated 

Transactions (as defined in section 

III.DD.) are not subordinated to the 

rights and interests evidenced by 

Securities of the same Issuer; (ii) such 

Securities acquired by the plan have 

received a rating from a Rating Agency 

at the time of such acquisition that is in 

one of the two highest generic rating 

categories; and (iii) any obligation 

included in the corpus or assets of the 

Issuer must be secured by collateral 

whose fair market value on the Closing 

Date of the Designated Transaction is at 

least equal to 80% of the sum of: (I) The 

outstanding principal balance due 

under the obligation which is held by 

the Issuer and (II) the outstanding 

principal balance(s) of any other 

obligation(s) of higher priority (whether 

or not held by the Issuer) which are 

secured by the same collateral. 

(2) Property which had secured any of 

the obligations described in subsection 

III.B.(1); 

(3)(a) Undistributed cash or temporary 

investments made therewith maturing 

no later than the next date on which 

distributions are made to 

securityholders; and/or 

(b) Cash or investments made 

therewith which are credited to an 

account to provide payments to 

securityholders pursuant to any Eligible 

Swap Agreement meeting the conditions 

of subsection II.A.(9) or pursuant to any 

Eligible Yield Supplement Agreement; 

and/or 

(c) Cash transferred to the Issuer on 

the Closing Date and permitted 

investments made therewith which: 

(i) Are credited to a Pre-Funding 

Account established to purchase 

additional obligations with respect to 

which the conditions set forth in 

paragraphs (a)–(g) of subsection II.A.(7) 

are met; and/or 

(ii) Are credited to a Capitalized 

Interest Account; and 

(iii) Are held by the Issuer for a period 

ending no later than the first 

distribution date to securityholders 

occurring after the end of the PreFunding Period. 

For purposes of this paragraph (c) of 

subsection III.B.(3), the term ‘‘permitted 

investments’’ means investments which: 

(i) are either: (x) direct obligations of, or 

obligations fully guaranteed as to timely 

payment of principal and interest by, 

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the United States or any agency or 

instrumentality thereof, provided that 

such obligations are backed by the full 

faith and credit of the United States or 

(y) have been rated (or the Obligor has 

been rated) in one of the three highest 

generic rating categories by a Rating 

Agency; (ii) are described in the Pooling 

and Servicing Agreement; and (iii) are 

permitted by the Rating Agency. 

(4) Rights of the Trustee under the 

Pooling and Servicing Agreement, and 

rights under any insurance policies, 

third-party guarantees, contracts of 

suretyship, Eligible Yield Supplement 

Agreements, Eligible Swap Agreements 

meeting the conditions of subsection 

II.A.(9) or other credit support 

arrangements with respect to any 

obligations described in subsection 

III.B.(1). 

Notwithstanding the foregoing, the 

term ‘‘Issuer’’ does not include any 

investment pool unless: (i) The assets of 

the type described in paragraphs (a)–(f) 

of subsection III.B.(1) which are 

contained in the investment pool have 

been included in other investment 

pools, (ii) Securities evidencing 

interests in such other investment pools 

have been rated in one of the three (or 

in the case of Designated Transactions, 

four) highest generic rating categories by 

a Rating Agency for at least one year 

prior to the plan’s acquisition of 

Securities pursuant to this Underwriter 

Exemption, and (iii) Securities 

evidencing interests in such other 

investment pools have been purchased 

by investors other than plans for at least 

one year prior to the plan’s acquisition 

of Securities pursuant to this 

Underwriter Exemption. 

C. ‘‘Underwriter’’ means: 

(1) An entity defined as an 

Underwriter in subsection III.C.(1) of 

each of the Underwriter Exemptions 

that are being amended by this 

exemption. In addition, the term 

Underwriter includes Deutsche Bank 

AG, New York Branch and Deutsche 

Morgan Grenfell/C.J. Lawrence Inc, 

Credit Lyonnais Securities (USA) Inc., 

ABN AMRO Inc., Ironwood Capital 

Partners Ltd., William J. Mayer 

Securities LLC, Raymond James & 

Associates Inc. & Raymond James 

Financial Inc., WAMU Capital 

Corporation, and Terwin Capital LLC 

(which received the approval of the 

Department to engage in transactions 

substantially similar to the transactions 

described in the Underwriter 

Exemptions pursuant to PTE 96–62); (2) 

Any person directly or indirectly, 

through one or more intermediaries, 

controlling, controlled by or under 

common control with such entity; or (3) 

Any member of an underwriting 

syndicate or selling group of which a 

person described in subsections III.C.(1) 

or (2) is a manager or co-manager with 

respect to the Securities. 

D. ‘‘Sponsor’’ means the entity that 

organizes an Issuer by depositing 

obligations therein in exchange for 

Securities. 

E. ‘‘Master Servicer’’ means the entity 

that is a party to the Pooling and 

Servicing Agreement relating to assets of 

the Issuer and is fully responsible for 

servicing, directly or through 

Subservicers, the assets of the Issuer. 

F. ‘‘Subservicer’’ means an entity 

which, under the supervision of and on 

behalf of the Master Servicer, services 

loans contained in the Issuer, but is not 

a party to the Pooling and Servicing 

Agreement. 

G. ‘‘Servicer’’ means any entity which 

services loans contained in the Issuer, 

including the Master Servicer and any 

Subservicer. 

H. ‘‘Trust’’ means an Issuer which is 

a trust (including an owner trust, 

grantor trust or a REMIC or FASIT 

which is organized as a Trust). 

I. ‘‘Trustee’’ means the Trustee of any 

Trust which issues Securities and also 

includes an Indenture Trustee. 

‘‘Indenture Trustee’’ means the Trustee 

appointed under the indenture pursuant 

to which the subject Securities are 

issued, the rights of holders of the 

Securities are set forth and a security 

interest in the Trust assets in favor of 

the holders of the Securities is created. 

The Trustee or the Indenture Trustee is 

also a party to or beneficiary of all the 

documents and instruments transferred 

to the Issuer, and as such, has both the 

authority to, and the responsibility for, 

enforcing all the rights created thereby 

in favor of holders of the Securities, 

including those rights arising in the 

event of default by the Servicer. 

J. ‘‘Insurer’’ means the insurer or 

guarantor of, or provider of other credit 

support for, an Issuer. Notwithstanding 

the foregoing, a person is not an insurer 

solely because it holds Securities 

representing an interest in an Issuer 

which are of a class subordinated to 

Securities representing an interest in the 

same Issuer. 

K. ‘‘Obligor’’ means any person, other 

than the Insurer, that is obligated to 

make payments with respect to any 

obligation or receivable included in the 

Issuer. Where an Issuer contains 

Qualified Motor Vehicle Leases or 

Qualified Equipment Notes Secured by 

Leases, ‘‘Obligor’’ shall also include any 

owner of property subject to any lease 

included in the Issuer, or subject to any 

lease securing an obligation included in 

the Issuer. 

L. ‘‘Excluded Plan’’ means any plan 

with respect to which any member of 

the Restricted Group is a ‘‘plan sponsor’’ 

within the meaning of section 3(16)(B) 

of the Act. 

M. ‘‘Restricted Group’’ with respect to 

a class of Securities means: 

(1) Each Underwriter; 

(2) Each Insurer; 

(3) The Sponsor; 

(4) The Trustee; 

(5) Each Servicer; 

(6) Any Obligor with respect to 

obligations or receivables included in 

the Issuer constituting more than 5 

percent of the aggregate unamortized 

principal balance of the assets in the 

Issuer, determined on the date of the 

initial issuance of Securities by the 

Issuer; 

(7) Each counterparty in an Eligible 

Swap Agreement; or 

(8) Any Affiliate of a person described 

in subsections III.M.(1)–(7). 

N. ‘‘Affiliate’’ of another person 

includes: 

(1) Any person directly or indirectly, 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with such other 

person; 

(2) Any officer, director, partner, 

employee, relative (as defined in section 

3(15) of the Act), a brother, a sister, or 

a spouse of a brother or sister of such 

other person; and 

(3) Any corporation or partnership of 

which such other person is an officer, 

director or partner. 

O. ‘‘Control’’ means the power to 

exercise a controlling influence over the 

management or policies of a person 

other than an individual. 

P. A person will be ‘‘independent’’ of 

another person only if: 

(1) Such person is not an Affiliate of 

that other person; and 

(2) The other person, or an Affiliate 

thereof, is not a fiduciary who has 

investment management authority or 

renders investment advice with respect 

to any assets of such person. 

Q. ‘‘Sale’’ includes the entrance into 

a Forward Delivery Commitment, 

provided: 

(1) The terms of the Forward Delivery 

Commitment (including any fee paid to 

the investing plan) are no less favorable 

to the plan than they would be in an 

arm’s-length transaction with an 

unrelated party; 

(2) The prospectus or private 

placement memorandum is provided to 

an investing plan prior to the time the 

plan enters into the Forward Delivery 

Commitment; and 

(3) At the time of the delivery, all 

conditions of this Underwriter 

Exemption applicable to sales are met. 

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R. ‘‘Forward Delivery Commitment’’ 

means a contract for the purchase or 

sale of one or more Securities to be 

delivered at an agreed future settlement 

date. The term includes both mandatory 

contracts (which contemplate obligatory 

delivery and acceptance of the 

Securities) and optional contracts 

(which give one party the right but not 

the obligation to deliver Securities to, or 

demand delivery of Securities from, the 

other party). 

S. ‘‘Reasonable Compensation’’ has 

the same meaning as that term is 

defined in 29 CFR 2550.408c–2. 

T. ‘‘Qualified Administrative Fee’’ 

means a fee which meets the following 

criteria: 

(1) The fee is triggered by an act or 

failure to act by the Obligor other than 

the normal timely payment of amounts 

owing in respect of the obligations; 

(2) The Servicer may not charge the 

fee absent the act or failure to act 

referred to in subsection III.T.(1); 

(3) The ability to charge the fee, the 

circumstances in which the fee may be 

charged, and an explanation of how the 

fee is calculated are set forth in the 

Pooling and Servicing Agreement; and 

(4) The amount paid to investors in 

the Issuer will not be reduced by the 

amount of any such fee waived by the 

Servicer. 

U. ‘‘Qualified Equipment Note 

Secured By A Lease’’ means an 

equipment note: 

(1) Which is secured by equipment 

which is leased; 

(2) Which is secured by the obligation 

of the lessee to pay rent under the 

equipment lease; and 

(3) With respect to which the Issuer’s 

security interest in the equipment is at 

least as protective of the rights of the 

Issuer as the Issuer would have if the 

equipment note were secured only by 

the equipment and not the lease. 

V. ‘‘Qualified Motor Vehicle Lease’’ 

means a lease of a motor vehicle where: 

(1) The Issuer owns or holds a 

security interest in the lease; 

(2) The Issuer owns or holds a 

security interest in the leased motor 

vehicle; and 

(3) The Issuer’s security interest in the 

leased motor vehicle is at least as 

protective of the Issuer’s rights as the 

Issuer would receive under a motor 

vehicle installment loan contract. 

W. ‘‘Pooling and Servicing 

Agreement’’ means the agreement or 

agreements among a Sponsor, a Servicer 

and the Trustee establishing a Trust. 

‘‘Pooling and Servicing Agreement’’ also 

includes the indenture entered into by 

the Issuer and the Indenture Trustee. 

X. ‘‘Rating Agency’’ means a credit 

rating agency that: 

(i) Is currently recognized by the U.S. 

Securities and Exchange Commission 

(SEC) as a nationally recognized 

statistical ratings organization (NRSRO); 

(ii) Has indicated on its most recently 

filed SEC Form NRSRO that it rates 

‘‘issuers of asset-backed securities’’; and 

(iii) Has had, within a period not 

exceeding 12 months prior to the initial 

issuance of the securities, at least three 

(3) ‘‘qualified ratings engagements. A 

‘‘qualified ratings engagement’’ is one (i) 

requested by an issuer or underwriter of 

securities in connection with the initial 

offering of the securities; (ii) for which 

the credit rating agency is compensated 

for providing ratings; (iii) which is made 

public to investors generally; and (iv) 

which involves the offering of securities 

of the type that would be granted relief 

by the Underwriter Exemptions. 

Y. ‘‘Capitalized Interest Account’’ 

means an Issuer account: (i) Which is 

established to compensate 

securityholders for shortfalls, if any, 

between investment earnings on the PreFunding Account and the interest rate 

payable under the Securities; and (ii) 

which meets the requirements of 

paragraph (c) of subsection III.B.(3). 

Z. ‘‘Closing Date’’ means the date the 

Issuer is formed, the Securities are first 

issued and the Issuer’s assets (other than 

those additional obligations which are 

to be funded from the Pre-Funding 

Account pursuant to subsection II.A.(7)) 

are transferred to the Issuer. 

AA. ‘‘Pre-Funding Account’’ means 

an Issuer account: (i) Which is 

established to purchase additional 

obligations, which obligations meet the 

conditions set forth in paragraph (a)–(g) 

of subsection II.A.(7); and (ii) which 

meets the requirements of paragraph (c) 

of subsection III.B.(3). 

BB. ‘‘Pre-Funding Limit’’ means a 

percentage or ratio of the amount 

allocated to the Pre-Funding Account, 

as compared to the total principal 

amount of the Securities being offered, 

which is less than or equal to 25 

percent. 

CC. ‘‘Pre-Funding Period’’ means the 

period commencing on the Closing Date 

and ending no later than the earliest to 

occur of: (i) The date the amount on 

deposit in the Pre-Funding Account is 

less than the minimum dollar amount 

specified in the Pooling and Servicing 

Agreement; (ii) the date on which an 

event of default occurs under the 

Pooling and Servicing Agreement; or 

(iii) the date which is the later of three 

months or ninety days after the Closing 

Date. 

DD. ‘‘Designated Transaction’’ means 

a securitization transaction in which the 

assets of the Issuer consist of secured 

consumer receivables, secured credit 

instruments or secured obligations that 

bear interest or are purchased at a 

discount and are: (i) Motor vehicle, 

home equity and/or manufactured 

housing consumer receivables; and/or 

(ii) motor vehicle credit instruments in 

transactions by or between business 

entities; and/or (iii) single-family 

residential, multi-family residential, 

home equity, manufactured housing 

and/or commercial mortgage obligations 

that are secured by single-family 

residential, multi-family residential, 

commercial real property or leasehold 

interests therein. For purposes of this 

section III.DD., the collateral securing 

motor vehicle consumer receivables or 

motor vehicle credit instruments may 

include motor vehicles and/or Qualified 

Motor Vehicle Leases. 

EE. ‘‘Ratings Dependent Swap’’ means 

an interest rate swap, or (if purchased 

by or on behalf of the Issuer) an interest 

rate cap contract, that is part of the 

structure of a class of Securities where 

the rating assigned by the Rating Agency 

to any class of Securities held by any 

plan is dependent on the terms and 

conditions of the swap and the rating of 

the counterparty, and if such Security 

rating is not dependent on the existence 

of the swap and rating of the 

counterparty, such swap or cap shall be 

referred to as a ‘‘Non-Ratings Dependent 

Swap’’. With respect to a Non-Ratings 

Dependent Swap, each Rating Agency 

rating the Securities must confirm, as of 

the date of issuance of the Securities by 

the Issuer, that entering into an Eligible 

Swap with such counterparty will not 

affect the rating of the Securities. 

FF. ‘‘Eligible Swap’’ means a Ratings 

Dependent or Non-Ratings Dependent 

Swap: 

(1) Which is denominated in U.S. 

dollars; 

(2) Pursuant to which the Issuer pays 

or receives, on or immediately prior to 

the respective payment or distribution 

date for the class of Securities to which 

the swap relates, a fixed rate of interest, 

or a floating rate of interest based on a 

publicly available index (e.g., LIBOR or 

the U.S. Federal Reserve’s Cost of Funds 

Index (COFI)), with the Issuer receiving 

such payments on at least a quarterly 

basis and obligated to make separate 

payments no more frequently than the 

counterparty, with all simultaneous 

payments being netted; 

(3) Which has a notional amount that 

does not exceed either: (i) The principal 

balance of the class of Securities to 

which the swap relates, or (ii) the 

portion of the principal balance of such 

class represented solely by those types 

of corpus or assets of the Issuer referred 

to in subsections III.B.(1), (2) and (3); 

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(4) Which is not leveraged (i.e., 

payments are based on the applicable 

notional amount, the day count 

fractions, the fixed or floating rates 

designated in subsection III.FF.(2), and 

the difference between the products 

thereof, calculated on a one to one ratio 

and not on a multiplier of such 

difference); 

(5) Which has a final termination date 

that is either the earlier of the date on 

which the Issuer terminates or the 

related class of securities is fully repaid; 

and 

(6) Which does not incorporate any 

provision which could cause a 

unilateral alteration in any provision 

described in subsections III.FF.(1) 

through (4) without the consent of the 

Trustee. 

GG. ‘‘Eligible Swap Counterparty’’ 

means a bank or other financial 

institution which has a rating, at the 

date of issuance of the Securities by the 

Issuer, which is in one of the three 

highest long-term credit rating 

categories, or one of the two highest 

short-term credit rating categories, 

utilized by at least one of the Rating 

Agencies rating the Securities; provided 

that, if a swap counterparty is relying on 

its short-term rating to establish 

eligibility under the Underwriter 

Exemption, such swap counterparty 

must either have a long-term rating in 

one of the three highest long-term rating 

categories or not have a long-term rating 

from the applicable Rating Agency, and 

provided further that if the class of 

Securities with which the swap is 

associated has a final maturity date of 

more than one year from the date of 

issuance of the Securities, and such 

swap is a Ratings Dependent Swap, the 

swap counterparty is required by the 

terms of the swap agreement to establish 

any collateralization or other 

arrangement satisfactory to the Rating 

Agencies in the event of a ratings 

downgrade of the swap counterparty. 

HH. ‘‘Qualified Plan Investor’’ means 

a plan investor or group of plan 

investors on whose behalf the decision 

to purchase Securities is made by an 

appropriate independent fiduciary that 

is qualified to analyze and understand 

the terms and conditions of any swap 

transaction used by the Issuer and the 

effect such swap would have upon the 

credit ratings of the Securities. For 

purposes of the Underwriter Exemption, 

such a fiduciary is either: 

(1) A ‘‘qualified professional asset 

manager’’ (QPAM),6 as defined under 

Part V(a) of PTE 84–14, 49 FR 9494, 

9506 (March 13, 1984), as amended by 

70 FR 49305 (August 23, 2005); 

(2) An ‘‘in-house asset manager’’ 

(INHAM),7 as defined under Part IV(a) 

of PTE 96–23, 61 FR 15975, 15982 

(April 10, 1996); or 

(3) A plan fiduciary with total assets 

under management of at least $100 

million at the time of the acquisition of 

such Securities. 

II. ‘‘Excess Spread’’ means, as of any 

day funds are distributed from the 

Issuer, the amount by which the interest 

allocated to Securities exceeds the 

amount necessary to pay interest to 

securityholders, servicing fees and 

expenses. 

JJ. ‘‘Eligible Yield Supplement 

Agreement’’ means any yield 

supplement agreement, similar yield 

maintenance arrangement or, if 

purchased by or on behalf of the Issuer, 

an interest rate cap contract to 

supplement the interest rates otherwise 

payable on obligations described in 

subsection III.B.(1). Such an agreement 

or arrangement may involve a notional 

principal contract provided that: 

(1) It is denominated in U.S. dollars; 

(2) The Issuer receives on, or 

immediately prior to the respective 

payment date for the Securities covered 

by such agreement or arrangement, a 

fixed rate of interest or a floating rate of 

interest based on a publicly available 

index (e.g., LIBOR or COFI), with the 

Issuer receiving such payments on at 

least a quarterly basis; 

(3) It is not ‘‘leveraged’’ as described 

in subsection III.FF.(4); 

(4) It does not incorporate any 

provision which would cause a 

unilateral alteration in any provision 

described in subsections III.JJ.(1)-(3) 

without the consent of the Trustee; 

(5) It is entered into by the Issuer with 

an Eligible Swap Counterparty; and 

(6) It has a notional amount that does 

not exceed either: (i) the principal 

balance of the class of Securities to 

which such agreement or arrangement 

relates, or (ii) the portion of the 

principal balance of such class 

represented solely by those types of 

corpus or assets of the Issuer referred to 

in subsections III.B.(1), (2) and (3). 

IV. Modifications 

For the Underwriter Exemptions 

provided to Residential Funding 

Corporation, Residential Funding 

Mortgage Securities, Inc., et al. and GE 

Capital Mortgage Services, Inc. and 

GECC Capital Markets (the Applicants) 

(PTEs 94–29 and 94–73, respectively); 

A. Section III.A. of this exemption is 

modified to read as follows: 

A. ‘‘Security’’ means: 

(1) A pass-through certificate or trust 

certificate that represents a beneficial 

ownership interest in the assets of an 

Issuer which is a Trust and which 

entitles the holder to payments of 

principal, interest and/or other 

payments made with respect to the 

assets of such Trust; or 

(2) A security which is denominated 

as a debt instrument that is issued by, 

and is an obligation of, an Issuer; with 

respect to which (i) one of the 

Applicants or any of its Affiliates is the 

Sponsor, [and] an entity which has 

received from the Department an 

individual prohibited transaction 

exemption relating to Securities which 

is similar to this exemption, is the sole 

underwriter or the manager or comanager of the underwriting syndicate 

or a selling or placement agent or (ii) 

one of the Applicants or any of its 

Affiliates is the sole underwriter or the 

manager or co-manager of the 

underwriting syndicate, or a selling or 

placement agent. 

B. Section III.C. of this exemption is 

modified to read as follows: 

C. Underwriter means: 

(1) An entity defined as an 

Underwriter in subsection III.C.(1) of 

each of the Underwriter Exemptions 

that are being amended by this 

exemption. In addition, the term 

Underwriter includes Deutsche Bank 

AG, New York Branch and Deutsche 

Morgan Grenfell/C.J. Lawrence Inc., 

Credit Lyonnais Securities (USA) Inc., 

ABN AMRO Inc., Ironwood Capital 

Partners Ltd., William J. Mayer 

Securities LLC, Raymond James & 

Associates Inc. & Raymond James 

Financial Inc., WAMU Capital 

Corporation, and Terwin Capital LLC 

(which received the approval of the 

Department to engage in transactions 

substantially similar to the transactions 

described in the Underwriter 

Exemptions pursuant to PTE 96–62); 

(2) Any person directly or indirectly, 

through one or more intermediaries, 

controlling, controlled by or under 

common control with such entity; 

(3) Any member of an underwriting 

syndicate or selling group of which a 

person described in subsections III.C.(1) 

or (2) above is a manager or co-manager 

with respect to the Securities; or 

(4) Any entity which has received 

from the Department an individual 

prohibited transaction exemption 

relating to Securities which is similar to 

this exemption. 

Technical Correction to the Notice 

In order to correct an inadvertent 

omission, the Department is adopting a 

correction to the Notice on its own 

motion. At footnote 13 on page 76773 of 

the Notice, the following organization 

and Final Authorization Number (FAN) 

is included in the list of organizations 

that the Department is granting 

individual relief for, after the phrase 

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5The attorneys that signed the Comment are: 

Micah Bloomfield of Stroock & Stroock & Lavan 

LLP; Susan M. Camillo of Dechert LLP; Sarah 

Downie of Orrick, Herrington & Sutcliffe LLP; 

Richard Gilbert of Trucker Huss, APC; Tae Jeon of 

Ashurst, LLP; Barbara D. Klippert of Bingham 

McCutchen LLP; Lennine Occhino of Mayer Brown 

LLP; Leslie Okinaka of Hunton & Williams LLC; 

David C. Olstein of Skadden, Arps, Slate, Meagher 

& Flom LLP; Andrew L. Oringer of Dechert LLP; 

Steven W. Rabits of Stroock & Stroock & Lavan LLP; 

and Kathleen Wechter of Kaye Scholer LLP. 

The Commenters explained that they submitted 

the Comment in the hope that their experience in 

working with the Underwriter Exemptions would 

be of assistance to the Department in finalizing the 

Notice. Specifically, the Commenters stated that in 

the course of their practices, they (i) may represent 

various Sponsors, Underwriters or plans regarding 

whether securitization transactions and the 

securities issued in such transactions meet the 

conditions of the Underwriter Exemptions and are 

thus eligible to be purchased or sold by the plans 

and; (ii) may also be called upon to render legal 

opinions as to whether the offering documents 

relating to the securities accurately describe matters 

of law relating to the Act, which by definition 

include their conclusions as to whether securities 

intended to be eligible to be purchased by plans 

pursuant to the Underwriter Exemptions are so 

eligible. In addition, the Commenters stated that a 

number of the attorneys listed as signatories of the 

Comment have represented Underwriters in their 

application and receipt of Underwriter Exemptions 

and amendments thereto from the Department, 

which Underwriter Exemptions would be amended 

by the Notice. 

6The term ‘‘Security’’ is defined in section III.A 

of the Underwriter Exemptions. 

7The term ‘‘Sponsor’’ is defined in section III.D 

of the Underwriter Exemptions. 

8The term ‘‘Issuer’’ is defined in section III.B of 

the Underwriter Exemptions. 

9The term ‘‘Underwriter’’ is defined in section 

III.C of the Underwriter Exemptions. 

‘‘(August 24, 2003);’’ ‘‘Barclays Bank 

PLC & Barclays Capital Inc., FAN 04– 

03E (February 4, 2004)’’. 

Description of Proposed Amendment 

On December 28, 2012, the 

Department published the Notice at 77 

FR 76773. As set forth in the Notice, the 

Department proposed to revise the 

definition of ‘‘Rating Agency,’’ as set 

forth in section III.X of the Underwriter 

Exemptions, by eliminating any specific 

reference to a particular credit rating 

agency, and substituting instead the 

following: 

Section III.X: 

Effective as of the date of publication 

of a final amendment to the Underwriter 

Exemptions in the Federal Register, the 

term ‘‘Rating Agency’’ means a credit 

rating agency that: (i) Is currently 

recognized by the U.S. Securities and 

Exchange Commission (SEC) as a 

nationally recognized statistical ratings 

organization (NRSRO); (ii) has indicated 

on its most recently filed SEC Form 

NRSRO that it rates ‘‘issuers of assetbacked securities’’; and (iii) has had, 

within a period not exceeding 12 

months prior to the closing of the 

current transaction, at least three (3) 

‘‘qualified ratings engagements.’’ A 

‘‘qualified ratings engagement’’ is one (i) 

requested by an issuer or underwriter of 

securities in connection with the initial 

offering of the securities; (ii) for which 

the credit rating agency is compensated 

for providing ratings; (iii) which is a 

public rating; and (iv) which involves 

the offering of securities of the type that 

would be granted relief by the 

Underwriter Exemptions. 

Written Comment 

The Department invited all interested 

persons to submit written comments 

and requests for a hearing with respect 

to the Notice by February 11, 2013. Prior 

to the deadline, Barbara Klippert of 

Bingham McCutchen LLP made a 

request for an extension of the comment 

period on behalf of herself and a group 

of 11 other attorneys from various law 

firms (together with Ms. Klippert, the 

Commenters) collaboratively working 

on a comment letter (the Comment) 

because additional time was needed to 

coordinate all of the attorney 

comments.5 Accordingly, the 

Department granted the Commenters a 

three-day extension of the comment 

period, and the Comment was received 

via email on February 14, 2013. No 

other comments were received during 

the comment period, and there were no 

requests for a public hearing. 

The Commenters expressed general 

support for the modifications described 

in the Notice and requested certain 

clarifications and/or changes regarding: 

(1) Footnote 23 of the Notice; (2) the 12- 

month period described in clause (iii) of 

the definition of ‘‘Rating Agency;’’ (3) 

the term ‘‘public rating,’’ as set forth in 

sub-clause (iii) of the definition of a 

‘‘qualified ratings engagement;’’ and (4) 

sub-clause (iv) of the definition of a 

‘‘qualified ratings engagement’’ and 

certain preamble language relating 

thereto. The Comment and the 

Department’s responses thereto are 

described in further detail below. 

1. Requested Clarification of Footnote 

23. Footnote 23 of the Notice states that 

‘‘[p]lan fiduciaries are responsible for 

confirming that any rating given for a 

certificate acquired pursuant to an 

Underwriter Exemption was issued by a 

credit rating agency that has met the 

Rating Agency criteria set forth herein. 

In that regard, plan fiduciaries may 

demonstrate that they have fulfilled 

their fiduciary responsibilities to the 

plan by accepting representations from 

credit rating agencies that the foregoing 

criteria have been met.’’ The 

Commenters indicate that footnote 23 

can have the unintended consequence 

of requiring a plan fiduciary to obtain 

representations directly from a rating 

agency in order to rely upon a rating 

agency’s representation that it has met 

the Rating Agency criteria set forth in 

the Notice. The Commenters explain 

that the offering documents pursuant to 

which Securities 6 that are intended to 

qualify under the Underwriter 

Exemption are issued take a position as 

to whether the conditions of the 

applicable Underwriter Exemption are 

met or may be met, which involves a 

determination by legal counsel as to 

whether a credit rating agency satisfies 

the definition of Rating Agency. The 

Commenters further explain that plan 

fiduciaries would in the normal course 

review such disclosures in the offering 

documents in making a decision, 

consistent with their fiduciary 

responsibilities, to invest in securities. 

The Commenters propose that the 

representation to the plan fiduciaries 

referred to in footnote 23 could, for 

example, be accomplished indirectly by 

means of a representation by the rating 

agency made to the Sponsor,7 depositor, 

Issuer,8 Underwriter 9 or other 

appropriate party to the securitization 

transaction (for example in the 

engagement letter retaining the rating 

agency to rate the securities). The 

Commenters state that counsel to the 

Issuer, counsel to the Underwriter, and 

plan fiduciaries, in making their 

respective determinations as to the 

applicability of an Underwriter 

Exemption would be able to take into 

account any relevant representations 

provided by the rating agencies in the 

engagement letters discussed above. 

The Commenters also state that they 

did not read footnote 23 and the 

accompanying text as intending to limit 

the alternatives that are available for 

determining that a rating agency has met 

the Rating Agency criteria under the 

Notice or that a representation to plans 

by a rating agency is the sole means by 

which a rating agency could 

demonstrate that it has met the Rating 

Agency criteria set forth in the Notice. 

The Commenters, however, express 

their belief that if the Department were 

to confirm that additional alternative 

methods could be used to ascertain 

whether a rating agency has, in fact, met 

the Rating Agency criteria, this would 

greatly facilitate transactions being able 

to proceed under the Notice when 

finalized. 

The Department, in stating that plan 

fiduciaries ‘‘may accept representations 

from credit rating agencies to confirm 

that the Rating Agency criteria have 

been met,’’ sought to identify direct 

representations by credit rating agencies 

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10The term ‘‘Closing Date’’ is defined in section 

III.Z of the Underwriter Exemptions. 

11See Representation 4 of the Notice on page 

76775. 

to plans as one of the possible means by 

which plan fiduciaries may confirm that 

the Rating Agency criteria have been 

met. In this regard, the Department 

acknowledges that it is possible for plan 

fiduciaries, consistent with their duties 

under section 404 of ERISA, to 

alternatively rely on material, indirect 

representations in making such 

confirmations. Accordingly, the 

Department agrees with the Commenters 

that the reference in footnote 23 that 

plan fiduciaries ‘‘may accept 

representations from credit rating 

agencies to confirm that the Rating 

Agency criteria have been met’’ should 

not be viewed as precluding plan 

fiduciaries from relying on material, 

indirect representations by rating 

agencies when confirming whether such 

agencies have met the Rating Agency 

criteria set forth in the Underwriter 

Exemptions. 

2. Requested Modification of Clause 

(3) of the Definition of Rating Agency. 

The Commenters note that clause (iii) of 

the definition of ‘‘Rating Agency’’ refers 

to the rating agency having had ‘‘within 

a period not exceeding 12 months prior 

to the closing of the current transaction, 

at least three (3) ‘‘qualified ratings 

engagements.’’ The definition of 

‘‘qualified ratings engagement,’’ 

meanwhile, refers to one ‘‘requested by 

an issuer or underwriter of securities in 

connection with the initial offering of 

the securities.’’ The Commenters believe 

that confusion may be created because 

the reference to 12 months prior to the 

‘‘closing of the current transaction’’ 

could be taken to include a secondary 

market transaction. The Commenters 

state that such a requirement would be 

extremely difficult for investors in the 

secondary market to confirm. Therefore, 

the Commenters suggest that once a 

rating agency qualifies as a Rating 

Agency as of the initial offering of a 

securitization transaction, it should 

remain qualified as a Rating Agency for 

purposes of the particular securities 

issued in that transaction when such 

securities are purchased in the 

secondary market. The Commenters 

state that security ratings are requested 

by an Issuer or an Underwriter of 

securities with respect to a structured 

finance transaction in the following 

circumstances: A rating agency may be 

asked to rate securities issued on the 

Closing Date; 10 or if the securities are 

not rated or the Issuer or Underwriter is 

not able to sell the securities, a new 

rating agency may be asked to rate the 

securities at a later date. Such securities 

rated at a later date are considered to be 

sold as part of the initial offering as they 

have not yet been sold to any party 

other than the Underwriter. As part of 

a rating agency’s engagement, it agrees 

to update its rating periodically over the 

life of the security. The Issuer or 

Underwriter would not retain another 

rating agency to rate the securities upon 

a secondary market transfer. 

Accordingly, the Commenters suggest 

that the reference in clause (iii) of the 

definition of ‘‘Rating Agency’’ to the 

rating agency having had ‘‘within a 

period not exceeding 12 months prior to 

the closing of the current transaction, at 

least three (3) ‘qualified ratings 

engagements’ ’’ could be changed to 

avoid confusion to read that the rating 

agency has had ‘‘within a period not 

exceeding 12 months prior to either, the 

Closing Date or the initial issuance of 

the securities, at least three (3) ‘qualified 

ratings engagements.’ ’’ 

Upon consideration of the comment 

above, the Department agrees that clause 

(iii) of the definition of Rating Agency 

should be modified. The Department 

has modified the relevant portion of 

clause (iii) of the Rating Agency 

definition to require that a Rating 

Agency, ‘‘has had, within a period not 

exceeding 12 months prior to the initial 

issuance of the securities, at least three 

(3) ‘qualified ratings engagements.’ ’’ 

Given the Commenters’ representation 

that an Issuer or Underwriter would not 

retain another rating agency to rate the 

securities upon a secondary market 

transfer, the Department believes that 

once a rating agency qualifies as a 

Rating Agency as of the initial offering 

of a securitization transaction, it should 

remain qualified as a Rating Agency for 

purposes of the particular securities 

issued in that transaction to the extent 

that the rating agency is still updating 

its rating of the security. However, 

while a Rating Agency’s rating of 

securities sold as part of an initial 

offering of securities may be counted as 

a ‘‘qualified ratings engagement,’’ 

subsequent updates of the same security 

by such Rating Agency may not be 

counted as a ‘‘qualified ratings 

engagement’’ for purposes of 

determining whether the Rating Agency 

has had ‘‘within a period not exceeding 

12 months prior to the closing of the 

current transaction, at least three (3) 

‘qualified ratings engagements,’ ’’ as 

described in clause (iii) of the definition 

of ‘‘Rating Agency.’’ 

3. Requested Clarification of SubClause (iii) of the Definition of a 

‘‘qualified ratings engagement.’’ The 

Commenters note that sub-clause (iii) of 

the definition of ‘‘qualified ratings 

engagement’’ set forth in the Notice 

refers to the term ‘‘public rating.’’ The 

Commenters believe that it would be 

helpful to clarify that this term refers to 

a rating which is made public to 

investors generally, as opposed to one 

that is made available only to certain 

investors. The Commenters suggest that 

the Department clarify that the nature of 

the type of a securities offering should 

not be determinative of whether a rating 

was ‘‘public.’’ The Commenters believe, 

for example, that securities issued 

pursuant to a private placement using a 

private placement memorandum as the 

offering document should be covered, 

provided the rating is available to the 

public. The Commenters also note that, 

at this time, many more securities of the 

type that would be granted relief under 

the Underwriter Exemptions are sold in 

private placements than are sold in 

public offerings. 

The Department, in proposing to 

describe a ‘‘qualified ratings 

engagement’’ as, among other things, a 

‘‘public rating,’’ intended that such 

rating be a rating that is made public to 

investors. Accordingly, the Department 

did not intend that such term refers to 

a rating that is available only to a 

controlled number of investors. The 

Department notes that a rating may be 

made public to investors generally in 

addition to being set forth in an offering 

document, such as a private placement 

memorandum, that is received by a 

controlled number of recipients. To 

clarify the views above, the Department 

is changing the term ‘‘public rating’’ as 

it appears in sub-clause (iii) of the 

definition of ‘‘qualified ratings 

engagement,’’ to read ‘‘rating that is 

made public to investors generally.’’ 

4. Requested Clarification of SubClause (iv) of the Definition of a 

‘‘qualified ratings engagement.’’ The 

Commenters seek two clarifications 

relating to sub-clause (iv) of the 

definition of a ‘‘qualified ratings 

engagement.’’ First, the Commenters 

note that sub-clause (iv) of the 

definition of a ‘‘qualified ratings 

engagement’’ provides that during the 

applicable 12-month period such 

engagement ‘‘involves the offering of 

securities of the type that would be 

granted relief by the Underwriter 

Exemptions.’’ The Commenters further 

note that, in contrast, the Department’s 

reference to this requirement in the 

preamble to the Notice reads: ‘‘. . . the 

NRSRO must demonstrate that it has 

been selected to rate at least three 

similar transactions during the 

preceding 12 months.’’ 11 The 

Commenters state that the term ‘‘similar 

transactions,’’ as set forth in the 

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12 Id. 

preamble, is substantively narrower 

than the phrase ‘‘securities of the type 

that would be granted relief under the 

Underwriter Exemptions,’’ as set forth 

in sub-clause (iv) of the definition of a 

‘‘qualified ratings engagement.’’ The 

Commenters believe that this distinction 

creates uncertainties regarding which 

‘‘transactions’’ are ‘‘similar’’ in nature. 

The Commenters also state that in the 

current market conditions, few assetbacked and mortgage-backed securities 

of the type covered under the 

Underwriter Exemptions are being 

offered. The Commenters opine that this 

creates fewer opportunities for the 

rating agencies to rate the necessary 

securities over a rolling 12-month 

period, and that this in turn could 

prevent securities of the type that would 

otherwise be granted relief under the 

Underwriter Exemptions from being 

available to be purchased by plans. The 

Commenters believe that it is the 

Department’s intent, as reflected in the 

text of the Notice, and more consistent 

with the general approach of the 

Underwriter Exemptions, that any 

security that is backed by the type of 

receivable that would be granted relief 

under the Underwriter Exemption 

would be satisfactory. Accordingly, the 

Commenters seek clarification that 

reference to ‘‘similar transactions’’ 

includes any offering of securities of the 

type that would be granted relief by the 

Underwriter Exemptions even if the 

securities were backed by different 

types of obligations (or combinations 

thereof), were issued as certificates or 

notes or were issued in transactions 

having different structures. 

Regarding this first issue, the 

Department notes that the term ‘‘similar 

transactions,’’ as found in the preamble 

to the Notice, was not intended to 

narrow the scope of the express 

definition of a ‘‘qualified ratings 

engagement,’’ which, as noted above, 

involves ‘‘the offering of securities of 

the type that would be granted relief by 

the Underwriter Exemptions.’’ The 

Department agrees with the Commenters 

that the term ‘‘similar transactions’’ is 

intended to reference an offering of 

securities of the type that has been 

granted relief under the Underwriter 

Exemptions, including where the 

securities are backed by a different type 

of obligation (or types of obligations), or 

were issued as certificates or notes, or 

were issued in transactions having 

different structures. In this last regard, 

however, the Department emphasizes 

that such different structure(s) must be 

of a type that is currently permitted by 

the Underwriter Exemptions. 

The second clarification sought by the 

Commenters relates to the same 

preamble language described above, that 

that ‘‘the NRSRO must demonstrate that 

it has been selected to rate at least three 

similar transactions during the 

preceding 12 months.’’ 12 The 

Commenters seek clarification regarding 

whether the word ‘‘selected’’ means the 

date the rating agency is engaged to rate 

the securities, as set forth in the rating 

agency’s engagement letter, or the date 

such securities are first issued. The 

Commenters state that otherwise, the 

term ‘‘selected’’ could be subject to 

differing interpretations. In addition, the 

Commenters state that there can be 

considerable lag time between the date 

the rating agency is engaged and the 

date the securities it rates are actually 

issued, which can arbitrarily affect 

whether the three-engagement 

requirement has been met. The 

Commenters opine that this could 

prevent securities of the type that would 

otherwise be granted relief under the 

Underwriter Exemptions from being 

eligible to be purchased by plans. 

Regarding this second issue raised by 

the Commenters, the Department notes 

that the three-engagement requirement 

is intended to ensure that a qualified 

rating agency is ‘‘seasoned.’’ As between 

the date that a rating agency is first 

selected and the date that the securities 

it rates are issued, the Department 

believes that the more relevant date is 

the date that the securities are issued. It 

is the view of the Department, therefore, 

that the preamble phrase, ‘‘. . . the 

NRSRO must demonstrate that it has 

been selected to rate at least three 

similar transactions during the 

preceding 12 months,’’ refers to the date 

that the securities are issued. 

Accordingly, after giving full 

consideration to the entire record, 

including the Comment Letter, the 

Department has determined to grant the 

exemption as modified herein. For a 

more complete statement of the facts 

and representations supporting the 

Department’s decision to amend the 

Underwriter Exemptions, refer to the 

notice of proposed exemption (the 

Notice) that was published on December 

28, 2012 in the Federal Register at 77 

FR 76773. For further information 

regarding the Comment and other 

matters discussed herein, interested 

persons are encouraged to obtain copies 

of the exemption application file 

(Exemption Application No. D–11718) 

the Department is maintaining in this 

case. The complete application file, 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. 

FOR FURTHER INFORMATION CONTACT: 

Anna Mpras Vaughan of the 

Department, telephone (202) 693–8565. 

(This is not a toll-free number.) 

General Information 

The attention of the 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 2nd day of 

July, 2013. 

Lyssa E. Hall, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2013–16386 Filed 7–8–13; 8:45 am] 

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