Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 3647 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Application Nos. and Proposed 

Exemptions; D–11477, D–11478, and D– 

11479, Respectively, UBS AG (UBS) and Its 

Affiliates UBS Financial Services Inc. (UBS 

Financial), and UBS Financial Services Inc. 

of Puerto Rico (PR Financial) (Collectively, 

the Applicants); and D–11488, Robert W. 

Baird & Co. Incorporated, et al.] 

Notice of Proposed Exemptions 

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. ll, 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. 

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. 

UBS AG (UBS), and Its Affiliates UBS 

Financial Services Inc. (UBS Financial), 

and UBS Financial Services Inc. of 

Puerto Rico (PR Financial) 

(Collectively, the Applicants), Located 

in Zurich, Switzerland; New York, New 

York; and San Juan, Puerto Rico, 

Respectively 

[Exemption Application Numbers D– 

11477, D–11478, and D–11479, 

Respectively] 

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, as amended (the Act) and 

section 4975(c)(2) of the Internal 

Revenue Code of 1986 (the Code) 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), 406(b)(1), 

406(b)(2), and 407(a) of the Act and the 

sanctions resulting from the application 

of section 4975 of the Code, by reason 

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

the Code, shall not apply to: (1) The 

acquisition by the UBS Savings and 

Investment Plan, the UBS Financial 

Services Inc. 401(k) Plus Plan, and the 

UBS Financial Services Inc. of Puerto 

Rico Savings Plus Plan (collectively, the 

Plans) of certain entitlements (each, an 

Entitlement) and certain subscription 

rights (each, a Right) issued by UBS, a 

party in interest with respect to the 

Plans; (2) the holding of the 

Entitlements by the Plans between April 

28, 2008 and May 9, 2008, inclusive, 

pending the automatic conversion of the 

Entitlements into shares of UBS 

common stock; and (3) the holding of 

the Rights by the Plans between May 27, 

2008 and June 9, 2008, inclusive, 

provided that the following conditions 

were satisfied: 

(a) All decisions regarding the 

acquisition and holding of the Rights 

and Entitlements by the Plans were 

made by U.S. Trust, Bank of America 

Private Wealth Management (U.S. 

Trust), a qualified, independent 

fiduciary; 

(b) The Plans’ acquisition of the 

Rights and Entitlements resulted from 

an independent act of UBS as a 

corporate entity, and without any 

participation on the part of the Plans; 

(c) The acquisition and holding of the 

Rights and Entitlements by the Plans 

occurred in connection with a capital 

improvement plan approved by the 

board of directors of UBS, in which all 

holders of UBS common stock, 

including the Plans, were treated 

exactly the same; 

(d) All holders of UBS common stock, 

including the Plans, were issued the 

same proportionate number of Rights 

based on the number of shares of UBS 

common stock held by such Plans; 

(e) All holders of UBS common stock, 

including the Plans, were issued the 

same proportionate number of 

Entitlements based on the number of 

shares of UBS common stock held by 

such Plans; 

(f) The acquisition of the Rights and 

Entitlements by the Plans occurred on 

the same terms made available to other 

holders of UBS common stock; 

(g) The acquisition of the Rights and 

Entitlements by the Plans was made 

pursuant to provisions of each such 

Plan for the individually-directed 

investment of participant accounts; and 

(h) The Plans did not pay any fees or 

commissions in connection with the 

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3648 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 

1The Applicants represent that SWX Europe 

Limited is a wholly-owned subsidiary of SWX 

Swiss Exchange, the securities exchange of 

Switzerland, and provides cross-border trading of 

primarily Swiss blue-chip securities. The 

Applicants also state that SWX Europe Limited 

(formerly known as virt-x Exchange Limited) has 

been in operation since 2001 and is a recognized 

investment exchange that is supervised by the 

United Kingdom’s Financial Services Authority. 

The Applicants represent that UBS holds no 

interest in any of the foregoing financial exchanges. 

acquisition or holding of the Rights or 

Entitlements. 

Summary of Facts and Representations 

1. UBS is one of the world’s largest 

financial firms and is a global wealth 

manager, an investment banking and 

securities firm, and a global asset 

manager. UBS is headquartered in 

Zurich, Switzerland and currently 

operates in over fifty countries and 

throughout the United States, including 

Puerto Rico and the Virgin Islands. 

Among the wholly-owned subsidiaries 

of UBS are UBS Financial and PR 

Financial. UBS Financial is 

headquartered in New York, New York, 

and PR Financial is headquartered in 

San Juan, Puerto Rico. 

2. UBS sponsors the UBS Savings and 

Investment Plan (the Savings Plan), a 

defined contribution, profit-sharing plan 

with a Code section 401(k) feature. The 

Savings Plan provides for participantdirected individual accounts that are 

intended to comply with the provisions 

of section 404(c) of the Act and the 

corresponding regulations located at 29 

CFR 2550.404c–1. The Applicants 

represent that the trustee of the Savings 

Plan is State Street Bank and Trust 

Company of Boston, Massachusetts. The 

Applicants further represent that UBS is 

a party in interest with respect to the 

Savings Plan because, under section 

3(14)(C) of the Act, it constitutes an 

employer whose employees are covered 

under the Savings Plan. As of December 

31, 2007, the Applicants represent that 

the Savings Plan had approximately 

14,719 participants and total assets of 

$1,416,402,131. The Applicants state 

that the Savings Plan allows 

participants to direct investments into 

various investment funds, including the 

UBS Common Stock Fund (the Fund). 

The Applicants represent that the Fund 

is not diversified, and consists primarily 

of UBS common stock (each whole 

share of the Fund comprising one UBS 

Share) plus cash for liquidity purposes. 

According to the Applicants, the UBS 

Shares held by the Savings Plan were 

valued at $87,773,382 as of December 

31, 2007, and comprised approximately 

6.2% of the total assets in the Savings 

Plan. 

3. UBS Financial sponsors the UBS 

Financial Services Inc. 401(k) Plus Plan 

(the Plus Plan), a defined contribution, 

profit-sharing plan with a Code section 

401(k) feature. The Plus Plan provides 

for participant-directed individual 

accounts that are intended to comply 

with the provisions of section 404(c) of 

the Act and the corresponding 

regulations located at 29 CFR 

2550.404c–1. The Applicants represent 

that the trustee of the Plus Plan is the 

Northern Trust Company of Chicago, 

Illinois. The Applicants further 

represent that UBS is a party in interest 

with respect to the Plus Plan under 

section 3(14)(H) of the Act because it 

owns, directly or indirectly, 100% of 

UBS Financial. The Applicants state 

that, as of December 31, 2007, the Plus 

Plan had approximately 23,471 

participants and total assets of 

$2,531,642,183. Like the Savings Plan, 

the Plus Plan allows participants to 

direct investments into the Fund, along 

with other investments. The Applicants 

represent that the UBS Shares held by 

the Plus Plan were valued at 

$547,605,850 as of December 31, 2007, 

and comprised approximately 21.6% of 

the total assets in the Plus Plan. 

4. PR Financial sponsors the UBS 

Financial Services Inc. of Puerto Rico 

Savings Plus Plan (the PR Plan), which 

provides for participant-directed 

individual accounts that are intended to 

comply with the provisions of section 

404(c) of the Act and the corresponding 

regulations located at 29 CFR 

2550.404c–1. The Applicants represent 

that the trustee of the PR Plan is the 

Northern Trust Company of Chicago, 

Illinois. The Applicants state that the PR 

Plan utilizes the same trust as the Plus 

Plan, and allows participants to direct 

investments into the Fund, along with 

other investments. The Applicants also 

represent that UBS is a party in interest 

with respect to the PR Plan under 

section 3(14)(H) of the Act because it 

owns, directly or indirectly, 100% of PR 

Financial. The Applicants state that, as 

of December 31, 2007, the PR Plan had 

approximately 368 participants and 

total assets of $39,050,978. The 

Applicants also represent that the UBS 

Shares held by the PR Plan were valued 

at $14,197,762 as of December 31, 2007, 

and comprised approximately 36.4% of 

the total assets in the PR Plan. 

5. The Applicants represent that the 

trustees of each of the Plans have the 

authority to invest and reinvest all 

amounts in each participant’s account, 

as elected by the participant. Generally, 

in the absence of any such election, the 

trustee shall invest the amounts as 

specified by the appropriate investment 

committee of each of the Plans. The 

Applicants further represent that the 

Savings Plan’s trust agreement provides 

that its trustee has the authority to 

exercise the voting rights of any stocks; 

to exercise any conversion privileges, 

subscription rights, or other options; to 

consent to or otherwise participate in 

changes affecting corporate securities; 

and generally to exercise any of the 

powers of an owner with respect to 

stocks, bonds, or other property held in 

the commingled fund or in the trust. 

The Applicants also represent that the 

Plus Plan’s and the PR Plan’s trust 

agreement provides that rights, options, 

or warrants offered to purchase UBS 

Shares shall be exercised by its trustee 

to the extent that there is cash available. 

The Applicants state that the Savings 

Plan’s trust agreement provides that 

cash dividends and earnings attributable 

to UBS Shares in the Fund shall be 

reinvested in the Fund and allocated in 

whole shares and fractions thereof to the 

account of each participant with respect 

to whom directed investments in the 

Fund are maintained on the date such 

allocation is made. The Applicants 

represent that cash dividends and 

earnings received by the Plus Plan and 

the PR Plan’s trust are reinvested by 

purchasing additional UBS Shares. 

The Entitlements 

6. On February 27, 2008, as part of 

UBS’s capital improvement program, 

the Applicants represent that the UBS 

board of directors proposed, and its 

shareholders approved, a change to the 

capital structure of the company that 

permitted the replacement of the UBS 

2007 cash dividend with an award to 

existing shareholders (including 

participants in the Plans who were 

invested in UBS Shares) of the 

Entitlements. The Applicants represent 

that, with respect to the awarding of the 

Entitlements by UBS, the Plans were 

treated exactly the same as the other 

holders of UBS Shares. 

On April 28, 2008, UBS awarded a 

total of 14,440,531 Entitlements to 

existing UBS shareholders on the date of 

record. According to the Applicants, the 

award stipulated that, at any time from 

April 28, 2008 to May 9, 2008, inclusive 

(the Entitlements Trading Period), 

shareholders in general were permitted 

to buy or sell the Entitlements on SWX 

Europe Limited (SWX), a securities 

exchange based in London, England.1

The Applicants state that at the end of 

the Entitlements Trading Period, any 

Entitlements held by a shareholder were 

to be aggregated and automatically 

converted into an appropriate whole 

number of UBS Shares. In this regard, 

the Applicants represent that under the 

terms of the award, no fewer than 

twenty (20) Entitlements enabled a 

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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 3649 

shareholder the right to receive one UBS 

Share. For example, if an individual 

held 23 Entitlements at the conclusion 

of the Entitlements Trading Period, he 

or she would have received a single 

UBS Share, and the remaining three 

Entitlements would have lapsed without 

any right of compensation from UBS. 

The Rights 

7. The Applicants represent that, 

under the foregoing capital 

improvement program, UBS decided to 

effect an ordinary capital increase by 

allotting subscription rights (the Rights 

Offering) to existing holders of UBS 

common stock (including participants 

in the Plans who were invested in UBS 

Shares). At its annual general meeting 

on April 23, 2008, the UBS board of 

directors proposed, and UBS 

shareholders approved, a change to the 

UBS’s capital structure to accommodate 

the Rights Offering. The Applicants 

represent that the Rights Offering 

provided for a public offering of 

approximately 760 million additional 

UBS Shares, which would result in 

approximately $15.5 billion in 

additional capital for UBS. The 

Applicants further represent that the 

right to vote on whether to permit the 

Rights Offering was passed through 

under the plans to those participants 

who held UBS Shares. The Applicants 

also represent that, with respect to the 

awarding of the Rights by UBS, the 

Plans were treated exactly the same as 

the other holders of UBS Shares. On 

May 21, 2008, the UBS board of 

directors determined the final terms of 

the Rights Offering, setting the 

subscription price at 21.00 Swiss Francs 

(CHF) per UBS Share (or $20.16 per 

UBS Share). 

On May 27, 2008, UBS awarded one 

Right for each UBS Share on the date of 

record. According to the Applicants, the 

award stipulated that, upon receiving 

the Rights, shareholders in general were 

permitted to (i) Exercise their Rights, 

which entitled them to purchase 

additional UBS Shares; (ii) purchase 

more Rights on the SWX or the New 

York Stock Exchange (NYSE); or (iii) 

sell their Rights on the SWX or the 

NYSE. The exercise of twenty (20) 

Rights allowed the holder to purchase 

seven (7) UBS Shares at a price of 

$20.16 per share. The Applicant states 

that the trading period for the Rights ran 

from May 27, 2008 through June 9, 

2008, inclusive (the Rights Trading 

Period). According to the Applicant, any 

Rights that remained unexercised at the 

end of the Rights Trading Period lapsed 

without any right of compensation from 

UBS. 

8. The Applicants represent that 

neither the Rights nor the Entitlements 

constitute qualifying employer 

securities as defined in section 407(d)(5) 

of the Act. Accordingly, in connection 

with the awarding of the Rights and 

Entitlements by UBS, the applicable 

investment provisions of each of the 

Plans and of the Plans’ respective trust 

agreements were amended effective 

April 1, 2008 to expressly permit the 

acquisition of the Rights and 

Entitlements by the Plans pending the 

submission of an application for an 

administrative exemption with the 

Department. The Plans and the Plans’ 

respective trust agreements were further 

amended as of April 1, 2008 to provide 

for the appointment of a designated 

independent fiduciary possessing 

discretionary authority with respect to 

the holding, exercise, conversion, sale, 

or other disposition of the Rights and 

Entitlements. In this connection, the 

provisions of the Plans and of the Plans’ 

respective trust agreements concerning 

participant investment elections were 

also amended as of April 1, 2008 to 

permit the designated independent 

fiduciary, rather than participants in the 

Plans, to direct the disposition of the 

Rights and Entitlements. 

9. On April 28, 2008, each of the 

Plans contracted with U.S. Trust to 

serve both as an investment manager 

(within the meaning of section 3(38) of 

the Act) for the Plans and as the 

designated independent fiduciary of the 

Plans with respect to transactions 

involving the Rights and Entitlements. 

The Applicants represent that U.S. Trust 

is an experienced and qualified 

fiduciary with extensive trust and 

management capabilities such as 

discretionary asset management, asset 

allocation and diversification, 

investment advice, securities trading, 

and the performance of independent 

fiduciary assignments for plans covered 

by the Act. 

At the time of its engagement, U.S. 

Trust determined that it was in the 

interests of the Plans to accept the 

Rights and Entitlements. In addition, the 

Plans’ April 28, 2008 engagement 

agreement with U.S. Trust specifically 

charged the independent fiduciary with 

responsibility for conducting a due 

diligence review of the Rights and 

Entitlements, as well as developing a 

prudent strategy for the disposition of 

the Rights and Entitlements on behalf of 

the Plans. In this connection, the 

Applicants further represent that they, 

and not the Plans, have borne the cost 

of any fees payable to U.S. Trust for its 

investment management and 

independent fiduciary services. 

10. Under the terms of the relevant 

master trust agreements, the assets held 

by each of the trusts in the employer’s 

stock fund must be invested in UBS 

Shares. For example, section 3(h) of the 

master trust for the Savings Plan states 

that ‘‘the UBS Stock Fund shall be 

invested primarily in UBS Shares,’’ and 

that it ‘‘may be invested in short-term 

liquid investments pending investment 

in UBS Shares.’’ In addition, article 

7.5(d) of the UBS Financial Services Inc. 

Master Investment Trust Agreement for 

the Plus Plan and the PR Plan provides 

that, ‘‘except for short-term investment 

of cash, [UBS] has limited the 

investment power of the Trustee in the 

Company Stock Investment Fund to the 

purchase of [UBS] Stock.’’ Accordingly, 

U.S. Trust decided that each of the 

Plans should hold the Entitlements until 

their automatic conversion into UBS 

Shares, rather than permitting the Plans 

to sell the Entitlements during the 

Entitlements Trading Period. U.S. Trust 

determined that, absent short-term cash 

needs, the trustees for the Plans must 

invest assets in the Fund in UBS 

common stock. U.S. Trust further 

determined that the Plans would receive 

substantially the same value (be it in 

UBS Shares or in cash) whether the 

Entitlements were sold or converted 

into UBS Shares. In addition, U.S. Trust 

represents that selling the Entitlements 

would have exposed the Plans to market 

risk (during the time required to sell the 

Entitlements and reinvest the proceeds 

in UBS common stock), foreign 

exchange risk (in that the cash proceeds 

generated from the sale of the 

Entitlements on the SWX would have 

necessitated a currency conversion to 

U.S. dollars prior to reinvestment into 

UBS common stock), and trading costs 

associated with the foregoing 

transactions. 

11. Following the acquisition of the 

Rights by the Plans, U.S. Trust 

determined that the Plans lacked 

sufficient funds in allocated accounts to 

exercise the Rights, and U.S. Trust had 

no authority to utilize other assets of the 

Plans for this purpose. Accordingly, 

U.S. Trust decided on behalf of the 

Plans to sell the Rights on either the 

SWX or the NYSE, and also determined 

the appropriate time during the Rights 

Trading Period that each of the Plans 

should sell the Rights on one of the 

exchanges. The Applicants further 

represent that U.S. Trust has confirmed 

that, prior to June 9, 2008 (the 

expiration of the Rights Trading Period), 

all of the Rights held by each of the 

Plans were sold in arm’s length 

transactions with third parties on the 

SWX or the NYSE. 

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3650 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 

2For purposes of this proposed exemption, 

references to section 406 of ERISA should be read 

to refer as well to the corresponding provisions of 

section 4975 of the Code. 

The Applicants represent that U.S. 

Trust’s in-house trade executing group 

executed the sales with brokers Cantor 

Fitzgerald, Knight Trading, Merrill 

Lynch, and JP Morgan, based on the 

group’s independent evaluation of 

relevant factors such as price, trading 

volume, trade flow, and best execution. 

The Applicants represent that none of 

the foregoing brokers were affiliates of 

either U.S. Trust or of UBS at the time 

that the Rights were sold. The 

Applicants state that the trades 

involving the Rights took place at 

brokerage commission rates ranging 

from $0.01 per Right to $0.015 per 

Right; collectively, the commissions 

represented less than 1% of the total 

sales proceeds from the Plans’ sales of 

the Rights. The Applicants represent 

that all trading commissions were paid 

to the respective brokers, and that 

neither U.S. Trust nor UBS (nor any 

affiliates of U.S. Trust or UBS) received 

any trading commissions in connection 

with the sale of the Rights. 

12. The Applicants represent that an 

administrative exemption providing 

relief for the acquisition and holding of 

both the Rights and Entitlements by the 

Plans would be administratively feasible 

because an independent fiduciary was 

appointed by the Plans to approve the 

acquisition, holding, and disposition of 

the Rights and Entitlements. In this 

connection, U.S. Trust subsequently 

provided, in writing, a comprehensive, 

reasoned rationale concerning its 

determinations with respect to the 

Rights and Entitlements. Accordingly, 

the Applicants represent, there is no 

need for monitoring by the Department 

of the transactions that are the subject 

of this exemption request. 

The Applicants represent that, with 

respect to the Entitlements, an 

exemption would be in the interests of 

the Plans and of their participants and 

beneficiaries because it would allow the 

Plans to acquire additional UBS Shares, 

which the independent fiduciary 

believed to be beneficial to the Plans. 

The Applicants represent that, with 

respect to the Entitlements, an 

exemption would be protective of the 

rights of participants and beneficiaries 

because it would ensure that such 

participants have the same opportunity 

as other holders of UBS Shares to 

receive additional UBS Shares. 

With respect to the Rights, the 

Applicants represent that an exemption 

would be in the interests of the Plans, 

and protective of the Plans and of their 

participants and beneficiaries, because 

it would ensure that such individuals 

have the same opportunity as other 

holders of UBS Shares to sell the Rights 

on an exchange and receive the 

proceeds from any such sale. 

13. In summary, the Applicants 

represent that the past transactions for 

which exemptive relief is sought meet 

the statutory criteria of section 408(a) of 

the Act because: (a) All decisions 

regarding the acquisition and holding of 

the Rights and Entitlements by the Plans 

were made by U.S. Trust, Bank of 

America Private Wealth Management 

(U.S. Trust), a qualified, independent 

fiduciary; (b) the Plans’ acquisition of 

the Rights and Entitlements resulted 

from an independent act of UBS as a 

corporate entity, and without any 

participation on the part of the Plans; (c) 

the acquisition and holding of the 

Rights and Entitlements by the Plans 

occurred in connection with a capital 

improvement plan approved by the 

board of directors of UBS, in which all 

holders of UBS common stock, 

including the Plans, were treated 

exactly the same; (d) all holders of UBS 

common stock, including the Plans, 

were issued the same proportionate 

number of Rights based on the number 

of shares of UBS common stock held by 

such Plans; (e) all holders of UBS 

common stock, including the Plans, 

were issued the same proportionate 

number of Entitlements based on the 

number of shares of UBS common stock 

held by such Plans; (f) the acquisition of 

the Rights and Entitlements by the Plans 

occurred on the same terms made 

available to other holders of UBS 

common stock; (g) the acquisition of the 

Rights and Entitlements by the Plans 

was made pursuant to provisions of 

each such Plan for individually-directed 

investment of participant accounts; and 

(h) the Plans did not pay any fees or 

commissions in connection with the 

acquisition or holding of the Rights or 

Entitlements. 

Notice to Interested Persons: Notice of 

the proposed exemption shall be given 

to all interested persons in the manner 

agreed upon by the Applicants and the 

Department within 15 days of the date 

of publication in the Federal Register. 

Comments and requests for a hearing are 

due forty-five (45) days after publication 

of the notice in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Judge of the Department, 

telephone (202) 693–8339. (This is not 

a toll-free number). 

Robert W. Baird & Co. Incorporated, 

Located in Milwaukee, Wisconsin. 

Exemption Application Number D– 

11488 

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 or the Act) and 

section 4975(c)(2) of the Internal 

Revenue Code of 1986, as amended (the 

Code), and in accordance with the 

procedures set forth in 29 CFR Part 

2570, Subpart B (55 FR 32836, 32847, 

August 10, 1990).2

Section I. Loans Involving Auction Rate 

Securities 

If the proposed exemption is granted, 

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

through (D) and section 406(b)(1) and 

(2) of ERISA, and the taxes imposed by 

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

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

(E) of the Code, shall not apply, effective 

February 1, 2008, to the lending of 

Auction Rate Securities (as defined in 

section III(b)) by a Plan (as defined in 

section III(e)) to Robert W. Baird & Co. 

Incorporated or any of its affiliates 

(Baird), provided that the conditions set 

forth in section II have been met. 

Section II. Conditions 

(a) The last auction for the loaned 

Auction Rate Security was unsuccessful; 

(b) The Plan does not waive any rights 

or claims in connection with the 

Auction Rate Security as a condition of 

engaging in the loan (the Loan); 

(c) The transaction is not part of an 

arrangement, agreement or 

understanding designed to benefit a 

party in interest; 

(d) Baird is and remains a brokerdealer registered under the Securities 

Exchange Act of 1934 (the Exchange 

Act) or is exempt from registration 

under section 15(a)(1) of the Exchange 

Act as a dealer in exempted government 

securities (as defined in section 3(a)(12) 

of the Exchange Act); 

(e) The decision to enter into a Loan 

is made by a Plan fiduciary who is 

Independent (as defined in section 

III(d)) of Baird. Notwithstanding the 

foregoing, an employee of Baird who is 

the Beneficial Owner (as defined in 

section III(c)) of a Title II Only Plan (as 

defined in section III(f)) may direct the 

Title II Only Plan to engage in a Loan 

if all of the other applicable conditions 

of this exemption, if granted, have been 

met; 

(f) Prior to any Loan, Baird shall have 

furnished the Plan fiduciary described 

in paragraph (e) with: 

(1) The most recently available 

audited statement of Baird’s financial 

condition, as audited by a United States 

certified public accounting firm; 

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(2) The most recently available 

unaudited statement of Baird’s financial 

condition (if the unaudited statement is 

more recent than the audited statement 

described above); and 

(3) A representation that, at the time 

the Loan is negotiated, there has been 

no material adverse change in its 

financial condition since the date of the 

most recent financial statement 

furnished to the Plan. Such 

representations may be made by Baird’s 

agreement that each Loan shall 

constitute a representation by Baird that 

there has been no such material adverse 

change. Notwithstanding the foregoing, 

an employee of Baird who is the 

Beneficial Owner of a Title II Only Plan 

may receive the information described 

in this paragraph (f) if all of the other 

applicable conditions of this exemption, 

if granted, have been met; 

(g) The Loan is made pursuant to a 

written loan agreement (the Lending 

Agreement), the terms of which are at 

least as favorable to the Plan as an 

arm’s-length transaction with an 

unrelated party would be. The Lending 

Agreement must contain all of the 

material terms of the Loan and cover 

only the lending of Auction Rate 

Securities by the Plan to Baird. Such 

Lending Agreement may be in the form 

of a master agreement covering a series 

of Loans; 

(h) With respect to any Loan, Baird 

credits the lending Plan’s account with 

Baird (the Account) with an amount of 

cash equal to 100 percent of the total par 

value of the loaned Auction Rate 

Securities. Baird must credit the 

Account by the close of business on the 

day on which Baird receives the 

Auction Rate Securities from the Plan; 

(i) The Plan has the opportunity to 

derive compensation through the 

investment of the cash collateral 

described in paragraph (h); 

(j) The Plan pays Baird a rebate fee 

negotiated in advance of the Loan that 

does not exceed the interest and/or 

dividends the Plan receives in 

connection with its ownership of the 

loaned Auction Rate Securities; 

(k) The Plan may terminate the Loan 

at any time and for any reason; 

(l) Baird may terminate the Loan if: 

(1) The Plan closes its Account or 

reduces the balance thereof to less than 

100 percent of the total par value of the 

Auction Rate Securities that are the 

subject of the Loan; 

(2) The Plan is an individual 

retirement account described in section 

4975(e)(1)(B)–(F) of the Code (an IRA) 

and the Beneficial Owner of the IRA 

dies or divides the IRA pursuant to a 

divorce, annulment or marital 

settlement; 

(3) The Auction Rate Security 

associated with the Loan is redeemed by 

its issuer or may be sold at auction for 

its par value, or; 

(4) Baird identifies a secondary 

market for the Auction Rate Security 

which Baird has a reasonable basis to 

believe will permit the lending Plan to 

receive no less than 90% of the 

Security’s par value if the Auction Rate 

Security is promptly offered for sale on 

such market; 

(m) Following any Loan termination 

as set forth in (k) or (l), Baird shall 

deliver Auction Rate Securities to the 

Plan which are identical (or the 

equivalent thereof (in the event of a 

reorganization, recapitalization or 

merger of the issuer of the Auction Rate 

Securities)) to the Auction Rate 

Securities borrowed by Baird within the 

lesser of: 

(1) The customary delivery period for 

such securities; 

(2) Five business days; or 

(3) The time negotiated for such 

delivery by the Plan and Baird; 

(n) Following any Loan termination as 

set forth in (k) or (l), if Baird fails to 

return all the borrowed Auction Rate 

Securities (or the equivalent thereof (in 

the event of a reorganization, 

recapitalization or merger of the issuer 

of the Auction Rate Securities)) within 

the timeframe set forth in paragraph (m), 

the Plan may keep the full amount of 

cash collateral provided by Baird in 

connection with the Loan; 

(o) Following any Loan termination as 

set forth in (k) or (l), if the Plan fails to 

return the full amount of cash collateral: 

(1) Baird may liquidate the borrowed 

Auction Rate Securities, in which case 

the Plan’s obligation to return the cash 

collateral shall terminate. If the amount 

received by Baird from the liquidation 

(after deducting brokerage commissions 

and other transaction costs) exceeds the 

amount of cash collateral provided by 

Baird in connection with the Loan, then 

Baird shall pay such excess to the Plan. 

If the amount received by Baird from the 

liquidation (after deducting brokerage 

commissions and other transaction 

costs) is less than the amount of cash 

collateral provided by Baird in 

connection with the Loan, then the Plan 

shall pay such deficiency to Baird; or 

(2) If Baird is unable to liquidate the 

ARS, Baird will retain the ARS and 

reserve its right to sue the Plan; 

(p)(1) Where the Plan, as lender, does 

not return the full amount of cash 

collateral in connection with a Loan 

termination, Baird, as borrower, can 

seek interest at the prime rate on the 

amount of cash collateral owed by the 

Plan; 

(2) Where Baird, as borrower, does not 

return the excess described in (o)(1), if 

any, the Plan, as lender, can seek 

interest at the prime rate on the amount 

of excess owed by Baird; and 

(q) If Baird fails to comply with any 

provision of a loan agreement which 

requires compliance with this 

exemption, if granted, the Plan fiduciary 

who caused the Plan to engage in such 

transaction shall not be deemed to have 

caused the Plan to engage in a 

transaction prohibited by section 

406(a)(1)(A) through (D) of ERISA solely 

by reason of Baird’s failure to comply 

with the conditions of the exemption. 

Section III. 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 

a Title II Only Plan is established and 

includes a relative or family trust with 

respect to such individual; 

(d) The term ‘‘Independent’’ means a 

person who is: (1) Not Baird or an 

affiliate; and (2) not a relative (as 

defined in ERISA section 3(15)) of the 

party engaging in the transaction; 

(e) The term ‘‘Plan’’ means: Any plan 

described in section 3(3) of the Act and/ 

or section 4975(e)(1)(B)–(F) of the Code; 

and 

(f) The term ‘‘Title II Only Plan’’ 

means: Any plan described in section 

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

employee benefit plan covered by Title 

I of ERISA. 

Summary of Facts and Representations 

1. The applicant is Baird (hereinafter, 

either the Applicant or Baird), an 

employee-owned wealth management, 

capital markets, asset management and 

private equity firm headquartered in 

Milwaukee, Wisconsin. Baird is a 

registered broker-dealer and a member 

of the Financial Industry Regulatory 

Authority. Baird is also a registered 

investment advisor, providing 

investment advice and asset 

management services to clients that 

include the Plans, which are plans 

described in section 3(3) of the Act and/ 

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

2. The Applicant describes Auction 

Rate Securities (ARS), and the 

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3652 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 

3The Department notes that the Act’s general 

standards of fiduciary conduct applies 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 fiduciary 

with respect to a Plan must act prudently with 

respect to, among other things, the decision to lend 

Auction Rate Securities to Baird. The Department 

further emphasizes that it expects Plan fiduciaries, 

prior to entering into any transaction proposed 

herein, to fully understand the risks associated with 

this type of transaction following disclosure by 

Baird of all relevant information. Plan fiduciaries 

are cautioned to carefully consider their particular 

facts and circumstances before determining whether 

a Loan transaction with Baird would satisfy section 

404 of ERISA. 

arrangement by which ARS are bought 

and sold, as follows. Auction Rate 

Securities 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 

securities among the bidders at such 

rate on a pro-rata basis. 

3. The Applicant states that Baird 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 auction rate 

securities market in its sole discretion. 

In this regard, Baird 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 which would 

result in the auction rate being set at a 

specified rate); or (2) an auction from 

clearing at a rate that Baird believes 

does not reflect the market for the 

particular ARS being auctioned. 

4. The Applicant states that for many 

ARS, Baird 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. Baird is typically 

appointed to serve as a dealer in the 

auctions pursuant to an agreement 

between the issuer and Baird. That 

agreement provides that Baird will 

receive from the issuer auction dealer 

fees based on the principal amount of 

the securities placed through Baird. 

5. The Applicant states further that 

Baird may share a portion of the auction 

rate dealer fees it receives from the 

issuer with other broker-dealers that 

submit orders through Baird, for those 

orders that Baird successfully places in 

the auctions. Similarly, with respect to 

ARS for which broker-dealers other than 

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

with Baird for orders submitted by 

Baird. 

6. According to the Applicant, since 

February 2008, a minority of auctions 

have cleared, particularly involving 

municipalities. The Applicant 

represents that, in certain instances, 

when an auction fails, the affected 

Auction Rate Security may pay little or 

no interest and/or dividends to the 

holder of the Security. The Applicant 

states that, when this happens, the 

owner of the Auction Rate Security may 

benefit from lending such low-paying 

Security as part of a securities lending 

transaction that: (1) Is collateralized 

with cash; and (2) limits the loan rebate 

fee (described below) to the interest 

and/or dividends attributable to the 

loaned Auction Rate Security. The 

Applicant describes the loan rebate fee 

as the fee paid by the lender of the 

Auction Rate Security (i.e., a Plan) to the 

borrower of the Auction Rate Security 

(i.e., Baird). Under the methodology 

described above, if, for example, a Plan 

lends an Auction Rate Security paying 

a one percent rate of interest to Baird, 

the Plan would pay Baird a loan rebate 

fee of one percent, leaving the Plan free 

to invest and receive interest on the 

cash collateral. The Applicant notes that 

a Plan receiving cash collateral for its 

loaned Auction Rate Securities benefits 

to the extent it is able to derive a greater 

rate of return (through the investment of 

such cash collateral) than the Plan 

would otherwise have received, as 

interest and/or dividends, from the 

issuer of the Auction Rate Security. 

However, the Applicant points out that 

lending Auction Rate Securities 

pursuant to this methodology may not 

always be advisable.3 In this regard, the 

Applicant represents that, in certain 

instances, when an auction fails, the 

affected Auction Rate Security may 

default to a high rate of interest or 

dividends. To the extent a Plan lends an 

Auction Rate Security bearing a high 

rate of interest, and, under the terms of 

the loan agreement, the Plan is required 

to pay a loan rebate fee equal to the 

interest or dividends attributable to the 

loaned Security, the Plan may be 

foregoing a greater rate of return than 

the Plan is likely to receive from its 

investment of the cash collateral. The 

Applicant explains this detrimental 

result with the following example: (1) A 

Plan earning 10% on an Auction Rate 

Security would be paying that 10% to 

Baird in the form of a loan rebate fee; 

(2) the Plan is not likely to receive more 

than 10% on the investment of the cash 

collateral provided by Baird in 

connection with the loan. 

7. The Applicant states that several 

Plans holding Auction Rate Securities 

with failed auctions previously 

expressed an interest in lending such 

Auction Rate Securities to Baird and, in 

response, Baird sent the Lending 

Agreement to such Plans. Each Lending 

Agreement required, among other things 

as described in further detail below: (1) 

That Baird, as borrower, pay cash 

collateral to the Plan lending the 

Auction Rate Securities; and (2) the 

Plan, as lender, to pay Baird a rebate fee 

equal to the interest or dividends the 

Plan would otherwise have received in 

connection with its ownership of the 

Auction Rate Security. The Applicant 

states that certain of these loans have 

already occurred. In this regard, the 

Applicant represents that, as of 

December 23, 2008, 6 Plans have lent a 

total (par value) of $1,175,000 in 

Auction Rate Securities to Baird: The 

first Loan was entered into on August 

22, 2008, and the most recent Loan was 

entered into on November 24, 2008. 

8. In connection with the above 

Loans, and to permit additional future 

Loans, the Applicant is requesting this 

proposed exemption. According to the 

Applicant, all Loans covered by the 

exemption, if granted, have been (and 

will be) structured in a manner that is 

protective of lending Plans. In this 

regard, the Applicant represents that, 

prior to entering into a Loan, a Plan 

fiduciary who is independent of Baird 

(with very narrow exceptions) will 

receive a written Lending Agreement. 

Among other things, the Agreement will 

alert such fiduciary that lending 

Auction Rate Securities paying an 

above-market rate of interest may not be 

advisable. The Plan fiduciary will 

further receive timely audited 

information from Baird regarding the 

financial condition of Baird; and must 

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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 3653 

approve the Plan’s participation in the 

Loan. Upon such approval, Baird will 

credit the lending Plan’s Account with 

an amount of cash equal to 100 percent 

of the par value of loaned Auction Rate 

Securities. This crediting must be 

accomplished by the close of business 

on the day on which Baird receives the 

Auction Rate Securities from the Plan, 

and the lending Plan will thereafter 

have the opportunity to derive 

compensation through the investment of 

the cash collateral. The Applicant states 

any rebate fee paid by a lending Plan to 

Baird pursuant to a Loan has not (and 

will not) exceed the interest and/or 

dividends the Plan receives in 

connection with its ownership of the 

loaned Auction Rate Securities. The 

Applicant states also that each Loan will 

involve only Auction Rate Securities for 

which the last auction was 

unsuccessful, and that lending Plans 

will not waive any rights or claims in 

connection with the Auction Rate 

Security as a condition of engaging in 

the Loan. The Applicant represents 

further that the Loans will not be part 

of an arrangement, agreement or 

understanding designed to benefit a 

party in interest. 

9. That Applicant represents also that 

a Plan may terminate a Loan at any time 

and for any reason. Baird, however, may 

terminate a Loan only in certain limited 

and specified instances. In this latter 

regard, pursuant to the terms of each 

Lending Agreement, Baird may only 

terminate a Loan if: (1) The Plan closes 

its Account or reduces the balance 

thereof to less than 100 percent of the 

par value of the loaned Auction Rate 

Securities; (2) the Plan is an IRA and the 

Beneficial Owner of the IRA dies or 

divides the IRA pursuant to a divorce, 

annulment or marital settlement; (3) the 

Auction Rate Security associated with 

the Loan is redeemed by its issuer or 

may be sold at auction for its par value; 

or (4) Baird identifies a secondary 

market for the Auction Rate Security 

which Baird has a reasonable basis to 

believe will permit the lending Plan to 

receive no less than 90% of the 

Security’s par value if the Auction Rate 

Security is promptly offered for sale on 

such market. 

10. The Applicant states that each 

Lending Agreement contains several 

provisions designed to ensure that any 

Loan termination, as described above, 

will be carried out in a manner that is 

fair and equitable to lending Plans. In 

this regard, the Applicant represents 

that if a Loan is properly terminated and 

Baird fails to return all the borrowed 

Auction Rate Securities within the 

timeframe specified in the Lending 

Agreement, the Plan may keep the full 

amount of cash collateral provided by 

Baird in connection with the Loan. If 

the Plan fails to return the full amount 

of cash collateral, Baird may liquidate 

the borrowed Auction Rate Securities. 

In this last regard, if the net amount 

received by Baird from the liquidation: 

(1) exceeds the amount of cash collateral 

provided by Baird in connection with 

the Loan, then Baird shall pay such 

excess to the Plan; (2) is less than the 

amount of cash collateral provided by 

Baird in connection with the Loan, then 

the Plan shall pay such deficiency to 

Baird. The Applicant notes that, if Baird 

is unable to liquidate the Auction Rate 

Securities, Baird will retain the ARS 

and reserve its right to sue the Plan. The 

Applicant notes also that, under the 

Lending Agreement, if one party to the 

Loan does not return the full amount 

due its counterparty (e.g., if Baird does 

not return all the borrowed Auction 

Rate Securities to a Plan), the Loan 

counterparty will be entitled to interest 

equal to the prime rate. 

10. In summary, the Applicant 

represents that the transactions 

described herein satisfy the statutory 

criteria set forth in section 408(a) of the 

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

because, among other things: 

(a) Lending Plans will not waive any 

rights or claims in connection with the 

Auction Rate Security as a condition of 

engaging in the Loan; 

(b) Prior to any Loan, Baird shall have 

furnished a Plan fiduciary with, at a 

minimum, the most recently available 

audited statement of Baird’s financial 

condition, as audited by a United States 

certified public accounting firm; 

(c) Each Loan will be made pursuant 

to a written Lending Agreement, the 

terms of which will be at least as 

favorable to the Plan as an arm’s-length 

transaction with an unrelated party 

would be; 

(d) With respect to any Loan, Baird 

will credit the lending Plan’s Account 

with an amount of cash equal to 100 

percent of the par value of loaned 

Auction Rate Securities, and such 

crediting will occur by the close of 

business on the day on which Baird 

receives the Auction Rate Securities 

from the Plan; 

(e) The Plan will have the opportunity 

to derive compensation through the 

investment of the cash collateral; 

(f) The Plan will pay Baird a rebate fee 

negotiated in advance of the Loan that 

does not exceed the interest or 

dividends the Plan receives in 

connection with its ownership of the 

loaned Auction Rate Securities; 

(g) The Plan may terminate the Loan 

at any time and for any reason; 

(h) Baird may terminate the Loan in 

narrow circumstances described in the 

Lending Agreement; and 

(i) Any termination of the Loan will 

be fair and equitable to the lending Plan. 

Notice to Interested Persons 

The Applicant represents that the 

potentially interested participants and 

beneficiaries cannot all be identified 

and therefore the only practical means 

of notifying such participants and 

beneficiaries of this proposed 

exemption is by the publication of this 

notice in the Federal Register. However, 

written notice will be provided to a 

representative of each Plan that has 

engaged in a Loan as of the date this 

notice is published in the Federal 

Register. The notice shall contain a 

copy of the proposed exemption as 

published in the Federal Register and 

an explanation of the rights of interested 

parties to comment regarding the 

proposed exemption. Such notice will 

be provided by personal or express 

delivery within 15 days of the issuance 

of the proposed exemption. Comments 

and requests for a hearing must be 

received by the Department not later 

than 45 days from the date of 

publication of this notice of proposed 

exemption in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Chris Motta of the Department, 

telephone (202) 693–8540. (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, 

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3654 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 

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. 

Signed at Washington, DC, this 13th day of 

January 2009. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. E9–962 Filed 1–16–09; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

Request for Extension of Previously 

Approved Information Collection: 

ATAA Activities Report, Comment 

Request 

ACTION: Notice. 

SUMMARY: The Department of Labor, 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 

(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This 

program helps to ensure that requested 

data can be 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 can be 

properly assessed. Currently, the 

Employment and Training 

Administration is soliciting comments 

concerning the proposed extension of 

the Alternative Trade Adjustment 

Assistance Activities Report (ATAAAR). 

A copy of the proposed collection 

request (ICR) can be obtained by 

contacting the office listed below in the 

addressee section of this notice by 

accessing: http://www.doleta.gov/ 

OMBCN/OMBControlNumber.cfm. 

DATES: Written comments must be 

submitted to the office listed below on 

or before March 23, 2009. 

ADDRESSES: Submit written comments 

to Susan Worden, U.S. Department of 

Labor, Employment and Training 

Administration, Room C–5325, 200 

Constitution Avenue, Phone: 202–693– 

3708 (this is not a toll-free number), 

Fax: 202.693.3517, E-mail 

worden.susan@dol.gov. 

SUPPLEMENTARY INFORMATION: 

I. Section 246 of Title II, Chapter 2 of 

the Trade Act of 1974, as amended by 

the Trade Act of 2002, establishes 

ATAA as an alternative assistance 

program for older workers certified 

eligible to apply for Trade Adjustment 

Assistance. This program is effective for 

petitions filed on or after August 6, 

2003. ATAA is designed to allow 

eligible older workers for whom 

retraining may not be appropriate to 

quickly find reemployment and receive 

a wage subsidy to help bridge the salary 

gap between their old and new 

employment. To receive the ATAA 

benefits, workers must be TAA and 

ATAA certified. 

Key workload data on ATAA is 

needed to measure program activities 

and to allocate program and 

administrative funds to the State 

Agencies administering the Trade 

programs for the Secretary. States will 

provide this information on the ATAA 

Activities Report (ATAAAR). 

Regulations published at 617.61 give 

the Secretary authority to require the 

States to report the data described in 

this directive; therefore the respondents’ 

obligation to fulfill these requirements 

is mandatory. 

II. Review Focus: 

The Department of Labor is 

particularly interested in comments 

which: 

• 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 

• Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submissions 

of responses. 

III. Current Actions: 

Type of Review: Extension without 

change. 

Agency: Employment and Training 

Administration. 

Title: Alternative Trade Adjustment 

Assistance Activities Report (ATAAAR), 

ETA. 

OMB Number: 1205–0459. 

Recordkeeping: Respondent is 

expected to maintain records which 

support the requested data for three 

years. 

Affected Public: State, Local or Tribal 

Government. 

Burden (annual): 50 Responses × .43 

Hours × 4 quarters = 86 hours. 

Total Respondents: 50. 

Frequency: Quarterly. 

Total Responses: 200 annually. 

Average Time per Response: .43 

Hours. 

Estimated Total Burden Hours: 86 

Hours. 

Total Burden Cost (capital/startup): 

$0. 

Total Burden Cost (operating/ 

maintaining): $0. 

Comments submitted in response to 

this notice will be summarized and/or 

included in the request for Office of 

Management and Budget approval of the 

information collection request; they will 

also become a matter of public record. 

Dated: January 12, 2009. 

Erin FitzGerald, 

Director, Division of Trade Adjustment 

Assistance, Office of National Response, 

Employment and Training Administration. 

[FR Doc. E9–1027 Filed 1–16–09; 8:45 am] 

BILLING CODE 4510–FN–P 

NATIONAL FOUNDATION ON THE 

ARTS AND THE HUMANITIES 

National Endowment for the Arts; Arts 

Advisory Panel 

Pursuant to Section 10(a)(2) of the 

Federal Advisory Committee Act (Pub. 

L. 92–463), as amended, notice is hereby 

given that six meetings of the Arts 

Advisory Panel to the National Council 

on the Arts will be held at the Nancy 

Hanks Center, 1100 Pennsylvania 

Avenue, NW., Washington, DC, 20506 

as follows (ending times are 

approximate): 

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