Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6013 

incur to implement an Administrative 

Order on Consent to perform a Remedial 

Investigation and Feasibility Study for 

the AUS OU, and for the Settling 

Federal Agencies’ share of DOI’s and 

EPA’s past response costs. Under the 

proposed settlement, the Settling 

Federal Agencies will reimburse GD– 

OTS $24.3 million for past response 

costs and agree to reimburse 48% of 

GD–OTS’ future response costs on a 

‘‘pay-as-you-go’’ basis. The Defendants 

will reimburse DOI for $3.1 million and 

EPA for $54,000 in past response costs. 

The Settling Federal Agencies will also 

reimburse DOI for $2.9 million and EPA 

for $50,000. 

The publication of this notice opens 

a period for public comment on the 

proposed Consent Decree. Comments 

should be addressed to Assistant 

Attorney General, Environment and 

Natural Resources Division, and should 

refer to United States of America v. 

General Dynamics-Ordnance and 

Tactical Systems et al., D.J. Ref. No. 90– 

11–3–643/17. All comments must be 

submitted no later than thirty (30) days 

after the publication date of this notice. 

Comments may be submitted by email 

or mail: 

To submit comments Send them to 

By e-mail ............ pubcomment-ees.enrd@

usdoj.gov 

By mail ................ Assistant Attorney General 

U.S. DOJ–ENRD 

P.O. Box 7611 

Washington, D.C. 20044– 

7611 

Any comments submitted in writing 

may be filed in whole or in part on the 

public court docket without notice to 

the commenter. During the public 

comment period, the proposed Consent 

Decree may be examined and 

downloaded at this Justice Department 

website: https://www.justice.gov/enrd/ 

consent-decrees. If you require 

assistance accessing the proposed 

Consent Decree, you may request 

assistance by email or by mail to the 

addresses provided above for submitting 

comments. 

Laura Thoms, 

Assistant Section Chief, Environmental 

Enforcement Section, Environment and 

Natural Resources Division. 

[FR Doc. 2025–01087 Filed 1–16–25; 8:45 am] 

BILLING CODE 4410–CW–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Exemption Application No. D–12102] 

Proposed Exemption for the Royal 

Bank of Canada and Its Current and 

Future Affiliates (Collectively, RBC or 

the Applicant) Located in Toronto, 

Ontario, Canada 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemption. 

SUMMARY: This document provides 

notice of the pendency before the 

Department of Labor (the Department) of 

a proposed individual exemption from 

certain of the prohibited transaction 

restrictions of the Employee Retirement 

Income Security Act of 1974 (ERISA or 

the Act) and the Internal Revenue Code 

of 1986 (the Code). This proposed 

exemption would permit certain 

qualified professional asset managers 

with specified relationships to Royal 

Bank of Canada Trust Company 

(Bahamas) Limited, and certain current 

and future affiliates of the Royal Bank 

of Canada (collectively, the RBC 

QPAMs), to continue to rely on the class 

exemptive relief granted in Prohibited 

Transaction Exemption (PTE) 84–14 

(PTE 84–14, or the QPAM Exemption), 

notwithstanding the March 5, 2024 

judgment of conviction against Royal 

Bank of Canada Trust Company 

(Bahamas) Limited (RBCTC Bahamas) 

for aiding and abetting tax fraud, 

entered in France in the Paris Court of 

Appeal. 

DATES: 

Exemption date: This proposed 

exemption would be in effect 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 

3, 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–12102 via 

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 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 

(202) 693–8673). See SUPPLEMENTARY

INFORMATION below for additional 

information regarding comments. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Blessed Chuksorji-Keefe of the 

Department at (202) 693–8567. (This is 

not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Comments: Persons are encouraged to 

submit all comments electronically and 

not to submit paper copies. Comments 

should state the nature of the person’s 

interest in the proposed exemption and 

how the person would be adversely 

affected by the exemption, if granted. 

Any person who may be adversely 

affected by an exemption can request a 

hearing on the exemption. A request for 

a hearing must state: (1) the name, 

address, telephone number, and email 

address of the person making the 

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

interest in the exemption, and the 

manner in which the person would be 

adversely affected by the exemption; 

and (3) a statement of the issues to be 

addressed and a general description of 

the evidence to be presented at the 

hearing. The Department will grant a 

request for a hearing made in 

accordance with the requirements above 

where a hearing is necessary to fully 

explore material factual issues 

identified by the person requesting the 

hearing. A notice of such hearing shall 

be published by the Department in the 

Federal Register. The Department may 

decline to hold a hearing if: 

(1) the request for the hearing does 

not meet the requirements 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 


KHAMMOND on DSK9W7S144PROD with NOTICES
6014 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

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. 

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. 

5See 89 FR 23090 at 23138 through 23140 (April 

4, 2024). 

6 Id. 

7The Department notes that availability of this 

exemption would be subject to the express 

condition that the material facts and representations 

made by the Applicant in Application D–12102 are 

true and complete at all times and accurately 

describe all material terms of the transaction(s) 

covered by the exemption. If there is any material 

change in a transaction covered by the exemption, 

or in a material fact or representation described in 

the application, the exemption will cease to apply 

as of the date of the change. 

8The conversion amounts are current as of 

January 10, 2025. 

9The figures included in this application are 

dated as of October 31, 2024, unless otherwise 

noted. Assets under management for U.S. managers 

are expressed in U.S. dollars. 

10The 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 RBC 

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

has expressly represented that the manager qualifies 

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

does not include an ERISA-covered plan or IRA to 

the extent that RBC 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. 

11 In its most recent (at the time of the 

application) Form ADV Part I(A) reported assets of 

almost $80 billion managed on a discretionary 

basis, including ERISA assets including 

approximately $4.7 billion in public pension assets 

for state and local plans, which may by law or 

contract require it to comply with the prohibited 

transaction rules under ERISA. 

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 RBC QPAMs will be allowed to 

continue their reliance on the QPAM 

Exemption) 2 notwithstanding the 

March 5, 2024 judgment of conviction 

against Royal Bank of Canada Trust 

Company (Bahamas) Limited (RBCTC 

Bahamas) for aiding and abetting tax 

fraud, as described in more detail below 

(the Conviction), provided the 

conditions set forth in the exemption 

are met. The terms of this proposed 

exemption have been specifically 

designed to permit plans to terminate 

their relationships in an orderly and 

cost-effective fashion in the event of an 

additional conviction or a determination 

that it is otherwise prudent for a plan to 

terminate its relationship with an entity 

covered by the exemption. 

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 the exemption would 

terminate immediately if, among other 

things, RBC or an affiliate of RBC (as 

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

is convicted of a crime covered by, or 

otherwise violates, section I(g) of PTE 

84–14 (other than the Conviction) 

during the Exemption Period.5 Although 

RBC could apply for a new exemption 

in that circumstance, the Department 

would not be obligated to grant the 

exemption.6

Summary of Facts and 

Representations 7

The Royal Bank of Canada 

1. The Royal Bank of Canada (RBC) is 

a Canadian corporation headquartered 

in Toronto, Ontario, Canada and is 

Canada’s largest bank. RBC provides 

personal and commercial banking, 

wealth management services, insurance, 

investor services and capital markets 

products and services on a global basis. 

As of October 31, 2024, RBC had more 

than CAD$1.342 trillion (more than 

$932 billion in U.S. dollars) 8 in assets 

under management, CAD$4.965 trillion 

(approximately $3.45 trillion in U.S. 

dollars) 9 in assets under administration, 

and equity attributable to shareholders 

of CAD$127 billion (approximately 

$88.3 billion in U.S. dollars). 

The Convicted Entity 

2. RBCTC Bahamas is a wholly-owned 

subsidiary of RBC located in the 

Bahamas and regulated by the Central 

Bank of the Bahamas. RBCTC Bahamas 

once provided trust and company 

management services in all major 

currencies to international clients. 

Currently, RBCTC Bahamas is not 

engaged in asset management activities 

and does not act as a fiduciary of any 

plans subject to part 4 of title I of ERISA 

or Internal Revenue Code (Code) section 

4975. 

3. Over the last several years, RBCTC 

Bahamas’s operations have been 

reduced in scope. In September 2014, 

RBCTC Bahamas ceased taking on new 

trust business. On November 4, 2015, 

RBCTC Bahamas announced that it had 

entered into a purchase and sale 

agreement with SMP Partners Group to 

sell its Trust, Custody and Fund 

Administration businesses in the 

Caribbean. This follows the 

announcement in November 2014 that 

RBC would be exiting a number of its 

Wealth Management businesses in the 

Caribbean. On November 18, 2016, RBC 

completed the sale of the assets of 

RBCTC Bahamas to another financial 

institution, but did not sell the assets 

relating to the servicing of the Bahamian 

trust (the Delta Trust) that is connected 

to the allegations at issue in the criminal 

case and for which RBCTC Bahamas has 

served as successor trustee since 2004 

(the Delta Trust). 

The RBC QPAMs 

4. Certain current and future 

‘‘affiliates’’ of RBCTC Bahamas, as that 

term is defined in section VI(d) of PTE 

84–14, may manage the assets of ERISAcovered plans and individual retirement 

accounts subject to the Internal Revenue 

Code (collectively, Covered Plans) as 

RBC QPAMs in reliance on PTE 84– 

14.10 The primary U.S. bank and U.S. 

registered investment adviser affiliates 

in which RBC owns a significant 

interest, directly or indirectly, include 

the following: (1) RBC Global Asset 

Management (U.S.) Inc.; 11 (2) RBC 

Global Asset Management (UK) 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6015 

12At the time of the application, managed assets 

of nearly $122 billion on a discretionary basis, 

including ERISA assets and approximately $993 

million in public pension assets for state and local 

plans, which may by law or contract require it to 

comply with the prohibited transaction rules under 

ERISA. 

13At the time of the application, this entity 

managed assets of approximately $149 billion 

managed on a discretionary basis, including ERISA 

and IRA assets. 

14At the time of the application, this entity 

managed assets of approximately $24.2 billion on 

a discretionary basis, including ERISA and IRA 

assets. 

15At the time of the application, this entity 

managed assets of nearly $1.5 billion on a 

discretionary basis, including ERISA and IRA 

assets. 

16At the time of the application, this entity 

managed assets of over $60 billion on a 

discretionary basis, including ERISA and IRA 

assets, and including $29 million in public pension 

assets for state and local plans, which may by law 

or contract require it to comply with the prohibited 

transaction rules under ERISA. 

17At the time of the application managed assets 

of over $125 million on a discretionary basis, 

including ERISA and IRA assets. Symphonic is in 

the process of being dissolved, which process is 

expected to be completed in the second quarter of 

2024. 

18Under the Code, such parties, or similar parties, 

are referred to as ‘‘disqualified persons.’’ 

19The 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. 

20PTE 84–14 was recently amended, effective 

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

QPAM 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). 

21See 75 FR 38837, 38839 (July 6, 2010). 

22Section VI(d) of PTE 84–14 defines the term 

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

person directly or indirectly through one or more 

intermediaries, controlling, controlled by, or under 

common control with the person, (2) Any director 

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

Any corporation, partnership, trust or 

unincorporated enterprise of which such person is 

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

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

person who—(A) Is a highly compensated employee 

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

officer (earning 10 percent or more of the yearly 

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

authority, responsibility or control regarding the 

custody, management or disposition of plan assets.’’ 

23See 47 FR 56947 (December 21, 1982). 

Limited; 12 (3) RBC Capital Markets, 

LLC; 13 (4) City National Bank; 14 (5) City 

National Securities, Inc.; 15 (6) City 

National Rochdale, LLC; 16 and (7) 

Symphonic Financial Advisors, LLC.17

5. RBC explains that the RBC QPAMs 

provide asset management services to 

thousands of Covered Plans. In 

managing these assets, the RBC QPAMs 

regularly rely on PTE 84–14 for, among 

other things, global fixed income, global 

equities, futures, options, swaps and 

other derivatives, alternative 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. 

6. According to the Applicant, the 

investment management businesses that 

are operated out of the RBC QPAMs are 

separate from RBCTC Bahamas, and 

from the non-investment management 

business activities of RBCTC Bahamas 

that are the subject of criminal charges 

under French law. The Applicant states 

that RBC QPAMs have dedicated 

systems, management, risk and 

compliance officers. In this regard, the 

Applicant represents that the RBC 

QPAMs are insulated from RBCTC 

Bahamas. The RBC QPAMs use their 

own, separate systems for trade 

management, employee supervision, 

client management, surveillance, risk 

management, and accounting, which are 

only accessible by authorized QPAM 

employees. RBC also represents that the 

investment management businesses of 

the RBC QPAMs are subject to policies 

and procedures, and RBC QPAM 

personnel engage in training, designed 

to ensure that such businesses 

understand and abide by their fiduciary 

duties in accordance with applicable 

law. 

7. According to RBC, the RBC 

QPAMs’ policies and procedures create 

information barriers designed to prevent 

employees of the RBC 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 policies and 

procedures apply to employees, officers, 

and directors of the RBC QPAMs. The 

Applicant also maintains an employee 

hotline for employees to express 

anonymously any concerns of 

wrongdoing. 

ERISA and Code Prohibited 

Transactions and PTE 84–14 

8. The rules set forth in ERISA section 

406 and Code section 4975(c) 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.18

The transactions prohibited by ERISA 

section 406(a) 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.19

9. ERISA section 408(a) gives the 

Department 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. 

10. 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.20 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.21

11. section I(g) of PTE 84–14 prevents 

an entity that may otherwise meet the 

definition of QPAM from utilizing the 

exemptive relief provided by the QPAM 

Exemption for itself and its client plans 

if that entity, an ‘‘affiliate’’ thereof,22 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.23

Investigation for Tax Fraud 

12. The Applicant has applied for an 

exemption in connection with the 

judgment of Conviction rendered on 


KHAMMOND on DSK9W7S144PROD with NOTICES
6016 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

24A judicial investigation in France is a 

proceeding run by an investigative judge that is 

required by French law to take place prior to a 

decision made by a prosecutor to charge a 

defendant. At the end of the investigation, the 

Prosecutor decides whether there is enough 

evidence against the identified suspect(s) and, in 

case there is, whether the suspect(s) should be 

judged by a criminal court. Babonneau et Associes: 

https://www.sba-avocats.com/Criminal-defenseattorney-paris-criminal-investigation-infrance.html. 

25The Referral Order charges both of the 

Wildensteins with multiple counts of tax fraud, 

notably for failing to disclose and pay taxes on 

assets held in various trusts following the death of 

Daniel Wildenstein. The Wildensteins both were 

among the beneficiaries of the Delta Trust and have 

been charged with failing to report and pay 

inheritance taxes on the assets held in the Delta 

Trust following the death in 2001 of Daniel 

Wildenstein. 

26The authorities allege that this disclosure 

should have occurred because the assets in the 

Delta Trust were initially revocable (i.e., the assets 

in trust could be revoked by Daniel Wildenstein up 

to the time of his death). As such, the authorities 

state that the assets in the Delta Trust belonged to 

Daniel Wildenstein’s estate and were therefore 

taxable under French tax laws. 

27 81 FR 75147 (October 28, 2016). 

28 Id. at 75149. 

29 Id. 

30See 88 FR 85931 (December 11, 2023). 

March 5, 2024, by the French Court of 

Appeal against RBCTC Bahamas. The 

facts forming the basis of the Conviction 

reach back to 1998, when Daniel 

Wildenstein established the Delta Trust. 

In January 2012, RBCTC Bahamas was 

summoned to appear before a French 

Judge of Instruction (the Investigative 

Judge) concerning an investigation into 

nonpayment of French inheritance taxes 

by Guy Wildenstein and Alec Daniel 

Armand Wildenstein (the Wildensteins) 

following the death in 2001 of family 

patriarch Daniel Wildenstein. RBCTC 

Bahamas was placed under judicial 

investigation,24 and in December 2013, 

the Investigative Judge referred the case 

to the French national prosecutor of 

financial crimes (the Special Prosecutor) 

for a review and recommendation. In 

January 2015, the Special Prosecutor 

submitted a recommendation that 

RBCTC Bahamas and several others be 

charged with complicity in the 

Wildensteins’ alleged tax fraud and 

money laundering. 

13. On April 9, 2015, the Paris Court 

of Appeal for the District Court of Paris 

(the Court) issued an Order of Dismissal 

and Referral before the Criminal Court 

(the Referral Order). In the Referral 

Order, RBCTC Bahamas was charged 

with complicity in the Wildenstein’s tax 

fraud involving taxes owed to France on 

assets held in the Delta Trust.25

Specifically, the Court found that the 

investigation produced sufficient 

evidence against RBCTC Bahamas for 

having, in the Bahamas, beginning on 

November 19, 2004, aided and abetted 

tax fraud committed in Paris by Daniel 

Wildenstein’s heirs by deliberately 

concealing a portion of the sums subject 

to French taxation on Daniel 

Wildenstein’s estate, in particular the 

works of art placed in the Delta Trust 

and deeds that are governed by and 

punishable under Articles 121–2, 121– 

6, 121–7, 321–1, 321–3, 321–12 of the 

French Criminal Code and Articles 1741 

et 1745 of the French General Tax Code. 

14. The pertinent facts that underlie 

these charges as set out in the Referral 

Order are as follows: on November 2, 

1998, Daniel Wildenstein created a 

discretionary trust in the Bahamas 

called the Delta Trust. The Delta Trust 

was designed to be revocable up to the 

point of Daniel Wildenstein’s death, 

then irrevocable thereafter. Upon the 

formation of the Delta Trust, Daniel 

Wildenstein contributed various works 

of art to be held as assets of the trust. 

Royal Bank of Scotland was the initial 

trustee of the Delta Trust. In early 2001, 

Royal Bank of Scotland was replaced as 

trustee by Coutts Trust Holdings 

Limited, which was succeeded by 

Coutts Trustees (Bahamas) Limited. On 

October 21, 2001, Daniel Wildenstein 

died in Paris. On April 28, 2002, Guy 

Wildenstein and his brother, Alec 

Wildenstein Sr., filed an inheritance tax 

statement in relation to the estate of 

their father, Daniel Wildenstein, as 

required by French tax laws. Guy 

Wildenstein and Alec Wildenstein Sr. 

did not disclose in this inheritance tax 

statement, the existence of the Delta 

Trust or the existence of the assets 

therein. At this point, RBCTC Bahamas 

was appointed trustee of the Delta Trust 

in November 2004, three years after 

Daniel Wildenstein’s death and more 

than two years after Guy Wildenstein 

and Alec Wildenstein Sr. had filed their 

inheritance tax statement. 

15. The Applicant represents that 

according to the French authorities, the 

existence of the Delta Trust as well as 

the assets of the Delta Trust should have 

been disclosed to the French authorities 

by Guy Wildenstein and by Alec 

Wildenstein Sr. when they filed their 

inheritance tax statement in 2002 

because an inheritance tax would have 

applied in relation to these assets. 26

16. The Referral Order provides that 

RBCTC Bahamas actually knew, or 

should have known, that Daniel 

Wildenstein was of French nationality, 

and that he died in France. The Referral 

Order also provides that, at the least, 

RBCTC should have investigated in 

greater detail the facts in relation to 

Daniel Wildenstein’s residency and, 

likewise, the tax consequences of that 

residency. In addition, the Referral 

Order provides that the Delta Trust did 

not operate as a discretionary trust for 

purposes of French tax law, which 

would have generally required the 

trustee to have control over the 

management of the trust’s assets. 

Further, among other things, the 

Referral Order points out that RBCTC 

Bahamas filed an amended declaration 

with the Internal Revenue Service to 

declare the paintings in the Delta Trust 

which were present on U.S. territory at 

the time of Daniel Wildenstein’s death, 

even though the Delta Trust was 

purportedly discretionary and 

irrevocable. 

PTE 2016–10 

17. In 2016, the Applicant submitted 

an application for an exemption to 

continue to rely upon the relief in PTE 

84–14 notwithstanding a conviction of 

RBCTC Bahamas in the District Court of 

Paris in connection with the criminal 

activity described in the Referral Order. 

After a review of the application and the 

public record, on October 28, 2016, the 

Department granted PTE 2016–10,27 in 

order to protect Covered Plans from the 

costs and/or investment losses RBC 

asserted could arise if RBC QPAMs 

became ineligible to rely on PTE 84–14 

due to the conviction of RBCTC 

Bahamas.28 The effective period was 

limited to one year from the date of the 

anticipated conviction in order to 

provide the Department ‘‘more time to 

consider whether longer-term relief is 

warranted.’’ 29

18. RBCTC Bahamas contested the 

charges in the French court and was 

acquitted, although further litigation 

ensued. Over the next few years, the 

French authorities appealed the case, 

and a new proceeding was scheduled. 

RBC requested that the Department 

confirm that PTE 2016–10 would still 

apply in the event that RBCTC Bahamas 

was ultimately convicted of the same 

crime based on the same underlying 

facts. In response, on December 11, 2023 

the Department issued a ‘‘Technical 

Correction’’ to PTE 2016–10 that revised 

the definition of ‘‘Conviction’’ in PTE 

2016–10 to refer to ‘‘the potential 

judgment of conviction against RBCTC 

Bahamas for aiding and abetting tax 

fraud to be entered in France in the 

Court of Appeal, French Special 

Prosecutor No. 1120392066, French 

Investigative Judge No. JIRSIF/11/12 or 

another court of competent 

jurisdiction.’’30

19. On March 5, 2024, the French 

Court of Appeal rendered its judgment 

of conviction against RBCTC Bahamas 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6017 

31On March 7, 2024, RBCTC Bahamas appealed 

the decision to the French Supreme Court. The 

appeal is currently pending. The Department notes 

that a disqualifying ‘‘Conviction’’ under section I(g) 

of PTE 84–14 occurs as of the date of judgment of 

the trial court, regardless of whether that judgment 

is appealed. See also section I(h)(1) of PTE 84–14 

at 89 FR 23090, 23139 (April 3, 2024). 

32The Applicant states that many of RBC’s asset 

management clients are advised by the same 

relatively small group of consultants, magnifying 

the effect of any recommendation to terminate an 

RBC manager. 

33For example, public plans that, like the 

Nebraska Public Employees Retirement System 

(NPERS), are not subject to ERISA have over $5.7 

billion in assets invested through RBC. While such 

public plans are not subject to ERISA, some state 

and local laws are substantially similar to ERISA, 

and RBC has contractually agreed to treat certain 

public plans as if they were subject to ERISA. 

According to the applicant, if even some of these 

plans were to pull their business in the event RBC 

loses its QPAM status, the impact on plans would 

be substantial. 

and the other defendants. RBCTC 

Bahamas was ordered by the Court of 

Appeal to pay a fine of Ö5,000 

($5,350.95 in U.S. dollars) in connection 

with the Conviction and held RBCTC 

Bahamas jointly and severally liable 

with the Wildensteins and Northern 

Trust Fiduciary Services (Guernsey) 

Limited, another trustee of separate 

trusts, for the unpaid inheritance taxes 

owing, plus penalties and interest (such 

aggregate amount will be determined in 

a separate proceeding before the tax 

courts).31 Pursuant to the Technical 

Correction, the relief in PTE 2016–10 

became effective on March 5, 2024, and 

will expire on March 4, 2025. 

The Exemption Request 

20. The Applicant requests exemptive 

relief that would permit the RBC 

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 2016–10. The 

Department has determined to propose 

relief for five years, beginning on March 

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

so that after five years, 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. 

The Applicant represents that the 

conduct that is the subject of the 

potential conviction did not involve any 

of the RBC QPAMs acting in its role as 

an investment manager of any Covered 

Plan or otherwise relate to the asset 

management services provided by the 

RBC QPAMs. Furthermore, the asset 

management businesses of the RBC 

QPAMs did not know or have reason to 

know of the conduct underlying the 

charges and did not participate in or 

receive compensation in connection 

with the conduct underlying the 

charges. The convicted entity, RBCTC 

Bahamas, did not provide any fiduciary 

services to or act as a QPAM for ERISA 

plans or IRAs and RBCTC Bahamas does 

not provide investment management 

services to ERISA plans or IRAs or 

otherwise exercise discretionary control 

over ERISA plan or IRA assets. 

Hardship to Covered Plans 

21. Overview of loss of QPAM. The 

Applicant represents that the requested 

exemption is in the interest of affected 

plans and their participants and 

beneficiaries, because it will enable the 

plans to continue their current 

investment strategy with their current 

investment manager or trustee. If the 

Department denies the requested 

exemption, the Applicant asserts that 

the many clients that depend on RBC’s 

ability to engage in transactions in 

reliance on QPAM status would be 

forced to find another asset manager to 

remain invested in their preferred 

strategies. The Applicant explains that 

clients with strategies dependent upon 

the RBC QPAMs’ ability to rely on PTE 

84–14 would likely terminate all of their 

contracts with RBC (even ones not 

dependent on PTE 84–14), and plan 

consultants likely would move their 

clients’ assets away from RBC.32

22. The Applicant further represents 

that pension plans, including nonERISA plans such as governmental 

plans, union plans, corporate plans and 

others, tend to treat an entity’s 

eligibility to rely on PTE 84–14 as a 

threshold prerequisite for entrusting an 

investment manager to manage plan 

assets. In the Applicant’s view, this 

could lead participants and regulators to 

view remaining with a manager that 

becomes ineligible to rely on PTE 84–14 

as a breach of fiduciary duties. As such, 

pension plans (ERISA and non-ERISA) 

could terminate their relationship with 

any manager that becomes ineligible to 

rely on the QPAM exemption, even if 

the plans do not technically require the 

entity to maintain its QPAM 

qualification to execute their investment 

strategies.33

23. The Applicant states further that 

it is disruptive and expensive to cause 

plan fiduciaries to reconsider their 

arrangements with their chosen 

investment manager because of 

uncertainties relating to the QPAM 

Exemption. This uncertainty is 

disruptive to investment strategies and 

could result in significant redemptions 

from pooled funds, which would 

frustrate efforts to manage effectively 

the pooled funds’ assets, harm 

remaining plan investors, and increase 

the expense ratios of the investment 

funds. 

Department’s Request for More 

Information: The Department notes the 

Applicant’s representations that denial 

of relief could have negative impacts on 

pooled funds but is unable to fully 

consider these comments due to a lack 

of supporting data. In order to properly 

weigh these costs as potential harms to 

plan in the event the Department denies 

exemptive relief, the Department 

requests additional information from the 

Applicant in its comment letter 

substantiating harms to pooled funds, 

including estimates of the costs and any 

assumptions relied upon in making the 

estimate. 

24. Transaction Costs/Harm to Plans. 

According to the Applicant, the 

transaction costs to plans of changing 

managers are significant, especially 

considering some of the investment 

strategies employed by the RBC QPAMs. 

For example, according to the 

Applicant, the cost of liquidating assets, 

identifying and selecting new managers, 

and reinvesting those assets would be 

borne by the plans and their 

participants. The Applicant represents 

that transactions that currently depend 

on the QPAM Exemption, or in which 

the counterparty relied on the QPAM 

exemption as the expected source of 

exemptive relief, could default and be 

terminated at a significant cost to the 

plans. Transaction costs may be higher 

in times of significant market volatility, 

especially with respect to certain 

strategies. Furthermore, the request for 

proposal process for transitioning to a 

new manager typically is lengthy and 

likely would involve numerous steps 

each of which could last several 

months—including retaining a 

consultant, reviewing request for 

proposals, negotiating contracts, and 

ultimately transitioning assets, as well 

as incurring additional transactionrelated expenses incurred in connection 

with the purchase of securities. 

Department’s Request for More 

Information: The Department notes the 

Applicant’s representations that the 

request for proposal process for 

transitioning to a new manager involves 

additional costs such as retaining a 

consultant, reviewing requests for 

proposal, negotiating contracts, etc. In 

order to properly weigh these costs as 

potential harms to plan in the event the 

Department denies exemptive relief, the 

Department requests additional 

information from the Applicant in its 


KHAMMOND on DSK9W7S144PROD with NOTICES
6018 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

comment letter substantiating these 

costs, including estimates of the costs 

and any assumptions relied upon. 

25. The Applicant states that the RBC 

QPAMs may rely on PTE 84–14 when 

investing in various securities and 

financial instruments on behalf of 

ERISA clients. For example, the RBC 

QPAMs may rely on PTE 84–14 when 

buying and selling fixed income 

products. Many counterparties in such 

transactions specifically require a 

representation that PTE 84–14 applies, 

and those contracts could be in default 

if the requested exemption were not 

granted. Accounts managed by the RBC 

QPAMs invest in fixed income 

products, with a total portfolio of ERISA 

and public plan assets valued at over 

$18.5 billion. Fixed income securities 

and instruments in which those 

accounts are invested generally include 

corporate bonds, U.S. Treasury and 

agency-backed securities, asset-backed 

securities, emerging market sovereign 

and corporate debt, convertible bonds, 

term loans, repurchase agreements, 

swaps, futures, options and foreign 

exchange transactions. The Applicant 

represents that if the RBC QPAMs 

become ineligible to rely on PTE 84–14, 

its plan clients could suffer additional 

transactions costs associated with 

liquidating fixed income securities 

depending on the strategy. The 

Applicants representations about these 

liquidation costs are further discussed 

below for each investment strategy. 

26. Liquidation Costs. According to 

the Applicant, if RBC QPAMs were 

required to liquidate investments 

because a Covered Plan opted to find 

another manager, the underlying 

investments of the following investment 

strategies could incur the following 

estimated transaction costs: 

a. Multi-Asset Credit: The multi-asset 

credit strategy invests in the following 

kinds of instruments: corporate bonds, 

government bonds, asset-backed 

securities, convertible bonds, mortgagebacked securities, loans, structured 

credit, contingent convertible bonds, 

convertible bonds, swaps, futures, 

options and foreign exchange 

transactions. These instruments are 

generally traded on the primary and 

secondary fixed income markets, overthe-counter or centrally cleared. The 

Applicant represents that if the RBC 

QPAMs were no longer able to rely on 

the QPAM Exemption, the estimated 

transaction costs associated with selling 

such instruments could range from 35 to 

65 basis points. 

RBC QPAMs currently manage 

approximately $400,000,000 of ERISA 

plan assets that are invested in multiasset credit investments. If PTE 84–14 

were lost, ERISA plan clients of the RBC 

QPAMs invested in this strategy could 

suffer liquidation costs of between 35 

and 65 basis points, which equates to 

between $1,400,000 and $2,600,000, not 

including reinvestment costs. 

b. Core Fixed Income: The core fixed 

income strategies invest in the following 

kinds of instruments: corporate bonds, 

government bonds, asset-backed 

securities, mortgage-backed securities, 

municipal bonds, loans, swaps, futures, 

options, and foreign exchange 

transactions. These instruments are 

generally traded on the primary and 

secondary markets (including fixed 

income trading venues), over-thecounter or centrally cleared. If the RBC 

QPAMs become ineligible to rely on 

PTE 84–14, the Applicant estimates the 

transaction costs on such instruments 

could range from 20 to 25 basis points. 

RBC QPAMs currently manage 

approximately $1.5 billion in market 

value of ERISA plan assets that are 

invested in core fixed income 

investments. If the RBC QPAMs become 

ineligible to rely on PTE 84–14, the 

Applicant represents that ERISA plan 

clients of the RBC QPAMs invested in 

this strategy could suffer liquidation 

costs of between 20 and 25 basis points, 

which equates to between $3,000,000 

and $3,750,000, not including 

reinvestment costs. 

c. Impact Investing: The impact 

investing strategies invest in the 

following kinds of instruments: U.S. 

Treasury securities, U.S. agency-backed 

securities, mortgage-backed securities, 

Small Business Administration loans 

and pools, municipal bonds, corporate 

bonds, certificates of deposit (CDs), 

commercial paper, foreign sovereign 

debt, private placements and 

derivatives. These instruments are 

generally traded on primary and 

secondary fixed income trading markets 

(including via fixed income trading 

venues), over-the-counter or centrally 

cleared. If the RBC QPAMs become 

ineligible to rely on PTE 84–14, the 

estimated transaction costs on such 

instruments could range from 15 to 25 

basis points. 

RBC QPAMs currently manage 

approximately $36,000,000 in market 

value of ERISA plan assets that are 

engaged in impact investing. The 

Applicant represents that if it became 

ineligible to rely on PTE 84–14, the RBC 

QPAMs’ ERISA plan clients invested in 

this strategy could suffer liquidation 

costs of between 15 and 25 basis points, 

which equates to between $54,000 and 

$90,000, not including reinvestment 

costs. 

d. Community Investing: The 

community investing strategy invests in 

the following kinds of instruments: U.S. 

Treasury securities, U.S. agency-backed 

securities, agency and non-agency 

mortgage-backed securities, SBA loans 

and pools, municipal bonds, corporate 

bonds, certificates of deposit (CDs), 

commercial paper, foreign sovereign 

debt, private placements and 

derivatives. These instruments are 

generally traded on primary and 

secondary fixed income trading markets 

(including via fixed income trading 

venues), over-the-counter or centrally 

cleared. If the RBC QPAMs became 

ineligible to rely on PTE 84–14, the 

estimated transaction costs on such 

instruments could range from 10 to 20 

basis points. 

RBC QPAMs currently manage 

approximately $450,000,000 in market 

value of ERISA and public plan assets 

that are invested in community 

investing. If the RBC QPAMs become 

ineligible to rely on PTE 84–14, the 

Applicant represents that their ERISA 

plan clients invested in this strategy 

could suffer liquidation costs of 

between 10 and 20 basis points, which 

equates to between $450,000 and 

$900,000, not including reinvestment 

costs. 

e. Emerging Markets Equity: The 

emerging markets strategies invest in the 

following kinds of instruments: 

common stock, real estate investment 

trusts (REITS), American depository 

receipts (ADRs), exchange-traded funds 

(ETFs) and certain derivatives. These 

instruments are generally traded on 

global stock exchanges, equity trading 

venues, over-the-counter or centrally 

cleared. If the RBC QPAMs were 

ineligible to rely on PTE 84–14, the 

estimated transaction costs on such 

instruments could range from 48 to 64 

basis points. 

RBC QPAMs currently manage 

approximately $2.35 billion in ERISA 

plan assets that are invested in emerging 

markets equity. According to the 

Applicant, if RBC QPAMs were 

ineligible to rely on PTE 84–14, ERISA 

plan clients of the RBC QPAMs invested 

in this strategy could suffer liquidation 

costs of between 48 and 64 basis points, 

which equates to between $11,280,000 

and over $15,000,000, not including 

reinvestment costs. 

f. Small and Mid-Cap Growth Equity: 

The small and mid-cap equity strategy 

invests in the following kinds of 

instruments: equity securities, REITS, 

ADRs and ETFs. These instruments are 

generally traded on national exchanges 

and equity trading venues. If the RBC 

QPAMs were no longer eligible to rely 

on PTE 84–14, the estimated transaction 

costs on such instruments could range 

from 34 to 85 basis points. 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6019 

RBC QPAMs currently manage 

approximately $9.6 million of ERISA 

and public plan assets that are invested 

in small and mid-cap equity. The 

Applicant represents that if the RBC 

QPAMs were ineligible to rely on PTE 

84–14, its ERISA plan clients invested 

in this strategy could suffer liquidation 

costs of between 34 and 85 basis points, 

which equates to between $32,640 and 

$81,600, not including reinvestment 

costs. 

g. International Equity: The 

international equity strategy invests in 

the following kinds of instruments: 

common stock, REITs, ADRs, and ETFs. 

These instruments are generally traded 

on global stock exchanges or equity 

trading venues. The applicant 

represents that if the RBC QPAMs were 

no longer able to rely on PTE 84–14, the 

estimated transaction costs on such 

instruments could range from 30 to 60 

basis points. RBC QPAMs currently 

manage approximately $292,000,000 of 

ERISA plan assets that are invested in 

international equity. If the RBC QPAMs 

were ineligible to rely on PTE 84–14, 

the Applicant represents that their 

ERISA plan clients invested in this 

strategy could suffer liquidation costs of 

between 30 and 60 basis points, which 

equates to between $876,000 and nearly 

$1,800,000, not including reinvestment 

costs. 

h. Small Cap Growth Equity: The 

small cap growth equity strategy invests 

primarily in the following kinds of 

instruments: equity securities, REITs, 

ADRs, and ETFs. These instruments are 

generally traded on national exchanges 

or equity trading venues. If the RBC 

QPAMs were ineligible to rely on PTE 

84–14, the Applicant represents that the 

estimated transaction costs on such 

instruments could range from 34 to 85 

basis points. 

RBC QPAMs currently manage 

approximately $1.23 billion in market 

value of ERISA plan assets that are 

invested in small cap growth equity. If 

the RBC QPAMs become ineligible to 

rely on PTE 84–14, the Applicant 

represents that their ERISA plan clients 

invested in this strategy could suffer 

liquidation costs of between 34 and 85 

basis points, which equates to between 

$4,200,000 and over $10,500,000, not 

including reinvestment costs. 

i. Emerging Markets Credit: The 

emerging markets credit strategies invest 

in the following kinds of instruments: 

government bonds, corporate bonds, 

loans, swaps, futures, foreign exchange 

transactions, options and repurchase 

transactions. These instruments are 

generally traded on the primary and 

secondary fixed income markets 

(including via fixed income trading 

venues), over-the-counter or centrally 

cleared. If the RBC QPAMs were 

ineligible to rely on PTE 84–14, the 

Applicant represents that the estimated 

transaction costs on such instruments 

could range from 35 to 70 basis points. 

RBC QPAMs currently manage 

approximately $510,000,000 in market 

value of ERISA assets that are invested 

in emerging markets credit. If the RBC 

QPAMs were ineligible to rely on PTE 

84–14, the Applicant maintains that 

their ERISA plan clients of the RBC 

QPAMs invested in this strategy could 

suffer liquidation costs of between 35 

and 70 basis points, which equates to 

between $1,800,000 and over 

$3,500,000, not including reinvestment 

costs. 

j. Cash Management: The cash 

management strategies invest in the 

following kinds of instruments: U.S. 

Treasury securities, U.S. agency-backed 

securities, agency and non-agency 

mortgage-backed securities, municipal 

bonds, repurchase agreements, bank 

deposits, corporate bonds, certificates of 

deposit (CDs), commercial paper and 

foreign sovereign debt. These 

instruments are generally traded on 

primary and secondary market fixed 

income trading markets (including via 

fixed income trading venues). If the RBC 

QPAMs were ineligible to rely on PTE 

84–14, the Applicant represents that the 

estimated transaction costs on such 

instruments could range from 10 to 20 

basis points. 

RBC QPAMs manage approximately 

$1.12 billion of ERISA and public plan 

assets that are invested in cash 

management strategies. If the RBC 

QPAMs become ineligible to rely on 

PTE 84–14, the Applicant represents 

that ERISA plan clients of the RBC 

QPAMs invested in this strategy could 

suffer liquidation costs of between 10 

and 20 basis points, which equates to 

between $1,120,000 and $2,240,000, not 

including reinvestment costs. 

k. Short Duration: The short duration 

strategy invests in the following kinds of 

instruments: U.S. Treasury securities, 

U.S. agency-backed securities, agency 

and non-agency mortgage-backed 

securities, municipal bonds, corporate 

bonds, certificates of deposit (CDs), 

commercial paper, foreign sovereign 

debt, futures, private placements and 

derivatives. These instruments are 

generally traded on primary and 

secondary fixed income trading markets 

(including via fixed income trading 

venues) or centrally cleared. If the RBC 

QPAMs were ineligible to rely on PTE 

84–14, the Applicant represents that the 

estimated transaction costs on such 

instruments could range from 10 to 20 

basis points. 

RBC QPAMs manage a total portfolio 

of over $1.3 billion in market value of 

public plans that invest in short 

duration strategies. According to the 

Applicant, if the RBC QPAMs were 

ineligible to rely on PTE 84–14, the RBC 

QPAMs’ ERISA plan clients invested in 

this strategy could suffer liquidation 

costs of between 10 and 20 basis points, 

which equates to between $1,300,000 

and $2,600,000, not including 

reinvestment costs. 

l. Ultra Short Duration: The ultra 

short duration strategy invests in the 

following kinds of instruments: U.S. 

Treasury securities, U.S. agency-backed 

securities, agency and non-agency 

mortgage-backed securities, municipal 

bonds, corporate bonds, certificates of 

deposit (CDs), commercial paper, 

foreign sovereign debt, private 

placements, and futures. These 

instruments are generally traded on 

primary and secondary fixed income 

trading markets (including via fixed 

income trading venues), over-thecounter or centrally cleared. If the RBC 

QPAMs were ineligible to rely on PTE 

84–14, the Applicant represents that the 

estimated transaction costs on such 

instruments could range from 15 to 25 

basis points. 

RBC QPAMs manage public plan 

assets with a total portfolio of almost 

$374,000,000 in market value that are 

invested in ultra short duration 

strategies. If the RBC QPAMs were 

ineligible to rely on PTE 84–14, the 

Applicant represents that ERISA plan 

clients of the RBC QPAMs invested in 

this strategy could suffer liquidation 

costs of between 15 and 25 basis points, 

which equates to between $561,000 and 

$935,000, not including reinvestment 

costs. 

Department’s Request for Comment and 

Notes Regarding Harms to Plans in 

Paragraphs 21 through 26 

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 must provide: 

(1) a description, in itemized form, 

how the basis point range described 

above was derived by the Applicant, 

including the assumptions or 

methodologies relied upon. 

(2) an explanation of 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. . . . 


KHAMMOND on DSK9W7S144PROD with NOTICES
6020 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

34Section I(i)(7) of PTE 2016–10, under which 

RBC QPAMs are currently operating for the ability 

to rely on PTE 84–14, contains substantially similar 

language. In that regard, section I(i)(7) of PTE 2016– 

10 requires the RBC QPAMs to ‘‘. . .indemnify and 

hold harmless the ERISA-covered plan or IRA for 

any damages resulting from a violation of 

applicable laws, a breach of contract, or any claim 

arising out of the failure of such RBC 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.’’ 

35The Applicant represents that, while certain 

other entities in the RBC corporate family were 

generally aware of RBCTC Bahamas’s 

responsibilities, including the administration of 

various trusts, no such entity was involved in the 

day-to-day operations of the trusts and the alleged 

misconduct did not relate to the asset management 

services provided by the RBC QPAMs. 

36See 89 FR 23090, 23143 (April 3, 2024). The 

amendment also provides 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. Id. at 23139–140. 

(3) an explanation of the likelihood of 

the costs occurring, for each of the 

transition costs described above. For 

example: 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. 

(4) an explanation of the 

circumstances under which the 

transition costs described 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, costs, etc.). 

(5) a description of 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. 

(6) 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. 

The Department notes that Condition 

(j)(2) of the proposed exemption 

requires RBC QPAMs to ‘‘indemnify and 

hold harmless’’ Covered Plans for 

‘‘actual losses resulting directly from the 

RBC QPAM’s violation of any 

conditions of this exemption, an RBC 

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 RBC QPAM; or 

any claim arising out of the failure of 

such RBC 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.’’ 34 Furthermore, the 

Department notes that, to the extent 

Covered Plans ‘‘feel forced’’ to transition 

to new asset managers because the RBC 

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 an RBC 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. 

The Exemption’s Protective Conditions 

27. In order to avail themselves of the 

relief provided under this proposed 

exemption, the RBC QPAMs will be 

required to meet the conditions 

described in this proposed exemption at 

all times. The first group of conditions 

for relief underscores the Department’s 

expectation that the affected RBC 

QPAMs were not involved in the 

misconduct engaged in RBCTC Bahamas 

that is the subject of the Conviction or 

otherwise tainted by such misconduct. 

For example, relief under this proposed 

exemption only will be available to the 

extent that: (1) RBC QPAMs, including 

their officers, directors, agents other 

than RBCTC, and employees, did not 

know of, have reason to know of, or 

participate in the criminal conduct of 

RBCTC Bahamas that is the subject of 

the Conviction (here and throughout, 

‘‘participated in’’ includes the knowing 

or tacit approval of the misconduct 

underlying the Conviction); 35 (2) any 

failure of the RBC QPAMs to satisfy 

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

from the Conviction; (3) the RBC 

QPAMs (including their officers, 

directors, agents other than RBCTC, and 

employees of such RBC QPAMs) did not 

receive direct compensation, or 

knowingly receive indirect 

compensation, in connection with the 

criminal misconduct that is the subject 

of the Conviction; and (4) no other party 

engaged on behalf of the RBC QPAMs 

who had responsibility for or exercised 

authority in connection with the 

management of plan assets knew or had 

reason to know of the criminal 

misconduct that is the subject of the 

Conviction nor did they participate in 

such misconduct. 

28. The Department expects the RBC 

QPAMs to rigorously ensure that the 

individuals associated with the criminal 

misconduct of RBCTC Bahamas will not 

be employed or knowingly engaged by 

such QPAMs. In this regard, the 

proposed exemption mandates that the 

RBC QPAMs will not employ or 

knowingly engage any of the individuals 

that participated in criminal misconduct 

that is the subject of the Conviction. 

Further, the RBC QPAMs will not use 

their authority or influence to direct an 

‘‘investment fund,’’ (as defined in 

section VI(b) of PTE 84–14) that is 

subject to ERISA or the Code and 

managed by such RBC QPAMs, to enter 

into any transaction with RBCTC 

Bahamas or engage RBCTC Bahamas 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. 

29. The RBC QPAMs must comply 

with each condition of PTE 84–14, as 

amended, with the sole exceptions of 

the violation of section I(g) of PTE 84– 

14 that is attributable to the Conviction. 

Furthermore, this exemption will 

terminate immediately if an affiliate of 

the RBC QPAMs (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). The Department 

notes that PTE 84–14 was amended 

effective June 17, 2024 to, among other 

things, explicitly broaden the 

disqualifying circumstances under 

section I(g) to include (1) convictions in 

foreign courts for crimes that are 

substantially equivalent to the 

disqualifying convictions in U.S. federal 

or state courts (with the exception of 

certain foreign countries denominated 

as ‘‘foreign adversaries’’ by the U.S. 

Department of Commerce); (2) the 

execution of a non-prosecution 

agreement or deferred prosecution 

agreement with U.S. federal or state 

prosecutors or regulatory agencies; and 

(3) final judgments or court-approved 

settlements by a federal or state criminal 

or civil court in a proceeding brought by 

certain U.S. regulatory agencies, state 

regulators, or state attorneys general 

involving participation in certain 

categories of conduct.36 The Applicant 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6021 

represents that RBC currently does not 

have a reasonable basis to believe that 

there are any pending criminal 

investigations involving RBC or any of 

its affiliated companies that would 

cause a reasonable plan or IRA customer 

not to hire or retain the institution as a 

QPAM. 

30. No relief will be provided by the 

exemption if any entities holding assets 

that constitute the assets of a Covered 

Plan were involved in the criminal 

misconduct that is the subject of the 

Conviction. Further, no relief will be 

provided to the extent RBCTC Bahamas 

provides any discretionary asset 

management services to Covered Plans 

or otherwise acts as a fiduciary with 

respect to Covered Plans. 

31. The second set of conditions 

underscores the Department’s intent to 

ensure that RBC QPAMs adhere to their 

ERISA-mandated fiduciary duties and 

the conditions of this proposed 

exemption. In this regard, the 

Department believes that robust policies 

and training are warranted where, as 

here, alleged criminal misconduct has 

occurred within a corporate 

organization that is affiliated with one 

or more QPAMs managing plan 

investments in reliance on PTE 84–14. 

Therefore, this proposed exemption 

requires each RBC QPAM to 

immediately develop, implement, 

maintain, and follow written policies 

(the Policies) requiring and reasonably 

designed to ensure that: (i) the asset 

management decisions of the RBC 

QPAM are conducted independently of 

the management and business activities 

of RBC, including RBCTC Bahamas; (ii) 

the RBC QPAM fully complies with 

ERISA’s fiduciary duties and with 

ERISA and the Code’s prohibited 

transaction provisions, and does not 

knowingly participate in any violations 

of these duties and provisions with 

respect to Covered Plans; (iii) the RBC 

QPAM does not knowingly participate 

in any other person’s violation of ERISA 

or the Code with respect to Covered 

Plans; any filings or statements made by 

the RBC 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 Covered Plans are 

materially accurate and complete, to the 

best of such QPAM’s knowledge at that 

time; (iv) the RBC QPAMs do 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 Plan 

clients; and (v) the RBC QPAMs comply 

with the terms of this exemption, if 

granted. Any violation of or failure to 

comply with these items must be 

corrected promptly upon discovery and 

if any such violation or compliance 

failure is not promptly corrected, then 

upon discovering the failure to 

promptly correct, the failure must be 

reported in writing to appropriate 

corporate officers, the head of 

compliance and the General Counsel (or 

their functional equivalent) of the 

relevant RBC QPAM, and an appropriate 

fiduciary of any affected Covered Plan 

that is independent of RBC. 

32. The Department has also included 

a provision in the proposed exemption 

that would require each RBC QPAM to 

immediately develop and implement a 

training program (the Training) for its 

asset and portfolio management, 

trading, legal, compliance, and internal 

audit personnel. The Training must 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 exemption, if granted (including 

any loss of exemptive relief provided 

herein), and prompt reporting of 

wrongdoing. 

33. The proposed exemption requires 

the RBC QPAMs to submit to an audit 

conducted every two years by an 

independent auditor that has been 

prudently selected and who has 

appropriate technical training and 

proficiency with ERISA and the Code. 

Each biennial audit must cover a 

consecutive 12-month period starting 

with the 24-month period that begins on 

the Conviction Date. 

34. The proposed exemption requires 

the RBC QPAMs to enter into certain 

contractual obligations in connection 

with the provision of services to their 

clients. For example, section III(j) of the 

proposed exemption requires any 

arrangement, agreement, or contract 

between a RBC QPAM and a Covered 

Plan for which a RBC QPAM provides 

asset management or other discretionary 

fiduciary services to provide that such 

RBC QPAM agrees to: (i) comply with 

ERISA and the Code, as applicable with 

respect to such Covered Plan and refrain 

from engaging in non-exempt prohibited 

transactions (and to promptly correct 

any inadvertent prohibited 

transactions); (ii) comply with the 

standards of prudence and loyalty set 

forth in ERISA section 404 with respect 

to each Covered Plan; (iii) indemnify 

and hold harmless the Covered Plan for 

any damages resulting from a violation 

of applicable laws, a breach of contract, 

or any claim arising out of the failure of 

such RBC QPAM to be eligible 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; 

(iv) not require (or otherwise cause) the 

Covered Plan to waive, limit, or qualify 

the liability of the RBC QPAM for 

violating ERISA or the Code or engaging 

in prohibited transactions; (v) not 

require the Covered Plan (or sponsor of 

such Covered Plan) to indemnify the 

RBC QPAM for violating ERISA or 

engaging in prohibited transactions, 

except for violations or prohibited 

transactions caused by an error, 

misrepresentation, or misconduct of a 

plan fiduciary or other party hired by 

the plan fiduciary who is independent 

of RBC; (vi) not restrict the ability of 

such Covered Plan to terminate or 

withdraw from its arrangement with the 

RBC QPAM (including 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 as a result of an actual lack of 

liquidity of the underlying assets, 

provided that such restrictions are 

applied consistently and in like manner 

to all such investors; and (vii) not 

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 

such 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. Furthermore, any 

contract, agreement or arrangement 

between an RBC QPAM and its Covered 

Plan client must not contain 

exculpatory provisions disclaiming or 

otherwise limiting liability of the RBC 

QPAM for a violation of such 

agreement’s terms. 

35. Within six (6) months after the 

publication of a notice of final 

exemption in the Federal Register each 

RBC QPAM must: (i) provide a notice of 

its obligations under section III(j) to 

each Covered Plan for which the RBC 

QPAM provides asset management or 

other discretionary fiduciary services; 


KHAMMOND on DSK9W7S144PROD with NOTICES
6022 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

37The Department notes that section I(l) of PTE 

2016–10 required RBC to: (i) 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 RBC 

or any of its affiliates in connection with conduct 

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

section 411; and (ii) provide the Department with 

any information it requests as permitted by law. 

The Department has determined not to include the 

same condition in this proposed exemption, 

because entering into DPAs and NPAs now is 

included in the list of disqualifying events under 

section I(g) of PTE 84–14, effective as of June 17, 

2024. 

38The Department notes that, as requested above, 

in order to make its findings under ERISA section 

408(a), it has requested specific information from 

the Applicant regarding the size and scope of the 

costs that Covered Plans are likely to incur and that 

are not subject to the hold harmless provision in 

section III(j)(2) of the exemption. 

and (ii) separately warrant in writing to 

each such Covered Plan its obligations 

under subparagraph (1) of section III(j). 

36. The last set of conditions is 

intended to, among other things, ensure 

accountability on behalf of the RBC 

QPAMs for compliance with the 

conditions for relief and to provide 

Covered Plans, the Department, and 

other external stakeholders transparency 

regarding the RBC QPAMs compliance 

with the conditions for this exemption. 

Among other things, RBC must 

designate a senior compliance officer 

who is generally responsible for an 

annual review for each 12-month period 

of the effective period under the 

exemption, that determines the 

effectiveness of the Policies and the 

Training, reports on instances of 

noncompliance and their remediation, 

and makes recommendations to improve 

compliance activities. The RBC QPAMs 

must inform Covered Plan clients of 

their right to obtain a copy of the 

Policies or a summary thereof, and each 

RBC QPAM must maintain records 

necessary to demonstrate that the 

conditions of this exemption, if granted, 

have been met for six (6) years following 

the date of any transaction for which 

such RBC QPAM relies upon the relief 

in the exemption and 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.37

37. The Applicant must impose its 

internal procedures, controls, and 

systems to prevent a recurrence of the 

misconduct; comply with any remedial 

measures required by other regulators 

designed to address the misconduct 

underlying the Conviction; all the 

material facts and representations made 

by the Applicant in connection with the 

application, must be true and accurate. 

Statutory Findings 

38. Based on the conditions included 

in this proposed exemption, the 

Department has tentatively determined 

that the relief sought by the Applicant 

would satisfy the statutory requirements 

for an exemption under ERISA section 

408(a) for the reasons set forth below. 

39. The Proposed Exemption is 

‘‘Administratively Feasible.’’ The 

Department has tentatively determined 

that the proposed exemption is 

administratively feasible because, 

among other things, a qualified 

independent auditor will be required to 

perform in-depth audit(s) covering, each 

RBC QPAM’s compliance with the 

exemption, and a corresponding written 

audit report will be provided to the 

Department and 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. 

40. ‘‘The Proposed Exemption is ‘‘In 

the Interest of the Covered Plans.’’ The 

Department has tentatively determined 

that the proposed exemption is in the 

interests of the participants and 

beneficiaries of each affected Covered 

Plan because of the potential costs that 

Covered Plans would incur if the RBC 

QPAMs ability to rely on PTE 84–14 

lapsed and the benefits plans would 

receive due to the RBC QPAMs’ 

continued eligibility to rely on PTE 84– 

14 subject to the additional protective 

conditions set forth in this proposed 

exemption.38

41. ‘‘The Proposed Exemption is 

‘‘Protective of the Plans.’’ The 

Department has tentatively determined 

that the proposed exemption is 

protective of Covered Plans. The 

Department has imposed protective 

conditions that it has used in the most 

recent exemptions for relief from section 

I(g), and the Department has determined 

that those conditions would be 

protective of the rights of participants 

and beneficiaries of covered Plans. In 

addition, the relief provided under this 

proposed exemption is limited to five 

(5) years, so that the Department can 

reassess the RBC QPAMs’ compliance 

with the exemption conditions and 

confirm that the exemption remains 

protective of the rights of participants 

and beneficiaries of Covered Plans. 

Finally, the Applicant’s representation 

that it maintains a hotline for employees 

who wish to report any concerns about 

wrongdoing anonymously also will help 

ensure that this proposed exemption is 

protective of the rights of participants 

and beneficiaries of Covered Plans. 

Summary 

42. Considering the revised and new 

conditions described above, the 

Department has tentatively determined 

that the relief sought by the Applicants 

in this proposed exemption satisfies the 

statutory requirements for an exemption 

under section 408(a) of ERISA. 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 

Applicant must provide notice of the 

proposed exemption as published in the 

Federal Register, along with a separate 

summary describing the facts that led to 

the Conviction (the Summary), which 

have 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, or 

the sponsor of an investment fund in 

any case where a RBC QPAM acts only 

as a sub-advisor to the investment fund 

in which such Covered Plan invests and 

a supplemental statement, as required 

pursuant to 29 CFR 2570.43(a)(2). The 

supplemental statement will inform 

interested persons of their right to 

comment on and request a hearing with 

respect to the proposed exemption. All 

written comments and/or requests for a 

hearing must be received by the 

Department within forty-five (45) days 

of the date of publication of this 

proposed exemption in the Federal 

Register and will be made available to 

the public. 

Warning: If you submit a comment, 

please include your name and other 

contact information in the body of your 

comment but DO NOT submit 

information that you consider to be 

confidential or otherwise protected 

(such as a Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. All comments 

may be posted on the internet and can 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6023 

39 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). 

40Section 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.’’ 

be retrieved by most internet search 

engines. 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under ERISA 

section 408(a) and/or Code section 

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

other party in interest or disqualified 

person from certain other provisions of 

ERISA and/or the Code, including any 

prohibited transaction provisions to 

which the exemption does not apply 

and the general fiduciary responsibility 

provisions of ERISA section 404, which, 

among other things, require a fiduciary 

to discharge their duties respecting the 

plan solely in the interest of the 

participants and beneficiaries of the 

plan and in a prudent fashion in 

accordance with ERISA section 

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

requirement of Code section 401(a) that 

the plan must operate for the exclusive 

benefit of the employees of the 

employer maintaining the plan and their 

beneficiaries; 

(2) Before an exemption may be 

granted under ERISA section 408(a) 

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

Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemption would be 

supplemental to, and not in derogation 

of, any other provisions of ERISA and/ 

or the Code, including statutory or 

administrative exemptions and 

transitional rules. Furthermore, the fact 

that a transaction is subject to an 

administrative or statutory exemption is 

not dispositive of whether the 

transaction is in fact a prohibited 

transaction; and 

(4) The proposed exemption would be 

subject to the express condition that the 

material facts and representations 

contained in each application are true 

and complete at all times, and that each 

application accurately describes all 

material terms of the transaction which 

is the subject of the exemption. 

Proposed Exemption 

The Department is considering 

granting 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 by the Applicant 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 RBCTC 

Bahamas, an RBC ‘‘affiliate’’ (as defined 

in PTE 84–14, section VI(d)), entered on 

March 5, 2024, for aiding and abetting 

tax fraud in France in the Paris Court of 

Appeal, French Special Prosecutor No. 

11203092066. 

(b) The term ‘‘RBC QPAM’’ means a 

‘‘qualified professional asset manager’’ 

(as defined in section VI(a) 5 of PTE 84– 

14) that relies on the relief provided by 

PTE 84–14 and with respect to which 

RBCTC Bahamas is a current or future 

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

PTE 84–14). The RBC QPAMs do not 

and must not include RBCTC Bahamas. 

(c) The term ‘‘RBC’’ means Royal 

Bank of Canada, together with its 

current and future affiliates. 

(d) The term ‘‘RBCTC Bahamas’’ 

means Royal Bank of Canada Trust 

Company (Bahamas) Limited, a 

Bahamian ‘‘affiliate’’ of RBC (as defined 

in section VI(c) of PTE 84–14). 

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

plan subject to ERISA title I, part 4 (an 

ERISA Plan) or a plan subject to Code 

section 4975 (an IRA), in each case, with 

respect to which a RBC QPAM relies on 

PTE 84–14, or with respect to which an 

RBC QPAM (or any RBC affiliate) has 

expressly represented that the manager 

qualifies as a QPAM or relies on PTE 

84–14 (the QPAM Exemption). A 

‘‘Covered Plan’’ does not include an 

ERISA Plan or IRA to the extent the RBC 

QPAM has expressly disclaimed 

reliance on QPAM status or PTE 84–14 

in entering into its contract, 

arrangement, or agreement with the 

Covered Plan. Notwithstanding the 

above, an RBC QPAM may disclaim 

reliance on QPAM status or PTE 84–14 

in a written modification of a contract, 

arrangement, or agreement with a 

Covered Plan where: the modification is 

made in a bilateral document signed by 

the client; the client’s attention is 

specifically directed toward the 

disclaimer; and the client is advised in 

writing that, with respect to any 

transaction involving the client’s assets, 

the RBC QPAM will not represent that 

it is a QPAM and will not rely on the 

relief described in PTE 84–14. 

(f) The term ‘‘Exemption Period’’ 

means the period of time beginning on 

March 5, 2025, and ending on March 4, 

2030. 

(g) 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. 

(h) 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 RBCTC 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 RBC’s board of 

directors. 

Section II: Transactions 

The RBC QPAMs will not be 

precluded from relying on the 

exemptive relief provided by Prohibited 

Transaction Exemption 84–14 (PTE 84– 

14) 39 notwithstanding the Conviction 

(as defined above) 40 during the 

Exemption Period, provided that the 

conditions in section III are satisfied. 


KHAMMOND on DSK9W7S144PROD with NOTICES
6024 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

Section III: Conditions 

(a) The RBC QPAMs (including their 

officers, directors, agents other than 

RBCTC, and employees of such RBC 

QPAMs) did not know of, have reason 

to know of, and did not participate in 

the criminal misconduct of RBCTC 

Bahamas that is the subject of the 

Conviction. Further, any other party 

engaged on behalf of the RBC 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 

misconduct that is the subject of the 

Conviction. 

(b) The RBC QPAMs (including their 

officers, directors, agents other than 

RBCTC, and employees of such RBC 

QPAMs) did not receive any direct 

compensation or knowingly receive any 

indirect compensation in connection 

with the criminal misconduct that is the 

subject of the Conviction. Further, any 

other party engaged on behalf of the 

RBC QPAMs who had responsibility for 

or exercised authority in connection 

with the management of plan assets did 

not receive any direct compensation or 

knowingly receive any indirect 

compensation in connection with the 

criminal misconduct that is the subject 

of the Conviction; 

(c) The RBC QPAMs will not employ 

or knowingly engage any of the 

individuals that participated in the 

criminal misconduct that is the subject 

of the Conviction; 

(d) At all times during the Exemption 

Period, no RBC QPAM will use its 

authority or influence to direct an 

‘‘investment fund,’’ (as defined in 

section VI(b) of PTE 84–14) that is 

subject to ERISA or the Code and 

managed by an RBC QPAM in reliance 

of PTE 84–14, or with respect to which 

an RBC 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 

RBCTC Bahamas or engage RBCTC 

Bahamas to provide any service to such 

Covered Plan for a direct or indirect fee 

borne by such Covered Plan 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 RBC QPAMs to 

satisfy PTE 84–14, section I(g) arose 

solely from the Conviction; 

(f) A RBC QPAM did not exercise 

authority over the assets of any Covered 

Plan in a manner that it knew or should 

have known would: (i) further the 

criminal misconduct that is the subject 

of the Conviction; or (ii) cause the RBC 

QPAM or its affiliates to directly or 

indirectly profit from the criminal 

misconduct that is the subject of the 

Conviction; 

(g) Other than with respect to 

employee benefit plans maintained or 

sponsored for its own employees or the 

employees of an affiliate, RBCTC 

Bahamas will not act as a fiduciary 

within the meaning of ERISA sections 

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

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

Covered Plan assets; provided, however, 

that RBCTC Bahamas will not be treated 

as violating the conditions of this 

exemption solely because they acted as 

investment advice fiduciaries within the 

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

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

(h)(1) Each RBC QPAM must continue 

to maintain, adjust (to the extent 

necessary), implement, and follow 

written policies and procedures (the 

Policies). The Policies must require and 

be reasonably designed to ensure that: 

(i) the asset management decisions of 

the RBC QPAM are conducted 

independently of the management and 

business activities of RBC, including 

RBCTC Bahamas; 

(ii) the RBC 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 RBC 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 RBC 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 RBC QPAM’s 

knowledge at the time, the RBC 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 RBC QPAM complies with the 

terms of the exemption; 

(vii) any violation of or failure to 

comply with a requirement set forth in 

subparagraphs (h)(1)(ii) through 

(h)(1)(vi), is corrected promptly upon 

discovery or as soon after the RBC 

QPAM reasonably should have known 

of the noncompliance (whichever is 

earlier) 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 RBC QPAM 

that engaged in the violation or failure, 

and the independent auditor 

responsible for reviewing compliance 

with the Policies. An RBC QPAM will 

not be treated as having failed to 

develop, implement, maintain, or follow 

the Policies, provided that it corrects 

any instance of noncompliance 

promptly 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 RBC QPAM must maintain, 

adjust (to the extent necessary) and 

implement a training program (the 

Training) that is conducted at least 

annually for all relevant RBC QPAM 

asset/portfolio management, trading, 

legal, compliance, and internal audit 

personnel. The Training must: 

(i) At a minimum, cover the Policies, 

ERISA and Code compliance (including 

applicable fiduciary duties and the 

prohibited transaction provisions), 

ethical conduct, the consequences for 

not complying with the conditions of 

this exemption (including any loss of 

exemptive relief provided herein), and 

prompt reporting of wrongdoing; 

(ii) Be conducted in-person, 

electronically or via a website by a 

professional who has been prudently 

selected and who has appropriate 

technical training and proficiency with 

ERISA and the Code to perform the 

tasks required by this exemption; and 

(iii) Be 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) The RBC QPAMs must submit to 

a 12-month audit conducted every two 

years by an independent auditor who 

has been prudently selected and has 

appropriate technical training and 

proficiency with ERISA and the Code to 

evaluate the adequacy of each RBC 

QPAM’s compliance with the Policies 

and Training conditions described 

herein. The audit requirement must be 

incorporated in the Policies, and the 

first audit must cover a consecutive 12- 

month period starting on March 5, 2025. 

The second audit must cover the 

consecutive 12-month period starting on 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6025 

March 5, 2027, and the third audit must 

cover the consecutive 12-month period 

starting on March 5, 2029. Each audit 

must be completed no later than six (6) 

months after the corresponding audit’s 

ending period; 

(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 

described herein, and only to the extent 

such disclosure is not prevented by state 

or federal statute, or involves 

communications subject to attorney 

client privilege, the RBC QPAMs and, if 

applicable, RBC, will grant the auditor 

unconditional access to its business, 

including, but not limited to: its 

computer systems; business records; 

transactional data; workplace locations; 

training materials; and personnel. Such 

access is limited to information relevant 

to the auditor’s objectives, as specified 

by the terms of this exemption; 

(3) The auditor’s engagement must 

specifically require the auditor to 

determine whether the RBC QPAMs 

have developed, implemented, 

maintained, and followed the Policies in 

accordance with the conditions of this 

exemption and have developed and 

implemented the Training, as required 

herein; 

(4) The auditor’s engagement must 

specifically require the auditor to test 

the RBC QPAMs operational compliance 

with the Policies and Training. In this 

regard, the auditor must test a sample of 

each QPAM’s transactions involving 

Covered Plans that are sufficient in size 

and nature to afford the auditor a 

reasonable basis to determine such RBC 

QPAM’s operational compliance with 

the Policies and Training; 

(5) For each audit, the auditor must 

issue a written report (the Audit Report) 

to RBC and the RBC QPAM to which the 

audit applies that describes the 

procedures performed by the auditor in 

connection with its examination on or 

before the end of the relevant period 

described in section III(i)(1) for 

completing the audit. The auditor, at its 

discretion, may issue a single 

consolidated Audit Report that covers 

all of the RBC QPAMs. The Audit 

Report must include the auditor’s 

specific determinations regarding: 

(i) The adequacy of each RBC QPAM’s 

Policies and Training; each RBC 

QPAM’s compliance with the Policies 

and Training; the need, if any, to 

strengthen such Policies and Training; 

and any instance of the respective RBC 

QPAM’s noncompliance with the 

written Policies and Training. The noncompliant RBC QPAM must promptly 

address any noncompliance and 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 RBC QPAM. 

Any action taken or the plan of action 

to be taken by the respective RBC 

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 RBC QPAM 

has implemented, maintained, and 

followed sufficient Policies and 

Training must not be based solely or in 

substantial part on an absence of 

evidence indicating noncompliance. In 

this last regard, any finding that an RBC 

QPAM has complied with the 

requirements under this subparagraph 

must be based on evidence that the 

particular RBC QPAM has actually 

implemented, maintained, and followed 

the Policies and Training required by 

this exemption. Furthermore, the 

auditor must not rely solely on the 

Annual Report created by the 

compliance officer (the Compliance 

Officer) as described in section III(m) 

below, as the basis for the auditor’s 

conclusions in lieu of independent 

determinations and testing performed 

by the auditor as required by section 

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

(ii) The adequacy of the most recent 

Annual Review described in section 

III(m); 

(6) The auditor must notify the 

respective RBC 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 RBC QPAM’s general counsel, or 

one of the three most senior executive 

officers of the line of business engaged 

in discretionary asset management 

services through the RBC QPAM with 

respect to which the Audit Report 

applies, must certify in writing, under 

penalty of perjury, that such signatory 

has reviewed the Audit Report and this 

exemption and that to the best of such 

signatory’s knowledge at the time, such 

RBC 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. Such 

certification must also include the 

signatory’s determination that, to the 

best of such signatory’s knowledge at 

the time, the Policies and Training in 

effect at the time of signing are adequate 

to ensure compliance with the 

conditions of this proposed exemption, 

and with the applicable provisions of 

ERISA and the Code. Notwithstanding 

the above, no person who knew of, or 

should have known of, or participated 

in the criminal conduct that is the 

subject of the Conviction, by any party, 

may provide the certification required 

by this exemption, unless the person 

took active documented steps to stop 

the misconduct underlying the 

Conviction; 

(8) The Audit Committee of RBC’s 

Supervisory Board is provided a copy of 

each Audit Report, and a senior 

executive officer with a direct reporting 

line to the highest-ranking compliance 

officer of RBC must review the Audit 

Report for each RBC QPAM and certify 

in writing and under penalty of perjury 

that such officer has reviewed each 

Audit Report. RBC must provide notice 

to the Department if there is a switch in 

the committee to which the Audit 

Report will be provided. With respect to 

this subsection (8), such certifying 

executive officer must not have known 

of, had reason to know of, or 

participated in, the criminal conduct 

that is the subject of the Conviction, 

unless such person took active 

documented steps to stop the 

misconduct underlying the Conviction; 

(9) Each RBC 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 RBC 

QPAM must make its Audit Report 

unconditionally available, electronically 

or otherwise, for examination upon 

request by any duly authorized 

employee or representative of the 

Department, other relevant regulators, 

and any fiduciary of a Covered Plan; 

(10) Each RBC QPAM and the auditor 

must submit the following document(s) 

to OED via electronic mail to e-oed@

dol.gov: Any engagement agreement(s) 

entered into 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, for 


KHAMMOND on DSK9W7S144PROD with NOTICES
6026 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

inspection and review, access to all the 

workpapers created and utilized in the 

course of the audit, provided such 

access and inspection is otherwise 

permitted by law; and 

(12) RBC must notify the Department 

of a change in the independent auditor 

no later than two (2) months after the 

engagement of a substitute or 

subsequent auditor and must provide an 

explanation for the substitution or 

change including a description of any 

material disputes between the 

terminated auditor, and RBC or any of 

its affiliates; 

(j) Throughout the Exemption Period, 

with respect to any arrangement, 

agreement, or contract between an RBC 

QPAM and a Covered Plan, the RBC 

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 RBC QPAM’s 

violation of any conditions of this 

exemption, an RBC 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 

RBC QPAM; or any claim arising out of 

the failure of such RBC 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 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 RBC QPAM 

for violating ERISA or the Code or 

engaging in prohibited transactions; 

(4) Not to restrict the ability of such 

Covered Plan to terminate or withdraw 

from its arrangement with the RBC 

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 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 such 

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 liability of the RBC 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 RBC and its affiliates, or damages 

arising from acts outside the control of 

the RBC QPAM; and 

(7) Within 60 calendar days after this 

exemption’s effective date, each RBC 

QPAM must provide a notice of its 

obligations under this section III(j) to 

each Covered Plan. For Covered Plans 

that enter into a written asset or 

investment management agreement with 

an RBC QPAM on or after 60 calendar 

days from this exemption’s effective 

date, the RBC QPAM must agree to its 

obligations under this section III(j) in an 

updated investment management 

agreement between the RBC 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– 

10 that meets the terms of this 

condition. This condition will also be 

met where the RBC QPAM has already 

agreed to the same obligations required 

by this section III(j) in an updated 

investment management agreement 

between the RBC QPAM and a Covered 

Plan. Notwithstanding the above, an 

RBC QPAM will not violate the 

condition solely because a Covered Plan 

client refuses to sign an updated 

investment management agreement; 

(k) Within 60 days after the effective 

date of this exemption, each RBC 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 have 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, or the sponsor of an 

investment fund in any case where an 

RBC QPAM acts only as a sub-advisor 

to the investment fund in which such 

Covered Plan invests. All prospective 

Covered Plan clients that enter into a 

written asset or investment management 

agreement with an RBC QPAM 

(including a participation or 

subscription agreement in a pooled fund 

managed by an RBC QPAM) after the 

date that is sixty days after the effective 

date of this exemption 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 RBC QPAM (for 

avoidance of doubt, all Covered Plan 

clients of an RBC 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 RBC QPAM). 

Disclosures required under this 

paragraph (k) may be delivered 

electronically (including by an email 

that has a link to this exemption). 

Notwithstanding the above paragraph, 

an RBC QPAM will not violate the 

condition solely because a Covered Plan 

client refuses to sign an updated 

investment management agreement; 

(l) The RBC QPAMs must comply 

with each condition of PTE 84–14, as 

amended, with the sole exception of the 

violation of PTE 84–14 section I(g) that 

is attributable to the Conviction. If, 

during the Exemption Period, an 

affiliate of an RBC 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), relief 


KHAMMOND on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 6027 

provided in this exemption would 

terminate immediately; 

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

publication of the exemption, each RBC 

QPAM designates a senior compliance 

officer (the Compliance Officer) who 

will 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 criminal 

conduct that is subject of the 

Conviction. The Compliance Officer 

must conduct a review of each twelvemonth period comprising the 

Exemption Period (each, an Exemption 

Review) to determine the adequacy and 

effectiveness of the 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 

compliance for asset management; 

(2) With respect to each Exemption 

Review, the following conditions must 

be met: 

(i) The Exemption Review includes a 

review of the RBC 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) the twelve-month period 

under review; the most recent Audit 

Report issued pursuant to this 

exemption; the most recent Audit 

Report issued in connection with this 

exemption; (B) any material change in 

the relevant business activities of the 

RBC QPAMs; and (C) 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 RBC 

QPAMs; 

(ii) The Compliance Officer prepares 

a written report for each Exemption 

Review (each, 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 on such 

recommendations; 

(iii) In each 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 have been 

identified in the Exemption Report; and 

(D) the RBC QPAMs have complied with 

the Policies and Training and/or 

corrected (or is correcting) any known 

instances of noncompliance in 

accordance with section III(h) above; 

(iv) Each Exemption Report must be 

provided to: (A) the appropriate 

corporate officers of RBC and each RBC 

QPAM to which such report relates, and 

(B) the head of compliance and the RBC 

QPAM’s general counsel (or their 

functional equivalent) of the relevant 

RBC QPAM; and must be made 

unconditionally available to the 

independent auditor described in 

section III(i) above; 

(v) Each Exemption Review, including 

the Compliance Officer’s written 

Exemption Report, must be completed 

within three (3) months following the 

end of the period to which it relates; 

(n) Each RBC 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 

RBC QPAM relies upon the relief in the 

exemption; 

(o) Within 60 days after the effective 

date of this exemption, each RBC 

QPAM, in its agreements with, or in 

other written disclosures provided to 

Covered Plans, clearly and prominently 

informs Covered Plan clients of the 

Covered Plan’s right to obtain a copy of 

the Policies or a description (Summary 

Policies), which accurately summarizes 

key components of the QPAM’s written 

Policies developed in connection with 

this exemption. If the Policies are 

thereafter changed, each Covered Plan 

client must receive a new disclosure 

within six (6) months following the end 

of the calendar year during which the 

Policies were changed. If the Applicant 

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 the Summary Policies is 

clearly and prominently disclosed to 

each Covered Plan; 

(p) An RBC QPAM will not fail to 

meet the terms of this exemption, solely 

because a different RBC QPAM fails to 

satisfy a condition for relief described in 

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

(n),(o), and (u) 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 RBC or its 

affiliates; 

(q) RBC imposes its internal 

procedures, controls, and protocols to 

reduce the likelihood of any recurrence 

of conduct that is the subject of the 

Conviction; 

(r) All the material facts and 

representations set forth in the 

Summary of Facts and Representations 

are true and accurate; 

(s) With respect to an asset manager 

that becomes an RBC QPAM after the 

effective date of the exemption by virtue 

of being acquired (in whole or in part) 

by RBC or a subsidiary or affiliate of 

RBC (a ‘‘newly-acquired RBC QPAM’’), 

the newly-acquired RBC 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 RBC QPAM until a date that is 

six (6) months after the closing date for 

the acquisition. To that end, the newly 

acquired RBC 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 acquisition date of the newlyacquired RBC QPAM; 

(t) Relief in this exemption will 

terminate on the date that is 12 months 

after the date a U.S. regulatory authority 

makes a final decision that RBC 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) The RBC QPAM(s) must provide 

the Department with the records 


KHAMMOND on DSK9W7S144PROD with NOTICES
6028 Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Notices 

1 5 U.S.C. 552b(a)(2) and (b). See also 45 CFR 

1622.2 & 1622.3. 

necessary to demonstrate that each 

condition of this exemption has been 

met within 30 days after a request for 

the records 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. 2025–01067 Filed 1–16–25; 8:45 am] 

BILLING CODE P 

LEGAL SERVICES CORPORATION 

Sunshine Act Meetings 

TIME AND DATE: The Legal Services 

Corporation (LSC) Board of Directors 

and its Finance, Audit, and Delivery of 

Legal Services committees will hold 

their 2025 quarterly business meeting 

January 26–28, 2025. On Monday, 

January 27, the first meeting will begin 

at 9:00 a.m. ET, with the next meeting 

commencing at 1:15 p.m. ET. On 

Tuesday, January 28, the first meeting 

will begin at 8:30 a.m. ET, with the next 

meeting commencing promptly upon 

adjournment of the immediately 

preceding meeting. 

PLACE: Public Notice of Hybrid Meeting. 

LSC will conduct its January 26–28, 

2025, meetings at the Embassy Suites by 

Hilton Tampa Downtown Convention 

Center, 513 South Florida Avenue, 

Tampa, FL 33602, and virtually via 

Zoom. 

Public Observation: Unless otherwise 

noted herein, the Board and all 

committee meetings will be open to 

public observation. Members of the 

public who wish to participate virtually 

in the public proceedings may do so by 

following the directions provided 

below. 

Directions for Open Sessions 

Monday, January 27, 2025 

• To join the Zoom meeting by 

computer, please use this link: 

Æ https://lsc-gov.zoom.us/j/815653

83451?pwd=1llll33RnbUjvY8C

jwW0FB9bORs8UM.1. 

Æ Meeting ID: 815 6538 3451. 

Æ Passcode: 153274. 

Tuesday, January 28, 2025 

• To join the Zoom meeting by 

computer, please use this link: 

Æ https://lsc-gov.zoom.us/j/8576913

7645?pwd=MLcrUbgNKPZ4ob

AcIbRt5QU7qM5Xr3.1. 

Æ Meeting ID: 857 6913 7645. 

Æ Passcode: 444480. 

Æ If calling from outside the U.S., find 

your local number here: https://lscgov.zoom.us/u/acCVpRj1FD. 

Once connected to Zoom, please 

immediately mute your computer or 

telephone. Members of the public are 

asked to keep their computers or 

telephones muted to eliminate 

background noise. To avoid disrupting 

the meetings, please refrain from 

placing the call on hold if doing so will 

trigger recorded music or other sound. 

From time to time, the Board or 

Committee Chair may solicit comments 

from the public. To participate in the 

meeting during public comment, use the 

‘raise your hand’ or ‘chat’ functions in 

Zoom and wait to be recognized by the 

Chair before stating your questions and/ 

or comments. 

STATUS: Parts of this meeting will be 

open to the public. The rest of the 

meeting will be closed to the public. 

Finance Committee—Open, except 

that, upon a vote of the Board of 

Directors, the meeting may be closed to 

the public for the review of banking 

services. 

Audit Committee—Open, except that, 

upon a vote of the Board of Directors, 

the meeting may be closed to the public 

to receive a briefing by the Office of 

Compliance and Enforcement on active 

enforcement matter(s); follow up on 

open investigation referrals to and from 

the Office of Inspector General (ACC 

§ VIII A (5)); and receive briefings by 

LSC Management regarding significant 

grantee oversight activities. 

Delivery of Legal Services 

Committee—Open, except that, upon a 

vote of the Board of Directors, the 

meeting may be closed to the public to 

receive a briefing on service area 

configuration. 

Board of Directors—Open, except 

that, upon a vote of the Board of 

Directors, a portion of the meeting may 

be closed to the public to receive 

briefings from Management and the 

Inspector General; to receive the General 

Counsel’s report on outside counsel 

expenditures; to consider and act on the 

General Counsel’s report on potential 

and pending litigation involving LSC; 

and to consider and act on a list of 

prospective Leaders Council and 

Emerging Leaders Council members. 

Any portion of the closed session 

consisting solely of briefings does not 

fall within the Sunshine Act’s definition 

of the term ‘‘meeting’’ and, therefore, 

the requirements of the Sunshine Act do 

not apply to such portion of the closed 

session.1

A verbatim written transcript will be 

made of the closed sessions of the 

Finance, Audit, Delivery of Legal 

Services, and the Board of Directors 

meetings. The transcript of any portions 

of the closed sessions falling within the 

relevant provisions of the Government 

in the Sunshine Act, 5 U.S.C. 552b(c)(6), 

(7), (9) and (10), will not be available for 

public inspection. A copy of the General 

Counsel’s certification that, in his 

opinion, the closing is authorized by 

law will be available upon request. 

MATTERS TO BE CONSIDERED: 

Meeting Schedule 

Monday, January 27, 2025 

Start Time 9:00 a.m. ET 

Finance Committee 

Portions Open to the Public 

1. Approval of Agenda 

2. Approval of Minutes of the 

Committee’s Open Session Meeting 

on October 28, 2024 

3. Discussion of Finance Committee’s 

Self-Evaluation for 2024 and Goals for 

2025 

4. Discussion of LSC’s Fiscal Year 2025 

Appropriation and Additional 

Supplemental Appropriation Requests 

5. Consider and Act on Resolution 

#2025–XXX: Temporary Operating 

Budget and Special Circumstance 

Operating Authority for Fiscal Year 

2025 

6. Update on Fiscal Year 2026 Budget 

Request 

7. Presentation of LSC’s Financial 

Report for the First Two Months of 

Fiscal Year 2025 (from Oct. 1–Nov. 

30, 2024) 

8. Discussion of LSC’s Fiscal Year 2026 

Appropriations Request 

9. Public Comment 

10. Consider and Act on Other Business 

11. Consider and Act on Motion to 

Adjourn the Open Session Meeting 

and Proceed to a Closed Session 

Meeting 

Portions Closed to the Public 

12. Review of Banking Services 

13. Consider and Act on Motion To 

Adjourn the Meeting 

Monday, January 27, 2025 

Start Time 1:15 p.m. ET 

Audit Committee 

Portions Open to the Public 

1. Approval of Agenda 

2. Approval of Minutes of the 

Committee’s Open Session Meeting 

on October 28, 2024 

3. Discussion of the Committee’s SelfEvaluation for 2024 and Goals for 

2025 


KHAMMOND on DSK9W7S144PROD with NOTICES