Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38557 

1For purposes of this proposed exemption, 

references to section 406 of ERISA should be read 

to refer also to the corresponding provisions of 

section 4975 of the Code. 

408(a) of the Act and/or section 

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

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which among other things 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

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

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) This exemption is supplemental to 

and not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transactional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(3) The availability of this exemption 

is subject to the express condition that 

the material facts and representations 

contained in the application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 28th day of 

June, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–16097 Filed 7–1–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Application Nos. and Proposed 

Exemptions; D–11489, Morgan Stanley 

& Co., Incorporated; L–11609, The 

Finishing Trades Institute of the MidAtlantic Region (the Plan) et al. 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemptions. 

SUMMARY: This document contains 

notices of pendency before the 

Department of Labor (the Department) of 

proposed exemptions from certain of the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

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

the Internal Revenue Code of 1986 (the 

Code). 

Written Comments and Hearing 

Requests 

All interested persons are invited to 

submit written comments or requests for 

a hearing on the pending exemptions, 

unless otherwise stated in the Notice of 

Proposed Exemption, within 45 days 

from the date of publication of this 

Federal Register Notice. Comments and 

requests for a hearing should state: (1) 

The name, address, and telephone 

number of the person making the 

comment or request, and (2) the nature 

of the person’s interest in the exemption 

and the manner in which the person 

would be adversely affected by the 

exemption. A request for a hearing must 

also state the issues to be addressed and 

include a general description of the 

evidence to be presented at the hearing. 

ADDRESSES: All written comments and 

requests for a hearing (at least three 

copies) should be sent to the Employee 

Benefits Security Administration 

(EBSA), Office of Exemption 

Determinations, Room N–5700, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

Attention: Application No.___, stated in 

each Notice of Proposed Exemption. 

Interested persons are also invited to 

submit comments and/or hearing 

requests to EBSA via e-mail or FAX. 

Any such comments or requests should 

be sent either by e-mail to: 

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

(202) 219–0204 by the end of the 

scheduled comment period. The 

applications for exemption and the 

comments received will be available for 

public inspection in the Public 

Documents Room of the Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Avenue, NW., 

Washington, DC 20210. 

Warning: If you submit written 

comments or hearing requests, do not 

include any personally-identifiable or 

confidential business information that 

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

requests are posted on the Internet 

exactly as they are received, and they 

can be retrieved by most Internet search 

engines. The Department will make no 

deletions, modifications or redactions to 

the comments or hearing requests 

received, as they are public records. 

Notice to Interested Persons 

Notice of the proposed exemptions 

will be provided to all interested 

persons in the manner agreed upon by 

the applicant and the Department 

within 15 days of the date of publication 

in the Federal Register. Such notice 

shall include a copy of the notice of 

proposed exemption as published in the 

Federal Register and shall inform 

interested persons of their right to 

comment and to request a hearing 

(where appropriate). 

SUPPLEMENTARY INFORMATION: The 

proposed exemptions were requested in 

applications filed pursuant to section 

408(a) of the Act and/or section 

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

accordance with procedures set forth in 

29 CFR part 2570, subpart B (55 FR 

32836, 32847, August 10, 1990). 

Effective December 31, 1978, section 

102 of Reorganization Plan No. 4 of 

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

the authority of the Secretary of the 

Treasury to issue exemptions of the type 

requested to the Secretary of Labor. 

Therefore, these notices of proposed 

exemption are issued solely by the 

Department. 

The applications contain 

representations with regard to the 

proposed exemptions which are 

summarized below. Interested persons 

are referred to the applications on file 

with the Department for a complete 

statement of the facts and 

representations. 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974 (ERISA) and section 

4975(c)(2) of the Internal Revenue Code 

of 1974 (the Code), and in accordance 

with the procedures set forth in 29 CFR 

part 2570, subpart B (55 FR 32836, 

32847, August 10, 1990). 

Section I. Transactions Involving Plans 

Described in Both Title I and Title II of 

ERISA 

If the proposed exemption is granted, 

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

through (D) and section 406(b) of 

ERISA, and the sanctions resulting from 

the application of sections 4975(a) and 

(b) of the Code, by reason of section 

4975(c)(1) of the Code, shall not apply, 

effective February 1, 2008, to the 

following transactions, if the conditions 

set forth in Section III have been met: 1

(a) The sale or exchange of an 

‘‘Auction Rate Security’’ (as defined in 

Section IV (b)) by a ‘‘Plan’’ (as defined 

in Section IV(h)) to the ‘‘Sponsor’’ (as 

defined in Section IV (g)) of such Plan; 

or 


emcdonald on DSK2BSOYB1PROD with NOTICES
38558 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

2The Department notes that this proposed 

exemption does not address tax issues. The 

Department has been informed by the Internal 

Revenue Service and the Department of the 

Treasury that they are considering providing 

limited relief from the requirements of sections 

72(t)(4), 401(a)(9), and 4974 of the Code with 

respect to retirement plans that hold Auction Rate 

Securities. The Department has also been informed 

by the Internal Revenue Service that if Auction Rate 

Securities are purchased from a Plan in a 

transaction described in Sections I and II at a price 

that exceeds the fair market value of those 

securities, then the excess value would be treated 

as a contribution for purposes of applying 

applicable contribution and deduction limits under 

sections 219, 404, 408, and 415 of the Code. 

3The Department notes that ERISA’s general 

standards of fiduciary conduct would also apply to 

the transactions described herein. In this regard, 

section 404 requires, among other things, that a 

fiduciary discharge his duties respecting a plan 

solely in the interest of the plan’s participants and 

beneficiaries and in a prudent manner. 

Accordingly, a plan fiduciary must act prudently 

with respect to, among other things: (1) The 

decision to exchange an Auction Rate Security for 

a Delivered Security; and (2) the negotiation of the 

terms of such exchange (or a cash sale or loan 

described above), including the pricing of such 

securities. The Department further emphasizes that 

it expects plan fiduciaries, prior to entering into any 

of the transactions, to fully understand the risks 

associated with these types of transactions, 

following disclosure by Morgan Stanley of all the 

relevant information. 

(b) A lending of money or other 

extension of credit to a Plan in 

connection with the holding of an 

Auction Rate Security by the Plan, from 

(1) Morgan Stanley & Co. Incorporated 

or an Affiliate (Morgan Stanley); (2) an 

‘‘Introducing Broker’’ (as defined in 

Section IV (f)); or (3) a ‘‘Clearing Broker’’ 

(as defined in Section IV (d))—where 

the loan is (i) repaid in accordance with 

its terms, and (ii) guaranteed by the Plan 

Sponsor. 

II. Transactions Involving Plans 

Described in Title II of ERISA Only 

If the proposed exemption is granted, 

the sanctions resulting from the 

application of section 4975(a) and (b) of 

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

of the Code, shall not apply, effective 

February 1, 2008, to the following 

transactions, if the conditions set forth 

in Section III have been met: (a) The sale 

or exchange of an Auction Rate Security 

by a ‘‘Title II-Only Plan’’ (as defined in 

Section IV(i)) to the Beneficial Owner’’ 

(as defined in Section IV(c)) of such 

Plan; or (b) A lending of money or other 

extension of credit to a Title II-Only 

Plan in connection with the holding of 

an Auction Rate Security by the Title IIOnly Plan, from (1) Morgan Stanley; (2) 

an Introducing Broker; or (3) a Clearing 

Broker—where the loan is (i) repaid in 

accordance with its terms, and (ii) 

guaranteed by the Beneficial Owner. 

III. Conditions 

(a) Morgan Stanley acted as a broker 

or dealer, non-bank custodian, or 

fiduciary in connection with the 

acquisition or holding of the Auction 

Rate Security that is the subject of the 

transaction; 

(b) For transactions involving a Plan 

(including a Title II-Only Plan) not 

sponsored by Morgan Stanley for its 

own employees, the decision to enter 

into the transaction is made by a Plan 

fiduciary who is ‘‘Independent’’ (as 

defined in Section IV(e)) of Morgan 

Stanley. Notwithstanding the foregoing, 

an employee of Morgan Stanley who is 

the Beneficial Owner of a Title II-Only 

Plan may direct such Plan to engage in 

a transaction described in Section II, if 

all of the other conditions of this 

Section III have been met; 

(c) The last auction for the Auction 

Rate Security was unsuccessful; 

(d) The Plan does not waive any rights 

or claims in connection with the loan or 

sale as a condition of engaging in the 

above described transaction; 

(e) The Plan does not pay any fees or 

commissions in connection with the 

transaction; 

(f) The transaction is not part of an 

arrangement, agreement, or 

understanding designed to benefit a 

party in interest or disqualified person; 

(g) With respect to any sale described 

in Section I(a) or Section II(a): 

(1) The sale is for no consideration 

other than cash payment against prompt 

delivery of the Auction Rate Security; 

and 

(2) For purposes of the sale, the 

Auction Rate Security is valued at par, 

plus any accrued but unpaid interest; 2

(h) With respect to an in-kind 

exchange described in Section (I)(a) or 

Section II(a), the exchange involves the 

transfer by a Plan of an Auction Rate 

Security in return for a ‘‘Delivered 

Security,’’ as such term is defined in 

Section IV(j), where: 

(1) The exchange is unconditional; 

(2) For purposes of the exchange, the 

Auction Rate Security is valued at par, 

plus any accrued but unpaid interest; 

(3) The Delivered Security is valued at 

fair market value, as determined at the 

time of the in-kind exchange by a third 

party pricing service or other objective 

source; 

(4) The Delivered Security is 

appropriate for the Plan and is a 

security that the Plan is otherwise 

permitted to hold under applicable 

law; 3

(5) The total value of the Auction Rate 

Security (i.e., par, plus any accrued but 

unpaid interest) is equal to the fair 

market value of the Delivered Security; 

(i) With respect to a loan described in 

Section I(b) or II(b): 

(1) The loan is documented in a 

written agreement containing all of the 

material terms of the loan, including the 

consequences of default; 

(2) The Plan does not pay an interest 

rate that exceeds one of the following 

three rates as of the commencement of 

the loan: 

(A) The coupon rate for the Auction 

Rate Security; 

(B) The Federal Funds Rate; or 

(C) The Prime Rate; 

(3) The loan is unsecured; and 

(4) The amount of the loan is not more 

than the total par value of the Auction 

Rate Securities held by the Plan. 

(j) Morgan Stanley maintains, or 

causes to be maintained, for a period of 

at least six (6) years from the date of a 

covered transaction, such records as are 

necessary to enable the persons 

described in paragraph (k), below, to 

determine whether the conditions of 

this exemption, if granted, have been 

met, except that— 

(1) No party in interest with respect 

to a Plan that engages in a covered 

transaction, other than Morgan Stanley 

shall be subject to a civil penalty under 

section 502(i) of ERISA or the taxes 

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

the Code, if such records are not 

maintained, or are not available for 

examination, as required, below, by 

paragraph (k); and 

(2) A separate prohibited transaction 

shall not be considered to have occurred 

solely because, due to circumstances 

beyond the control of Morgan Stanley, 

such records are lost or destroyed prior 

to the end of the six-year period; and 

(k)(1) Except as provided in 

subparagraph (2), below, and 

notwithstanding any provisions of 

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

of ERISA, the records referred to in 

paragraph (j), above, are unconditionally 

available at their customary location for 

examination during normal business 

hours by— 

(A) Any duly authorized employee or 

representative of the Department, the 

Internal Revenue Service, or the U.S. 

Securities and Exchange Commission; 

(B) Any fiduciary of any Plan, 

including any IRA owner, or any duly 

authorized employee or representative 

of such fiduciary; or 

(C) Any employer of participants and 

beneficiaries and any employee 

organization whose members are 

covered by the Plan that engages in a 

covered transaction, or any authorized 

employee or representative of these 

entities; 

(2) None of the persons described 

above in paragraph (k)(1)(B) or (C) shall 

be authorized to examine trade secrets 

of Morgan Stanley, or commercial or 

financial information which is 

privileged or confidential; and 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38559 

(3) Should Morgan Stanley refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure, Morgan Stanley shall, by the 

close of the thirtieth (30th) day 

following the request, provide a written 

notice advising that person of the 

reasons for the refusal and that the 

Department may request such 

information. 

IV. Definitions 

(a) The term ‘‘Affiliate’’ means any 

person, directly or indirectly, through 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; 

(b) The term ‘‘Auction Rate Security’’ 

or ‘‘ARS’’ means a security: 

(1) That is either a debt instrument 

(generally with a long-term nominal 

maturity) or preferred stock; and 

(2) With an interest rate or dividend 

that is reset at specific intervals through 

a Dutch Auction process; 

(c) The term ‘‘Beneficial Owner’’ 

means the individual for whose benefit 

the Title II-Only Plan is established and 

includes a relative or family trust with 

respect to such individual; 

(d) The term ‘‘Clearing Broker’’ means 

a member of a securities exchange who 

acts as a liaison between an investor and 

a clearing corporation, helps to ensure 

that a trade is settled appropriately, 

ensures that the transaction is 

successfully completed, and is 

responsible for maintaining the paper 

work associated with the clearing and 

execution of a transaction; 

(e) The term ‘‘Independent’’ means a 

person who is (1) not Morgan Stanley or 

an Affiliate, and (2) not a ‘‘relative’’ (as 

defined in ERISA section 3(15)) of the 

party engaging in the transaction; 

(f) The term ‘‘Introducing Broker’’ 

means a registered broker who is able to 

perform all the functions of a broker, 

except for the ability to accept money, 

securities, or property from a customer; 

(g) The term ‘‘Sponsor’’ means a plan 

sponsor as described in section 3(16)(B) 

of ERISA and any Affiliates; 

(h) The term ‘‘Plan’’ means any plan 

described in section 3(3) of ERISA and/ 

or section 4975(e)(1) of the Code; 

(i) The term ‘‘Title II-Only Plan’’ 

means any plan described in section 

4975(e)(1) of the Code that is not an 

employee benefit plan covered by Title 

I of ERISA; 

(j) The term ‘‘Delivered Security’’ 

means a security that is (1) Listed on a 

national securities exchange (excluding 

OTC Bulletin Board-eligible securities 

and Pink Sheets-quoted securities); or 

(2) A U.S. Treasury obligation; or (3) A 

fixed income security that has a rating 

at the time of the exchange that is in one 

of the two highest generic rating 

categories from an Independent 

nationally recognized statistical rating 

organization (e.g., a highly rated 

municipal bond or a highly rated 

corporate bond); or (4) A certificate of 

deposit insured by the Federal Deposit 

Insurance Corporation. Notwithstanding 

the above, the term ‘‘Delivered Security’’ 

shall not include any Auction Rate 

Security, or any related Auction Rate 

Security, including derivatives or 

securities materially comprised of 

Auction Rate Securities or any illiquid 

securities. 

Summary of Facts and Representations 

1. The applicant Morgan Stanley & 

Co. Incorporated and its Affiliates 

(hereinafter, either ‘‘Morgan Stanley’’ or 

the ‘‘applicant’’), headquartered in New 

York, New York, is one of the nation’s 

pre-eminent global financial services 

firms. Morgan Stanley serves a large and 

diversified group of clients and 

customers, including corporations, 

governments, financial institutions, and 

individuals around the world. On 

September 21, 2008 Morgan Stanley 

obtained approval from the Board of 

Governors of the Federal Reserve 

System to become a bank holding 

company upon the conversion of its 

wholly owned indirect subsidiary, 

Morgan Stanley Bank (Utah), from a 

Utah industrial bank to a national bank. 

On September 23, 2008 the Office of the 

Comptroller of the Currency authorized 

Morgan Stanley Bank (Utah) to 

commence business as a national bank, 

operating as Morgan Stanley Bank, N.A. 

Concurrent with this conversion, 

Morgan Stanley became a financial 

holding company under the Bank 

Holding Company Act of 1956, as 

amended. Morgan Stanley & Co. 

Incorporated, Morgan Stanley’s primary 

operating unit, is also both a registered 

investment adviser subject to the 

Investment Advisers Act of 1940 and a 

SEC-registered broker-dealer subject to 

the supervision of various governmental 

and self-regulatory bodies. Morgan 

Stanley offers a full array of investmentrelated services, including securities 

research, brokerage, execution, asset 

allocation, financial planning, 

investment advice, discretionary asset 

management services, sweep, and trust/ 

custody services. 

Morgan Stanley Smith Barney has 

recently been formed as a joint venture. 

Under the joint venture agreement, 

Citigroup, Inc. (Citigroup) and Morgan 

Stanley (including their respective 

subsidiaries) each contributed specified 

businesses to the joint venture, together 

with all contracts, employees, property 

licenses, and other assets (as well as 

liabilities) used primarily in the 

contributed businesses. Generally, in 

the case of Citigroup, the contributed 

businesses include Citigroup’s retail 

brokerage and futures business operated 

under the name ‘‘Smith Barney’’ in the 

United States and Australia and 

operated under the name ‘‘Quilter’’ in 

the United Kingdom, Ireland and 

Channel Islands. Certain investment 

advisory and other businesses of 

Citigroup are also included. In the case 

of Morgan Stanley, the contributed 

businesses generally consist of Morgan 

Stanley’s global wealth management 

(retail brokerage) and private wealth 

management businesses. 

As of September 30, 2009, Morgan 

Stanley employed 62,000 individuals 

and operates 1200 offices in 36 

countries with over $1.5 trillion in 

client assets held at its broker-dealer. 

The applicant requests both 

retroactive and prospective exemptive 

relief for transactions involving certain 

of Morgan Stanley’s client accounts in 

the time frame prior to the formation of 

the joint venture and going forward. 

2. Among other things, Morgan 

Stanley acts as a broker and dealer with 

respect to the purchase and sale of 

securities, including Auction Rate 

Securities (ARS). The applicant 

describes ARS and the arrangement by 

which ARS are bought and sold as 

follows. ARS are securities (issued as 

debt or preferred stock) with an interest 

rate or dividend that is reset at periodic 

intervals pursuant to a process called a 

Dutch Auction. Investors submit orders 

to buy, hold, or sell a specific ARS to 

a broker-dealer selected by the entity 

that issued the ARS. The broker-dealers, 

in turn, submit all of these orders to an 

auction agent. The auction agent’s 

functions include collecting orders from 

all participating broker-dealers by the 

auction deadline, determining the 

amount of securities available for sale, 

and organizing the bids to determine the 

winning bid. If there are any buy orders 

placed into the auction at a specific rate, 

the auction agent accepts bids with the 

lowest rate above any applicable 

minimum rate and then successively 

higher rates up to the maximum 

applicable rate, until all sell orders and 

orders that are treated as sell orders are 

filled. Bids below any applicable 

minimum rate or above the applicable 

maximum rate are rejected. After 

determining the clearing rate for all of 

the securities at auction, the auction 

agent allocates the ARS available for 

sale to the participating broker-dealers 

based on the orders they submitted. If 

there are multiple bids at the clearing 

rate, the auction agent will allocate 


emcdonald on DSK2BSOYB1PROD with NOTICES
38560 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

4The Department notes that Prohibited 

Transaction Exemption (PTE) 80–26 (45 FR 28545 

(Apr. 29, 1980), as amended at 71 FR 17917 (Apr. 

7, 2006)) is a class exemption that permits interestfree loans or other extensions of credit from a party 

in interest to a plan if, among other things, the 

proceeds of the loan or extension of credit are used 

only (1) for the payment of ordinary operating 

expenses of the plan, including the payment of 

benefits in accordance with the terms of the plan 

and periodic premiums under an insurance or 

annuity contract, or (2) for a purpose incidental to 

the ordinary operation of the plan. 

5The Department notes that the relief contained 

in this proposed exemption does not extend to the 

fiduciary provisions of section 404 of ERISA. 

6The Applicant represents that, as of May 7, 

2010, no in-kind exchanges have occurred but may 

in the future. 

securities among the bidders at such 

rate on a pro rata basis. 

3. The applicant represents that 

Morgan Stanley is permitted, but not 

obligated, to submit orders in auctions 

for its own account either as a bidder or 

a seller and routinely does so in the 

ARS market in its sole discretion. 

Morgan Stanley may routinely place one 

or more bids in an auction for its own 

account to acquire ARS for its 

inventory, to prevent (1) a failed auction 

(i.e., an event where there are 

insufficient clearing bids that would 

result in the auction rate being set at a 

specified rate); or (2) an auction from 

clearing at a rate that Morgan Stanley 

believes does not reflect the market for 

the particular ARS being auctioned. 

4. The applicant represents that for 

many ARS, Morgan Stanley has been 

appointed by the issuer of the securities 

to serve as a dealer in the auction and 

is paid by the issuer for its services. 

Morgan Stanley is typically appointed 

to serve as a dealer in the auctions 

pursuant to an agreement between the 

issuer and Morgan Stanley. That 

agreement provides that Morgan Stanley 

will receive from the issuer auction 

dealer fees based on the principal 

amount of the securities placed through 

Morgan Stanley. 

5. The applicant states that Morgan 

Stanley may share a portion of the 

auction rate dealer fees it receives from 

the issuer with other broker-dealers that 

submit orders through Morgan Stanley, 

for those orders that Morgan Stanley 

successfully places in the auctions. 

Similarly, with respect to ARS for 

which broker-dealers other than Morgan 

Stanley act as dealer, such other brokerdealers may share auction dealer fees 

with Morgan Stanley for orders 

submitted by Morgan Stanley. 

6. According to the applicant, since 

February 2008, a minority of auctions 

have cleared, particularly involving 

municipalities. As a result, Plans 

holding ARS may not have sufficient 

liquidity to make benefit payments, 

mandatory payments and withdrawals, 

and expense payments when due.4

7. The applicant represents that, in 

certain instances, Morgan Stanley may 

have previously advised or otherwise 

caused a Plan to acquire and hold an 

ARS and thus may be considered a 

fiduciary to the Plan so that a loan to the 

Plan by Morgan Stanley may violate 

section 406(a) and (b) of ERISA; in 

addition, a sale between a Plan and its 

sponsor or an IRA and its Beneficial 

Owner violates ERISA section 406 

and/or section 4975(c)(1) of the Code.5

The applicant is therefore requesting 

relief for the following transactions, 

involving all employee benefit plans: (1) 

The sale or exchange of an ARS from a 

Plan to the Plan’s Sponsor; 6 and (2) a 

lending of money or other extension of 

credit to a Plan in connection with the 

holding of an ARS from Morgan Stanley, 

an Introducing Broker, or a Clearing 

Broker—where the subsequent 

repayment of the loan is made in 

accordance with its terms and is 

guaranteed by the Plan Sponsor. 

8. The applicant is requesting similar 

relief for plans covered by only Title II 

of ERISA. In this regard, the applicant 

is requesting relief for: (1) The sale or 

exchange of an ARS from a Title II-Only 

Plan to the Beneficial Owner of such 

Plan; and (2) a lending of money or 

other extension of credit to a Title IIOnly Plan in connection with the 

holding of an ARS from Morgan Stanley, 

an Introducing Broker, or a Clearing 

Broker—where the subsequent 

repayment of the loan is made in 

accordance with its terms and is 

guaranteed by the Beneficial Owner. 

9. The applicant represents that the 

proposed transactions are in the 

interests of the Plans. In this regard, the 

applicant represents that the exemption, 

if granted, will provide Plan fiduciaries 

with liquidity, notwithstanding changes 

that have occurred in the ARS markets. 

The applicant also notes that, other than 

for Plans sponsored by the applicant, 

the decision to enter into a transaction 

described herein will be made by a Plan 

fiduciary who is Independent of Morgan 

Stanley. 

10. The proposed exemption contains 

a number of safeguards designed to 

protect the interests of each Plan. With 

respect to the sale of an ARS by a Plan, 

the Plan must receive cash equal to the 

par value of the Security, plus any 

accrued interest. The sale must also be 

unconditional, other than being for 

payment against prompt delivery. For 

in-kind exchanges covered by the 

proposed exemption, the security 

delivered to the Plan (i.e., the Delivered 

Security) must be: (1) Listed on a 

national securities exchange (excluding 

OTC Bulletin Board-eligible securities 

and Pink Sheets-quoted securities); or 

(2) a U.S. Treasury obligation; or (3) a 

fixed income security that has a rating 

at the time of the exchange that is in one 

of the two highest generic rating 

categories from an independent 

nationally recognized statistical rating 

organization (e.g., a highly rated 

municipal bond or a highly rated 

corporate bond); or (4) a certificate of 

deposit insured by the Federal Deposit 

Insurance Corporation. The Delivered 

Security must be appropriate for the 

Plan and must be a security that the 

Plan is permitted to hold under 

applicable law. The proposed 

exemption further requires that the 

Delivered Security be valued at its fair 

market value, as determined at the time 

of the exchange from a third party 

pricing service or other objective source 

and must equal the total value of the 

ARS being exchanged (i.e., par value, 

plus any accrued interest). 

11. With respect to a loan to a Plan 

holding an ARS, such loan must be 

documented in a written agreement 

containing all of the material terms of 

the loan, including the consequences of 

default. Further, the Plan may not pay 

an interest rate that exceeds one of the 

following three rates as of the 

commencement of the loan: The coupon 

rate for the ARS, the Federal Funds 

Rate, or the Prime Rate. Additionally, 

such loan must be unsecured and for an 

amount that is no more than the total 

par value of ARS held by the affected 

Plan. 

12. Additional conditions apply to 

each transaction covered by the 

exemption, if granted. Among other 

things, the Plan may not pay any fees or 

commissions in connection with the 

transaction and the transaction may not 

be part of an arrangement, agreement, or 

understanding designed to benefit a 

party in interest or disqualified person. 

Further, any waiver of rights or claims 

by a Plan is prohibited, in connection 

with the sale or exchange of an ARS by 

a Plan, or a lending of money or other 

extension of credit to a Plan holding an 

ARS. 

13. In summary, the applicant 

represents that the transactions 

described herein satisfy the statutory 

criteria set forth in section 408(a) of 

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

Code because: 

(1) Any sale will be: 

(A) For no consideration other than 

cash against prompt delivery of the 

ARS; and 

(B) At par, plus any accrued but 

unpaid interest; 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38561 

7Unless otherwise stated herein, the Facility and 

the Land are together referred to as the ‘‘Property.’’ 

8The difference between $2,600,000 and 

$1,200,000 was paid with a cash down payment. 

(2) Any in-kind exchange will be 

unconditional, other than being for 

payment against prompt delivery, and 

will involve Delivered Securities that 

are: 

(A) Appropriate for the Plan; 

(B) Listed on a national securities 

exchange (but not OTC Bulletin Boardeligible securities and Pink Sheetsquoted securities); U.S. Treasury 

obligations; fixed income securities; or 

certificates of deposit; and 

(C) Securities that the Plan is 

permitted to hold under applicable law; 

and, 

(3) Any loan will be: 

(A) Documented in a written 

agreement containing all of the material 

terms of the loan, including the 

consequences of default; 

(B) At an interest rate not in excess of 

the coupon rate for the ARS, the Federal 

Funds Rate, or the Prime Rate; 

(C) Unsecured; and 

(D) For an amount that is not more 

than the total par value of ARS held by 

the affected Plan. 

Notice to Interested Persons 

The applicant represents that all the 

potentially interested persons cannot be 

identified and that, therefore, the only 

practicable means of notifying 

interested persons of this proposed 

exemption is by the publication of this 

notice in the Federal Register. 

Comments and requests for a hearing are 

due within 45 days from the date of 

publication of this notice of proposed 

exemption in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Karin Weng of the Department, 

telephone (202) 693–8557. (This is not 

a toll-free number.) 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act (or 

ERISA), and in accordance with the 

procedures set forth in 29 CFR Part 

2570, Subpart B (55 FR 32836, 32847, 

August 10, 1990). 

If the proposed exemption is granted, 

the restrictions of sections 406(a)(1)(A) 

through (D) and 406(b)(1) and (b)(2) of 

the Act shall not apply to the proposed 

loan of approximately $1,081,416 (the 

Loan) to the Plan by the International 

Union of Painters and Allied Trades, 

District Council 21 (the Union), a party 

in interest with respect to the Plan, for 

(1) the repayment of an outstanding loan 

(the Original Loan) made to the Plan by 

Commerce Bank and currently held by 

TD Bank (the Bank), both of which are 

unrelated parties; and (2) to facilitate 

the expansion of a training facility (the 

Facility) that is situated on certain real 

property (the Land) 7 owned by the Plan, 

provided that the following conditions 

are met: 

(a) The terms and conditions of the 

Loan are at least as favorable to the Plan 

as those which the Plan could have 

obtained in an arm’s length transaction 

with an unrelated party; 

(b) The Plan’s trustees determine in 

writing that the Loan is appropriate for 

the Plan and in the best interests of the 

Plan’s participants and beneficiaries; 

(c) A qualified, independent fiduciary 

that is acting on behalf of the Plan (the 

Qualified Independent Fiduciary) 

reviews the terms of the Loan and 

determines that the Loan is an 

appropriate investment for the Plan and 

protective of and in the best interests of 

the Plan and its participants and 

beneficiaries; 

(d) In determining the fair market 

value of the Property that serves as 

collateral for the Loan, the Qualified 

Independent Fiduciary (1) obtains an 

appraisal of the Property from a 

qualified, independent appraiser (the 

Qualified Independent Appraiser); and 

(2) ensures that the appraisal prepared 

by the Qualified Independent Appraiser 

is consistent with sound principles of 

valuation; 

(e) The Qualified Independent 

Fiduciary monitors the Loan, as well as 

the terms and conditions of the 

exemption, and takes whatever actions 

are necessary and appropriate to 

safeguard the interests of the Plan and 

its participants and beneficiaries under 

the Loan; 

(f) The Loan is repaid by the Plan 

solely with the funds the Plan retains 

after paying all of its operational 

expenses; and 

(g) The Plan does not pay any fees or 

other expenses in connection with the 

servicing or administration of the Loan. 

Summary of Facts and Representations 

1. The Union is located in 

Philadelphia, Pennsylvania, and it 

represents members in the finishing 

trades, such as painters, drywall 

finishers, wall coverers, glaziers and 

glass workers, in Pennsylvania and New 

Jersey. The Plan was established by the 

Union in 1966 as a training program for 

individuals who are Union members 

and are employed by contributing 

employers with regard to the Plan. The 

Plan has twelve (12) trustees (the 

Trustees). Half of the Trustees represent 

Union members and half of the Trustees 

represent contributing employers. The 

purpose of the Plan is to provide eligible 

participants (the Participants) with 

training for career advancement to 

journeyperson status and continued 

education in the Union’s construction 

industries. As of February 15, 2010, the 

Plan had approximately 5,000 

Participants and approximately 

$5,649,370 in total assets. 

2. Among the Plan’s assets is the 

Facility, which is located at 2190 Hornig 

Road, Philadelphia, PA. The Facility is 

comprised mainly of classrooms and 

indoor work areas, and it is used by 

Participants to acquire construction 

training. 

3. In 2004, the Trustees determined a 

need to purchase a training facility to 

better serve the ongoing needs of the 

Participants due to the increasingly 

sophisticated requirements of workers 

in the finishing trades, particularly with 

regard to glazing and architectural glass 

and metalworking. In November 2004, 

the Trustees identified the Property as a 

viable option to serve their training 

needs. 

4. The Trustees secured third party 

financing of $1,200,000 to assist in the 

purchase of the Property, for a total 

purchase price of $2,600,000 (the 

Purchase).8 The Property was purchased 

from a party that was not related to the 

Plan or the Union. To finance the 

Purchase, the Trustees caused the Plan 

to receive the Original Loan from the 

Bank. The Original Loan was entered 

into on March 23, 2005. 

5. The Original Loan, which is in the 

principal amount of $1,200,000, has a 

term of 15 years, and it requires the Plan 

to pay an adjustable rate of interest. At 

the time the Original Loan was made, 

the interest rate was set at the prime rate 

published in The Wall Street Journal, or 

5.5%, calculated based on a 360-day 

year. Since entering into the Original 

Loan with the Plan, the Bank has 

reduced the interest rate to 3.5%. The 

Bank is required to review the annual 

interest rate of the Original Loan on the 

fifth and tenth anniversaries of the 

Original Loan, but the annual interest 

rate cannot exceed 5.5%. 

Under the terms of the Original Loan, 

the Plan is required to make, 

commencing May 1, 2005, 179 

consecutive monthly installments of 

principal and interest, amortized over 

the fifteen (15) year loan period in an 

amount equal to $9,805, followed by 

one final payment of all outstanding 

principal, interest and fees on the 

maturity date of April 1, 2020. 

Further, under the Original Loan, the 

Plan has assigned its lessor’s interest in 

all rents, income and profits arising 

from leases pertaining to the Property as 


emcdonald on DSK2BSOYB1PROD with NOTICES
38562 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

9The outstanding principal balance on the 

Original Loan will decline with each monthly 

payment made by the Plan. As a result, the 

anticipated Loan amount will be adjusted to reflect 

any such decline. 

10The Department is expressing no opinion in 

this proposed exemption regarding whether the 

Loan violates any of the fiduciary responsibility 

provisions of Part 4 of Title I of the Act. In this 

regard, the Department notes that section 404(a) of 

the Act requires, among other things, that a 

fiduciary of a plan act prudently, solely in the 

interest of the plan’s participants and beneficiaries, 

and for the exclusive purpose of providing benefits 

to participants and beneficiaries when making 

investment decisions on behalf of a plan. Section 

404(a) of the Act also states that a plan fiduciary 

should diversify the investments of a plan so as to 

minimize the risk of large losses, unless under the 

circumstances it is clearly prudent not to do so. 

Moreover, the Department is not providing any 

opinion as to whether a particular category of 

investments or investment strategy would be 

considered prudent or in the best interests of a plan 

as required by section 404 of the Act. The 

determination of the prudence of a particular 

investment or investment course of action must be 

made by a plan fiduciary after appropriate 

consideration of those facts and circumstances that, 

given the scope of such fiduciary’s investment 

duties, the fiduciary knows or should know are 

relevant to the particular investment or investment 

course of action involved, including a plan’s 

potential exposure to losses and the role the 

investment or investment course of action plays in 

that portion of the plan’s portfolio with respect to 

which the fiduciary has investment duties (see 29 

CFR 2550.404a–1). The Department also notes that 

in order to act prudently in making investment 

decisions, a plan fiduciary must consider, among 

other factors, the availability, risks and potential 

return of alternative investments for the plan. Thus, 

a particular investment by a plan, which is selected 

in preference to other alternative investments, 

would generally not be prudent if such investment 

involves a greater risk to the security of a plan’s 

assets than other comparable investments offering 

a similar return or result. 

11The Union represents that the Plan’s 

operational expenses are funded by contributions 

made to the Plan by contributing employers. These 

contributions are based on a portion of each 

Participant’s hourly wage paid by such employers. 

The Union represents that the Participants’ hourly 

wage rate is negotiated periodically between the 

Union and the contributing employers. Thus, the 

Union represents that the Participants’ wage 

deduction amount for contributions made by the 

employers to the Plan is determined by the parties 

each year. 

The Union further represents that the 

computation of the amount of Excess Funds 

available for repayment of the Loan will be 

according to generally accepted accounting 

principles by a certified public accountant 

representing the Plan. 

well as all contracts, licenses and 

permits associated with its ownership of 

the Property, and it has executed an 

environmental indemnity agreement. In 

addition, the Original Loan allows the 

Bank to reserve the right to elect, on the 

fifth and tenth anniversaries of the 

Original Loan, to call such loan in full 

and require the Plan to repay the 

remaining principal of the Original Loan 

and any interest then due and payable. 

Finally, as security for the Original 

Loan, the Plan has granted the Bank a 

first lien interest in both the Facility and 

the Land. As of March 23, 2010, the 

principal balance outstanding on the 

Original Loan was $881.418.95.9

6. In March 2010, despite the fact that 

the Plan has made all of the payments 

required under the Original Loan on 

time without any defaults or 

delinquencies, the Bank indicated that it 

may elect to call the Original Loan by 

July 1, 2010. Therefore, the Union 

proposes to lend the Plan, as of March 

23, 2010, $1,081,416 under the terms of 

a replacement loan (i.e., the Loan). The 

Loan will enable the Plan to repay the 

Original Loan and provide 

approximately $200,000 in additional 

funds to finance an expansion of the 

Facility by adding two new 

classrooms.10 Accordingly, an 

administrative exemption is requested 

from the Department. 

7. The Loan will have a fixed rate of 

interest of 4% per annum, and the Loan 

will not be able to be called by the 

Union, except in the event of a complete 

default upon the Loan. Under the terms 

of the Loan, the Plan will be required to 

make 180 consecutive monthly 

installments of principal and interest, 

amortized over the fifteen (15) year loan 

period, calculated over a 365-day year, 

followed by one final payment of all 

outstanding principal, interest and fees 

on the maturity date. The Plan will not 

be required to assign its lessor’s interest 

in rents, income and profits arising from 

leases pertaining to the Property or its 

interests in contracts, licenses and 

permits associated with its ownership of 

the Property. In addition, the Loan will 

not require the Plan to execute an 

environmental indemnity agreement. As 

security for the Loan, the Plan will grant 

the Union a first lien interest in the 

Facility and the Land. Finally, the Plan 

will not be required to pay any fees or 

other expenses in connection with the 

servicing or the administration of the 

Loan. 

8. The Trustees represent that the 

Loan will be beneficial to the Plan since 

it allows the Plan to forecast more 

accurately the cost of its debt service 

over the life of the Loan. Further, the 

Trustees explain that the potential for 

the interest rate of the Original Loan to 

reset on the fifth and tenth anniversaries 

of the Original Loan raises problems for 

the Plan’s ability to conduct accurate 

expense forecasting. 

The Trustees also represent that the 

terms of the Loan are more favorable to 

the Plan than the terms of the Original 

Loan for several reasons. First, the Loan 

cannot be called by the Union except in 

the event of a complete default upon the 

Loan. Second, unlike the Original Loan, 

the Loan does not require provisions 

such as environmental indemnity 

agreements; assignments of contracts, 

licenses and permits; and assignments 

of leases and rents. Third, the Loan 

provides a more favorable interest 

calculation in comparison to the 

Original Loan, with such interest being 

calculated based on a 365-day year 

instead of a 360-day year. 

Further, the Trustees state that the 

Loan will be beneficial to the Plan in 

that it will allow the Plan to expand the 

Facility to better serve the Participants. 

The Trustees note that the Plan will add 

two classrooms with $200,000 of the 

proceeds from the Loan, thus allowing 

the Plan to offer training sessions in a 

broader range of subjects and to a higher 

number of Participants. 

Finally, the Trustees assert that the 

Plan will repay the Loan solely with 

funds retained by the Plan after paying 

for all of its operational expenses (the 

Excess Funds).11

9. The Plan retained Louis A. Iatarola, 

MAI, SRA, to appraise the Property. Mr. 

Iatarola is a Qualified Independent 

Appraiser who is affiliated with the real 

estate appraisal firm of Louis A. Iatarola 

Appraisal Group, Ltd., located in 

Philadelphia, PA. Mr. Iatarola has no 

present or prospective interest in the 

Loan transaction, and he is unrelated to 

the Union. During 2009, he derived less 

than one percent of his gross revenue 

from parties in interest with respect to 

the Plan. Mr. Iatarola visited the 

Property on November 17, 2009, 

prepared a valuation report, dated 

December 16, 2009, and examined 

relevant public records. As of November 

17, 2009, Mr. Iatarola opined in his 

appraisal report that an unencumbered 

fee simple interest in the Property had 

a fair market value $4,000,000, with 

such opinion based on a reconciliation 

of value estimates derived from the 

Sales Comparison Approach and the 

Income Capitalization Approach to 

valuation. 

10. The terms of the Loan have been 

initially reviewed and, thereafter, will 

be monitored by John Ward, an attorney 

in Washington, DC, who will act as the 

Plan’s Qualified Independent Fiduciary. 

Mr. Ward has no present or prospective 

interest in the Loan transaction, and he 

is unrelated to the Union. Mr. Ward has 

represented labor unions and their 

associated benefit funds throughout his 

career, and he has focused his 

professional energies on tax and ERISA 

matters faced by those organizations. 

During 2009, Mr. Ward derived less 

than one percent of his gross revenue 

from parties in interest with respect to 

the Plan. Mr. Ward represents that he is 

qualified to act as the Qualified 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38563 

12 In an addendum to his Qualified Independent 

Fiduciary report, dated May 6, 2010, Mr. Ward 

stated that he was unaware that the interest rate for 

the Original Loan at its outset had been 5.5%, with 

the interest rate being lowered to 3.5% at a later 

date. Nevertheless, he explained that the fact that 

the Original Loan’s interest rate had been reduced 

from 5.5 to 3.5 percent would have no bearing on 

his opinion regarding the appropriateness of the 

Loan. 

Independent Fiduciary, and he 

understands and accepts the duties, 

responsibilities and liabilities in acting 

as a fiduciary with respect to the Plan. 

In this regard, Mr. Ward states (a) that 

the Loan is both an appropriate 

investment for the Plan and in the best 

interest of the Plan and its participants 

and beneficiaries and (b) that he will 

continue to monitor the Plan’s 

repayment of the Loan and will take 

whatever actions are necessary to 

protect the interest of the Plan and its 

participants and beneficiaries. 

11. As part of his review of the Loan 

transaction, Mr. Ward engaged two 

additional Qualified Independent 

Appraisers, George Calomiris, AIA, 

CDS, Certified General Appraiser, and 

Kevin Boyle, Certified Residential 

Appraiser, to confirm the accuracy of 

the initial appraisal performed by Mr. 

Iatarola. Messrs. Calomiris and Boyle 

are affiliated with the real estate 

appraisal firm of William Calomiris 

Company, LLC, located in Washington, 

DC. They have no present or prospective 

interest in the Loan transaction, and 

they are unrelated to the Plan and the 

Union. During 2009, Messrs. Calomiris 

and Boyle derived less than one percent 

of their gross revenue from parties in 

interest with respect to the Plan. In 

developing their opinion on the 

accuracy of Mr. Iatarola’s appraisal, 

Messrs. Calomiris and Boyle visited the 

Property, reviewed a valuation report 

prepared by Mr. Iatarola, and examined 

relevant public records. In an appraisal 

report dated February 19, 2010, Messrs. 

Calomiris and Boyle confirmed the 

opinion of Mr. Iatarola that the Property 

would have a fair market value of at 

least $4,000,000, which would place the 

loan-to-value ratio at 28%. 

12. Mr. Ward investigated the interest 

rates that would be available to the Plan 

were it to secure a fixed rate loan from 

an unrelated lender. In so doing, he 

noted that not only would any potential 

lender benefit from the 28% loan to 

value ratio, thereby making any 

potential loan highly secured, but that 

the Plan had consistently demonstrated 

over the past five (5) years that it was 

willing and able to make monthly 

mortgage payments on time and in full, 

with more than sufficient annual 

income to easily cover monthly 

obligations under nearly any potential 

mortgage loan. 

Mr. Ward also opined that the current 

commercial interest rates would be 

higher than the rate charged by the 

Union under the Loan. Specifically, Mr. 

Ward sampled senior loan officers at 

PNC Bank and Wachovia Bank/Wells 

Fargo, and such senior loan officers 

indicated that neither bank would be 

able to match the terms provided in the 

Loan. In this regard, the PNC Bank 

representative informed Mr. Ward that a 

fixed rate loan at 4% for 15 years 

seemed rather low and that a 6% rate 

would be more realistic for a 15 year 

commercial loan. The Wachovia Bank/ 

Wells Fargo representative concurred 

with the guidance offered by the PNC 

Bank representative. 

In conclusion, Mr. Ward opined that 

(a) the Loan is both an appropriate 

investment for the Plan and in the best 

interest of the Plan and its participants 

and beneficiaries; and (b) the terms and 

conditions of the Loan are more 

favorable to the Plan and its participants 

and beneficiaries than the terms of 

similar loans which might be made to 

the Plan by an unrelated party in an 

arm’s length transaction.12

13. In summary, the Plan represents 

that the transaction satisfies the 

statutory criteria for an administrative 

exemption that are contained in section 

408(a) of the Act for the following 

reasons: (a) The terms and conditions of 

the Loan will be at least as favorable to 

the Plan as those which the Plan could 

obtain in an arm’s length transaction 

with an unrelated party; (b) the Trustees 

have determined in writing that the 

Loan is appropriate for the Plan and in 

the best interests of the Plan’s 

participants and beneficiaries; (c) Mr. 

Ward, as the Plan’s Qualified 

Independent Fiduciary, has reviewed 

the terms of the Loan and has 

determined that the Loan would be 

protective of and in the best interests of 

the Plan and its participants and 

beneficiaries; (d) in determining the fair 

market value of the Property, Mr. Ward 

has obtained an appraisal from a 

Qualified Independent Appraiser and 

has ensured that the appraisal prepared 

by the Qualified Independent Appraiser 

is consistent with sound principles of 

valuation; (e) Mr. Ward will monitor the 

Loan, as well as the terms and 

conditions of the proposed exemption 

(if granted), and will take whatever 

actions are necessary to safeguard the 

interests of the Plan and its participants 

and beneficiaries under the Loan; (f) the 

Loan will be repaid by the Plan solely 

with the funds the Plan retains after 

paying all of its operational expenses; 

and (g) the Plan will not pay any fees 

or other expenses in connection with 

the servicing or administration of the 

Loan. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Brian Shiker of the Department, 

telephone (202) 693–8552. (This is not 

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

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

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions of the Act and/or the Code, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which, among other things, 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

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

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) Before an exemption may be 

granted under section 408(a) of the Act 

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

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemptions, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act 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 exemptions, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in each 

application are true and complete, and 

that each application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 


emcdonald on DSK2BSOYB1PROD with NOTICES
38564 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

Signed at Washington, DC, this 28th day of 

June, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–16096 Filed 7–1–10; 8:45 am] 

BILLING CODE 4510–29–P 

NATIONAL FOUNDATION ON THE 

ARTS AND THE HUMANITIES 

National Endowment for the Arts; 

Proposed Collection; Comment 

Request 

AGENCY: National Endowment for the 

Arts, National Foundation on the Arts 

and the Humanities. 

ACTION: Notice. 

SUMMARY: The National Endowment for 

the Arts (NEA), as part of its continuing 

effort to reduce paperwork and 

respondent burden, conducts a 

preclearance consultation program to 

provide the general public and federal 

agencies with an opportunity to 

comment on proposed and/or 

continuing collections of information in 

accordance with the Paperwork 

Reduction Act of 1995. This program 

helps to ensure that requested data is 

provided in the desired format; 

reporting burden (time and financial 

resources) is minimized; collection 

instruments are clearly understood; and 

the impact of collection requirements on 

respondents is properly assessed. 

Currently, the NEA is soliciting 

comments concerning the proposed 

information collection of: Blanket 

Justification for NEA Funding 

Application Guidelines and Reporting 

Requirements. A copy of the current 

information collection request can be 

obtained by contacting the office listed 

below in the address section of this 

notice. 

DATES: Written comments must be 

submitted to the office listed in the 

address section below within 60 days 

from the date of this publication in the 

Federal Register. The NEA is 

particularly interested in comments 

that: 

• Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

• Evaluate the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• Can help the agency minimize the 

burden of the collection of information 

on those who are to respond, including 

through the use of electronic submission 

of responses through Grants.gov. 

ADDRESSES: Send comments to Jillian 

Miller, Director, Office of Guidelines 

and Panel Operations, National 

Endowment for the Arts, 1100 

Pennsylvania Avenue, NW., Room 621, 

Washington, DC 20506–0001; telephone 

(202) 682–5504 (this is not a toll-free 

number), fax (202) 682–5049. 

Kathleen Edwards, 

Director, Administrative Services, National 

Endowment for the Arts. 

[FR Doc. 2010–16155 Filed 7–1–10; 8:45 am] 

BILLING CODE 7537–01–P 

NUCLEAR REGULATORY 

COMMISSION 

Advisory Committee on Reactor 

Safeguards (ACRS); Meeting of the 

ACRS Subcommittee on ESBWR 

The ACRS Subcommittee on ESBWR 

will hold a meeting on July 13, 2010, 

Room T–2B1, 11545 Rockville Pike, 

Rockville, Maryland. 

The entire meeting will be open to 

public attendance, with the exception of 

a portion that may be closed to protect 

information that is proprietary to 

General Electric—Hitachi Nuclear 

Americas, LLC (GEH) and its contractors 

pursuant to 5 U.S.C. 552b(c)(4). 

The agenda for the subject meeting 

shall be as follows: 

Tuesday, July 13, 2010—8:30 a.m. until 

5 p.m. 

The Subcommittee will discuss issues 

relating to long-term core cooling, 

containment peak pressure, vacuum 

breaker isolation, and accumulation of 

hydrogen in containment. The 

Subcommittee will hear presentations 

by and hold discussions with 

representatives of the NRC staff, GEH, 

and other interested persons regarding 

this matter. The Subcommittee will 

gather information, analyze relevant 

issues and facts, and formulate 

proposed positions and actions, as 

appropriate, for deliberation by the Full 

Committee. 

Members of the public desiring to 

provide oral statements and/or written 

comments should notify the Designated 

Federal Official (DFO), Christopher 

Brown (Telephone 301–415–7111 or 

Email Christopher.Brown@nrc.gov) five 

days prior to the meeting, if possible, so 

that appropriate arrangements can be 

made. Thirty-five hard copies of each 

presentation or handout should be 

provided to the DFO thirty minutes 

before the meeting. In addition, one 

electronic copy of each presentation 

should be emailed to the DFO one day 

before the meeting. If an electronic copy 

cannot be provided within this 

timeframe, presenters should provide 

the DFO with a CD containing each 

presentation at least thirty minutes 

before the meeting. Electronic 

recordings will be permitted only 

during those portions of the meeting 

that are open to the public. Detailed 

procedures for the conduct of and 

participation in ACRS meetings were 

published in the Federal Register on 

October 14, 2009, (74 FR 58268–58269). 

Detailed meeting agendas and meeting 

transcripts are available on the NRC 

Web site at http://www.nrc.gov/readingrm/doc-collections/acrs. Information 

regarding topics to be discussed, 

changes to the agenda, whether the 

meeting has been canceled or 

rescheduled, and the time allotted to 

present oral statements can be obtained 

from the Web site cited above or by 

contacting the identified DFO. 

Moreover, in view of the possibility that 

the schedule for ACRS meetings may be 

adjusted by the Chairman as necessary 

to facilitate the conduct of the meeting, 

persons planning to attend should check 

with these references if such 

rescheduling would result in a major 

inconvenience. 

Dated: June 25, 2010. 

Cayetano Santos, 

Chief, Reactor Safety Branch A, Advisory 

Committee on Reactor Safeguards. 

[FR Doc. 2010–16170 Filed 7–1–10; 8:45 am] 

BILLING CODE 7590–01–P 

NUCLEAR REGULATORY 

COMMISSION 

Advisory Committee on Reactor 

Safeguards (ACRS) Meeting of the 

Subcommittee on Plant Operations 

and Fire Protection 

The ACRS Subcommittee on Plant 

Operations and Fire Protection will hold 

a meeting on July 29, 2010, at the U.S. 

NRC Region IV, Texas Health Resources 

Tower, 612 E. Lamar Blvd., Suite 400, 

Arlington, TX 76011–4125. 

The entire meeting will be open to 

public attendance. 

The agenda for the subject meeting 

shall be as follows: 

Thursday, July 29, 2010—8:30 a.m. 

until 2 p.m. 

The Subcommittee will meet with the 

Administrator and Region IV staff on 


emcdonald on DSK2BSOYB1PROD with NOTICES