7174 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 

aware that submitted comments are not 

instantaneously available for public 

view on https://www.regulations.gov. If 

you have received a Comment Tracking 

Number, your comment has been 

successfully submitted and there is no 

need to resubmit the same comment. 

SUPPLEMENTARY INFORMATION: In 

accordance with 21 CFR 1301.33(a), this 

is notice that on November 14, 2024, 

Invizyne Technologies, Inc., 750 Royal 

Oaks Drive, Suite 106, Monrovia, 

California 91016–6357 applied to be 

registered as a bulk manufacturer of the 

following basic class(es) of controlled 

substance(s): 

Controlled substance Drug 

code Schedule 

Tetrahydrocannabinols ... 7370 I 

The company plans to bulk 

manufacture the listed controlled 

substance for the internal use 

intermediates or for sale to its 

customers. In reference to drug code 

7370 (Tetrahydrocannabinols), the 

company plans to bulk manufacture this 

drug as synthetic. No other activity for 

this drug code is authorized for this 

registration. 

Matthew Strait, 

Deputy Assistant Administrator. 

[FR Doc. 2025–01347 Filed 1–17–25; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF JUSTICE 

National Institute of Justice 

[OJP (NIJ) Docket No. 1833] 

Body Armor Manufacturer Workshop 

AGENCY: National Institute of Justice, 

Office of Justice Programs, U.S. 

Department of Justice. 

ACTION: Notice. 

SUMMARY: The National Institute of 

Justice (NIJ) will hold an online 

workshop for body armor manufacturers 

to provide updates on its standards and 

conformity assessment activities related 

to ballistic-resistant body armor. 

DATES: The workshop will be held 

online Wednesday, March 19, 2025, 

from 1 p.m. to 3 p.m. eastern time. 

FOR FURTHER INFORMATION CONTACT: 

Jared Gardner, Technology and 

Standards Advisor, Office of 

Technology and Standards, National 

Institute of Justice, 999 North Capitol 

Street NE, Washington, DC 20531, by 

telephone at (202) 702–2917 [Note: this 

is not a toll-free telephone number], or 

by email at jared.gardner@usdoj.gov. 

SUPPLEMENTARY INFORMATION: The 

National Institute of Justice (NIJ) will 

hold an online workshop for body armor 

manufacturers to provide updates on its 

standards and conformity assessment 

activities related to ballistic-resistant 

body armor. NIJ will discuss recent 

addenda to NIJ Standard 0101.07, 

‘‘Ballistic Resistance of Body Armor’’, 

and NIJ Standard 0123.00, 

‘‘Specification for NIJ Ballistic 

Protection Levels and Associated Test 

Threats’’. The NIJ Compliance Testing 

Program (CTP) will update program 

participants on the initial 

implementation of testing body armor to 

NIJ Standard 0101.07 (‘‘07’’) and the 

anticipated timeline for publication of 

the NIJ Compliant Products List (CPL) 

for those ‘‘07’’ armor models. The NIJ 

CTP will also discuss ongoing 

administration of the NIJ CPL for armor 

compliant with NIJ Standard 0101.06 

(‘‘06’’) and continued Follow-up 

Inspection and Testing (FIT) for those 

‘‘06’’ armor models. Potential revisions 

to NIJ CTP program requirements will 

also be discussed, including FIT testing 

procedures for ‘‘07’’ armor models listed 

on the NIJ CPL, disclosure of 

information about ballistic materials 

used to manufacture body armor 

submitted to the NIJ CTP for 

certification, and labeling requirements, 

among others. NIJ will also discuss 

potential changes to how information is 

displayed on the NIJ Compliant 

Products List and how it anticipates 

future updates to NIJ standards and NIJ 

CTP program requirements will be 

communicated. 

The workshop will be presented as an 

online webinar with opportunities for 

attendees to ask questions. To register 

for the workshop, please send an email 

to askctp@nijctp.org by 5 p.m. eastern 

time on Friday, March 14, 2025, and 

provide the name of your company and 

the names of the representatives who 

will attend. Please put ‘‘Body Armor 

Manufacturer Workshop’’ in the subject 

line of the email. A preliminary agenda 

will be sent to registered attendees 

approximately 48 hours prior to the 

workshop. 

For more information on NIJ’s 

standards and conformity assessment 

activities, please visit https://

nij.ojp.gov/topics/equipment-andtechnology/standards-and-conformityassessment. For more information on 

body armor, please visit https://

nij.ojp.gov/topics/equipment-andtechnology/body-armor. More 

information on the NIJ CTP can be 

found here: https://cjttec.org/ 

compliance-testing-program/. 

NIJ publishes this notice pursuant to 

its authority at 34 U.S.C. 10122(c) and 

6 U.S.C. 161–165. 

Nancy La Vigne, 

Director, National Institute of Justice. 

[FR Doc. 2025–01247 Filed 1–17–25; 8:45 am] 

BILLING CODE 4410–18–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Exemption Application No. D–12101] 

Proposed Exemption From Certain 

Prohibited Transaction Restrictions 

Involving Northern Trust Corporation 

(Together With its Current and Future 

Affiliates, Northern or the Applicant) 

Located in Chicago, IL 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemption. 

SUMMARY: This document provides 

notice of the pendency before the 

Department of Labor (the Department) of 

a proposed individual exemption from 

certain prohibited transaction 

restrictions of the Employee Retirement 

Income Security Act of 1974 (ERISA) 

and the Internal Revenue Code of 1986 

(the Code). The proposed exemption 

would allow certain entities with 

specified relationships to Northern 

Trust Fiduciary Services (Guernsey) 

Limited (NTFS) (hereinafter, the 

Northern QPAMs, as further defined in 

section I(e) of the operative language) to 

rely on the exemptive relief provided by 

Prohibited Transaction Class Exemption 

84–14 (PTE 84–14 or the QPAM 

Exemption), notwithstanding the 

judgment of conviction (the Conviction) 

against NTFS for aiding and abetting tax 

fraud entered in France in the Paris 

Court of Appeal, French Special 

Prosecutor No. 1120392066, French 

Investigative Judge No. JIRSIF/11/12. 

DATES: 

Exemption date: This proposed 

exemption would be in effect for a 

period of five years beginning on March 

5, 2025, and ending on March 4, 2030 

(the Exemption Period). 

Comments due: Written comments 

and requests for a public hearing on the 

proposed exemption should be 

submitted to the Department by March 

7, 2025. 

ADDRESSES: All written comments and 

requests for a hearing should be 

submitted to the Employee Benefits 

Security Administration (EBSA), Office 

of Exemption Determinations, 

Attention: Application No. D–12101 via 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 7175 

1 29 CFR part 2570, subpart B (75 FR 66637, 

66644, October 27, 2011). 

2 49 FR 9494 (March 13, 1984), as corrected at 50 

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

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

38837 (July 6, 2010), and as amended at 89 FR 

23090 (April 3, 2024). 

3For purposes of this proposed exemption, 

references to specific provisions of ERISA Title I, 

unless otherwise specified, should be read to refer 

as well to the corresponding provisions of Code 

section 4975. Further, this proposed exemption, if 

granted, does not provide relief from the 

requirements of, or specific sections of, any law not 

noted above. 

4PTE 84–14 section VI(d) defines the term 

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

person directly or indirectly through one or more 

intermediaries, Controlling, Controlled by, or under 

Common Control with the person, (2) Any director 

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

Any corporation, partnership, trust or 

unincorporated enterprise of which such person is 

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

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

person who-(A) Is a highly compensated employee 

(as defined in Code section 4975(e)(2)(H)) 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.’’ For 

purposes of this definition, section VI(e) defines the 

terms ‘‘Controlling,’’ ‘‘Controlled by,’’ ‘‘under 

Common Control with,’’ and ‘‘Controls’’ means the 

power to exercise a controlling influence over the 

management or policies of a person other than an 

individual. 

5The Summary of Facts and Representations is 

based on the Applicant’s representations and does 

not reflect factual findings or opinions of the 

Department, unless indicated otherwise. The 

Department notes that the availability of this 

exemption, if granted, is subject to the express 

condition that the material facts and representations 

contained in the Application (D–12101) are true 

and complete, and accurately describe all material 

terms of the transactions covered by this exemption. 

If there is any material change in a transaction 

covered by this exemption, or in a material fact or 

representation described in the Application, the 

exemption will cease to apply as of the date of such 

change. 

email to e-OED@dol.gov or online 

through https://www.regulations.gov. 

Any such comments or requests should 

be sent by the end of the scheduled 

comment period. The application for 

exemption (the Application) and the 

comments received will be available for 

public inspection in the Public 

Disclosure Room of the Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1515, 

200 Constitution Avenue NW, 

Washington, DC 20210, reachable by 

telephone at (202) 693–8673. See 

SUPPLEMENTARY INFORMATION below for 

additional information regarding 

comments. 

FOR FURTHER INFORMATION CONTACT: 

Anna Mpras Vaughan of the 

Department, telephone (202) 693–8565. 

(This is not a toll-free number.) 

SUPPLEMENTARY INFORMATION: 

Comments: Persons are encouraged to 

submit all comments electronically 

without submitting paper versions. 

Comments should state the nature of the 

person’s interest in the proposed 

exemption and how the person would 

be adversely affected by the exemption, 

if granted. Any person who may be 

adversely affected by an exemption can 

request a hearing on the exemption. A 

request for a hearing must state: (1) The 

name, address, telephone number, and 

email address of the person making the 

request; (2) the nature of the person’s 

interest in the exemption and the 

manner in which the person would be 

adversely affected by the exemption; 

and (3) a statement of the issues to be 

addressed and a general description of 

the evidence to be presented at the 

hearing. The Department will grant a 

request for a hearing made in 

accordance with the requirements above 

where a hearing is necessary to fully 

explore material factual issues 

identified by the person requesting the 

hearing. The Department would publish 

a notice announcing such hearing in the 

Federal Register. The Department may 

decline to hold a hearing if: (1) the 

request for the hearing does not meet 

the requirements above; (2) the only 

issues identified for exploration at the 

hearing are matters of law; or (3) the 

factual issues identified can be fully 

explored through the submission of 

evidence in written (including 

electronic) form. 

Warning: All comments received will 

be included in the public record 

without change and may be made 

available online at https://

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be confidential or other 

information whose disclosure is 

restricted by statute. If you submit a 

comment, EBSA recommends that you 

include your name and other contact 

information in the body of your 

comment, but DO NOT submit 

information that you consider to be 

confidential, or otherwise protected 

(such as a Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. However, if 

EBSA cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EBSA might not be 

able to consider your comment. 

Additionally, the https://

www.regulations.gov website is an 

‘‘anonymous access’’ system, which 

means EBSA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email directly 

to EBSA without going through https:// 

www.regulations.gov, your email 

address will be automatically captured 

and included as part of the comment 

that is placed in the public record and 

made available on the internet. 

Proposed Exemption 

The Department is considering 

granting the exemption pursuant to its 

authority under ERISA section 408(a) 

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

accordance with the Department’s 

exemption procedures.1 If the 

Department grants a final exemption, 

the Northern QPAMs will not be 

precluded from relying on the QPAM 

Exemption 2 notwithstanding the 

Conviction, provided the conditions and 

definitions set forth in the exemption 

are met. 

This proposed exemption would 

provide relief from certain restrictions 

set forth in ERISA sections 406 and 

407.3 It would not, however, provide 

relief from any other violation of law. 

Furthermore, the Department cautions 

that the relief in this proposed 

exemption would terminate 

immediately if, among other things, 

Northern or an affiliate of Northern (as 

defined in section VI(d) of PTE 84–14) 4

is convicted of a crime covered by 

section I(g) of PTE 84–14 (other than the 

Conviction) or any other violation 

occurs during the Exemption Period. 

Although Northern could apply for a 

new exemption in that circumstance, 

the Department would not be obligated 

to grant the exemption. 

The terms of this proposed exemption 

have been specifically designed to 

permit a plan to terminate its 

relationship with Northern or an 

Affiliate in an orderly and cost-effective 

fashion in the event of an additional 

conviction of them or a plan fiduciary 

determines that it otherwise prudent for 

a plan to terminate its relationship with 

Northern. 

Summary of Facts and Represenations 5

Northern Trust Corporation (Northern) 

1. Northern is a financial holding 

company that provides investment 

management, asset and fund 

administration, fiduciary, and banking 

services for corporations, institutions, 

and affluent individuals. Northern 

conducts business through various U.S. 

and non-U.S. subsidiaries, including 

The Northern Trust Company (the 

Bank), an Illinois bank headquartered in 

Chicago, Illinois. 

Northern QPAMS 

2. Northern has several U.S. and nonU.S. affiliates that provide investment 

management services. The Northern 


ddrumheller on DSK120RN23PROD with NOTICES1
7176 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 

6 In each case, a Covered Plan is an ERISAcovered plan or an IRA with respect to which 

Northern relies on PTE 84–14, or with respect to 

which Northern has expressly represented that the 

manager qualifies as a QPAM or relies on the 

QPAM class exemption (PTE 84–14 or the QPAM 

Exemption). A Covered Plan does not include an 

ERISA-covered plan or IRA to the extent that 

Northern 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. 

7Under the Code, such parties, or similar parties, 

are referred to as ‘‘disqualified persons.’’ 8 The prohibited transaction provisions also 

include certain fiduciary prohibited transactions 

under ERISA section 406(b). These include 

transactions involving fiduciary self-dealing, 

fiduciary conflicts of interest, and kickbacks to 

fiduciaries. 9PTE 84–14 was recently amended, effective June 

17, 2024 to among other things, (1) require a QPAM 

affiliates that currently manage assets of 

plans subject to Part 4 of Title I of 

ERISA (i.e., an ERISA-covered plan) or 

Code section 4975 (i.e., an IRA; together, 

a Covered Plan), 6 collective investment 

trusts and other commingled funds on a 

discretionary basis, and that routinely 

rely on the QPAM Exemption to provide 

relief for party-in-interest transactions, 

are: 

• The Northern Trust Company (the 

Bank) acts as trustee for plans subject to 

Title I of ERISA and IRAs and other 

accounts subject to ERISA or Code 

section 4975. The Bank also maintains 

ERISA-governed collective investment 

trusts and commingled vehicles for 

investment of plan assets. 

• Northern Trust Investments, Inc. 

(NTI) is both an Illinois bank regulated 

by the Illinois Department of Financial 

and Professional Regulation and an 

investment adviser registered with the 

SEC under the Advisers Act with its 

principal office in Chicago, Illinois. NTI 

provides portfolio management services 

to corporations, public and private 

pension plans, Taft-Hartley plans, 

charitable institutions, foundations, 

endowments, municipalities, registered 

mutual funds, collective investment 

trusts, private investment funds, trust 

programs, individuals, wrap sponsors 

and other U.S. and international 

institutions. As of December 31, 2023, 

NTI manages discretionary assets of 

approximately $1,017 billion, including 

ERISA and IRA assets. 

• 50 South Capital Advisors, LLC (50 

South) is an investment adviser 

registered with the SEC under the 

Advisers Act, with its principal office in 

Chicago, Illinois. 50 South provides 

portfolio management services to pooled 

investment vehicles including plan 

asset funds. As of December 31, 2023, 

50 South manages discretionary assets 

of nearly $11.3 billion, including ERISA 

and IRA assets. 

• Northern Trust Securities, Inc. 

(NTSI) is an investment advisor 

registered with the SEC under the 

Advisers Act with its principal office in 

Chicago, Illinois. NTSI provides 

portfolio management services to 

separately managed accounts. As of 

October 28, 2024, NTSI manages 

discretionary assets of approximately 

$1.27 billion, including ERISA and IRA 

assets. 

3. According to the Applicant, the 

Northern QPAMs rely on the QPAM 

Exemption for transaction that include, 

without limitation, global fixed income, 

global equities, futures, options, swaps 

and other derivatives, investments made 

by alternative plan asset funds, 

including hedge funds, and similar 

instruments and strategies. The issuing 

documents for many instruments state 

that the investment manager is deemed 

to represent that it is relying, at least 

partially, on PTE 84–14. The four 

QPAMs described above, and any future 

manager affiliated with Northern that 

relies on the exemptive relief provided 

in PTE 84–14 with respect to any 

Covered Plan, are hereinafter referred to 

as the ‘‘Northern QPAMs.’’ 

The Convicted Entity: NTFS 

4. Northern has an indirect wholly 

owned subsidiary, Northern, NTFS, that 

is a limited liability company organized 

under the laws of Guernsey. NTFS 

provides a wide range of services, 

including trust and fiduciary services, to 

a global client base that includes 

institutional clients (such as non-U.S. 

thrift savings and pension trusts of large 

corporations) and private ultra-high net 

worth individual or family office 

clients/trusts. The trust and company 

management and administration 

services provided by NTFS include 

ongoing interaction with the settlor and 

beneficiaries, investment managers and 

advisors, and the settlor’s legal counsel, 

among others. NTFS also may appoint 

individual directors that are personnel 

of NTFS, if required, or more commonly 

corporate directors (entities wholly 

owned by NTFS) to act as the directors 

of some of the underlying holding 

companies owned by the trusts for 

which NTFS acts as trustee. These 

holding companies hold assets which 

could include cash, marketable 

securities, privately held companies, art, 

real estate and other property. With 

respect to non-U.S. thrift savings and 

pension trusts, NTFS may be appointed 

as trustee and responsible for: (i) 

payments to beneficiaries of the trust 

(i.e., employees of the company funding 

the trust); and (ii) auditing the trust 

using external auditor(s) and providing 

annual tax filings (depending on 

domicile). The Applicant represents that 

NTFS does not act as a ‘‘qualified 

professional asset manager’’ (QPAM) or 

otherwise provide investment 

management services to any accounts 

subject to ERISA or Code section 4975 

and does not act as a fiduciary to any 

ERISA plan or IRA. 

5. NTFS operates based on internal 

policies and procedures of Northern and 

is subject to internal audits to ascertain 

compliance. NTFS is managed by a 

board of directors, which meets at least 

quarterly. In addition, the board has 

delegated certain powers to an 

Appointment Committee for 

consideration of new or existing 

business, a Fiduciary Committee for the 

review of the companies’ fiduciary 

activities and for consideration of the 

exercise of discretionary powers by 

NTFS as trustee and a Risk Committee 

for consideration and management of 

risks. 

ERISA and Code Prohibited 

Transactions and PTE 84–14 

6. The rules set forth in ERISA section 

406 proscribe certain ‘‘prohibited 

transactions’’ between plans and parties 

in interest with respect to those plans. 

ERISA section 3(14) defines parties in 

interest with respect to a plan to 

include, among others, the plan 

fiduciary, a sponsoring employer of the 

plan, a union whose members are 

covered by the plan, service providers 

with respect to the plan, and certain of 

their affiliates.7 The transactions 

prohibited by ERISA section 406(a) 

prohibit that are relevant to this 

proposed exemption are (1) sales, leases, 

loans, or the provision of services 

between a party in interest and a plan 

(or an entity whose assets are deemed to 

constitute the assets of a plan), (2) the 

use of plan assets by or for the benefit 

of a party in interest, or (3) a transfer of 

plan assets to a party in interest.8

7. ERISA section 408(a) gives the 

Department the authority to grant an 

exemption from such ‘‘prohibited 

transactions’’ if the Department finds an 

exemption is: (a) administratively 

feasible for the Department; (b) in the 

interests of the plan and of its 

participants and beneficiaries; and (c) 

protective of the rights of participants 

and beneficiaries. 

8. PTE 84–14 exempts certain 

prohibited transactions between a party 

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

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

in which a plan has an interest if the 

investment manager satisfies the 

definition of ‘‘qualified professional 

asset manager’’ (QPAM) and satisfies 

additional conditions of the exemption.9


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 7177 

to provide a one-time notice to the Department that 

the QPAM is relying upon the exemption; (2) 

update the list of crimes enumerated under section 

I(g) to explicitly include foreign crimes that are 

substantially equivalent to the listed crimes; (3) 

expand the circumstances that may lead to 

ineligibility; and (4) provide a one-year transition 

period to help Covered Plans avoid or minimize 

possible negative impacts of terminating or 

switching QPAMs or adjusting asset management 

arrangements when a QPAM becomes ineligible 

pursuant to section I(g) and allow QPAMs a 

reasonable period of time to seek an individual 

exemption, if appropriate. See 89 FR 23090 (April 

3, 2024). 

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

11See 47 FR 56947 (December 21, 1982). 

12 In September 1999, Baring Trustees became the 

trustee of these two trusts. Baring Trustees was 

acquired by Northern on March 31, 2005, and 

became NTFS by change of name effective on 

August 31, 2005. With respect to these trusts, the 

Applicant states that NTFS was a directed trustee; 

as such, it was not involved in the settlement of the 

trusts and was not involved in any of the family’s 

tax matters. 

13As described above, the Applicant notes that 

Baring Trustees was the trustee of the Sons and 

David Trust until 2005. 

14PTE 2016–11, 81 FR 75150, 75152 (October 28, 

2016). ‘‘Conviction Date’’ was defined, in relevant 

part, to mean the date a judgment was rendered 

Continued 

PTE 84–14 was developed and granted 

based on the premise that broad relief 

could be afforded for all types of 

transactions in which a plan engages 

only if the commitments and the 

investments of plan assets and the 

negotiations leading thereto are the sole 

responsibility of an independent 

discretionary manager.10

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

an entity that may otherwise meet the 

definition of a QPAM from utilizing the 

exemptive relief provided by the QPAM 

Exemption for itself and its client plans 

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

any direct or indirect five percent or 

more owner of the QPAM has been 

either convicted or released from 

imprisonment, whichever is later, 

because of criminal activity described in 

section I(g), or otherwise violates 

section I(g), within the 10 years 

immediately preceding a transaction. 

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

in part, based on the Department’s 

expectation that QPAMs, and those who 

may be in a position to influence the 

QPAM’s policies, must maintain a high 

standard of integrity.11

Investigation for Tax Fraud 

10. In 2010 and 2011, French 

prosecutors opened judicial 

investigations questioning whether Guy 

Wildenstein and Alec Daniel Armand 

Wildenstein (the Wildensteins), heirs to 

a set of trusts established by family 

patriarch Daniel Wildenstein, had 

engaged in money laundering, 

fraudulent organization of insolvency, 

forgery and/or tax evasion in connection 

with their decision not to include trust 

assets in French tax filings made 

following Daniel Wildenstein’s death in 

2001. NTFS, as successor trustee to the 

trusts, was itself investigated by French 

prosecutors.12

11. On April 9, 2015, the investigating 

authorities for the District Court of Paris 

issued an Order of Partial Discharge and 

Referral before the Criminal Court (the 

Referral Order). The Referral Order 

charged the Wildensteins with several 

counts of tax fraud for failing to 

disclose, and pay taxes on, assets held 

in various trusts following the 2001 

death of their father, Daniel 

Wildenstein. One of eight defendants in 

the Referral Order, NTFS, was charged 

with violations of Articles 121–2, 121– 

6, and 121–7 of the French Criminal 

Code, and Articles 1741 et 1745 of the 

French General Tax Code for complicity 

in the Wildensteins’ tax fraud based on 

assets held in trust for certain 

beneficiaries, including the 

Wildensteins. The portion of the case 

relevant to NTFS relates to assets held 

in two Guernsey trusts for which NTFS 

served as successor trustee: the ‘‘1989 

Sonstrust’’ (the Sons Trust) and the 

‘‘1989 Davidtrust’’ (the David Trust). 

The trusts include properties located in 

Kenya, the British Virgin Islands, 740 

Madison Avenue and 19 East 64th Street 

in New York City, shares of Wildenstein 

and Co Inc., and of various art galleries. 

12. As described in the Referral Order, 

on February 23, 1989, Daniel 

Wildenstein established two trusts in 

Bermuda, the Sons Trust and the David 

Trust with Bermuda Trust Company 

Limited was appointed as trustee. The 

Sons Trust was incorporated for the 

benefit of the children of Daniel 

Wildenstein, Guy and Alec, and of his 

second wife, Sylvia Roth-Wildenstein. 

The David Trust was incorporated for 

the benefit of the grandchildren of 

Daniel Wildenstein. Baring Brothers 

(Guernsey) Limited replaced Bermuda 

Trust Company Limited as the trustee in 

1990, and it was itself replaced as 

trustee in September 1999 by Baring 

Trustees (Guernsey) Limited (Baring 

Trustees). The Applicant states that, 

only in 2005, following the purchase of 

Baring Asset Management’s Financial 

Services Group (including Baring 

Trustees) by the Northern Trust Corp, 

did Baring Trustees become Northern 

Trust Fiduciary Services (Guernsey) 

Limited. 

13. On October 21, 2001, Daniel 

Wildenstein died in Paris. On April 28, 

2002, the Wildensteins filed an 

inheritance tax statement in relation to 

their father Daniel Wildenstein’s estate 

in France. The statement did not 

identify the Sons Trust and the David 

Trust or the assets held by these trusts. 

The Referral Order provides that the 

Sons Trust and David Trust, as well as 

their assets, should have been disclosed 

in the inheritance tax statement, 

because the trusts were nondiscretionary. The Referral Order 

provides that that these assets in the 

Sons Trust and the David Trust are 

subject to French taxes, and that an 

inheritance tax would have been 

imposed on these assets. In this regard, 

the Referral Order provides: 

• The assets placed within the trusts 

were held by companies. The trusts 

hold a securities interest in these 

companies, but the trustee does not 

have sufficient control of the companies 

or the assets. 

• Daniel Wildenstein was co-trustee, 

and during his lifetime he could have 

asked the trustee to distribute all of the 

trusts’ assets to the beneficiaries. 

• In addition to naming a trustee, the 

trust deeds also named an individual to 

fulfill the role of ‘‘protector’’ of the 

trusts, a Wildenstein family attorney 

who was financially dependent upon 

the family. 

• The protector permitted certain 

financial flows debited from the Sons 

Trust bank account without the trustee’s 

consent, and these money flows were 

later re-characterized as loans. 

• The trusts operated abnormally in 

some respects and there was some 

commingling between the trusts’ assets 

and Daniel Wildenstein’s assets. 

• The trustee’s fees were too low in 

relation to the value of the assets in the 

trusts, and the assets were actually 

managed by companies without 

supervision by the trustee. 

14. The French authorities state that 

their investigation produced sufficient 

information to allege that NTFS, in 

Guernsey, beginning in September 1999, 

aided and abetted tax fraud committed 

in Paris by Daniel Wildenstein’s heirs 

by concealing a portion of the sums 

subject to French estate taxes owed by 

the Wildensteins.13

PTE 2016–11 

15. The trial commenced on January 

4, 2016. Due to the possibility of a 

conviction that would lead to the loss of 

the Northern QPAMs’ ability to rely on 

PTE 84–14, the Applicant applied for 

and received a temporary one year 

exemption from the Department 

effective as of the date of judgment of 

conviction against NTFS for aiding and 

abetting tax fraud to be entered in 

France in the District Court of Paris, 

French Special Prosecutor No. 

1120392066, French Investigative Judge 

No. JIRSIF/11/12.14 The Department 


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against NTFS in the District Court of Paris, French 

Special Prosecutor No. 1120392066, French 

Investigative Judge No. JIRSIF/11/12. 

15The Court of Appeals found that the offenses 

were time-barred and that there was no legal basis 

for the offense of tax fraud in relation to the 

Wildensteins’ inheritance. 

16The Court of Cassation found: (1) that the 

offenses were not time barred and (2) that there was 

a legal obligation under French law to declare assets 

held in certain (but not all) types of trusts. Namely, 

the legal requirement to declare trust assets applies 

to trusts where the settlor had not divested 

themselves of the trust assets during their lifetime. 

17The Applicant represents that it used the 

currency converter from Oanda FX Data Services, 

located at https://www.oanda.com/currencyconverter/en/ to calculate these figures. 

18On March 5, 2024, NTFS appealed the verdict 

to the Court of Cassation. According to the 

Applicant, under French law, until the Conviction 

is final, there is no conviction, and NTFS continues 

to be presumed innocent. The Applicant states that 

the judgment, as well as its effects including the 

fine and joint and several liability, will be stayed 

pending the outcome of the appeal. However, under 

section I(g) of PTE 84–14 as in effect on the date 

of the Conviction, ‘‘. . . a person shall be deemed 

to have been ‘‘convicted’’ from the date of the 

judgment of the trial court, regardless of whether 

that judgment remains under appeal.’’ 

19See 81 FR 75152 (October 28, 2016). 

20See 89 FR 23612. 

21As described below, the conditions for relief 

provide that no investment management services 

may be provided by NTFS to ERISA-covered plans 

or IRAs. 

granted PTE 2016–11 to protect Covered 

Plans from the harm that could result 

from the Northern QPAMs’ loss of relief 

under PTE 84–14 due to the potential 

conviction of NTFS. Exemptive relief 

was provided for a period of 12 months 

from the potential conviction date to 

provide the Department with sufficient 

time to determine whether longer-term 

relief was appropriate. 

16. On January 12, 2017, the Criminal 

Court of Paris acquitted all prosecuted 

parties, including NTFS. The Paris 

District Court’s verdict was appealed by 

the French government to the Paris 

Court of Appeal. Because NTFS was not 

convicted, the ‘‘Effective Date’’ under 

PTE 2016–11 did not occur. On June 29, 

2018, following a retrial in March 2018, 

the Paris Court of Appeal upheld the 

District Court’s acquittal of all 

prosecuted parties.15 The French 

government appealed again to the Court 

of Cassation, the highest court in 

France. In January 2021 the Court of 

Cassation quashed the appellate court’s 

judgment.16 From September to October 

2023, the case was tried a third time, in 

front of a different panel of the Paris 

Court of Appeal. 

17. Ultimately, on March 5, 2024, the 

Paris Court of Appeal rendered a 

judgment of conviction (the Conviction) 

against all defendants, including NTFS. 

NTFS was ordered by the court to pay 

a fine of Ö187,500 in conjunction with 

the judgment. The Applicant represents 

that the US dollar equivalent of this fine 

is $203,445 as of March 5, 2024, and 

$204,197 as of November 5, 2024.17

18. When the Paris Court of Appeal 

rendered a judgment of Conviction 

against NTFS, PTE 84–14 section I(g) 

was triggered.18 PTE 2016–11 was 

technically inapplicable because its 

definition of ‘‘Conviction’’ referred to 

the District Court of Paris, instead of the 

Paris Court of Appeal, and did not 

include that the judgment of conviction 

could be entered by another court of 

competent jurisdiction.19

19. On April 4, 2024, the Department 

issued a technical correction to PTE 

2016–11.20 The technical correction 

changed the definition of the term 

‘‘Conviction’’ in PTE 2016–11 by 

replacing ‘‘the District Court of Paris, 

French Special Prosecutor No. 

1120392066, French Investigative Judge 

No. JIRSIF/11/12’’ with ‘‘the Court of 

Appeal, French Special Prosecutor No. 

1120392066, French Investigative Judge 

No. JIRSIF/11/12 or another court of 

competent jurisdiction.’’ PTE 2016–11, 

as corrected, is effective for a period of 

one year from the date of the 

Conviction, ending March 4, 2025. The 

one-year exemption gives the 

Department time to consider whether a 

longer term (5 years) exemption is 

appropriate based on the facts of the 

conviction and to more fully develop 

the record upon which relief, if any, 

would be based. Upon the expiration of 

the one-year exemption on March 4, 

2025, the Applicant cannot rely on the 

QPAM Exemption without this five-year 

relief, regardless of whether or not the 

Applicant appeals the judgment of 

Conviction. 

This Exemption Request 

20. The Applicant requests exemptive 

relief that would permit the Northern 

QPAMs to continue to rely on the relief 

provided by the QPAM Exemption, 

notwithstanding the disqualifying 

conviction, for the remaining nine-year 

period of disqualification upon the 

expiration of PTE 2016–11. The 

Department has determined to propose 

relief for five years, beginning on March 

5, 2025, and ending on March 4, 2030, 

so that it may reevaluate the 

effectiveness of the protective 

conditions for relief as well as whether 

the QPAMs, and those in position to 

influence them, have continued to 

maintain a high standard of integrity. 

21. According to the Applicant, the 

Northern QPAMs’ investment 

management business operations are 

separate from NTFS, and from the 

activities of NTFS that are the subject of 

criminal charges under French law.21

The Northern QPAMs have dedicated 

systems, management, risk and 

compliance officers, that are separate 

from and independent of NTFS. The 

investment management businesses of 

the Northern QPAMs are subject to 

codes of conduct, and Northern QPAM 

personnel engage in training, designed 

to ensure that such businesses 

understand and abide by their fiduciary 

duties in accordance with applicable 

law. The codes of conduct create 

information barriers designed to prevent 

employees of the Northern QPAMs from 

gaining access to inside information that 

an affiliate may have acquired or 

developed in connection with the 

investment banking, treasury services or 

other investor services business 

activities. These codes of conduct apply 

to employees, officers, and directors of 

Northern QPAMs. The Applicant also 

maintains an employee hotline for 

employees to express any concerns of 

wrongdoing anonymously. 

22. The Applicant represents that no 

NTFS employees (or former employees 

of Baring Trustees) were investigated or 

charged, nor were any other corporate 

entities related to NTFS investigated or 

charged. The Applicant states that the 

individual who appears to have been 

the primary contact for the Wildenstein 

business after NTFS acquired Baring 

Trustees was a former employee of 

Baring Trustees who was not charged in 

the French proceeding and who left 

NTFS in January 2006, shortly after the 

acquisition. Further, the Applicant 

represents that all personnel involved in 

working on the Wildenstein accounts, 

regardless of whether they were 

implicated in the conduct that became 

the subject of the Conviction, either left 

Baring Trustees prior to its acquisition 

by NTFS in 2005 or shortly thereafter, 

and none of these persons is employed 

by NTFS or other Northern affiliates 

today. 

23. The Applicant states that 

Northern’s review of the files has not 

identified any wrongdoing on the part of 

former NTFS staff, nor are any current 

or former NTFS (or Baring Trustees) 

employees among the six individuals 

charged by the French prosecutors in 

connection with the Wildenstein 

business. 

24. The Applicant represents that new 

policies, procedures and training came 

into effect since Northern’s acquisition 

of Baring Trustees in 2005. Upon 

becoming a part of the Northern 

organization, Baring Trustees was 

renamed NTFS and became subject to 

Northern’s own internal control 

procedures designed to prevent 

improper activities. The Applicant 

represents that NTFS has complied (and 


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22Rule 144A of the Securities Act of 1933, as 

amended (the ‘‘Securities Act’’) provides a safe 

harbor from the registration requirements of the 

Securities Act of 1933 for certain private resales of 

certain securities, including foreign securities, to 

qualified institutional buyers (QIBs), which 

generally are large institutional investors that own 

at least $100 million in investable assets. 

23The Applicant states that a common reason to 

engage in hedging transactions and fixed income 

transactions, and why the inability to engage in 

these transactions could be specifically harmful to 

Covered Plans, would be to provide protection 

against market risk, where fixed income and 

hedging transactions are used to manage unknown 

risks of interest rate fluctuation and market 

volatility for a specific period of time, while 

providing a specified return. The Applicant 

represents that it is not able to quantify the 

potential harms to Covered Plans if relief for these 

transactions are no longer available, because the 

market risks are unknown. The Applicant states 

that another reason to engage in hedging and fixed 

income transactions would be to address 

circumstances where there are limited available 

securities, such as the use of hedging transactions 

where a Covered Plan has long-term liabilities, and 

there are insufficient long-term, fixed-income 

securities available in the marketplace to provide 

the required returns over the specified period. The 

Applicant states that it is not able to ascertain 

which long-term, fixed-income securities will have 

limited availability at any given time, and thus the 

Applicant is not able to quantify the potential 

harms to Covered Plans. 

24The Applicant represents that historically, 

counterparties engaging in certain hedging and 

securitized transactions have required that Covered 

Plans be able to rely on the QPAM Exemption in 

connection with such transactions. Further, the 

Applicant states that generally, counterparties to a 

Covered Plan have not agreed to allow the Covered 

Plan to rely on other potentially available 

prohibited transaction exemptions (e.g., ERISA 

section 408(b)(17)) because of the perceived risk 

related to satisfying the conditions of such other 

prohibited transaction exemptions. The Applicant 

states that if it were unable to use the QPAM 

Exemption in such transactions, it expects that the 

counterparties who view prohibited transaction 

exemptions (other than the QPAM Exemption) to be 

riskier could (a) increase the costs of such 

transactions to reflect the increased compliance risk 

or (b) not engage in such transactions with Covered 

Plans at all. The Applicant states that because this 

harm is counterparty dependent, the Applicant is 

unable to quantify the potential harm to Covered 

Plans. 

will continue to comply) with all 

applicable legal and regulatory 

requirements, including but not limited 

to requirements potentially linked to the 

conduct underlying the charges against 

NTFS. 

25. The Applicant further represents 

that resources dedicated to maintaining 

risk and compliance procedures have 

been enhanced significantly since 

Northern’s acquisition of Baring 

Trustees in 2005. Hundreds of new risk 

and compliance personnel have been 

hired by Northern in that period. For 

example, according to the Applicant, at 

the time of the acquisition of Baring 

Trustees (and the Wildenstein 

relationship) in 2005, Northern had five 

full-time equivalent employees handling 

compliance with anti-money laundering 

(AML) regulations; as of December 31, 

2015, that number had increased to 78 

full-time equivalent employees. 

26. The Applicant represents that it 

maintains a system of internal controls 

to ensure ongoing compliance with 

AML and know-your-client (KYC) 

related regulations. One of the key 

controls is the implementation of riskbased, comprehensive customer due 

diligence policies, procedures and 

processes for all customers, particularly 

those that present a high risk for money 

laundering or terrorist financing. 

Northern has also adopted Global 

Minimum Standards for Customer Due 

Diligence for its clients as a critical part 

of its Global AML/Economic Sanctions 

Compliance Program. 

27. The Applicant represents that it 

has new systems for evaluating new 

clients or acquisitions. Northern 

represents that it assesses the money 

laundering and related risks of each new 

client relationship. Northern represents 

that it has developed a Global AntiMoney Laundering & Combating the 

Financing of Terrorism Risk Rating 

Policy & Methodology to evaluate new 

client/business relationships and assess 

their money laundering risk and related 

risks. In addition, Northern represents 

that it utilizes a Client Relationship 

Form to collect the information 

necessary to assess the client risk rating. 

Clients will initially be risk rated during 

the client take-on process and 

subsequently as the client profile 

changes. 

Hardship to Covered Plans 

28. Overview of loss of QPAM. The 

Applicant represents that without the 

ability to use PTE 84–14 (i.e., the QPAM 

Exemption), it would be difficult for 

Northern and its affiliates that currently 

manage the assets of Covered Plans, 

collective investment trusts and other 

commingled funds, on a discretionary 

basis, to efficiently engage in a variety 

of routine transactions on behalf of 

Covered Plan clients with 

counterparties, because many such 

counterparties could be a service 

provider to such Covered Plans. The 

Applicant states that counterparties are 

familiar and comfortable with PTE 84– 

14, as it is generally the most commonly 

used prohibited transaction exemption 

for asset managers of ERISA covered 

Plans or IRAs. The Applicant states that 

market participants, both clients and 

counterparties, routinely expect an 

investment manager of Covered Plan 

clients to represent that it qualifies as a 

QPAM—even if such a representation 

may not technically be required in a 

particular circumstance or for a 

particular transaction. 

29. The Applicant represents that 

Northern QPAMs have entered into and 

could enter into contracts in the future 

that require the Northern QPAMs to 

meet the conditions in PTE 84–14 on 

behalf of Covered Plan clients and on 

behalf of collective trusts and other 

funds subject to ERISA. These contracts 

include contracts entered into by 

Northern QPAMs on behalf of or as 

investment adviser for Covered Plans, 

collective trusts and other funds subject 

to ERISA for certain outstanding 

transactions, including, but not limited 

to the purchase and sale of debt and 

equity securities (both foreign and 

domestic, both registered and issued 

pursuant to Rule 144A or otherwise); 

asset-backed securities, commodities, 

real estate financing and leasing 

arrangements; and certain derivative 

transactions (e.g., futures, forwards, 

swaps, and options). The Applicant 

states that loss of the Northern QPAMs’ 

ability to rely upon PTE 84–14 could 

cause considerable harm to Covered 

Plan clients. For example, the Applicant 

states that counterparties could seek to 

terminate existing contracts, and certain 

derivative transactions and other 

contractual agreements could terminate 

automatically and immediately without 

notice or action. 

30. In addition, the Applicant 

represents that its Covered Plan clients 

that continue to retain the Northern 

QPAMs could be prohibited from 

engaging in certain transactions that 

would be beneficial to such Covered 

Plan clients on a going forward basis, 

such as hedging transactions using overthe-counter options or derivatives or 

certain fixed income transactions (e.g., 

144A debt securities).22 The Applicant 

states that it is unable to quantify the 

harm to Covered Plans for not being able 

to engage in hedging transactions or 

invest in certain fixed income products. 

Nonetheless, the Applicant represents 

that these types of transactions are key 

to managing both risk and returns of a 

given investment portfolio.23 Further, 

the Applicant states that even if other 

exemptions were acceptable to such 

counterparties, the cost of the 

transaction could increase to reflect the 

increased risk of compliance with 

respect to new exemptions that are 

unfamiliar to counterparties, to the 

detriment of Covered Plan clients.24

31. Overview of Costs. The Applicant 

represents that if the Department does 

not grant the requested exemption, 

fiduciaries of Covered Plan clients may 

seek other investment managers, at 

significant disruption and cost to the 

Covered Plan clients and ultimately to 

their participants and beneficiaries. The 


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25Notwithstanding that the Applicant’s 

representations regarding certain costs to Covered 

Plans if Northern QPAMs are unable to rely on PTE 

84–14, the proposed exemption would require the 

Northern QPAMs to indemnify Covered Plans for 

‘‘actual losses’’ that include transition costs. See 

discussion below. 26The Applicant states that these estimates are 

based on Northern’s general industry knowledge. 27The Applicant states that these estimates are its 

internal calculations based on the estimated size of 

the notional portfolio multiplied by the estimated 

basis points. In this regard, the Applicant states that 

trade-related costs were calculated based on the 

total asset size of equity collective investment funds 

of $279 billion. The Applicant states that there is 

an additional $40 billion of assets invested in 

Northern QPAMs common funds and through 

separately managed accounts. In addition, the 

Applicant states that the ‘‘Total Trading-Related 

Cost’’ figures do not include potential volatility 

costs, and there could be unknown additional 

expenses if clients are out of the market for a period 

of time. Further, the Applicant states that 

‘‘Commissions’’ are $0.05 per share for U.S. 

securities and 1.5 basis points for non-U.S. 

securities. 

28The Applicant states that these figures are 

internal calculations based on the estimated size of 

the notional portfolio multiplied by the estimated 

basis points. The Applicant states that the ‘‘Costs’’ 

are measured in terms of implementation shortfall, 

which measures the difference between the 

decision price and the net execution price 

(including commissions, fees, etc.). 

29Trading-related costs were calculated based on 

the total asset size of fixed income collective 

investment funds of $127 billion, and by 

categorizing the portfolios into lower trading costs 

portfolios with total trading costs below 0.10% and 

higher trading cost portfolios with total trading 

costs exceeding 0.10%. The Applicant states that 

there is an additional $11 billion of Covered Plan 

assets invested in Northern QPAM’s common funds 

and through separately managed accounts. 

30The Applicant states that low trading costs 

portfolios include investment grade bonds and 

emerging market sovereign debt, while high trading 

cost portfolios include leverage finance and 

emerging market corporate debt. 

31 50 South also provides discretionary and asset 

management services to other non-ERISA accounts. 

Applicant states that these issues are 

described below: 

• Time: The process of transitioning 

to a new investment manager is 

typically lengthy and would likely 

involve numerous steps each of which 

could last several months—including 

retaining a consultant, creating the 

requests for proposal, evaluating 

requests for proposal, meeting with 

prospective investment managers, 

negotiating contracts and ultimately 

transitioning assets. 

• Costs: There are various costs 

involved in transitioning to a new 

investment manager.25 Some of those 

costs are described in more detail 

below. 

• Investment consultant costs: 

Covered Plans generally incur tens of 

thousands of dollars in consulting fees 

in connection with searching for and 

transitioning to a new investment 

manager. The costs depend on 

numerous factors, including the 

consultants retained, as well as the 

strategy and/or purpose for which they 

are being retained. Costs are estimated 

as follows: 26

Æ $25,000 to $75,000 for the 

replacement of an individual manager 

or single investment product, or 

Æ $30,000 to $100,000 for the 

replacement of an ‘‘outsourced chief 

investment officer’’ (OCIO) or ‘‘manager 

of managers.’’ The Applicant states that 

Northern currently has 47 OCIO clients 

that would presumably select another 

investment manager should the 

Northern QPAMs no longer be able to 

rely on the QPAM Exemption 

• Legal costs: Covered Plans generally 

incur tens of thousands of dollars in 

legal fees in connection with 

transitioning to a new investment 

manager. The costs depend on 

numerous factors, including the billing 

rate, the ability to negotiate and the 

complexity of the agreement. Assuming 

a $1,000 blended legal rate (and 

ignoring any potential alternative fee 

arrangements), legal costs are estimated 

to range from $5,000 to $30,000 to 

transition to a new investment manager. 

Legal costs with respect to alternative 

investments can range from $15,0000 to 

$150,000 per investment, depending on 

the type of alternative investment and 

the law firm retained. 

• Investing costs: The investing costs, 

or the costs of selling and reinvesting a 

Covered Plan’s assets, differ based on 

the asset class, as further described 

below. 

32. Costs Relating to Transitioning an 

Equity Portfolio. The Applicant states 

that trading costs related to an equity 

portfolio consist of explicit fees and 

implicit costs. The Applicant states that 

explicit fees include stamp and 

exchange fees and commissions. The 

Applicant also states that implicit costs 

include bid-ask spreads of assets traded 

on a principal basis. 

33. The Applicant represents that it 

estimates the costs of transitioning the 

equity investment portfolio, categorized 

by geography of equity, as follows: 27

Geography 

of equity 

Explicit fees Implicit 

costs Total 

tradingrelated 

costs 

Stamp and 

exchange 

fees 

Commissions Bid ask 

spread 

US .................................................................................................................... $5,426,400 $14,000,000 $178,500,000 $197,926,400 

Americas (excluding US) ................................................................................. 226,540 701,017 3,619,000 4,546,557 

EMEA ............................................................................................................... 460,460 4,265,763 19,162,000 23,888,223 

APAC ............................................................................................................... 20,326,130 3,833,220 27,499,000 51,658,350 

34. Additionally, the Applicant states 

that many Covered Plan clients employ 

a transition manager for large asset 

movements. The Applicant states that in 

such cases, the following transition 

management costs could apply to the 

following portfolio types: 28

Class of equity Costs 

US ......................................... $230,257,370 

Emerging Markets ................ 47,624,262 

Global (excluding US) .......... 298,687,332 

Global ................................... 1,489,917 

35. Costs Relating to Transitioning a 

Fixed Income Portfolio. The Applicant 

states that trading-related costs relating 

to a fixed income portfolio transition are 

implicit costs. The Applicant states that 

it estimates that the costs of 

transitioning the fixed income 

investment portfolio categorized by 

whether the type of fixed income has 

low trading costs or high trading costs, 

are as follows:29

Class of fixed income 30 Total tradingrelated costs 

Low Trading Costs Portfolio $54,520,000 

Higher Trading Costs Portfolio .................................... 33,250,000 

36. CostsRelating to Transitioning an 

Alternative Investment (Private Equity 

and Hedge) Portfolio. The Applicant 

states that 50 South provides 

discretionary asset management services 

to six ERISA accounts through funds of 

one and pooled funds subject to 

ERISA.31 The Applicant states that each 


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of the two largest ERISA accounts 

managed by 50 South has $150 million 

attributable to Covered Plan clients. In 

total, the Applicant states that Covered 

Plan clients own $519 million of assets 

under management within these 50 

South-managed ERISA accounts. 

37. The Applicant states that Covered 

Plan clients expend between six and 

eighteen months to select alternative 

investment managers. When new 

investment managers are finally 

selected, Covered Plans may be forced 

to sell their holdings in the Applicant’s 

funds on the secondary market. The 

Applicant states that there are unique 

transaction costs relating to private 

equity fund-of-funds that are sold on the 

secondary market. The Applicant states 

that because interests in private funds 

are not available on the public markets, 

Covered Plans typically engage 

specialized investment banks to run 

auction processes to sell private equity 

holdings. The Applicant states that the 

use of an investment bank ensures 

transparent price discovery and price 

maximization for the assets, consistent 

with the fiduciary requirements for 

Covered Plans. The Applicant states that 

investment banks typically charge an 

advisory fee equal to 50 to 200 basis 

points of the total exposure sold on the 

secondary market, which could result in 

costs ranging from $2,121,708 to 

$8,486,830 for Covered Plan clients 

investing in 50 South’s applicable 

funds. The Applicant states that in 

addition to the direct transaction 

expenses typically associated with a 

secondary sale, sellers of private equity 

fund-of-funds typically experience a 

22.5% to 30% discount on net asset 

value for the early liquidation, which 

could result in an economic loss ranging 

from $49,319,123 to $65,758,831 for 

Covered Plan clients investing in 50 

South’s applicable funds. 

38. Other Disruptions: The Applicant 

states that in some cases, Covered Plan 

clients may find it difficult to transition 

to a new investment manager, 

specifically with respect to certain 

strategies. The Applicant states that 

below are examples of such disruptions. 

• Pooled Funds: The Northern 

QPAMs’ inability to rely upon PTE 84– 

14 could result in significant, 

unplanned redemptions from pooled 

funds, which would in turn frustrate the 

QPAMs’ efforts to effectively manage 

the pooled funds’ assets and harm 

remaining plan investors by increasing 

the expense ratios of such pooled funds. 

In this regard, the Applicant states that 

pooled funds incur both fixed and 

variable expenses. The Applicant 

represents that unlike variable expenses, 

fixed expenses (e.g., accounting, 

regulatory and legal fees) remain the 

same regardless of the amount of assets 

in the pooled fund. The Applicant states 

that such fixed expenses are shared 

amongst the investors in the Covered 

Plans. Therefore, the Applicant states 

that if some, but not all, Covered Plan 

investors seek to withdraw from a 

pooled fund, the remaining investors 

will bear a greater portion of the fixed 

expenses. The Applicant states that 

because it cannot anticipate the extent 

to which Covered Plan investors will 

withdraw, it cannot quantify this harm 

with specificity. 

• Opening Custody Accounts: When 

an investment manager is hired to 

manage a separately managed account, 

it will need to open custody accounts in 

applicable jurisdictions. There are 

several jurisdictions where it can take a 

considerable amount of time to open 

custody accounts (e.g., India). There are 

other jurisdictions where it may not be 

possible to open a new custody account. 

In this regard, the Applicant states that 

during the time period in which a 

Covered Plan is opening a new custody 

account (the lapse period), such 

Covered Plan may not be able to be 

invested in accordance with the 

Covered Plan’s chosen investment 

strategy. The Applicant states that the 

potential harm cannot be quantified 

because it would require the Applicant 

to predict and compare the investment 

returns of (x) the securities that the 

Covered Plan actually invests during the 

lapse period, with (y) the alternative 

securities in which the Covered Plan 

desired to invest during the lapse 

period. The Applicant state that these 

are forward-looking variables over 

which the Applicant has no control. 

Department’s Request for Comment and 

Notes Regarding Harms to Plans in 

Paragraphs 31 Through 38 

The Department requests the 

Applicant to provide a clear description 

regarding their estimates of costs to 

Covered Plans in its comment letter. In 

this regard, the Applicant should 

describe: 

(1) the amount of Covered Plan assets 

that are likely to be subject to the costs 

described above and an explanation of 

the Applicant’s assumptions or 

methodologies in connection with such 

figures. For example: ‘‘50% of the 

Covered Plan assets will be likely to 

incur such costs because. . . .’’ 

(2) the likelihood of the costs 

occurring, for each of the transition 

costs described above. For example: 

with respect to Covered Plans’ 

Alternative Investments, how likely are 

Covered Plans to leave Northern Trust 

for a different manager; with respect to 

violating representations as to QPAM 

status in an offering document, the 

Applicant should provide information 

regarding how likely that is to occur; 

etc. 

(3) the circumstances under which the 

transition costs described in the tables 

above are being incurred (e.g., are these 

transition costs that the Applicant 

contends would be incurred by Covered 

Plans to remedy contractual violations 

due to loss of QPAM status, costs due 

to Covered Plans seeking to use a 

different investment manager that can 

rely on QPAM, etc.). 

(4) the extent to which any of the 

asserted costs reflect the QPAMs’ 

imposition of additional charges or fees 

on Covered Plans resulting from the loss 

of QPAM status, and the cause of such 

additional charges or fees. 

(5) an explanation of the extent to 

which the costs described herein are not 

likely to be covered by the QPAMs 

indemnification obligations under 

section III(j)(2), described in more detail 

below, and an explanation why such 

costs are not attributable to the 

Applicant’s violation of exemption 

conditions. 

Condition (j)(2) of the proposed 

exemption requires Northern QPAMs to 

‘‘indemnify and hold harmless’’ 

Covered Plans for ‘‘actual losses 

resulting directly from the Northern 

QPAM’s violation of any conditions of 

this exemption, an Northern 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 Northern QPAM; or any claim 

arising out of the failure of such 

Northern 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 the 

Conviction.’’ Furthermore, the 

Department notes that, to the extent 

Covered Plans ‘‘feel forced’’ to transition 

to new asset managers because the 

Northern QPAMs can 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 Northern 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. 


ddrumheller on DSK120RN23PROD with NOTICES1
7182 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 

32This preamble contains a general description of 

the conditions for the benefit of the reader. See the 

operative conditions below for more detail. In the 

event of any inconsistency between the description 

in this preamble and the operative conditions 

contained below, the operative conditions are 

controlling. 

33For clarity, references to the Northern QPAMs 

include their officers, directors, agents other than 

NTFS, and employees of such QPAMs. 

34 ‘‘Participate in’’ for purposes of the conditions 

refers not only to active participation in the 

misconduct of NTFS that is the subject of the 

Conviction, but also includes the knowing or tacit 

approval of the misconduct underlying the 

Conviction or knowledge of such conduct without 

taking active steps to prohibit it, including 

reporting the conduct to such individual’s 

supervisors, and to Northern’s board of directors. 

35The Department expects the Northern QPAMs 

to rigorously ensure that the individuals associated 

with the criminal conduct of NTFS will not be 

employed or knowingly engaged by such QPAMs. 

36A Northern QPAM will not be treated as having 

failed to develop, implement, maintain, or follow 

the Policies, provided that it corrects any instance 

of noncompliance when discovered or when it 

reasonably should have known of the 

noncompliance (whichever is earlier), and provided 

that it adheres to the reporting requirements 

described herein. 

The Exemption’s Protective Conditions 

39. This proposed exemption contains 

conditions that are similar to the 

conditions in the Department’s recent 

exemptions from the prohibitions of 

section I(g) of PTE 84–14. The 

Department is able to make its findings 

under ERISA section 408(a) only with 

the imposition of these conditions, and 

only if every condition is adhered to in 

good faith by the Applicant and the 

Northern QPAMs.32 Several of this 

proposed exemption’s conditions are 

designed to ensure that the Northern 

QPAMs were not involved in the 

conduct that gave rise to the Conviction. 

Accordingly, this proposal does not 

provide prohibited transaction relief if 

the Northern QPAMs knew of, had 

reason to know of, participated in, 

approved of, or profited from the 

conduct that gave rise to the 

Conviction.33 No other party engaged on 

behalf of the Northern QPAMs who had 

responsibility for, or exercised authority 

in connection with the management of 

plan assets may have known or have 

had reason to know of, and did not 

participate in, the criminal conduct that 

is the subject of the Conviction.34 Nor is 

relief available if a Northern QPAM 

exercised any authority over plan assets 

in a manner that it knew or should have 

known would further the criminal 

conduct that is the subject of the 

Conviction or cause the Northern QPAM 

or its affiliates to directly or indirectly 

profit from the criminal conduct that is 

the subject of the Conviction. 

40. Further, the Northern QPAMs may 

not employ or knowingly engage any of 

the individuals that participated in the 

criminal conduct attributable to the 

Conviction. 35 The Northern QPAMs 

(including their officers, directors, 

agents other than NTFS, and employees 

of such Northern QPAMs), any other 

party engaged on behalf of the Northern 

QPAMs who had responsibility for, or 

exercised authority in connection with, 

the management of plan assets, must not 

have received direct compensation or 

knowingly received indirect 

compensation in connection with the 

criminal conduct that is the subject of 

the Conviction. 

41. The proposal further provides that 

no Northern QPAM will use its 

authority or influence to direct an 

‘‘investment fund’’ that is subject to 

ERISA or the Code and managed by 

such Northern QPAM in reliance on 

PTE 84–14, or with respect to which a 

Northern QPAM has expressly 

represented to a Covered Plan that it 

qualifies as a QPAM or relies on PTE 

84–14, to enter into any transaction with 

NTFS 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. 

42. If the Department grants this 

exemption, it will terminate 

immediately if an affiliate of the 

Northern QPAM (as defined in section 

VI(d) of PTE 84–14) violates section I(g) 

of PTE 84–14 (other than with respect 

to the Conviction). Also, NTFS may not 

act as a fiduciary within the meaning of 

ERISA section 3(21)(A)(i) or (iii), or 

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

respect to Covered Plan assets. 

43. The proposed exemption requires 

each Northern QPAM to implement and 

follow certain written policies and (the 

Policies). The Policies must require and 

be reasonably designed to ensure, 

among other things, that: (i) the 

Northern QPAMs’ asset management 

decisions are conducted independently 

of the management and business 

activities of Northern, including NTFS 

and Northern’s non-asset management 

affiliates; (ii) the Northern QPAMs fully 

comply with ERISA’s fiduciary duties 

and with ERISA and the Code’s 

prohibited transaction provisions, as 

applicable with respect to each Covered 

Plan,; (iii) the Northern QPAMs do 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 

Northern QPAMs to regulators on behalf 

of or in relation to Covered Plans are 

materially accurate and complete; (v) 

the Northern QPAMs do not make 

material misrepresentations or omit 

material information in communications 

with such regulators with respect to 

Covered Plans; (vi) the Northern QPAMs 

comply with the terms of the 

exemption; and (vii) any violation of or 

failure to comply with any of these 

items is corrected promptly upon 

discovery, and any such violation or 

compliance failure not so corrected 

must be reported in writing to 

appropriate corporate officers, the head 

of compliance and the QPAM’s general 

counsel (or their functional equivalent) 

of the relevant Northern QPAM, and an 

appropriate fiduciary of any affected 

Covered Plan where such fiduciary is 

independent of Northern.36

44. This proposed exemption 

mandates training (Training) conducted 

at least annually during the Exemption 

Period. In this regard, all relevant 

Northern QPAM asset/portfolio 

management, trading, legal, compliance, 

and internal audit personnel must be 

trained during the Exemption Period. 

Among other things, the Training must 

cover at a minimum, the Policies, ERISA 

and Code compliance, ethical conduct, 

the consequences for not complying 

with the exemption conditions 

(including any loss of the exemptive 

relief provided herein) and the 

requirement for prompt reporting of 

wrongdoing. The Training may be 

conducted electronically and must be 

conducted by a professional who has 

been prudently selected and has 

appropriate technical training and 

proficiency with ERISA and the Code. 

45. Under this proposed exemption 

each Northern QPAM must submit to an 

audit conducted every two years by an 

independent auditor, which covers the 

prior consecutive 12 months. Among 

other things, the auditor must test a 

sample of each Northern QPAM’s 

transactions involving Covered Plans 

that are sufficient in size, number and 

nature to afford the auditor a reasonable 

basis to determine such QPAM’s 

operational compliance with the 

Policies and Training. The auditor’s 

conclusions cannot be based solely on 

the written report created by the 

Compliance Officer (the Exemption 

Report), described below, in lieu of 

independent determinations and testing 

performed by the auditor. 

46. The written report issued by the 

auditor (the Audit Report) must be 

certified by the respective general 

counsel or one of the three most senior 

executive officers of the line of business 

engaged in discretionary asset 

management services through the 

Northern QPAM with respect to which 

the Audit Report applies. A copy of the 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 7183 

37The Department notes that with respect to the 

notice of obligations requirement in section III(j)(7), 

all Covered Plans must receive a notice that 

includes the definition of actual losses as provided 

in section III(j)(2) of this proposed exemption. 

Audit Report must be provided to 

Northern’s Board of Directors. A senior 

executive officer who has a direct 

reporting line to Northern’s highest 

ranking legal compliance officer must 

review the Audit Report for each 

Northern QPAM and certify in writing 

and under penalty of perjury that such 

officer has reviewed each Audit Report. 

47. This proposed exemption requires 

the Northern QPAM to agree and 

warrant with respect to any 

arrangement, agreement, or contract 

between a Northern QPAM and a 

Covered Plan that, throughout the 

effective period of the exemption, the 

Northern QPAM will: (i) comply with 

ERISA and the Code, as applicable with 

respect to the Covered Plan; (ii) refrain 

from engaging in prohibited transactions 

that are not otherwise exempt (and to 

promptly correct any prohibited 

transactions); and (iii) comply with the 

standards of prudence and loyalty set 

forth in ERISA section 404 with respect 

to each such ERISA-covered plan. Each 

Northern QPAM must also agree and 

warrant to indemnify and hold harmless 

the Covered Plan for any actual losses 

resulting directly from any of the 

following: (a) a Northern QPAM’s 

violation of any conditions of this 

exemption; (b) a Northern QPAM’s 

violation of ERISA’s fiduciary duties 

and/or the prohibited transaction 

provisions of ERISA and the Code as 

applicable; (c) a breach of contract by 

the Northern QPAM; or (d) any claim 

arising out of the failure of the Northern 

QPAM to qualify for the exemptive 

relief provided by PTE 84–14 as a result 

of a violation of section I(g) of the 

exemption other than the Conviction. 

This condition applies to actual losses 

caused by the Northern QPAM, 

including but 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 

because of a Northern QPAM’s inability 

to rely upon the relief in the QPAM 

Exemption. The definition of ‘‘actual 

losses’’ used in this proposed exemption 

allows fiduciaries of Covered Plans to 

prudently manage and make the best 

decisions on behalf of their plans 

without needing to consider the costs 

caused by a Northern QPAM’s or its 

affiliate’s misconduct, including costs 

associated with unwinding transactions 

and transitioning plan assets to a new 

asset manager, because these costs will 

be borne by the Northern QPAM and not 

the Covered Plan.37

48. The proposed exemption also 

requires the Northern QPAM to agree 

and warrant with respect to any 

arrangement, agreement, or contract 

between a Northern QPAM and a 

Covered Plan that it will not require or 

cause the Covered Plan to waive, limit, 

or qualify the liability of the Northern 

QPAM for violating ERISA or the Code 

or engaging in prohibited transactions; 

restrict a Covered Plan from terminating 

or withdrawing from its arrangement 

with the Northern QPAM, with the 

exception of reasonable restrictions 

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; 

impose fees, penalties, or charges for 

such termination or withdrawal with 

the exception of reasonable fees 

specifically designed to prevent abusive 

investment practices or ensure equitable 

treatment of all investors in a pooled 

fund; or generally include exculpatory 

provisions disclaiming or otherwise 

limiting the liability of the Northern 

QPAM for a violation of such 

agreement’s terms. 

49. This proposed exemption contains 

specific notice requirements. Each 

Northern QPAM must provide a notice 

regarding the proposed exemption and a 

separate summary describing the facts 

that led to each Conviction (the 

Summary), which must be submitted to 

the Department, and a prominently 

displayed statement (the Statement) that 

each Conviction results in a failure to 

meet a condition in PTE 84–14, to each 

sponsor and beneficial owner of a 

Covered Plan that entered into a written 

asset or investment management 

agreement with a Northern QPAM. The 

notice, Summary, and Statement must 

be provided before or 

contemporaneously with the client’s 

receipt of a written asset management 

agreement from the Northern QPAM. If 

the Department grants an exemption, 

the clients must receive a Federal 

Register copy of the notice of final 

exemption within sixty (60) days of this 

exemption’s effective date. The notice 

may be delivered electronically 

(including by an email containing a link 

to this exemption). 

50. The proposed exemption requires 

each Northern QPAM to maintain 

records necessary to demonstrate that 

the exemption conditions have been met 

for six (6) years following the date of 

any transaction for which the Northern 

QPAM relies upon the relief provided in 

the exemption. The proposed exemption 

mandates that each Northern QPAM 

must designate a senior compliance 

officer (the Compliance Officer) who 

will be responsible for compliance with 

the Policies and Training requirements 

described herein. The Compliance 

Officer must conduct an exemption 

review (the Exemption Review) to 

determine the adequacy and 

effectiveness of the implementation of 

the Policies and Training. The 

Compliance Officer must be a 

professional with extensive relevant 

experience with a reporting line to the 

highest-ranking corporate officer in 

charge of legal compliance for asset 

management for the applicable Northern 

QPAM. At a minimum, the Exemption 

Review must include review of the 

following items: (i) any compliance 

matter related to the Policies or Training 

that was identified by, or reported to, 

the Compliance Officer during the 

previous year; (ii) any material change 

in the relevant business activities of the 

Northern QPAMs; and (iii) any change 

to ERISA, the Code, or regulations that 

may be applicable to the activities of the 

Northern QPAMs. 

51. The Compliance Officer must 

prepare a written report (i.e., the 

Exemption Report) that (A) summarizes 

their material activities during the 

effective period of the exemption; (B) 

sets forth any instance of 

noncompliance discovered, and any 

related corrective action; (C) details any 

change to the Policies or Training to 

guard against any similar instance of 

noncompliance occurring again; and (D) 

makes recommendations, as necessary, 

for additional training, procedures, 

monitoring, or additional and/or 

changed processes or systems, and 

management’s actions in response to 

such recommendations. In each 

Exemption Report, the Compliance 

Officer must certify in writing that, 

among other things, to the best of their 

knowledge at the time, the report is 

accurate, and note whether the Northern 

QPAMs have complied with the Policies 

and Training, and/or corrected (or are 

correcting) any instances of 

noncompliance. 

52. The Exemption Report must be (i) 

provided to the appropriate corporate 

officers of each Northern QPAM to 

which such report relates and to the 

head of compliance and the general 

counsel (or their functional equivalent) 

of the relevant Northern QPAM, and (ii) 

made unconditionally available to the 

independent auditor. The Exemption 

Review, including the Compliance 


ddrumheller on DSK120RN23PROD with NOTICES1
7184 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 

38The Department notes that section I(l) of PTE 

2016–11 required Northern to disclose to the 

Department any Deferred Prosecution Agreement 

(DPA) or a Non-Prosecution Agreement (NPA) with 

the U.S. Department of Justice, entered into by 

Northern or any of its affiliates in connection with 

conduct described in section I(g) of PTE 84–14 and/ 

or ERISA section 411; and provide the Department 

any information requested by the Department, as 

permitted by law. The Department has determined 

not to include the same condition in this proposed 

exemption, because a DPA or NPA is now included 

in the list of disqualifying events under section I(g) 

of PTE 84–14, effective as of June 17, 2024. 

39 If the Applicant satisfies this disclosure 

requirement through Summary Policies, changes to 

the Policies will not require new disclosure to 

Covered Plans unless the Summary Policies are no 

longer accurate because of the changes. 

Officer’s written Exemption Report, 

must be completed within 90 days 

following the end of the period to which 

it relates. 38

53. The proposed exemption also 

mandates that, within 60 days of the 

effective date of the exemption, each 

Northern QPAM clearly and promptly 

informs Covered Plan clients of their 

right to obtain a copy of the Policies or 

a description (the Summary Policies) 

which accurately summarizes key 

components of the Northern 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 180 days following 

the end of the calendar year during 

which the Policies were changed.39

With respect to this requirement, the 

description may be continuously 

maintained on a website, provided that 

such website’s link to the Policies or 

Summary Policies is clearly and 

prominently disclosed to each Covered 

Plan. 

54. Each Northern QPAM must 

impose its internal procedures, controls, 

and protocols to reduce the likelihood 

of any recurrence of conduct that is the 

subject of the Conviction, and each 

Northern QPAM must provide the 

Department with the records necessary 

to demonstrate that each condition of 

this exemption has been met within 30 

days of a request by the Department. 

With respect to an asset manager that 

becomes an Northern QPAM after the 

effective date of the exemption by virtue 

of being acquired (in whole or in part) 

by Northern or a subsidiary or affiliate 

of Northern (a ‘‘newly-acquired 

Northern QPAM’’), the newly-acquired 

Northern QPAM would not be 

precluded from relying on the 

exemptive relief provided by PTE 84–14 

notwithstanding the Conviction as of 

the closing date for the acquisition; 

however, the operative terms of the 

exemption shall not apply to the newlyacquired Northern QPAM until a date 

that is six (6) months after the closing 

date for the acquisition. To that end, the 

newly acquired Northern QPAM will 

initially submit to an audit pursuant to 

section III(i) of this exemption as of the 

first audit period that begins following 

the closing date for the acquisition. The 

period covered by the audit must begin 

on the date on which the Northern 

QPAM was acquired. 

55. Finally, all the material facts and 

representations set forth in the 

Summary of Facts and Representations 

must be true and accurate at all times. 

Statutory Findings—Administratively 

Feasible 

56. The Department has tentatively 

determined that this proposed 

exemption would be administratively 

feasible because, among other things, a 

qualified independent auditor would be 

required to perform in-depth audit(s) 

covering each Northern QPAM’s 

compliance with the exemption, and 

draft a corresponding written audit 

report that would be available to the 

public. The Department notes that the 

independent audit will provide an 

incentive for and a measure of 

compliance with the exemption 

conditions, while reducing the 

immediate need for review and 

oversight by the Department. 

Statutory Findings—In the Interests of 

the Covered Plans 

57. The Department has tentatively 

determined that the proposed 

exemption would be in the interests of 

the participants and beneficiaries of 

each affected Covered Plan because of 

the likely costs the plans would incur if 

the exemption were denied and the 

benefits of permitting plans to continue 

to rely upon the Northern QPAM’s 

services with the additional protections 

set forth in this exemption. 

Statutory Findings—Protective of the 

Rights of Participants of the Covered 

Plans 

58. The Department has tentatively 

determined that this proposed 

exemption would be protective of 

Covered Plans. The exemption would be 

subject to a suite of protective 

conditions that the Department has 

determined provide ample protections 

for the rights of Covered Plans and their 

participants and beneficiaries that are 

managed by QPAMs that have 

experienced a disqualifying event 

similar to the one experienced by the 

Northern QPAMs. The Department 

notes, however, that in the event the 

Northern QPAMs become subject to 

another disqualifying event under PTE 

84–14, the Department would be forced 

to reconsider whether relief is 

appropriate for the Northern QPAMs, 

and whether the conditions for relief 

hereunder are/were adequate to protect 

Covered Plans. The Department also 

takes note of the Applicant’s 

representation that the criminal conduct 

relating to the Wildensteins occurred 

prior to the acquisition of Baring 

Trustees by Northern Trust, and that 

Baring Trustees, currently known as 

NTFS, is now subject to Northern 

Trust’s policies and compliance 

procedures. The Department further 

notes the Applicant’s representation 

that no one involved in taking on the 

Wildenstein business or that had any 

dealings with such matters at the time 

of the misconduct described in the 

Conviction works for NTFS. In addition, 

under this proposed exemption, 

exemptive relief would begin on March 

5, 2025, and it has a limited prospective 

term of five (5) years, which permits the 

Department to re-evaluate the Northern 

QPAMs’ adherence to the condition for 

relief under this exemption, and to 

determine whether or not to continue to 

provide the relief hereunder. 

Summary 

59. Given the revised and new 

conditions described above, the 

Department has tentatively determined 

that the relief sought by the Applicants 

satisfies the statutory requirements for 

an exemption under ERISA section 

408(a) and Code section 4975(c)(2). The 

proposed exemption provides relief 

from certain of the restrictions set forth 

in section 406 and 407 of ERISA. The 

proposed exemption does not provide 

relief from any other violation of law, 

including any criminal conviction not 

expressly described herein. Any 

criminal conviction not expressly 

described herein, or other violation of 

section I(g) of PTE 84–14 that is 

attributable to the Applicant would 

result in the applicant’s loss of this 

exemption. 

Notice to Interested Persons 

Notice of the proposed exemption 

will be provided to all interested 

persons within fifteen (15) days of the 

publication of the notice of proposed 

exemption in the Federal Register. The 

notice will be provided to all interested 

persons in the manner approved by the 

Department and will contain the 

documents described therein and a 

supplemental statement required by 29 

CFR 2570.43(a)(2). The supplemental 

statement will inform interested persons 

of their right to comment on and to 

request a hearing with respect to the 

pending exemption. All written 

comments and/or requests for a hearing 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 7185 

40 In general terms, a QPAM is an independent 

fiduciary that is a bank, savings and loan 

association, insurance company, or investment 

adviser that meets certain equity or net worth 

requirements and other licensure requirements and 

that has acknowledged in a written management 

agreement that it is a fiduciary with respect to each 

plan that has retained the QPAM 

41 49 FR 9494 (March 13, 1984), as corrected at 

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

Continued 

must be received by the Department 

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

publication of this proposed exemption 

in the Federal Register. All comments 

will be made available to the public. 

Warning: If you submit a comment, 

EBSA recommends that you include 

your name and other contact 

information in the body of your 

comment, but DO NOT submit 

information that you consider to be 

confidential, or otherwise protected 

(such as Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. All comments 

may be posted on the internet and can 

be retrieved by most internet search 

engines. 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under ERISA 

section 408(a) and/or Code section 

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

other party in interest or disqualified 

person from certain other provisions of 

ERISA and/or the Code, including any 

prohibited transaction provisions to 

which the exemption does not apply 

and the general fiduciary responsibility 

provisions of ERISA section 404, which, 

among other things, require a fiduciary 

to discharge their duties respecting the 

plan solely in the interest of the plan 

and its participants and beneficiaries 

and in a prudent manner in accordance 

with ERISA section 404(a)(1)(B); nor 

does it affect the requirement of Code 

section 401(a) that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) Before an exemption may be 

granted under ERISA section 408(a) 

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

Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The exemption would be 

supplemental to, and not in derogation 

of, any other provisions of ERISA and/ 

or the Code, including statutory or 

administrative exemptions and 

transitional rules. Furthermore, the fact 

that a transaction is subject to an 

administrative or statutory exemption is 

not dispositive of whether the 

transaction is, in fact, a prohibited 

transaction; and 

(4) The exemption would be subject to 

the express condition that the material 

facts and representations contained in 

the Application are true and complete at 

all times and that the Application 

accurately describes all material terms 

of the transactions which are the subject 

of the exemption. 

Proposed Exemption 

Based on the facts and representations 

set forth in the application for 

exemption, the Department is proposing 

to grant an exemption under the 

authority of ERISA section 408(a) and 

Code section 4975(c)(2) in accordance 

with the procedures set forth in 29 CFR 

part 2570, subpart B (76 FR 66637, 

66644, October 27, 2011). Effective 

December 31, 1978, section 102 of 

Reorganization Plan No. 4 of 1978, 5 

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

authority of the Secretary of the 

Treasury to issue exemptions of the type 

requested to the Secretary of Labor. 

Therefore, this notice of proposed 

exemption is issued solely by the 

Department. 

Section I. Definitions 

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

judgment of conviction against NTFS for 

aiding and abetting tax fraud entered in 

France in the Court of Appeal, French 

Special Prosecutor No. 1120392066, 

French Investigative Judge No. JIRSIF/ 

11/12, or to be entered in another court 

of competent jurisdiction; 

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

plan subject to Part IV of Title I of 

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

plan subject to Code section 4975 (an 

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

which Northern relies on PTE 84–14, or 

with respect to which Northern has 

expressly represented that the manager 

qualifies as a QPAM or relies on the 

QPAM class exemption (PTE 84–14 or 

the QPAM Exemption). A Covered Plan 

does not include an ERISA-covered plan 

or IRA to the extent that Northern has 

expressly disclaimed reliance on QPAM 

status or PTE 84–14 in entering into a 

contract, arrangement, or agreement 

with the ERISA-covered plan or IRA; 

(c) The term ‘‘Exemption Period’’ 

means a period of five years, beginning 

on March 5, 2025 and ending on March 

4, 2030; 

(d) The term ‘‘Northern’’ means 

Northern Trust Corporation, together 

with its current and future affiliates; 

(e) The term ‘‘Northern QPAM’’ 

means a ‘‘qualified professional asset 

manager’’ (as defined in PTE 84–14 

section VI(a)) 40 that relies on the relief 

provided by PTE 84–14 and with 

respect to which NTFS is a current or 

future ‘‘affiliate’’ (as defined in PTE 84– 

14 section VI(d)); and the Northern 

QPAMs do not and must not include 

NTFS. 

(f) The term ‘‘NTFS’’ means Northern 

Trust Fiduciary Services (Guernsey) ltd., 

an affiliate’’ of Northern (as defined in 

PTE 84–14 section VI(c)) located in 

Guernsey; 

(g) The terms ‘‘participate,’’ and 

‘‘participate in,’’ when used to describe 

a person’s role in the criminal conduct 

described in this exemption, refer not 

only to a person’s active participation in 

the misconduct of NTFS that is the 

subject of the Conviction, but also 

includes the knowing or tacit approval 

of the misconduct underlying the 

Conviction or knowledge of such 

conduct without taking active steps to 

prohibit it, including reporting the 

conduct to such individual’s 

supervisors, and to Northern’s board of 

directors. 

(h) Wherever found, any reference in 

this exemption to ‘‘the best knowledge’’ 

of a party, ‘‘best of [a party’s] 

knowledge,’’ and similar formulations of 

the ‘‘best knowledge’’ standard, will be 

deemed to mean the actual knowledge 

of the party and the knowledge which 

they would have had if they had 

conducted their reasonable due 

diligence required under the 

circumstances into the relevant subject 

matter. If a condition of the exemption 

requires an individual to provide 

certification pursuant to their ‘‘best 

knowledge,’’ then such individual, in 

order to make such certification, must 

perform their reasonable due diligence 

required under the circumstances to 

determine whether the information such 

individual is certifying is complete and 

accurate in all respects. Furthermore, 

with respect to an entity other than a 

natural person, the ‘‘best knowledge’’ of 

the entity 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. 

Section II. Covered Transactions 

If the proposed exemption is granted, 

certain entities with specified 

relationships to NTFS (i.e., the Northern 

QPAMs, as defined above) will not be 

precluded from relying on the 

exemptive relief provided by Prohibited 

Transaction Class Exemption 84–14 

(PTE 84–14),41 notwithstanding the 


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

38837 (July 6, 2010), and as amended at 89 FR 

23090 (April 3, 2024). 

42Section I(g) of PTE 84–14 generally provides 

that ‘‘[n]either the QPAM nor any affiliate thereof 

. . . nor any owner . . . of a 5 percent or more 

interest in the QPAM is a person who within the 

10 years immediately preceding the transaction has 

been either convicted or released from 

imprisonment, whichever is later, as a result of’’ 

certain felonies including income tax evasion, and 

aiding and abetting tax evasion.’’ 

Conviction (as defined above),42 during 

the Exemption Period, provided that the 

conditions in section III are satisfied. 

Section III. Conditions 

(a) The Northern QPAMs (including 

their officers, directors, agents other 

than NTFS, and employees of such 

Northern QPAMs) did not know of, have 

reason to know of, or participate in the 

criminal conduct of NTFS that is the 

subject of the Conviction. Further, any 

other party engaged on behalf of the 

Northern 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 that is the subject of 

the Conviction; 

(b) The Northern QPAMs (including 

their officers, directors, agents other 

than NTFS, and employees of such 

Northern QPAMs) did not receive direct 

compensation, or knowingly receive 

indirect compensation, in connection 

with the criminal conduct that is the 

subject of the Conviction. Further, any 

other party engaged on behalf of the 

Northern 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 conduct that is the 

subject of the Conviction; 

(c) The Northern QPAMs will not 

employ or knowingly engage any of the 

individuals that participated in the 

criminal conduct that is the subject of 

the Conviction; 

(d) At all times during the Exemption 

Period, no Northern QPAM will use its 

authority or influence to direct an 

‘‘investment fund,’’ (as defined in PTE 

84–14 section VI(b)) that is subject to 

ERISA or the Code and managed by 

such Northern QPAM in reliance on 

PTE 84–14, or with respect to which a 

Northern QPAM has expressly 

represented to a Covered Plan that it 

qualifies as a QPAM or relies on the 

QPAM Exemption, to enter into any 

transaction with NTFS or engage NTFS 

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; 

(e) Any failure of the Northern 

QPAMs to satisfy PTE 84–14 section I(g) 

arose solely from the Conviction; 

(f) No Northern QPAM exercised 

authority over the assets of any Covered 

Plan in a manner that it knew or should 

have known would further the criminal 

conduct that is the subject of the 

Conviction or cause a Northern QPAM 

or its affiliates to directly or indirectly 

profit from the criminal conduct that is 

the subject of the Conviction; 

(g) NTFS has not provided and will 

not provide discretionary asset 

management services to Covered Plans, 

nor will it otherwise act as a fiduciary 

within the meaning of ERISA section 

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

4975(e)(3)(A) and (C), with respect to 

Covered Plan assets; 

(h)(1) Each Northern QPAM will 

continue to implement, maintain, adjust 

(to the extent necessary), and follow 

written policies (the Policies) requiring 

and reasonably designed to ensure that: 

(i) The asset management decisions of 

each Northern QPAM are conducted 

independently of the management and 

business activities of Northern, 

including NTFS and Northern’s nonasset management affiliates; 

(ii) The Northern QPAM fully 

complies with ERISA’s fiduciary duties 

and with ERISA and the Code’s 

prohibited transaction provisions, as 

applicable with respect to each Covered 

Plan, and does not knowingly 

participate in any violations of these 

duties and provisions with respect to 

Covered Plans; 

(iii) The Northern 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 Northern QPAM to regulators, 

including but not limited to, the 

Department of Labor, 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 the Northern 

QPAM’s knowledge at the time, the 

Northern 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; 

(vi) The Northern QPAM complies 

with the terms of this exemption, if 

granted; and 

(vii) Any violation of, or failure to 

comply with, an item in subparagraph 

(ii) through (vi), is corrected promptly 

upon discovery, and any such violation 

or compliance failure not promptly 

corrected is reported, upon discovering 

the failure to promptly correct, in 

writing, to appropriate corporate 

officers, the head of compliance and the 

General Counsel (or their functional 

equivalent) of the relevant Northern 

QPAM, and an appropriate fiduciary of 

any affected Covered Plan where such 

fiduciary is independent of Northern; 

however, with respect to any Covered 

Plan sponsored by an ‘‘affiliate’’ (as 

defined in PTE 84–14 section VI(d)) of 

Northern or beneficially owned by an 

employee of Northern or its affiliates, 

such fiduciary does not need to be 

independent of Northern. A Northern 

QPAM will not be treated as having 

failed to develop, implement, maintain, 

or follow the Policies, provided that it 

corrects any instance of noncompliance 

when discovered or when it reasonably 

should have known of the 

noncompliance (whichever is earlier), 

and provided that it adheres to the 

reporting requirements set forth in this 

subparagraph (vii); 

(2) Each Northern QPAM must 

continue to implement a program of 

training (the Training), conducted at 

least annually during the Exemption 

Period, for all relevant Northern QPAM 

asset/portfolio management, trading, 

legal, compliance, and internal audit 

personnel during the Exemption Period. 

The Training may be conducted 

electronically and must: (a) be set forth 

in the Policies and 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 temporary 

exemption (including any loss of 

exemptive relief provided herein), and 

prompt reporting of wrongdoing; (b) be 

conducted by a professional who has 

been prudently selected and who has 

appropriate training and proficiency 

with ERISA and the Code to perform the 

tasks required by this exemption; and 

(c) be verified, through in-training 

knowledge checks, ‘‘graduation’’ tests, 

and/or other technological tools 

designed to confirm that personnel fully 

and in good faith participate in the 

Training. 

(i)(1) Each Northern QPAM must 

submit to an audit conducted every two 

years by an independent auditor who 

has been prudently selected and who 


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has appropriate technical training and 

proficiency with ERISA and the Code, to 

evaluate the adequacy of and each 

Northern QPAM’s compliance with the 

Policies and Training conditions 

described herein. The audit requirement 

must be incorporated in the Policies. 

Each audit must cover the preceding 

consecutive twelve (12) month period. 

The first audit must cover the period 

from March 5, 2025 (at the end of the 

period of protection granted under PTE 

2016–11), through March 4, 2026, and 

must be completed by September 4, 

2026. The second audit must cover the 

period from March 5, 2027, through 

March 4, 2028, and must be completed 

by September 4, 2028. The third audit 

must cover the period from March 5, 

2029, through March 4, 2030, and must 

be completed by September 4, 2030; 

(2) Within the scope of the audit and 

to the extent necessary for the auditor, 

in its sole opinion, to complete its audit 

and comply with the conditions for 

relief described herein, each Northern 

QPAM and, if applicable, Northern, will 

grant the auditor unconditional access 

to its businesses, including, but not 

limited to: its computer systems; 

business records; transactional data; 

workplace locations; training materials; 

and personnel. Such access will be 

provided only to the extent that it is not 

prevented by State or Federal statute, or 

involves communications subject to 

attorney client privilege and may be 

limited to information relevant to the 

auditor’s objectives as specified by the 

terms of this exemption; 

(3) The auditor’s engagement must 

specifically require the auditor to 

determine whether each Northern 

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; 

(4) The auditor’s engagement must 

specifically require the auditor to test 

each Northern QPAM’s operational 

compliance with the Policies and 

Training conditions. In this regard, the 

auditor must test, for each QPAM, a 

sample of the QPAM’s transactions 

involving Covered Plans. The sample 

must include transactions that are 

sufficient in size, number and nature to 

afford the auditor a reasonable basis to 

determine the QPAM’s operational 

compliance with the Policies and 

Training; 

(5) For each audit, on or before the 

end of the relevant period for 

completing the audit described in 

section III(i)(1), the auditor must issue a 

written report (the Audit Report) to 

Northern and the Northern QPAM to 

which the audit applies that describes 

the procedures performed by the auditor 

during the course of its examination. At 

its discretion, the auditor may issue a 

single consolidated Audit Report that 

covers all the Northern QPAMs. The 

Audit Report must include the auditor’s 

specific determinations regarding: 

(i) the adequacy of each Northern 

QPAM’s Policies and Training; each 

Northern QPAM’s compliance with the 

Policies and Training conditions; the 

need, if any, to strengthen such Policies 

and Training; and any instance of the 

respective Northern QPAM’s 

noncompliance with the written 

Policies and Training described in 

section III(h) above. The Northern 

QPAM must promptly address any 

noncompliance and promptly address or 

prepare a written plan of action to 

address any determination by the 

auditor regarding the adequacy of the 

Policies and Training and the auditor’s 

recommendations (if any) with respect 

to strengthening the Policies and 

Training of the respective Northern 

QPAM. Any action taken, or the plan of 

action to be taken, by the respective 

Northern QPAM must be included in an 

addendum to the Audit Report (and 

such addendum must be completed 

before the certification described in 

section III(i)(7) below). In the event such 

a plan of action to address the auditor’s 

recommendation regarding the 

adequacy of the Policies and Training is 

not completed by the time the Audit 

Report is submitted, the following 

period’s Audit Report must state 

whether the plan was satisfactorily 

completed. Any determination by the 

auditor that the respective Northern 

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 a 

Northern QPAM has complied with the 

requirements under this subparagraph 

must be based on evidence that the 

particular Northern QPAM has actually 

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 officer (Compliance 

Officer), as described in section III(m) 

below, as the basis for the auditor’s 

conclusions in lieu of independent 

determinations and testing performed 

by the auditor, as required by section 

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

(ii) The adequacy of the most recent 

Exemption Review described in section 

III(m); 

(6) The auditor must notify the 

respective Northern 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; 

(7) With respect to each Audit Report, 

the general counsel, or one of the three 

most senior executive officers of the line 

of business engaged in discretionary 

asset management services through the 

Northern QPAM with respect 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 and that to 

the best of such officer’s knowledge at 

the time, the Northern QPAM has 

addressed, corrected or remedied any 

noncompliance and inadequacy, or has 

an appropriate written plan to address 

any inadequacy regarding the Policies 

and Training identified in the Audit 

Report. The certification must also 

include the signatory’s determination 

that the Policies and Training in effect 

at the time of signing are adequate to 

ensure compliance with the conditions 

of this exemption and with the 

applicable provisions of ERISA and the 

Code. Notwithstanding the above, no 

person who participated in the criminal 

conduct that is the subject of the 

Conviction may provide the certification 

required by this exemption, unless the 

person took active documented steps to 

stop the misconduct underlying the 

Conviction; 

(8) Northern’s Board of Directors must 

be provided a copy of each Audit 

Report, and a senior executive officer 

with a direct reporting line to the 

highest-ranking legal compliance officer 

of Northern must review the Audit 

Report for each Northern QPAM and 

certify in writing, under penalty of 

perjury, that such officer has reviewed 

each Audit Report. With respect to this 

subsection (8), such certifying senior 

executive officer must not have known 

of, had reason to know of, or 

participated in, any misconduct 

underlying the Conviction, unless such 

person took active documented steps to 

stop the misconduct underlying the 

Conviction; 

(9) Each Northern QPAM provides its 

certified Audit Report, by electronic 

mail to e-oed@dol.gov. This delivery 

must take place no later than forty-five 

(45) days following completion of the 

Audit Report. The Audit Report will be 

made part of the public record regarding 

this exemption. Furthermore, each 

Northern QPAM must make its Audit 

Report unconditionally available, 

electronically or otherwise, for 


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examination upon request by any duly 

authorized employee or representative 

of the Department, other relevant 

regulators, and any fiduciary of a 

Covered Plan; 

(10) Each Northern QPAM and the 

auditor must submit to e-oed@dol.gov 

any engagement agreement(s) executed 

pursuant to the engagement of the 

auditor under this exemption no later 

than two (2) months after the execution 

of any such engagement agreement; 

(11) The auditor must provide the 

Department, upon request access to all 

the workpapers it created and utilized 

in the course of the audit, for inspection 

and review, provided such access and 

inspection is otherwise permitted by 

law; and 

(12) Northern must notify the 

Department of a change in the 

independent auditor no later than 60 

days after the engagement of a substitute 

or subsequent auditor and must provide 

an explanation for the substitution or 

change including a description of any 

material disputes between the 

terminated auditor and Northern; 

(j) Throughout the Exemption Period, 

with respect to any arrangement, 

agreement, or contract between a 

Northern QPAM and a Covered Plan, 

each Northern QPAM agrees and 

warrants: 

(1) To comply with ERISA and the 

Code, as applicable with respect to such 

Covered Plan; to refrain from engaging 

in prohibited transactions that are not 

otherwise exempt (and to promptly 

correct any prohibited transactions in 

accordance with applicable rules under 

ERISA and the Code); and to comply 

with the standards of prudence and 

loyalty set forth in ERISA section 404 

with respect to each such Covered Plan, 

to the extent that section is applicable; 

(2) To indemnify and hold harmless 

the Covered Plan for any actual losses 

resulting directly from the Northern 

QPAM’s violation of any conditions of 

this exemption, a Northern 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 Northern QPAM; or any claim 

arising out of the failure of such 

Northern 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 the Conviction. 

Actual losses include, but are 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 Northern 

QPAM’s inability to rely upon the relief 

in the QPAM Exemption. 

(3) Not to require (or otherwise cause) 

the Covered Plan to waive, limit, or 

qualify the liability of the Northern 

QPAM for violating ERISA or the Code 

or engaging in prohibited transactions; 

(4) Not to restrict the ability of the 

Covered Plan to terminate or withdraw 

from its arrangement with the Northern 

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 of 

these arrangements involving 

investments in pooled funds subject to 

ERISA entered into after the effective 

date of this exemption, the adverse 

consequences must relate to a lack of 

liquidity of the underlying assets, 

valuation issues, or regulatory reasons 

that prevent the fund from promptly 

redeeming a Covered Plan’s investment, 

and such restrictions must be applicable 

to all such investors in the pooled fund 

on equal terms and effective no longer 

than reasonably necessary to avoid the 

adverse consequences; 

(5) Not to impose any fees, penalties, 

or charges for such termination or 

withdrawal with the exception of 

reasonable fees, appropriately disclosed 

in advance, that are specifically 

designed to prevent generally 

recognized abusive investment practices 

or specifically designed to ensure 

equitable treatment of all investors in a 

pooled fund in the event the withdrawal 

or termination may have adverse 

consequences for all other investors, 

provided that such fees are applied 

consistently and in like manner to all 

such investors; 

(6) Not to include exculpatory 

provisions disclaiming or otherwise 

limiting the liability of the Northern 

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 the Northern QPAM and 

its affiliates, or damages arising from 

acts outside the control of the Northern 

QPAM; and 

(7) Within 60 calendar days after this 

exemption’s effective date, each 

Northern QPAM must provide a notice 

of its obligations under this section III(j) 

to each Covered Plan, including for 

avoidance of doubt the definition of 

actual losses as provided in clause (2) 

above. For Covered Plans that enter into 

a written asset or investment 

management agreement with a Northern 

QPAM on or after 60 calendar days from 

this exemption’s effective date, the 

Northern QPAM must agree to its 

obligations under this section III(j) in an 

updated investment management 

agreement between the Northern QPAM 

and such clients or other written 

contractual agreement. This condition 

will be deemed met for each Covered 

Plan that received a notice pursuant to 

PTE 2016–11 that meets the terms of 

this condition. This condition will also 

be met where the Northern QPAM has 

already agreed to the same obligations 

required by this section III(j) in an 

updated investment management 

agreement between the Northern QPAM 

and a Covered Plan. 

(k) Within 60 days after the effective 

date of this exemption, each Northern 

QPAM provides notice of the exemption 

as published in the Federal Register, 

along with a separate summary 

describing the facts that led to the 

Conviction (the Summary), which has 

been submitted to the Department, and 

a prominently displayed statement (the 

Statement) that the Conviction results in 

a failure to meet a condition in PTE 84– 

14 to each sponsor and beneficial owner 

of a Covered Plan that has entered into 

a written asset or investment 

management agreement with the 

Northern QPAM. All prospective 

Covered Plan clients that enter into a 

written asset or investment management 

agreement with the Northern QPAM 

(including a participation or 

subscription agreement in a pooled fund 

managed by an Northern QPAM) after a 

date that is 60 days after the effective 

date of this exemption must receive 

must receive the proposed and final 

exemptions with the Summary and the 

Statement prior to, or 

contemporaneously with, the client’s 

receipt of a written asset management 

agreement from the Northern QPAM (for 

avoidance of doubt, all Covered Plan 

clients of an Northern QPAM during the 

Exemption Period must receive the 

disclosures described in this section by 

the later of (i) 60 days after the effective 

date of the exemption or (ii) the date 

that a Covered Plan client enters into a 

written asset or investment management 

agreement with an Northern QPAM). 

Disclosures required under this 

paragraph (k) may be delivered 

electronically (including by an email 

that has a link to this exemption. 


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Notwithstanding the above paragraph, a 

Northern QPAM will not violate the 

condition solely because a Covered Plan 

refuses to sign an updated investment 

management agreement; 

(l) The Northern QPAMs must comply 

with each condition of PTE 84–14, as 

amended, with the sole exceptions of 

the violations of PTE 84–14 section I(g) 

that are attributable to the Conviction. If 

an affiliate of the Northern QPAM (as 

defined in section VI(d) of PTE 84–14) 

is convicted of a crime described in PTE 

84–14 section I(g) (other than the 

Conviction) during the Exemption 

Period, this exemption will terminate 

immediately; 

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

publication of the exemption, each 

Northern QPAM must designate a senior 

compliance officer (i.e., the Compliance 

Officer) to be responsible for 

compliance with the Policies and 

Training requirements described herein. 

No person who participated in the 

criminal conduct that is the subject of 

the Conviction, may be involved with 

the designation or responsibilities 

required by this condition unless the 

person took active documented steps to 

stop the misconduct. The Compliance 

Officer must conduct a review of each 

twelve-month period comprising the 

Exemption Period (each an Exemption 

Review), to determine the adequacy and 

effectiveness of the Northern QPAM’s 

implementation of the Policies and 

Training. With respect to the 

Compliance Officer, the following 

conditions must be met: 

(i) The Compliance Officer must be a 

professional who has extensive 

experience with, and knowledge of, the 

regulation of financial services and 

products, including under ERISA and 

the Code; and 

(ii) The Compliance Officer must have 

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

legal compliance for asset management. 

(2) With respect to the Exemption 

Review, the following conditions must 

be met: 

(i) The Exemption Review must 

include a review of the Northern 

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 

Officer or others within the compliance 

and risk control function (or its 

equivalent) during the twelve-month 

period under review; the most recent 

Audit Report issued pursuant to this 

exemption; any material change in the 

relevant business activities of the 

Northern QPAM; 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 

Northern QPAM; 

(ii) The Compliance Officer prepares 

a written report for the Exemption 

Review (an Exemption Report) that (A) 

summarizes their material activities 

during the twelve-month period under 

review; (B) sets forth any instance of 

noncompliance discovered during the 

twelve-month period under review, and 

any related corrective action; (C) details 

any change to the Policies or Training 

to guard against any similar instance of 

noncompliance occurring again; and (D) 

makes recommendations, as necessary, 

for additional training, procedures, 

monitoring, or additional and/or 

changed processes or systems, and 

management’s actions in response to 

such recommendations; 

(iii) In the Exemption Report, the 

Compliance Officer must certify in 

writing that to the best of their 

knowledge at the time: (A) the report is 

accurate; (B) the Policies and Training 

are working in a manner which is 

reasonably designed to ensure that the 

Policies and Training requirements 

described herein are met; (C) any known 

instance of noncompliance during the 

twelve-month period under review and 

any prior period, and any related 

correction taken to date, has been 

identified in the Exemption Report; and 

(D) the Northern QPAM 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 the Northern QPAM; the head 

of compliance and the general counsel 

(or their functional equivalent) of the 

Northern QPAM; and must be made 

unconditionally available to the 

independent auditor described above; 

and 

(v) The Exemption Review, including 

the Compliance Officer’s written Report, 

must be completed within 90 days 

following the end of the period to which 

it relates; 

(n) Each Northern 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 Northern 

QPAM relies upon the relief in the 

exemption; 

(o) Within 60 days after the effective 

date of the exemption, each Northern 

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 such Northern 

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 180 days following 

the end of the calendar year during 

which the Policies were changed. If the 

Northern QPAM meets this disclosure 

requirement through Summary Policies, 

changes to the Policies shall not result 

in the requirement for a new disclosure 

unless, as a result of changes to the 

Policies, the Summary Policies are no 

longer accurate. With respect to this 

requirement, the description may be 

continuously maintained on a website, 

provided that such website link to the 

Policies or Summary Policies is clearly 

and prominently disclosed to each 

Covered Plan; 

(q) A Northern QPAM will not fail to 

meet the terms of this exemption, solely 

because a different Northern QPAM fails 

to satisfy a condition for relief under 

this exemption, described in sections 

III(c), (d), (h), (i), (j), (k), (l), (m), (n), and 

(o) 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)(11), provided that such 

failure did not result from any actions 

or inactions of Northern or its affiliates. 

(r) Each Northern QPAM imposes 

internal procedures, controls, and 

protocols to reduce the likelihood of any 

recurrence of conduct that is the subject 

of the Conviction; 

(s) All the material facts and 

representations set forth in the 

Summary of Facts and Representations 

are true and accurate at all times; and 

(t) With respect to an asset manager 

that becomes an Northern QPAM after 

the effective date of the exemption by 

virtue of being acquired (in whole or in 

part) by Northern or a subsidiary or 

affiliate of Northern (a ‘‘newly-acquired 

Northern QPAM’’), the newly-acquired 

Northern QPAM would not be 

precluded from relying on the 

exemptive relief provided by PTE 84–14 

notwithstanding the Conviction as of 

the closing date for the acquisition; 

however, the operative terms of the 

exemption shall not apply to the newlyacquired Northern QPAM until a date 

that is six (6) months after the closing 

date for the acquisition. To that end, the 

newly acquired Northern QPAM will 

initially submit to an audit pursuant to 

section III(i) of this exemption as of the 

first audit period that begins following 

the closing date for the acquisition. The 


ddrumheller on DSK120RN23PROD with NOTICES1
7190 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Notices 

period covered by the audit must begin 

on the date on which the Northern 

QPAM was acquired; 

(t) Relief in this exemption will 

terminate on the date that is 12 months 

following the date that a U.S. regulatory 

authority makes a final decision that 

Northern or an affiliate failed to comply 

in all material respects with any 

requirement imposed by such regulatory 

authority in connection with the 

Conviction; and 

(u) Each Northern QPAM must 

provide the Department with the 

records necessary to demonstrate that 

each condition of this exemption has 

been met within 30 days of a request by 

the Department. 

Exemption Date: This exemption will 

be in effect beginning on March 5, 2025, 

and ending on March 4, 2030. 

Signed at Washington, DC. 

George Christopher Cosby, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2025–01244 Filed 1–17–25; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Agency Information Collection 

Activities; Submission for OMB 

Review; Comment Request; Senior 

Community Service Employment 

Program Older Workers Study Impact 

Evaluation 

ACTION: Notice of availability; request 

for comments. 

SUMMARY: The Department of Labor 

(DOL) is submitting this Chief 

Evaluation Office (CEO)-sponsored 

information collection request (ICR) to 

the Office of Management and Budget 

(OMB) for review and approval in 

accordance with the Paperwork 

Reduction Act of 1995 (PRA). Public 

comments on the ICR are invited. 

DATES: The OMB will consider all 

written comments that the agency 

receives on or before February 20, 2025. 

ADDRESSES: Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

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

PRAMain. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

Comments are invited on: (1) whether 

the collection of information is 

necessary for the proper performance of 

the functions of the Department, 

including whether the information will 

have practical utility; (2) the accuracy of 

the agency’s estimates of the burden and 

cost of the collection of information, 

including the validity of the 

methodology and assumptions used; (3) 

ways to enhance the quality, utility and 

clarity of the information collection; and 

(4) ways to minimize the burden of the 

collection of information on those who 

are to respond, including the use of 

automated collection techniques or 

other forms of information technology. 

FOR FURTHER INFORMATION CONTACT: 

Nicole Bouchet by telephone at 202– 

693–0213, or by email at DOL_PRA_

PUBLIC@dol.gov. 

SUPPLEMENTARY INFORMATION: The 

Senior Community Service Employment 

Program (SCSEP), administered by the 

U.S. Department of Labor, aims to help 

low-income seniors ages 55 and older 

obtain private-sector, unsubsidized 

employment through job training and 

placement activities. To learn more 

about SCSEP and to inform continuous 

improvement of the program, the Older 

Workers Study was created. This is a 

new collection request associated with 

the same study. For additional 

substantive information about this ICR, 

see the related notice published in the 

Federal Register on October 1, 2024 (89 

FR 22432). 

This information collection is subject 

to the PRA. A Federal agency generally 

cannot conduct or sponsor a collection 

of information, and the public is 

generally not required to respond to an 

information collection, unless the OMB 

approves it and displays a currently 

valid OMB Control Number. In addition, 

notwithstanding any other provisions of 

law, no person shall generally be subject 

to penalty for failing to comply with a 

collection of information that does not 

display a valid OMB Control Number. 

See 5 CFR 1320.5(a) and 1320.6. 

DOL seeks PRA authorization for this 

information collection for three (3) 

years. OMB authorization for an ICR 

cannot be for more than three (3) years 

without renewal. The DOL notes that 

information collection requirements 

submitted to the OMB for existing ICRs 

receive a month-to-month extension 

while they undergo review. 

Agency: DOL–CEO. 

Title of Collection: SCSEP Older 

Workers Study Impact Evaluation. 

OMB Control Number: 1290–0NEW. 

Affected Public: Individuals or 

Households. 

Total Estimated Number of 

Respondents: 1,600. 

Total Estimated Number of 

Responses: 1,600. 

Total Estimated Annual Time Burden: 

400 hours. 

Total Estimated Annual Other Costs 

Burden: $0. 

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

Nicole Bouchet, 

Senior Paperwork Reduction Act Analyst. 

[FR Doc. 2025–01254 Filed 1–17–25; 8:45 am] 

BILLING CODE 4510–HX–P 

NUCLEAR REGULATORY 

COMMISSION 

[NRC–2025–0009] 

Monthly Notice; Applications and 

Amendments to Facility Operating 

Licenses and Combined Licenses 

Involving No Significant Hazards 

Considerations 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Monthly notice. 

SUMMARY: Pursuant to section 189a.(2) of 

the Atomic Energy Act of 1954, as 

amended (the Act), the U.S. Nuclear 

Regulatory Commission (NRC) is 

publishing this regular monthly notice. 

The Act requires the Commission to 

publish notice of any amendments 

issued, or proposed to be issued, and 

grants the Commission the authority to 

issue and make immediately effective 

any amendment to an operating license 

or combined license, as applicable, 

upon a determination by the 

Commission that such amendment 

involves no significant hazards 

consideration (NSHC), notwithstanding 

the pendency before the Commission of 

a request for a hearing from any person. 

DATES: Comments must be filed by 

February 20, 2025. A request for a 

hearing or petitions for leave to 

intervene must be filed by March 24, 

2025. This monthly notice includes all 

amendments issued, or proposed to be 

issued, from December 6, 2024, to 

January 2, 2025. The last monthly notice 

was published on December 23, 2024. 

ADDRESSES: You may submit comments 

by any of the following methods; 

however, the NRC encourages electronic 

comment submission through the 

Federal rulemaking website. 

• Federal Rulemaking Website: Go to 

https://www.regulations.gov and search 

for Docket ID NRC–2025–0009. Address 

questions about Docket IDs in 

Regulations.gov to Stacy Schumann; 

telephone: 301–415–0624; email: 

Stacy.Schumann@nrc.gov. For technical 

questions, contact the individual listed 

in the FOR FURTHER INFORMATION

CONTACT section of this document. 

• Mail comments to: Office of 

Administration, Mail Stop: TWFN–7– 


ddrumheller on DSK120RN23PROD with NOTICES1