```

[Federal Register Volume 90, Number 12 (Tuesday, January 21, 2025)]
[Notices]
[Pages 7174-7190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01244]

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Exemption Application No. D-12101]

Proposed Exemption From Certain Prohibited Transaction 
Restrictions Involving Northern Trust Corporation (Together With its 
Current and Future Affiliates, Northern or the Applicant) Located in 
Chicago, IL

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of proposed exemption.

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SUMMARY: This document provides notice of the pendency before the 
Department of Labor (the Department) of a proposed individual exemption 
from certain prohibited transaction restrictions of the Employee 
Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue 
Code of 1986 (the Code). The proposed exemption would allow certain 
entities with specified relationships to Northern Trust Fiduciary 
Services (Guernsey) Limited (NTFS) (hereinafter, the Northern QPAMs, as 
further defined in section I(e) of the operative language) to rely on 
the exemptive relief provided by Prohibited Transaction Class Exemption 
84-14 (PTE 84-14 or the QPAM Exemption), notwithstanding the judgment 
of conviction (the Conviction) against NTFS for aiding and abetting tax 
fraud entered in France in the Paris Court of Appeal, French Special 
Prosecutor No. 1120392066, French Investigative Judge No. JIRSIF/11/12.

DATES: 
    Exemption date: This proposed exemption would be in effect for a 
period of five years beginning on March 5, 2025, and ending on March 4, 
2030 (the Exemption Period).
    Comments due: Written comments and requests for a public hearing on 
the proposed exemption should be submitted to the Department by March 
7, 2025.

ADDRESSES: All written comments and requests for a hearing should be 
submitted to the Employee Benefits Security Administration (EBSA), 
Office of Exemption Determinations, Attention: Application No. D-12101 
via

[[Page 7175]]

email to [email protected] or online through https://www.regulations.gov. 
Any such comments or requests should be sent by the end of the 
scheduled comment period. The application for exemption (the 
Application) and the comments received will be available for public 
inspection in the Public Disclosure Room of the Employee Benefits 
Security Administration, U.S. Department of Labor, Room N-1515, 200 
Constitution Avenue NW, Washington, DC 20210, reachable by telephone at 
(202) 693-8673. See SUPPLEMENTARY INFORMATION below for additional 
information regarding comments.

FOR FURTHER INFORMATION CONTACT: Anna Mpras Vaughan of the Department, 
telephone (202) 693-8565. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: 
    Comments: Persons are encouraged to submit all comments 
electronically without submitting paper versions. Comments should state 
the nature of the person's interest in the proposed exemption and how 
the person would be adversely affected by the exemption, if granted. 
Any person who may be adversely affected by an exemption can request a 
hearing on the exemption. A request for a hearing must state: (1) The 
name, address, telephone number, and email address of the person making 
the request; (2) the nature of the person's interest in the exemption 
and the manner in which the person would be adversely affected by the 
exemption; and (3) a statement of the issues to be addressed and a 
general description of the evidence to be presented at the hearing. The 
Department will grant a request for a hearing made in accordance with 
the requirements above where a hearing is necessary to fully explore 
material factual issues identified by the person requesting the 
hearing. The Department would publish a notice announcing such hearing 
in the Federal Register. The Department may decline to hold a hearing 
if: (1) the request for the hearing does not meet the requirements 
above; (2) the only issues identified for exploration at the hearing 
are matters of law; or (3) the factual issues identified can be fully 
explored through the submission of evidence in written (including 
electronic) form.
    Warning: All comments received will be included in the public 
record without change and may be made available online at https://www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be confidential or 
other information whose disclosure is restricted by statute. If you 
submit a comment, EBSA recommends that you include your name and other 
contact information in the body of your comment, but DO NOT submit 
information that you consider to be confidential, or otherwise 
protected (such as a Social Security number or an unlisted phone 
number) or confidential business information that you do not want 
publicly disclosed. However, if EBSA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EBSA 
might not be able to consider your comment.
    Additionally, the https://www.regulations.gov website is an 
``anonymous access'' system, which means EBSA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an email directly to EBSA without going 
through https://www.regulations.gov, your email address will be 
automatically captured and included as part of the comment that is 
placed in the public record and made available on the internet.

Proposed Exemption

    The Department is considering granting the exemption pursuant to 
its authority under ERISA section 408(a) and Code section 4975(c)(2), 
and in accordance with the Department's exemption procedures.\1\ If the 
Department grants a final exemption, the Northern QPAMs will not be 
precluded from relying on the QPAM Exemption \2\ notwithstanding the 
Conviction, provided the conditions and definitions set forth in the 
exemption are met.
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    \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).
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    This proposed exemption would provide relief from certain 
restrictions set forth in ERISA sections 406 and 407.\3\ It would not, 
however, provide relief from any other violation of law. Furthermore, 
the Department cautions that the relief in this proposed exemption 
would terminate immediately if, among other things, Northern or an 
affiliate of Northern (as defined in section VI(d) of PTE 84-14) \4\ is 
convicted of a crime covered by section I(g) of PTE 84-14 (other than 
the Conviction) or any other violation occurs during the Exemption 
Period. Although Northern could apply for a new exemption in that 
circumstance, the Department would not be obligated to grant the 
exemption.
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    \3\ For purposes of this proposed exemption, references to 
specific provisions of ERISA Title I, unless otherwise specified, 
should be read to refer as well to the corresponding provisions of 
Code section 4975. Further, this proposed exemption, if granted, 
does not provide relief from the requirements of, or specific 
sections of, any law not noted above.
    \4\ PTE 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.
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    The terms of this proposed exemption have been specifically 
designed to permit a plan to terminate its relationship with Northern 
or an Affiliate in an orderly and cost-effective fashion in the event 
of an additional conviction of them or a plan fiduciary determines that 
it otherwise prudent for a plan to terminate its relationship with 
Northern.

Summary of Facts and Represenations \5\
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    \5\ The Summary of Facts and Representations is based on the 
Applicant's representations and does not reflect factual findings or 
opinions of the Department, unless indicated otherwise. The 
Department notes that the availability of this exemption, if 
granted, is subject to the express condition that the material facts 
and representations contained in the Application (D-12101) are true 
and complete, and accurately describe all material terms of the 
transactions covered by this exemption. If there is any material 
change in a transaction covered by this exemption, or in a material 
fact or representation described in the Application, the exemption 
will cease to apply as of the date of such change.
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Northern Trust Corporation (Northern)

    1. Northern is a financial holding company that provides investment 
management, asset and fund administration, fiduciary, and banking 
services for corporations, institutions, and affluent individuals. 
Northern conducts business through various U.S. and non-U.S. 
subsidiaries, including The Northern Trust Company (the Bank), an 
Illinois bank headquartered in Chicago, Illinois.

Northern QPAMS

    2. Northern has several U.S. and non-U.S. affiliates that provide 
investment management services. The Northern

[[Page 7176]]

affiliates that currently manage assets of plans subject to Part 4 of 
Title I of ERISA (i.e., an ERISA-covered plan) or Code section 4975 
(i.e., an IRA; together, a Covered Plan), \6\ collective investment 
trusts and other commingled funds on a discretionary basis, and that 
routinely rely on the QPAM Exemption to provide relief for party-in-
interest transactions, are:
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    \6\ In each case, a Covered Plan is an ERISA-covered plan or an 
IRA with respect to which Northern relies on PTE 84-14, or with 
respect to which Northern has expressly represented that the manager 
qualifies as a QPAM or relies on the QPAM class exemption (PTE 84-14 
or the QPAM Exemption). A Covered Plan does not include an ERISA-
covered plan or IRA to the extent that Northern has expressly 
disclaimed reliance on QPAM status or PTE 84-14 in entering into a 
contract, arrangement, or agreement with the ERISA-covered plan or 
IRA.
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     The Northern Trust Company (the Bank) acts as trustee for 
plans subject to Title I of ERISA and IRAs and other accounts subject 
to ERISA or Code section 4975. The Bank also maintains ERISA-governed 
collective investment trusts and commingled vehicles for investment of 
plan assets.
     Northern Trust Investments, Inc. (NTI) is both an Illinois 
bank regulated by the Illinois Department of Financial and Professional 
Regulation and an investment adviser registered with the SEC under the 
Advisers Act with its principal office in Chicago, Illinois. NTI 
provides portfolio management services to corporations, public and 
private pension plans, Taft-Hartley plans, charitable institutions, 
foundations, endowments, municipalities, registered mutual funds, 
collective investment trusts, private investment funds, trust programs, 
individuals, wrap sponsors and other U.S. and international 
institutions. As of December 31, 2023, NTI manages discretionary assets 
of approximately $1,017 billion, including ERISA and IRA assets.
     50 South Capital Advisors, LLC (50 South) is an investment 
adviser registered with the SEC under the Advisers Act, with its 
principal office in Chicago, Illinois. 50 South provides portfolio 
management services to pooled investment vehicles including plan asset 
funds. As of December 31, 2023, 50 South manages discretionary assets 
of nearly $11.3 billion, including ERISA and IRA assets.
     Northern Trust Securities, Inc. (NTSI) is an investment 
advisor registered with the SEC under the Advisers Act with its 
principal office in Chicago, Illinois. NTSI provides portfolio 
management services to separately managed accounts. As of October 28, 
2024, NTSI manages discretionary assets of approximately $1.27 billion, 
including ERISA and IRA assets.
    3. According to the Applicant, the Northern QPAMs rely on the QPAM 
Exemption for transaction that include, without limitation, global 
fixed income, global equities, futures, options, swaps and other 
derivatives, investments made by alternative plan asset funds, 
including hedge funds, and similar instruments and strategies. The 
issuing documents for many instruments state that the investment 
manager is deemed to represent that it is relying, at least partially, 
on PTE 84-14. The four QPAMs described above, and any future manager 
affiliated with Northern that relies on the exemptive relief provided 
in PTE 84-14 with respect to any Covered Plan, are hereinafter referred 
to as the ``Northern QPAMs.''

The Convicted Entity: NTFS

    4. Northern has an indirect wholly owned subsidiary, Northern, 
NTFS, that is a limited liability company organized under the laws of 
Guernsey. NTFS provides a wide range of services, including trust and 
fiduciary services, to a global client base that includes institutional 
clients (such as non-U.S. thrift savings and pension trusts of large 
corporations) and private ultra-high net worth individual or family 
office clients/trusts. The trust and company management and 
administration services provided by NTFS include ongoing interaction 
with the settlor and beneficiaries, investment managers and advisors, 
and the settlor's legal counsel, among others. NTFS also may appoint 
individual directors that are personnel of NTFS, if required, or more 
commonly corporate directors (entities wholly owned by NTFS) to act as 
the directors of some of the underlying holding companies owned by the 
trusts for which NTFS acts as trustee. These holding companies hold 
assets which could include cash, marketable securities, privately held 
companies, art, real estate and other property. With respect to non-
U.S. thrift savings and pension trusts, NTFS may be appointed as 
trustee and responsible for: (i) payments to beneficiaries of the trust 
(i.e., employees of the company funding the trust); and (ii) auditing 
the trust using external auditor(s) and providing annual tax filings 
(depending on domicile). The Applicant represents that NTFS does not 
act as a ``qualified professional asset manager'' (QPAM) or otherwise 
provide investment management services to any accounts subject to ERISA 
or Code section 4975 and does not act as a fiduciary to any ERISA plan 
or IRA.
    5. NTFS operates based on internal policies and procedures of 
Northern and is subject to internal audits to ascertain compliance. 
NTFS is managed by a board of directors, which meets at least 
quarterly. In addition, the board has delegated certain powers to an 
Appointment Committee for consideration of new or existing business, a 
Fiduciary Committee for the review of the companies' fiduciary 
activities and for consideration of the exercise of discretionary 
powers by NTFS as trustee and a Risk Committee for consideration and 
management of risks.

ERISA and Code Prohibited Transactions and PTE 84-14

    6. The rules set forth in ERISA section 406 proscribe certain 
``prohibited transactions'' between plans and parties in interest with 
respect to those plans. ERISA section 3(14) defines parties in interest 
with respect to a plan to include, among others, the plan fiduciary, a 
sponsoring employer of the plan, a union whose members are covered by 
the plan, service providers with respect to the plan, and certain of 
their affiliates.\7\ The transactions prohibited by ERISA section 
406(a) prohibit that are relevant to this proposed exemption are (1) 
sales, leases, loans, or the provision of services between a party in 
interest and a plan (or an entity whose assets are deemed to constitute 
the assets of a plan), (2) the use of plan assets by or for the benefit 
of a party in interest, or (3) a transfer of plan assets to a party in 
interest.\8\
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    \7\ Under the Code, such parties, or similar parties, are 
referred to as ``disqualified persons.''
    \8\ The prohibited transaction provisions also include certain 
fiduciary prohibited transactions under ERISA section 406(b). These 
include transactions involving fiduciary self-dealing, fiduciary 
conflicts of interest, and kickbacks to fiduciaries.
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    7. ERISA section 408(a) gives the Department the authority to grant 
an exemption from such ``prohibited transactions'' if the Department 
finds an exemption is: (a) administratively feasible for the 
Department; (b) in the interests of the plan and of its participants 
and beneficiaries; and (c) protective of the rights of participants and 
beneficiaries.
    8. PTE 84-14 exempts certain prohibited transactions between a 
party in interest and an ``investment fund'' (as defined in section 
VI(b) of PTE 84-14) in which a plan has an interest if the investment 
manager satisfies the definition of ``qualified professional asset 
manager'' (QPAM) and satisfies additional conditions of the 
exemption.\9\

[[Page 7177]]

PTE 84-14 was developed and granted based on the premise that broad 
relief could be afforded for all types of transactions in which a plan 
engages only if the commitments and the investments of plan assets and 
the negotiations leading thereto are the sole responsibility of an 
independent discretionary manager.\10\
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    \9\ PTE 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).
    \10\ See 75 FR 38837, 38839 (July 6, 2010).
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    9. Section I(g) of PTE 84-14 prevents an entity that may otherwise 
meet the definition of a QPAM from utilizing the exemptive relief 
provided by the QPAM Exemption for itself and its client plans if that 
entity, an ``affiliate'' thereof, or any direct or indirect five 
percent or more owner of the QPAM has been either convicted or released 
from imprisonment, whichever is later, because of criminal activity 
described in section I(g), or otherwise violates section I(g), within 
the 10 years immediately preceding a transaction. section I(g) was 
included in PTE 84-14, in part, based on the Department's expectation 
that QPAMs, and those who may be in a position to influence the QPAM's 
policies, must maintain a high standard of integrity.\11\
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    \11\ See 47 FR 56947 (December 21, 1982).
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Investigation for Tax Fraud

    10. In 2010 and 2011, French prosecutors opened judicial 
investigations questioning whether Guy Wildenstein and Alec Daniel 
Armand Wildenstein (the Wildensteins), heirs to a set of trusts 
established by family patriarch Daniel Wildenstein, had engaged in 
money laundering, fraudulent organization of insolvency, forgery and/or 
tax evasion in connection with their decision not to include trust 
assets in French tax filings made following Daniel Wildenstein's death 
in 2001. NTFS, as successor trustee to the trusts, was itself 
investigated by French prosecutors.\12\
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    \12\ In September 1999, Baring Trustees became the trustee of 
these two trusts. Baring Trustees was acquired by Northern on March 
31, 2005, and became NTFS by change of name effective on August 31, 
2005. With respect to these trusts, the Applicant states that NTFS 
was a directed trustee; as such, it was not involved in the 
settlement of the trusts and was not involved in any of the family's 
tax matters.
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    11. On April 9, 2015, the investigating authorities for the 
District Court of Paris issued an Order of Partial Discharge and 
Referral before the Criminal Court (the Referral Order). The Referral 
Order charged the Wildensteins with several counts of tax fraud for 
failing to disclose, and pay taxes on, assets held in various trusts 
following the 2001 death of their father, Daniel Wildenstein. One of 
eight defendants in the Referral Order, NTFS, was charged with 
violations of Articles 121-2, 121-6, and 121-7 of the French Criminal 
Code, and Articles 1741 et 1745 of the French General Tax Code for 
complicity in the Wildensteins' tax fraud based on assets held in trust 
for certain beneficiaries, including the Wildensteins. The portion of 
the case relevant to NTFS relates to assets held in two Guernsey trusts 
for which NTFS served as successor trustee: the ``1989 Sonstrust'' (the 
Sons Trust) and the ``1989 Davidtrust'' (the David Trust). The trusts 
include properties located in Kenya, the British Virgin Islands, 740 
Madison Avenue and 19 East 64th Street in New York City, shares of 
Wildenstein and Co Inc., and of various art galleries.
    12. As described in the Referral Order, on February 23, 1989, 
Daniel Wildenstein established two trusts in Bermuda, the Sons Trust 
and the David Trust with Bermuda Trust Company Limited was appointed as 
trustee. The Sons Trust was incorporated for the benefit of the 
children of Daniel Wildenstein, Guy and Alec, and of his second wife, 
Sylvia Roth-Wildenstein. The David Trust was incorporated for the 
benefit of the grandchildren of Daniel Wildenstein. Baring Brothers 
(Guernsey) Limited replaced Bermuda Trust Company Limited as the 
trustee in 1990, and it was itself replaced as trustee in September 
1999 by Baring Trustees (Guernsey) Limited (Baring Trustees). The 
Applicant states that, only in 2005, following the purchase of Baring 
Asset Management's Financial Services Group (including Baring Trustees) 
by the Northern Trust Corp, did Baring Trustees become Northern Trust 
Fiduciary Services (Guernsey) Limited.
    13. On October 21, 2001, Daniel Wildenstein died in Paris. On April 
28, 2002, the Wildensteins filed an inheritance tax statement in 
relation to their father Daniel Wildenstein's estate in France. The 
statement did not identify the Sons Trust and the David Trust or the 
assets held by these trusts. The Referral Order provides that the Sons 
Trust and David Trust, as well as their assets, should have been 
disclosed in the inheritance tax statement, because the trusts were 
non-discretionary. The Referral Order provides that that these assets 
in the Sons Trust and the David Trust are subject to French taxes, and 
that an inheritance tax would have been imposed on these assets. In 
this regard, the Referral Order provides:
     The assets placed within the trusts were held by 
companies. The trusts hold a securities interest in these companies, 
but the trustee does not have sufficient control of the companies or 
the assets.
     Daniel Wildenstein was co-trustee, and during his lifetime 
he could have asked the trustee to distribute all of the trusts' assets 
to the beneficiaries.
     In addition to naming a trustee, the trust deeds also 
named an individual to fulfill the role of ``protector'' of the trusts, 
a Wildenstein family attorney who was financially dependent upon the 
family.
     The protector permitted certain financial flows debited 
from the Sons Trust bank account without the trustee's consent, and 
these money flows were later re-characterized as loans.
     The trusts operated abnormally in some respects and there 
was some commingling between the trusts' assets and Daniel 
Wildenstein's assets.
     The trustee's fees were too low in relation to the value 
of the assets in the trusts, and the assets were actually managed by 
companies without supervision by the trustee.
    14. The French authorities state that their investigation produced 
sufficient information to allege that NTFS, in Guernsey, beginning in 
September 1999, aided and abetted tax fraud committed in Paris by 
Daniel Wildenstein's heirs by concealing a portion of the sums subject 
to French estate taxes owed by the Wildensteins.\13\
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    \13\ As described above, the Applicant notes that Baring 
Trustees was the trustee of the Sons and David Trust until 2005.
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PTE 2016-11

    15. The trial commenced on January 4, 2016. Due to the possibility 
of a conviction that would lead to the loss of the Northern QPAMs' 
ability to rely on PTE 84-14, the Applicant applied for and received a 
temporary one year exemption from the Department effective as of the 
date of judgment of conviction against NTFS for aiding and abetting tax 
fraud to be entered in France in the District Court of Paris, French 
Special Prosecutor No. 1120392066, French Investigative Judge No. 
JIRSIF/11/12.\14\ The Department

[[Page 7178]]

granted PTE 2016-11 to protect Covered Plans from the harm that could 
result from the Northern QPAMs' loss of relief under PTE 84-14 due to 
the potential conviction of NTFS. Exemptive relief was provided for a 
period of 12 months from the potential conviction date to provide the 
Department with sufficient time to determine whether longer-term relief 
was appropriate.
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    \14\ PTE 2016-11, 81 FR 75150, 75152 (October 28, 2016). 
``Conviction Date'' was defined, in relevant part, to mean the date 
a judgment was rendered against NTFS in the District Court of Paris, 
French Special Prosecutor No. 1120392066, French Investigative Judge 
No. JIRSIF/11/12.
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    16. On January 12, 2017, the Criminal Court of Paris acquitted all 
prosecuted parties, including NTFS. The Paris District Court's verdict 
was appealed by the French government to the Paris Court of Appeal. 
Because NTFS was not convicted, the ``Effective Date'' under PTE 2016-
11 did not occur. On June 29, 2018, following a retrial in March 2018, 
the Paris Court of Appeal upheld the District Court's acquittal of all 
prosecuted parties.\15\ The French government appealed again to the 
Court of Cassation, the highest court in France. In January 2021 the 
Court of Cassation quashed the appellate court's judgment.\16\ From 
September to October 2023, the case was tried a third time, in front of 
a different panel of the Paris Court of Appeal.
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    \15\ The Court of Appeals found that the offenses were time-
barred and that there was no legal basis for the offense of tax 
fraud in relation to the Wildensteins' inheritance.
    \16\ The Court of Cassation found: (1) that the offenses were 
not time barred and (2) that there was a legal obligation under 
French law to declare assets held in certain (but not all) types of 
trusts. Namely, the legal requirement to declare trust assets 
applies to trusts where the settlor had not divested themselves of 
the trust assets during their lifetime.
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    17. Ultimately, on March 5, 2024, the Paris Court of Appeal 
rendered a judgment of conviction (the Conviction) against all 
defendants, including NTFS. NTFS was ordered by the court to pay a fine 
of [euro]187,500 in conjunction with the judgment. The Applicant 
represents that the US dollar equivalent of this fine is $203,445 as of 
March 5, 2024, and $204,197 as of November 5, 2024.\17\
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    \17\ The Applicant represents that it used the currency 
converter from Oanda FX Data Services, located at https://www.oanda.com/currency-converter/en/ to calculate these figures.
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    18. When the Paris Court of Appeal rendered a judgment of 
Conviction against NTFS, PTE 84-14 section I(g) was triggered.\18\ PTE 
2016-11 was technically inapplicable because its definition of 
``Conviction'' referred to the District Court of Paris, instead of the 
Paris Court of Appeal, and did not include that the judgment of 
conviction could be entered by another court of competent 
jurisdiction.\19\
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    \18\ On March 5, 2024, NTFS appealed the verdict to the Court of 
Cassation. According to the Applicant, under French law, until the 
Conviction is final, there is no conviction, and NTFS continues to 
be presumed innocent. The Applicant states that the judgment, as 
well as its effects including the fine and joint and several 
liability, will be stayed pending the outcome of the appeal. 
However, under section I(g) of PTE 84-14 as in effect on the date of 
the Conviction, ``. . . a person shall be deemed to have been 
``convicted'' from the date of the judgment of the trial court, 
regardless of whether that judgment remains under appeal.''
    \19\ See 81 FR 75152 (October 28, 2016).
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    19. On April 4, 2024, the Department issued a technical correction 
to PTE 2016-11.\20\ The technical correction changed the definition of 
the term ``Conviction'' in PTE 2016-11 by replacing ``the District 
Court of Paris, French Special Prosecutor No. 1120392066, French 
Investigative Judge No. JIRSIF/11/12'' with ``the Court of Appeal, 
French Special Prosecutor No. 1120392066, French Investigative Judge 
No. JIRSIF/11/12 or another court of competent jurisdiction.'' PTE 
2016-11, as corrected, is effective for a period of one year from the 
date of the Conviction, ending March 4, 2025. The one-year exemption 
gives the Department time to consider whether a longer term (5 years) 
exemption is appropriate based on the facts of the conviction and to 
more fully develop the record upon which relief, if any, would be 
based. Upon the expiration of the one-year exemption on March 4, 2025, 
the Applicant cannot rely on the QPAM Exemption without this five-year 
relief, regardless of whether or not the Applicant appeals the judgment 
of Conviction.
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    \20\ See 89 FR 23612.
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This Exemption Request

    20. The Applicant requests exemptive relief that would permit the 
Northern QPAMs to continue to rely on the relief provided by the QPAM 
Exemption, notwithstanding the disqualifying conviction, for the 
remaining nine-year period of disqualification upon the expiration of 
PTE 2016-11. The Department has determined to propose relief for five 
years, beginning on March 5, 2025, and ending on March 4, 2030, so that 
it may reevaluate the effectiveness of the protective conditions for 
relief as well as whether the QPAMs, and those in position to influence 
them, have continued to maintain a high standard of integrity.
    21. According to the Applicant, the Northern QPAMs' investment 
management business operations are separate from NTFS, and from the 
activities of NTFS that are the subject of criminal charges under 
French law.\21\ The Northern QPAMs have dedicated systems, management, 
risk and compliance officers, that are separate from and independent of 
NTFS. The investment management businesses of the Northern QPAMs are 
subject to codes of conduct, and Northern QPAM personnel engage in 
training, designed to ensure that such businesses understand and abide 
by their fiduciary duties in accordance with applicable law. The codes 
of conduct create information barriers designed to prevent employees of 
the Northern QPAMs from gaining access to inside information that an 
affiliate may have acquired or developed in connection with the 
investment banking, treasury services or other investor services 
business activities. These codes of conduct apply to employees, 
officers, and directors of Northern QPAMs. The Applicant also maintains 
an employee hotline for employees to express any concerns of wrongdoing 
anonymously.
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    \21\ As described below, the conditions for relief provide that 
no investment management services may be provided by NTFS to ERISA-
covered plans or IRAs.
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    22. The Applicant represents that no NTFS employees (or former 
employees of Baring Trustees) were investigated or charged, nor were 
any other corporate entities related to NTFS investigated or charged. 
The Applicant states that the individual who appears to have been the 
primary contact for the Wildenstein business after NTFS acquired Baring 
Trustees was a former employee of Baring Trustees who was not charged 
in the French proceeding and who left NTFS in January 2006, shortly 
after the acquisition. Further, the Applicant represents that all 
personnel involved in working on the Wildenstein accounts, regardless 
of whether they were implicated in the conduct that became the subject 
of the Conviction, either left Baring Trustees prior to its acquisition 
by NTFS in 2005 or shortly thereafter, and none of these persons is 
employed by NTFS or other Northern affiliates today.
    23. The Applicant states that Northern's review of the files has 
not identified any wrongdoing on the part of former NTFS staff, nor are 
any current or former NTFS (or Baring Trustees) employees among the six 
individuals charged by the French prosecutors in connection with the 
Wildenstein business.
    24. The Applicant represents that new policies, procedures and 
training came into effect since Northern's acquisition of Baring 
Trustees in 2005. Upon becoming a part of the Northern organization, 
Baring Trustees was renamed NTFS and became subject to Northern's own 
internal control procedures designed to prevent improper activities. 
The Applicant represents that NTFS has complied (and

[[Page 7179]]

will continue to comply) with all applicable legal and regulatory 
requirements, including but not limited to requirements potentially 
linked to the conduct underlying the charges against NTFS.
    25. The Applicant further represents that resources dedicated to 
maintaining risk and compliance procedures have been enhanced 
significantly since Northern's acquisition of Baring Trustees in 2005. 
Hundreds of new risk and compliance personnel have been hired by 
Northern in that period. For example, according to the Applicant, at 
the time of the acquisition of Baring Trustees (and the Wildenstein 
relationship) in 2005, Northern had five full-time equivalent employees 
handling compliance with anti-money laundering (AML) regulations; as of 
December 31, 2015, that number had increased to 78 full-time equivalent 
employees.
    26. The Applicant represents that it maintains a system of internal 
controls to ensure ongoing compliance with AML and know-your-client 
(KYC) related regulations. One of the key controls is the 
implementation of risk-based, comprehensive customer due diligence 
policies, procedures and processes for all customers, particularly 
those that present a high risk for money laundering or terrorist 
financing. Northern has also adopted Global Minimum Standards for 
Customer Due Diligence for its clients as a critical part of its Global 
AML/Economic Sanctions Compliance Program.
    27. The Applicant represents that it has new systems for evaluating 
new clients or acquisitions. Northern represents that it assesses the 
money laundering and related risks of each new client relationship. 
Northern represents that it has developed a Global Anti-Money 
Laundering & Combating the Financing of Terrorism Risk Rating Policy & 
Methodology to evaluate new client/business relationships and assess 
their money laundering risk and related risks. In addition, Northern 
represents that it utilizes a Client Relationship Form to collect the 
information necessary to assess the client risk rating. Clients will 
initially be risk rated during the client take-on process and 
subsequently as the client profile changes.

Hardship to Covered Plans

    28. Overview of loss of QPAM. The Applicant represents that without 
the ability to use PTE 84-14 (i.e., the QPAM Exemption), it would be 
difficult for Northern and its affiliates that currently manage the 
assets of Covered Plans, collective investment trusts and other 
commingled funds, on a discretionary basis, to efficiently engage in a 
variety of routine transactions on behalf of Covered Plan clients with 
counterparties, because many such counterparties could be a service 
provider to such Covered Plans. The Applicant states that 
counterparties are familiar and comfortable with PTE 84-14, as it is 
generally the most commonly used prohibited transaction exemption for 
asset managers of ERISA covered Plans or IRAs. The Applicant states 
that market participants, both clients and counterparties, routinely 
expect an investment manager of Covered Plan clients to represent that 
it qualifies as a QPAM--even if such a representation may not 
technically be required in a particular circumstance or for a 
particular transaction.
    29. The Applicant represents that Northern QPAMs have entered into 
and could enter into contracts in the future that require the Northern 
QPAMs to meet the conditions in PTE 84-14 on behalf of Covered Plan 
clients and on behalf of collective trusts and other funds subject to 
ERISA. These contracts include contracts entered into by Northern QPAMs 
on behalf of or as investment adviser for Covered Plans, collective 
trusts and other funds subject to ERISA for certain outstanding 
transactions, including, but not limited to the purchase and sale of 
debt and equity securities (both foreign and domestic, both registered 
and issued pursuant to Rule 144A or otherwise); asset-backed 
securities, commodities, real estate financing and leasing 
arrangements; and certain derivative transactions (e.g., futures, 
forwards, swaps, and options). The Applicant states that loss of the 
Northern QPAMs' ability to rely upon PTE 84-14 could cause considerable 
harm to Covered Plan clients. For example, the Applicant states that 
counterparties could seek to terminate existing contracts, and certain 
derivative transactions and other contractual agreements could 
terminate automatically and immediately without notice or action.
    30. In addition, the Applicant represents that its Covered Plan 
clients that continue to retain the Northern QPAMs could be prohibited 
from engaging in certain transactions that would be beneficial to such 
Covered Plan clients on a going forward basis, such as hedging 
transactions using over-the-counter options or derivatives or certain 
fixed income transactions (e.g., 144A debt securities).\22\ The 
Applicant states that it is unable to quantify the harm to Covered 
Plans for not being able to engage in hedging transactions or invest in 
certain fixed income products. Nonetheless, the Applicant represents 
that these types of transactions are key to managing both risk and 
returns of a given investment portfolio.\23\ Further, the Applicant 
states that even if other exemptions were acceptable to such 
counterparties, the cost of the transaction could increase to reflect 
the increased risk of compliance with respect to new exemptions that 
are unfamiliar to counterparties, to the detriment of Covered Plan 
clients.\24\
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    \22\ Rule 144A of the Securities Act of 1933, as amended (the 
``Securities Act'') provides a safe harbor from the registration 
requirements of the Securities Act of 1933 for certain private 
resales of certain securities, including foreign securities, to 
qualified institutional buyers (QIBs), which generally are large 
institutional investors that own at least $100 million in investable 
assets.
    \23\ The Applicant states that a common reason to engage in 
hedging transactions and fixed income transactions, and why the 
inability to engage in these transactions could be specifically 
harmful to Covered Plans, would be to provide protection against 
market risk, where fixed income and hedging transactions are used to 
manage unknown risks of interest rate fluctuation and market 
volatility for a specific period of time, while providing a 
specified return. The Applicant represents that it is not able to 
quantify the potential harms to Covered Plans if relief for these 
transactions are no longer available, because the market risks are 
unknown. The Applicant states that another reason to engage in 
hedging and fixed income transactions would be to address 
circumstances where there are limited available securities, such as 
the use of hedging transactions where a Covered Plan has long-term 
liabilities, and there are insufficient long-term, fixed-income 
securities available in the marketplace to provide the required 
returns over the specified period. The Applicant states that it is 
not able to ascertain which long-term, fixed-income securities will 
have limited availability at any given time, and thus the Applicant 
is not able to quantify the potential harms to Covered Plans.
    \24\ The Applicant represents that historically, counterparties 
engaging in certain hedging and securitized transactions have 
required that Covered Plans be able to rely on the QPAM Exemption in 
connection with such transactions. Further, the Applicant states 
that generally, counterparties to a Covered Plan have not agreed to 
allow the Covered Plan to rely on other potentially available 
prohibited transaction exemptions (e.g., ERISA section 408(b)(17)) 
because of the perceived risk related to satisfying the conditions 
of such other prohibited transaction exemptions. The Applicant 
states that if it were unable to use the QPAM Exemption in such 
transactions, it expects that the counterparties who view prohibited 
transaction exemptions (other than the QPAM Exemption) to be riskier 
could (a) increase the costs of such transactions to reflect the 
increased compliance risk or (b) not engage in such transactions 
with Covered Plans at all. The Applicant states that because this 
harm is counterparty dependent, the Applicant is unable to quantify 
the potential harm to Covered Plans.
---------------------------------------------------------------------------

    31. Overview of Costs. The Applicant represents that if the 
Department does not grant the requested exemption, fiduciaries of 
Covered Plan clients may seek other investment managers, at significant 
disruption and cost to the Covered Plan clients and ultimately to their 
participants and beneficiaries. The

[[Page 7180]]

Applicant states that these issues are described below:
     Time: The process of transitioning to a new investment 
manager is typically lengthy and would likely involve numerous steps 
each of which could last several months--including retaining a 
consultant, creating the requests for proposal, evaluating requests for 
proposal, meeting with prospective investment managers, negotiating 
contracts and ultimately transitioning assets.
     Costs: There are various costs involved in transitioning 
to a new investment manager.\25\ Some of those costs are described in 
more detail below.
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    \25\ Notwithstanding that the Applicant's representations 
regarding certain costs to Covered Plans if Northern QPAMs are 
unable to rely on PTE 84-14, the proposed exemption would require 
the Northern QPAMs to indemnify Covered Plans for ``actual losses'' 
that include transition costs. See discussion below.
---------------------------------------------------------------------------

     Investment consultant costs: Covered Plans generally incur 
tens of thousands of dollars in consulting fees in connection with 
searching for and transitioning to a new investment manager. The costs 
depend on numerous factors, including the consultants retained, as well 
as the strategy and/or purpose for which they are being retained. Costs 
are estimated as follows: \26\
---------------------------------------------------------------------------

    \26\ The Applicant states that these estimates are based on 
Northern's general industry knowledge.
---------------------------------------------------------------------------

    [cir] $25,000 to $75,000 for the replacement of an individual 
manager or single investment product, or
    [cir] $30,000 to $100,000 for the replacement of an ``outsourced 
chief investment officer'' (OCIO) or ``manager of managers.'' The 
Applicant states that Northern currently has 47 OCIO clients that would 
presumably select another investment manager should the Northern QPAMs 
no longer be able to rely on the QPAM Exemption
     Legal costs: Covered Plans generally incur tens of 
thousands of dollars in legal fees in connection with transitioning to 
a new investment manager. The costs depend on numerous factors, 
including the billing rate, the ability to negotiate and the complexity 
of the agreement. Assuming a $1,000 blended legal rate (and ignoring 
any potential alternative fee arrangements), legal costs are estimated 
to range from $5,000 to $30,000 to transition to a new investment 
manager. Legal costs with respect to alternative investments can range 
from $15,0000 to $150,000 per investment, depending on the type of 
alternative investment and the law firm retained.
     Investing costs: The investing costs, or the costs of 
selling and reinvesting a Covered Plan's assets, differ based on the 
asset class, as further described below.
    32. Costs Relating to Transitioning an Equity Portfolio. The 
Applicant states that trading costs related to an equity portfolio 
consist of explicit fees and implicit costs. The Applicant states that 
explicit fees include stamp and exchange fees and commissions. The 
Applicant also states that implicit costs include bid-ask spreads of 
assets traded on a principal basis.
    33. The Applicant represents that it estimates the costs of 
transitioning the equity investment portfolio, categorized by geography 
of equity, as follows: \27\
---------------------------------------------------------------------------

    \27\ The Applicant states that these estimates are its internal 
calculations based on the estimated size of the notional portfolio 
multiplied by the estimated basis points. In this regard, the 
Applicant states that trade-related costs were calculated based on 
the total asset size of equity collective investment funds of $279 
billion. The Applicant states that there is an additional $40 
billion of assets invested in Northern QPAMs common funds and 
through separately managed accounts. In addition, the Applicant 
states that the ``Total Trading-Related Cost'' figures do not 
include potential volatility costs, and there could be unknown 
additional expenses if clients are out of the market for a period of 
time. Further, the Applicant states that ``Commissions'' are $0.05 
per share for U.S. securities and 1.5 basis points for non-U.S. 
securities.

----------------------------------------------------------------------------------------------------------------
                                                           Explicit fees          Implicit costs
                                                 ------------------------------------------------ Total trading-
               Geography of equity                   Stamp and                                     related costs
                                                   exchange fees    Commissions   Bid ask spread
----------------------------------------------------------------------------------------------------------------
US..............................................      $5,426,400     $14,000,000    $178,500,000    $197,926,400
Americas (excluding US).........................         226,540         701,017       3,619,000       4,546,557
EMEA............................................         460,460       4,265,763      19,162,000      23,888,223
APAC............................................      20,326,130       3,833,220      27,499,000      51,658,350
----------------------------------------------------------------------------------------------------------------

    34. Additionally, the Applicant states that many Covered Plan 
clients employ a transition manager for large asset movements. The 
Applicant states that in such cases, the following transition 
management costs could apply to the following portfolio types: \28\
---------------------------------------------------------------------------

    \28\ The Applicant states that these figures are internal 
calculations based on the estimated size of the notional portfolio 
multiplied by the estimated basis points. The Applicant states that 
the ``Costs'' are measured in terms of implementation shortfall, 
which measures the difference between the decision price and the net 
execution price (including commissions, fees, etc.).

------------------------------------------------------------------------
                     Class of equity                           Costs
------------------------------------------------------------------------
US......................................................    $230,257,370
Emerging Markets........................................      47,624,262
Global (excluding US)...................................     298,687,332
Global..................................................       1,489,917
------------------------------------------------------------------------

    35. Costs Relating to Transitioning a Fixed Income Portfolio. The 
Applicant states that trading-related costs relating to a fixed income 
portfolio transition are implicit costs. The Applicant states that it 
estimates that the costs of transitioning the fixed income investment 
portfolio categorized by whether the type of fixed income has low 
trading costs or high trading costs, are as follows:\29\
---------------------------------------------------------------------------

    \29\ Trading-related costs were calculated based on the total 
asset size of fixed income collective investment funds of $127 
billion, and by categorizing the portfolios into lower trading costs 
portfolios with total trading costs below 0.10% and higher trading 
cost portfolios with total trading costs exceeding 0.10%. The 
Applicant states that there is an additional $11 billion of Covered 
Plan assets invested in Northern QPAM's common funds and through 
separately managed accounts.

------------------------------------------------------------------------
                                                          Total trading-
               Class of fixed income \30\                  related costs
------------------------------------------------------------------------
Low Trading Costs Portfolio.............................     $54,520,000
Higher Trading Costs Portfolio..........................      33,250,000
------------------------------------------------------------------------

    36. Costs Relating to Transitioning an Alternative Investment 
(Private Equity and Hedge) Portfolio. The Applicant states that 50 
South provides discretionary asset management services to six ERISA 
accounts through funds of one and pooled funds subject to ERISA.\31\ 
The Applicant states that each

[[Page 7181]]

of the two largest ERISA accounts managed by 50 South has $150 million 
attributable to Covered Plan clients. In total, the Applicant states 
that Covered Plan clients own $519 million of assets under management 
within these 50 South-managed ERISA accounts.
---------------------------------------------------------------------------

    \30\ The Applicant states that low trading costs portfolios 
include investment grade bonds and emerging market sovereign debt, 
while high trading cost portfolios include leverage finance and 
emerging market corporate debt.
    \31\ 50 South also provides discretionary and asset management 
services to other non-ERISA accounts.
---------------------------------------------------------------------------

    37. The Applicant states that Covered Plan clients expend between 
six and eighteen months to select alternative investment managers. When 
new investment managers are finally selected, Covered Plans may be 
forced to sell their holdings in the Applicant's funds on the secondary 
market. The Applicant states that there are unique transaction costs 
relating to private equity fund-of-funds that are sold on the secondary 
market. The Applicant states that because interests in private funds 
are not available on the public markets, Covered Plans typically engage 
specialized investment banks to run auction processes to sell private 
equity holdings. The Applicant states that the use of an investment 
bank ensures transparent price discovery and price maximization for the 
assets, consistent with the fiduciary requirements for Covered Plans. 
The Applicant states that investment banks typically charge an advisory 
fee equal to 50 to 200 basis points of the total exposure sold on the 
secondary market, which could result in costs ranging from $2,121,708 
to $8,486,830 for Covered Plan clients investing in 50 South's 
applicable funds. The Applicant states that in addition to the direct 
transaction expenses typically associated with a secondary sale, 
sellers of private equity fund-of-funds typically experience a 22.5% to 
30% discount on net asset value for the early liquidation, which could 
result in an economic loss ranging from $49,319,123 to $65,758,831 for 
Covered Plan clients investing in 50 South's applicable funds.
    38. Other Disruptions: The Applicant states that in some cases, 
Covered Plan clients may find it difficult to transition to a new 
investment manager, specifically with respect to certain strategies. 
The Applicant states that below are examples of such disruptions.
     Pooled Funds: The Northern QPAMs' inability to rely upon 
PTE 84-14 could result in significant, unplanned redemptions from 
pooled funds, which would in turn frustrate the QPAMs' efforts to 
effectively manage the pooled funds' assets and harm remaining plan 
investors by increasing the expense ratios of such pooled funds. In 
this regard, the Applicant states that pooled funds incur both fixed 
and variable expenses. The Applicant represents that unlike variable 
expenses, fixed expenses (e.g., accounting, regulatory and legal fees) 
remain the same regardless of the amount of assets in the pooled fund. 
The Applicant states that such fixed expenses are shared amongst the 
investors in the Covered Plans. Therefore, the Applicant states that if 
some, but not all, Covered Plan investors seek to withdraw from a 
pooled fund, the remaining investors will bear a greater portion of the 
fixed expenses. The Applicant states that because it cannot anticipate 
the extent to which Covered Plan investors will withdraw, it cannot 
quantify this harm with specificity.
     Opening Custody Accounts: When an investment manager is 
hired to manage a separately managed account, it will need to open 
custody accounts in applicable jurisdictions. There are several 
jurisdictions where it can take a considerable amount of time to open 
custody accounts (e.g., India). There are other jurisdictions where it 
may not be possible to open a new custody account. In this regard, the 
Applicant states that during the time period in which a Covered Plan is 
opening a new custody account (the lapse period), such Covered Plan may 
not be able to be invested in accordance with the Covered Plan's chosen 
investment strategy. The Applicant states that the potential harm 
cannot be quantified because it would require the Applicant to predict 
and compare the investment returns of (x) the securities that the 
Covered Plan actually invests during the lapse period, with (y) the 
alternative securities in which the Covered Plan desired to invest 
during the lapse period. The Applicant state that these are forward-
looking variables over which the Applicant has no control.

Department's Request for Comment and Notes Regarding Harms to Plans in 
Paragraphs 31 Through 38

    The Department requests the Applicant to provide a clear 
description regarding their estimates of costs to Covered Plans in its 
comment letter. In this regard, the Applicant should describe:
    (1) the amount of Covered Plan assets that are likely to be subject 
to the costs described above and an explanation of the Applicant's 
assumptions or methodologies in connection with such figures. For 
example: ``50% of the Covered Plan assets will be likely to incur such 
costs because. . . .''
    (2) the likelihood of the costs occurring, for each of the 
transition costs described above. For example: with respect to Covered 
Plans' Alternative Investments, how likely are Covered Plans to leave 
Northern Trust for a different manager; with respect to violating 
representations as to QPAM status in an offering document, the 
Applicant should provide information regarding how likely that is to 
occur; etc.
    (3) the circumstances under which the transition costs described in 
the tables above are being incurred (e.g., are these transition costs 
that the Applicant contends would be incurred by Covered Plans to 
remedy contractual violations due to loss of QPAM status, costs due to 
Covered Plans seeking to use a different investment manager that can 
rely on QPAM, etc.).
    (4) the extent to which any of the asserted costs reflect the 
QPAMs' imposition of additional charges or fees on Covered Plans 
resulting from the loss of QPAM status, and the cause of such 
additional charges or fees.
    (5) an explanation of the extent to which the costs described 
herein are not likely to be covered by the QPAMs indemnification 
obligations under section III(j)(2), described in more detail below, 
and an explanation why such costs are not attributable to the 
Applicant's violation of exemption conditions.
    Condition (j)(2) of the proposed exemption requires Northern QPAMs 
to ``indemnify and hold harmless'' Covered Plans for ``actual losses 
resulting directly from the Northern QPAM's violation of any conditions 
of this exemption, an Northern QPAM's violation of ERISA's fiduciary 
duties, as applicable, and of the prohibited transaction provisions of 
ERISA and the Code, as applicable; a breach of contract by the Northern 
QPAM; or any claim arising out of the failure of such Northern QPAM to 
qualify for the exemptive relief provided by PTE 84-14 as a result of a 
violation of section I(g) of PTE 84-14 other than the Conviction.'' 
Furthermore, the Department notes that, to the extent Covered Plans 
``feel forced'' to transition to new asset managers because the 
Northern QPAMs can no longer rely on PTE 84-14, the liquidation and 
additional costs arising from the transition constitute actual losses 
resulting directly from the failure of such QPAM to qualify for the 
exemptive relief provided by PTE 84-14 as a result of violation of 
section I(g) of PTE 84-14. If a plan's fiduciary is compelled to 
replace a Northern asset manager as a result of a violation of section 
I(g) and the asset manager's loss of QPAM status, the affected plan is 
entitled to indemnification of its associated losses, including the 
transitional expenses necessary to effectuate the switch to a qualified 
QPAM.

[[Page 7182]]

The Exemption's Protective Conditions

    39. This proposed exemption contains conditions that are similar to 
the conditions in the Department's recent exemptions from the 
prohibitions of section I(g) of PTE 84-14. The Department is able to 
make its findings under ERISA section 408(a) only with the imposition 
of these conditions, and only if every condition is adhered to in good 
faith by the Applicant and the Northern QPAMs.\32\ Several of this 
proposed exemption's conditions are designed to ensure that the 
Northern QPAMs were not involved in the conduct that gave rise to the 
Conviction. Accordingly, this proposal does not provide prohibited 
transaction relief if the Northern QPAMs knew of, had reason to know 
of, participated in, approved of, or profited from the conduct that 
gave rise to the Conviction.\33\ No other party engaged on behalf of 
the Northern QPAMs who had responsibility for, or exercised authority 
in connection with the management of plan assets may have known or have 
had reason to know of, and did not participate in, the criminal conduct 
that is the subject of the Conviction.\34\ Nor is relief available if a 
Northern QPAM exercised any authority over plan assets in a manner that 
it knew or should have known would further the criminal conduct that is 
the subject of the Conviction or cause the Northern QPAM or its 
affiliates to directly or indirectly profit from the criminal conduct 
that is the subject of the Conviction.
---------------------------------------------------------------------------

    \32\ This preamble contains a general description of the 
conditions for the benefit of the reader. See the operative 
conditions below for more detail. In the event of any inconsistency 
between the description in this preamble and the operative 
conditions contained below, the operative conditions are 
controlling.
    \33\ For clarity, references to the Northern QPAMs include their 
officers, directors, agents other than NTFS, and employees of such 
QPAMs.
    \34\ ``Participate in'' for purposes of the conditions refers 
not only to active participation in the misconduct of NTFS that is 
the subject of the Conviction, but also includes the knowing or 
tacit approval of the misconduct underlying the Conviction or 
knowledge of such conduct without taking active steps to prohibit 
it, including reporting the conduct to such individual's 
supervisors, and to Northern's board of directors.
---------------------------------------------------------------------------

    40. Further, the Northern QPAMs may not employ or knowingly engage 
any of the individuals that participated in the criminal conduct 
attributable to the Conviction. \35\ The Northern QPAMs (including 
their officers, directors, agents other than NTFS, and employees of 
such Northern QPAMs), any other party engaged on behalf of the Northern 
QPAMs who had responsibility for, or exercised authority in connection 
with, the management of plan assets, must not have received direct 
compensation or knowingly received indirect compensation in connection 
with the criminal conduct that is the subject of the Conviction.
---------------------------------------------------------------------------

    \35\ The Department expects the Northern QPAMs to rigorously 
ensure that the individuals associated with the criminal conduct of 
NTFS will not be employed or knowingly engaged by such QPAMs.
---------------------------------------------------------------------------

    41. The proposal further provides that no Northern QPAM will use 
its authority or influence to direct an ``investment fund'' that is 
subject to ERISA or the Code and managed by such Northern QPAM in 
reliance on PTE 84-14, or with respect to which a Northern QPAM has 
expressly represented to a Covered Plan that it qualifies as a QPAM or 
relies on PTE 84-14, to enter into any transaction with NTFS to provide 
any service to such investment fund, for a direct or indirect fee borne 
by such investment fund, regardless of whether such transaction or 
service may otherwise be within the scope of relief provided by an 
administrative or statutory exemption.
    42. If the Department grants this exemption, it will terminate 
immediately if an affiliate of the Northern QPAM (as defined in section 
VI(d) of PTE 84-14) violates section I(g) of PTE 84-14 (other than with 
respect to the Conviction). Also, NTFS may not act as a fiduciary 
within the meaning of ERISA section 3(21)(A)(i) or (iii), or Code 
section 4975(e)(3)(A) and (C), with respect to Covered Plan assets.
    43. The proposed exemption requires each Northern QPAM to implement 
and follow certain written policies and (the Policies). The Policies 
must require and be reasonably designed to ensure, among other things, 
that: (i) the Northern QPAMs' asset management decisions are conducted 
independently of the management and business activities of Northern, 
including NTFS and Northern's non-asset management affiliates; (ii) the 
Northern QPAMs fully comply with ERISA's fiduciary duties and with 
ERISA and the Code's prohibited transaction provisions, as applicable 
with respect to each Covered Plan,; (iii) the Northern QPAMs do not 
knowingly participate in any other person's violation of ERISA or the 
Code with respect to Covered Plans; (iv) any filings or statements made 
by the Northern QPAMs to regulators on behalf of or in relation to 
Covered Plans are materially accurate and complete; (v) the Northern 
QPAMs do not make material misrepresentations or omit material 
information in communications with such regulators with respect to 
Covered Plans; (vi) the Northern QPAMs comply with the terms of the 
exemption; and (vii) any violation of or failure to comply with any of 
these items is corrected promptly upon discovery, and any such 
violation or compliance failure not so corrected must be reported in 
writing to appropriate corporate officers, the head of compliance and 
the QPAM's general counsel (or their functional equivalent) of the 
relevant Northern QPAM, and an appropriate fiduciary of any affected 
Covered Plan where such fiduciary is independent of Northern.\36\
---------------------------------------------------------------------------

    \36\ A Northern QPAM will not be treated as having failed to 
develop, implement, maintain, or follow the Policies, provided that 
it corrects any instance of noncompliance when discovered or when it 
reasonably should have known of the noncompliance (whichever is 
earlier), and provided that it adheres to the reporting requirements 
described herein.
---------------------------------------------------------------------------

    44. This proposed exemption mandates training (Training) conducted 
at least annually during the Exemption Period. In this regard, all 
relevant Northern QPAM asset/portfolio management, trading, legal, 
compliance, and internal audit personnel must be trained during the 
Exemption Period. Among other things, the Training must cover at a 
minimum, the Policies, ERISA and Code compliance, ethical conduct, the 
consequences for not complying with the exemption conditions (including 
any loss of the exemptive relief provided herein) and the requirement 
for prompt reporting of wrongdoing. The Training may be conducted 
electronically and must be conducted by a professional who has been 
prudently selected and has appropriate technical training and 
proficiency with ERISA and the Code.
    45. Under this proposed exemption each Northern QPAM must submit to 
an audit conducted every two years by an independent auditor, which 
covers the prior consecutive 12 months. Among other things, the auditor 
must test a sample of each Northern QPAM's transactions involving 
Covered Plans that are sufficient in size, number and nature to afford 
the auditor a reasonable basis to determine such QPAM's operational 
compliance with the Policies and Training. The auditor's conclusions 
cannot be based solely on the written report created by the Compliance 
Officer (the Exemption Report), described below, in lieu of independent 
determinations and testing performed by the auditor.
    46. The written report issued by the auditor (the Audit Report) 
must be certified by the respective general counsel or one of the three 
most senior executive officers of the line of business engaged in 
discretionary asset management services through the Northern QPAM with 
respect to which the Audit Report applies. A copy of the

[[Page 7183]]

Audit Report must be provided to Northern's Board of Directors. A 
senior executive officer who has a direct reporting line to Northern's 
highest ranking legal compliance officer must review the Audit Report 
for each Northern QPAM and certify in writing and under penalty of 
perjury that such officer has reviewed each Audit Report.
    47. This proposed exemption requires the Northern QPAM to agree and 
warrant with respect to any arrangement, agreement, or contract between 
a Northern QPAM and a Covered Plan that, throughout the effective 
period of the exemption, the Northern QPAM will: (i) comply with ERISA 
and the Code, as applicable with respect to the Covered Plan; (ii) 
refrain from engaging in prohibited transactions that are not otherwise 
exempt (and to promptly correct any prohibited transactions); and (iii) 
comply with the standards of prudence and loyalty set forth in ERISA 
section 404 with respect to each such ERISA-covered plan. Each Northern 
QPAM must also agree and warrant to indemnify and hold harmless the 
Covered Plan for any actual losses resulting directly from any of the 
following: (a) a Northern QPAM's violation of any conditions of this 
exemption; (b) a Northern QPAM's violation of ERISA's fiduciary duties 
and/or the prohibited transaction provisions of ERISA and the Code as 
applicable; (c) a breach of contract by the Northern QPAM; or (d) any 
claim arising out of the failure of the Northern QPAM to qualify for 
the exemptive relief provided by PTE 84-14 as a result of a violation 
of section I(g) of the exemption other than the Conviction. This 
condition applies to actual losses caused by the Northern QPAM, 
including but not limited to losses and related costs arising from 
unwinding transactions with third parties and from transitioning Plan 
assets to an alternative asset manager as well as costs associated with 
any exposure to excise taxes under Code section 4975 because of a 
Northern QPAM's inability to rely upon the relief in the QPAM 
Exemption. The definition of ``actual losses'' used in this proposed 
exemption allows fiduciaries of Covered Plans to prudently manage and 
make the best decisions on behalf of their plans without needing to 
consider the costs caused by a Northern QPAM's or its affiliate's 
misconduct, including costs associated with unwinding transactions and 
transitioning plan assets to a new asset manager, because these costs 
will be borne by the Northern QPAM and not the Covered Plan.\37\
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    \37\ The Department notes that with respect to the notice of 
obligations requirement in section III(j)(7), all Covered Plans must 
receive a notice that includes the definition of actual losses as 
provided in section III(j)(2) of this proposed exemption.
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    48. The proposed exemption also requires the Northern QPAM to agree 
and warrant with respect to any arrangement, agreement, or contract 
between a Northern QPAM and a Covered Plan that it will not require or 
cause the Covered Plan to waive, limit, or qualify the liability of the 
Northern QPAM for violating ERISA or the Code or engaging in prohibited 
transactions; restrict a Covered Plan from terminating or withdrawing 
from its arrangement with the Northern QPAM, with the exception of 
reasonable restrictions specifically designed to ensure equitable 
treatment of all investors in a pooled fund in the event such 
withdrawal or termination may have adverse consequences for all other 
investors; impose fees, penalties, or charges for such termination or 
withdrawal with the exception of reasonable fees specifically designed 
to prevent abusive investment practices or ensure equitable treatment 
of all investors in a pooled fund; or generally include exculpatory 
provisions disclaiming or otherwise limiting the liability of the 
Northern QPAM for a violation of such agreement's terms.
    49. This proposed exemption contains specific notice requirements. 
Each Northern QPAM must provide a notice regarding the proposed 
exemption and a separate summary describing the facts that led to each 
Conviction (the Summary), which must be submitted to the Department, 
and a prominently displayed statement (the Statement) that each 
Conviction results in a failure to meet a condition in PTE 84-14, to 
each sponsor and beneficial owner of a Covered Plan that entered into a 
written asset or investment management agreement with a Northern QPAM. 
The notice, Summary, and Statement must be provided before or 
contemporaneously with the client's receipt of a written asset 
management agreement from the Northern QPAM. If the Department grants 
an exemption, the clients must receive a Federal Register copy of the 
notice of final exemption within sixty (60) days of this exemption's 
effective date. The notice may be delivered electronically (including 
by an email containing a link to this exemption).
    50. The proposed exemption requires each Northern QPAM to maintain 
records necessary to demonstrate that the exemption conditions have 
been met for six (6) years following the date of any transaction for 
which the Northern QPAM relies upon the relief provided in the 
exemption. The proposed exemption mandates that each Northern QPAM must 
designate a senior compliance officer (the Compliance Officer) who will 
be responsible for compliance with the Policies and Training 
requirements described herein. The Compliance Officer must conduct an 
exemption review (the Exemption Review) to determine the adequacy and 
effectiveness of the implementation of the Policies and Training. The 
Compliance Officer must be a professional with extensive relevant 
experience with a reporting line to the highest-ranking corporate 
officer in charge of legal compliance for asset management for the 
applicable Northern QPAM. At a minimum, the Exemption Review must 
include review of the following items: (i) any compliance matter 
related to the Policies or Training that was identified by, or reported 
to, the Compliance Officer during the previous year; (ii) any material 
change in the relevant business activities of the Northern QPAMs; and 
(iii) any change to ERISA, the Code, or regulations that may be 
applicable to the activities of the Northern QPAMs.
    51. The Compliance Officer must prepare a written report (i.e., the 
Exemption Report) that (A) summarizes their material activities during 
the effective period of the exemption; (B) sets forth any instance of 
noncompliance discovered, and any related corrective action; (C) 
details any change to the Policies or Training to guard against any 
similar instance of noncompliance occurring again; and (D) makes 
recommendations, as necessary, for additional training, procedures, 
monitoring, or additional and/or changed processes or systems, and 
management's actions in response to such recommendations. In each 
Exemption Report, the Compliance Officer must certify in writing that, 
among other things, to the best of their knowledge at the time, the 
report is accurate, and note whether the Northern QPAMs have complied 
with the Policies and Training, and/or corrected (or are correcting) 
any instances of noncompliance.
    52. The Exemption Report must be (i) provided to the appropriate 
corporate officers of each Northern QPAM to which such report relates 
and to the head of compliance and the general counsel (or their 
functional equivalent) of the relevant Northern QPAM, and (ii) made 
unconditionally available to the independent auditor. The Exemption 
Review, including the Compliance

[[Page 7184]]

Officer's written Exemption Report, must be completed within 90 days 
following the end of the period to which it relates. \38\
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    \38\ The Department notes that section I(l) of PTE 2016-11 
required Northern to disclose to the Department any Deferred 
Prosecution Agreement (DPA) or a Non-Prosecution Agreement (NPA) 
with the U.S. Department of Justice, entered into by Northern or any 
of its affiliates in connection with conduct described in section 
I(g) of PTE 84-14 and/or ERISA section 411; and provide the 
Department any information requested by the Department, as permitted 
by law. The Department has determined not to include the same 
condition in this proposed exemption, because a DPA or NPA is now 
included in the list of disqualifying events under section I(g) of 
PTE 84-14, effective as of June 17, 2024.
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    53. The proposed exemption also mandates that, within 60 days of 
the effective date of the exemption, each Northern QPAM clearly and 
promptly informs Covered Plan clients of their right to obtain a copy 
of the Policies or a description (the Summary Policies) which 
accurately summarizes key components of the Northern QPAM's written 
Policies developed in connection with this exemption. If the Policies 
are thereafter changed, each Covered Plan client must receive a new 
disclosure within 180 days following the end of the calendar year 
during which the Policies were changed.\39\ With respect to this 
requirement, the description may be continuously maintained on a 
website, provided that such website's link to the Policies or Summary 
Policies is clearly and prominently disclosed to each Covered Plan.
---------------------------------------------------------------------------

    \39\ If the Applicant satisfies this disclosure requirement 
through Summary Policies, changes to the Policies will not require 
new disclosure to Covered Plans unless the Summary Policies are no 
longer accurate because of the changes.
---------------------------------------------------------------------------

    54. Each Northern QPAM must impose its internal procedures, 
controls, and protocols to reduce the likelihood of any recurrence of 
conduct that is the subject of the Conviction, and each Northern QPAM 
must provide the Department with the records necessary to demonstrate 
that each condition of this exemption has been met within 30 days of a 
request by the Department. With respect to an asset manager that 
becomes an Northern QPAM after the effective date of the exemption by 
virtue of being acquired (in whole or in part) by Northern or a 
subsidiary or affiliate of Northern (a ``newly-acquired Northern 
QPAM''), the newly-acquired Northern QPAM would not be precluded from 
relying on the exemptive relief provided by PTE 84-14 notwithstanding 
the Conviction as of the closing date for the acquisition; however, the 
operative terms of the exemption shall not apply to the newly-acquired 
Northern QPAM until a date that is six (6) months after the closing 
date for the acquisition. To that end, the newly acquired Northern QPAM 
will initially submit to an audit pursuant to section III(i) of this 
exemption as of the first audit period that begins following the 
closing date for the acquisition. The period covered by the audit must 
begin on the date on which the Northern QPAM was acquired.
    55. Finally, all the material facts and representations set forth 
in the Summary of Facts and Representations must be true and accurate 
at all times.

Statutory Findings--Administratively Feasible

    56. The Department has tentatively determined that this proposed 
exemption would be administratively feasible because, among other 
things, a qualified independent auditor would be required to perform 
in-depth audit(s) covering each Northern QPAM's compliance with the 
exemption, and draft a corresponding written audit report that would be 
available to the public. The Department notes that the independent 
audit will provide an incentive for and a measure of compliance with 
the exemption conditions, while reducing the immediate need for review 
and oversight by the Department.

Statutory Findings--In the Interests of the Covered Plans

    57. The Department has tentatively determined that the proposed 
exemption would be in the interests of the participants and 
beneficiaries of each affected Covered Plan because of the likely costs 
the plans would incur if the exemption were denied and the benefits of 
permitting plans to continue to rely upon the Northern QPAM's services 
with the additional protections set forth in this exemption.

Statutory Findings--Protective of the Rights of Participants of the 
Covered Plans

    58. The Department has tentatively determined that this proposed 
exemption would be protective of Covered Plans. The exemption would be 
subject to a suite of protective conditions that the Department has 
determined provide ample protections for the rights of Covered Plans 
and their participants and beneficiaries that are managed by QPAMs that 
have experienced a disqualifying event similar to the one experienced 
by the Northern QPAMs. The Department notes, however, that in the event 
the Northern QPAMs become subject to another disqualifying event under 
PTE 84-14, the Department would be forced to reconsider whether relief 
is appropriate for the Northern QPAMs, and whether the conditions for 
relief hereunder are/were adequate to protect Covered Plans. The 
Department also takes note of the Applicant's representation that the 
criminal conduct relating to the Wildensteins occurred prior to the 
acquisition of Baring Trustees by Northern Trust, and that Baring 
Trustees, currently known as NTFS, is now subject to Northern Trust's 
policies and compliance procedures. The Department further notes the 
Applicant's representation that no one involved in taking on the 
Wildenstein business or that had any dealings with such matters at the 
time of the misconduct described in the Conviction works for NTFS. In 
addition, under this proposed exemption, exemptive relief would begin 
on March 5, 2025, and it has a limited prospective term of five (5) 
years, which permits the Department to re-evaluate the Northern QPAMs' 
adherence to the condition for relief under this exemption, and to 
determine whether or not to continue to provide the relief hereunder.

Summary

    59. Given the revised and new conditions described above, the 
Department has tentatively determined that the relief sought by the 
Applicants satisfies the statutory requirements for an exemption under 
ERISA section 408(a) and Code section 4975(c)(2). The proposed 
exemption provides relief from certain of the restrictions set forth in 
section 406 and 407 of ERISA. The proposed exemption does not provide 
relief from any other violation of law, including any criminal 
conviction not expressly described herein. Any criminal conviction not 
expressly described herein, or other violation of section I(g) of PTE 
84-14 that is attributable to the Applicant would result in the 
applicant's loss of this exemption.

Notice to Interested Persons

    Notice of the proposed exemption will be provided to all interested 
persons within fifteen (15) days of the publication of the notice of 
proposed exemption in the Federal Register. The notice will be provided 
to all interested persons in the manner approved by the Department and 
will contain the documents described therein and a supplemental 
statement required by 29 CFR 2570.43(a)(2). The supplemental statement 
will inform interested persons of their right to comment on and to 
request a hearing with respect to the pending exemption. All written 
comments and/or requests for a hearing

[[Page 7185]]

must be received by the Department within forty-five (45) days of the 
date of publication of this proposed exemption in the Federal Register. 
All comments will be made available to the public.
    Warning: If you submit a comment, EBSA recommends that you include 
your name and other contact information in the body of your comment, 
but DO NOT submit information that you consider to be confidential, or 
otherwise protected (such as Social Security number or an unlisted 
phone number) or confidential business information that you do not want 
publicly disclosed. All comments may be posted on the internet and can 
be retrieved by most internet search engines.

General Information

    The attention of interested persons is directed to the following:
    (1) The fact that a transaction is the subject of an exemption 
under ERISA section 408(a) and/or Code section 4975(c)(2) does not 
relieve a fiduciary or other party in interest or disqualified person 
from certain other provisions of ERISA and/or the Code, including any 
prohibited transaction provisions to which the exemption does not apply 
and the general fiduciary responsibility provisions of ERISA section 
404, which, among other things, require a fiduciary to discharge their 
duties respecting the plan solely in the interest of the plan and its 
participants and beneficiaries and in a prudent manner in accordance 
with ERISA section 404(a)(1)(B); nor does it affect the requirement of 
Code section 401(a) that the plan must operate for the exclusive 
benefit of the employees of the employer maintaining the plan and their 
beneficiaries;
    (2) Before an exemption may be granted under ERISA section 408(a) 
and/or Code section 4975(c)(2), the Department must find that the 
exemption is administratively feasible, in the interests of the plan 
and of its participants and beneficiaries, and protective of the rights 
of participants and beneficiaries of the plan;
    (3) The exemption would be supplemental to, and not in derogation 
of, any other provisions of ERISA and/or the Code, including statutory 
or administrative exemptions and transitional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is, in fact, a 
prohibited transaction; and
    (4) The exemption would be subject to the express condition that 
the material facts and representations contained in the Application are 
true and complete at all times and that the Application accurately 
describes all material terms of the transactions which are the subject 
of the exemption.

Proposed Exemption

    Based on the facts and representations set forth in the application 
for exemption, the Department is proposing to grant an exemption under 
the authority of ERISA section 408(a) and Code section 4975(c)(2) in 
accordance with the procedures set forth in 29 CFR part 2570, subpart B 
(76 FR 66637, 66644, October 27, 2011). Effective December 31, 1978, 
section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 
(1996), transferred the authority of the Secretary of the Treasury to 
issue exemptions of the type requested to the Secretary of Labor. 
Therefore, this notice of proposed exemption is issued solely by the 
Department.

Section I. Definitions

    (a) The term ``Conviction'' means the judgment of conviction 
against NTFS for aiding and abetting tax fraud entered in France in the 
Court of Appeal, French Special Prosecutor No. 1120392066, French 
Investigative Judge No. JIRSIF/11/12, or to be entered in another court 
of competent jurisdiction;
    (b) The term ``Covered Plan'' means a plan subject to Part IV of 
Title I of ERISA (an ``ERISA-covered plan'') or a plan subject to Code 
section 4975 (an ``IRA''), in each case, with respect to which Northern 
relies on PTE 84-14, or with respect to which Northern has expressly 
represented that the manager qualifies as a QPAM or relies on the QPAM 
class exemption (PTE 84-14 or the QPAM Exemption). A Covered Plan does 
not include an ERISA-covered plan or IRA to the extent that Northern 
has expressly disclaimed reliance on QPAM status or PTE 84-14 in 
entering into a contract, arrangement, or agreement with the ERISA-
covered plan or IRA;
    (c) The term ``Exemption Period'' means a period of five years, 
beginning on March 5, 2025 and ending on March 4, 2030;
    (d) The term ``Northern'' means Northern Trust Corporation, 
together with its current and future affiliates;
    (e) The term ``Northern QPAM'' means a ``qualified professional 
asset manager'' (as defined in PTE 84-14 section VI(a)) \40\ that 
relies on the relief provided by PTE 84-14 and with respect to which 
NTFS is a current or future ``affiliate'' (as defined in PTE 84-14 
section VI(d)); and the Northern QPAMs do not and must not include 
NTFS.
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    \40\ In general terms, a QPAM is an independent fiduciary that 
is a bank, savings and loan association, insurance company, or 
investment adviser that meets certain equity or net worth 
requirements and other licensure requirements and that has 
acknowledged in a written management agreement that it is a 
fiduciary with respect to each plan that has retained the QPAM
---------------------------------------------------------------------------

    (f) The term ``NTFS'' means Northern Trust Fiduciary Services 
(Guernsey) ltd., an affiliate'' of Northern (as defined in PTE 84-14 
section VI(c)) located in Guernsey;
    (g) The terms ``participate,'' and ``participate in,'' when used to 
describe a person's role in the criminal conduct described in this 
exemption, refer not only to a person's active participation in the 
misconduct of NTFS that is the subject of the Conviction, but also 
includes the knowing or tacit approval of the misconduct underlying the 
Conviction or knowledge of such conduct without taking active steps to 
prohibit it, including reporting the conduct to such individual's 
supervisors, and to Northern's board of directors.
    (h) Wherever found, any reference in this exemption to ``the best 
knowledge'' of a party, ``best of [a party's] knowledge,'' and similar 
formulations of the ``best knowledge'' standard, will be deemed to mean 
the actual knowledge of the party and the knowledge which they would 
have had if they had conducted their reasonable due diligence required 
under the circumstances into the relevant subject matter. If a 
condition of the exemption requires an individual to provide 
certification pursuant to their ``best knowledge,'' then such 
individual, in order to make such certification, must perform their 
reasonable due diligence required under the circumstances to determine 
whether the information such individual is certifying is complete and 
accurate in all respects. Furthermore, with respect to an entity other 
than a natural person, the ``best knowledge'' of the entity includes 
matters that are known to the directors and officers of the entity or 
should be known to such individuals upon the exercise of such 
individuals' due diligence required under the circumstances.

Section II. Covered Transactions

    If the proposed exemption is granted, certain entities with 
specified relationships to NTFS (i.e., the Northern QPAMs, as defined 
above) will not be precluded from relying on the exemptive relief 
provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-
14),\41\ notwithstanding the

[[Page 7186]]

Conviction (as defined above),\42\ during the Exemption Period, 
provided that the conditions in section III are satisfied.
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    \41\ 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).
    \42\ Section 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.''
---------------------------------------------------------------------------

Section III. Conditions

    (a) The Northern QPAMs (including their officers, directors, agents 
other than NTFS, and employees of such Northern QPAMs) did not know of, 
have reason to know of, or participate in the criminal conduct of NTFS 
that is the subject of the Conviction. Further, any other party engaged 
on behalf of the Northern QPAMs who had responsibility for, or 
exercised authority in connection with the management of plan assets 
did not know or have reason to know of and did not participate in the 
criminal conduct that is the subject of the Conviction;
    (b) The Northern QPAMs (including their officers, directors, agents 
other than NTFS, and employees of such Northern QPAMs) did not receive 
direct compensation, or knowingly receive indirect compensation, in 
connection with the criminal conduct that is the subject of the 
Conviction. Further, any other party engaged on behalf of the Northern 
QPAMs who had responsibility for, or exercised authority in connection 
with, the management of plan assets did not receive direct 
compensation, or knowingly receive indirect compensation, in connection 
with the criminal conduct that is the subject of the Conviction;
    (c) The Northern QPAMs will not employ or knowingly engage any of 
the individuals that participated in the criminal conduct that is the 
subject of the Conviction;
    (d) At all times during the Exemption Period, no Northern QPAM will 
use its authority or influence to direct an ``investment fund,'' (as 
defined in PTE 84-14 section VI(b)) that is subject to ERISA or the 
Code and managed by such Northern QPAM in reliance on PTE 84-14, or 
with respect to which a Northern QPAM has expressly represented to a 
Covered Plan that it qualifies as a QPAM or relies on the QPAM 
Exemption, to enter into any transaction with NTFS or engage NTFS to 
provide any service to such investment fund, for a direct or indirect 
fee borne by such investment fund, regardless of whether such 
transaction or service may otherwise be within the scope of relief 
provided by an administrative or statutory exemption;
    (e) Any failure of the Northern QPAMs to satisfy PTE 84-14 section 
I(g) arose solely from the Conviction;
    (f) No Northern QPAM exercised authority over the assets of any 
Covered Plan in a manner that it knew or should have known would 
further the criminal conduct that is the subject of the Conviction or 
cause a Northern QPAM or its affiliates to directly or indirectly 
profit from the criminal conduct that is the subject of the Conviction;
    (g) NTFS has not provided and will not provide discretionary asset 
management services to Covered Plans, nor will it otherwise act as a 
fiduciary within the meaning of ERISA section 3(21)A)(i) or (iii), or 
Code section 4975(e)(3)(A) and (C), with respect to Covered Plan 
assets;
    (h)(1) Each Northern QPAM will continue to implement, maintain, 
adjust (to the extent necessary), and follow written policies (the 
Policies) requiring and reasonably designed to ensure that:
    (i) The asset management decisions of each Northern QPAM are 
conducted independently of the management and business activities of 
Northern, including NTFS and Northern's non-asset management 
affiliates;
    (ii) The Northern QPAM fully complies with ERISA's fiduciary duties 
and with ERISA and the Code's prohibited transaction provisions, as 
applicable with respect to each Covered Plan, and does not knowingly 
participate in any violations of these duties and provisions with 
respect to Covered Plans;
    (iii) The Northern QPAM does not knowingly participate in any other 
person's violation of ERISA or the Code with respect to Covered Plans;
    (iv) Any filings or statements made by the Northern QPAM to 
regulators, including but not limited to, the Department of Labor, the 
Department of the Treasury, the Department of Justice, and the Pension 
Benefit Guaranty Corporation, on behalf of or in relation to Covered 
Plans are materially accurate and complete, to the best of such QPAM's 
knowledge at that time;
    (v) To the best of the Northern QPAM's knowledge at the time, the 
Northern QPAM does not make material misrepresentations or omit 
material information in its communications with such regulators with 
respect to Covered Plans, or make material misrepresentations or omit 
material information in its communications with Covered Plans;
    (vi) The Northern QPAM complies with the terms of this exemption, 
if granted; and
    (vii) Any violation of, or failure to comply with, an item in 
subparagraph (ii) through (vi), is corrected promptly upon discovery, 
and any such violation or compliance failure not promptly corrected is 
reported, upon discovering the failure to promptly correct, in writing, 
to appropriate corporate officers, the head of compliance and the 
General Counsel (or their functional equivalent) of the relevant 
Northern QPAM, and an appropriate fiduciary of any affected Covered 
Plan where such fiduciary is independent of Northern; however, with 
respect to any Covered Plan sponsored by an ``affiliate'' (as defined 
in PTE 84-14 section VI(d)) of Northern or beneficially owned by an 
employee of Northern or its affiliates, such fiduciary does not need to 
be independent of Northern. A Northern QPAM will not be treated as 
having failed to develop, implement, maintain, or follow the Policies, 
provided that it corrects any instance of noncompliance when discovered 
or when it reasonably should have known of the noncompliance (whichever 
is earlier), and provided that it adheres to the reporting requirements 
set forth in this subparagraph (vii);
    (2) Each Northern QPAM must continue to implement a program of 
training (the Training), conducted at least annually during the 
Exemption Period, for all relevant Northern QPAM asset/portfolio 
management, trading, legal, compliance, and internal audit personnel 
during the Exemption Period. The Training may be conducted 
electronically and must: (a) be set forth in the Policies and at a 
minimum, cover the Policies, ERISA and Code compliance (including 
applicable fiduciary duties and the prohibited transaction provisions), 
ethical conduct, the consequences for not complying with the conditions 
of this temporary exemption (including any loss of exemptive relief 
provided herein), and prompt reporting of wrongdoing; (b) be conducted 
by a professional who has been prudently selected and who has 
appropriate training and proficiency with ERISA and the Code to perform 
the tasks required by this exemption; and (c) be verified, through in-
training knowledge checks, ``graduation'' tests, and/or other 
technological tools designed to confirm that personnel fully and in 
good faith participate in the Training.
    (i)(1) Each Northern QPAM must submit to an audit conducted every 
two years by an independent auditor who has been prudently selected and 
who

[[Page 7187]]

has appropriate technical training and proficiency with ERISA and the 
Code, to evaluate the adequacy of and each Northern QPAM's compliance 
with the Policies and Training conditions described herein. The audit 
requirement must be incorporated in the Policies. Each audit must cover 
the preceding consecutive twelve (12) month period. The first audit 
must cover the period from March 5, 2025 (at the end of the period of 
protection granted under PTE 2016-11), through March 4, 2026, and must 
be completed by September 4, 2026. The second audit must cover the 
period from March 5, 2027, through March 4, 2028, and must be completed 
by September 4, 2028. The third audit must cover the period from March 
5, 2029, through March 4, 2030, and must be completed by September 4, 
2030;
    (2) Within the scope of the audit and to the extent necessary for 
the auditor, in its sole opinion, to complete its audit and comply with 
the conditions for relief described herein, each Northern QPAM and, if 
applicable, Northern, will grant the auditor unconditional access to 
its businesses, including, but not limited to: its computer systems; 
business records; transactional data; workplace locations; training 
materials; and personnel. Such access will be provided only to the 
extent that it is not prevented by State or Federal statute, or 
involves communications subject to attorney client privilege and may be 
limited to information relevant to the auditor's objectives as 
specified by the terms of this exemption;
    (3) The auditor's engagement must specifically require the auditor 
to determine whether each Northern QPAM has developed, implemented, 
maintained, and followed the Policies in accordance with the conditions 
of this exemption, and has developed and implemented the Training, as 
required herein;
    (4) The auditor's engagement must specifically require the auditor 
to test each Northern QPAM's operational compliance with the Policies 
and Training conditions. In this regard, the auditor must test, for 
each QPAM, a sample of the QPAM's transactions involving Covered Plans. 
The sample must include transactions that are sufficient in size, 
number and nature to afford the auditor a reasonable basis to determine 
the QPAM's operational compliance with the Policies and Training;
    (5) For each audit, on or before the end of the relevant period for 
completing the audit described in section III(i)(1), the auditor must 
issue a written report (the Audit Report) to Northern and the Northern 
QPAM to which the audit applies that describes the procedures performed 
by the auditor during the course of its examination. At its discretion, 
the auditor may issue a single consolidated Audit Report that covers 
all the Northern QPAMs. The Audit Report must include the auditor's 
specific determinations regarding:
    (i) the adequacy of each Northern QPAM's Policies and Training; 
each Northern QPAM's compliance with the Policies and Training 
conditions; the need, if any, to strengthen such Policies and Training; 
and any instance of the respective Northern QPAM's noncompliance with 
the written Policies and Training described in section III(h) above. 
The Northern QPAM must promptly address any noncompliance and promptly 
address or prepare a written plan of action to address any 
determination by the auditor regarding the adequacy of the Policies and 
Training and the auditor's recommendations (if any) with respect to 
strengthening the Policies and Training of the respective Northern 
QPAM. Any action taken, or the plan of action to be taken, by the 
respective Northern QPAM must be included in an addendum to the Audit 
Report (and such addendum must be completed before the certification 
described in section III(i)(7) below). In the event such a plan of 
action to address the auditor's recommendation regarding the adequacy 
of the Policies and Training is not completed by the time the Audit 
Report is submitted, the following period's Audit Report must state 
whether the plan was satisfactorily completed. Any determination by the 
auditor that the respective Northern QPAM has implemented, maintained, 
and followed sufficient Policies and Training must not be based solely 
or in substantial part on an absence of evidence indicating 
noncompliance. In this last regard, any finding that a Northern QPAM 
has complied with the requirements under this subparagraph must be 
based on evidence that the particular Northern QPAM has actually 
implemented, maintained, and followed the Policies and Training 
required by this exemption. Furthermore, the auditor must not solely 
rely on the Exemption Report created by the compliance officer 
(Compliance Officer), as described in section III(m) below, as the 
basis for the auditor's conclusions in lieu of independent 
determinations and testing performed by the auditor, as required by 
section III(i)(3) and (4) above; and
    (ii) The adequacy of the most recent Exemption Review described in 
section III(m);
    (6) The auditor must notify the respective Northern QPAM of any 
instance of noncompliance identified by the auditor within five (5) 
business days after such noncompliance is identified by the auditor, 
regardless of whether the audit has been completed as of that date;
    (7) With respect to each Audit Report, the general counsel, or one 
of the three most senior executive officers of the line of business 
engaged in discretionary asset management services through the Northern 
QPAM with respect to which the Audit Report applies must certify in 
writing, under penalty of perjury, that the officer has reviewed the 
Audit Report and this exemption and that to the best of such officer's 
knowledge at the time, the Northern QPAM has addressed, corrected or 
remedied any noncompliance and inadequacy, or has an appropriate 
written plan to address any inadequacy regarding the Policies and 
Training identified in the Audit Report. The certification must also 
include the signatory's determination that the Policies and Training in 
effect at the time of signing are adequate to ensure compliance with 
the conditions of this exemption and with the applicable provisions of 
ERISA and the Code. Notwithstanding the above, no person who 
participated in the criminal conduct that is the subject of the 
Conviction may provide the certification required by this exemption, 
unless the person took active documented steps to stop the misconduct 
underlying the Conviction;
    (8) Northern's Board of Directors must be provided a copy of each 
Audit Report, and a senior executive officer with a direct reporting 
line to the highest-ranking legal compliance officer of Northern must 
review the Audit Report for each Northern QPAM and certify in writing, 
under penalty of perjury, that such officer has reviewed each Audit 
Report. With respect to this subsection (8), such certifying senior 
executive officer must not have known of, had reason to know of, or 
participated in, any misconduct underlying the Conviction, unless such 
person took active documented steps to stop the misconduct underlying 
the Conviction;
    (9) Each Northern QPAM provides its certified Audit Report, by 
electronic mail to [email protected]. This delivery must take place no 
later than forty-five (45) days following completion of the Audit 
Report. The Audit Report will be made part of the public record 
regarding this exemption. Furthermore, each Northern QPAM must make its 
Audit Report unconditionally available, electronically or otherwise, 
for

[[Page 7188]]

examination upon request by any duly authorized employee or 
representative of the Department, other relevant regulators, and any 
fiduciary of a Covered Plan;
    (10) Each Northern QPAM and the auditor must submit to e-
[email protected] any engagement agreement(s) executed pursuant to the 
engagement of the auditor under this exemption no later than two (2) 
months after the execution of any such engagement agreement;
    (11) The auditor must provide the Department, upon request access 
to all the workpapers it created and utilized in the course of the 
audit, for inspection and review, provided such access and inspection 
is otherwise permitted by law; and
    (12) Northern must notify the Department of a change in the 
independent auditor no later than 60 days after the engagement of a 
substitute or subsequent auditor and must provide an explanation for 
the substitution or change including a description of any material 
disputes between the terminated auditor and Northern;
    (j) Throughout the Exemption Period, with respect to any 
arrangement, agreement, or contract between a Northern QPAM and a 
Covered Plan, each Northern QPAM agrees and warrants:
    (1) To comply with ERISA and the Code, as applicable with respect 
to such Covered Plan; to refrain from engaging in prohibited 
transactions that are not otherwise exempt (and to promptly correct any 
prohibited transactions in accordance with applicable rules under ERISA 
and the Code); and to comply with the standards of prudence and loyalty 
set forth in ERISA section 404 with respect to each such Covered Plan, 
to the extent that section is applicable;
    (2) To indemnify and hold harmless the Covered Plan for any actual 
losses resulting directly from the Northern QPAM's violation of any 
conditions of this exemption, a Northern QPAM's violation of ERISA's 
fiduciary duties, as applicable, and of the prohibited transaction 
provisions of ERISA and the Code, as applicable; a breach of contract 
by the Northern QPAM; or any claim arising out of the failure of such 
Northern QPAM to qualify for the exemptive relief provided by PTE 84-14 
as a result of a violation of section I(g) of PTE 84-14 other than the 
Conviction. Actual losses include, but are not limited to, losses and 
related costs arising from unwinding transactions with third parties 
and from transitioning Plan assets to an alternative asset manager as 
well as costs associated with any exposure to excise taxes under Code 
section 4975 as a result of a Northern QPAM's inability to rely upon 
the relief in the QPAM Exemption.
    (3) Not to require (or otherwise cause) the Covered Plan to waive, 
limit, or qualify the liability of the Northern QPAM for violating 
ERISA or the Code or engaging in prohibited transactions;
    (4) Not to restrict the ability of the Covered Plan to terminate or 
withdraw from its arrangement with the Northern QPAM with respect to 
any investment in a separately managed account or pooled fund subject 
to ERISA and managed by such QPAM, with the exception of reasonable 
restrictions, appropriately disclosed in advance, that are specifically 
designed to ensure equitable treatment of all investors in a pooled 
fund in the event such withdrawal or termination may have adverse 
consequences for all other investors. In connection with any of these 
arrangements involving investments in pooled funds subject to ERISA 
entered into after the effective date of this exemption, the adverse 
consequences must relate to a lack of liquidity of the underlying 
assets, valuation issues, or regulatory reasons that prevent the fund 
from promptly redeeming a Covered Plan's investment, and such 
restrictions must be applicable to all such investors in the pooled 
fund on equal terms and effective no longer than reasonably necessary 
to avoid the adverse consequences;
    (5) Not to impose any fees, penalties, or charges for such 
termination or withdrawal with the exception of reasonable fees, 
appropriately disclosed in advance, that are specifically designed to 
prevent generally recognized abusive investment practices or 
specifically designed to ensure equitable treatment of all investors in 
a pooled fund in the event the withdrawal or termination may have 
adverse consequences for all other investors, provided that such fees 
are applied consistently and in like manner to all such investors;
    (6) Not to include exculpatory provisions disclaiming or otherwise 
limiting the liability of the Northern QPAM for a violation of such 
agreement's terms. To the extent consistent with ERISA section 410, 
however, this provision does not prohibit disclaimers for liability 
caused by an error, misrepresentation, or misconduct of a plan 
fiduciary or other party hired by the plan fiduciary who is independent 
of the Northern QPAM and its affiliates, or damages arising from acts 
outside the control of the Northern QPAM; and
    (7) Within 60 calendar days after this exemption's effective date, 
each Northern QPAM must provide a notice of its obligations under this 
section III(j) to each Covered Plan, including for avoidance of doubt 
the definition of actual losses as provided in clause (2) above. For 
Covered Plans that enter into a written asset or investment management 
agreement with a Northern QPAM on or after 60 calendar days from this 
exemption's effective date, the Northern QPAM must agree to its 
obligations under this section III(j) in an updated investment 
management agreement between the Northern QPAM and such clients or 
other written contractual agreement. This condition will be deemed met 
for each Covered Plan that received a notice pursuant to PTE 2016-11 
that meets the terms of this condition. This condition will also be met 
where the Northern QPAM has already agreed to the same obligations 
required by this section III(j) in an updated investment management 
agreement between the Northern QPAM and a Covered Plan.
    (k) Within 60 days after the effective date of this exemption, each 
Northern QPAM provides notice of the exemption as published in the 
Federal Register, along with a separate summary describing the facts 
that led to the Conviction (the Summary), which has been submitted to 
the Department, and a prominently displayed statement (the Statement) 
that the Conviction results in a failure to meet a condition in PTE 84-
14 to each sponsor and beneficial owner of a Covered Plan that has 
entered into a written asset or investment management agreement with 
the Northern QPAM. All prospective Covered Plan clients that enter into 
a written asset or investment management agreement with the Northern 
QPAM (including a participation or subscription agreement in a pooled 
fund managed by an Northern QPAM) after a date that is 60 days after 
the effective date of this exemption must receive must receive the 
proposed and final exemptions with the Summary and the Statement prior 
to, or contemporaneously with, the client's receipt of a written asset 
management agreement from the Northern QPAM (for avoidance of doubt, 
all Covered Plan clients of an Northern QPAM during the Exemption 
Period must receive the disclosures described in this section by the 
later of (i) 60 days after the effective date of the exemption or (ii) 
the date that a Covered Plan client enters into a written asset or 
investment management agreement with an Northern QPAM). Disclosures 
required under this paragraph (k) may be delivered electronically 
(including by an email that has a link to this exemption.

[[Page 7189]]

Notwithstanding the above paragraph, a Northern QPAM will not violate 
the condition solely because a Covered Plan refuses to sign an updated 
investment management agreement;
    (l) The Northern QPAMs must comply with each condition of PTE 84-
14, as amended, with the sole exceptions of the violations of PTE 84-14 
section I(g) that are attributable to the Conviction. If an affiliate 
of the Northern QPAM (as defined in section VI(d) of PTE 84-14) is 
convicted of a crime described in PTE 84-14 section I(g) (other than 
the Conviction) during the Exemption Period, this exemption will 
terminate immediately;
    (m)(1) Within 60 days after the date of publication of the 
exemption, each Northern QPAM must designate a senior compliance 
officer (i.e., the Compliance Officer) to be responsible for compliance 
with the Policies and Training requirements described herein. No person 
who participated in the criminal conduct that is the subject of the 
Conviction, may be involved with the designation or responsibilities 
required by this condition unless the person took active documented 
steps to stop the misconduct. The Compliance Officer must conduct a 
review of each twelve-month period comprising the Exemption Period 
(each an Exemption Review), to determine the adequacy and effectiveness 
of the Northern QPAM's implementation of the Policies and Training. 
With respect to the Compliance Officer, the following conditions must 
be met:
    (i) The Compliance Officer must be a professional who has extensive 
experience with, and knowledge of, the regulation of financial services 
and products, including under ERISA and the Code; and
    (ii) The Compliance Officer must have a direct reporting line to 
the highest-ranking corporate officer in charge of legal compliance for 
asset management.
    (2) With respect to the Exemption Review, the following conditions 
must be met:
    (i) The Exemption Review must include a review of the Northern 
QPAM's compliance with and effectiveness of the Policies and Training 
and of the following: any compliance matter related to the Policies or 
Training that was identified by, or reported to, the Compliance Officer 
or others within the compliance and risk control function (or its 
equivalent) during the twelve-month period under review; the most 
recent Audit Report issued pursuant to this exemption; any material 
change in the relevant business activities of the Northern QPAM; and 
any change to ERISA, the Code, or regulations related to fiduciary 
duties and the prohibited transaction provisions that may be applicable 
to the activities of the Northern QPAM;
    (ii) The Compliance Officer prepares a written report for the 
Exemption Review (an Exemption Report) that (A) summarizes their 
material activities during the twelve-month period under review; (B) 
sets forth any instance of noncompliance discovered during the twelve-
month period under review, and any related corrective action; (C) 
details any change to the Policies or Training to guard against any 
similar instance of noncompliance occurring again; and (D) makes 
recommendations, as necessary, for additional training, procedures, 
monitoring, or additional and/or changed processes or systems, and 
management's actions in response to such recommendations;
    (iii) In the Exemption Report, the Compliance Officer must certify 
in writing that to the best of their knowledge at the time: (A) the 
report is accurate; (B) the Policies and Training are working in a 
manner which is reasonably designed to ensure that the Policies and 
Training requirements described herein are met; (C) any known instance 
of noncompliance during the twelve-month period under review and any 
prior period, and any related correction taken to date, has been 
identified in the Exemption Report; and (D) the Northern QPAM complied 
with the Policies and Training, and/or corrected (or are correcting) 
any known instances of noncompliance in accordance with section III(h) 
above;
    (iv) The Exemption Report must be provided to appropriate corporate 
officers of the Northern QPAM; the head of compliance and the general 
counsel (or their functional equivalent) of the Northern QPAM; and must 
be made unconditionally available to the independent auditor described 
above; and
    (v) The Exemption Review, including the Compliance Officer's 
written Report, must be completed within 90 days following the end of 
the period to which it relates;
    (n) Each Northern QPAM will maintain records necessary to 
demonstrate that the conditions of this exemption have been met, for 
six (6) years following the date of any transaction for which the 
Northern QPAM relies upon the relief in the exemption;
    (o) Within 60 days after the effective date of the exemption, each 
Northern QPAM, in its agreements with, or in other written disclosures 
provided to Covered Plans, will clearly and prominently inform Covered 
Plan clients of their right to obtain a copy of the Policies or a 
description (Summary Policies) which accurately summarizes key 
components of such Northern QPAM's written Policies developed in 
connection with this exemption. If the Policies are thereafter changed, 
each Covered Plan client must receive a new disclosure within 180 days 
following the end of the calendar year during which the Policies were 
changed. If the Northern QPAM meets this disclosure requirement through 
Summary Policies, changes to the Policies shall not result in the 
requirement for a new disclosure unless, as a result of changes to the 
Policies, the Summary Policies are no longer accurate. With respect to 
this requirement, the description may be continuously maintained on a 
website, provided that such website link to the Policies or Summary 
Policies is clearly and prominently disclosed to each Covered Plan;
    (q) A Northern QPAM will not fail to meet the terms of this 
exemption, solely because a different Northern QPAM fails to satisfy a 
condition for relief under this exemption, described in sections 
III(c), (d), (h), (i), (j), (k), (l), (m), (n), and (o) or if the 
independent auditor described in section III(i) fails to comply with a 
provision of the exemption, other than the requirement described in 
section III(i)(11), provided that such failure did not result from any 
actions or inactions of Northern or its affiliates.
    (r) Each Northern QPAM imposes internal procedures, controls, and 
protocols to reduce the likelihood of any recurrence of conduct that is 
the subject of the Conviction;
    (s) All the material facts and representations set forth in the 
Summary of Facts and Representations are true and accurate at all 
times; and
    (t) With respect to an asset manager that becomes an Northern QPAM 
after the effective date of the exemption by virtue of being acquired 
(in whole or in part) by Northern or a subsidiary or affiliate of 
Northern (a ``newly-acquired Northern QPAM''), the newly-acquired 
Northern QPAM would not be precluded from relying on the exemptive 
relief provided by PTE 84-14 notwithstanding the Conviction as of the 
closing date for the acquisition; however, the operative terms of the 
exemption shall not apply to the newly-acquired Northern QPAM until a 
date that is six (6) months after the closing date for the acquisition. 
To that end, the newly acquired Northern QPAM will initially submit to 
an audit pursuant to section III(i) of this exemption as of the first 
audit period that begins following the closing date for the 
acquisition. The

[[Page 7190]]

period covered by the audit must begin on the date on which the 
Northern QPAM was acquired;
    (t) Relief in this exemption will terminate on the date that is 12 
months following the date that a U.S. regulatory authority makes a 
final decision that Northern or an affiliate failed to comply in all 
material respects with any requirement imposed by such regulatory 
authority in connection with the Conviction; and
    (u) Each Northern QPAM must provide the Department with the records 
necessary to demonstrate that each condition of this exemption has been 
met within 30 days of a request by the Department.
    Exemption Date: This exemption will be in effect beginning on March 
5, 2025, and ending on March 4, 2030.

    Signed at Washington, DC.
George Christopher Cosby,
Director, Office of Exemption Determinations, Employee Benefits 
Security Administration, U.S. Department of Labor.
[FR Doc. 2025-01244 Filed 1-17-25; 8:45 am]
BILLING CODE 4510-29-P
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