Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 88115 

TOTAL BURDEN HOURS

Activity Number of 

respondents 

Frequency 

(annually) 

Total annual 

responses 

Time per 

response 

minutes 

Total annual 

burden 

(hours) 

L3 Evaluation surveys .................................................................. 950 1 950 15 238 

L3 Evaluation interviews .............................................................. 277 1 277 60 277 

Unduplicated totals ............................................................... 1,227 .................... 1,227 .................... 515 

If additional information is required 

contact: Darwin Arceo, Department 

Clearance Officer, United States 

Department of Justice, Justice 

Management Division, Policy and 

Planning Staff, Two Constitution 

Square, 145 N Street NE, 4W–218, 

Washington, DC. 

Dated: December 15, 2023. 

Darwin Arceo, 

Department Clearance Officer for PRA, U.S. 

Department of Justice. 

[FR Doc. 2023–27971 Filed 12–19–23; 8:45 am] 

BILLING CODE 4410–17–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Exemption Application No. D–12096] 

Proposed Exemption for Certain 

Prohibited Transaction Restrictions 

Involving TT International Asset 

Management Ltd (TTI or the Applicant) 

Located in London, United Kingdom 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemption. 

SUMMARY: This document provides 

notice of the pendency before the 

Department of Labor (the Department) of 

a proposed individual exemption from 

certain of the prohibited transaction 

restrictions of the Employee Retirement 

Income Security Act of 1974 (ERISA) 

and/or the Internal Revenue Code of 

1986 (the Code). If this proposed 

exemption is granted, TT International 

Asset Management Ltd (TTI) will not be 

precluded from relying on the 

exemptive relief provided by Prohibited 

Transaction Class Exemption 84–14 

(PTE 84–14 or the QPAM Exemption), 

notwithstanding the conviction of 

SMBC Nikko Securities, Inc. (Nikko 

Tokyo) in Tokyo District Court for 

attempting to peg, fix or stabilize the 

prices of certain Japanese equity 

securities that Nikko Tokyo was 

attempting to place in a block offering 

that occurred on February 13, 2023 (the 

Conviction). 

DATES: If granted, the exemption will be 

in effect for a period of five years, 

beginning on February 13, 2024, and 

ending on February 12, 2029. Written 

comments and requests for a public 

hearing on the proposed exemption 

should be submitted to the Department 

by February 5, 2024. 

ADDRESSES: All written comments and 

requests for a hearing should be 

submitted to the Employee Benefits 

Security Administration (EBSA), Office 

of Exemption Determinations, 

Attention: Application No. D–12096, via 

email to e-OED@dol.gov or online 

through http://www.regulations.gov. 

Any such comments or requests should 

be sent by the end of the scheduled 

comment period. The application for 

exemption and the comments received 

will be available for public inspection in 

the Public Disclosure Room of the 

Employee Benefits Security 

Administration, U.S. Department of 

Labor, Room N–1515, 200 Constitution 

Avenue NW, Washington, DC 20210. 

See SUPPLEMENTARY INFORMATION below 

for additional information regarding 

comments. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Joseph Brennan of the Department at 

(202) 693–8456. (This is not a toll-free 

number.) 

SUPPLEMENTARY INFORMATION: 

Comments 

Persons are encouraged to submit all 

comments electronically and not to 

follow with paper copies. Comments 

should state the nature of the person’s 

interest in the proposed exemption and 

how the person would be adversely 

affected by the exemption, if granted. 

Any person who may be adversely 

affected by an exemption can request a 

hearing on the exemption. A request for 

a hearing must state: (1) the name, 

address, telephone number, and email 

address of the person making the 

request; (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; 

and (3) a statement of the issues to be 

addressed and a general description of 

the evidence to be presented at the 

hearing. The Department will grant a 

request for a hearing made in 

accordance with the requirements above 

where a hearing is necessary to fully 

explore material factual issues 

identified by the requestor, and a notice 

of such hearing will be published by the 

Department in the Federal Register. The 

Department may decline to hold a 

hearing if: (1) the request for the hearing 

does not meet the requirements stated 

above; (2) the only issues identified for 

exploration at the hearing are matters of 

law; or (3) the factual issues identified 

in the request can be fully explored 

through the submission of evidence in 

written (including electronic) form. 

Warning: All comments received will 

be included in the public record 

without change and may be made 

available online at http://

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be confidential or 

information whose disclosure is 

restricted by statute. If you submit a 

comment, EBSA recommends that you 

include your name and other contact 

information in the body of your 

comment, but DO NOT submit 

information that you consider to be 

confidential, or otherwise protected 

(such as a Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. If EBSA cannot 

read your comment due to technical 

difficulties and cannot contact you for 

clarification, EBSA might not be able to 

consider your comment. 

Additionally, the http://

www.regulations.gov website is an 

‘‘anonymous access’’ system, which 

means EBSA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email directly 

to EBSA without going through http:// 

www.regulations.gov, your email 

address will be automatically captured 

and included as part of the comment 

that is placed in the public record and 

made available on the internet. 

Proposed Exemption 

This proposed exemption would 

provide relief from certain restrictions 


ddrumheller on DSK120RN23PROD with NOTICES1
88116 Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 

1For purposes of this proposed exemption, 

references to specific provisions of ERISA Title I, 

unless otherwise specified, should be read to refer 

as well to the corresponding provisions of Code 

section 4975. Further, this proposed exemption, if 

granted, does not provide relief from the 

requirements of, or specific sections of, any law not 

noted above. Accordingly, TTI is responsible for 

ensuring compliance with any other laws 

applicable to the transactions described herein. 

2Section VI(d) of PTE 84–14 defines the term 

‘‘affiliate’’ for purposes of Section I(g) as ‘‘(1) Any 

person directly or indirectly through one or more 

intermediaries, controlling, controlled by, or under 

common control with the person, (2) Any director 

of, relative of, or partner in, any such person, (3) 

Any corporation, partnership, trust or 

unincorporated enterprise of which such person is 

an officer, director, or a 5 percent or more partner 

or owner, and (4) Any employee or officer of the 

person who—(A) Is a highly compensated employee 

(as defined in Section 4975(e)(2)(H) of the Code) or 

officer (earning 10 percent or more of the yearly 

wages of such person), or (B) Has direct or indirect 

authority, responsibility or control regarding the 

custody, management or disposition of plan assets.’’ 

3The Summary of Facts and Representations is 

based on TTI’s representations provided in its 

exemption application and does not reflect factual 

findings or opinions of the Department unless 

indicated otherwise. The Department notes that the 

availability of this exemption is subject to the 

express condition that the material facts and 

representations contained in application D–12096 

are true and complete at all times, and accurately 

describe all material terms of the transactions 

covered by the exemption. If there is any material 

change in a transaction covered by the exemption, 

or in a material fact or representation described in 

the application, the exemption will cease to apply 

as of the date of the change. 

4TTI subsidiaries include TT International 

Investment Management LLP, TT International 

(Hong Kong) Ltd, TT Crosby Ltd, and TT 

International Advisors Inc. 

5The term ‘‘Covered Plan’’ means a plan subject 

to Part IV of Title I of ERISA (an ‘‘ERISA-covered 

plan’’) or a plan subject to Code section 4975 (an 

‘‘IRA’’), in each case, with respect to which TTI 

relies on PTE 84–14, or with respect to which TTI 

has expressly represented that the manager qualifies 

as a QPAM or relies on PTE 84–14. A Covered Plan 

does not include an ERISA-covered plan or IRA to 

the extent that TTI has expressly disclaimed 

reliance on QPAM status or PTE 84–14 in entering 

into a contract, arrangement, or agreement with the 

ERISA-covered plan or IRA. 

6Currently, TTI is the only member of the SMBC 

group that relies on the QPAM Exemption. 

7Together, these two ERISA-covered plans 

currently hold approximately $352.7 million in 

assets. 

8Although the public pension plans are not 

statutory ERISA assets, TTI has committed to those 

plans to follow the same rules and operate under 

the same restrictions as ERISA plans. Accordingly, 

these plans are operated in compliance with ERISA 

and utilize the QPAM exemption. 

9For purposes of the Summary of Facts and 

Representations, references to specific provisions of 

Title I of ERISA, unless otherwise specified, refer 

also to the corresponding provisions of the Code. 

10Under the Code, such parties, or similar parties, 

are referred to as ‘‘disqualified persons.’’ 

11The prohibited transaction provisions also 

include certain fiduciary prohibited transactions 

under ERISA Section 406(b). These include 

transactions involving fiduciary self-dealing, 

fiduciary conflicts of interest, and kickbacks to 

fiduciaries. 

12The Department’s exemption procedure 

regulation is codified at 29 CFR part 2570, subpart 

B (76 FR 66637, 66644, October 27, 2011). 

set forth in ERISA sections 406 and 

407.1 It would not, however, provide 

relief from any other violation of law. 

Furthermore, the Department cautions 

that the relief in this proposed 

exemption would terminate 

immediately if, among other things, TTI 

or an affiliate of TTI (as defined in 

Section VI(d) of PTE 84–14) 2 is 

convicted of a crime covered by Section 

I(g) of PTE 84–14 (other than the 

Conviction) during the Exemption 

Period. Although TTI could apply for a 

new exemption in that circumstance, 

the Department would not be obligated 

to grant the exemption. 

The terms of this proposed exemption 

have been specifically designed to 

permit a plan to terminate its 

relationship in an orderly and costeffective fashion in the event of an 

additional conviction of TTI or a TTI 

affiliate, or a determination by the plan 

that it is otherwise prudent to terminate 

its relationship with TTI. 

Summary of Facts and 

Representations 3

Background 

1. The Sumitomo Mitsui Banking 

Corporation group (SMBC) is a Japanese 

financial services firm that conducts 

activities across a wide range of 

financial sectors, including banking, 

asset management, securities trading, 

leasing, credit card lending, and 

consumer finance. SMBC provides asset 

management services through two 

subsidiaries. The first is TTI, which is 

managed independently of the broader 

SMBC group. The second is Sumitomo 

Mitsui DS Asset Management Company, 

Limited, an investment manager 

headquartered in Tokyo. The SMBC 

group also conducts securities market 

activities through the SMBC Nikko 

Securities franchise. As relevant to this 

proposed exemption, that includes 

Nikko Tokyo, a Japanese broker-dealer. 

2. TTI is a global investment firm 

headquartered in London, UK that 

manages approximately $7.1 billion in 

assets. TTI and its subsidiaries 4 have 

operations in the United States, Hong 

Kong, and Japan. TTI was wholly 

acquired by Sumitomo Mitsui Financial 

Group, Inc. (SMFG) on February 28, 

2020, and is currently a member of the 

SMBC Group. Since the acquisition, TTI 

has remained a stand-alone business 

with distinct reporting lines, governance 

structures, and control frameworks. 

3. TTI is an SEC-registered investment 

advisor that specializes in managing 

portfolios for institutional investors, 

including ERISA-covered Plans 

(Covered Plans),5 public retirement 

plans, and other collective investment 

vehicles through a variety of equity 

long-only and long/short strategies 

across a broad range of industry sectors 

and geographies. 

4. In offering investment management 

services, TTI operates as a QPAM in 

reliance on PTE 84–14.6 TTI advises 

four segregated ERISA accounts on 

behalf of the ERISA-covered plans of 

two major U.S. employers 7 and operates 

three segregated accounts for public 

pension plans, which currently hold 

approximately $466.4 million in assets.8

TTI also manages three funds as ERISA 

‘‘plan asset’’ funds: the TT Emerging 

Markets Opportunities Fund II Limited, 

which is operational and holds ERISA 

assets; the TT Environmental Solutions 

Equity Master Fund II Limited, which is 

in the process of being launched; and 

the TT Non-U.S. Equity Master Fund 

Limited, which is operational but does 

not hold any ERISA assets. 

ERISA and Code Prohibited 

Transactions and PTE 84–14 

5. The rules set forth in ERISA section 

406 and Code section 4975(c)(1) 

proscribe certain ‘‘prohibited 

transactions’’ between plans and certain 

parties in interest with respect to those 

plans.9 ERISA section 3(14) defines 

parties in interest with respect to a plan 

to include, among others, the plan 

fiduciary, a sponsoring employer of the 

plan, a union whose members are 

covered by the plan, service providers 

with respect to the plan, and certain of 

their affiliates.10 The prohibited 

transaction provisions under ERISA 

section 406(a) and Code section 

4975(c)(1) prohibit, in relevant part, (1) 

sales, leases, loans, or the provision of 

services between a party in interest and 

a plan (or an entity whose assets are 

deemed to constitute the assets of a 

plan), (2) the use of plan assets by or for 

the benefit of a party in interest, or (3) 

a transfer of plan assets to a party in 

interest.11

6. Under the authority of ERISA 

section 408(a) and Code section 

4975(c)(2), the Department has the 

authority to grant an exemption from 

such ‘‘prohibited transactions’’ in 

accordance with the procedures set 

forth in its exemption procedure 

regulation if the Department finds that 

an exemption is: (a) administratively 

feasible, (b) in the interests of the plan 

and of its participants and beneficiaries, 

and (c) protective of the rights of the 

plan’s participants and beneficiaries.12

7. PTE 84–14 exempts certain 

prohibited transactions between a party 

in interest and an ‘‘investment fund’’ (as 

defined in Section VI(b) of PTE 84–14) 


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13See 75 FR 38837, 38839 (July 6, 2010). 

14 49 FR 9494 (March 13, 1984), as corrected at 

50 FR 41430 (October 10, 1985), as amended at 70 

FR 49305 (August 23, 2005), and as amended at 75 

FR 38837 (July 6, 2010). 

15According to the Applicant, the unofficial 

English-language translation of Article 159, 

paragraph 3 of the FIEA, available on the Japanese 

Financial Services Agency website, provides that no 

person may ‘‘conduct a series of Sales and Purchase 

of Securities, etc. or make offer, Entrustment, etc. 

or Accepting an Entrustment, etc. therefore in 

violation of a Cabinet Order for the purpose of 

pegging, fixing or stabilizing prices of Listed 

Financial Instruments, etc. in a Financial 

Instruments Exchange Market or prices of Over-theCounter Traded Securities in an Over-the-Counter 

Securities Market.’’ 

16The Tokyo Public Prosecutor alleged that these 

‘‘stabilization transactions’’ violated Article 197 

Paragraph 1, Item 5, Article 159, Paragraph 3, and 

Article 207, Paragraph 1, Item 1 of the FIEA and 

Article 60 of the Penal Code. 

17See PTE 2023–13, 88 FR 26336 (April 28, 

2023). 

18The following paragraphs do not discuss all of 

the conditions set out in PTE 2023–13. For the 

complete set of conditions, see PTE 2023–13. 

19Further, certain TTI senior personnel must 

review the Audit Report, make certain 

certifications, and take corrective actions when 

necessary. 

in which a plan has an interest if the 

investment manager managing the 

investment fund satisfies the definition 

of a ‘‘qualified professional asset 

manager’’ (QPAM) and satisfies 

additional conditions of the exemption. 

PTE 84–14 was developed and granted 

based on the essential premise that 

broad relief could be afforded for all 

types of transactions in which a plan 

engages only if the commitments and 

the investments of plan assets and the 

negotiations leading thereto are the sole 

responsibility of an independent, 

discretionary manager.13

8. Section I(g) of PTE 84–14 prevents 

an entity that may otherwise meet the 

QPAM definition from utilizing the 

exemptive relief provided by the QPAM 

Exemption for itself and its client plans 

if that entity, an ‘‘affiliate’’ thereof, or 

any direct or indirect five percent or 

more owner in the QPAM has been 

either convicted or released from 

imprisonment, whichever is later, as a 

result of criminal activity described in 

Section I(g) within the 10 years 

immediately preceding a transaction. 

Section I(g) was included in PTE 84–14, 

in part, based on the Department’s 

expectation that a QPAM, and those 

who may be in a position to influence 

the QPAM’s policies, maintain a high 

standard of integrity.14

Nikko Tokyo Conviction and PTE 84–14 

Disqualification 

9. On February 13, 2023, Nikko Tokyo 

and four of its officers and employees 

were convicted in Tokyo District Court 

of violating Japan’s Financial 

Instruments and Exchange Act (the 

FIEA) for attempting to peg, fix, or 

stabilize 15 the prices of certain Japanese 

equity securities that Nikko Tokyo was 

attempting to place in a block offering 

(the Conviction). Nikko Tokyo was 

convicted of 10 violations of the FIEA 

and was ordered to pay a ¥700 million 

fine (approximately $5.3 million) and a 

surcharge of approximately ¥4.5 billion 

(approximately $33.7 million). 

A block offering is a type of limited 

public offering that is common in Japan 

whereby a dealer typically applies a 

spread to the price at which it purchases 

the shares from the seller and the price 

at which it sells them in the block 

offering. Between December 2019 and 

November 2021, Nikko Tokyo, through 

the actions of relevant officers, 

purchased shares of five issuers for its 

own account in an attempt to peg, fix, 

or stabilize the prices of those securities 

in anticipation of a block offer. This 

activity was intended to ensure that the 

price of the securities being sold 

through the block offering did not 

decline significantly, which would have 

potentially harmed Nikko Tokyo’s 

interests.16

Nikko Tokyo Affiliation and Loss of 

QPAM Status 

10. Both TTI and Nikko Tokyo are 

direct subsidiaries of SMFG and thus 

are affiliates for the purposes of Section 

I(g) of the QPAM Exemption. When the 

Tokyo District Court sentenced Nikko 

Tokyo in connection with the 

Conviction, Section I(g) of PTE 84–14 

was triggered, and TTI became ineligible 

to rely on the QPAM Exemption to 

service its Plan clients, without 

receiving an individual prohibited 

transaction exemption from the 

Department. 

PTE 2023–13 

11. On October 19, 2022, TTI 

requested an individual exemption for 

TTI and its Covered Plan clients to 

continue to utilize the relief in PTE 84– 

14, notwithstanding the thenanticipated Conviction of Nikko Tokyo. 

In support of its exemption request, TTI 

asserted that: there has always been a 

complete separation in operations 

between TTI and Nikko Tokyo; Nikko 

Tokyo is a remote foreign affiliate of TTI 

with wholly separate businesses, 

operations, management, systems, 

premises, and legal and compliance 

personnel; TTI was not involved in any 

way in the Misconduct; and the 

Misconduct did not involve any ERISA 

assets. In its exemption application, TTI 

requested: (1) a five-year term of relief 

and (2) an exemption that would cover 

TTI and TTI’s current and future 

affiliates and related entities. 

12. On April 28, 2023, the Department 

granted PTE 2023–13,17 which 

permitted TTI to continue to rely upon 

the relief provided in the QPAM 

exemption for a one-year period from 

the date of the Conviction. The 

Department declined TTI’s request for a 

longer five-year exemption term and 

instead proposed a limited one-year 

term that applies exclusively to TTI, so 

the Department retained the ability to 

review TTI’s adherence to the 

conditions set out in the one-year 

exemption before considering longerterm relief. 

Conditions of PTE 2023–13 

13. PTE 2023–13 contains a set of 

conditions that are designed to protect 

those Covered Plans that entrust their 

assets to TTI despite the serious nature 

of the criminal misconduct underlying 

the Conviction of Nikko Tokyo. Under 

PTE 2023–13, TTI must: 18

• Develop, implement, maintain, and 

follow written policies (the Policies) 

that are reasonably designed to ensure 

that, among other things: the asset 

management decisions of TTI are 

conducted independently of Nikko 

Tokyo; TTI fully complies with ERISA’s 

fiduciary duties; and any filings or 

statements made by TTI to regulators are 

materially accurate and complete. 

• Develop and implement a training 

program (the Training) conducted by a 

prudently selected independent 

professional that covers the Policies, 

ERISA and Code compliance, ethical 

conduct, the consequences for not 

complying with the conditions of the 

exemption, and the duty to promptly 

report wrongdoing. 

• Submit to an audit conducted by a 

prudently selected independent auditor 

(the Auditor) who completes a written 

report (the Audit Report) assessing the 

adequacy of TTI’s Policies and Training, 

TTI’s compliance with the Policies and 

Training, the need, if any, to strengthen 

the Policies and Training; and any 

instance(s) of noncompliance by TTI.19

• Agree and warrant to Covered Plan 

clients that it will: (a) comply with 

ERISA and the Code; (b) refrain from 

engaging in prohibited transactions that 

are not otherwise exempt (and promptly 

correct any inadvertent prohibited 

transactions); and (c) comply with the 

standards of prudence and loyalty set 

forth in ERISA section 404. 

• Agree and warrant: (a) to indemnify 

and hold harmless Covered Plans for 

certain damages; (b) not to require (or 

otherwise cause) Covered Plans to 


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20The board of directors is responsible for, among 

other things, setting strategic objectives, approving 

major initiatives, and ensuring the company has 

adopted and implemented a compliance 

infrastructure that is reasonably designed to meet 

its regulatory obligations. 

waive, limit, or qualify the liability of 

TTI for violating ERISA or the Code or 

engaging in prohibited transactions; (c) 

not to restrict the ability of Covered 

Plans to terminate or withdraw from 

their arrangement with TTI except for 

reasonable restrictions disclosed in 

advance; and (d) not to impose any fees, 

penalties, or charges for such 

termination or withdrawal, except for 

reasonable fees. 

• Designate a senior compliance 

officer (the Compliance Officer) to 

conduct a twelve-month review to 

determine the adequacy and 

effectiveness of TTI’s implementation of 

the Policies and Training (the Review). 

PTE 2023–13 Compliance 

14. TTI states that it has complied 

with the conditions of PTE 2023–13 

and, therefore, should be permitted to 

continue to rely upon PTE 84–14 

through the remainder of its 10-year 

Section I(g) ineligibility period in order 

to avoid substantial costs and other 

disruptions that would occur if TTI no 

could no longer act as a QPAM. TTI 

represents that it has taken the 

following concrete steps to comply with 

the requirements of PTE 2023–13. 

15. Adoption of Comprehensive 

Policies. TTI states that it has developed 

and implemented specific policies (the 

ERISA Policies) that ensure that asset 

management decisions of TTI are 

conducted independently of Nikko 

Tokyo. TTI states that its ERISA Policies 

promote compliance with ERISA’s 

fiduciary duties and prohibited 

transaction provisions, including with 

respect to co-fiduciary liability, and 

ensure accuracy in communications 

with regulators and Covered Plan 

clients. TTI further states that its ERISA 

Policies include required monitoring to 

ensure compliance with the specific 

terms of PTE 2023–13 and the prompt 

identification and correction of any 

Policy violations. 

TTI states that it maintains policies 

and procedures that are reasonably 

designed to ensure that all TTI 

personnel comply with applicable 

regulations and act in the best interests 

of TTI’s clients, including ERISA plan 

participants. TTI represents that it does 

not share trading decisions and 

investment strategies for its clients with 

personnel outside of TTI’s asset 

management businesses and does not 

consult with other parts of the SMBC 

group in connection with investment 

decisions it makes on behalf of its 

clients. 

16. Implementation of a Training 

Program. TTI represents that it has 

implemented a comprehensive, 

mandatory training program for all 

relevant TTI asset/portfolio 

management, trading, legal, compliance, 

and internal audit personnel (the ERISA 

Training). TTI submits that initial 

ERISA Training sessions under PTE 

2023–13 have been completed, with 

mandatory attendance for relevant 

personnel. Two WilmerHale partners 

who are experienced in ERISA training 

and the regulatory compliance of asset 

managers taught the ERISA Training 

course on August 8, 2023, with a 

simultaneous broadcast in TTI’s London 

office. TTI states that required personnel 

who were unable to attend the live 

training have completed the training via 

a recording of the live session. TTI 

represents further that it has made 

electronic training modules available for 

new relevant personnel and that followups are made to ensure that all relevant 

personnel complete the Training. 

17. Disclosure to Client and 

Amendment of Client Agreements. TTI 

represents that it has provided its 

Covered Plan clients with a copy of PTE 

2023–13, a summary of TTI’s written 

ERISA Policies developed in connection 

therewith, a summary of the conduct 

leading to the Conviction, and notice 

that the requirements of the QPAM 

Exemption were not satisfied as a result 

of the Conviction. TTI states further that 

it has amended its agreements with 

Covered Plan clients to allow for the 

termination of the relationship with TTI 

without penalty to the Covered Plan 

clients, and to incorporate all other 

conditions of PTE 2023–13. TTI notes 

that, throughout this process, no 

Covered Plan client has decided to 

terminate its relationship with TTI. 

18. Strengthening of Compliance 

within TTI. TTI represents that it has 

designated its Chief Compliance Officer 

as the initial Compliance Officer under 

PTE 2023–13. TTI states that its Chief 

Compliance Officer now oversees the 

ERISA Policies and ERISA Training and 

ensures that each conforms to the 

requirements set out in PTE 2023–13. 

TTI states that by designating its Chief 

Compliance Officer to this role, it is 

ensuring that the Compliance Officer 

will have a direct reporting line to 

senior management. 

19. Strengthening of Compliance 

within the SMBC Group. The Applicant 

states that TTI and the SMBC group 

have strengthened their group-wide 

coordination regarding potentially 

disqualifying conduct, in order to 

ensure compliance with the conditions 

of PTE 2023–13, including 

identification of deferred prosecution or 

non-prosecution agreements. Further, to 

prevent the possibility of reoccurrence, 

Nikko Tokyo has ceased block offerings 

while completing remedial measures 

supervised by Japanese regulators, 

including a verification process to 

assess whether the root causes of the 

problems have been addressed. 

20. Note on the Audit. PTE 2023–13 

requires TTI to undergo an audit that 

covers the one-year period of February 

13, 2023, through February 12, 2024. 

The audit report must be completed by 

August 12, 2024. TTI represents that it 

has engaged Newport Trust Company to 

carry out the independent auditor 

functions required under PTE 2023–13 

and this exemption if it is granted by the 

Department. 

Remedial Efforts by Nikko Tokyo and 

SMFG 

21. According to the Applicant, Nikko 

Tokyo has taken significant steps to 

address the issues that led to the 

Conviction and has enhanced its 

policies and procedures related to 

proprietary trading and enhanced its 

surveillance over that activity, including 

hiring additional compliance officers. In 

addition, Nikko Tokyo refused to renew 

its employment contracts with each of 

the four executive officers who were 

alleged to have been involved in the 

misconduct underlying the Conviction 

and has dismissed the remaining two 

employees on disciplinary grounds. 

Separation of TTI and Nikko Tokyo 

22. TTI states that: none of the 

misconduct underlying the Nikko Tokyo 

Conviction involved TTI or the SMBC 

group’s asset management businesses; 

none of TTI’s personnel was involved in 

the misconduct; and none of the 

individual officers or employees of 

Nikko Tokyo had any role at TTI. 

According to the Applicant, TTI and 

Nikko Tokyo have separate businesses, 

operations, management teams, systems, 

premises, and legal and compliance 

personnel. Since its acquisition by 

SMFG on February 28, 2020, TTI has 

remained a stand-alone business with 

distinct reporting lines, governance 

structures, and control frameworks. 

Further, TTI is not directly owned by or 

in the same vertical ownership chain as 

Nikko Tokyo, and TTI and Nikko Tokyo 

do not share personnel or office space. 

23. The Applicant states that although 

TTI’s seven-member board of directors 

includes four representatives from the 

SMBC group, TTI’s Management 

Committee provides direct oversight of 

TTI’s business.20 Day-to-day 

management at TTI is conducted by a 


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Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 88119 

21This includes TTI’s Code of Ethics, which sets 

forth TTI’s expectation that all personnel will 

‘‘[o]bserve the highest standards of integrity’’ and 

ensure that TTI maintains its ‘‘strong reputation for 

regulatory compliance and high professional 

standards.’’ This Code of Ethics also addresses 

prohibitions on market abuse and restrictions on 

personal trading. 

22The actual percentage of AUM in each fund 

that is hedged at any given time varies. 

dedicated management team with 

support from other TTI committees, 

including the Operations Committee, 

Product Committee, Valuation 

Committee, and ESG Committee. In 

addition, TTI has dedicated 

independent legal, risk, and compliance 

teams, as well as its own control 

framework and compliance 

infrastructure.21

24. According to the Applicant, TTI 

personnel remain fully and 

independently responsible for TTI’s 

material functions, including portfolio 

and risk management activities, 

investment and trading decisions, 

compliance, marketing, and the 

provision of client services. In addition, 

dedicated TTI personnel perform all 

day-to-day functions related to TTI’s 

business as an investment adviser, 

including onboarding customers, 

managing customer accounts, and 

executing trading decisions. 

25. TTI states that it has detailed 

policies setting forth its process for 

handling ERISA assets, identifying and 

addressing conflicts of interest, best 

execution, and compliance with 

applicable anti-money laundering 

requirements. TTI also states that it has 

a dedicated Compliance Manual that 

sets forth, among other things, firm 

policies related to whistleblowing, 

handling internal and external 

complaints, client onboarding, and the 

process for approving new products or 

instruments. 

26. Finally, TTI states that Nikko 

Tokyo is not a QPAM, does not manage 

any ERISA assets, and that no ERISA 

assets were involved in the Misconduct 

underlying the Nikko Tokyo Conviction. 

Further, TTI has not engaged in trading 

activity with Nikko Tokyo on behalf of 

ERISA accounts at any point since TTI 

became affiliated with Nikko Tokyo. 

Hardship to Covered Plans 

27. TTI represents that Covered Plans 

would suffer certain hardships if TTI 

loses its eligibility to rely on the QPAM 

Exemption. TTI’s representations 

regarding these hardships are set forth 

below in paragraphs 28 through 37. 

28. According to the Applicant, loss 

of the QPAM Exemption would severely 

limit the investment transactions 

available to the accounts that TTI 

manages on behalf of Covered Plans, 

hindering TTI’s ability to efficiently 

manage the strategies for which it 

contracted with Covered Plan clients. 

Further, if TTI were ineligible to rely on 

the QPAM Exemption, it could receive 

less advantageous pricing for 

transactions it engages in on behalf of 

Covered Plans. 

29. TTI states that it has extensively 

reviewed its investment activity and 

concluded that, as a practical matter, the 

QPAM Exemption is the only exemption 

available to provide relief for certain 

types of investment transactions it 

enters into on behalf of Covered Plans. 

TTI states that counterparties to the 

swaps and other transactions in which 

TTI-managed accounts engage require 

compliance with, and a representation 

as to satisfaction of the conditions of, 

the QPAM Exemption. In light of market 

reliance on QPAM Exemption, the 

Applicant submits that it would not be 

possible for TTI to effectively manage its 

strategies for ERISA clients, absent the 

grant of exemptive relief. 

TTI states that considering the nature 

of emerging market investments and 

swap, options, and other derivative 

transactions, Covered Plan clients and 

counterparties are reluctant to utilize 

more recent alternative exemptions, 

such as the service provider exemption 

under ERISA section 408(b)(17). This 

reluctance is due to uncertainty about 

the application of the adequate 

consideration requirements of the 

statutory exemption and the resulting 

possibility that the use of the exemption 

could later be challenged by the 

Department on those grounds. 

30. TTI states that it relies on the 

QPAM Exemption to conduct a variety 

of transactions on behalf of Covered 

Plans, including buying and selling 

equity securities; preferred stock; 

American Depository Receipts, and 

related options; U.S. and foreign fixedincome instruments, including 

unregistered offerings; various 

derivatives, including futures, options 

on futures, and swaps; and foreign 

exchange products, including spot 

currencies, forwards, and swaps. TTI 

also relies upon the QPAM Exemption 

for the purchase and sale of both foreign 

and domestic equity securities, 

registered and sold under Rule 144A or 

otherwise (e.g., traditional private 

placement). 

31. TTI represents that if it loses its 

ability to rely upon the QPAM 

Exemption, it would no longer be able 

to hedge currency for its private and 

public plan asset clients, preventing it 

from managing absolute and relative 

currency risk for such clients in such 

clients’ best interests. TTI states that it 

specializes in international and 

emerging market strategies that depend 

on TTI’s ability to translate and 

maintain the value of Covered Plan 

investments from the local currency in 

which the investment is made into U.S. 

dollars, the benchmark currency in 

which performance is measured. To 

limit plan risk exposure to the 

underlying securities without 

simultaneously exposing them to the 

risk of currency fluctuation, TTI makes 

substantial use of foreign exchange (FX) 

hedges by using forward transactions 

and other FX derivatives. If this 

proposed exemption is not granted, TTI 

states that nearly $900 million in ERISA 

plans and separately managed accounts 

for private and public employers would 

likely be affected, either directly or as a 

result of TTI’s inability to effectively 

hedge risk. 

32. For all but one of the ERISA funds 

that TTI manages, virtually all assets are 

either actively or dynamically hedged 

based on exposures and market 

conditions.22 As of November 3, 2022, 

approximately 16% of the assets under 

management (AUM) in each of the four 

segregated ERISA accounts that TTI 

manages on behalf of the ERISA plans 

of two major U.S. employers are hedged 

with respect to Indian, Taiwanese, and 

Chinese currency, which translates to 

approximately $35 million in hedges. 

Further, the TT Emerging Markets 

Opportunities Fund II has over the past 

year hedged risks associated with 

British, Indian, Taiwanese, Chinese, 

Mexican, and Polish currencies. 

Without these positions, the Applicant 

states that TT Emerging Markets 

Opportunities Fund II would have 

incurred nearly $5.5 million in losses 

due to unhedged FX exposures, 

negatively impacting overall returns. 

33. TTI represents that the loss of the 

QPAM Exemption would also impact 

TTI’s agreements with the swap dealers 

it executes these hedges with pursuant 

to International Swaps and Derivatives 

Association Agreements (ISDA 

Agreements). ISDA agreements require 

TTI to represent that it meets all 

conditions of the QPAM Exemption, 

and a breach of this representation 

would entitle the counterparty to 

terminate the transaction. The 

Applicant states that, as a practical 

matter, swap dealers would be nearly 

certain to exercise their right to 

terminate because TTI’s loss of the 

QPAM Exemption would increase the 

swap dealers’ exposure to risk. Thus, 

these agreements would be unwound 

and TTI would no longer be able to 

employ the hedging activities on which 

its strategies depend. If these ISDA 


ddrumheller on DSK120RN23PROD with NOTICES1
88120 Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 

23The approximate total FX forward exposure of 

TTI’s public and private plan asset accounts as of 

November 10, 2022, is $330 million. 

24TTI represents that it has managed ERISA 

assets for a major U.S. financial institution since at 

least 2015. TTI also states that it has managed 

ERISA assets for a large aerospace company since 

at least 2018. 

Agreements were terminated, TTI states 

that it would immediately need to 

unwind approximately $73,784,388 

million in hedges.23

34. TTI submits that if this proposed 

exemption is not granted, Covered Plans 

could incur significant costs, including 

transaction costs, costs associated with 

finding and evaluating other managers, 

and costs associated with reinvesting 

assets with those new managers. TTI 

states that it has longstanding 

relationships with its ERISA plan 

clients and if this exemption were 

denied, these plans would need to 

undertake significant work to find an 

alternative manager.24 These costs, 

according to TTI include the following: 

(a) consultant fees, legal fees, and other 

due diligence expenses associated with 

identifying new managers; (b) 

transaction costs associated with a 

change in investment manager, 

including the sale and purchase of 

portfolio investments to accommodate 

the investment policies and strategy of 

the new manager, and the cost of 

entering into new custodial 

arrangements; and (c) lost investment 

opportunities as a result of the change 

in investment managers. 

The Applicant states that, given the 

sophistication of TTI’s investment 

strategies, Covered Plan clients would 

likely engage in a full RFP process that 

could take several months to complete. 

TTI states that plans generally incur 

tens of thousands of dollars in 

consulting and legal fees in connection 

with a search for a new manager and 

that consultants may charge more for 

searches involving specialized 

strategies, such as TTI’s international, 

emerging markets, and environmentally 

conscious portfolios. 

35. TTI represents that terminating 

management agreements and liquidating 

associated positions can have a 

significant impact on both transaction 

fees and the market value of the 

underlying assets. This is particularly 

true for many of TTI’s strategies, which 

focus on international and emerging 

markets and may occasionally involve 

investments in illiquid foreign securities 

and related derivatives that have large 

bid-ask spreads, infrequent trading, and/ 

or low trading volumes. 

TTI states that for U.S. Equity 

Strategies, assuming average market 

conditions, the liquidation costs over a 

30-day liquidation timeframe might 

range from 20 to 40 basis points; for 

significantly shorter liquidation periods, 

and depending on the strategy, the range 

could be 30 to 50 basis points. In 

addition, commission fees and 

transactions would likely average an 

additional 4 basis points. 

For International and Emerging 

Markets Equity, TTI relies on the QPAM 

Exemption to buy and sell certain 

international and emerging markets 

equity securities. International, and 

particularly emerging, equity markets 

are typically less liquid than their 

domestic counterparts and incur higher 

transaction costs. Assuming average 

market conditions, the liquidation costs 

for equity strategies over a 30-day 

liquidation timeframe might range from 

30 to 50 basis points; for significantly 

shorter liquidation periods, the range 

could be 40 to 80 basis points, 

depending on the strategy. In addition, 

there would also be an additional 

average of 10 basis points in 

commission fees on the transactions. 

36. For futures, options, and cleared 

and bilateral swaps, TTI relies on the 

QPAM Exemption to buy and sell these 

products, which certain strategies rely 

on to hedge risk and obtain certain 

exposures on an economic basis. 

Without the ability to invest in these 

instruments, plans would no longer 

have access to a tool that managers 

routinely use to protect against losses 

caused by market volatility. If the 

QPAM Exemption were lost, TTI 

estimates that its clients could incur 

average weighted liquidation costs of 

approximately 5 basis points of the total 

market value of these products. 

37. In the case of foreign currency 

exposure, Covered Plans that invest in 

global strategies would be 

disadvantaged were they to lose the 

ability to hedge currency risk. If the 

QPAM Exemption were lost, TTI 

estimates that its clients could incur 

average weighted liquidation costs of 

approximately 5 basis points of the total 

market value in fixed income products. 

38. TTI also provides estimated 

liquidation as dollar cost estimates. 

TTI’s estimate of liquidation costs is of 

the emerging market equity portfolios 

only, which represents the predominant 

strategy for ERISA Clients. TTI states 

that its estimates on equity liquidation 

costs below are based on the gross 

values of the portfolio, utilizing the 

basis point figures, without analysis as 

to the specific portfolio components. 

ERISA client 

Emerging 

market 

portfolio 

AUM at 12/7/23 

Min. 30-day 

equity liquidation 

cost 

(30 bps) 

Max. 30-day 

liquidation cost 

(50 bps) 

Min. intermediate 

liquidation cost 

(40 bps) 

1 ......................................................................................... $54,845,803 164,537 274,229 219,383 

2 ......................................................................................... 172,160,384 516,481 860,801 688,641 

3 ......................................................................................... 102,787,100 308,361 513,935 411,148 

(Plan Asset Fund) .............................................................. 441,117,644 1,323,352 2,205,588 1,764,470 

Total ............................................................................ 770,910,931 2,312,731 3,854,553 3,083,642 

ERISA client 

Max. intermediate 

liquidation cost 

(80 bps) 

Commission fees 

(10 bps) 

Liquidation cost 

of currency hedge 

(50 bps) 

1 ......................................................................................................................... $438,766 $54,845 $27,788 

2 ......................................................................................................................... 1,377,283 172,160 86,914 

3 ......................................................................................................................... 822,296 102,787 51,982 

Plan Asset Fund ................................................................................................ 3,528,941 441,117 202,235 

Total ............................................................................................................ 6,167,286 770,909 368,919 


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Term of Relief Requested 

39. In its exemption application, TTI 

requested a nine-year exemption that 

would carry TTI through the end of the 

Section I(g) 10-year disqualification 

period triggered by the Conviction. The 

Department is declining to include a 

nine-year term with this exemption and 

instead has proposed a five-year term. 

With this limited term of relief, the 

Department is reserving the right to 

review TTI’s adherence to the 

conditions set out in this exemption 

before granting additional relief that 

would carry TTI through the end of its 

disqualification period. To continue to 

rely upon the QPAM Exemption beyond 

the five-year term of this exemption, TTI 

will have to submit another exemption 

application to the Department. 

40. In developing administrative 

exemptions under ERISA section 408(a), 

the Department implements its statutory 

directive to grant only exemptions that 

are appropriately protective and in the 

interest of affected plans and IRAs. The 

Department is proposing this exemption 

with conditions that would protect 

Covered Plans (and their participants 

and beneficiaries) and allow them to 

continue to utilize the services of TTI if 

they determine that it is prudent to do 

so. If this proposed exemption is 

granted as proposed, it would allow 

Covered Plans to avoid costs and 

disruption to investment strategies that 

may arise if such Covered Plans are 

forced, on short notice, to hire a 

different QPAM or asset manager 

because TTI is no longer able to rely on 

the relief provided by PTE 84–14 due to 

the Conviction. 

41. This proposed exemption includes 

a suite of conditions that are similar to 

those conditions set out under PTE 

2023–13 and requires TTI to: continue 

to implement, maintain, and follow its 

ERISA Policies and ERISA Training; 

submit to an annual independent audit 

performed by a prudently selected 

independent auditor; agree and warrant 

to Covered Plan clients that it will, 

among other things, comply with ERISA 

and the Code and refrain from engaging 

in prohibited transactions that are not 

otherwise exempt; agree and warrant to 

indemnify and hold harmless Covered 

Plans for certain damages, not to require 

(or otherwise cause) Covered Plans to 

waive, limit, or qualify the liability of 

TTI, and not to restrict the ability of 

Covered Plans to terminate or withdraw 

from their arrangement with TTI, except 

for reasonable restrictions, or impose 

any fees, penalties, or charges for such 

termination or withdrawal, except for 

reasonable fees. This proposed 

exemption also contains extensive 

notice requirements and obligates TTI to 

ensure that a qualified senior 

compliance officer continues to conduct 

annual reviews to determine the 

adequacy and effectiveness of TTI’s 

implementation of the Policies and 

Training. 

42. Finally, the Department notes that 

relief under this proposed exemption is 

limited solely to TTI and no other 

affiliates of TTI, SMBC, or SMFG, as the 

term affiliate is defined in PTE 84–14. 

Statutory Findings 

43. Based on the conditions included 

in this proposed exemption, the 

Department has tentatively determined 

that the relief sought by TTI would 

satisfy the statutory requirements for an 

exemption under ERISA section 408(a). 

44. The Proposed Exemption is 

‘‘Administratively Feasible.’’ The 

Department has tentatively determined 

that the proposed exemption is 

administratively feasible for the 

Department because, among other 

things, a qualified independent auditor 

would be required to perform an indepth audit covering TTI’s compliance 

with the terms of the exemption, and a 

corresponding written audit report 

would be provided to the Department 

and be made available to the public. The 

Department notes that the independent 

audit will incentivize TTI to comply 

with conditions set out herein while 

reducing the immediate need for direct 

review and oversight by the Department. 

45. The Proposed Exemption is ‘‘In 

the Interest of the Covered Plans and 

their Participants and Beneficiaries.’’ 

The Department has tentatively 

determined that the proposed 

exemption is in the interests of the 

participants and beneficiaries of affected 

Covered Plans because of the likely 

costs that plans would incur if the 

exemption were denied and the benefits 

of permitting plans to continue to rely 

upon TTI’s services with the additional 

protections set forth in this exemption. 

46. The Proposed Exemption Is 

‘‘Protective of the Rights of Covered 

Plan Participants and Beneficiaries.’’ 

The Department has tentatively 

determined that the proposed 

exemption is protective of the rights of 

participants and beneficiaries of 

Covered Plans. As described above, the 

proposed exemption is subject to a suite 

of conditions that include, but are not 

limited to: (a) the maintenance of the 

Policies; (b) the continued 

implementation of the Training; (c) a 

robust audit conducted by a qualified 

independent auditor; (d) the provision 

of certain agreements and warranties by 

TTI to Covered Plans; (e) specific 

notices and disclosures that inform 

Covered Plans of the circumstances 

necessitating the need for exemptive 

relief and TTI’s obligations under this 

exemption; and (f) the designation of a 

Compliance Officer who must ensure 

that TTI continues to comply with the 

Policies and Training requirements of 

this exemption. Further, the Department 

notes that the disqualifying conduct 

occurred at an entity (Nikko Tokyo) that 

is completely separate from TTI. 

Summary 

47. This proposed exemption would 

provide relief from certain of the 

restrictions set forth in ERISA section 

406 and Code section 4975(c)(1). No 

relief or waiver of a violation of any 

other law would be provided by this 

proposed exemption. The relief set forth 

in this proposed exemption would 

terminate immediately if, among other 

things, an entity within the TTI 

corporate structure were convicted of 

any crime covered by Section I(g) of PTE 

84–14 (other than the Conviction). 

While TTI could request a new 

individual prohibited transaction 

exemption in that event, the Department 

would not be obligated to grant such a 

request. Consistent with this proposed 

exemption, the Department’s 

consideration of additional exemptive 

relief is subject to the findings required 

under ERISA section 408(a) and Code 

section 4975(c)(2). 

48. When interpreting and 

implementing this exemption, TTI 

should resolve any ambiguities in favor 

of the exemption’s protective purposes. 

To the extent additional clarification is 

necessary, TTI and others should 

contact EBSA’s Office of Exemption 

Determinations at 202–693–8540. 

49. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that the relief sought by TTI 

would satisfy the statutory requirements 

for an individual exemption under 

ERISA Section 408(a) and Code Section 

4975(c)(2). 

Notice to Interested Persons 

Notice of the proposed exemption 

will be provided to all interested 

persons within fifteen (15) days of the 

publication of the notice of proposed 

five-year exemption in the Federal 

Register. The notice will be provided to 

all interested persons in the manner 

approved by the Department and will 

contain the documents described 

therein and a supplemental statement, 

as required pursuant to 29 CFR 

2570.43(a)(2). The supplemental 

statement will inform interested persons 

of their right to comment on and to 

request a hearing with respect to the 


ddrumheller on DSK120RN23PROD with NOTICES1
88122 Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 

25 29 CFR part 2570, subpart B (76 FR 66637, 

66644, October 27, 2011). Effective December 31, 

1978, section 102 of Reorganization Plan No. 4 of 

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

authority of the Secretary of the Treasury to issue 

exemptions of the type requested to the Secretary 

of Labor. Therefore, this notice of proposed 

exemption is issued solely by the Department. 

pending exemption. All written 

comments and/or requests for a hearing 

must be received by the Department 

within forty-five (45) days of the date of 

publication of this proposed five-year 

exemption in the Federal Register. All 

comments will be made available to the 

public. 

Warning 

If you submit a comment, EBSA 

recommends that you include your 

name and other contact information in 

the body of your comment, but DO NOT 

submit information that you consider to 

be confidential, or otherwise protected 

(such as a Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. All comments 

may be posted on the internet and can 

be retrieved by most internet search 

engines. 

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 ERISA 

section 408(a) and/or Code section 

4975(c)(2) does not relieve a fiduciary or 

other party in interest or disqualified 

person from certain other provisions of 

ERISA and/or the Code, including any 

prohibited transaction provisions to 

which the exemption does not apply 

and the general fiduciary responsibility 

provisions of ERISA section 404, which, 

among other things, require a fiduciary 

to discharge their duties respecting the 

plan solely in the interest of the 

participants and beneficiaries of the 

plan and in a prudent fashion in 

accordance with ERISA section 

404(a)(1)(B); nor does it affect the 

requirement of Code section 401(a) that 

the plan must operate for the exclusive 

benefit of the employees of the 

employer maintaining the plan and their 

beneficiaries; 

(2) Before an exemption may be 

granted under ERISA section 408(a) 

and/or Code section 4975(c)(2), 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 the plan; 

(3) The proposed exemption would be 

supplemental to, and not in derogation 

of, any other provisions of ERISA and/ 

or the Code, including statutory or 

administrative exemptions and 

transitional rules. Furthermore, the fact 

that a transaction is subject to an 

administrative or statutory exemption is 

not dispositive of whether the 

transaction is, in fact, a prohibited 

transaction; and 

(4) The proposed exemption would be 

subject to the express condition that the 

material facts and representations 

contained in the application are true 

and complete at all times and that the 

application accurately describes all 

material terms of the transactions that 

are the subject of the exemption. 

Proposed Exemption 

The Department is considering 

granting a five-year exemption under 

the authority of ERISA section 408(a) 

and Internal Revenue Code (or Code) 

section 4975(c)(2), and in accordance 

with the procedures set forth in the 

exemption procedure regulation.25

Section I. Definitions 

(a) The term ‘‘Conviction’’ means the 

judgment of conviction against SMBC 

Nikko Securities, Inc. (Nikko Tokyo) in 

Tokyo District Court for attempting to 

peg, fix or stabilize the prices of certain 

Japanese equity securities that Nikko 

Tokyo was attempting to place in a 

block offering that occurred on February 

13, 2023. 

(b) The term ‘‘Covered Plan’’ means a 

plan subject to Part IV of title I of ERISA 

(an ‘‘ERISA-covered plan’’) or a plan 

subject to Code section 4975 (an ‘‘IRA’’), 

in each case, with respect to which TTI 

relies on PTE 84–14, or with respect to 

which TTI has expressly represented 

that the manager qualifies as a QPAM or 

relies on the QPAM class exemption 

(PTE 84–14 or the QPAM Exemption). A 

Covered Plan does not include an 

ERISA-covered plan or IRA to the extent 

that TTI has expressly disclaimed 

reliance on QPAM status or PTE 84–14 

in entering into a contract, arrangement, 

or agreement with the ERISA-covered 

plan or IRA. 

(c) The term ‘‘Exemption Period’’ 

means the five-year period beginning on 

February 13, 2024, and ending on 

February 12, 2029. 

(d) The term ‘‘TTI’’ means TT 

International Asset Management Ltd, 

and does not include SMBC Nikko 

Securities, Inc. (Nikko Tokyo), or any 

other entity affiliated with TT 

International Asset Management Ltd. 

Section II. Covered Transactions 

Under this proposed exemption, TTI 

would not be precluded from relying on 

the exemptive relief provided by 

Prohibited Transaction Class Exemption 

84–14 (PTE 84–14 or the QPAM 

Exemption) notwithstanding the 

Conviction, as defined in Section I(a), 

during the Exemption Period, as defined 

in Section I(c), provided that the 

conditions set forth in Section III below 

are satisfied. 

Section III. Conditions 

(a) TTI (including its officers, 

directors, agents other than Nikko 

Tokyo, and employees) did not know of, 

did not have reason to know of, and did 

not participate in the criminal conduct 

that is the subject of the Conviction. 

Further, any other party engaged on 

behalf of TTI who had responsibility for 

or exercised authority in connection 

with the management of plan assets did 

not know or have reason to know of and 

did not participate in the criminal 

conduct that is the subject of the 

Conviction. For purposes of this 

proposed exemption, ‘‘participate in’’ 

refers not only to active participation in 

the criminal conduct of Nikko Tokyo 

that is the subject of the Conviction, but 

also to knowing approval of the criminal 

conduct or knowledge of such conduct 

without taking active steps to prohibit 

it, including reporting the conduct to 

such individual’s supervisors, and to 

TTI’s Board of Directors; 

(b) TTI (including its officers, 

directors, employees, and agents, other 

than Nikko Tokyo) did not receive 

direct compensation, or knowingly 

receive indirect compensation, in 

connection with the criminal conduct 

that is the subject of the Conviction. 

Further, any other party engaged on 

behalf of TTI who had responsibility for, 

or exercised authority in connection 

with the management of plan assets did 

not receive direct compensation, or 

knowingly receive indirect 

compensation, in connection with the 

criminal conduct that is the subject of 

the Conviction; 

(c) TTI does not currently and will not 

in the future employ or knowingly 

engage any of the individuals who 

participated in the criminal conduct 

that is the subject of the Conviction; 

(d) At all times during the Exemption 

Period, TTI will not use its authority or 

influence to direct an ‘‘investment 

fund’’ (as defined in Section VI(b) of 

PTE 84–14) that is subject to ERISA or 

the Code and managed by TTI in 

reliance on PTE 84–14, or with respect 

to which TTI has expressly represented 

to a Covered Plan that it qualifies as a 

QPAM or relies on the QPAM 

Exemption, to enter into any transaction 

with Nikko Tokyo, or to engage Nikko 

Tokyo to provide any service to such 


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investment fund, for a direct or indirect 

fee borne by such investment fund, 

regardless of whether such transaction 

or service may otherwise be within the 

scope of relief provided by an 

administrative or statutory exemption; 

(e) Any failure of TTI to satisfy 

Section I(g) of PTE 84–14 arose solely 

from the Conviction; 

(f) TTI did not exercise authority over 

the assets of any Covered Plan in a 

manner that it knew or should have 

known would further the criminal 

conduct that is the subject of the 

Conviction or cause TTI or its affiliates 

to directly or indirectly profit from the 

criminal conduct that is the subject of 

the Conviction; 

(g) Other than with respect to 

employee benefit plans maintained or 

sponsored for its own employees or the 

employees of an affiliate, Nikko Tokyo 

will not act as a fiduciary within the 

meaning of ERISA section 3(21)(A)(i) or 

(iii), or Code section 4975(e)(3)(A) and 

(C), with respect to Covered Plan assets. 

(h)(1) TTI must continue to 

implement, maintain, adjust (to the 

extent necessary), and follow the 

written policies and procedures (the 

Policies). The Policies must require and 

be reasonably designed to ensure that: 

(i) The asset management decisions of 

TTI are conducted independently of the 

corporate management and business 

activities of Nikko Tokyo; 

(ii) TTI fully complies with ERISA’s 

fiduciary duties and with ERISA and the 

Code’s prohibited transaction 

provisions, as applicable with respect to 

each Covered Plan, and does not 

knowingly participate in any violation 

of these duties and provisions with 

respect to Covered Plans; 

(iii) TTI does not knowingly 

participate in any other person’s 

violation of ERISA or the Code with 

respect to Covered Plans; 

(iv) Any filings or statements made by 

TTI to regulators, including, but not 

limited to, the Department of Labor (the 

Department), the Department of the 

Treasury, the Department of Justice, and 

the Pension Benefit Guaranty 

Corporation, on behalf of or in relation 

to Covered Plans, are materially 

accurate and complete to the best of 

such QPAM’s knowledge at that time; 

(v) To the best of TTI’s knowledge at 

the time, TTI does not make material 

misrepresentations or omit material 

information in its communications with 

such regulators with respect to Covered 

Plans or make material 

misrepresentations or omit material 

information in its communications with 

Covered Plans; 

(vi) TTI complies with the terms of 

this exemption; and 

(vii) Any violation of or failure to 

comply with an item in subparagraphs 

(ii) through (vi) is corrected as soon as 

reasonably possible upon discovery or 

as soon after TTI reasonably should 

have known of the noncompliance 

(whichever is earlier), and any such 

violation or compliance failure not so 

corrected is reported, upon the 

discovery of such failure to so correct, 

in writing, to the head of compliance 

and the general counsel (or their 

functional equivalent) of TTI, and the 

independent auditor responsible for 

reviewing compliance with the Policies. 

TTI will not be treated as having failed 

to develop, implement, maintain, or 

follow the Policies, provided it corrects 

any instance of noncompliance as soon 

as reasonably possible upon discovery, 

or as soon as reasonably possible after 

TTI reasonably should have known of 

the noncompliance (whichever is 

earlier), and provided it adheres to the 

reporting requirements set forth in this 

subparagraph (vii); 

(2) TTI must continue to implement 

an annual training program (the 

Training) during the Exemption Period 

for all relevant TTI asset/portfolio 

management, trading, legal, compliance, 

and internal audit personnel. The 

Training required under this exemption 

may be conducted electronically and 

must: (a) at a minimum, cover the 

Policies, ERISA and Code compliance 

(including applicable fiduciary duties 

and the prohibited transaction 

provisions), ethical conduct, the 

consequences for not complying with 

the conditions of this exemption 

(including any loss of exemptive relief 

provided herein), and prompt reporting 

of wrongdoing; and (b) be conducted by 

a professional who has been prudently 

selected and who has appropriate 

technical training and proficiency with 

ERISA and the Code to perform the 

tasks required by this exemption; 

(i)(1) TTI must submit to biannual 

audits conducted by an independent 

auditor who has been prudently 

selected and who has appropriate 

technical training and proficiency with 

ERISA and the Code, to evaluate the 

adequacy of and TTI’s compliance with 

the Policies and Training conditions 

described herein. The audit requirement 

must be incorporated into the Policies. 

The first audit covered under this 

exemption must cover the period of 

February 13, 2025, through February 12, 

2026, and must be completed by August 

12, 2026. The second audit covered 

under this exemption must cover the 

period of February 13, 2027, through 

February 12, 2028, and must be 

completed by August 12, 2028. 

(2) Within the scope of the audit and 

to the extent necessary for the auditor, 

in its sole opinion, to complete its audit 

and comply with the conditions for 

relief described herein, TTI will grant 

the auditor unconditional access to its 

businesses, including, but not limited 

to: its computer systems; business 

records; transactional data; workplace 

locations; training materials; and 

personnel. Such access will be provided 

only to the extent that it is not 

prevented by state or federal statute, or 

involves communications subject to 

attorney client privilege, and may be 

limited to information relevant to the 

auditor’s objectives as specified by the 

terms of this exemption; 

(3) The auditor’s engagement must 

specifically require the auditor to 

determine whether TTI has developed, 

implemented, maintained, and followed 

the Policies in accordance with the 

conditions of the exemption, and has 

developed and implemented the 

Training, as required herein; 

(4) The auditor’s engagement must 

specifically require the auditor to test 

TTI’s operational compliance with the 

Policies and Training conditions. In this 

regard, the auditor must test, for TTI, 

transactions involving Covered Plans 

sufficient in size, number, and nature to 

afford the auditor a reasonable basis to 

determine TTI’s operational compliance 

with the Policies and Training; 

(5) Before the end of the relevant 

period for completing the audit, the 

auditor must issue a written report (the 

Audit Report) to TTI that describes the 

procedures performed by the auditor 

during the course of its examination. 

The Audit Report must include the 

auditor’s specific determinations 

regarding: 

(i) the adequacy of TTI’s Policies and 

Training; TTI’s compliance with the 

Policies and Training conditions; the 

need, if any, to strengthen such Policies 

and Training; and any instance of TTI’s 

noncompliance with the written 

Policies and Training described in 

Section III(h) above. TTI must promptly 

address any noncompliance and 

promptly address or prepare a written 

plan of action to address any 

determination by the auditor regarding 

the adequacy of the Policies and 

Training and the auditor’s 

recommendations (if any) with respect 

to strengthening the Policies and 

Training. Any action taken, or the plan 

of action to be taken by TTI must be 

included in an addendum to the Audit 

Report (and such addendum must be 

completed before the certification 

described in Section III(i)(7) below). In 

the event such a plan of action to 

address the auditor’s recommendation 


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regarding the adequacy of the Policies 

and Training is not completed by the 

time the Audit Report is submitted, the 

following period’s Audit Report must 

state whether the plan was satisfactorily 

completed. Any determination by the 

auditor that TTI has implemented, 

maintained, and followed sufficient 

Policies and Training must not be based 

solely or in substantial part on an 

absence of evidence indicating 

noncompliance. In this last regard, any 

finding that TTI has complied with the 

requirements under this subparagraph 

must be based on evidence that TTI has 

actually implemented, maintained, and 

followed the Policies and Training 

required by the exemption. 

Furthermore, the auditor must not 

solely rely on the Report created by the 

compliance officer (the Compliance 

Officer), as described in Section III(m) 

below, as the basis for the auditor’s 

conclusions in lieu of independent 

determinations and testing performed 

by the auditor, as required by Section 

III(i)(3) and (4) above; and 

(ii) The adequacy of the Review 

described in Section III(m); 

(6) The auditor must notify TTI of any 

instance of noncompliance identified by 

the auditor within five (5) business days 

after such noncompliance is identified 

by the auditor, regardless of whether the 

audit has been completed as of that 

date; 

(7) With respect to the Audit Report, 

the general counsel, or one of the three 

most senior executive officers of TTI 

must certify in writing, under penalty of 

perjury, that the officer has reviewed the 

Audit Report and the exemption and 

that to the best of such officer’s 

knowledge at the time, TTI has 

addressed, corrected or remedied any 

noncompliance and inadequacy, or has 

an appropriate written plan to address 

any inadequacy regarding the Policies 

and Training identified in the Audit 

Report. The certification must also 

include the signatory’s determination 

that the Policies and Training in effect 

at the time of signing are adequate to 

ensure compliance with the conditions 

of this exemption and with the 

applicable provisions of ERISA and the 

Code. Notwithstanding the above, no 

person, including any person identified 

by Japanese authorities, who knew of, or 

should have known of, or participated 

in, any misconduct underlying the 

Conviction, by any party, may provide 

the certification required by the 

exemption, unless the person took 

active documented steps to stop the 

misconduct underlying the Conviction; 

(8) TTI’s Board of Directors must be 

provided a copy of the Audit Report and 

the joint general manager of SMFG’s 

Corporate Planning Department must 

review the Audit Report for TTI and 

certify in writing, under penalty of 

perjury, that such officer has reviewed 

the Audit Report. With respect to this 

subsection (8), such certifying joint 

general manager must not have known 

of, had reason to know of, or 

participated in, any misconduct 

underlying the Conviction, unless such 

person took active documented steps to 

stop the misconduct underlying the 

Conviction. 

(9) TTI must provide its certified 

Audit Report, by electronic mail to eoed@dol.gov. This delivery must take 

place no later than thirty (30) days 

following completion of the Audit 

Report. The Audit Report will be made 

part of the public record regarding this 

exemption. Furthermore, TTI must 

make its Audit Report unconditionally 

available, electronically or otherwise, 

for examination upon request by any 

duly authorized employee or 

representative of the Department, other 

relevant regulators, and any fiduciary of 

a Covered Plan; 

(10) TTI and the auditor must submit 

to e-OED@dol.gov, any engagement 

agreement(s) entered into pursuant to 

the engagement of the auditor under the 

exemption no later than two (2) months 

after the execution of any such 

engagement agreement; 

(11) The auditor must provide the 

Department, upon request, access to all 

the workpapers it created and utilized 

in the course of the audit for inspection 

and review, provided such access and 

inspection is otherwise permitted by 

law; and 

(12) TTI must notify the Department 

of a change in the independent auditor 

no later than 60 days after the 

engagement of a substitute or 

subsequent auditor and must provide an 

explanation for the substitution or 

change including a description of any 

material disputes between the 

terminated auditor and TTI; 

(j) Throughout the Exemption Period, 

with respect to any arrangement, 

agreement, or contract between TTI and 

a Covered Plan, TTI agrees and 

warrants: 

(1) To comply with ERISA and the 

Code, as applicable with respect to such 

Covered Plan; to refrain from engaging 

in prohibited transactions that are not 

otherwise exempt (and to promptly 

correct any prohibited transactions); and 

to comply with the standards of 

prudence and loyalty set forth in ERISA 

section 404 with respect to each such 

Covered Plan, to the extent that section 

is applicable; 

(2) To indemnify and hold harmless 

the Covered Plan with respect to: any 

actual losses resulting directly from 

TTI’s violation of ERISA’s fiduciary 

duties, as applicable, and of the 

prohibited transaction provisions of 

ERISA and the Code, as applicable; a 

breach of contract by TTI; or any claim 

arising out of the failure of TTI to 

qualify for the exemptive relief provided 

by PTE 84–14 as a result of a violation 

of Section I(g) of PTE 84–14, other than 

the Conviction. This condition applies 

only to actual losses caused by TTI’s 

violations. Actual losses include losses 

and related costs arising from 

unwinding transactions with third 

parties and from transitioning Plan 

assets to an alternative asset manager as 

well as costs associated with any 

exposure to excise taxes under Code 

section 4975 because of TTI’s inability 

to rely upon the relief in the QPAM 

Exemption. 

(3) Not to require (or otherwise cause) 

the Covered Plan to waive, limit, or 

qualify the liability of TTI for violating 

ERISA or the Code or engaging in 

prohibited transactions; 

(4) Not to restrict the ability of the 

Covered Plan to terminate or withdraw 

from its arrangement with TTI with 

respect to any investment in a 

separately managed account or pooled 

fund subject to ERISA and managed by 

TTI, with the exception of reasonable 

restrictions, appropriately disclosed in 

advance, that are specifically designed 

to ensure equitable treatment of all 

investors in a pooled fund in the event 

such withdrawal or termination may 

have adverse consequences for all other 

investors. In connection with any of 

these arrangements involving 

investments in pooled funds subject to 

ERISA entered into after the effective 

date of this exemption, the adverse 

consequences must relate to a lack of 

liquidity of the underlying assets, 

valuation issues, or regulatory reasons 

that prevent the fund from promptly 

redeeming a Covered Plan’s investment, 

and the restrictions must be applicable 

to all such investors and effective no 

longer than reasonably necessary to 

avoid the adverse consequences; 

(5) Not to impose any fees, penalties, 

or charges for such termination or 

withdrawal with the exception of 

reasonable fees, appropriately disclosed 

in advance, that are specifically 

designed to prevent generally 

recognized abusive investment practices 

or specifically designed to ensure 

equitable treatment of all investors in a 

pooled fund in the event the withdrawal 

or termination may have adverse 

consequences for all other investors, 

provided that such fees are applied 

consistently and in like manner to all 

such investors; 


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(6) Not to include exculpatory 

provisions disclaiming or otherwise 

limiting the liability of TTI for a 

violation of such agreement’s terms. To 

the extent consistent with ERISA 

section 410, however, this provision 

does not prohibit disclaimers for 

liability caused by an error, 

misrepresentation, or misconduct of a 

plan fiduciary or other party hired by 

the plan fiduciary who is independent 

of TTI and its affiliates, or damages 

arising from acts outside the control of 

TTI; and 

(7) TTI must provide a notice of its 

obligations under this Section III(j) to 

each Covered Plan. For all other 

prospective Covered Plans, TTI must 

agree to its obligations under this 

Section III(j) in an updated investment 

management agreement between TTI 

and such clients or other written 

contractual agreement. Notwithstanding 

the above, TTI will not violate this 

condition solely because a Covered Plan 

refuses to sign an updated investment 

management agreement; 

(k) Within 60 days after the effective 

date of this exemption, TTI provides 

notice of the exemption as published in 

the Federal Register, along with a 

separate summary describing the facts 

that led to the Conviction (the 

Summary), which has been submitted to 

the Department, and a prominently 

displayed statement (the Statement) that 

the Conviction results in a failure to 

meet a condition in PTE 84–14 to each 

sponsor and beneficial owner of a 

Covered Plan that has entered into a 

written asset or investment management 

agreement with TTI. All prospective 

Covered Plan clients that enter into a 

written asset or investment management 

agreement with TTI after a date that is 

60 days after the effective date of this 

exemption must receive a copy of the 

notice of the exemption, the Summary, 

and the Statement before, or 

contemporaneously with, the Covered 

Plan’s receipt of a written asset or 

investment management agreement from 

TTI. The notices may be delivered 

electronically (including by an email 

that has a link to the exemption). 

Notwithstanding the above, TTI will not 

violate the condition solely because a 

Covered Plan refuses to sign an updated 

investment management agreement. 

(l) TTI must comply with each 

condition of PTE 84–14, as amended, 

with the sole exception of the violation 

of Section I(g) of PTE 84–14 that is 

attributable to the Conviction. If an 

affiliate of TTI (as defined in Section 

VI(d) of PTE 84–14) is convicted of a 

crime described in Section I(g) of PTE 

84–14 (other than the Conviction) 

during the Exemption Period, relief in 

the exemption would terminate 

immediately; 

(m)(1) TTI must continue to designate 

a senior compliance officer (the 

Compliance Officer) to be responsible 

for compliance with the Policies and 

Training requirements described herein. 

The Compliance Officer previously 

designated by TTI under PTE 2023–13 

may continue to serve in the role of 

Compliance Officer provided they meet 

all the requirements of this Section 

(m)(1). Notwithstanding the above, no 

person, including any person referenced 

in the indictment that gave rise to the 

Conviction, who knew of, or should 

have known of, or participated in, any 

misconduct described in the indictment, 

by any party, may be involved with the 

designation or responsibilities required 

by this condition unless the person took 

active documented steps to stop the 

misconduct. The Compliance Officer 

must conduct a review of the Exemption 

Period (the Exemption Review), to 

determine the adequacy and 

effectiveness of TTI’s implementation of 

the Policies and Training. With respect 

to the Compliance Officer, the following 

conditions must be met: 

(i) The Compliance Officer must be a 

professional who has extensive 

experience with, and knowledge of, the 

regulation of financial services and 

products, including under ERISA and 

the Code; and 

(ii) The Compliance Officer must have 

a direct reporting line to the highestranking corporate officer in charge of 

legal compliance for asset management. 

(2) With respect to the Exemption 

Review, the following conditions must 

be met: 

(i) The Exemption Review must 

include a review of TTI’s compliance 

with and effectiveness of the Policies 

and Training and of the following: any 

compliance matter related to the 

Policies or Training that was identified 

by, or reported to, the Compliance 

Officer or others within the compliance 

and risk control function (or its 

equivalent) during the previous year; 

any material change in the relevant 

business activities of TTI; and any 

change to ERISA, the Code, or 

regulations related to fiduciary duties 

and the prohibited transaction 

provisions that may be applicable to the 

activities of TTI; 

(ii) The Compliance Officer prepares 

a written report for the Exemption 

Review (an Exemption Report) that (A) 

summarizes their material activities 

during the Exemption Period; (B) sets 

forth any instance of noncompliance 

discovered during the Exemption 

Period, and any related corrective 

action; (C) details any change to the 

Policies or Training to guard against any 

similar instance of noncompliance 

occurring again; and (D) makes 

recommendations, as necessary, for 

additional training, procedures, 

monitoring, or additional and/or 

changed processes or systems, and 

management’s actions in response to 

such recommendations; 

(iii) In the Exemption Report, the 

Compliance Officer must certify in 

writing that to the best of their 

knowledge at the time: (A) the report is 

accurate; (B) the Policies and Training 

are working in a manner which is 

reasonably designed to ensure that the 

Policies and Training requirements 

described herein are met; (C) any known 

instance of noncompliance during the 

prior year, and any related correction 

taken to date, has been identified in the 

Exemption Report; and (D) TTI 

complied with the Policies and 

Training, and/or corrected (or are 

correcting) any known instances of 

noncompliance in accordance with 

Section III(h) above; 

(iv) The Exemption Report must be 

provided to appropriate corporate 

officers of TTI; the head of compliance 

and the general counsel (or their 

functional equivalent) of TTI; and must 

be made unconditionally available to 

the independent auditor described 

above; 

(v) The Exemption Review, including 

the Compliance Officer’s written Report, 

must be completed within 90 days 

following the end of the period to which 

it relates. 

(n) TTI imposes internal procedures, 

controls, and protocols to reduce the 

likelihood of any recurrence of conduct 

that is the subject of the Conviction; 

(o) Nikko Tokyo complies in all 

material respects with any requirements 

imposed by a U.S. regulatory authority 

in connection with the Conviction; 

(p) TTI maintains records necessary to 

demonstrate that the conditions of the 

exemption have been met for six (6) 

years following the date of any 

transaction for which TTI relies upon 

the relief in this exemption; 

(q) During the Exemption Period, TTI 

must: (1) immediately disclose to the 

Department any Deferred Prosecution 

Agreement (a DPA) or Non-Prosecution 

Agreement (an NPA) with the U.S. 

Department of Justice, entered into by 

TTI or any of its affiliates (as defined in 

Section VI(d) of PTE 84–14) in 

connection with the conduct described 

in Section I(g) of PTE 84–14 or ERISA 

section 411; and (2) immediately 

provide the Department with any 

information requested by the 

Department, as permitted by law, 

regarding the agreement and/or conduct 


ddrumheller on DSK120RN23PROD with NOTICES1
88126 Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 

and allegations that led to the 

agreement; 

(r) Within 60 days after the effective 

date of the exemption, TTI, in its 

agreements with, or in other written 

disclosures provided to Covered Plans, 

will clearly and prominently inform 

Covered Plan clients of their right to 

obtain a copy of the Policies or a 

description (Summary Policies) which 

accurately summarizes key components 

of TTI’s written Policies developed in 

connection with this exemption. If the 

Policies are thereafter changed, each 

Covered Plan client must receive a new 

disclosure within 180 days following 

the end of the calendar year during 

which the Policies were changed. If TTI 

meets this disclosure requirement 

through Summary Policies, changes to 

the Policies shall not result in the 

requirement for a new disclosure unless, 

as a result of changes to the Policies, the 

Summary Policies are no longer 

accurate. With respect to this 

requirement, the description may be 

continuously maintained on a website, 

provided that such website link to the 

Policies or Summary Policies is clearly 

and prominently disclosed to each 

Covered Plan; 

(s) TTI must provide the Department 

with the records necessary to 

demonstrate that each condition of this 

exemption has been met within 30 days 

of a request by the Department; and 

(t) All the material facts and 

representations set forth in the 

Summary of Facts and Representations 

are true and accurate at all times. 

Effective Date: If the Department 

grants this proposed exemption, it 

would be in effect for a five-year period 

beginning on February 13, 2024, and 

ending on February 12, 2029. 

Signed at Washington, DC. 

George Christopher Cosby, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2023–27937 Filed 12–19–23; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Agency Information Collection 

Activities; Submission for OMB 

Review; Comment Request; Voluntary 

Demographic Form 

ACTION: Notice of availability; request 

for comments. 

SUMMARY: The Department of Labor 

(DOL) is submitting this Office of 

Workers’ Compensation Programs 

(OWCP)-sponsored information 

collection request (ICR) to the Office of 

Management and Budget (OMB) for 

review and approval in accordance with 

the Paperwork Reduction Act of 1995 

(PRA). Public comments on the ICR are 

invited. 

DATES: The OMB will consider all 

written comments that the agency 

receives on or before January 19, 2024. 

ADDRESSES: Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to www.reginfo.gov/public/do/ 

PRAMain. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

Comments are invited on: (1) whether 

the collection of information is 

necessary for the proper performance of 

the functions of the Department, 

including whether the information will 

have practical utility; (2) if the 

information will be processed and used 

in a timely manner; (3) the accuracy of 

the agency’s estimates of the burden and 

cost of the collection of information, 

including the validity of the 

methodology and assumptions used; (4) 

ways to enhance the quality, utility and 

clarity of the information collection; and 

(5) ways to minimize the burden of the 

collection of information on those who 

are to respond, including the use of 

automated collection techniques or 

other forms of information technology. 

FOR FURTHER INFORMATION CONTACT: 

Michelle Neary by telephone at 202– 

693–6312, or by email at DOL_PRA_

PUBLIC@dol.gov. 

SUPPLEMENTARY INFORMATION: 

Historically, the Black Lung Program 

application forms and other claims 

processing forms have not collected 

demographic information. The use of 

this voluntary demographic form will 

help identify underserved communities 

and guide language and outreach 

strategies, thereby strengthening the 

customer service experience. Collecting 

and analyzing demographic data aligns 

with the following executive orders 

Executive Orders: Executive Order 

13985, Advancing Racial Equity and 

Support for Underserved Communities 

Through the Federal Government, 

signed by President Biden in January 

2021; Executive Order 14075, 

Advancing Equality for Lesbian, Gay, 

Bisexual, Transgender, Queer, and 

Intersex Individuals, also signed by 

President Biden in January 2021; 

Executive Order 14031, Advancing 

Equity, Justice, and Opportunity for 

Asian Americans, Native Hawaiians, 

and Pacific Islanders, signed in May 

2021; and Executive Order 14058, 

Transforming Federal Customer 

Experience and Service Delivery to 

Rebuild Trust in Government, signed in 

December 2021. For additional 

substantive information about this ICR, 

see the related notice published in the 

Federal Register on August 8, 2023 (88 

FR 53525). 

This information collection is subject 

to the PRA. A Federal agency generally 

cannot conduct or sponsor a collection 

of information, and the public is 

generally not required to respond to an 

information collection, unless the OMB 

approves it and displays a currently 

valid OMB Control Number. In addition, 

notwithstanding any other provisions of 

law, no person shall generally be subject 

to penalty for failing to comply with a 

collection of information that does not 

display a valid OMB Control Number. 

See 5 CFR 1320.5(a) and 1320.6. 

DOL seeks PRA authorization for this 

information collection for three (3) 

years. OMB authorization for an ICR 

cannot be for more than three (3) years 

without renewal. The DOL notes that 

information collection requirements 

submitted to the OMB for existing ICRs 

receive a month-to-month extension 

while they undergo review. 

Agency: DOL–OWCP. 

Title of Collection: Voluntary 

Demographic Form. 

OMB Control Number: 1240–0NEW. 

Affected Public: Individuals or 

Households. 

Total Estimated Number of 

Respondents: 18,077. 

Total Estimated Number of 

Responses: 18,077. 

Total Estimated Annual Time Burden: 

1,506 hours. 

Total Estimated Annual Other Costs 

Burden: $1,550. 

(Authority: 44 U.S.C. 3507(a)(1)(D)) 

Michelle Neary, 

Senior PRA Analyst. 

[FR Doc. 2023–27936 Filed 12–19–23; 8:45 am] 

BILLING CODE 4510–CK–P 

DEPARTMENT OF LABOR 

Wage and Hour Division 

Agency Information Collection 

Activities; Comment Request; 

Information Collections: Requirements 

of a Bona Fide Thrift Savings Plan and 

Requirements of a Bona Fide ProfitSharing Plan or Trust 

AGENCY: Wage and Hour Division, 

Department of Labor. 

ACTION: Notice. 

SUMMARY: The Department of Labor 

(Department) is soliciting comments 


ddrumheller on DSK120RN23PROD with NOTICES1