47056 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

1Pursuant to 29 CFR 2510.3–2(d), the IRA is not

within the jurisdiction of Title I of the Act.

However, there is jurisdiction under Title II of the

Act pursuant to section 4975 of the Code.

Department has determined to grant the

requested exemption as proposed.

FOR FURTHER INFORMATION CONTACT: Mr.

E.F. Williams of the Department,

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

a toll-free number.)

Martin D. Ross Individual Retirement

Account (the IRA) Located in Boca

Raton, Florida

[Prohibited Transaction Exemption 97–48;

Exemption Application No. D–10451]

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 March 4, 1996 sale by the IRA of

certain debentures (the Debentures) to

Mr. Martin D. Ross (Mr. Ross), a

disqualified person with respect to the

IRA, provided the following conditions

were satisfied: (1) The sale of the

Debentures by the IRA was a one-time

transaction for cash; (2) the IRA

received no less than the fair market

value of the Debentures as of the time

of the sale; and (3) as soon as Mr. Ross

became aware that the transaction was

prohibited, he reversed the transaction.1

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption, refer to the notice of

proposed exemption published on July

21, 1997 at 62 FR 39030.

EFFECTIVE DATE: This exemption is

effective March 4, 1996.

FOR FURTHER INFORMATION CONTACT: Gary

H. 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 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) 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 are true and complete and

accurately describe all material terms of

the transaction which is the subject of

the exemption. In the case of continuing

exemption transactions, if any of the

material facts or representations

described in the application change

after the exemption is granted, the

exemption will cease to apply as of the

date of such change. In the event of any

such change, application for a new

exemption may be made to the

Department.

Signed at Washington, DC, this 2nd day of

September, 1997.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 97–23641 Filed 9–4–97; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10393]

AEW Capital Management, L.P. (AEW);

Located in Boston, Massachusetts

AGENCY: Pension and Welfare Benefits

Administration.

ACTION: Notice of proposed exemption,

U.S. Department of Labor to replace

Prohibited Transaction Exemption (PTE)

93–40 Involving Aldrich, Eastman &

Waltch, L.P. and Aldrich, Eastman &

Waltch, Inc. (collectively, Old AEW).

SUMMARY: This document contains a

notice of pendency before the

Department of Labor (the Department) of

a proposed individual exemption

which, if granted, would replace PTE

93–40 (58 FR 34821, June 29, 1993). PTE

93–40 permitted the payment to Old

AEW of certain investment fees and

disposition fees relating to real estate

investments by employee benefit plans

for which Old AEW provided

investment management services, as

well as the investment by such plans in

a multiple client commingled account

managed by Old AEW, subject to certain

conditions. These transactions were

described in a notice of pendency that

was published in the Federal Register

on April 27, 1993 at 58 FR 25662. PTE

93–40, which was effective as of April

27, 1993, expired by operation of law,

as discussed below. The proposed

exemption would provide conditional

relief identical to that provided by PTE

93–40 for a newly-merged entity known

as ‘‘AEW Capital Management, L.P.’’

DATES: Written comments and/or

requests for a public hearing should be

received by the Department within 45

days of the date of publication of this

notice of proposed exemption in the

Federal Register. The proposed

exemption, if granted, will be effective

December 10, 1996.

ADDRESSES: All written comments and/

or requests for a public hearing

(preferably, three copies) should be sent

to the Office of Exemption

Determinations, Pension and Welfare

Benefits Administration, Room N–5649,

U.S. Department of Labor, 200

Constitution Avenue, NW, Washington,

DC 20210, Attention: Application No.

D–10393. The application pertaining to

the proposed 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–5507,

200 Constitution Avenue, NW.,

Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Ms.

Karin Weng of the Department,

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

a toll-free number.)

SUPPLEMENTARY INFORMATION: Notice is

hereby given of the pendency before the

Department of a proposed exemption

that would replace PTE 93–40. PTE 93–

40 provided an exemption from certain

prohibited transaction restrictions of

section 406 of the Employee Retirement

Income Security Act of 1974 (the Act)

and from the sanctions resulting from

the application of section 4975 of the

Internal Revenue Code of 1986 (the

Code), as amended, by reason of section

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

exemption was requested in an

application filed by AEW pursuant to

section 408(a) of the Act and section

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

accordance with the procedures (the

Procedures) set forth in 29 CFR part

2570, subpart B (55 FR 32836, August

10, 1990). Effective December 31, 1978,
Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices 47057

section 102 of Reorganization Plan No.

4 of 1978 (43 FR 47713, October 17,

1978) transferred the authority of the

Secretary of the Treasury to issue

exemptions of the type requested to the

Secretary of Labor. Accordingly, this

proposed replacement exemption is

being issued solely by the Department.

Specifically, PTE 93–40 provided

exemptive relief from section 406(b)(1)

and (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)(E) of the Code, with respect

to the payment by the plans of certain

initial investment fees and disposition

fees to Old AEW. In addition, PTE 93–

40 provided exemptive relief from the

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

through (D) 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,

with respect to the investment by the

plans in a multiple client commingled

account managed by Old AEW.

Subsequent to the granting of PTE 93–

40, AEW informed the Department that,

effective as of December 10, 1996, all

the assets of Old AEW and certain of

their affiliates had been transferred to

the new AEW Capital Management, L.P.

(denoted herein as AEW). All of the

partnership interests of AEW are owned,

directly or indirectly, by New England

Investment Companies, a publicly held

limited partnership, which in turn is

approximately 53 percent owned by The

Metropolitan Life Insurance Company.

Because AEW is a newly created legal

entity, the Department determined that

PTE 93–40 was no longer effective as of

December 10, 1996. Thus, the

Department is of the view that PTE 93–

40 would be unavailable for use by

AEW with respect to the subject

transactions.

AEW represents that, in all material

respects, notwithstanding its changes in

structure and ownership, AEW has

otherwise continued to operate in the

same manner, and with the same senior

management personnel. AEW is an

investment adviser registered under the

Investment Advisers Act of 1940 whose

client accounts continue to consist of

either separate accounts for individual

clients or commingled accounts for

multiple clients. Accordingly, the

Department has decided to publish a

new exemption for AEW which, if

granted, would replace PTE 93–40 and

would have an effective date of

December 10, 1996 for transactions

described in PTE 93–40.

Notice to Interested Persons

In accordance with the requirements

of the Investment Advisers Act of 1940,

Old AEW provided notice and obtained

the consent of the independent

fiduciary of each of its client plans with

respect to its anticipated changes in

structure and ownership. AEW will

further provide written notice of the

proposed exemption to same within 15

days of the date of publication of this

notice of pendency in the Federal

Register. Such notice will include a

copy of this notice of pendency as

published in the Federal Register and

an explanation of the rights of interested

persons to comment on and/or request

a hearing with respect thereto. Written

comments and hearing requests are due

within 45 days of the date of publication

of this notice in the Federal Register.

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 section 4975(c)(2)

of the Code does not relieve a fiduciary

or other party in interest or disqualified

person from certain other provisions of

the Act and the Code, including any

prohibited transaction provisions to

which the exemption does not apply

and the general fiduciary responsibility

provisions of section 404 of the Act,

which require, among other things, a

fiduciary to discharge his or her 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

requirements of section 401(a) of the

Code that the plan operate for the

exclusive benefit of the employees of

the employer maintaining the plan and

their beneficiaries

(2) Before an exemption can be

granted under section 408(a) of the Act

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

Department must find that the

exemption is administratively feasible,

in the interests of the plan and of its

participants and beneficiaries, and

protective of the rights of participants

and beneficiaries of such plan; and

(3) The proposed exemption, if

granted, will be supplemental to, and

not in derogation of, any other

provisions of the Act and the Code,

including statutory or administrative

exemptions. 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.

(4) The proposed exemption, if

granted, will be applicable to the

transactions previously described in

PTE 93–40 only if the conditions

specified herein are satisfied.

Written Comments and Hearing

Requests

All interested persons are invited to

submit written comments or requests for

a hearing on the proposed replacement

exemption to the address above, within

the time period set forth above. All

comments will be made a part of the

record. Comments and requests for a

hearing should state the reasons for the

writer’s interest in the proposed

exemption. Comments received will be

available for public inspection with the

referenced application at the address set

forth above.

Proposed Exemption

Under the authority of section 408(a)

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

Code and in accordance with the

procedures set forth in 29 CFR part

2570, subpart B, the Department

proposes to replace PTE 93–40 as

follows:

Part I. Exemption for Payment of

Certain Fees to AEW

The restrictions of section 406(b)(1)

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

apply to the payment of certain initial

investment fees (the Investment Fee)

and disposition fees (the Disposition

Fee) to AEW by employee benefit plans

for which AEW provides investment

management services (the Client Plans),

pursuant to an investment management

agreement (the Agreement) entered into

between AEW and the Client Plans

either individually, through the

establishment of a single client separate

account (Single Client Account), or

collectively, as participants in a

multiple client commingled account

(Multiple Client Account), provided that

the conditions set forth below in Part III

are satisfied. (Single Client Accounts

and Multiple Client Accounts are

collectively referred to herein as

Accounts).

Part II. Exemption for Investments in a

Multiple Client Account

The restrictions of section 406(a)(1)

(A) through (D) 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 to any

investment by a Client Plan in a

Multiple Client Account managed by

AEW, provided that the conditions set

forth below in Part III are satisfied.
47058 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

Part III. General Conditions

(a) The investment of plan assets in a

Single or Multiple Client Account,

including the terms and payment of any

Investment Fee and Disposition Fee,

shall be approved in writing by a

fiduciary of a Client Plan which is

independent of AEW and its affiliates

and, in the case of a Multiple Client

Account for which ultimate investment

discretion is exercised by a bank trustee,

a fiduciary which is independent of the

bank trustee and AEW and its affiliates

(the Independent Fiduciary).

Notwithstanding the foregoing, AEW

may authorize the transfer of cash from

a Single Client Account to a Multiple

Client Account, provided that: (1) The

Multiple Client Account has similar

investment objectives and the identical

fee structure as the Single Client

Account; (2) the Agreement governing

the Single Client Account authorizes

AEW to invest in a Multiple Client

Account; (3) AEW receives no

additional fees from the Single Client

Account for cash invested in the

Multiple Client Account and no

additional Investment Fee is paid with

respect to cash transferred to the

Multiple Client Account; (4) a binding

commitment to make the transfer to the

Multiple Client Account is made by

AEW within six months of the

Independent Fiduciary’s decision to

allocate assets to the Single Client

Account or, in the event that AEW’s

binding commitment to make the

transfer occurs more than six months

after such Fiduciary’s decision, AEW

obtains an additional authorization from

the Independent Fiduciary; and (5) each

transfer of assets from the Single Client

Account to the Multiple Client Account

occurs within 60 days of the actual

transfer of such assets to the Single

Client Account.

(b) The terms of any investment in an

Account and of any Investment Fee or

Disposition Fee shall be at least as

favorable to the Client Plans as those

obtainable in arm’s length transactions

between unrelated parties.

(c) At the time any Account is

established and at the time of any

subsequent investment of assets

(including the reinvestment of assets) in

such Account:

(1) Each Client Plan shall have total

net assets with a value in excess of $50

million; and

(2) No Client Plan shall invest, in the

aggregate, more than five percent of its

total assets in any Account or more than

10 percent of its total assets in all

Accounts established by AEW.

(d) Prior to making an investment in

any Account, the Independent Fiduciary

of each Client Plan investing in an

Account shall receive offering materials

from AEW which disclose all material

facts concerning the purpose, structure,

and operation of the Account, including

any fee arrangements.

(e) With respect to its ongoing

participation in an Account, each Client

Plan shall receive the following written

information from AEW:

(1) Audited financial statements of the

Account prepared by independent

public accountants selected by AEW no

later than 90 days after the end of the

fiscal year of the Account;

(2) Quarterly and annual reports

prepared by AEW relating to the overall

financial position and operating results

of the Account and, in the case of a

Multiple Client Account, the value of

each Client Plan’s interest in the

Account. Each such report shall include

a statement regarding the amount of fees

paid to AEW during the period covered

by such report;

(3) Annual appraisals indicating the

fair market value of the Account’s assets

as established by an M.A.I. licensed real

estate appraiser independent of AEW

and its affiliates which has been

approved by the Client Plan prior to

investing in the Account, provided that

if a new appraiser for a property is

chosen by AEW, the appraiser shall be

approved by the Independent Fiduciary

of the Client Plan or the responsible

independent fiduciaries of Client Plans

and other authorized persons acting for

investors in a Multiple Client Account

(the Responsible Independent

Fiduciaries, as defined in Part IV(e)

below), prior to any valuation of such

property; and

(4) In the case of any Multiple Client

Account, a list of all other investors in

the Account.

(f) The total fees paid to AEW shall

constitute no more than reasonable

compensation.

(g) The Investment Fee shall be equal

to a specified percentage of the net

value of the Client Plan assets allocated

to the Account, which shall be payable

either:

(1) At the time assets are deposited (or

deemed deposited in the case of

reinvestment of assets) in the Account;

or

(2) In periodic installments, the

amount (as a percentage of the aggregate

Investment Fee) and timing of which

have been specified in advance based on

the percentage of the Client Plan’s assets

invested in real property as of the

payment date, provided that (i) the

installment period is no less than three

months, and (ii) if the percentage of the

Client Plan assets which have actually

been invested by a payment date is less

than the percentage required for the

aggregate Investment Fee to be paid in

full through that date (both determined

on a cumulative basis), the Investment

Fee paid on such date shall be reduced

by the amount necessary to cause the

percentage of the aggregate Investment

Fee paid to equal only the percentage of

the Client Plan assets actually invested

by that date. The unpaid portion of such

Investment Fee shall be deferred to and

payable on a cumulative basis on the

next scheduled payment date (subject to

the percentage limitation described in

the preceding sentence).

(h) The Disposition Fee shall be

payable after the Client Plan has

received distributions from the Account

in excess of an amount equal to 100

percent of its invested capital plus a

pre-specified annual compounded

cumulative rate of return (the Threshold

Amount), except that in the case of

AEW’s removal or resignation, AEW

shall be entitled to receive a Disposition

Fee payable either at the time of

removal or, in the event of AEW’s

resignation, upon sale of the assets to

which the fee is allocable or upon

termination of the Account as the case

may be, subject to the requirements of

paragraph (k) below, as determined by

a deemed distribution of the assets of

the Account based on an assumed sale

of such assets at their fair market value

(in accordance with independent

appraisals), only to the extent that the

Client Plan would receive distributions

from the Account in excess of an

amount equal to the Threshold Amount

at the time of AEW’s removal or

resignation. Both the Threshold Amount

and the amount of the Disposition Fee,

expressed as a percentage of the amount

distributed (or deemed distributed) from

the Account in excess of the Threshold

Amount, shall be established by the

Agreement and agreed to by the

Independent Fiduciary of the Client

Plan.

(i) The Threshold Amount for any

Disposition Fee shall include at least a

minimum rate of return to the Client

Plan, as defined below in Part IV(f).

(j) For any sale of property in an

Account which shall give rise to the

payment of a Disposition Fee to AEW

prior to the termination of the Account,

the sales price of the property shall be

at least equal to a target amount (the

Target Amount), as defined in Part IV(g),

in order for AEW to sell the property

and receive its Disposition Fee. If the

proposed sales price of the property is

less than the Target Amount, the

proposed sale shall be disclosed to and

approved by the Independent Fiduciary

for a Single Client Account or the

Responsible Independent Fiduciaries for
Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices 47059

a Multiple Client Account, in which

event AEW shall be entitled to sell the

property and receive its Disposition Fee.

If the proposed sales price is less than

the Target Amount and the Independent

Fiduciary’s or Responsible Independent

Fiduciaries’ approval is not obtained,

AEW shall still have the authority to sell

the property, if the Agreement provides

AEW with complete investment

discretion for the Account, provided

that the Disposition Fee which would

have been payable to AEW is paid only

at the termination of the Account.

(k) In the event AEW resigns as

investment manager for an Account, the

Disposition Fee shall be calculated at

the time of resignation as described

above in paragraph (h) and allocated to

each property based upon the

relationship that the appraised value of

such property bears to the total

appraised value of the Account. Each

amount arrived at through this

calculation shall be multiplied by a

fraction, the numerator of which shall

be the actual sales price received by the

Account on disposition of the property

(or in the case of a property which has

not been sold prior to the termination of

the Account, the appraised value of the

property as of the termination date) and

to the denominator of which shall be the

appraised value of the property which

was used in connection with

determining the Disposition Fee at the

time of resignation, provided that this

fraction shall never exceed 1.0. The

resulting amount for each property shall

be the Disposition Fee payable to AEW

upon sale of such property or

termination of the Account, as the case

may be.

(l) AEW or its affiliates shall maintain,

for a period of six years, the records

necessary to enable the persons

described in paragraph (m) of this Part

III 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 AEW or its affiliates, the records are

lost or destroyed prior to the end of the

six year period; and (2) no party in

interest, other than AEW, 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 (m) below.

(m)(1) Except as provided in

paragraph (m)(2) and notwithstanding

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

(b) of the Act, the records referred to in

paragraph (l) of this Part III shall be

unconditionally available at their

customary location for examination

during normal business hours by:

(i) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service;

(ii) Any fiduciary of a Client Plan or

any duly authorized employee or

representative of such fiduciary;

(iii) Any contributing employer to a

Client Plan or any duly authorized

employee or representative of such

employer; and

(iv) Any participant or beneficiary of

a Client Plan or any duly authorized

employee or representative of such

participant or beneficiary.

(2) None of the persons described

above in paragraph (m)(1) (ii)–(iv) shall

be authorized to examine the trade

secrets of AEW and its affiliates or any

commercial or financial information

which is privileged or confidential.

Part IV. Definitions

For purposes of this exemption:

(a) An ‘‘affiliate’’ of a person 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,

relative, or partner of such person; and

(3) Any corporation or partnership of

which such person is an officer,

director, partner, or employee.

(b) The term ‘‘control’’ means the

power to exercise a controlling

influence over the management or

policies of a person other than an

individual.

(c) The term ‘‘management services’’

means:

(1) Development of an investment

strategy for the Account and

identification of suitable real estaterelated investments;

(2) Directing the investments of the

assets of the Account, including the

determination of the structure of each

investment, the negotiation of its terms

and conditions and the performance of

all requisite due diligence;

(3) Timing and directing the

disposition of any assets of the Account

and directing the liquidation of the

Account;

(4) Administration of the overall

operation of the investments of the

Account, including all applicable

leasing, management, financing, and

capital improvement decisions;

(5) Establishing and maintaining

accounting records of the Accounts and

distributing reports to Client Plans as

described in Part III; and

(6) Selecting and directing all service

providers of ancillary services as

defined in this Part IV.

(d) The term ‘‘ancillary services’’

means:

(1) Legal services;

(2) Services of architects, designers,

engineers, hazardous materials

consultants, contractors, leasing agents,

real estate brokers, and others in

connection with the acquisition,

construction, improvement,

management and disposition of

investments in real property;

(3) Insurance brokerage and

consultation services;

(4) Services of independent auditors

and accountants in connection with

auditing the books and records of the

Accounts and preparing tax returns;

(5) Appraisal and mortgage brokerage

services; and

(6) Services for the development of

income-producing real property.

(e) The term ‘‘Responsible

Independent Fiduciaries’’ means with

respect to a Multiple Client Account the

Independent Fiduciary of each Client

Plan invested in the Account and other

authorized persons acting for investors

in the Account which are not employee

benefit plans as defined under section

3(3) of the Act (such as governmental

plans, university endowment funds,

etc.) that are independent of AEW and

its affiliates and are persons other than

the bank trustee for the Account, and

that collectively hold at least 50% of the

interests in the Account.

(f) The term ‘‘Threshold Amount’’

means with respect to any Disposition

Fee an amount which equals all of a

Client Plan’s capital invested in an

Account plus a pre-specified annual

compounded cumulative rate of return

that is at least a minimum rate of return

determined as follows:

(1) A non-fixed rate which is at least

equal to the rate of change in the

consumer price index (CPI) during the

period from the deposit of the Client

Plan’s assets into the Account until

distributions of the Client Plan’s assets

from the Account equal or exceed the

Threshold Amount; or

(2) A fixed rate which is at least equal

to the rate of change in the CPI over

some period of time specified in the

Agreement, which shall not exceed 10

years.

(g) The term ‘‘Target Amount’’ means

a value assigned to each property in the

Account established by AEW either (1)

at the time the property is acquired, by

mutual agreement between AEW and

the Independent Fiduciary for a Single

Client Account or the Responsible

Independent Fiduciaries for a Multiple

Client Account, or (2) pursuant to an

objective formula approved by such

Fiduciaries at the time the Account is

established. However, in no event will

such value be less than the acquisition

price of the property.
47060 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

EFFECTIVE DATE: This exemption, if

granted, is effective as of December 10,

1996.

The availability of this proposed

exemption is subject to the express

condition that the material facts and

representations contained in the

applications for exemption are true and

complete and accurately describe all

material terms of the transactions.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant PTE 93–

40, refer to the proposed exemption and

grant notice which are cited above.

Signed at Washington, DC, this 2nd day of

September, 1997.

Ivan L. Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 97–23640 Filed 9–4–97; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10464 et al.]

Proposed Exemptions; NatWest

Securities Corporations

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

Unless otherwise stated in the Notice

of Proposed Exemption, all interested

persons are invited to submit written

comments, and with respect to

exemptions involving the fiduciary

prohibitions of section 406(b) of the Act,

requests for hearing 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. 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 Pension and Welfare Benefits

Administration, U.S. Department of

Labor, Room N–5507, 200 Constitution

Avenue, NW., Washington, DC 20210.

Notice to Interested Persons

Notice of the proposed exemptions

will be provided to all interested

persons in the manner agreed upon by

the applicant and the Department

within 15 days of the date of publication

in the Federal Register. Such notice

shall include a copy of the notice of

proposed exemption as published in the

Federal Register and shall inform

interested persons of their right to

comment and to request a hearing

(where appropriate).

SUPPLEMENTARY INFORMATION: The

proposed exemptions were requested in

applications filed pursuant to section

408(a) of the Act and/or section

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

accordance with procedures set forth in

29 CFR part 2570, subpart B (55 FR

32836, 32847, August 10, 1990).

Effective December 31, 1978, section

102 of Reorganization Plan No. 4 of

1978 (43 FR 47713, October 17, 1978)

transferred the authority of the Secretary

of the Treasury to issue exemptions of

the type requested to the Secretary of

Labor. Therefore, these notices of

proposed exemption are issued solely

by the Department.

The applications contain

representations with regard to the

proposed exemptions which are

summarized below. Interested persons

are referred to the applications on file

with the Department for a complete

statement of the facts and

representations.

NatWest Securities Corporation,

NatWest Securities Limited, Located in

New York, New York

[Application Nos. D–10464, D–10465]

Proposed Exemption

The Department is considering

granting an exemption under the

authority of section 408(a) of the Act

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

in accordance with the procedures set

forth in 29 CFR part 2570, subpart B (55

FR 32836, 32847, August 10, 1990).

Section I—Transactions

A. Effective May 22, 1997, the

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

through (D) of the Employee Retirement

Income Security Act of 1974 (the Act)

and the taxes imposed by section 4975

(a) and (b) of the Internal Revenue Code

of 1986 (the Code), by reason of section

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

shall not apply to any purchase or sale

of a security between an employee

benefit plan and a broker-dealer

affiliated with NatWest Securities

Corporation and subject to British law

(NatWest/UK Affiliate), if the following

conditions, and the conditions of

Section II, are satisfied:

(1) The NatWest/UK Affiliate

customarily purchases and sells

securities for its own account in the

ordinary course of its business as a

broker-dealer.

(2) Such transaction is on terms at

least as favorable to the plan as those

which the plan could obtain in an arm’s

length transaction with an unrelated

party.

(3) Neither the NatWest/UK Affiliate

nor an affiliate thereof has discretionary

authority or control with respect to the

investment of the plan assets involved

in the transaction, or renders investment

advice (within the meaning of 29 CFR

2510.3–21(c)) with respect to those

assets, and the NatWest/UK Affiliate is

a party in interest or disqualified person

with respect to the plan assets involved

in the transaction solely by reason of

section 3(14)(B) of the Act or section

4975(e)(2)(B) of the Code, or by reason

of a relationship to a person described

in such sections. For purposes of this

paragraph, the NatWest/UK Affiliate

shall not be deemed to be a fiduciary

with respect to a plan solely by reason

of providing securities custodial

services for a plan.

B. Effective May 22, 1997, the

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

through (D) 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 lending of securities that

are assets of an employee benefit plan

to an NatWest/UK Affiliate if the

following conditions, and the

conditions of Section II, are satisfied:

(1) Neither the NatWest/UK Affiliate

(the Borrower) nor an affiliate of the

Borrower has discretionary authority or

control with respect to the investment of

the plan assets involved in the

transaction, or renders investment

advice (within the meaning of 29 CFR