Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices 37165

Tube from Argentina, Brazil, Canada,

India, Korea, Mexico, Singapore,

Taiwan, Thailand, Turkey, and

Venezuela)—briefing and vote. (The

Commission will transmit its

determination to the Secretary of

Commerce on July 26, 2000).

In accordance with 19 CFR

§ 201.35(d)(2), interested parties are

hereby notified that the Commission has

determined that Commission business

requires removal of the above agenda

item from the meeting of Monday, June

12, 2000 at 2:00 p.m. No earlier

announcement of such change was

possible.

Issued: June 9, 2000.

By order of the Commission.

Donna R. Koehnke,

Secretary.

[FR Doc. 00–14996 Filed 6–9–00; 2:10 pm]

BILLING CODE 7020–02–U

DEPARTMENT OF JUSTICE

Office of Justice Programs; Agency

Information Collection Activities:

Proposed Collection; Comment

Request

ACTION: Notice of information collection

under review; (reinstatement, without

change, of a previously approved

collection for which approval has

expired) Juvenile Residential Facility

Census.

The Department of Justice, Office of

Justice Programs, Bureau of Justice

Assistance, has submitted the following

information collection request for

review and clearance in accordance

with the Paperwork Reduction Act of

1995. This proposed information

collection is published to obtain

comments from the public and affected

agencies. Comments are encouraged and

will be accepted for ‘‘sixty days’’ until

August 14, 2000.

If you have additional comments,

suggestions, or need a copy of the

proposed information collection

instrument with instructions or

additional information, please contact

Joseph Moone, 202–616–3634, Office of

Juvenile Justice and Delinquency

Prevention, Office of Justice Programs,

U.S. Department of Justice, 810 7th

Street, N.W., Washington, DC 20531.

Written comments and suggestions from

the public and affected agencies

concerning the proposed collection of

information should address one or more

of the following four points:

(1) Evaluate whether the proposed

collection of information is necessary

for the proper performance of the

function of the agency, including

whether the information will have

practical utility;

(2) Evaluate the accuracy of the

agency’s estimate of the burden of the

proposed collection of information,

including the validity of the

methodology and assumptions used;

(3) Enhance the quality, utility, and

clarity of the information to be

collected; and

(4) Minimize the burden of the

collection of information on those who

are to respond, including through the

use of appropriate automated,

electronic, mechanical, or other

technological collection techniques or

other forms of information technology,

e.g., permitting electronic submission of

responses.

Overview of This Information

(1) Type of information collection:

Extension of a currently approved

collection.

(2) The title of the form/collection:

Juvenile Residential Facility Census

Bravery.

(3) The agency form number, if any,

and the applicable component of the

Department sponsoring the collection:

The form number is CJ–15, Office of

Justice Programs, United States

Department of Justice.

(4) Affected public who will be asked

or required to respond, as well as a brief

abstract: Primary: State, Local or Tribal

public juvenile justice facilities, private

juvenile facilities. Other: none.

This collection will gather

information necessary to routinely

monitor the types of facilities into

which the juvenile justice system places

young persons and the services

available in these facilities.

(5) An estimate of the total number of

respondents and the amount of time

estimated for an average respondent to

respond/reply: It is estimated that 3,500

respondents will complete a 2-hour

questionnaire.

(6) An estimate of the total public

burden (in hours) associated with the

collection: The total hour burden to

complete the questionnaire is 7,000

annual burden hours. The survey will

be conducted biennially.

If additional information is required

contact: Mrs. Brenda E. Dyer, Deputy

Clearance Officer, United States

Department of Justice, Information

Management and Security Staff, Justice

Management Division, Suite 1220,

National Place Building, 1331

Pennsylvania, NW, Washington, D.C..

Dated: June 7, 2000.

Brenda E. Dyer,

Department Deputy Clearance Officer,

Department of Justice.

[FR Doc. 00–14816 Filed 6–12–00; 8:45 am]

BILLING CODE 4410–18–M

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 2000–

30; Exemption Application No. D–10188, et

al.

Grant of Individual Exemptions;

Barclays Bank PLC and Its Affiliates

(Collectively, Barclays)

AGENCY: Pension and Welfare Benefits

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 (the Act) and/or

the Internal Revenue Code of 1986 (the

Code).

Notices were published in the Federal

Register of the pendency before the

Department of proposals to grant such

exemptions. The notices set forth a

summary of facts and representations

contained in each application for

exemption and referred interested

persons to the respective applications

for a complete statement of the facts and

representations. The applications have

been available for public inspection at

the Department in Washington, DC. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of

the notification to interested persons.

No public comments and no requests for

a hearing, unless otherwise stated, were

received by the Department.

The notices of proposed exemption

were issued and the exemptions are

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.

37166 Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices

1See 65 FR 13836.

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 exemptions are

administratively feasible;

(b) They are in the interests of the

plans and their participants and

beneficiaries; and

(c) They are protective of the rights of

the participants and beneficiaries of the

plans.

Barclays Bank PLC and its Affiliates

(Collectively, Barclays), Located in

London, England;

[Prohibited Transaction Exemption 2000–30;

Application No. D–10188]

Exemption

Section I—Retroactive Exemption for

the Acquisition, Holding and

Disposition of Barclays PLC Stock

The restrictions of sections

406(a)(1)(D), 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)(D) and (E) of the Code, shall

not apply, as of December 31, 1995 until

June 13, 2000, to the acquisition,

holding and disposition of the common

stock of Barclays PLC (the Barclays PLC

Stock) by Index and Model-Driven

Funds managed by Barclays, provided

that the following conditions and the

general conditions in Section III are met:

(a) The acquisition or disposition of

the Barclays PLC Stock is for the sole

purpose of maintaining strict

quantitative conformity with the

relevant index upon which the Index or

Model-Driven Fund is based, and does

not involve any agreement, arrangement

or understanding regarding the design

or operation of the Fund acquiring the

Barclays PLC Stock which is intended to

benefit Barclays or any party in which

Barclays may have an interest.

(b) All aggregate daily purchases of

Barclays PLC Stock by the Funds do not

exceed on any particular day the greater

of:

(1) 15 percent of the average daily

trading volume for the Barclays PLC

Stock occurring on the applicable

exchange and automated trading system

(as described in paragraph (c) below) for

the previous five (5) business days, or

(2) 15 percent of the trading volume

for Barclays PLC Stock occurring on the

applicable exchange and automated

trading system on the date of the

transaction, as determined by the best

available information for the trades

occurring on that date.

(c) All purchases and sales of Barclays

PLC Stock occur either (i) on the

London Stock Exchange, a recognized

securities exchange as defined in

Section IV(k) below, (ii) through an

automated trading system (as defined in

Section IV(j) below) operated by a

broker-dealer independent of Barclays

that is subject to regulation and

supervision by the Securities and

Futures Authority of the United

Kingdom (pursuant to the applicable

securities laws) that provides a

mechanism for customer orders to be

matched on an anonymous basis

without the participation of a brokerdealer, or (iii) in a direct, arms-length

transaction entered into on a principal

basis with a broker-dealer, in the

ordinary course of its business, where

such broker-dealer is independent of

Barclays and is either registered under

the Securities Exchange Act of 1934 (the

‘‘34 Act), and thereby subject to

regulation by the U.S. Securities and

Exchange Commission (SEC), or subject

to regulation and supervision by the

Securities and Futures Authority of the

United Kingdom (UK).

(d) No transactions by a Fund involve

purchases from, or sales to, Barclays

(including officers, directors, or

employees thereof), or any party in

interest that is a fiduciary with

discretion to invest plan assets into the

Fund (unless the transaction by the

Fund with such party in interest would

otherwise be subject to an exemption).

(e) No more than five (5) percent of

the total amount of Barclays PLC Stock

issued and outstanding at any time is

held in the aggregate by Index and

Model-Driven Funds managed by

Barclays.

(f) Barclays PLC Stock constitutes no

more than three (3) percent of any

independent third party index on which

the investments of an Index or ModelDriven Fund are based.

(g) A plan fiduciary independent of

Barclays authorizes the investment of

such plan’s assets in an Index or ModelDriven Fund which purchases and/or

holds Barclays PLC Stock, pursuant to

the procedures described in the notice

of proposed exemption published on

March 14, 2000 1 (see Paragraph 11 of

the Summary of Facts and

Representations regarding portfolio

management services provided for

particular plans), other than in the case

of an employee benefit plan sponsored

or maintained by Barclays PLC and/or

an Affiliate for its own employees (a

Barclays Plan).

(h) A fiduciary independent of

Barclays directs the voting of the

Barclays PLC Stock held by an Index or

Model-Driven Fund on any matter in

which shareholders of Barclays PLC

Stock are required or permitted to vote.

(i) No more than ten (10) percent of

the assets of any Fund that acquires and

holds Barclays PLC Stock is comprised

of assets of any Barclays Plan(s) for

which Barclays exercises investment

discretion.

Section II—Prospective Exemption for

the Acquisition, Holding and

Disposition of Barclays Stock

The restrictions of sections

406(a)(1)(D), 406(b)(1) and 406(b)(2) of

the Act, section 8477(c)(2)(A) and (B) of

FERSA, and the sanctions resulting from

the application of section 4975 of the

Code by reason of section 4975(c)(1)(D)

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

the acquisition, holding and disposition

of Barclays PLC Stock or the common

stock of an Affiliate of Barclays PLC

(Barclays PLC Affiliate Stock) by Index

and Model-Driven Funds managed by

Barclays, provided that the following

conditions and the general conditions in

Section III are met:

(a) The acquisition or disposition of

Barclays PLC Stock or Barclays PLC

Affiliate Stock (collectively, Barclays

Stock) is for the sole purpose of

maintaining strict quantitative

conformity with the relevant index

upon which the Index or Model-Driven

Fund is based, and does not involve any

agreement, arrangement or

understanding regarding the design or

operation of the Fund acquiring the

Barclays Stock which is intended to

benefit Barclays or any party in which

Barclays may have an interest.

(b) Whenever Barclays Stock is

initially added to an index on which an

Index or Model-Driven Fund is based, or

initially added to the portfolio of an

Index or Model-Driven Fund, all

acquisitions of Barclays Stock necessary

to bring the Fund’s holdings of such

Stock either to its capitalizationweighted or other specified composition

in the relevant index, as determined by

the independent organization

maintaining such index, or to its correct

weighting as determined by the model

which has been used to transform the

index, occur in the following manner:

(1) Purchases are from, or through,

only one broker or dealer on a single

trading day;

(2) Based on the best available

information, purchases are not the

opening transaction for the trading day;

Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices 37167

(3) Purchases are not effected in the

last half hour before the scheduled close

of the trading day;

(4) Purchases are at a price that is not

higher than the lowest current

independent offer quotation,

determined on the basis of reasonable

inquiry from non-affiliated brokers;

(5) Aggregate daily purchases do not

exceed 15 percent of the average daily

trading volume for the security, as

determined by the greater of either (i)

the trading volume for the security

occurring on the applicable exchange

and automated trading system on the

date of the transaction, or (ii) an

aggregate average daily trading volume

for the security occurring on the

applicable exchange and automated

trading system for the previous five (5)

business days, both based on the best

information reasonably available at the

time of the transaction;

(6) All purchases and sales of Barclays

Stock occur either (i) on a recognized

securities exchange (as defined in

Section IV(k) below), (ii) through an

automated trading system (as defined in

Section IV(j) below) operated by a

broker-dealer independent of Barclays

that is either registered under the ’34

Act, and thereby subject to regulation by

the SEC, or subject to regulation and

supervision by the Securities and

Futures Authority of the UK or another

applicable regulatory authority, which

provides a mechanism for customer

orders to be matched on an anonymous

basis without the participation of a

broker-dealer, or (iii) through an

automated trading system (as defined in

Section IV(j) below) that is operated by

a recognized securities exchange (as

defined in Section IV(k) below),

pursuant to the applicable securities

laws, and provides a mechanism for

customer orders to be matched on an

anonymous basis without the

participation of a broker-dealer; and

(7) If the necessary number of shares

of Barclays Stock cannot be acquired

within 10 business days from the date

of the event which causes the particular

Fund to require Barclays Stock, Barclays

appoints a fiduciary which is

independent of Barclays to design

acquisition procedures and monitor

Barclays’ compliance with such

procedures.

(c) Subsequent to acquisitions

necessary to bring a Fund’s holdings of

Barclays Stock to its specified weighting

in the index or model pursuant to the

restrictions described in paragraph (b)

above, all aggregate daily purchases of

Barclays Stock by the Funds do not

exceed on any particular day the greater

of:

(1) 15 percent of the average daily

trading volume for the Barclays Stock

occurring on the applicable exchange

and automated trading system (as

defined below) for the previous five (5)

business days, or

(2) 15 percent of the trading volume

for Barclays Stock occurring on the

applicable exchange and automated

trading system (as defined below) on the

date of the transaction, as determined by

the best available information for the

trades that occurred on such date.

(d) All transactions in Barclays Stock

not otherwise described in paragraph (b)

above are either: (i) Entered into on a

principal basis in a direct, arms-length

transaction with a broker-dealer, in the

ordinary course of its business, where

such broker-dealer is independent of

Barclays and is either registered under

the ’34 Act, and thereby subject to

regulation by the SEC, or subject to

regulation and supervision by the

Securities and Futures Authority of the

UK (SFA–UK) or another applicable

regulatory authority, (ii) effected on an

automated trading system (as defined in

Section IV(j) below) operated by a

broker-dealer independent of Barclays

that is subject to regulation by either the

SEC, SFA–UK, or another applicable

regulatory authority, or an automated

trading system operated by a recognized

securities exchange (as defined in

Section IV(k) below) which, in either

case, provides a mechanism for

customer orders to be matched on an

anonymous basis without the

participation of a broker-dealer, or (iii)

effected through a recognized securities

exchange (as defined in Section IV(k)

below) so long as the broker is acting on

an agency basis.

(e) No transactions by a Fund involve

purchases from, or sales to, Barclays

(including officers, directors, or

employees thereof), or any party in

interest that is a fiduciary with

discretion to invest plan assets into the

Fund (unless the transaction by the

Fund with such party in interest would

otherwise be subject to an exemption).

(f) No more than five (5) percent of the

total amount of either Barclays PLC

Stock or any Barclays PLC Affiliate

Stock, that is issued and outstanding at

any time, is held in the aggregate by

Index and Model-Driven Funds

managed by Barclays.

(g) Barclays Stock constitutes no more

than five (5) percent of any independent

third party index on which the

investments of an Index or ModelDriven Fund are based.

(h) A plan fiduciary independent of

Barclays authorizes the investment of

such plan’s assets in an Index or ModelDriven Fund which purchases and/or

holds Barclays Stock, pursuant to the

procedures described in the notice of

proposed exemption published on

March 14, 2000 (see Paragraph 11 of the

Summary of Facts and Representations

regarding portfolio management services

provided for particular plans), other

than in the case of a Barclays Plan.

(i) A fiduciary independent of

Barclays directs the voting of the

Barclays Stock held by an Index or

Model-Driven Fund on any matter in

which shareholders of Barclays Stock

are required or permitted to vote.

(j) No more than ten (10) percent of

the assets of any Fund that acquires and

holds Barclays Stock is comprised of

assets of any Barclays Plan(s) for which

Barclays exercises investment

discretion.

Section III—General Conditions

(a) Barclays maintains or causes to be

maintained for a period of six years

from the date of the transaction the

records necessary to enable the persons

described in paragraph (b) of this

Section to determine whether the

conditions of this exemption have been

met, except that (1) a prohibited

transaction will not be considered to

have occurred if, due to circumstances

beyond the control of Barclays, the

records are lost or destroyed prior to the

end of the six-year period, and (2) no

party in interest other than Barclays

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 (b) below.

(b)(1) Except as provided in paragraph

(b)(2) and notwithstanding any

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

the Act, the records referred to in

paragraph (a) of this Section are

unconditionally available at their

customary location for examination

during normal business hours by—

(A) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service,

(B) Any fiduciary of a plan

participating in an Index or ModelDriven Fund who has authority to

acquire or dispose of the interests of the

plan, or any duly authorized employee

or representative of such fiduciary,

(C) Any contributing employer to any

plan participating in an Index or ModelDriven Fund or any duly authorized

employee or representative of such

employer, and

(D) Any participant or beneficiary of

any plan participating in an Index or

Model-Driven Fund, or a representative

of such participant or beneficiary.

37168 Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices

(2) None of the persons described in

subparagraphs (B) through (D) of this

paragraph (b) shall be authorized to

examine trade secrets of Barclays or

commercial or financial information

which is considered confidential.

Section IV—Definitions

(a) The term ‘‘Index Fund’’ means any

investment fund, account or portfolio

sponsored, maintained, trusteed, or

managed by Barclays, in which one or

more investors invest, and—

(1) which is designed to track the rate

of return, risk profile and other

characteristics of an independently

maintained securities Index, as

described in Section IV(c) below, by

either (i) replicating the same

combination of securities which

compose such Index or (ii) sampling the

securities which compose such Index

based on objective criteria and data;

(2) for which Barclays does not use its

discretion, or data within its control, to

affect the identity or amount of

securities to be purchased or sold;

(3) that contains ‘‘plan assets’’ subject

to the Act, pursuant to the Department’s

regulations (see 29 CFR 2510.3–101,

Definition of ‘‘plan assets’’—plan

investments); and,

(4) that involves no agreement,

arrangement, or understanding

regarding the design or operation of the

Fund which is intended to benefit

Barclays or any party in which Barclays

may have an interest.

(b) The term ‘‘Model-Driven Fund’’

means any investment fund, account or

portfolio sponsored, maintained,

trusteed, or managed by Barclays, in

which one or more investors invest,

and—

(1) which is composed of securities

the identity of which and the amount of

which are selected by a computer model

that is based on prescribed objective

criteria using independent third party

data, not within the control of Barclays,

to transform an independently

maintained Index, as described in

Section IV(c) below;

(2) which contains ‘‘plan assets’’

subject to the Act, pursuant to the

Department’s regulations (see 29 CFR

2510.3–101, Definition of ‘‘plan

assets’’—plan investments); and

(3) that involves no agreement,

arrangement, or understanding

regarding the design or operation of the

Fund or the utilization of any specific

objective criteria which is intended to

benefit Barclays or any party in which

Barclays may have an interest.

(c) The term ‘‘Index’’ means a

securities index that represents the

investment performance of a specific

segment of the public market for equity

or debt securities in the United States

and/or foreign countries, but only if—

(1) the organization creating and

maintaining the index is—

(A) engaged in the business of

providing financial information,

evaluation, advice or securities

brokerage services to institutional

clients,

(B) a publisher of financial news or

information, or

(C) a public stock exchange or

association of securities dealers; and,

(2) the index is created and

maintained by an organization

independent of Barclays; and,

(3) the index is a generally accepted

standardized index of securities which

is not specifically tailored for the use of

Barclays.

(d) The term ‘‘opening date’’ means

the date on which investments in or

withdrawals from an Index or ModelDriven Fund may be made.

(e) The term ‘‘Buy-up’’ means an

acquisition of Barclays Stock by an

Index or Model-Driven Fund in

connection with the initial addition of

such Stock to an independently

maintained index upon which the Fund

is based or the initial investment of a

Fund in such Stock.

(f) The term ‘‘Barclays’’ refers to

Barclays PLC and its Affiliates, as

defined below in paragraph (g),

including Barclays Global Investors,

N.A. (BGI), Barclays Global Fund

Advisors, Barclays Global Investors

Services, Barclays Global Investors

International, Inc., Barclays Global

Investors Asset Risk Management

Limited, Barclays Bank PLC (London),

Barclays Bank of Canada, Barclays Bank

Zimbabwe, Barclays Bank of Kenya, and

Barclays Bank of Botswana, Ltd.

(g) The term ‘‘Affiliate’’ means, with

respect to Barclays PLC, an entity

which, directly or indirectly, through

one or more intermediaries, is

controlled by Barclays PLC;

(h) An ‘‘affiliate’’ of Barclays includes:

(1) Any person, directly or indirectly,

through one or more intermediaries,

controlling, controlled by or under

common control with the person;

(2) Any officer, director, employee or

relative of such person, or partner of any

such person; and

(3) Any corporation or partnership of

which such person is an officer,

director, partner or employee.

(i) The term ‘‘control’’ means the

power to exercise a controlling

influence over the management or

policies of a person other than an

individual.

(j) The term ‘‘automated trading

system’’ means an electronic trading

system that functions in a manner

intended to simulate a securities

exchange by electronically matching

orders on an agency basis from multiple

buyers and sellers, such as an

‘‘alternative trading system’’ within the

meaning of the SEC’s Reg. ATS [17 CFR

part 242.300], as such definition may be

amended from time to time, or an

‘‘automated quotation system’’ as

described in Section 3(a)(51)(A)(ii) of

the ’34 Act [15 USC 78c(a)(51)(A)(ii)].

(k) The term ‘‘recognized securities

exchange’’ means a U.S. securities

exchange that is registered as a

‘‘national securities exchange’’ under

Section 6 of the ’34 Act (15 USC 78f),

or a designated offshore securities

market, as defined in Regulation S of the

SEC [17 CFR part 230.902(b)], as such

definition may be amended from time to

time, which performs with respect to

securities the functions commonly

performed by a stock exchange within

the meaning of definitions under the

applicable securities laws (e.g., 17 CFR

part 240.3b–16).

EFFECTIVE DATE: This exemption is

effective as of December 31, 1995, for

those transactions described in Section

I above, and as of the date the

exemption is published in the Federal

Register for those transactions described

in Section II above.

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

March 14, 2000, at 65 FR 13836.

Written Comments:

The applicant (i.e., Barclays)

submitted written comments with

respect to the notice of proposed

exemption (the Proposal). These

comments, and the Department’s

responses thereto, are summarized

below.

1. Volume Limitations. With respect

to the percentage limitations on the

volume of trading that aggregate daily

purchases of Barclays Stock by the

Funds may represent, sections I(b),

II(b)(5), and II(c) of the Proposal state

that such purchases may not exceed 15

percent of the average daily trading

volume ‘‘* * * occurring on the

applicable exchange or automated

trading system.’’ The Applicant stated

that the volume limitation should refer

to the aggregate trading volume in

Barclays Stock, rather than the trading

volume on a particular trading system

on which the Barclays Stock may have

been traded. Barclays noted that the

language of the Proposal may prove

overly restrictive and present

difficulties in gathering the required

daily volume data for a particular

Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices 37169

automated trading system. Therefore,

Barclays requested that the conditions

relating to the volume limitation be

modified to state that aggregate daily

purchases not exceed 15% of the total

trading volume of the Barclays Stock

(regardless of where it is traded).

In consideration of this comment, the

Department has revised the language of

sections I(b)(1) and (2), II(b)(5), and

II(c)(1) and (2) of the exemption by

deleting the word ‘‘or’’ and substituting

the word ‘‘and’’ in its place, so that the

operative phrase in each of the

subsections now reads ‘‘* * * occurring

on the applicable exchange and

automated trading system.’’ [emphasis

added]

2. Investments by Affiliated Plans.

The applicant represented that certain

employee benefit plans established or

maintained by an Affiliate of Barclays

PLC for its own employees (i.e., a

Barclays Plan) have invested, and may

continue to invest, in Index Funds or

Model-Driven Funds that invest in

Barclays Stock. Since December 31,

1995, and currently, three of these

Barclays Plans have invested in a Fund

which held or holds Barclays PLC

Stock. These three Barclays Plans are: (i)

The Barclays Global Investors 401(k)

Savings Plan; (ii) the Barclays Global

Investors Retirement Plan; and (iii) the

Barclays Bank PLC USA Pension Trust.

The applicant stated that at all times

since December 31, 1995, the holdings

of these three Barclays Plans together

have comprised less than ten (10)

percent of the assets of the Fund. In this

regard, Barclays stated that a Barclays

Plan should not be required to have an

independent fiduciary authorize the

investment of such a Plan’s assets in an

Index or Model-Driven Fund that

includes Barclays Stock in its portfolio,

especially since such Stock may only

represent a small portion of the index

on which the investments of the Fund

are based. Therefore, the applicant

requested that the requirements

contained in section I(g) and II(h) of the

Proposal be modified accordingly.

In consideration of the applicant’s

comment, the Department has modified

sections I(g) and II(h) herein by inserting

the phrases ‘‘ * * * other than in the

case of an employee benefit plan

sponsored or maintained by Barclays

PLC and/or an Affiliate for its own

employees (a Barclays Plan)’’ and

‘‘* * * other than in the case of a

Barclays Plan’’ respectively at the end of

those subsections.

In addition, with the applicant’s

consent, the Department has added a

condition (see sections I(i) and II(j)

above) which requires that no more than

ten (10) percent of the assets of any

Fund that acquires and holds Barclays

Stock shall be comprised of assets of

any Barclays Plan(s) for which Barclays

exercises investment discretion.

3. Changes in Names and Status of

Certain Entities. The Applicant noted

that in section III(f) of the Proposal, and

in Paragraph 1 of the Summary of Facts

and Representations in the Proposal (the

Summary), reference is made to several

entities whose name has changed since

the date the exemption application was

filed. In this regard, the Applicant

represented the following: BZW

Barclays Global Investors, N.A., is now

Barclays Global Investors, N.A.; BZW

Barclays Global Fund Advisors is now

Barclays Global Fund Advisors; BZW

Barclays Global Investors Services is

now Barclays Global Investors Services;

BZW Investment Management, Inc. is

now Barclays Global Investors

International Inc.; and BZW Asset Risk

Management Limited is now Barclays

Global Investors Asset Risk Management

Limited. The Applicant noted further

that Barclays Global Investors Asset

Risk Management Limited is no longer

registered as an investment adviser

under the Investment Advisers Act of

1940.

Therefore, the Department has

modified the information contained in

the definition of the term ‘‘Barclays’’ in

section IV(f) of the exemption to refer to

these entities as stated above.

4. Exclusion of Barclays Stock from

Certain Funds. The Applicant noted that

in Paragraph 5 of the Summary,

reference is made to the exclusion of

Barclays Stock, since December 31,

1995, from the portfolios of any new

Index or Model-Driven Funds

established by Barclays, even though

such Stock is included in indexes upon

which such Funds are based. Barclays

wished to clarify that there have been

Index and Model-Driven Funds

established since December 31, 1995,

that have purchased Barclays Stock.

However, Barclays represented that

these Funds were not subject to the

fiduciary responsibility provisions of

the Act at the time the ‘‘buy-up’’ of

Barclays Stock by the Funds occurred.

The Department acknowledges the

applicant’s clarification to the

information contained in Paragraph 5 of

the Summary.

5. Weight of Barclays PLC Stock in

Certain Indexes. The applicant noted

that in Paragraph 10 of the Summary,

reference is made to the weight of

Barclays PLC Stock in certain indexes.

In this regard, Barclays represented that

as of April 25, 2000, Barclays PLC Stock

represented 2.05% of the MSCI UK

Index and 1.75% of the FTSE 100 Index.

The Department acknowledges the

applicant’s additional information and

notes that the data provided is

consistent with the requirements of the

exemption (see section I(f) above).

6. Transactions with Parties in

Interest. The applicant noted that in

Sections I(d) and II(e) of the Proposal,

Barclays Stock cannot be acquired from,

or sold to, a Barclays entity (including

officers, directors or employees thereof)

or any party in interest that is a

fiduciary with discretion to invest plan

assets into the Fund. With respect to the

latter portion of these restrictions, the

applicant requested that the Department

clarify that principal transactions by a

Fund with such parties in interest

should be permitted, if such

transactions would otherwise be subject

to an applicable exemption.

In such transactions, Barclays Stock

would be acquired or sold by the Fund

along with a ‘‘basket’’ of other

securities. The Fund would enter into a

principal transaction with a party in

interest that is a broker-dealer that is

either registered under the ’34 Act, and

thereby subject to regulation by the SEC,

or subject to regulation and supervision

by the SFA–UK or another applicable

regulatory authority (see Section II(d)(i)

of the exemption). The applicant stated

that such a transaction could be exempt

under another exemption, if the

applicable conditions of that exemption

were met. For example, Prohibited

Transaction Exemption (PTE) 91–38, 56

FR 31966 (July 12, 1991) permits bank

collective investment funds, in which

employee benefit plans have an interest,

to engage in certain transactions with

parties in interest (including fiduciaries

of investing plans), provided that the

specified conditions required therein

are met. However, Section I(a) of PTE

91–38 does not provide an exemption

for any violations of section 406(b)(1) of

the Act which may occur as a result of

such transactions. Section 406(b)(1)

states, in pertinent part, that a fiduciary

for a plan shall not deal with the assets

of the plan in his own interest or for his

own account.

In consideration of these comments,

the Department has modified the

language of Sections I(d) and II(e) of the

exemption by adding the following

parenthetical phrase at the end of those

subsections:

‘‘* * * (unless the transaction by the Fund

with such party in interest would otherwise

be subject to an exemption).’’

In this regard, the Department is

providing no opinion as to whether

such principal transactions would be

covered by any existing exemptions.

37170 Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices

2Since Mr. McPhail is the only participant in the

Plan, there is no jurisdiction under Title I of the Act

pursuant to 29 CFR 2510.3–3(b). However, there is

jurisdiction under Title II of the Act pursuant to

section 4975 of the Code.

3Triumph Funds are generally expected to be

organized as venture capital operating companies

that are managed by Triumph.

4For purposes of this exemption, the term ‘‘full

investment responsibility’’ means that the fiduciary

responsible for making the investment decision has

and exercises discretionary management authority

over all of the assets of the group trust or other plan

assets entity.

Finally, the applicant stated that there

is a pending merger of the London Stock

Exchange and the German Bourse, a

recognized securities exchange as

defined in Section IV(k) above.

Therefore, the applicant requested that

Section II(b)(6) and II(d)(i) and (ii) be

amended to refer to applicable foreign

regulatory authorities other than the

SFA–UK.

In response to this comment, the

Department has modified Section

II(b)(6) and II(d)(i) and (ii) by adding the

phrase ‘‘* * * or another applicable

regulatory authority’’ following the

reference to the SFA–UK in those

subsections.

No other comments, and no requests

for a hearing, were received by the

Department. Accordingly, the

Department has determined to grant the

exemption as modified herein.

FOR FURTHER INFORMATION CONTACT: Mr.

E.F. Williams of the Department,

telephone (202) 219–8194. (This is not

a toll-free number.)

H. Ray McPhail (Mr. McPhail) and the

H. Ray McPhail Profit Sharing Plan (the

Plan), Located in Atlanta, Georgia

[Prohibited Transaction Exemption 2000–31;

Exemption Application No. D–10678]

Exemption

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

to the sale (the Sale) of four parcels of

unimproved real property (the Property)

and loan (the Loan) from the Plan to Mr.

McPhail,2 a disqualified person with

respect to the Plan, provided that the

following conditions are met:

(1) With respect to the Sale:

(A) The terms and conditions of the

Sale will be at least as favorable to the

Plan as those obtainable in an arm’s

length transaction with an unrelated

party;

(B) The Sale will occur at a price (the

Sale Price) which includes the greater of

$270,000 or the Property’s fair market

value as established by a qualified,

independent appraiser;

(C) In addition, the Sale Price will

include a premium of $30,000 (the

Assemblage Value) due to Mr. McPhail’s

ownership of unimproved real property

located adjacent to the Property;

(D) The Plan will pay no fees or

commissions with respect to the Sale;

and

(E) Mr. McPhail will pay $60,000 or

20% of the Sale Price in cash with the

balance paid for by the Loan; and

(2) With Respect to the Loan:

(A) The interest rate on the Loan (the

Interest Rate) will be 7%, a rate set by

the Macon Bank for a real estate loan

having terms similar to the Loan;

(B) The Loan terms are at least as

favorable to the Plan as those obtainable

in an arm’s length transaction with an

unrelated party;

(C) The Loan is secured by a first

security interest on certain real

property, which has been appraised by

a qualified, independent appraiser to

have a fair market value not less than

150% of the principal amount of the

Loan;

(D) The outstanding balance of the

Loan will never exceed 20% of the

assets of the Plan throughout the

duration of the Loan; and

(E) The fair market value of the

collateral remains at least equal to 150%

of the outstanding principal balance

plus accrued but not unpaid interest,

throughout the duration of the Loan;

and

(3) Should any employee of the Plan

Sponsor become eligible for Plan

participation, the new participant will

be enrolled in another qualified

retirement plan or the Loan will be

immediately repaid.

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 April

7, 2000 at 65 FR 18354.

FOR FURTHER INFORMATION CONTACT: Mr.

J. Martin Jara of the Department,

telephone (202) 219–8883 (this is not a

toll free number).

Triumph Capital Group, Inc., Located

in Boston, MA;

[Prohibited Transaction Exemption 2000–32;

Exemption Application No. D–10708]

Exemption

The restrictions of sections 406(a) of

the Act and the sanctions resulting from

the application of section 4975 of the

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

through (D) of the Code, shall not apply,

effective July 22, 1997, to the making, by

an employee benefit plan subject to the

Act (the Plan), of capital contributions

to any private equity fund (the Triumph

Fund) that is organized, sponsored and/

or managed by Triumph Capital Group,

Inc. and/or any of its affiliates

(collectively, Triumph) pursuant to a

contractual obligation by a Plan having

an interest in the Triumph Fund.3

This exemption is subject to the

following conditions:

a. At the time the Plan undertakes the

obligation to make such capital

contributions (the Determination Date),

the Triumph Fund is not a party in

interest with respect to the Plan.

b. The decision to make a capital

contribution to a Triumph Fund is made

on behalf of the Plan by a Plan fiduciary

which is independent of and unrelated

to Triumph and the portfolio company

whose interest is acquired by the

Triumph Fund.

c. Triumph does not otherwise

provide investment advice as a fiduciary

to the Plan, within the meaning of the

Department’s regulations at 29 CFR

2510.3–21(c), with respect to such

Plan’s assets that are invested in the

Triumph Fund.

d. At the Determination Date, the Plan

has aggregate assets that are in excess of

$50 million; provided, however, that in

the case of:

(1) Two or more Plans which are not

maintained by the same employer,

controlled group of corporations or

employee organization (the Unrelated

Plans), whose assets are invested in a

Triumph Fund through a group trust, an

insurance company pooled separate

account or any other form of entity the

assets of which are ‘‘plan assets’’ under

the Department’s regulations at 29 CFR

2510.3–101 (the Plan Asset Regulation),

the foregoing $50 million requirement

shall be satisfied if such trust, separate

account, or other entity has aggregate

assets which are in excess of $50

million, provided further that the

fiduciary responsible for making the

investment decision on behalf of such

group trust, insurance company pooled

separate account, or other entity has—

i. Full investment responsibility 4

with respect to the plan assets invested

therein; and

ii. Total assets under its management

and control, exclusive of the assets

invested in the Triumph Fund, which

are in excess of $100 million, for

Triumph Funds established after April

7, 2000 (i.e., the date the notice of

proposed exemption was published in

the Federal Register).

(2) Two or more Plans which are

maintained by the same employer,

Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices 37171

5Section I.A. provides no relief from sections

406(a)(1)(E), 406(a)(2) and 407 for any person

rendering investment advice to an Excluded Plan

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

regulation 29 CFR 2510.3–21(c).

controlled group of corporations or

employee organization (the Related

Plans), whose assets are invested in a

Triumph Fund through a master trust or

any other entity the assets of which are

‘‘plan assets’’ under the Plan Asset

Regulation, the $50 million requirement

shall in any event be satisfied if such

trust or other entity has aggregate assets

which are in excess of $50 million,

provided, further, that, in the case of a

Triumph Fund established after the date

the notice granting the exemption is

published in the Federal Register, in

addition to the $50 million requirement,

if the fiduciary responsible for making

the investment decision on behalf of

such master trust or other entity is not

the employer or an affiliate of the

employer, then such fiduciary has total

assets under its management and

control, exclusive of the assets invested

in the Triumph Fund, which are in

excess of $100 million.

e. The Triumph Fund is a party in

interest with respect to the Plan solely

by reason of a relationship to a portfolio

company which is a service provider to

a Plan, as described in Section 3(14)(H)

or (I) of the Act, including a fiduciary

with respect to such Plan.

f. The capital commitment of the Plan

(together with the capital commitments

of any other Plans maintained by the

same employer, controlled group of

corporations or employee organization)

with respect to the Triumph Fund, does

not exceed 15 percent of the total capital

commitments made by all investors

with respect to such Triumph Fund,

determined at the later of (i) the

Determination Date or (ii) the date on

which the Triumph Fund first becomes

a party in interest with respect to such

Plan.

g. At the Determination Date, the

percentage of the Plan’s assets

committed to be invested in the

Triumph Fund does not exceed 5

percent of the Plan’s total assets.

h. At the Determination Date, a Plan’s

aggregate capital commitment to all

Triumph Funds does not exceed 25

percent of the Plan’s total assets.

i. The Plan receives the following

initial and ongoing disclosures with

respect to the Triumph Fund:

(1) A copy of the private placement

memorandum applicable to the

Triumph Fund or another comparable

document containing substantially the

same information;

(2) A copy of the limited partnership

or other agreement establishing the

Triumph Fund;

(3) A copy of the subscription

agreement applicable to the Triumph

Fund, if any;

(4) Copies of the proposed and final

exemption, once such documents are

published in the Federal Register; and

(5) Periodic, but no less frequently

than annually, reports relating to the

overall financial position and

operational results of the Triumph

Fund, including copies of the Triumph

Fund’s annual financial statements.

j. With respect to capital contributions

made to a Triumph Fund by a Plan after

the date this exemption is published in

the Federal Register, Triumph

maintains or causes to be maintained,

for a period of six (6) years from the date

of the transaction, the records necessary

to enable the persons described in

paragraph (k) to determine whether the

conditions of the exemption have been

met, except that—

(1) A prohibited transaction will not

be considered to have occurred, if due

to circumstances beyond the control of

Triumph, the records are lost or

destroyed prior to the end of the six year

period; and

(2) No party in interest, other than

Triumph, 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

(k).

k. (1) Except as provided in paragraph

(k)(2) and notwithstanding any

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

of section 504 of the Act, the records

referred to in paragraph (j) are

unconditionally available at their

customary location for examination

during normal business hours by—

(A) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service;

(B) Any fiduciary of a Plan which has

an interest in the Triumph Fund and

has the authority to acquire or dispose

of the interest of the Plan in the

Triumph Fund, or any duly authorized

employee or representative of such

fiduciary; and

(C) Any participant or beneficiary of

any Plan which has an interest in the

Triumph Fund, or duly authorized

representative of such participant or

beneficiary.

(2) None of the persons described in

paragraph (k)(1)(B) and (k)(1)(C) shall be

authorized to examine trade secrets of

Triumph or commercial or financial

information which is privileged or

confidential.

Effective Date: This exemption is

effective as of July 22, 1997.

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 April

7, 2000, at 65 FR 18356.

FOR FURTHER INFORMATION CONTACT: Mr.

Gary Lefkowitz of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

McDonald Investments Inc.

(McDonald), Located in Cleveland,

Ohio

[Prohibited Transaction Exemption 2000–33;

Exemption Application No. D–10857]

Exemption

I. Transactions

A. Effective January 4, 2000, 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 the

following transactions involving trusts

and certificates evidencing interests

therein:

(1) The direct or indirect sale,

exchange or transfer of certificates in the

initial issuance of certificates between

the sponsor or underwriter and an

employee benefit plan when the

sponsor, servicer, trustee or insurer of a

trust, the underwriter of the certificates

representing an interest in the trust, or

an obligor is a party in interest with

respect to such plan;

(2) The direct or indirect acquisition

or disposition of certificates by a plan in

the secondary market for such

certificates; and

(3) The continued holding of

certificates 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

for the acquisition or holding of a

certificate 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.5

B. Effective January 4, 2000, the

restrictions of sections 406(b)(1) and

406(b)(2) of the Act, and the taxes

imposed by section 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 certificates in the

initial issuance of certificates between

the sponsor or underwriter and a plan

37172 Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices

6For purposes of this 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.

7 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 certificates 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 certificates are offered to

investors.

when the person who has discretionary

authority or renders investment advice

with respect to the investment of plan

assets in the certificates is (a) an obligor

with respect to 5 percent or less of the

fair market value of obligations or

receivables contained in the trust, 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 certificates in connection with the

initial issuance of the certificates, at

least 50 percent of each class of

certificates 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 trust is

acquired by persons independent of the

Restricted Group;

(iii) a plan’s investment in each class

of certificates does not exceed 25

percent of all of the certificates of that

class outstanding at the time of the

acquisition; and

(iv) immediately after the acquisition

of the certificates, 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

certificates representing an interest in a

trust containing assets sold or serviced

by the same entity.6 For purposes of this

paragraph B.(1)(iv) only, an entity will

not be considered to service assets

contained in a trust if it is merely a

subservicer of that trust;

(2) The direct or indirect acquisition

or disposition of certificates by a plan in

the secondary market for such

certificates, provided that the conditions

set forth in paragraphs B.(1)(i), (iii) and

(iv) are met; and

(3) The continued holding of

certificates acquired by a plan pursuant

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

C. Effective January 4, 2000, 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 a trust,

provided:

(1) Such transactions are carried out

in accordance with the terms of a

binding pooling and servicing

agreement; and

(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 certificates

issued by the trust.7

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 trust from a

person other than the trustee or sponsor,

unless such fee constitutes a ‘‘qualified

administrative fee’’ as defined in section

III.S.

D. Effective January 4, 2000, 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 sections 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

certificates.

II. General Conditions

A. The relief provided under Part I is

available only if the following

conditions are met:

(1) The acquisition of certificates by a

plan is on terms (including the

certificate price) that are at least as

favorable to the plan as they would be

in an arm’s-length transaction with an

unrelated party;

(2) The rights and interests evidenced

by the certificates are not subordinated

to the rights and interests evidenced by

other certificates of the same trust;

(3) The certificates acquired by the

plan have received a rating from a

Rating Agency (as defined in section

III.W.) at the time of such acquisition

that is in one of the three highest

generic rating categories;

(4) The trustee is not an affiliate of

any other member of the Restricted

Group. However, 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;

(5) The sum of all payments made to

and retained by the underwriters in

connection with the distribution or

placement of certificates represents not

more than reasonable compensation for

underwriting or placing the certificates;

the sum of all payments made to and

retained by the sponsor pursuant to the

assignment of obligations (or interests

therein) to the trust 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

certificates 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 a trust have not all been

transferred to the trust on the closing

date, additional obligations as specified

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

to the trust during the pre-funding

period (as defined in section III.BB.) in

exchange for amounts credited to the

pre-funding account (as defined in

section III.Z.), provided that:

(a) The pre-funding limit (as defined

in section III.AA.) is not exceeded;

(b) All such additional obligations

meet the same terms and conditions for

eligibility as those of the original

obligations used to create the trust

corpus (as described in the prospectus

or private placement memorandum and/

or pooling and servicing agreement for

such certificates), 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 of the outstanding

certificateholders or by a Rating Agency;

(c) The transfer of such additional

obligations to the trust during the prefunding period does not result in the

certificates receiving a lower credit

Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices 37173

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

certificates by the trust;

(d) The weighted average annual

percentage interest rate (the average

interest rate) for all of the obligations in

the trust at the end of the pre-funding

period will not be more than 100 basis

points lower than the average interest

rate for the obligations which were

transferred to the trust 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 be either

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

trustees) 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, will enforce all the rights created

in favor of certificateholders of such

trust, including employee benefit plans

subject to the Act.

B. Neither any underwriter, sponsor,

trustee, servicer, insurer, nor 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

certificates, shall be denied the relief

provided under Part I, if the provision

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

satisfied with respect to acquisition or

holding by a plan of such certificates,

provided that (1) such condition is

disclosed in the prospectus or private

placement memorandum; and (2) in the

case of a private placement of

certificates, 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 certificates) 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) above.

III. Definitions

For purposes of this exemption:

A. ‘‘Certificate’’ means:

(1) a certificate—

(a) that represents a beneficial

ownership interest in the assets of a

trust; and

(b) that entitles the holder to passthrough payments of principal, interest,

and/or other payments made with

respect to the assets of such trust; or

(2) a certificate denominated as a debt

instrument—

(a) that represents an interest in 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

(b) that is issued by, and is an

obligation of, a trust; with respect to

certificates defined in (1) and (2) above

for which McDonald or any of its

affiliates is either (i) the sole

underwriter or the manager or comanager of the underwriting syndicate,

or (ii) a selling or placement agent.

For purposes of this exemption,

references to ‘‘certificates representing

an interest in a trust’’ include

certificates denominated as debt which

are issued by a trust.

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

the corpus of which is held in trust and

consists 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, as defined in section

III.T); 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 commercial

real property (including obligations

secured by leasehold interests on

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 (as defined in section III.U); 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 section B.(1);

(2) property which had secured any of

the obligations described in subsection

B.(1);

(3)(a) Undistributed cash or temporary

investments made therewith maturing

no later than the next date on which

distributions are to be made to

certificateholders; and/or

(b) Cash or investments made

therewith which are credited to an

account to provide payments to

certificateholders pursuant to any yield

supplement agreement or similar yield

maintenance arrangement to

supplement the interest rates otherwise

payable on obligations described in

subsection III.B.(1) held in the trust,

provided that such arrangements do not

involve swap agreements or other

notional principal contracts; and/or

(c) Cash transferred to the trust 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 clauses

(a)–(g) of subsection II.A.(7) are met

and/or;

(ii) are credited to a capitalized

interest account (as defined in section

III.X.); and

(iii) are held in the trust for a period

ending no later than the first

distribution date to certificateholders

occurring after the end of the prefunding period.

For purposes of this clause (c) of

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

investments’’ means investments which

are either: (i) Direct obligations of, or

obligations fully guaranteed as to timely

payment of principal and interest by 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

(ii) have been rated (or the obligor has

been rated) in one of the three highest

generic rating categories by a rating

agency; are described in the pooling and

37174 Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices

servicing agreement; and are permitted

by the rating agency; and

(4) Rights of the trustee under the

pooling and servicing agreement, and

rights under any insurance policies,

third-party guarantees, contracts of

suretyship, yield supplement

agreements described in clause (b) of

subsection III.B.(3) and other credit

support arrangements with respect to

any obligations described in subsection

III.B.(1).

Notwithstanding the foregoing, the

term ‘‘trust’’ does not include any

investment pool unless: (i) The

investment pool consists only of assets

of the type described in clauses (a)

through (f) of subsection III.B.(1) which

have been included in other investment

pools, (ii) certificates evidencing

interests in such other investment pools

have been rated in one of the three

highest generic rating categories by a

Rating Agency for at least one year prior

to the plan’s acquisition of certificates

pursuant to this exemption, and (iii)

certificates 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 certificates pursuant to

this exemption.

C. ‘‘Underwriter’’ means:

(1) McDonald;

(2) Any person directly or indirectly,

through one or more intermediaries,

controlling, controlled by or under

common control with McDonald; or

(3) Any member of an underwriting

syndicate or selling group of which

McDonald or a person described in (2)

is a manager or co-manager with respect

to the certificates.

D. ‘‘Sponsor’’ means the entity that

organizes a trust by depositing

obligations therein in exchange for

certificates.

E. ‘‘Master Servicer’’ means the entity

that is a party to the pooling and

servicing agreement relating to trust

assets and is fully responsible for

servicing, directly or through

subservicers, the assets of the trust.

F. ‘‘Subservicer’’ means an entity

which, under the supervision of and on

behalf of the master servicer, services

obligations contained in the trust, but is

not a party to the pooling and servicing

agreement.

G. ‘‘Servicer’’ means any entity which

services obligations contained in the

trust, including the master servicer and

any subservicer.

H. ‘‘Trustee’’ means the trustee of the

trust, and in the case of certificates

which are denominated as debt

instruments, also means the trustee of

the indenture trust.

I. ‘‘Insurer’’ means the insurer or

guarantor of, or provider of other credit

support for, a trust. Notwithstanding the

foregoing, a person is not an insurer

solely because it holds securities

representing an interest in a trust which

are of a class subordinated to certificates

representing an interest in the same

trust.

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

than the insurer, that is obligated to

make payments with respect to any

obligation or receivable included in the

trust. Where a trust 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 trust, or subject to any lease

securing an obligation included in the

trust.

K. ‘‘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.

L. ‘‘Restricted Group’’ with respect to

a class of certificates 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 trust constituting more than 5

percent of the aggregate unamortized

principal balance of the assets in the

trust, determined on the date of the

initial issuance of certificates by the

trust; or

(7) any affiliate of a person described

in (1)–(6) above.

M. ‘‘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.

N. ‘‘Control’’ means the power to

exercise a controlling influence over the

management or policies of a person

other than an individual.

O. 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.

P. ‘‘Sale’’ includes the entrance into a

forward delivery commitment (as

defined in section Q below), 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 exemption applicable

to sales are met.

Q. ‘‘Forward delivery commitment’’

means a contract for the purchase or

sale of one or more certificates to be

delivered at an agreed future settlement

date. The term includes both mandatory

contracts (which contemplate obligatory

delivery and acceptance of the

certificates) and optional contracts

(which give one party the right but not

the obligation to deliver certificates to,

or demand delivery of certificates from,

the other party).

R. ‘‘Reasonable compensation’’ has

the same meaning as that term is

defined in 29 CFR 2550.408c–2.

S. ‘‘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 (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

trust will not be reduced by the amount

of any such fee waived by the servicer.

T. ‘‘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 trust’s

security interest in the equipment is at

least as protective of the rights of the

trust as would be the case if the

equipment note were secured only by

the equipment and not the lease.

U. ‘‘Qualified Motor Vehicle Lease’’

means a lease of a motor vehicle where:

(1) the trust owns or holds a security

interest in the lease;

Federal Register / Vol. 65, No. 114 / Tuesday, June 13, 2000 / Notices 37175

(2) the trust owns or holds a security

interest in the leased motor vehicle; and

(3) the trust’s security interest in the

leased motor vehicle is at least as

protective of the trust’s rights as would

be the case if the trust consisted of

motor vehicle installment loan

contracts.

V. ‘‘Pooling and Servicing

Agreement’’ means the agreement or

agreements among a sponsor, a servicer

and the trustee establishing a trust. In

the case of certificates which are

denominated as debt instruments,

‘‘Pooling and Servicing Agreement’’ also

includes the indenture entered into by

the trustee of the trust issuing such

certificates and the indenture trustee.

W. ‘‘Rating Agency’’ means Standard

& Poor’s Structured Rating Group

(S&P’s), Moody’s Investors Service, Inc.

(Moody’s), Duff & Phelps Credit Rating

Co. (D&P) or Fitch IBCA, Inc. (Fitch) or

their successors;

X. ‘‘Capitalized Interest Account’’

means a trust account: (i) which is

established to compensate

certificateholders for shortfalls, if any,

between investment earnings on the prefunding account and the pass-through

rate payable under the certificates; and

(ii) which meets the requirements of

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

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

trust is formed, the certificates are first

issued and the trust’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 trust.

Z. ‘‘Pre-Funding Account’’ means a

trust account: (i) Which is established to

purchase additional obligations, which

obligations meet the conditions set forth

in clauses (a)–(g) of subsection II.A.(7);

and (ii) which meets the requirements of

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

AA. ‘‘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 certificates being offered which is

less than or equal to 25 percent.

BB. ‘‘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 90 days after the closing date.

CC. ‘‘McDonald’’ means McDonald

Investments Inc. and its affiliates.

The Department notes that this

exemption is included within the

meaning of the term ‘‘Underwriter

Exemption’’ as it is defined in section

V(h) of Prohibited Transaction

Exemption 95–60 (60 FR 35925, July 12,

1995), the Class Exemption for Certain

Transactions Involving Insurance

Company General Accounts at (see 60

FR 35932).

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 April

7, 2000 at 65 FR 18365.

FOR FURTHER INFORMATION CONTACT: Gary

Lefkowitz of the Department, telephone

(202) 219–8881. (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 exemptions

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) These exemptions are

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 these

exemptions is subject to the express

condition that the material facts and

representations contained in each

application accurately describes all

material terms of the transaction which

is the subject of the exemption.

Signed at Washington, DC, this 7th day of

June, 2000.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 00–14809 Filed 6–12–00; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10758, et al.]

Proposed Exemptions; Goldman,

Sachs & Co.

AGENCY: Pension and Welfare Benefits

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 (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 request 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

request for a hearing (at least three

copies) should be sent to the Pension

and Welfare Benefits Administration,

Office of Exemption Determinations,

Room N–5649, U.S. Department of

Labor, 200 Constitution Avenue, NW.,

Washington, DC 20210. Attention:

Application No. ll, stated in each

Notice of Proposed Exemption. The

applications for exemption and the

comments received will be available for

public inspection in the Public

Documents Room of the Pension and

Welfare Benefits Administration, U.S.

Department of Labor, Room N–5638,