Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / Notices 3929 

1 88 FR 30785 (May 12, 2023). 

2For purposes of this exemption, the term 

‘‘Affiliated QPAM’’ and ‘‘Related QPAM’’ mean, 

respectively: (1) UBS Americas, UBS Hedge Fund 

Solutions LLC, Credit Suisse Asset Management, 

LLC, and any future separate legal entity within the 

Asset Management or the Global Wealth 

Management Americas U.S. divisions of UBS that 

qualifies as a ‘‘qualified professional asset manager’’ 

(as defined in Section VI(a) of PTE 84–14) and that 

relies on the relief provided by PTE 84–14, and 

with respect to which UBS is an ‘‘affiliate’’ (as 

defined in Part VI(d) of PTE 84–14) and (2) any 

current or future ‘‘qualified professional asset 

manager’’ (as defined in Section VI(a) of PTE 84– 

14) that relies on the relief provided by PTE 84–14, 

and with respect to which UBS owns a direct or 

indirect five (5) percent or more interest. The terms 

‘‘Affiliated QPAM’’ and ‘‘Related QPAM’’ exclude 

any Misconduct Entity, and the term ‘‘Related 

QPAM’’ excludes any entity with respect to which 

a Misconduct Entity is an ‘‘affiliate’’ (as defined in 

section VI(d)(1) of PTE 84–14). 

3 89 FR 65, 23090 (April 3, 2024). 

4The term ‘‘Covered Plan’’ means a plan subject 

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

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

IRA), in each case, with respect to which an 

Affiliated QPAM relies on PTE 84–14 or with 

respect to which an Affiliated QPAM (or any UBS 

affiliate) has expressly represented that the manager 

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

Covered Plan does not include an ERISA-covered 

plan or IRA to the extent the Affiliated QPAM has 

expressly disclaimed reliance on QPAM status or 

PTE 84–14 in entering into a contract, arrangement, 

or agreement with the ERISA-covered plan or IRA. 

Notwithstanding the above, an Affiliated QPAM 

may disclaim reliance on QPAM status or PTE 84– 

14 in a written modification of a contract, 

arrangement, or agreement with an ERISA-covered 

plan or IRA, where: the modification is made in a 

bilateral document signed by the client; the client’s 

attention is specifically directed toward the 

disclaimer; and the client is advised in writing that, 

with respect to any transaction involving the 

client’s assets, the Affiliated QPAM will not 

represent that it is a QPAM, and will not rely on 

the relief described in PTE 84–14. 

(o) All the material facts and 

representations set forth in the Proposed 

Exemption’s Summary of Facts and 

Representations are true and accurate at 

all times. 

Exemption Date: This exemption is in 

effect as of January 15, 2025. 

Signed at Washington, DC. 

George Christopher Cosby, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2025–00810 Filed 1–14–25; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Prohibited Transaction Exemption 2025– 

03; Exemption Application No. D–12098] 

Exemption From Certain Prohibited 

Transaction Restrictions Involving 

UBS AG (UBS), Located in Zurich, 

Switzerland 

AGENCY: Employee Benefits Security 

Administration, Department of Labor. 

ACTION: Notice of exemption. 

SUMMARY: This exemption provides 

conditional prospective relief that 

allows current and future asset 

managers under the UBS corporate 

umbrella (UBS QPAMs) to continue to 

rely on PTE 84–14 for the five-year 

period from June 12, 2024, through June 

11, 2029, notwithstanding four 

judgments of conviction involving 

entities within the UBS and CSAG 

(Credit Suisse AG) corporate umbrellas. 

The exemption also provides 

conditional retroactive relief to UBS 

QPAMs covering their reliance on PTE 

84–14 during the one-year period from 

June 12, 2023, through June 11, 2024. 

DATES: The exemption is in effect from 

June 12, 2023, through June 11, 2029. 

FOR FURTHER INFORMATION CONTACT: 

Nicholas Schroth of the Department at 

(202) 693–8571 (this is not a toll-free 

number). 

SUPPLEMENTARY INFORMATION: On June 

11, 2024, the Department published a 

notice of proposed exemption in the 

Federal Register,1 (the Proposal) that 

would permit UBS’ Affiliated QPAMs 

and/or the Related QPAMs (referred to 

herein individually or collectively as 

the UBS QPAMs) 2 to continue to rely 

on the exemptive relief provided by PTE 

84–14, notwithstanding several 

judgments of conviction involving 

entities within the UBS and CSAG 

corporate umbrellas that are described 

below.3 The Department is hereby 

granting this exemption to ensure that 

participants and beneficiaries of ERISAcovered plans and Individual 

Retirement Accounts managed by UBS 

QPAMs (collectively referred to as 

Covered Plans) 4 do not suffer harm that 

UBS represented would occur if the 

UBS QPAMs can no longer rely on PTE 

84–14. This exemption provides only 

the relief expressly specified herein and 

does not provide relief from violations 

of any law other than the prohibited 

transaction provisions of Title I of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA), and 

the Internal Revenue Code of 1986, as 

amended (the Code). 

As discussed below, based on the 

administration record, the Department 

makes the requisite findings under 

ERISA section 408(a) that this 

exemption is: (1) administratively 

feasible, (2) in the interest of Covered 

Plans and their participants and 

beneficiaries, and (3) protective of the 

rights of the participants and 

beneficiaries of Covered Plans. Effective 

December 31, 1978, section 102 of the 

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. 

Accordingly, this final individual 

exemption is being issued solely by the 

Department. Affected parties should be 

aware that the exemption’s conditions 

are, individually and collectively, 

necessary for the Department to grant 

the requested relief. Absent these 

conditions, the Department would not 

have granted this exemption. 

Benefits of the Exemption: 

The Department’s objective in 

granting this exemption is to protect 

Covered Plans from the harms and costs 

UBS represents would be imposed on 

them if the UBS QPAMs no longer could 

rely on the relief provided in PTE 84– 

14. Among other important conditions, 

this exemption ensures that Covered 

Plans can terminate their relationships 

with one of the UBS QPAMs in an 

orderly and cost-effective fashion when 

the fiduciary of a Covered Plan 

determines that it is prudent to do so. 

This exemption promotes adherence to 

basic fiduciary standards and 

responsibilities required by Title I of 

ERISA and the Code by the UBS QPAMs 

and reinforces their obligation to act 

with a high degree of integrity on behalf 

of their Covered Plan clients as required 

by PTE 84–14. 

Background 

1. UBS is a Swiss-based global 

financial services company organized 

under the laws of Switzerland. On June 

12, 2023, UBS acquired CSAG, another 

Swiss-based global financial services 

firm. This acquisition brought Credit 

Suisse Asset Management, LLC, a 

subsidiary of CSAG and a QPAM, under 

the UBS corporate umbrella. UBS 

represents that on May 1, 2024, Credit 

Suisse Asset Management, LLC was 

merged into UBS Asset Management 

(Americas) LLC. (UBS Americas), and 

UBS Americas is the surviving entity 

after the merger. As of November 5, 

2024, UBS represents that UBS 

Americas is the only current Affiliated 

QPAM. 

PTE 84–14 

2. PTE 84–14 reflects the 

Department’s conclusion that it could 

provide broad relief from the prohibited 

transaction provisions of ERISA section 

406(a) and Code section 4975(c)(1) only 

if the commitments and the investments 

of plan assets and the negotiations 

leading thereto are the sole 

responsibility of an independent 

discretionary manager called a Qualified 


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5 ‘‘Qualified Plan Asset Manager’’ or ‘‘QPAM’’ is 

defined in Section VI(a) of PTE 84–14. (See 89 FR 

65, 23090, 23141 (April 3, 2024)). 6Section VI(d) of PTE 84–14 defines the term 

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

person directly or indirectly through one or more 

intermediaries, controlling, controlled by, or under 

common control with the person, (2) Any director 

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

Any corporation, partnership, trust or 

unincorporated enterprise of which such person is 

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

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

person who—(A) is a highly compensated employee 

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

officer (earning 10 percent or more of the yearly 

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

authority, responsibility or control regarding the 

custody, management or disposition of plan assets.’’ 

(See 89 FR 23090, 23141 (April 3, 2024)). 

7The prohibited misconduct provision was 

effective on June 17, 2024 (89 FR 65, 23090 (April. 

3, 2024)). 8 In connection with the Credit Suisse-related 

convictions, the Department issued the following 

exemptions: PTE 2022–01 (87 FR 1186 (Jan. 10, 

2022)); PTE 2019–07 (84 FR 61928 (Nov. 14, 2019)); 

PTE 2015–14 (80 FR 59817 (Oct. 2, 2015)); PTE 

2014–11 (79 FR 68716 (Nov. 18, 2014)). In 

connection with the UBS-related convictions, the 

Department issued: PTE 2020–01 (85 FR 8020 (Feb. 

12, 2020)); PTE 2019–01 (84 FR 6163 (Feb. 26, 

2019)); PTE 2017–07 (82 FR 61903 (Dec. 29, 2017)); 

PTE 2016–17 (81 FR 94049 (Dec. 22, 2016)); PTE 

2013–09 (78 FR 56740 (Sep. 13, 2013)). 

9The UBS QPAMs received exemptive relief to 

continue to rely on PTE 84–14 notwithstanding the 

2013 Conviction. However, the Section I(g) 

disqualification period for the 2013 Conviction 

expired on or about February 19, 2023; therefore, 

the UBS QPAMs no longer require exemptive relief 

from the Department to continue their reliance on 

PTE 84–14 with respect to the 2013 conviction. 

10 In PTE 2023–14, the Department erroneously 

referred to this conviction as the 2018 Conviction. 

The conviction actually occurred on January 10, 

2017 (as described in PTE 2020–01, the prior UBS 

exemption). 

Plan Asset Manager or ‘‘QPAM’’ that 

meets the exemption’s conditions.5

3. Section I(g) of PTE 84–14 provides 

that a QPAM becomes ineligible to rely 

on the relief provided by PTE 84–14 for 

ten years following: (1) a Criminal 

Conviction, as such term is defined in 

Section VI(s) of PTE 84–14, of the 

QPAM or an ‘‘affiliate’’ thereof,6 or any 

direct or indirect owner of a five percent 

or more interest in the QPAM; or (2) on 

or after June 17, 2024, the date on which 

the QPAM, an ‘‘affiliate’’ thereof, or any 

direct or indirect owner of a five percent 

or more interest in the QPAM is found 

or determined in a final judgment or 

court-approved settlement by a Federal 

or State criminal or civil court to have 

engaged in Prohibited Misconduct, as 

such term is defined in Section VI(t) of 

amended PTE 84–14.7

4. The Department included Section 

I(g) in PTE 84–14 based on its 

expectation that QPAMs will maintain a 

high standard of integrity in order to 

remain eligible to receive the broad 

prohibited transaction relief provided in 

PTE 84–14. This expectation extends 

not only to the QPAM itself, but also to 

those who may be in a position to 

influence the QPAM’s policies. 

Relevant Convictions 

5. UBS-related entities are currently 

the subject of four criminal convictions 

that violate Section I(g) of PTE 84–14 

(the Convictions). To protect Covered 

Plans from the costs and harms that 

UBS represents could arise if the UBS 

QPAMs suddenly lost their ability to 

engage in potentially beneficial 

transactions on behalf of their Covered 

Plan clients under PTE 84–14 due to 

these Convictions, the Department 

issued several temporary individual 

prohibited transaction exemptions over 

several years with protective conditions 

that are discussed below.8

6. The 2017 UBS Conviction. In 2013, 

UBS Securities Japan Co. Ltd. (UBS 

Securities Japan) pled guilty to a crime 

arising out of its fraudulent submission 

of Yen London Interbank Offer (Yen 

LIBOR) rates between 2006 and 2009, 

and its participation in a scheme to 

defraud counterparties to interest rate 

derivatives trades executed on its behalf 

by secretly manipulating certain 

benchmark interest rates to which the 

profitability of those trades was tied (the 

2013 UBS Conviction).9

7. In connection with misconduct 

related to the 2013 UBS Conviction, 

UBS and the United States Department 

of Justice (DOJ) entered into a NonProsecution Agreement (the LIBOR 

NPA) wherein the DOJ agreed not to 

criminally prosecute UBS for any crimes 

related to UBS’s misconduct involving 

its submission of Yen LIBOR rates and 

other benchmark rates between 2001 

and 2010 (LIBOR Manipulation). A 

provision of DOJ’s LIBOR NPA required 

UBS to avoid engaging in additional 

criminal activity for two years from the 

date of the LIBOR NPA. 

8. Separately from the LIBOR 

Manipulation and after entering into the 

LIBOR NPA, UBS also was determined 

by DOJ to have participated in deceptive 

currency trading and sales practices 

with respect to certain foreign exchange 

(FX) market transactions and collusive 

conduct in certain FX markets (FX 

Misconduct). DOJ determined that by 

engaging in the FX Misconduct, UBS 

had breached the terms of the LIBOR 

NPA. As a result, UBS entered a guilty 

plea and was convicted on January 10, 

2017 of engaging in the LIBOR 

Manipulation that was the subject of the 

LIBOR NPA. Specifically, UBS pled 

guilty to a scheme to defraud 

counterparties to interest rate 

derivatives transactions by secretly 

manipulating benchmark interest rates 

to which the profitability of those 

transactions was tied. This conviction is 

referred to as the ‘‘2017 UBS 

Conviction,’’ 10 which disqualifies UBSrelated QPAMs from relying on the 

relief set forth in PTE 84–14 for a tenyear period from January 10, 2017, 

through January 9, 2027. 

9. The 2014 CSAG Conviction. On 

May 19, 2014, the Tax Division of DOJ 

and the U.S. Attorney’s Office for the 

Eastern District of Virginia filed a onecount criminal information in the 

District Court for the Eastern District of 

Virginia charging CSAG with a 

conspiracy to violate Code section 

7206(2) in contravention of Title 18, 

United States Code, Section 371. 

According to the Statement of Facts, for 

decades before and through 

approximately 2009, CSAG operated an 

illegal cross-border banking business 

that knowingly and willfully aided and 

assisted thousands of U.S. clients in 

opening and maintaining undeclared 

accounts that concealed offshore assets 

and income from the Internal Revenue 

Service. On May 19, 2014, pursuant to 

a plea agreement (the Plea Agreement), 

CSAG pleaded guilty to a charge of 

assisting U.S. citizens in federal income 

tax evasion. The District Court entered 

a judgment of conviction against CSAG 

on November 21, 2014, which 

disqualified CSAG-related (and, thus, 

UBS-related QPAMs due to the merger) 

from the relief set forth in PTE 84–14 

from November 21, 2014, through 

November 20, 2024. 

10. The 2019 UBS France Conviction. 

In 2013, France opened an investigation 

into UBS, UBS France, and certain 

former employees of UBS France S.A. 

The investigation centered on the 

maintenance of foreign (‘‘cross-border’’) 

UBS bank accounts held for private 

citizens. Following a trial in the French 

First Instance Court, the French court 

convicted UBS and UBS France on 

February 20, 2019, of illegally soliciting 

clients from 2004 to 2012 and 

laundering the proceeds of tax fraud 

from 2004 to 2012. Based on this 

conviction, the UBS-related QPAMs 

were disqualified from relying on the 

relief provided in PTE 84–14 from 

February 20, 2019, through February 19, 

2029. 

11. The 2022 Credit Suisse Securities 

(Europe) Limited (CSSEL) Conviction. 

On October 19, 2021, DOJ’s, Criminal 

Division, Money Laundering and Asset 

Recovery Section and Fraud Section and 

the United States Attorney’s Office for 

the Eastern District of New York, filed 

a criminal information in the District 

Court for the Eastern District of New 


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11Before the merger of UBS and CSAG, PTE 

2020–01 required that the UBS QPAMs submit to 

annual audits covering periods from March 20 

through March 19 of the following year (the CS 

QPAMs were on a different audit schedule). Upon 

the merger of UBS and CSAG on June 12, 2023, a 

one-year temporary exemption provided in PTE 

2023–14 became effective. PTE 2023–14 provided 

that the combined UBS–CSAG entity would resume 

audits on a unified schedule from June 12, 2023, 

through June 11, 2024. Thus, the last audit to occur 

under PTE 2020–01, originally scheduled from 

March 20, 2023 through March 19, 2024, was 

modified to run from March 20, 2023, through June 

11, 2023 and became known as the Stub Period 

Audit. 

12 In a supplemental letter to the Department 

dated May 29, 2024, UBS’ counsel informed the 

Department that the auditor notified UBS about the 

failure to complete the stub audit in January 2024, 

and the auditor sent a draft of the engagement letter 

to perform the audit to UBS on February 12, 2024. 

These events occurred before the Department 

received UBS’ exemption application on February 

23, 2024, and UBS should have disclosed them in 

its exemption application. 13 29 CFR 2570.35(d). 

York charging CSSEL with one count of 

conspiracy to commit wire fraud in 

violation of 18 U.S.C. 1349. CSSEL 

agreed to resolve the action through a 

plea agreement presented to the New 

York District Court on October 19, 2021 

(the CSSEL Plea Agreement). Under the 

CSSEL Plea Agreement, CSSEL agreed 

to enter a guilty plea to the charge set 

out in the CSSEL information (the 

CSSEL Plea). 

The District Court entered a judgment 

of conviction against CSSEL on July 22, 

2022. Due to the judgement of 

conviction, the CSAG-related QPAMs 

(and, thus, UBS-related QPAMs due to 

the merger) are ineligible from relying 

on the relief set forth in PTE 84–14 from 

July 22, 2022 through July 21, 2032. 

Requests for Relief and Additional 

Information 

12. On April 17, 2023, UBS and CSAG 

(and their affiliated QPAMs) submitted 

an exemption application to the 

Department that requested 

modifications to their existing 

exemptions due to their imminent 

merger. On June 2, 2023, the 

Department published PTE 2023–14, 

which allowed UBS-related and Credit 

Suisse-related QPAMs to continue to 

rely on PTE 84–14, notwithstanding the 

Convictions, for one year following the 

date of the merger, which UBS 

represents occurred on June 12, 2023 

(the Merger). PTE 2023–14 had an audit 

requirement tailored to the unique 

circumstances of the one-year 

exemption, which is referred to as the 

Stub Period Audit.11

13. On February 22, 2024, UBS filed 

an exemption application with the 

Department that requested a five-year 

extension of PTE 2023–14 from June 12, 

2024, through June 11, 2029. During the 

Department’s review process for UBS’ 

exemption application, the Department 

requested additional information from 

UBS regarding the auditor’s findings for 

each audit that was performed before its 

application was submitted. In response, 

UBS’ counsel notified the Department 

on May 3, 2024, that UBS failed to 

complete the Stub Period Audit report, 

and UBS did not submit the certified 

audit report to the Department until 

May 10, 2024.12 In fact, the record 

currently before the Department 

indicates that UBS did not engage the 

independent auditor, Fiduciary 

Counselors Inc, to complete the Stub 

Period Audit until March 18, 2024, 

notwithstanding the fact that PTE 2023– 

14 required the audit to be completed by 

December 9, 2023, and for the audit 

report to be certified and submitted to 

the Department by January 23, 2024. 

The Department stated in the proposed 

exemption that UBS should have 

engaged an independent auditor well in 

advance of the dates set forth in Section 

III(j) of the exemption for the audit to be 

timely completed and for the audit 

report to be timely certified and 

submitted to the Department. 

14. On June 11, 2024, the Department 

published a proposed exemption in the 

Federal Register with an effective 

period from June 12, 2024, through June 

11, 2029. The Proposal alerted UBS that 

its failure to timely comply with the 

Stub Period Audit requirement violated 

an important condition of the relief the 

Department provided in PTE 2023–14. 

UBS itself pointed out the importance of 

the audit requirement in its exemption 

application where it stated that, ‘‘[t]he 

purpose of the independent audit is to 

give [Covered Plan] clients and the 

Department the confidence that the 

asset manager is complying with ERISA, 

and that continued exemptive relief is 

warranted.’’ In the Proposal, the 

Department reiterated this point by 

stating that it included the independent 

audit requirements in the exemption to 

ensure that the UBS QPAMs remain 

insulated from the convicted UBS and 

Credit Suisse entities and could be 

trusted to safeguard plan assets, 

notwithstanding the convictions. 

15. Because the UBS QPAMs failed to 

comply with the audit conditions of the 

exemption, the Department determined 

that they were ineligible to rely on the 

relief provided by PTE 2023–14, and the 

Department indicated in the proposed 

exemption that it is considering whether 

it should grant retroactive relief 

extending back to June 12, 2023 as part 

of this exemption, which would 

otherwise provide relief only from June 

12, 2024 through June 11, 2029. The 

Department requested comments from 

UBS, the public, and interested parties 

on whether retroactive relief is 

appropriately including in this 

exemption, which would extend 

exemptive coverage to include the 

period from June 12, 2023, through June 

11, 2024, as well as June 12, 2024, 

through June 11, 2029. The Department 

also requested UBS provide a detailed 

statement regarding how a grant of 

retroactive relief would be consistent 

with the requirements for such relief set 

forth in the Department’s exemption 

procedure regulation.13

16. In connection with the 

Department’s request for comment on 

retroactive relief, in the Proposal, the 

Department also requested UBS to 

describe how Covered Plans were 

safeguarded in light of this failure to 

satisfy the Stub Audit condition and 

whether UBS acted in good faith despite 

its failure. UBS’s comments and the 

Department’s responses to those 

comments are discussed below. 

Retroactive Relief Periods 

17. The exemption provides 

retroactive relief to UBS for two periods. 

The first period covers June 12, 2023, 

through June 11, 2024, and allows UBS 

QPAMs to rely on PTE 84–14 despite 

UBS’ failure to comply with the Stub 

Period Audit requirement in Section 

III(j)(1) of PTE 2023–14. The second 

period of retroactive relief applies from 

June 12, 2024, through January 15, 2025, 

and is needed because UBS failed to 

submit a complete exemption 

application with sufficient information 

(including a description of its failure to 

meet the Stub Period Audit 

Requirement) and enough lead time for 

the Department to develop a complete 

administrative record, publish a 

proposed exemption with an adequate 

public notice and comment period, 

consider the public comments received, 

and publish this grant notice exemption 

before the relief provided under PTE 

2023–14 expired. 

Department’s Note: 

18. The Department notes that this 

individual exemption would solely 

provide relief from the ineligibility 

under PTE 84–14 Section I(g) that 

occurred with respect to the four 

criminal convictions of entities within 

the UBS corporate family that are 

described above. The conditions of this 

exemption require the UBS QPAMs to 

adhere to every other specific condition 

for relief that is required under PTE 84– 

14, as amended, including the 

ineligibility provision in the amended 

version of PTE 84–14, which became 

effective on June 17, 2024. If any UBSVerDate Sep<11>2014 18:37 Jan 14, 2025 Jkt 265001 PO 00000 Frm 00145 Fmt 4703 Sfmt 4703 E:\FR\FM\15JAN1.SGM 15JAN1

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14PTE 2024–03’s original deadline for the 

comment period was July 15, 2024. The Department 

extended the comment period to July 29, 2024, 

based on two requests from commentors. (See 89 FR 

137, 58189). 

15The Department also received comments three 

months after the end of the comment period, as 

extended, which the Department did not consider. 

16The representations stated herein that are 

attributable to UBS or any commenter do not reflect 

factual findings or opinions of the Department. The 

Department notes that the availability of this 

exemption is subject to the express condition that 

the material facts and representations contained in 

the are true and complete at all times, and 

accurately describe all material terms of the 

transactions covered by the exemption. If there is 

any material change in a transaction covered by the 

exemption, or in a material fact or representation 

described in the application, the exemption will 

cease to apply as of the date of the change. 

17The Department is not opining on UBS’ 

determination as to whether the transactions it has 

described are prohibited transactions as that is 

outside the scope of this prohibited transaction 

exemption. 

Affiliated QPAMs violate any 

conditions of amended PTE 84–14 in 

the future, they would fail to comply 

with the requirements of the exemption, 

and the relief provided under this 

exemption would become unavailable. 

Written Comments 

19. In the Proposal, the Department 

invited all interested persons to submit 

written comments and/or requests for a 

public hearing with respect to the notice 

of the Proposal by July 29, 2024.14 The 

Department received written comments 

from the following commenter: (1) UBS; 

(2) an anonymous commenter; (3) the 

ERISA Industry Committee; (4) SIFMA; 

and (5) a group of individuals referring 

to themselves as the ‘‘QPAM 

Coalition.’’ 15

20. In granting this exemption, the 

Department has considered the public 

comments noted above, as well as 

representations by UBS. If any material 

statement or representation by UBS to 

the Department that is included in its 

application or its comment is not or has 

not remained completely and factually 

accurate, UBS must immediately alert 

the Department.16

Comments From UBS 

Comment 1: Department’s Request for 

Justification of Retroactive Relief for 

Failure To Perform Audit 

21. As stated above, in the Proposal, 

the Department requested that UBS 

demonstrate whether retroactive relief is 

appropriate, and that the UBS QPAMs at 

a minimum: (a) ensured that appropriate 

safeguards were established during the 

period of exemptive relief provided 

under PTE 2023–14 from June 12, 2023 

to June 11, 2024, to protect the interests 

of Covered Plan clients (the First 

Retroactive Period); (b) Covered Plan 

clients were not harmed by non-exempt 

transactions during the First Retroactive 

Period; (c) a responsible plan fiduciary 

acted in good faith and took appropriate 

steps that were necessary to protect the 

Covered Plans from abuse, loss, and risk 

during the First Retroactive Period; and 

(d) the UBS QPAMs have adjusted their 

policies and procedures in light of past 

failures to comply with PTE 2023–14 to 

ensure that such failures will not 

reoccur. 

22. Comment #1(a): UBS Ensured and 

will ensure that appropriate safeguards 

were established during the First 

Retroactive Period to protect the 

interests of Covered Plan. UBS stated 

that appropriate safeguards were 

established during the First Retroactive 

Period despite its failure to properly 

perform the required audit. Specifically, 

UBS represents that the UBS official 

responsible for overseeing the audits 

failed to meet the deadline, in part, 

because they mistakenly believed that 

the Stub Period Audit’s findings would 

be rolled into the following year’s audit 

report. UBS represents that, upon 

realizing the mistake, it engaged an 

independent auditor who completed the 

Stub Period Audit. The Auditor 

concluded that it found no deficiencies 

on behalf of UBS or the UBS QPAMs 

during the Stub Audit period, and the 

Auditor provided no recommendations 

for improvement. In its comment letter, 

UBS asserted that the successful 

completion of the Stub Period Audit, 

albeit late, evidences that UBS 

established adequate safeguards to 

protect Covered Plans during the First 

Retroactive Period. 

23. Comment #1(b): Covered Plan 

clients were not harmed by non-exempt 

transactions during the First Retroactive 

Period. UBS represented that Covered 

Plans were not harmed by non-exempt 

transactions. To make that 

determination, UBS reviewed all Client 

Plan transactions that UBS conducted 

from June 2023 to June 2024, which 

encompassed more than 16,000 

transactions. UBS’ review determined 

that there were, in fact, no non-exempt 

prohibited transactions. In this regard, 

UBS determined that potentially 

implicated Client Plan transactions for 

which UBS QPAMs would otherwise 

rely on PTE 84–14 were either (1) 

covered, in the alternative, by other 

prohibited transaction exemptions or (2) 

were not, in fact, prohibited 

transactions. 

24. The transactions that UBS 

determined were not prohibited 

transactions in need of exemptive relief 

consisted of approximately three to four 

hundred loans held during the relevant 

period in which one component of the 

investment—a service fee paid to an 

administrative agent by the borrower, 

rather than the plan—was not covered 

by an alternative exemption and very 

likely involved a party in interest for 

many of the transactions. UBS 

confirmed to the Department, however, 

that the fee was not paid from plan 

assets. UBS provided that the fee was 

paid by the counterparty to the loans, 

not the plan or UBS, and the fee was not 

incorporated in the plan’s payment for 

the loans’ overarching investment 

because, as the lender, the plan’s 

investment was in the form of lending 

money to the counterparty. UBS further 

stated that the borrower of these loans 

also selects the administrative agent on 

its own accord without direction from 

plans or UBS. Furthermore, the fees are 

usually negotiated between the 

administrative service agent and the 

borrower before the identity of the plan 

lender is even known.17

25. Comment 1(c): A responsible plan 

fiduciary acted (and is acting) in good 

faith and took (and will take) 

appropriate steps that are necessary to 

protect the Covered Plans from abuse, 

loss, and risk during the Relief Period. 

UBS maintains that the UBS QPAMs 

acted in good faith to protect Covered 

Plans because they maintained 

extensive protocols to ensure it upheld 

its fiduciary responsibilities and no 

Covered Plans were harmed during the 

Relief Period. For example, UBS 

represents that its protocols required the 

UBS QPAMs to seek the best possible 

trade execution for each and every 

transaction regardless of the identity of 

the counterparty, and in accordance 

with each of the written investment 

guidelines approved by each Covered 

Plan. Further, UBS addressed the failure 

to perform the Stub Audit and proposed 

changes to its protocols, as discussed 

immediately below, to ensure that such 

a failure does not reoccur. 

26. Comment 1(d): The UBS QPAMs 

have adjusted their policies and 

procedures in light of past failures to 

comply with PTE 2023–14 to ensure that 

such failures will not reoccur. To 

prevent the reoccurrence of a missed 

Stub Period Audit, UBS proposed to 

take the following steps: (1) designate a 

second Compliance Officer both to 

facilitate the timely completion of 

exemption reviews and audits and 

check to ensure that exemption 

deadlines are correctly identified and 

completed; (2) inform the Auditor in 

writing within 45 days after receiving 

the Auditor’s engagement agreement of 

the target dates for the Auditor to send 

UBS the initial document requests and 

for UBS to respond to those requests; (3) 


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18UBS submitted a report by an independent 

consultant in support of the estimated liquidation 

cost. 19The report was provided by John Minihan, 

Ph.D., a former Senior Lecturer of finance at MIT 

Sloan School of Management, a former associate 

editor of the Journal of Investing, and currently an 

investment management industry consultant with 

30 years of experience in institutional investment 

consulting. Dr. Minahan provided, in summary, that 

UBS’s estimates and assumptions were reasonable 

as expected values but with two minor caveats. 

First, asset managers can take several years to 

transition assets and if market conditions 

deteriorate during that time transitions could cause 

additional risk to ERISA clients. Second, new asset 

managers may decide that not all assets need to be 

liquidated and, if so, an assumption that all assets 

need to be liquidated would overstate transition 

costs. Dr. Minahan believes that these two caveats 

do not undermine the reasonableness of the 

estimated expected values ‘‘as long as they do not 

overwhelm each other.’’ He also provides that these 

caveats are difficult to quantify and work in 

opposite directions. 

20 In footnote 24 of the Proposal, ‘‘[t]he 

Department notes that UBS provided information 

not mentioned in this proposal regarding the 

potential losses to ERISA clients, but without 

clearly identifying the dollar amount of losses to 

plans in concrete terms. In such cases, the 

Department does not have enough information to 

include such representations in its findings. 

However, the information that UBS provided that 

the Department can rely on is described below.’’ 89 

FR 49219 n.24 

require the Compliance Officers to 

provide the Auditor with the Exemption 

Report created pursuant to Section 

III(m)(4)(ii) of the exemption within 

seven days after the Exemption Report’s 

completion; (4) allow the Department to 

receive audit updates from UBS and the 

Auditor upon request; and (5) provide 

the Department with a copy of the 

Auditor’s engagement agreement within 

15 days after its execution. 

27. The Department is persuaded that 

adding these conditions to the 

exemption’s existing protective 

conditions will be beneficial to Covered 

Plans and has included them in this 

final exemption. 

Comment 2: UBS’ Materiality Argument 

28. UBS contends that failing to 

adhere to a condition of PTE 2023–14 

relating to the due date of the Stub 

Period Audit should not cause it to 

forfeit the exemptive relief provided in 

PTE 2023–14 because its failure to 

comply with the condition was not a 

‘‘material failure.’’ 

29. The Department strongly disagrees 

with UBS’s materiality argument. First, 

each condition in an exemption is 

material to the Department’s findings 

and must be adhered to in order for an 

ERISA-covered plan, IRA, a party in 

interest, or disqualified person to rely 

on the exemption. Second, the 

independent audits required by PTE 

2023–14 and similar exemptions are 

particularly vital to the Department’s 

findings, because they help ensure that, 

among other things: the QPAMs adhere 

to their basic fiduciary obligations 

under ERISA; transactions prohibited 

under ERISA section 406 are 

implemented in accordance with the 

requirements of PTE 84–14 and 

monitored in a way that protects 

participants; the Policies and Training 

requirements of the exemption are 

maintained; and violations of the 

Policies and Training requirements are 

promptly reported and remedied. The 

purpose of the audit requirement is not 

merely to ascertain possible past 

violations, but rather to promote and 

encourage an ongoing culture of 

compliance for personnel subject to the 

audit. The latter goal is ill-served when 

the QPAMs disregard their obligation to 

perform timely audits, irrespective of 

whether any particular audit would 

have found serious past violations of the 

exemption’s conditions. Lastly, in 

contradiction of UBS’ contention that 

the failure to comply with the condition 

was not a ‘‘material failure,’’ UBS 

acknowledged the importance of the 

independent audit requirement in its 

exemption application, which stated 

that, ‘‘[t]he purpose of the independent 

audit is to give [Covered Plans] clients 

and the Department the confidence that 

the asset manager is complying with 

ERISA, and that continued exemptive 

relief is warranted.’’ 

Comment 3: Covered Plans Would Be 

Harmed Without an Exemption 

30. UBS asserts that Covered Plans 

would incur harm if relief is not 

granted, because Covered Plans would 

likely terminate their relationships with 

the UBS QPAMs and hire new asset 

managers. UBS contends that Covered 

Plans would switch because the 

Covered Plan’s fiduciaries would be 

uncertain as to which transactions 

would have prohibited transaction 

relief, and as to the specific conditions 

and limitations that would be imposed 

upon those transactions. UBS argues 

that Covered Plans that switch asset 

managers would be harmed because 

they would lose access to UBS’s unique 

services and strategies. Further, the 

Covered Plans would spend additional 

fees and incur lost opportunities costs 

as a result of an asset manager switch, 

and the additional fees would include 

costs incurred to solicit and hire a new 

asset manager. UBS estimates Covered 

Plans would incur $90 million in 

liquidation and reinvestment costs as a 

result of liquidating all of the Covered 

Plan positions.18 In support of this 

estimate, UBS provided a report from an 

institutional investment consultant 

concluding that UBS’ assumptions and 

methodology in calculating these 

liquidation costs were reasonable and 

the estimation of $90 million in 

liquidation costs was also reasonable.19

31. Department’s Note: While the 

Department recognizes that Covered 

Plans may incur certain liquidation and 

reinvestment costs as a result of 

liquidating their positions, UBS QPAMs 

are cautioned that if UBS engages in 

future conduct prohibited by PTE 84– 

14, the Department may not be able to 

make its required findings in order to 

grant future exemptive relief. UBS 

QPAMs must take all prudent steps 

pursuant to its obligations under ERISA 

section 404 to mitigate risks of losses to, 

and to defray the reasonable expenses 

related to the investment of, Covered 

Plan assets if UBS engages in future 

conduct prohibited by PTE 84–14. The 

Department believes that the failure to 

take such basic steps, in the event that 

the UBS QPAMs become ineligible for 

their exemptive relief under PTE 84–14, 

would likely constitute a violation of 

the QPAMs’ fiduciary duties to act in 

the best interest of their Covered Plan 

clients. 

Comment 4: Nonquantifiable Harms 

Should Be Considered 

32. UBS argues that the Department 

should include nonquantifiable harms 

in the Department’s findings. UBS 

suggests that the Department has 

foreclosed including information about 

potential harms in its findings unless 

the harm is estimated in dollar 

amounts.20 The Department has no 

objection to considering any 

nonquantifiable harms identified by 

UBS. However, information concerning 

the dollar value of harms, including the 

methodology and assumptions made in 

reaching such dollar values, are 

important to the Department’s analysis. 

The Department will consider 

representations about nonquantifiable 

harm to Covered Plans to the extent the 

Department is able to determine that the 

information presented is relevant, 

reliable, and necessary to the 

Department’s findings. The Department 

notes, however, that depending on 

context and the type of harm that the 

applicant represents may occur, the 

Department will request to see 

additional, quantifiable data in order 

appropriately consider such 

representations. 

Comment 5: Denying Exemptive Relief 

Would Negatively Impact the QPAM 

Program as a Whole 

33. UBS argues that denying 

prospective or retroactive relief would 

result in wide-ranging consequences for 

all retirement accounts within the 


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21See, for example, the following publicly 

available news articles describing inquiries into 

possible UBS/Credit Suisse-related misconduct: 

UBS’s French unit placed under formal 

investigation at https://www.fnlondon.com/articles/ 

ubs-french-division-placed-under-formalinvestigation-20160304; Credit Suisse has violated 

US tax evasion deal, Senate Committee finds | The 

Business Standard, at https://www.tbsnews.net/ 

world/global-economy/credit-suisse-has-violatedus-tax-evasion-deal-senate-committee-finds-607578. 

22 It is expected that a number of conditions 

would apply, including that no QPAM or its 

personnel were involved in the Prohibited 

Misconduct. 

23The Department notes that, should UBS 

QPAMs become disqualified from the relief in this 

exemption due to additional UBS-related prohibited 

misconduct described in Section I(g) of PTE 84–14, 

Section I(i) of PTE 84–14 may permit UBS QPAMs 

to continue to rely on the class exemption for one 

year, if the terms and conditions of the class 

exemption are met. In that instance, the effective 

date of the above-described individual exemption, 

if granted, would begin following the period 

covered by Section I(i) of PTE 84–14. 

24PTE 2023–14, Section III(k)(2) requires UBS 

QPAMs ‘‘[t]o indemnify and hold harmless the 

Covered Plan for any actual losses resulting directly 

from the QPAM’s violation of ERISA’s fiduciary 

duties, as applicable, and of the prohibited 

transaction provisions of ERISA and the Code, as 

applicable; a breach of contract by the QP AM; or 

financial industry. UBS contends, for 

example, that denying relief would 

make it more difficult for counterparties 

to transact with any industry QPAMs 

because counterparties would be unsure 

if new convictions or later-discovered 

issues would result in crippling 

financial penalties for those 

counterparties. UBS argues that this 

increased risk would be priced into the 

market for all retirement plans, whether 

or not a QPAM is compliant with PTE 

84–14 or an individual exemption with 

respect to a failure to comply with PTE 

84–14 I(g). 

34. The Department agrees that a 

denial of UBS’ exemption request could 

have consequences for Covered Plans. 

However, these consequences would be 

due to the widespread UBS-related 

criminal behavior that occurred over 

long periods of time, involved massive 

amounts of client assets, and UBS’ 

inability to comply with the terms of 

PTE 2023–14 that are described above. 

The Department does not believe that 

UBS’ history of criminal sanctions is 

representative of the industry as a 

whole, or is likely to result in the sorts 

of consequences suggested by UBS with 

respect to entities that have far different 

compliance histories. 

35. Additionally, the Department 

notes that it is aware that UBS and/or 

its affiliates are the subject of additional 

investigations that could result in future 

violations of Section I(g) of PTE 84– 

14.21 While the Department cannot 

opine on the likelihood that UBS asset 

managers will receive additional 

exemptive relief if it engages in 

additional violations of Section I(g) of 

PTE 84–14, the Department may take a 

proactive approach to protecting 

Covered Plans in light of the uncertainty 

created by these additional 

investigations. Especially given the 

history and extent of criminal conduct 

at issue, the Department is considering 

proposing an individual exemption that 

would, in certain circumstances, permit 

UBS asset managers to continue to 

engage in the same covered transactions 

described in Section I of PTE 84–14, if 

the UBS QPAMs become ineligible 

again to rely on PTE 84–14 due to 

another violation of Section I(g) of PTE 

84–14.22

36. As currently contemplated, the 

relief that would be provided in the 

individual exemption would not be 

linked to PTE 84–14, and the asset 

managers that rely on the individual 

exemption would not be referred to as 

QPAMs.23 If the Department takes this 

approach, the proposed individual 

exemption would be subject to a full 

notice and comment period, and UBS, 

plan fiduciaries and plan counterparties 

would have ample opportunity to 

comment. 

37. The Department previously raised 

the possibility of this type of individual 

exemption in the preamble to the PTE 

2023–14 proposal and requested 

comment from UBS. UBS responded 

that current QPAMs have existing 

contracts that expressly rely on the 

QPAM exemption or include 

representations that the asset manager is 

a QPAM, and those contracts do not 

account for an alternative individual 

exemption such as the one the 

Department described in the preamble 

to the proposal for PTE 2023–14. 

Moreover, UBS asserted that the QPAM 

exemption is widely accepted and 

understood by sophisticated clients; 

therefore, the Department’s withdrawal 

of the availability of the relief provided 

in PTE 84–14 for a particular asset 

manager and substituting an alternative 

individual exemption would put that 

asset manager at a competitive 

disadvantage. UBS claimed that this 

result is directly contrary to the 

financial strength and stability that 

regulators intended to be achieved by 

the Merger, and that if the Department 

is interested in creating an alternative 

individual exemption to the QPAM 

exemption, it should make the 

alternative available to all asset 

managers concurrently with the QPAM 

exemption, so that the alternative can 

gain broad market adoption. 

38. The Department is not persuaded 

by UBS’ response. The fact that UBS 

QPAMs may have existing contracts 

with the provisions and limitations 

described above, is not dispositive to 

the Department’s determination whether 

UBS QPAMs should be permitted to 

continue to rely on PTE 84–14, 

especially considering UBS’ multiple 

violations of Section I(g) of the class 

exemption that call its integrity and 

compliance culture into question. The 

Department is also skeptical of 

assertions that it should rely on the 

parties’ contract provisions as a basis for 

disregarding exemption conditions or 

limiting the consequences of violating 

those provisions. A QPAM cannot 

simply contract with a client in a 

manner that ensures the QPAM will 

always be able to remain a QPAM, 

regardless of the QPAM’s or its 

affiliates’ behavior. 

39. Further, the fact that the QPAM 

exemption is widely accepted and 

understood by sophisticated clients 

suggests to the Department that these 

counterparties would not be confused 

by an individual exemption that clearly 

states it has the same scope of relief as 

Section I of PTE 84–14. UBS’ 

‘‘competitive disadvantage’’ arguments 

also do not support a finding under 

ERISA Section 408(a) that UBS QPAMs 

should be permitted to rely on PTE 84– 

14; particularly where to the 

Department’s knowledge, none of UBS’ 

‘‘competitors’’ have as many 

disqualifying convictions as UBS. 

40. Regarding UBS’s suggestion that 

the Department should make the 

individual exemption approach 

‘‘available to all asset managers 

concurrently with the QPAM 

exemption, so that the alternative can 

gain broad market adoption,’’ the 

Department notes that the scope, 

seriousness, and recurrent nature of 

UBS’ prohibited misconduct are unique. 

Therefore, the Department is not 

persuaded that making such an 

individual exemption available for 

broad market adoption is presently 

warranted. 

Comment 6: Indemnification 

41. Section III(k) of PTE 2023–14 

requires UBS to ‘‘indemnify and hold 

harmless the Covered Plans for any 

actual losses resulting directly from 

UBS QPAM’s violation of fiduciary 

duties, prohibited transactions, breach 

of contract, or any claim arising out of 

the failure of such QPAM to qualify for 

the exemptive relief provided by PTE 

84–14 as a result of violation of Section 

I(g) of PTE 84–14.’’ 24 Given this 


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any claim arising out of the failure of such QPAM 

to qualify for the exemptive relief provided by PTE 

84–14 as a result of a violation of Section I(g) of PTE 

84–14, other than a Conviction covered under this 

exemption. This condition applies only to actual 

losses caused by the QPAM’s violations.’’ 

25The Proposal added a new definition of the 

term ‘‘UBS Seconded Employee’’ that means, an 

individual nominally employed by a Misconduct 

Entity who performs work on behalf of a qualified 

UBS QPAM, provided that such UBS QPAM is 

solely responsible for the management and control 

of the employee’s job activities performed on behalf 

of such QPAM. The UBS QPAM must be solely 

responsible for the establishment of the employee’s 

job duties and terms of employment (including 

compensation, promotions, and benefits), and must 

Continued 

requirement, the Department requested 

in the Proposal that UBS comment on 

why Covered Plans would incur the 

liquidation and other costs identified by 

UBS if the Department does not grant 

relief. 

42. In its response, UBS argues that 

liquidation and additional costs do not 

result ‘‘directly’’ from UBS’s criminal 

convictions and failures to comply with 

exemptive conditions. UBS argues 

instead that a Covered Plan fiduciary 

and new asset manager’s decision to 

liquidate and reinvest plan assets is an 

intervening decision by a separate agent, 

which is inconsistent with one of many 

definitions of ‘‘directly’’ contained in 

the Oxford Dictionary. 

43. The Department disagrees with 

UBS’s analysis. The condition requires 

indemnification for costs that result 

‘‘directly’’ from, among other things, 

‘‘the failure of such QPAM to qualify for 

the exemptive relief provided by PTE 

84–14 as a result of violation of Section 

I(g) of PTE 84–14.’’ As UBS itself noted 

in a letter to the Department, dated July 

29, 2024, ‘‘[i]n fact, Dr. Minahan, an 

expert in the field of ERISA plan 

transitions, projects that if the 

Department does not grant UBS a new 

exemption, ‘‘then most, and likely all, 

UBS ERISA Clients would feel forced to 

replace UBS as their asset manager.’’ 

Certainly, to the extent Covered Plans 

‘‘feel forced’’ to transition to new asset 

managers because the UBS QPAMs 

could no longer rely on PTE 84–14, the 

liquidation and additional costs arising 

from the transition constitute actual 

losses resulting directly from the failure 

of such QPAM to qualify for the 

exemptive relief provided by PTE 84–14 

as a result of violation of Section I(g) of 

PTE 84–14. If a plan’s fiduciary is 

compelled to replace a UBS asset 

manager as a result of a violation of 

Section I(g) and the asset manager’s loss 

of QPAM status, the affected plan is 

entitled to indemnification of its 

associated losses, including the 

transitional expenses necessary to 

effectuate the switch to a qualified 

QPAM. 

Comment 7. Violation Notice 

44. Section III(t) of the Proposal 

includes a condition that would require 

UBS to send a Violation Notice, as 

defined therein, to Covered Plans if UBS 

fails to comply with an exemption 

condition. UBS commented that this 

proposed condition would be too 

difficult to administer and would not 

materially increase protection for 

Covered Plans. 

45. The Department disagrees. 

Providing timely information to Covered 

Plans will allow their fiduciaries to take 

prudent and timely steps, as necessary 

to protect themselves from loss of the 

exemption’s protections. This Violation 

Notice is particularly relevant to UBS 

due to its history of recidivism. 

46. However, the Department 

understands UBS’ position that certain 

aspects of the Violation Notice 

requirement may be difficult to 

administer. In particular, UBS raised 

concerns regarding the difficulty it 

would confront to determine whether a 

Violation Notice must be issued. In 

response to this concern, and as a 

recognition that UBS may need more 

time to make its required determination 

that sending a violations notice is 

required, the Department has revised 

the deadline in Section III to extend the 

time a Violation Notice must be 

provided to Covered Plans as a result of 

a breach of an exemption condition, 

from 14 to 30 days after the violation is 

discovered. In situations where the 

auditor discovers a violation that the 

UBS QPAM had not previously 

detected, the UBS QPAM may comply 

with the Violation Notice condition by 

sending the Violation Notice to all 

affected Covered Plans and the 

Department within 30-days after the 

completion of the audit, if the notice 

includes an addendum describing the 

reason for the UBS QPAM’s failure to 

send the Violation Notice. This last 

provision is not a substitute for UBS’ 

own responsibility to take reasonable 

steps to determine whether a violation 

has occurred. 

Comment 8: Written Processes Related 

to Indemnification 

47. Section III(v) of the Proposal 

would require all UBS QPAMs to 

develop written processes that clearly 

describe: (a) how the QPAM identifies 

and quantifies ‘‘actual losses’’ for 

purposes of Section III(j)(2) of the 

exemption; and (b) how Covered Plans 

may recover or avoid incurring the 

losses that the UBS QPAM must 

indemnify or hold Covered Plans 

harmless from incurring pursuant to 

Section III(j)(2) of the exemption. UBS 

commented that losses are too specific 

to each Covered Plan for it to develop 

an effective written indemnification 

process. Additionally, UBS asserted that 

it would be unable to develop written 

processes for indemnification because 

the party seeking indemnification 

would have to identify the specific 

covered losses or expenses. 

48. The Department disagrees with 

UBS’ interpretation of this condition. 

The condition simply requires UBS to 

establish a process that would apply 

when Covered Plans submit 

indemnification claims, not to identify 

all the specific losses or expenses that 

could conceivably be covered in 

advance of violation. The process 

should, at a minimum, inform Covered 

Plans of how to initiate a claim for 

indemnification with a UBS QPAM 

(including a description of the 

information required to be submitted) 

and provide reasonable time frames for 

the resolution of claims. The process 

should also ensure that substantially 

similar claims are treated alike, and 

Covered Plans are equitably treated 

based on the merits of the claim rather 

than type or size of client. The process 

also should require the UBS QPAM to 

fully and fairly notify Covered Plans of 

the indemnification requirement and 

inform them that they can submit 

questions relating to the final 

indemnification provision to the 

Department’s email inbox (e-oed@

dol.gov). The Department believes that 

these clarifications address the concerns 

raised by UBS. 

49. Further, the Department has 

revised the provision in the final 

exemption to require each UBS QPAM 

to complete the development of the 

indemnification claims process and 

deliver a copy of the process to each 

Covered Plan within 90 days after 

January 15, 2025, rather than within 30 

days as originally proposed. The 

extended timelines give the UBS 

QPAMs enough time to specify 

appropriate processes and make any 

required internal changes to 

operationalize such processes. The 

exemption requires the UBS QPAMs to 

notify Covered Plans of any subsequent 

material changes to the processes within 

30 days after the effective date of such 

changes. 

Comment 9: Seconded Employee 

Definition 

50. UBS commented that it has no 

fundamental objection to the 

Department’s proposed definition of 

‘‘UBS Seconded Employee’’ in Section 

I(l) of the Proposal.25 However, UBS 


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have supervisory responsibility with respect to, 

among other things, the employee’s performance, 

training, and disciplinary actions. The definition of 

UBS Seconded Employee is used in Sections III(d) 

to clarify that an employee of a Misconduct Entity 

may provide services to a UBS QPAM, as long as 

the individual is a ‘‘Seconded Employee.’’ Sections 

III(a) and (b) require that Seconded Employees did 

not participate in the conduct underlying the 

Criminal Activity or receive compensation in 

connection therewith. 

26See 89 FR 76, 27789 (April 18, 2024). 

27These employees were required not to have 

participated in, been aware of, and received 

compensation in respect of, any of the misconduct. 

28Section III(g) of PTE 2024–02 provides that, 

‘‘Other than with respect to employee benefit plans 

maintained or sponsored for its own employees or 

the employees of an affiliate, DB Group Services 

will not act as a fiduciary within the meaning of 

ERISA Sections 3(21)(A)(i) or (iii) or Code Sections 

4975(e)(3)(A) and (C) with respect to ERISA-covered 

plan and IRA assets; provided, however, that DB 

Group Services will not be treated as violating the 

conditions of this exemption solely because . . . . 

(2) DB Group Services’ employees perform work on 

behalf of a DB QPAM that is solely responsible for 

the management and oversight of the DB Group 

Services’ employee’s day to day activities 

performed on behalf of such QPAM, including the 

employee’s performance, training, and terms of 

employment (including compensation, promotions, 

and benefits), including any such employees acting 

in a discretionary fiduciary capacity with respect to 

the DB QPAM.’’ See also 89 FR 76, 27795–96. 

29 This footnote states that ‘‘UBS represents that 

UBS O’Connor LLC and UBS Realty Investors LLC 

are entities under the UBS corporate umbrella that 

currently offer investment products which are 

accessible by ERISA-covered plans, but do not 

currently rely on Class PTE 84–14 when managing 

those products.’’ 

30The referenced footnote states that ‘‘[t]he 

exemption does not preclude the UBSQPAMs and 

CS Affiliated QPAM from maintaining separate 

Policies provided that the Policies comply with this 

exemption.’’ 

believes that the definition should 

reflect the language in the recent 

Deutsche Bank exemption (PTE 2024– 

02), which does not contain this new 

definition of Seconded Employee, to 

promote greater consistency across 

individual QPAM exemptions.26

51. The Department has decided to 

retain the proposed language in the final 

exemption. Conditions in the 

Department’s individual exemptions 

may evolve over time as it becomes 

clear that additional clarity or 

substantive improvements are 

appropriate. The Department notes that 

prior QPAM Section I(g) exemptions 

relied on the term ‘‘seconded employee’’ 

to permit certain employees to perform 

services for QPAMs notwithstanding the 

fact that such employees were 

nominally employed by a corporate 

entity that had been involved in 

misconduct.27 In the recent Deutsche 

Bank exemption, PTE 2024–02, that the 

Applicant points out, the Department 

declined to use the term ‘‘seconded 

employee’’ and instead included a 

description of the type of employees 

permitted to perform services under 

these circumstances.28 In the Proposal, 

the Department created a defined term 

‘‘UBS Seconded Employee’’ in order to 

further streamline the operative 

language of the exemption. The defined 

term also slightly modified the language 

from that which was in the Deutsche 

Bank exemption to more clearly set 

forth the requirement that the QPAMs 

have control over the seconded 

employee. For example, the term 

‘‘oversight’’ was changed to ‘‘control’’ 

and the term ‘‘day to day activities’’ was 

changed to ‘‘job activities.’’ 

Comment 10: Other Edits 

52. UBS requested that the 

Department make the following edits to 

the Proposal’s operative text, which it 

characterizes as clarification of facts or 

technical corrections: 

(a) The definition of ‘‘CSAG’’ in 

Section I(a)(1) should be revised to 

clarify that CSAG merged into UBS AG 

on May 31, 2024, with UBS AG as the 

surviving entity. 

Department Response: The 

Department concurs and has made the 

change. 

(b) The definition of ‘‘UBS Americas’’ 

in Section I(a)(5) should be revised to 

reflect that UBS AM Americas no longer 

is wholly owned by UBS Americas, Inc. 

Department Response: The 

Department concurs and has revised 

Section I(a)(5) to reflect that UBS AM is 

majority-owned by UBS Americas, Inc. 

(c) The definition of ‘‘UBS Hedge 

Fund Solutions LLC’’ in Section I(a)(7) 

should be deleted because UBS Hedge 

Fund Solutions LLC merged with UBS 

Asset Management (Americas) LLC, on 

April 1, 2024. 

Department’s Response: The 

Department has not made the requested 

change, because the definition in the 

Proposal provides clarity that the 

retroactive relief covers the subject 

entity as well. 

(d) The definition of ‘‘Affiliated 

QPAM’’ should be modified to reflect 

that UBS AM Americas is the only 

current UBS QPAM, and a future 

additional QPAM may sit within a 

successor of the Asset Management or 

Global Wealth Management Americas 

U.S. divisions of UBS. 

Department’s Response: The 

Department has not made UBS’ 

requested changes, because the 

retrospective nature of this exemption 

warrants defining the term ‘‘Affiliated 

QPAM’’ consistent with PTE 2023–14, 

and UBS’ requested change would allow 

an entity to qualify as an Affiliated 

QPAM notwithstanding that it also fits 

within the definition of Misconduct 

Entity. 

(e) The footnote in Section I(b) should 

be deleted.29 This footnote is 

unnecessary. Moreover, UBS O’Connor 

LLC no longer exists; it merged with 

UBS AM Americas on April 1, 2024, 

with UBS AM Americas as the surviving 

entity. 

Department’s Response: The 

Department concurs and has made the 

change. 

(f) The definition of ‘‘Misconduct 

Entity’’ in Section I(i) should be revised 

to remove ‘‘CSAG,’’ as CSAG no longer 

exists. 

Department’s Response: The 

Department has not made the requested 

change, because the proposed definition 

provides clarity that retroactive relief 

covers periods of time that CSAG 

existed. 

(g) The reference to ‘‘CS Affiliated 

QPAM[s]’’ in the footnote in Section 

III(h)(1) should be deleted.30

Department’s Response: The 

Department concurs and has made the 

change. 

(h) Section III(i) should be revised to 

require provision of a copy of the audit 

report to the Risk Committee of UBS 

Group AG’s Board of Directors and to a 

senior executive officer of UBS Group 

AG’s Compliance and Operational Risk 

Control function. 

Department’s Response: The 

Department concurs and has made the 

requested change. 

(i) The phrase ‘‘one-year exemption’’ 

should be revised to ‘‘five-year 

exemption’’ in Sections III(i)(3) and 

III(k). 

Department’s Response: The 

Department concurs that the operative 

language in Sections III(i)(3) and III(k) 

should not read ‘‘one-year exemption’’ 

and has modified the provisions to read 

‘‘exemption.’’ 

(j) Section III(m)(1)(ii) should be 

revised to require that the compliance 

officer (or officers) have a direct 

reporting line to either the highestranking corporate officer in charge of 

compliance for the applicable Affiliated 

QPAM or the highest-ranking corporate 

officer in charge of the applicable 

Affiliated QPAM. This would allow the 

QPAM to designate the highest-ranking 

corporate compliance officer as a 

‘‘compliance officer’’ under the 

exemption. 

Department’s Response: The 

Department concurs and has made the 

requested change. 

(k) Section III(l) should be included in 

the list in the first clause of Section 

III(s), and the reference in the second 

clause of Section III(s) should be to 

Section III(i)(10), not Section III(i)(11). 


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31Section III(u) provides that, ‘‘All the material 

facts and representations set forth in the Summary 

of Facts and Representations are true and accurate 

at all times.’’ 

32 29 CFR 2570.35(a)(5). The QPAM Coalition also 

takes issue with UBS’ representation that the 

‘‘number of plans and IRAs to which the exemption 

will apply are too numerous to identify.’’ 

33 29 CFR part 2570 (76 FR 66637 (Oct. 27, 2011)). 

34See Section 2570.46(b). 

35See Section 2570.46(b)(3). 

36See Section 2570.46(a)(2). 

Department’s Response: The 

Department concurs and has made UBS’ 

requested changes, although due to 

changes to Section III(i) described 

above, the latter change was made to 

Section III(i)(12) not Section III(i)(11). 

(l) The phrase ‘‘at all times’’ should be 

deleted from Section III(u),31 because 

that phrase is inconsistent with the 

Proposed Exemption’s statement that 

only ‘‘material change[s]’’ in ‘‘material 

fact[s] or representation[s]’’ would affect 

the status of the exemption. 

Department’s Response: The 

Department disagrees with this revision. 

If, at any time, a material representation 

UBS made to the Department is no 

longer accurate, UBS must immediately 

inform the Department. If UBS has 

questions regarding the materiality of a 

representation, it should contact the 

Office of Exemption Determinations 

immediately. 

Industry Comments 

SIFMA (Securities Industry and 

Financial Markets Association) and the 

ERISA Industry Committee (ERIC) 

53. SIFMA and ERIC’s comment 

letters argue that if the Department does 

not grant UBS retroactive relief, it will 

cause wide ranging disruption to the 

securities markets. 

54. The Department notes that it has 

addressed these broad concerns in its 

response to Comment 5, above. The 

Department reiterates that it must make 

the findings required by ERISA section 

408(a) in order to grant an exemption 

with respect to the particular applicant 

seeking relief and for the transactions 

described in the application. If a QPAM 

or related party’s behavior precludes 

such a finding, any wide-ranging 

disruption to the securities markets that 

results would be solely attributable to 

behavior of such QPAM or related party. 

As such, many of the concerns raised in 

SIFMA and ERIC’s comments are 

outside the scope of this exemption. 

Anonymous 

55. An anonymous commenter stated 

without specificity that the Department 

should not grant the proposed 

exemption in order to better protect the 

financial industry from corruption. 

Since the comment offered no further 

reasoning or substance, the Department 

cannot respond with specificity to this 

comment. This exemption, however, has 

taken the commenter’s position into 

account by ensuring that Covered Plans 

are insulated from UBS’ malfeasance. 

The QPAM Coalition Comment 1: 

Hearing Request 

56. A commenter entitled the ‘‘QPAM 

Coalition,’’ is comprised of, at various 

times, Mr. James S. Henry; Mr. John 

Christensen; Dr. Paul J. Morganoff; Mr. 

Ralph Nader; Mr. Khadija Sharife; Mr. 

Ke Francis Karugu; and Mr. and Mrs. 

Andreas and Dagmar Frank. The 

coalition made two separate 

submissions during the comment 

period, which are considered together 

for purposes of this granted notice. As 

a preliminary matter, the QPAM 

Coalition requested a public hearing to 

provide a ‘‘more thorough examination 

and interrogation.’’ In the view of the 

QPAM Coalition, the Application 

omitted critical data required by the 

Department’s exemption procedure 

regulation, and a public hearing is 

needed to fully air the universe of 

relevant lawsuits and criminal 

investigations concerning UBS’ and 

Credit Suisse’s conduct as a fiduciary 

....32 The QPAM Coalition states that 

‘‘extraordinary new details about UBS/ 

CS misconduct [discussed below] really 

do deserve to be aired in public.’’ The 

QPAM Coalition states that its members 

‘‘would be available to present even 

more [i]mportant evidence directly 

related to the question of whether UBS/ 

CS deserve to have their (collectively) 

14th QPAM Exemption since 1994, 

despite serial criminal convictions.’’ 

57. The Department notes that most of 

the exemptions identified by the QPAM 

Coalition were either extensions of 

existing exemptions or necessitated by 

the merger of UBS and Credit Suisse. 

Such extensions do not involve new 

instances of misconduct, and it is 

inappropriate to treat them as if they 

were the result of new, distinct, and 

separate violations of exemption 

conditions. To the contrary, the grants 

of extensions generally reflected the 

Department’s view that the QPAMs had 

complied with the conditions of the 

initial exemptions. Similarly, it is 

inappropriate to penalize the UBS 

QPAMs solely because they received 

exemptions (including this one) that 

arose from the merger of Credit Suisse 

and UBS; particularly when considering 

that these exemptions did not arise from 

any additional criminal misconduct or 

failure to supervise by UBS or its 

affiliates. 

58. As the Department notes in its 

exemption procedure regulation (the 

Procedures),33 ‘‘[t]he Department will 

grant a request for a hearing . . . where 

a hearing is necessary to fully explore 

material factual issues identified by the 

person requesting the hearing.’’ 34 The 

QPAM Coalition provided an expansive 

and detailed description of the 

‘‘extraordinary new details’’ that needed 

to be discussed at a public hearing in 

their comment letter. Although the 

QPAM Coalition suggests that it could 

provide more evidence at a hearing, the 

Department’s regulations provide that it 

may decline to hold a hearing if, among 

other things, ‘‘the factual issues 

identified can be fully explored through 

the submission of evidence in written 

(including electronic) form.’’ 35

59. In the Department’s view, the 

‘‘factual issues’’ identified by the QPAM 

Coalition could be and have been fully 

explored through the submission of its 

written and electronically provided 

evidence. The Department also notes 

that its Procedures provide that hearing 

requestors must state, among other 

things, ‘‘the nature of the person’s 

interest in the exemption and the 

manner in which the person would be 

adversely affected by the exemption.’’ 36

The QPAM Coalition did not state in 

their comment letters how they would 

be ‘‘materially affected by the 

exemption.’’ 

60. The Department notes that in 

processing UBS’ exemption request, it 

thoroughly reviewed UBS’ application. 

The Department relied on public 

comments and a robust exchange of 

information with UBS and external 

stakeholders to fill in factual gaps in the 

public record. The QPAM Coalition’s 

own comment provided information 

concerning a number of past and current 

investigations and prosecutions that 

form part of the public record that the 

Department has reviewed in making its 

requisite findings under ERISA section 

408(a) Among other materials provided 

in their comments, the QPAM Coalition 

provided the text of a decision of the 

French Court of Cassation, Criminal 

Division, dated November 15, 2023 

dealing with UBS’ participation in a 

cross-border tax evasion via French and 

Swiss branches of UBS; a copy of the 

criminal complaint filed by the U.S. 

Department of Justice against UBS 

Securities LLC, et al. on November 08, 

2018 in Case No. 1:18–cv–06369–RPK– 

PK; a comment letter describing 

additional lawsuits and criminal trials 

that they believe should be taken into 


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37The comment letter provides information 

about: United States v. UBS Securities, LLC, et al. 

(generally, UBS’ conduct in the mortgage crisis); 

Murray v. UBS Securities, LLC 601 U.S. 23 (2024) 

(regarding an employee’s claim that UBS forced him 

to fraudulently certify his analyst reports); U.S. v. 

Birkenfeld, Case No. 08–60099–CR–ZLOCH 

(concerning offshore bank accounts and 

suppression of whistleblower activity); and links to 

various French and German tax fraud matters 

involving UBS. 

38Letter from Dr. Paul Morjanoff, Financial 

Recovery and Consulting Services Pty Ltd to Ms. 

Barbara Levi, UBS Group General Counsel, dated 

July 11, 2023. 

39Letter from Dr. Paul Morjanoff, Financial 

Recovery and Consulting Services Pty Ltd to 

Thomas Perez, U.S. Secretary of Labor, dated June 

23, 2014. 

40Credit Suisse was granted PTE 2014–11 on 

November 18, 2014 (79 FR 68716). 

41See UBS Exemption Application, dated 

February 22, 2024, pp. 1–2. 

consideration by the Department; 37

copies of letters written by members of 

the QPAM Coalition to the UBS General 

Counsel 38 describing shortcomings in 

the compliance and controls of Credit 

Suisse’ banking systems and generally 

detailing efforts to inform UBS and 

Credit Suisse of ‘‘entrenched criminal 

structures’’ within Credit Suisse; a 

transcript of comments at the 

Department’s November 2022 hearing 

regarding amendments to the QPAM 

Exemption; and a copy of a letter to the 

Department 39 advocating for the denial 

of Credit Suisse’s exemption application 

No. D–11819.40

61. The QPAM Coalition’s comment 

further supplemented the record with 

articles written by its members that 

describe, among other things: the role of 

Swiss banks in money laundering and 

corrupt banking practices in Kenya; 

how, in the QPAM Coalition’s view, 

Swiss bank secrecy laws facilitate 

participation by UBS and Credit Suisse 

in various criminal and political 

activities, including Swiss banks’ past 

involvement in South Africa’s 

‘‘apartheid machinery’’; political 

activities in Yemen, the Democratic 

Republic of Congo, and Mozambique; 

circumvention of European Union 

sanctions on various governments; the 

facilitation of corrupt finance and 

banking activities in various developing 

countries; and UBS’ leveraging of the 

British Channel Island’s legal 

jurisdiction to avoid criminal 

prosecution for various acts. 

62. Finally, the QPAM Coalition 

submitted a brief article advocating for 

an ‘‘institutional grey list’’ similar to 

ones established by various intergovernmental organizations, such as the 

Organization for Economic Co-operation 

and Development, that would assist the 

Department in evaluating financial 

institutions that repeatedly find 

themselves in violation of applicable 

law. Even though the information 

provided by the QPAM Coalition does 

not lead the Department to conclude 

that a hearing is necessary to further 

explore any of the issues presented in 

its comment, the information provided 

by the QPAM Coalition validates the 

importance of one of the exemption’s 

critical conditions: an in-depth annual 

audit of each UBS QPAM by a qualified, 

independent auditor. In this regard, the 

scope of ongoing investigations and 

potential misconduct identified by the 

QPAM Coalition in its comments 

illustrates the need for an independent 

audit to verify on an annual basis that 

the UBS QPAMs continue to adhere to 

applicable fiduciary provisions and the 

terms of this exemption and maintain a 

strong culture of compliance. 

63. Based on the record developed by 

the Department, it does not appear to 

the Department that UBS QPAM 

personnel participated in the conduct 

described by the QPAM Coalition. In 

fact, the Department is able to make its 

findings that the UBS QPAMs may 

continue to rely on PTE 84–14 in part 

because the QPAMs and their personnel 

are insulated from the corporate 

management and business activities of 

UBS entities that were involved in 

criminal activity described above. In 

this regard, the independent auditor 

must continue to validate, among other 

things, that the asset management 

decisions of the QPAM are conducted 

independently of the corporate and 

management and business activities of 

each Misconduct Entity, and any 

failures of the QPAMs to maintain or 

follow the Policies must be corrected 

and reported to the QPAM’s head of 

compliance and general counsel. 

The QPAM Coalition Comment 2: 

Rebutting UBS 

64. The QPAM Coalition’s comment 

focuses on rebutting UBS’ five 

‘‘principal reasons’’ justifying the 

Department’s grant of a five-year 

exemption. As described by the QPAM 

Coalition, UBS argues that (1) the 

convictions and the pending French 

charge do not relate to the UBS QPAMs, 

which are operated as separate 

businesses from the entities involved in 

the underlying conduct; (2) the 

disqualifying conduct described in the 

convictions and the pending French 

charge is historical in nature; (3) the 

UBS QPAMs have documented proof 

that ERISA plan assets have been 

safeguarded, as evidenced by their 

ERISA audit results for many years; (4) 

it is in the best interest of plans and 

their participants and beneficiaries for 

plan fiduciaries, well versed in their 

obligations to protect plan assets, to be 

able to select the asset managers they 

judge best, particularly when DOLsupervised audits confirm the managers’ 

capability; and (5) UBS and the UBS 

QPAMs should not be punished, in 

effect, for the acquisition of Credit 

Suisse AG by UBS Group AG at the 

strong encouragement of the Swiss 

government.41

65. In response to these arguments, 

the QPAM Coalition states that (1) is 

irrelevant because the QPAM 

Exemption’s required standard of 

integrity relates to the ‘‘corporate 

family’s culture of compliance,’’ and the 

exemption is a privilege to execute 

transactions which would otherwise be 

illegal; (2) is irrelevant because ‘‘UBS 

and Credit Suisse repeatedly engaged in 

stonewalling and obstruction of 

investigations, as well as legal tactics of 

interminable delays, even when they 

knew of their own guilt;’’ (3) the UBS 

and Credit Suisse audit reports are not 

‘‘proof’’ because they did not assess all 

relevant factors, ‘‘including if financial 

instruments were being illegitimately 

laundered through pension funds;’’ (4) 

UBS and Credit Suisse should have 

taken its responsibility more seriously 

before engaging in criminal activity; 

moreover, according to the QPAM 

Coalition, the UBS entities are still 

engaging in some of these behaviors; 

and (5) UBS benefitted greatly from 

taking over Credit Suisse AG. The 

QPAM Coalition also points out in their 

comment that the UBS QPAMs violated 

various conditions of the exemption, 

including the requirement for the stub 

audit. 

66. The Department has considered 

and rejected the QPAM Coalition’s 

request to deny the UBS QPAMs’ 

exemption application. The QPAM 

Coalition’s points are addressed in turn: 

(1) The Department agrees with the 

principle that the required standard of 

integrity in PTE 84–14 relates not just to 

the QPAM’s compliance culture, but 

also to its ‘‘corporate family’s culture of 

compliance.’’ Therefore, an important 

aspect of the Proposal is that the UBS 

QPAMs are operated separately from the 

parts of the UBS organization that 

engaged in criminal misconduct 

underlying the Convictions (Criminal 

Misconduct). The record in this case 

demonstrates that the UBS QPAMs have 

been insulated from UBS’ corporate and 

business decisions, and from the parts 

of UBS that were involved in the 

Criminal Misconduct. Furthermore, the 

Department designed the Proposal’s first 

six conditions for relief to ensure that 

the UBS QPAMs: (1) had no 

involvement with the Criminal 


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42The Department notes that the record does not 

contain any information that the UBS QPAMs 

illegally laundered financial instruments through 

pension plans, and this has not been a specific 

target of the independent audits required by the 

Department in numerous individual exemptions. If 

the QPAM Coalition or any other commenter has 

evidence demonstrating that the UBS QPAMs had 

used or permitted money laundering through 

pension funds, this would be of great import to the 

Department, and likely also to a number of other 

Federal and international regulators. 

Misconduct; and (2) continue to have no 

relationship with any entity or 

individual that was involved in the 

Criminal Misconduct. In order to further 

support the UBS QPAMs’ insulation 

from the rest of UBS and to strengthen 

their own culture of compliance, the 

Department included other conditions 

in the Proposal that would require the 

UBS QPAMs to maintain their own 

policies, procedures, and training 

program, perform internal compliance 

reporting, and submit to a publicly 

available independent audit; 

(2) The Department agrees that it is 

important that the Department consider 

the Criminal Misconduct irrespective of 

the applicant’s suggestion that it is 

‘‘historical in nature,’’ and the 

Department has, accordingly, 

considered all the Criminal Misconduct 

in connection with this exemption. The 

Department considered the numerous 

convictions, and the extent of UBS’ 

cooperation (or non-cooperation) with 

investigators, as well as the information 

provided by UBS, commenters 

(including the QPAM Coalition), and 

other internal and external stakeholders, 

in formulating the conditions for relief 

described in this exemption and making 

its findings under ERISA section 408(a); 

(3) The Department notes that the 

independent audits are meant to verify 

that the assets of Covered Plans are 

managed in accordance with the 

requirements of Title I of ERISA and the 

Code, as applicable, and that the 

requirements of the individual 

exemptions from Section I(g) of PTE 84– 

14 are met. The Department determined 

in this exemption and in others that an 

independent audit with the 

requirements described herein, provides 

a sufficient mechanism for the 

Department to make its findings that the 

Proposal is protective of the rights of 

participants and beneficiaries of 

Covered Plans; 42

(4) The QPAM Coalition is not clear 

which responsibilities it is referring to 

in its statement that UBS should have 

taken its responsibilities more seriously 

before engaging in criminal activity. In 

this regard, the Department notes that 

the Proposal is focused on the actions of 

the UBS QPAMS and is not aware that 

the UBS QPAMs failed to take their 

responsibilities under ERISA seriously 

prior to the criminal activity engaged in 

by other UBS entities. However, the 

conditions for relief in this grant notice 

require the UBS QPAMs to adhere to 

Policies and Training designed to 

promote adherence to basic fiduciary 

standards under Title I of ERISA and the 

Code and reinforce their obligation to 

act with a high degree of integrity on 

behalf of their Covered Plan clients as 

required by PTE 84–14. The Department 

acknowledges the QPAM Coalition’s 

statement that certain UBS entities 

continue to be investigated for their 

participation in various forms of 

misconduct, but it has not seen 

evidence of wrongdoing sufficient to 

warrant a different approach to the 

exemption than that taken by the 

Department. Also, when considering 

past and continuing Criminal 

Misconduct by other corporate entities, 

the Department must consider the 

potential harms to Covered Plans that 

may result from a denial of the 

exemption. The final exemption reflects 

the Department’s primary focus on 

protecting Covered Plans and their 

participants and beneficiaries from the 

costs that they may incur if the UBS 

QPAMs become ineligible to rely on 

PTE 84–14, subject to the QPAMs’ 

adherence to protective conditions that 

insulate UBS QPAMs, and by extension 

Covered Plans, from potential concerns 

based on the compliance culture in 

other parts of the organization; and 

(5) Lastly, the QPAM Coalition states 

that UBS benefitted greatly from taking 

over Credit Suisse, thus undercutting 

the Applicant’s argument that UBS 

should not be punished, in effect for 

acquiring Credit Suisse AG at the behest 

of the Swiss government. The 

Department notes that its primary 

concern is to ensure that an exemption 

is in the interest and protective of the 

rights of Covered Plans and their 

participants and beneficiaries—not 

whether UBS benefitted from the 

acquisition of Credit Suisse AG. 

67. In sum, in response to the QPAM 

Coalition’s rebuttal of UBS, the 

Department acknowledges the severity 

of the misconduct at issue, but also 

notes that none of the specific entities 

responsible for the wrongdoing are 

granted relief under the terms of this 

exemption. In addition to considering 

past misconduct, the Department must 

consider the potential harms to Covered 

Plans that may result from a denial of 

the exemption. Based on the written 

administrative record for this 

exemption, the Department has 

concluded that the exemption’s 

conditions will appropriately ensure 

that Covered Plans are protected from 

future violations, and insulated from the 

injury they could experience from 

denial of the requested exemption. The 

Department also has determined that a 

hearing is not necessary to further 

explore the issues raised in the 

commenter’s written submission. 

The QPAM Coalition Comment 3: 

Request for Changes to the Exemption 

68. The QPAM Coalition made a 

series of requests if the Department 

determines to grant exemptive relief for 

the UBS QPAMs. Generally, the QPAM 

Coalition requested that the Department: 

(1) require UBS to provide additional 

information regarding the plans for 

which it provides services; prohibit UBS 

from managing plan assets due to a selfperception that it is ‘‘above the law’’; (2) 

limit the exemption’s effective period to 

two-years; (3) require UBS to pay 

monetary penalties (presumably in 

order to rely on the QPAM Exemption); 

implement a regime for monitoring UBS 

compliance with the exemption’s 

conditions that includes a panel of 

independent auditors; (4) establish a 

public registry for all financial actors 

involved in working with QPAMs; and 

(5)collaborate with financial regulators 

from around the world in making its 

determinations regarding UBS’ 

exemption request, and other financial 

entities that on the relief provided in 

PTE 84–14. 

69. The Department carefully 

considered the QPAM Coalition’s 

comments and determined not to make 

their requested changes for the 

following reasons. First, the Department 

does not have the authority to make 

some of the requested changes. For 

example, in connection with the 

exemption process, the Department does 

not have the authority to prohibit the 

UBS QPAMs from managing plan assets 

if the UBS QPAMs rely on other 

available prohibited transaction 

exemptions or to require the UBS 

QPAMs to pay additional monetary 

penalties based on the Covered 

Convictions. 

70. Second, in the Department’s view, 

several of the QPAM Coalition’s 

recommendations would not provide 

meaningful protections to Covered 

Plans. For example, limiting relief in the 

exemption to two years as suggested by 

coalition would not provide much 

additional protection to Covered Plans 

especially considering the exemption 

condition requiring the UBS QPAMs to 

undergo an in-depth annual audit by an 

independent auditor. The audit reports 

are publicly available and could form 

the basis for the Department to revise or 

revoke this exemption, if warranted or 

lead to a referral of the UBS QPAMs to 


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43The ERISA Coalition also failed to provide any 

detail regarding how the ‘‘panel of auditors’’ could 

be operationalized as a condition for relief. 

Important unanswered questions include how a 

panel of auditors would be chosen, how they would 

coordinate their audit findings, and how any 

conflicts in their findings would be resolved. 

44The QPAM Coalition, suggests, among other 

things, that ‘‘foreign banks should provide 

information on why they wish to open branches in 

the E.U. financial market, including submission of 

all possible convictions, deferred prosecution 

agreements, and equivalent measures, transparently 

and publicly.’’ 

EBSA’s Office of Enforcement in the 

event that violations of ERISA were 

revealed through the audit. UBS QPAMs 

are well aware of these potential 

consequences, which makes the audit 

an effective means to ensure compliance 

with the provisions of Title I of ERISA 

and the terms of this exemption. The 

Department also is not persuaded that a 

panel of auditors would provide 

significant additional protection to 

Covered Plans as compared to a single 

independent auditor experienced and 

knowledgeable about ERISA and the 

terms of this exemption.43 The 

Department reviews each audit and is 

empowered to seek additional 

information from the auditor if the audit 

appears lacking in any respect. The 

Department notes that Covered Plans 

already receive a copy of the proposed 

exemption, the final exemption, the 

Summary and the Statement. Further, 

the annual independent audit is 

available to all Covered Plan fiduciaries 

through EBSA’s Public Disclosure Room 

(see above). This final exemption also 

adds two additional disclosure 

requirements (the Violation Notice, and 

disclosure of the QPAMs’ 

indemnification procedures). The 

Department is skeptical that, under the 

circumstances, more disclosure of the 

kind suggested by the QPAM 

Coalition 44 will benefit Covered Plans, 

and the QPAM Commenters Coalition 

has not made a showing to the contrary. 

71. Regarding the comment that the 

Department should coordinate with 

regulators around the world, the 

Department notes that it has 

communicated with other regulators in 

the past during its consideration of 

exemption requests and will continue to 

do so in the future when appropriate to 

protect affected plans. 

The conditions of this exemption are 

not intended to punish UBS or burden 

the UBS QPAMs in a manner that will 

not provide meaningful protections to 

Covered Plans. Instead, the 

Department’s objective in granting this 

exemption is to (i) insulate UBS QPAMs 

from the business and corporate 

decision making of UBS and its affiliates 

and any Criminal Misconduct or 

potential future misconduct of UBS and 

its affiliates; (ii) allow Covered Plans to 

terminate their relationship with the 

UBS QPAMs with minimal disruption 

to the Covered Plans; (iii) create an 

annual reliable and independent public 

record that documents the UBS QPAMs’ 

level of compliance with the terms of 

this exemption and adherence to their 

basic fiduciary duties; and (iv) provide 

the Department with the flexibility to 

revise or revoke the relief in this 

exemption in a manner most protective 

of Covered Plans if UBS engages in 

future criminal activity. 

Modifications to the Proposal the 

Department Is Making on Its Own 

Motion 

72. The Department has decided to 

make several minor changes to the 

Proposal in the final exemption to 

correct scrivener’s errors in the 

operative text, renumber sections of the 

operative text, and make certain updates 

to the factual record. 

73. The Department also revised 

Section III(l) of the Proposal by 

replacing text referencing the 

exemption’s termination if a UBS entity 

is convicted of a crime described in 

Section I(g) of PTE 84–14 and replacing 

this text with the exemption’s 

termination if a UBS entity engages in 

conduct prohibited by Section I(g) of 

PTE 84–14 (see Section III (l) in this 

exemption). The Department made this 

modification to ensure consistency with 

the ineligibility requirements of the 

recently amended PTE 84–14. 

74. Section III(o) of the Proposal 

reads: ‘‘Relief in this exemption will 

terminate on the date that is six months 

following the date that a U.S. regulatory 

authority makes a final decision that 

UBS or an affiliate of either failed to 

comply in all material respects with any 

requirement imposed by such regulatory 

authority in connection with the 

Covered Convictions.’’ The Department 

inadvertently omitted the words ‘‘or 

CSAG’’ following ‘‘UBS.’’ Further, the 

Department has determined to extend 

the relief period to one year to make the 

provision consistent with the one-year 

transition period requirement in Section 

I(i) of amended PTE 84–14. After these 

edits, Condition (o) of this final 

exemption reads: ‘‘this exemption will 

terminate on the date that is one year 

following the date that a U.S. regulatory 

authority makes a final decision that 

UBS or CSAG or an affiliate of either 

failed to comply in all material respects 

with any requirement imposed by such 

regulatory authority in connection with 

the Covered Convictions [emphasis 

added].’’ 

75. Finally, the Department modified 

Section III(s) of the Proposal by adding 

language that an Affiliated QPAM will 

not fail to meet the terms of this 

exemption if a different Affiliated 

QPAM failed to provide Covered Plans 

with a Violation Notice required by 

Section III(t) of this exemption. The 

Department is making this revision 

because it did not intend for a QPAM to 

lose exemptive relief under the 

exemption solely when a different 

QPAM fails to provide a Violation 

Notice. 

Publicly Available Information: 

76. The complete application file (D– 

12098) is available for public inspection 

in the Public Disclosure Room of the 

Employee Benefits Security 

Administration, Room N–1515, U.S. 

Department of Labor, 200 Constitution 

Avenue NW, Washington, DC 20210, 

reachable by phone at (202) 693–8673. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, please refer to the notice of 

proposed exemption published on June 

11, 2024 (89 FR 49213). 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under ERISA 

section 408(a) and/or Code section 

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

other party in interest from certain 

requirements of other provisions of 

ERISA or the Code, including but not 

limited to any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of ERISA 

section 404, which, among other things, 

require a fiduciary to discharge their 

duties respecting the plan solely in the 

interest of the plan’s participants and 

beneficiaries and in a prudent fashion in 

accordance with ERISA section 

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

requirement of Code section 401(a) that 

the plan must operate for the exclusive 

benefit of the employees of the 

employer maintaining the plan and their 

beneficiaries. 

(2) As required by ERISA section 

408(a) and/or Code section 4975(c)(2), 

the Department finds that the exemption 

is: (a) administratively feasible for the 

Department; (b) in the interests of 

Covered Plans and their participants 

and beneficiaries; and (c) protective of 

the rights of the Covered Plan’s 

participants and beneficiaries. 

(3) This exemption is supplemental to 

and not in derogation of any other 

provisions of ERISA and/or the Code, 

including statutory or administrative 


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45 76 FR 66637, 66644, October 27, 2011. 

exemptions and transitional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive 

for determining whether the transaction 

is in fact a prohibited transaction. 

(4) The availability of this exemption 

is subject to the express condition that 

the facts and representations contained 

in the application accurately describe 

all material terms of the transactions 

that are the subject of the exemption 

and are true at all times. 

Accordingly, after considering the 

entire record developed in connection 

with UBS’s exemption application, the 

Department has determined to grant the 

following exemption under the 

authority of ERISA section 408(a) and 

Code section 4975(c)(2) and in 

accordance with the Department’s 

exemption procedures set forth in 29 

CFR part 2570, subpart B.45

Exemption 

Section I. Definitions 

(a) Names of Certain Corporate 

Entities: 

(1) The term ‘‘CSAG’’ means Credit 

Suisse AG, which was 100% owned by 

Credit Suisse Group AG, before UBS 

acquired Credit Suisse Group AG on 

June 12, 2024, and became the sole 

surviving entity. 

(2) The term ‘‘CSAM LLC’’ means 

Credit Suisse Asset Management, LLC. 

On May 1, 2024, CSAM LLC was 

merged into UBS Americas, with UBS 

Americas as the surviving entity. 

(3) The term ‘‘CSSEL’’ means Credit 

Suisse Securities (Europe) Limited an 

indirectly a wholly owned subsidiary of 

UBS Group AG. 

(4) The term ‘‘UBS’’ means UBS AG 

which is a wholly owned subsidiary of 

UBS Group AG. 

(5) The term ‘‘UBS Americas’’ means 

UBS Asset Management (Americas) 

LLC, which is majority owned by UBS 

Americas, Inc., a wholly owned 

subsidiary of UBS AG. 

(6) The term ‘‘UBS Europe’’ means 

UBS Europe SE. UBS Europe is the 

successor to UBS (France) S.A. UBS 

(France) S.A. was a wholly owned 

subsidiary of UBS under the laws of 

France until 2023. In July of 2023, UBS 

France S.A. merged into UBS Europe 

and set up a branch in France called 

UBS Europe SE France Branch. 

(7) The term ‘‘UBS Hedge Fund 

Solutions LLC’’ was formerly known as 

UBS Alternative and Quantitative 

Investments, LLC and is wholly owned 

by UBS Americas Holding LLC, a 

wholly owned subsidiary of UBS. UBS 

Hedge Fund Solutions merged into UBS 

Americas on April 1, 2024. 

(8) The term ‘‘UBS Securities Japan’’ 

means UBS Securities Japan Co. Ltd, a 

wholly owned subsidiary of UBS 

incorporated under the laws of Japan. 

(b) The term ‘‘Affiliated QPAM’’ 

means: UBS Americas, UBS Hedge Fund 

Solutions LLC, Credit Suisse Asset 

Management, LLC, and any future 

separate legal entity within the Asset 

Management or the Global Wealth 

Management Americas U.S. divisions of 

UBS that qualifies as a ‘‘qualified 

professional asset manager’’ (as defined 

in Section VI(a) of PTE 84–14) and that 

relies on the relief provided by PTE 84– 

14, and with respect to which UBS is an 

‘‘affiliate’’ (as defined in Part VI(d) of 

PTE 84–14). The term Affiliated QPAM 

excludes a Misconduct Entity. 

(c) The term ‘‘Criminal Activity’’ 

means the Covered Convictions, the 

2013 UBS Conviction, and the FX 

Misconduct. 

(d) The term ‘‘Covered Convictions’’ 

means (1) the judgment of conviction 

against CSAG for one count of 

conspiracy to violate section 7206(2) of 

the Internal Revenue Code in violation 

of Title 18, United States Code, Section 

371, that was entered in the District 

Court for the Eastern District of Virginia 

in Case Number 1:14–cr–188–RBS, on 

November 21, 2014 (the ‘‘2014 CSAG 

Conviction’’); (2) the judgment of 

conviction against CSSEL in Case 

Number 1:21–cr–00520–WFK (the 

‘‘2022 CSSEL Conviction’’); (3) the 

judgment of conviction against UBS in 

case number 3:15–cr–00076–RNC in the 

U.S. District Court for the District of 

Connecticut for one count of wire fraud 

in violation of Title 18, United States 

Code, Sections 1343 and 2 in 

connection with UBS’s submission of 

Yen London Interbank Offered Rates 

and other benchmark interest rates 

between 2001 and 2010; and (4) the 

judgment of conviction on February 20, 

2019, against UBS and UBS France in 

case Number 1105592033 in the French 

First Instance Court (the ‘‘2019 UBS 

France Conviction’’). 

(e) The term ‘‘2013 UBS Conviction’’ 

means the judgment of conviction 

against UBS Securities Japan Co. Ltd. in 

case number 3:12 cr 00268 RNC in the 

U.S. District Court of the District of 

Connecticut for one count of wire fraud 

in violation of Title 18, United States 

Code, sections 1343 and 2 in connection 

with submission of YEN London 

Interbank Offered Rates and other 

benchmark interest rates. 

(f) The term ‘‘FX Misconduct’’ means 

the conduct engaged in by UBS 

personnel described in Exhibit 1 of the 

Plea Agreement (Factual Basis for 

Breach) entered into between UBS and 

the Department of Justice Criminal 

Division, on May 20, 2015, in 

connection with Case Number 3:15–cr– 

00076–RNC filed in the US District 

Court for the District of Connecticut. 

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

plan subject to Part IV of Title I of 

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

plan subject to Code section 4975 (an 

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

which an Affiliated QPAM relies on 

PTE 84–14, or with respect to which an 

Affiliated QPAM (or any UBS affiliate) 

has expressly represented that the 

manager qualifies as a QPAM or relies 

on PTE 84–14. A Covered Plan does not 

include an ERISA-covered plan or IRA 

to the extent the Affiliated QPAM has 

expressly disclaimed reliance on QPAM 

status or PTE 84–14 in entering into a 

contract, arrangement, or agreement 

with the ERISA-covered plan or IRA. 

Notwithstanding the above, an 

Affiliated QPAM may disclaim reliance 

on QPAM status or PTE 84–14 in a 

written modification of a contract, 

arrangement, or agreement with an 

ERISA-covered plan or IRA, where: the 

modification is made in a bilateral 

document signed by the client; the 

client’s attention is specifically directed 

toward the disclaimer; and the client is 

advised in writing that, with respect to 

any transaction involving the client’s 

assets, the Affiliated QPAM will not 

represent that it is a QPAM, and will not 

rely on the relief described in PTE 84– 

14. 

(h) The term ‘‘Exemption Period’’ 

means the period beginning on June 12, 

2024, and ending on June 11, 2029. 

(i) The term ‘‘Misconduct Entity’’ 

means any one of the following: an 

entity subject to one of the Covered 

Convictions, i.e., UBS, UBS France 

(recently merged into UBS Europe), 

CSAG and CSSEL; the entity subject to 

the 2013 UBS Conviction, i.e., UBS 

Securities Japan; or an entity that was 

the subject of the FX Misconduct, i.e., 

UBS. 

(j) The term ‘‘Related QPAM’’ means 

any current or future ‘‘qualified 

professional asset manager’’ (as defined 

in Section VI(a) of PTE 84–14) that 

relies on the relief provided by PTE 84– 

14, and with respect to which UBS 

owns a direct or indirect five (5) percent 

or more interest, but with respect to 

which a Misconduct Entity is not an 

‘‘affiliate’’ (as defined in section VI(d)(1) 

of PTE 84–14). The term ‘‘Related 

QPAM’’ excludes a Misconduct Entity. 

(k) The term ‘‘best knowledge,’’ ‘‘to 

the best of one’s knowledge,’’ ‘‘best 

knowledge at that time,’’ and other 

similar ‘‘best knowledge’’ terms shall 

include matters that are known to the 


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46 49 FR 9494 (March 13, 1984), as corrected at 

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

49305 (Aug. 23, 2005), as amended at 75 FR 38837 

(July 6, 2010), and as amended at 89 FR 23090 

(April 3, 2024). 

applicable individual or should be 

known to such individual upon the 

exercise of such individual’s due 

diligence required under the 

circumstances, and, with respect to an 

entity other than a natural person, such 

term includes matters that are known to 

the directors and officers of the entity or 

should be known to such individuals 

upon the exercise of such individuals’ 

due diligence required under the 

circumstances. 

(l) The term ‘‘UBS Seconded 

Employee’’ means, an individual 

nominally employed by a Misconduct 

Entity who performs work on behalf of 

a UBS QPAM; provided that such UBS 

QPAM is solely responsible for the 

management and control of the 

employee’s job activities performed on 

behalf of such QPAM. Notwithstanding 

the preceding sentence, the UBS QPAM 

must be solely responsible for the 

establishment of the employee’s job 

duties and terms of employment 

(including compensation, promotions, 

and benefits); and must have 

supervisory responsibility with respect 

to, among other things, the employee’s 

performance, training, and disciplinary 

actions. 

(m) The term ‘‘UBS QPAMs’’ means, 

individually or collectively, the 

Affiliated QPAMs and/or the Related 

QPAMs. 

(n) The ‘‘conduct’’ of any person or 

entity that is the ‘‘subject of’’ the 

Criminal Activity encompasses any 

misconduct of CSAG, CSSEL, UBS, UBS 

France (later merged with UBS Europe), 

UBS Securities Japan, and/or their 

personnel: (i) that is described in 

Exhibit 3 to the Plea Agreement entered 

into between UBS and the Department 

of Justice Criminal Division, on May 20, 

2015, in connection with case number 

3:15–cr–00076–RNC; (ii) that is 

described in Exhibits 3 and 4 to the Plea 

Agreement entered into between UBS 

Securities Japan and the Department of 

Justice Criminal Division, on December 

19, 2012, in connection with case 

number 3:12–cr–00268–RNC; (iii) that is 

described in Exhibit 1 of the Plea 

Agreement (Factual Basis for Breach) 

entered into between UBS and the 

Department of Justice Criminal Division, 

on May 20, 2015, in connection with 

Case Number 3:15–cr–00076–RNC filed 

in the US District Court for the District 

of Connecticut; (iv) that is the basis of 

the 2019 UBS France Conviction; and 

(v) that is the subject of the 2014 CSAG 

Conviction and the 2022 CSSEL 

Conviction described in Section I(c)(1) 

and (c)(2). 

(o) The term ‘‘participate in’’ when 

used to describe an individual or 

entity’s participation in the Criminal 

Activity refers not only to active 

participation in the Criminal Activity 

but also includes an individual or 

entity’s knowledge or approval of the 

Criminal Activity, without taking active 

steps to prohibit such conduct, such as 

reporting the conduct to the individual’s 

supervisors, and to the Board of 

Directors. 

Section II. Covered Transactions 

(a) UBS QPAMs are not precluded 

from relying on the exemptive relief 

provided by Prohibited Transaction 

Exemption 84–14 (PTE 84–14) 46 during 

the Exemption Period, notwithstanding 

the ‘‘Covered Convictions,’’ provided 

that the definitions in Section I and the 

conditions in Section III are satisfied. 

(b) UBS QPAMS are not precluded 

from relying on the exemptive relief 

provided by PTE 84–14 during the 

period from June 12, 2023, to June 11, 

2024, notwithstanding UBS’s failure to 

comply with Section III(j)(1) of PTE 

2023–14. 

Section III. Conditions 

(a) The UBS QPAMs (including their 

officers, directors, agents other than the 

Misconduct Entities, employees of such 

QPAMs, and UBS Seconded Employees) 

did not know nor have reason to know 

of and did not participate in the conduct 

underlying the Criminal Activity. 

Further, any other party engaged on 

behalf of the UBS QPAMs who had 

responsibility for, or exercised authority 

in connection with, the management of 

plan assets did not know or have reason 

to know of and did not participate in the 

criminal conduct underlying the 

Criminal Activity. 

(b) The UBS QPAMs (including their 

officers, directors, agents other than the 

Misconduct Entities, employees of such 

QPAMs, and UBS Seconded Employees) 

did not receive direct compensation, or 

knowingly receive indirect 

compensation, in connection with the 

criminal conduct that is the subject of 

the Criminal Activity. Further, any other 

party engaged on behalf of the UBS 

QPAMs who had responsibility for, or 

exercised authority in connection with 

the management of plan assets did not 

receive direct compensation, or 

knowingly receive indirect 

compensation, in connection with the 

Criminal Activity. 

(c) The Affiliated QPAMs do not 

currently and will not in the future 

employ or knowingly engage any of the 

individuals who participated in the 

criminal conduct underlying the 

Criminal Activity. 

(d) At all times during the Exemption 

Period, no Affiliated QPAM will use its 

authority or influence to direct an 

‘‘investment fund’’ (as defined in 

Section VI(b) of PTE 84–14) that is 

subject to ERISA or the Code and 

managed by such Affiliated QPAM with 

respect to one or more Covered Plans, to 

enter into any transaction with a 

Misconduct Entity or to engage a 

Misconduct Entity to provide any 

service to such investment fund, for a 

direct or indirect fee borne by such 

investment fund, regardless of whether 

such transaction or service may 

otherwise be within the scope of relief 

provided by an administrative or 

statutory exemption. An Affiliated 

QPAM will not fail this condition solely 

because: 

(1) A UBS (or successor) affiliate 

serves as a local sub-custodian that is 

selected by an unaffiliated global 

custodian that, in turn, is selected by 

someone other than a UBS QPAM; or 

(2) Services are provided by UBS 

Seconded Employees. 

(e) Any failure of an Affiliated QPAM 

to satisfy Section I(g) of PTE 84–14 arose 

solely from the Covered Convictions. 

(f) A UBS QPAM did not exercise 

authority over the assets of any plan 

subject to Part 4 of Title I of ERISA (an 

‘‘ERISA-covered plan’’) or Code section 

4975 (an ‘‘IRA’’) in a manner that it 

knew or should have known would 

further the criminal conduct underlying 

the Criminal Activity; or cause the UBS 

QPAM or its affiliates to directly or 

indirectly profit from the criminal 

conduct underlying the Criminal 

Activity. 

(g) No Misconduct Entity will act as 

a fiduciary within the meaning of ERISA 

section 3(21)(A)(i) or (iii) or Code 

section 4975(e)(3)(A) and (C) with 

respect to ERISA-covered Plan and IRA 

assets, except that each may act as such 

a fiduciary with respect to employee 

benefit plans sponsored for its own 

employees or employees of an affiliate. 

No Misconduct Entity will be treated as 

violating the conditions of the 

exemption solely because it acted as an 

investment advice fiduciary within the 

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

Code section 4975(e)(3)(B). 

(h)(1) Each Affiliated QPAM must 

maintain, adjust (to the extent 

necessary), implement, and follow the 

written policies and procedures 

described below (Policies). The Policies 

must require and must be reasonably 

designed to ensure that: 

(i) The asset management decisions of 

the QPAM are conducted independently 

of the corporate and management and 


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47The exemption does not preclude an Affiliated 

QPAM from maintaining separate training programs 

provided each training program complies with this 

exemption. 

business activities of each Misconduct 

Entity, and without considering any fee 

a related local sub-custodian may 

receive from those decisions. This 

condition does not preclude an 

Affiliated QPAM, as defined in Section 

I(b)(1), from receiving publicly available 

research and other widely available 

information from a UBS affiliate; 

(ii) The QPAM fully complies with 

ERISA’s fiduciary duties, and with 

ERISA and the Code’s prohibited 

transaction provisions, in each case as 

applicable with respect to each Covered 

Plan, and does not knowingly 

participate in any violation of these 

duties and provisions with respect to 

Covered Plans; 

(iii) The QPAM does not knowingly 

participate in any other person’s 

violation of ERISA or the Code with 

respect to Covered Plans; 

(iv) Any filings or statements made by 

the QPAM to regulators, including but 

not limited to, the Department, the 

Department of the Treasury, the 

Department of Justice, and the Pension 

Benefit Guaranty Corporation, on behalf 

of or in relation to Covered Plans, are 

materially accurate and complete, to the 

best of such QPAM’s knowledge at that 

time; 

(v) To the best of its knowledge at that 

time, the QPAM does not make material 

misrepresentations or omit material 

information in its communications with 

such regulators with respect to Covered 

Plans, or make material 

misrepresentations or omit material 

information in its communications with 

Covered Plans; and 

(vi) The QPAM complies with the 

terms of this exemption; 

(2) Any violation of or failure to 

comply with an item in subparagraphs 

(h)(1)(ii) through (vi) is corrected as 

soon as reasonably possible upon 

discovery, or as soon after the QPAM 

reasonably should have known of the 

noncompliance (whichever is earlier), 

and any such violation or compliance 

failure not so corrected is reported, 

upon the discovery of such failure to so 

correct, in writing. This report must be 

made to the head of compliance and the 

general counsel (or their functional 

equivalent) of the relevant UBS QPAM 

that engaged in the violation or failure 

and the independent auditor 

responsible for reviewing compliance 

with the Policies. A QPAM will not be 

treated as having failed to develop, 

implement, maintain, or follow the 

Policies, if it corrects any instance of 

noncompliance as soon as reasonably 

possible upon discovery, or as soon as 

reasonably possible after the QPAM 

reasonably should have known of the 

noncompliance (whichever is earlier), 

and provided that it adheres to the 

reporting requirements set forth in this 

subparagraph (2); 

(3) Each Affiliated QPAM must 

maintain, adjust (to the extent 

necessary), and implement or continue 

a program of training during the 

Exemption Period (the Training) that is 

conducted at least annually for all 

relevant Affiliated QPAM asset/portfolio 

management, trading, legal, compliance, 

and internal audit personnel.47 The 

Training must: 

(i) At a minimum, cover the Policies, 

ERISA and Code compliance (including 

applicable fiduciary duties and the 

prohibited transaction provisions), 

ethical conduct, the consequences for 

not complying with the conditions of 

this exemption (including any loss of 

exemptive relief provided herein), and 

the requirement for prompt reporting of 

any wrongdoing; 

(ii) Be conducted by a professional 

who has been prudently selected and 

who has appropriate technical training 

and proficiency with ERISA and the 

Code to perform the tasks required by 

this exemption; and 

(iii) Be conducted in-person, 

electronically, or via a website. 

(i)(1) Each Affiliated QPAM submits 

to an audit conducted by an 

independent auditor, who has been 

prudently selected and who has 

appropriate technical training and 

proficiency with ERISA and the Code, to 

evaluate the adequacy of, and each 

Affiliated QPAM’s compliance with, the 

Policies and Training described above 

in Section (h). The audit requirement 

must be incorporated in the Policies. 

(2) UBS shall provide the Department 

a copy of the engagement agreement 

with the independent auditor within 15 

days after its execution. Within 45 days 

after executing the engagement 

agreement with the independent 

auditor, and after consultation with the 

auditor, UBS must finalize and provide 

to the independent auditor a schedule 

for completion of the audit. The 

schedule must include target dates for 

the auditor to send initial information 

and document requests to UBS and for 

UBS to respond to those requests. The 

Department’s receipt and incorporation 

of the engagement agreement into the 

record, with or without comment, 

should not be taken as an indication 

that the Department has approved of the 

engagement agreement. 

(3) The initial audit under this 

exemption must cover the period that 

begins on June 12, 2024, and ends on 

June 11, 2025, and the audit must be 

completed by Thursday, December 11, 

2025. The second audit must cover the 

period that begins on June 12, 2025, and 

ends on June 11, 2026, and must be 

completed by Friday, December 11, 

2026. The third audit must cover the 

period that begins on June 12, 2026, and 

ends on June 11, 2027, and must be 

completed by Monday, December 13, 

2027. The fourth audit must cover the 

period that begins on June 12, 2027, and 

ends on June 11, 2028, and must be 

completed by Monday, December 11, 

2028. The fifth audit must cover the 

period that begins on June 12, 2028, and 

ends on June 11, 2029, and must be 

completed by Tuesday, December 11, 

2029. Notwithstanding the audit periods 

described above, the audit required 

under PTE 2023–14 must be completed 

for the prior period of June 12, 2023, 

through June 11, 2024 and delivered to 

the Department in accordance with the 

terms of that exemption. The prior 

exemption audit report(s) must be 

submitted in accordance with section 

III(i)(9) below; 

(4) Within the scope of the audit and 

to the extent necessary for the auditor, 

in its sole opinion, to complete its audit 

and comply with the conditions for 

relief described herein, and only to the 

extent such disclosure is not prevented 

by state or federal statute, or involves 

communications subject to attorneyclient privilege, each Affiliated QPAM 

and, if applicable, UBS, must grant the 

auditor unconditional access to its 

business, including, but not limited to: 

its computer systems; business records; 

transactional data; workplace locations; 

training materials; and personnel. Such 

access is limited to information relevant 

to the auditor’s objectives as specified 

by the terms of this exemption; 

(5) The auditor’s engagement must 

specifically require the auditor to 

annually determine whether each 

Affiliated QPAM has developed, 

implemented, maintained, and followed 

the Policies in accordance with the 

conditions of this exemption, and has 

developed and implemented the 

Training, as required herein; 

(6) The auditor’s engagement must 

specifically require the auditor to test 

each Affiliated QPAM’s operational 

compliance with the Policies and 

Training. In this regard, the auditor 

must test, for each Affiliated QPAM, a 

sample of such Affiliated QPAM’s 

transactions involving Covered Plans, 

sufficient in size and nature to afford 

the auditor a reasonable basis to 

determine such Affiliated QPAM’s 

operational compliance with the 

Policies and Training; 


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(7) For the audit, on or before the end 

of the relevant period described in 

Section III(i)(1) for completing the audit, 

the auditor must issue a written report 

(the Audit Report) to UBS and the 

Affiliated QPAM to which the audit 

applies that describes the procedures 

performed by the auditor in connection 

with its examination. The auditor, at its 

discretion, may issue a single 

consolidated Audit Report that covers 

all the Affiliated QPAMs. The Audit 

Report must include the auditor’s 

specific determinations regarding: 

(i) The adequacy of each Affiliated 

QPAM’s Policies and Training; each 

Affiliated QPAM’s compliance with the 

Policies and Training; the need, if any, 

to strengthen such Policies and 

Training; and any instance of the 

respective Affiliated QPAM’s 

noncompliance with the written 

Policies and Training described in 

Section III(h) above. The Affiliated 

QPAM must promptly address any 

noncompliance and prepare a written 

plan of action to address any 

determination as to the adequacy of the 

Policies and Training and the auditor’s 

recommendations (if any) with respect 

to strengthening the Policies and 

Training of the respective Affiliated 

QPAM. Any action taken or the plan of 

action to be taken by the respective 

Affiliated QPAM must be included in an 

addendum to the Audit Report (such 

addendum must be completed prior to 

the certification described in Section 

III(i)(7) below). In the event such a plan 

of action to address the auditor’s 

recommendation regarding the 

adequacy of the Policies and Training is 

not completed by the time of 

submission of the Audit Report, the 

following period’s Audit Report must 

state whether the plan was satisfactorily 

completed. Any determination by the 

auditor that an Affiliated QPAM has 

implemented, maintained, and followed 

sufficient Policies and Training must 

not be based solely or in substantial part 

on an absence of evidence indicating 

noncompliance. In this last regard, any 

finding that an Affiliated QPAM has 

complied with the requirements under 

this subparagraph must be based on 

evidence that each Affiliated QPAM has 

implemented, maintained, and followed 

the Policies and Training required by 

this exemption. Furthermore, the 

auditor must not solely rely on the 

Exemption Report created by the 

Compliance Officers, as described in 

Section III(m) below, as the basis for the 

auditor’s conclusions in lieu of 

independent determinations and testing 

performed by the auditor as required by 

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

(ii) The adequacy of the Exemption 

Review described in Section III(m); 

(8) The auditor must notify the 

respective Affiliated QPAM of any 

instance of noncompliance identified by 

the auditor within five (5) business days 

after such noncompliance is identified 

by the auditor, regardless of whether the 

audit has been completed as of that 

date; 

(9) With respect to the Audit Report, 

the General Counsel, or one of the three 

most senior executive officers of the 

Affiliated QPAM to which the Audit 

Report applies, must certify in writing, 

under penalty of perjury, that the officer 

has reviewed the Audit Report and this 

exemption; that, to the best of such 

officer’s knowledge at the time, such 

Affiliated QPAM has addressed, 

corrected, and remedied any 

noncompliance and inadequacy or has 

an appropriate written plan to address 

any inadequacy regarding the Policies 

and Training identified in the Audit 

Report. Such certification must also 

include the signatory’s determination 

that, to the best of such officer’s 

knowledge at the time, the Policies and 

Training in effect at the time of signing 

are adequate to ensure compliance with 

the conditions of this exemption and 

with the applicable provisions of ERISA 

and the Code; 

(10) The Risk Committee of UBS’s 

Group AG’s Board of Directors is 

provided a copy of the Audit Report; 

and a senior executive officer of UBS 

Group AG’s Compliance and 

Operational Risk Control function must 

review the Audit Report for each 

Affiliated QPAM and must certify in 

writing, under penalty of perjury, that 

such officer has reviewed the Audit 

Report; 

(11) Each Affiliated QPAM provides 

its certified Audit Report, by regular 

mail to: Office of Exemption 

Determinations (OED), 200 Constitution 

Avenue NW, Washington, DC 20001; or 

via email to e-OED@dol.gov. This 

delivery must take place no later than 

45 days following completion of the 

Audit Report. The Audit Reports will be 

made part of the public record regarding 

this exemption. Furthermore, each 

Affiliated QPAM must make its Audit 

Reports unconditionally available, 

electronically or otherwise, for 

examination upon request by any duly 

authorized employee or representative 

of the Department, other relevant 

regulators, and any fiduciary of a 

Covered Plan; 

(12) The auditor must provide the 

Department, upon request, for 

inspection and review, access to all the 

workpapers created and used in 

connection with the audit, provided 

such access and inspection is otherwise 

permitted by law; 

(13) UBS must notify the Department 

of Labor’s Office of Exemption 

Determinations (OED) no later than 90 

days after the Effective Date of this 

exemption, of the auditor selected to 

complete audits required by Section 

III(i)(1) above for the periods covering 

June 12, 2024, through June 11, 2029. 

Any engagement agreement with an 

auditor to perform the audit required by 

this exemption that is entered into 

subsequent to the effective date of this 

exemption must be submitted to OED no 

later than two months after the 

execution of such agreement; 

(14) At the Department’s request, UBS 

and the Auditor shall provide the 

Department with updates about the 

progress of the audit. The Department’s 

requests may be directed to UBS and/or 

the auditor; 

(15) For only the initial audit required 

by Section III(i)(1) above for the period 

covering June 12, 2024, through June 11, 

2025, the auditor must consult with the 

auditors who performed the audits 

required pursuant to PTE 2023–14 for 

the period of June 12, 2023, through 

June 11, 2024, unless such auditor is the 

same auditor selected under paragraph 

11 of this subsection. UBS must notify 

OED if for any reason the consultation 

required by this paragraph 12 cannot 

occur and must provide an explanation 

for why the consultation cannot occur. 

Such consultation may, but need not, 

occur for subsequent audits; and 

(16) UBS must notify the Department 

of a change in the independent auditor 

no later than two months after the 

engagement of a substitute or 

subsequent auditor and must provide an 

explanation for the substitution or 

change including a description of any 

material disputes between the 

terminated auditor and UBS. 

(j) As of the effective date of this 

exemption, with respect to any 

arrangement, agreement, or contract 

between an Affiliated QPAM and a 

Covered Plan, the QPAM agrees and 

warrants to Covered Plans: 

(1) To comply with ERISA and the 

Code, as applicable with respect to such 

Covered Plan; to refrain from engaging 

in prohibited transactions that are not 

otherwise exempt (and to promptly 

correct any prohibited transactions); and 

to comply with the standards of 

prudence and loyalty set forth in ERISA 

section 404 with respect to each such 

ERISA-covered plan and IRA to the 

extent that ERISA section 404 is 

applicable; 

(2) To indemnify and hold harmless 

the Covered Plan for any actual losses 

resulting directly from the QPAM’s 


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48Pursuant to PTE 2023–14, the Compliance 

Officer also must conduct and complete an 

exemption review within three months of June 11, 

2024. 

violation of any conditions of this 

exemption, ERISA’s fiduciary duties, as 

applicable, and of the prohibited 

transaction provisions of ERISA and the 

Code, as applicable; a breach of contract 

by the QPAM; or any claim arising out 

of the failure of such QPAM to qualify 

for the exemptive relief provided by 

PTE 84–14 as a result of a violation of 

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

Conviction covered under this 

exemption. The term ‘‘actual losses’’ 

includes, but is not limited to, losses 

and related costs arising from 

unwinding transactions with third 

parties and from transitioning Plan 

assets to an alternative asset manager as 

well as costs associated with any 

exposure to excise taxes under Code 

section 4975 as a result of a QPAM’s 

inability to rely upon the relief in PTE 

84–14; 

(3) Not to require (or otherwise cause) 

the Covered Plan to waive, limit, or 

qualify the liability of the QPAM for 

violating ERISA or the Code for 

engaging in prohibited transactions; 

(4) Not to restrict the ability of the 

Covered Plan to terminate or withdraw 

from its arrangement with the QPAM, 

with respect to any investment in a 

separately-managed account or pooled 

fund subject to ERISA and managed by 

such QPAM, with the exception of 

reasonable restrictions, appropriately 

disclosed in advance, that are 

specifically designed to ensure equitable 

treatment of all investors in a pooled 

fund in the event such withdrawal or 

termination may have adverse 

consequences for all other investors. In 

connection with any such arrangement 

involving investments in pooled funds 

subject to ERISA entered into after the 

effective date of this exemption, the 

adverse consequences must relate to a 

lack of liquidity of the underlying 

assets, valuation issues, or regulatory 

reasons that prevent the fund from 

promptly redeeming an ERISA-covered 

plan’s or IRA’s investment, and such 

restrictions must be applicable to all 

such investors and be effective no 

longer than reasonably necessary to 

avoid the adverse consequences; 

(5) Not to impose any fees, penalties, 

or charges for such termination or 

withdrawal with the exception of 

reasonable fees, appropriately disclosed 

in advance, that are specifically 

designed to prevent generallyrecognized abusive investment practices 

or specifically designed to ensure 

equitable treatment of all investors in a 

pooled fund in the event such 

withdrawal or termination may have 

adverse consequences for all other 

investors, provided that such fees are 

applied consistently and in a like 

manner to all such investors; 

(6) Not to include exculpatory 

provisions disclaiming or otherwise 

limiting liability of the QPAM for a 

violation of such agreement’s terms. To 

the extent consistent with ERISA 

section 410, however, this provision 

does not prohibit disclaimers for 

liability caused by an error, 

misrepresentation, or misconduct of a 

plan fiduciary or other party hired by 

the plan fiduciary who is independent 

of UBS (and affiliates), or damages 

arising from acts outside the control of 

the Affiliated QPAM; and 

(7) Within 120 days after the effective 

date of this exemption, each QPAM 

must provide a notice of its obligations 

under this Section III(j) to each Covered 

Plan. For prospective Covered Plans that 

enter into a written asset or investment 

management agreement with a QPAM 

on or after a date that is 120 days after 

the effective date of this exemption, the 

QPAM must agree to its obligations 

under this Section III(j) in an updated 

investment management agreement 

between the QPAM and such clients or 

other written contractual agreement. 

Notwithstanding the above, a QPAM 

will not violate the condition solely 

because a Covered Plan refuses to sign 

an updated investment management 

agreement. For new Covered Plans that 

were provided an investment 

management agreement prior to the 

effective date of this exemption, 

returning it within 120 days after the 

effective date of this exemption, and 

that signed investment management 

agreement requires amendment to meet 

the terms of the exemption, the QPAM 

may provide the new Covered Plan with 

amendments that need not be signed 

with any documents required by this 

subsection (j) within ten (10) business 

days after receipt of the signed 

agreement. 

(k) Within 60 days after the 

publication date of the notice of final 

exemption in the Federal Register, each 

Affiliated QPAM provides notice of the 

proposed and final exemption as 

published in the Federal Register, along 

with a summary describing the facts that 

led to the Covered Convictions (the 

Summary), which has been submitted to 

the Department, and a prominently 

displayed statement (the Statement) that 

the Covered Convictions result in a 

failure to meet a condition in PTE 84– 

14, to each sponsor and beneficial 

owner of a Covered Plan that has 

entered into a written asset or 

investment management agreement with 

an Affiliated QPAM, or the sponsor of 

an investment fund in any case where 

an Affiliated QPAM acts as a subadviser to the investment fund in which 

such ERISA-covered plan and IRA 

invests. The Summary will be submitted 

to OED before it is distributed by each 

Affiliated QPAM. All prospective 

Covered Plan clients that enter into a 

written asset or investment management 

agreement with an Affiliated QPAM 

after a date that is 60 days after the 

effective date of this exemption must 

receive a copy of the notice of the 

exemption, the Summary, and the 

Statement before, or contemporaneously 

with, the Covered Plan’s receipt of a 

written asset or investment management 

agreement from the Affiliated QPAM. 

The notices may be delivered 

electronically (including by an email 

that has a link to the exemption). 

(l) The Affiliated QPAMs must 

comply with each condition of PTE 84– 

14, as amended, with the sole exception 

of the violation of Section I(g) of PTE 

84–14 that is attributable to the Covered 

Convictions. If, during the Exemption 

Period, an entity within UBS’s corporate 

structure engages in conduct prohibited 

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

the Covered Convictions), relief in this 

exemption would terminate 

immediately. 

(m)(1) Within 60 days after the date of 

publication of the exemption, each 

Affiliated QPAM must designate two 

senior Compliance Officers (the 

Compliance Officers) who will be 

responsible for compliance with the 

Policies and Training requirements 

described herein. For purposes of this 

condition (m), each relevant line of 

business within an Affiliated QPAM 

may designate its own two Compliance 

Officers. Notwithstanding the above, the 

appointed Compliance Officers must not 

be a person who: (i) participated in the 

criminal conduct underlying the 

Criminal Activity, or knew of, or (ii) had 

reason to know of, the Criminal Activity 

without taking active documented steps 

to stop the misconduct. 

(2) The Compliance Officers must 

conduct a review of each twelve-month 

period of the Exemption Period (the 

Exemption Review), to determine the 

adequacy and effectiveness of the 

implementation of the Policies and 

Training.48

(3) With respect to the Compliance 

Officers, the following conditions must 

be met: 

(i) Each Compliance Officer must be 

a professional who has extensive 

experience with, and knowledge of, the 

regulation of financial services and 


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49 If the UBS meets this disclosure requirement 

through Summary Policies, changes to the Policies 

shall not result in the requirement for a new 

disclosure unless, as a result of changes to the 

Policies, the Summary Policies are no longer 

accurate. 

products, including under ERISA and 

the Code; 

(ii) Each Compliance Officer must 

have a direct reporting line to the 

highest-ranking corporate officer in 

charge of compliance for the applicable 

Affiliated QPAM or the highest-ranking 

corporate officer in charge of the 

applicable Affiliated QPAM and 

(iii) The Compliance Officers 

responsible for the Exemption Review 

must provide the Exemption Report 

described in Section III(m)(4)(ii) below 

to the Auditor within seven (7) days of 

completing the report. 

(4) With respect to the Exemption 

Review, the following conditions must 

be met: 

(i) The Annual Exemption Review 

includes a review of the Affiliated 

QPAM’s compliance with and 

effectiveness of the Policies and 

Training and of the following: any 

compliance matter related to the 

Policies or Training that was identified 

by, or reported to, the Compliance 

Officers or others within the compliance 

and risk control function (or its 

equivalent) during the time period; the 

most recent Audit Report issued 

pursuant to this exemption or PTE 

2023–14; any material change in the 

relevant business activities of the 

Affiliated QPAMs; and any change to 

ERISA, the Code, or regulations related 

to fiduciary duties and the prohibited 

transaction provisions that may be 

applicable to the activities of the 

Affiliated QPAMs; 

(ii) The Compliance Officers must 

prepare a written report for the 

Exemption Review (an Exemption 

Report) that (A) summarizes their 

material activities during the prior year; 

(B) sets forth any instance of 

noncompliance discovered during the 

prior year, and any related corrective 

action; (C) details any change to the 

Policies or Training to guard against any 

similar instance of noncompliance 

occurring again; and (D) makes 

recommendations, as necessary, for 

additional training, procedures, 

monitoring, or additional and/or 

changed processes or systems, and 

management’s actions on such 

recommendations; 

(iii) In the Exemption Report, each 

Compliance Officer must certify in 

writing that to the best of his or her 

knowledge at the time: (A) the report is 

accurate; (B) the Policies and Training 

are working in a manner which is 

reasonably designed to ensure that the 

Policies and Training requirements 

described herein are met; (C) any known 

instance of noncompliance during the 

prior year and any related correction 

taken to date have been identified in the 

Exemption Report; and (D) the Affiliated 

QPAMs have complied with the Policies 

and Training, and/or corrected (or are 

correcting) any known instances of 

noncompliance in accordance with 

Section III(h) above; 

(iv) The Exemption Report must be 

provided to appropriate corporate 

officers of UBS and to each Affiliated 

QPAM to which such report relates, and 

to the head of compliance and the 

general counsel (or their functional 

equivalent) of UBS, and the relevant 

Affiliated QPAM. The Exemption 

Report must be made unconditionally 

available to the independent auditor 

described in Section III(i) above; and 

(v) The Exemption Review, including 

the Compliance Officers’ written 

Annual Exemption Report, must cover 

the Exemption Period, and the Annual 

Review, including the Compliance 

Officers’ written Report, must be 

completed within three (3) months 

following the end of the period to which 

it relates. 

(n) UBS imposes its internal 

procedures, controls, and protocols on 

each Misconduct Entity to reduce the 

likelihood of any recurrence of conduct 

that is the subject of the Criminal 

Activity. 

(o) Relief in this exemption will 

terminate on the date that is one year 

following the date that a U.S. regulatory 

authority makes a final decision that 

UBS or CSAG or an affiliate of either 

failed to comply in all material respects 

with any requirement imposed by such 

regulatory authority in connection with 

the Covered Convictions. 

(p) Each Affiliated QPAM will 

maintain records necessary to 

demonstrate that the conditions of this 

exemption have been met for six (6) 

years following the date of any 

transaction for which the Affiliated 

QPAM relies upon the relief in this 

exemption. 

(q) During the Exemption Period, UBS 

must: (1) immediately disclose to the 

Department any Deferred Prosecution 

Agreement (a DPA) or Non-Prosecution 

Agreement (an NPA) with the U.S. 

Department of Justice, entered into by 

UBS or any of its affiliates (as defined 

in Section VI(d) of PTE 84–14) in 

connection with conduct described in 

Section I(g) of PTE 84–14 or section 411 

of ERISA via email addressed to e-OED@

dol.gov; and (2) immediately provide 

the Department with any information 

requested by the Department, as 

permitted by law, regarding the 

agreement and/or conduct and 

allegations that led to the agreement via 

email addressed to e-OED@dol.gov. 

(r) Within 60 days after the effective 

date of this exemption, each Affiliated 

QPAM, in its agreements with, or in 

other written disclosures provided to 

Covered Plans, will clearly and 

prominently inform Covered Plan 

clients of their right to obtain a copy of 

the Policies or a description (Summary 

Policies) which accurately summarizes 

key components of the QPAM’s written 

Policies developed in connection with 

this exemption. If the Policies are 

thereafter changed, each Covered Plan 

client must receive a new disclosure 

within six (6) months following the end 

of the calendar year during which the 

Policies were changed.49 With respect to 

this requirement, the description may be 

continuously maintained on a website, 

provided that such website link to the 

Policies or Summary Policies is clearly 

and prominently disclosed to each 

Covered Plan. 

(s) An Affiliated QPAM will not fail 

to meet the terms of this exemption 

solely because a different Affiliated 

QPAM fails to satisfy a condition for 

relief described in Section III(c), (d), (h), 

(i), (j), (k), (l), (m), (p), (r), or (t); or if 

the independent auditor described in 

Section III(i) fails to comply with a 

provision of the exemption other than 

the requirement described in Section 

III(i)(12), provided that such failure did 

not result from any actions or inactions 

of UBS or its affiliates; 

(t) If the independent auditor or UBS 

or its affiliates learns of any material 

noncompliance with a condition of this 

exemption, UBS must send a notice (a 

‘‘Violation Notice’’) to all affected 

Covered Plans and the Department that 

prominently and conspicuously states 

or describes: (1) that UBS, or the UBS 

QPAM, as applicable, failed to meet the 

terms of this exemption (and describes 

the failure); (2) the extent to which UBS 

QPAMs have potentially been operating 

without an exemption due to the failure; 

(3) whether UBS plans to apply for 

retroactive relief from the Department 

for this failed condition; (4) any further 

transactions engaged in by the UBS 

QPAMs on behalf of Covered Plans that 

may be non-exempt prohibited 

transactions unless the Department 

grants retroactive relief for the period in 

which the transactions occurred; and (5) 

UBS must indemnify and hold harmless 

the Covered Plan for any actual losses 

resulting directly from the QPAM’s 

failure to comply with any conditions of 

this exemption, ERISA’s fiduciary 

duties and of the prohibited transaction 

provisions of ERISA and the Code, a 


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1 76 FR 66637, 66644, (October 27, 2011). 

2 89 FR 56422 (July 9, 2024). 

3 29 CFR 2509.95–1. 

4As discussed in more detail below, the 

exemption requires the Plan participants and 

beneficiaries to receive the majority of the benefits 

derived from the Reinsurance Arrangement. While, 

as noted above, it is ‘‘currently expected’’ that a 

5.55% increase in Plan’s participants’ and 

beneficiaries’ monthly pension benefits will achieve 

this objective, the exact percentage increase needed 

to ensure that Plan participants and beneficiaries 

receive the majority of the benefits derived from the 

proposed arrangement will not be known until the 

Plan actually enters into the GAC, which will occur 

after the Fronting Insurer is selected by the IB 95– 

1 Fiduciary. As described in further detail below, 

after the Plan enters into the GAC, Milliman, a 

second independent fiduciary acting solely on 

behalf of the Plan, must determine, based on 

objective data, that the Plan participants’ and 

beneficiaries’ monthly pension benefits have been 

increased by a percentage that ensures they will 

receive the majority of the benefits derived from the 

Reinsurance Arrangement. The methodology for 

making this calculation is discussed below. 

Milliman as independent fiduciary must, among 

other things, conclude, in a written report 

submitted to the Department, that Plan participants 

and beneficiaries received the appropriate 

percentage increase in their monthly pension 

benefits. The written report of the independent 

fiduciary will be available to the public by 

contacting EBSA’s Public Disclosure Office and 

referencing Exemption Application D–12073. 

breach of contract by the QPAM, or any 

claim arising out of the failure of such 

QPAM to qualify for the exemptive 

relief provided by PTE 84–14 as a result 

of a violation of PTE 84–14 Section I(g), 

other than a Conviction covered under 

the exemption. The Violation Notice 

must be sent to all affected Covered 

Plans and the Department within 30 

days after the independent auditor 

becomes aware of the violation. If the 

Violation Notice is not sent within the 

30-day period, the UBS QPAM may selfcorrect the failure by sending the 

Violation Notice to all affected Covered 

Plans and the Department with an 

addendum describing the failure within 

30 days after the completion of next 

scheduled audit. 

(u) All the material facts and 

representations set forth in the 

Summary of Facts and Representations 

are true and accurate at all times. 

(v) Each UBS QPAM must develop 

written processes that clearly describe: 

(1) how the QPAM identifies and 

quantifies ‘‘actual losses’’ for purposes 

of Section III(j)(2); and (2) how Covered 

Plans may recover or avoid incurring 

the losses that the UBS QPAM must 

indemnify or hold Covered Plans 

harmless from incurring pursuant to 

Section III(j)(2). Each UBS QPAM must 

develop these processes and deliver a 

copy of the processes to each Covered 

Plan within 90 days after the date the 

Department publishes a final exemption 

in the Federal Register and notify 

Covered Plans of any subsequent 

material changes to the processes within 

30 days of the effective date of such 

changes. Applicability Date: This 

exemption will be in effect for the 

period beginning on June 12, 2024 and 

ending on June 11, 2029, as well as the 

period of June 12, 2023, through June 

11, 2024. 

Signed at Washington, DC. 

George Christopher Cosby, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2025–00812 Filed 1–14–25; 8:45 am] 

BILLING CODE 4510–29–P 

EMPLOYEE BENEFITS SECURITY 

ADMINISTRATION 

[Prohibited Transaction Exemption 2025– 

02; Exemption Application No. D–12073] 

Exemption From Certain Prohibited 

Transaction Restrictions Involving 

Memorial Sloan Kettering Cancer 

Center (MSKCC or the Applicant) 

Located in New York, New York 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of exemption. 

SUMMARY: This document contains a 

notice of exemption issued by the 

Department of Labor (the Department) 

from certain 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). This 

exemption permits the reinsurance of 

risks and the receipt of a premium by 

MSK Employee Benefits IC (MSK EB or 

the Captive), a captive insurance and 

reinsurance subsidiary that is whollyowned by MSKCC, in connection with 

a single premium group insurance 

contract sold by an unrelated fronting 

insurer (the Fronting Insurer or the 

Fronter) to provide pension annuities to 

participants and beneficiaries in the 

Memorial Sloan Kettering Cancer Center 

Pension Plan (the Plan). The relief 

provided in the exemption will only be 

available if the conditions in Section III 

are met in conformance with the 

definitions in Section I. 

DATES: The exemption will be in effect 

on January 15, 2025. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Joseph Brennan of the Department at 

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

number.) 

SUPPLEMENTARY INFORMATION: The 

Applicant submitted an exemption 

application requesting an individual 

exemption pursuant to ERISA section 

408(a) in accordance with the 

Department’s exemption procedures set 

forth in 29 CFR part 2570, subpart B.1

On July 9, 2024, the Department 

published a notice of proposed 

exemption in the Federal Register.2

Based on adherence to the conditions of 

this exemption by MSKCC, the 

Independent Fiduciary, and the IB 95– 

1 Independent Fiduciary (as defined 

below), the Department makes the 

requisite findings under ERISA section 

408(a) that this exemption is: (1) 

administratively feasible for the 

Department, (2) in the interest of the 

participants and beneficiaries of the 

Plan, and (3) protective of the rights of 

the participants and beneficiaries of the 

Plan. Accordingly, affected parties 

should be aware that the conditions 

incorporated in this exemption are, 

individually and taken as a whole, 

necessary for the Department to grant 

the relief provided herein. The 

Department would not have granted this 

exemption without these conditions. 

Background 

Overview of the Exemption 

1. Under the exemption, the Plan will 

enter into a single premium group 

annuity insurance contract (the GAC) 

with an unrelated Fronting Insurer that 

will be selected by an IB 95–1 Fiduciary 

in compliance with the requirements of 

the Department’s Interpretive Bulletin 

95–1.3 The Fronting Insurer will, in 

turn, enter into a reinsurance contract 

(the Reinsurance Arrangement) with the 

Captive. Under the Reinsurance 

Arrangement, the Captive will reinsure 

100 percent of the Plan’s risks under the 

GAC. Importantly, the Fronting Insurer 

will remain fully responsible for the 

benefits of participants and beneficiaries 

for the entire duration of the GAC and 

Reinsurance Arrangement if the Captive 

fails to fulfill its contractual obligations 

to the Fronting Insurer, without any 

caveats, contingencies, or conditions 

that would relieve or limit the Fronting 

Insurer’s contractual obligation to pay 

benefits to the Plan’s participants and 

beneficiaries. 

In connection with the Reinsurance 

Arrangement, all Plan participants and 

beneficiaries will receive an increase to 

their monthly pension benefit that is 

currently expected to be 5.55 percent.4

The Applicant expects that this benefit 

increase will provide $66,408,000 in 

additional benefits to the Plan’s 

participants and beneficiaries. 

Importantly, this increase will remain in 

place for the entirety of Plan 

participants’ and beneficiaries’ lives 

and, as a condition of this exemption, 


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