34048 Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 

State Administering Agencies to collect 

and submit information regarding the 

death of any person who is detained, 

under arrest, or is in the process of 

being arrested, is en route to be 

incarcerated, or is incarcerated at a 

municipal or county jail, State prison, 

State-run boot camp prison, boot camp 

prison that is contracted out by the 

State, any State or local contract facility, 

or other local or State correctional 

facility (including any juvenile facility). 

DOJ proposes the following plan to 

collect DCRA information at the end of 

fiscal year 2019 and beyond. The plan, 

which constitutes ‘‘guidelines 

established by the Attorney General’’ 

pursuant to section 2(a) of the DCRA, 

encompasses provisions specifically 

required by the statute. 

For purposes of this notice, the term 

‘‘reportable death’’ means any death that 

the DCRA or the Department’s 

guidelines require States to report. 

Generally, these are deaths that 

occurred during interactions with law 

enforcement personnel or while the 

decedent was in their custody or in the 

custody, under the supervision, or 

under the jurisdiction of a State or local 

law enforcement or correctional agency, 

such as a jail or prison. Specifically, the 

DCRA requires States to report 

‘‘information regarding the death of any 

person who is detained, under arrest, or 

is in the process of being arrested, is en 

route to be incarcerated, or is 

incarcerated at a municipal or county 

jail, State prison, State-run boot camp 

prison, boot camp prison that is 

contracted out by the State, any State or 

local contract facility, or other local or 

State correctional facility (including any 

juvenile facility).’’ 34 U.S.C. 60105(a). 

Please note that the DCRA 

information that States submit to the 

Department must originate from official 

government records, documents, or 

personnel. 

The DCRA requires quarterly 

reporting. Beginning with the first 

quarter of FY 2020 (October 2019), 

quarterly DCRA reporting to BJA will 

include all reportable deaths—deaths 

occurring during interactions with law 

enforcement personnel or while in their 

custody and deaths in jail, prison, or 

detention settings (i.e., deaths reportable 

on Form DCR–1). 

5. An estimate of the total number of 

respondents and the amount of time 

estimated for an average respondent to 

respond: For purposes of this collection, 

the term ‘‘State’’ includes any State of 

the United States, the District of 

Columbia, the Commonwealth of Puerto 

Rico, the Virgin Islands, American 

Samoa, Guam, and the Northern 

Mariana Islands. Thus, the affected 

public that will be asked to respond on 

a quarterly basis each federal fiscal year 

includes 56 State and Territorial actors. 

These States will be requesting 

information from approximately 19,450 

State and local law enforcement 

agencies (LEAs), 56 State and Territorial 

departments of corrections, and 2,800 

local adult jail jurisdictions. 

6. An estimate of the total public 

burden (in hours) associated with the 

collection: For purposes of this burden 

calculation, it is estimated that for each 

fiscal year there will be a total of 1,900 

reportable deaths by 1,060 LEAs, 1,053 

reportable deaths by 600 jails, and 3,483 

reportable deaths by prisons. 

For FY 2020 and beyond, the total 

projected respondent burden is 

13,756.49 hours. States will need an 

estimated 4.00 hours to complete each 

Quarterly Summary for a total of 

4,480.00 hours, 0.25 hours to complete 

each corresponding Incident Reports 

(DCR–1A) for a total of 1,713.49 hours. 

For LEAs, the estimated burden to assist 

States in completing the Quarterly 

Summaries is 0.40 hours per Report for 

a total of 1,696.00 hours, and a total of 

1,425.00 hours, at 0.75 hours for each 

corresponding Incident Report. The 

estimated burden for jails is a total of 

960.00 hours to assist States in 

completing the Quarterly Summaries 

and 789.75 hours in completing 

Incident Reports. Finally, the estimated 

burden for prisons to assist States in 

completing the Quarterly Summaries is 

a total of 80.00 hours, and a total of 

2,612.25 hours to assist States in 

completing Incident Reports. 

If additional information is required 

contact: Melody Braswell, Department 

Clearance Officer, United States 

Department of Justice, Justice 

Management Division, Policy and 

Planning Staff, Two Constitution 

Square, 145 N Street NE, 3E.405A, 

Washington, DC 20530. 

Dated: June 22, 2021. 

Melody Braswell, 

Department Clearance Officer for PRA, U.S. 

Department of Justice. 

[FR Doc. 2021–13634 Filed 6–25–21; 8:45 am] 

BILLING CODE 4410–18–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Exemption Application No. D–12003] 

Proposed Exemption for Certain 

Prohibited Transaction Restrictions 

Involving the Mitsubishi UJF Trust and 

Banking Corporation Located in New 

York, NY 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemption. 

SUMMARY: This document provides 

notice of the pendency before the 

Department of Labor (the Department) of 

a proposed individual exemption from 

certain of the prohibited transaction 

restrictions of the Employee Retirement 

Income Security Act of 1974 (ERISA or 

the Act) and/or the Internal Revenue 

Code of 1986 (the Code). 

DATES: If granted, the exemption will be 

in effect as of the date the grant notice 

is published in the Federal Register. 

Written comments and requests for a 

public hearing on the proposed 

exemption should be submitted to the 

Department by August 12, 2021. 

ADDRESSES: All written comments and 

requests for a hearing should be sent to 

the Employee Benefits Security 

Administration (EBSA), Office of 

Exemption Determinations, Attention: 

Application No. D–12003 via email to eOED@dol.gov or online through the 

Federal eRulemaking Portal: http://

www.regulations.gov. Any such 

comments or requests should be sent by 

the end of the scheduled comment 

period. The application for exemption 

and the comments received will be 

available for public inspection in the 

Public Disclosure Room of the 

Employee Benefits Security 

Administration, U.S. Department of 

Labor, Room N–1515, 200 Constitution 

Avenue NW, Washington, DC 20210. 

See SUPPLEMENTARY INFORMATION below 

for additional information regarding 

comments. 

FOR FURTHER INFORMATION CONTACT: 

Frank Gonzalez of the Department, 

telephone (202) 693–8553. (This is not 

a toll-free number.) 

SUPPLEMENTARY INFORMATION: 

Comments 

In light of the current circumstances 

surrounding the COVID–19 pandemic 

caused by the novel coronavirus which 

may result in disruption to the receipt 

of comments by U.S. Mail or hand 

delivery/courier, persons are 

encouraged to submit all comments 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 34049 

1For purposes of this proposed exemption, 

references to the provisions of section 406 of Title 

I of ERISA, unless otherwise specified, should be 

read to refer as well to the corresponding provisions 

of Code section 4975. 

2The Department notes that availability of this 

exemption, is subject to the express condition that 

the material facts and representations contained in 

application D–12003 are true and complete, and 

accurately describe all material terms of the 

transactions covered by the exemption. If there is 

any material change in a transaction covered by the 

exemption, or in a material fact or representation 

described in the application, the exemption will 

cease to apply to the covered transactions as of the 

date of such change. 

3This proposed exemption is not an endorsement 

by the Department of the transactions described 

herein. The fiduciary responsibility provisions of 

Part 4 of Title I of ERISA apply to a Covered Plan 

fiduciary’s decision to invest in a Fund. 

Specifically, ERISA section 404(a)(1) requires, 

among other things, that a plan fiduciary act 

prudently, solely in the interest of the plan’s 

participants and beneficiaries, and for the exclusive 

purpose of providing benefits to participants and 

beneficiaries when making investment decisions on 

behalf of the plan. Such an exemption would not 

constitute an opinion as to whether a particular 

investment strategy, or arrangement, would be 

considered prudent or in the best interests of a plan, 

as required by ERISA section 404. The 

determination of the prudence of a particular 

investment must be made by a plan fiduciary, after 

appropriate consideration of those facts and 

circumstances that, given the scope of such 

fiduciary’s investment duties, the fiduciary knows 

or should know, are relevant to the particular 

investment involved, including the plan’s potential 

exposure to losses, and the role a particular 

investment plays in that portion of the plan’s 

investment portfolio with respect to which the 

fiduciary has investment duties and responsibilities 

(see 29 CFR 1550.404a–1). 

4The phrase ‘‘other similar forms of credit 

arrangements’’ is a catch-all in the event the needs 

of the Fund change. Occasionally, a Credit Facility 

might provide variations on extensions of credit, for 

Continued 

electronically and not to follow with 

paper copies. Comments should state 

the nature of the person’s interest in the 

proposed exemption and the manner in 

which the person would be adversely 

affected by the exemption, if granted. 

Any person who may be adversely 

affected by an exemption can request a 

hearing on the exemption. A request for 

a hearing must state: (1) The name, 

address, telephone number, and email 

address of the person making the 

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

interest in the exemption and the 

manner in which the person would be 

adversely affected by the exemption; 

and (3) a statement of the issues to be 

addressed and a general description of 

the evidence to be presented at the 

hearing. The Department will grant a 

request for a hearing made in 

accordance with the requirements above 

where a hearing is necessary to fully 

explore material factual issues 

identified by the person requesting the 

hearing. A notice of such hearing shall 

be published by the Department in the 

Federal Register. The Department may 

decline to hold a hearing if: (1) The 

request for the hearing does not meet 

the requirements above; (2) the only 

issues identified for exploration at the 

hearing are matters of law; or (3) the 

factual issues identified can be fully 

explored through the submission of 

evidence in written (including 

electronic) form. WARNING: All 

comments received will be included in 

the public record without change and 

may be made available online at http:// 

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 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 http://

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 http:// 

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. 

Background: The Department is 

considering granting an exemption 

under the authority of section 408(a) of 

the Employee Retirement Income 

Security Act of 1974, as amended 

(ERISA) and section 4975(c)(2) of the 

Internal Revenue Code of 1986, as 

amended (the Code), and in accordance 

with the procedures set forth in 29 CFR 

part 2570, subpart B (76 FR 66637, 

66644, October 27, 2011).1 If the 

proposed exemption is granted, the 

restrictions of ERISA sections 

406(a)(1)(A) through (D), and the 

sanctions resulting from the application 

of Code section 4975, by reason of Code 

sections 4975(c)(1)(A) through (D), shall 

not apply to certain transactions arising 

from credit arrangements involving 

Mitsubishi UJF Trust and Banking 

Corporation and its indirectly whollyowned subsidiary MUFG Alternative 

Fund Services (Cayman) Limited and 

the investment funds in which 

employee benefit plans invest. 

Summary of Facts and 

Representations 2

1. Mitsubishi UJF Trust and Banking 

Corporation is a foreign banking 

corporation organized under the laws of 

Japan, and a subsidiary of Mitsubishi 

UFJ Financial Group. MUFG Alternative 

Fund Services (Cayman) Limited is an 

ordinary resident company organized 

under the laws of the Cayman Islands, 

and is an indirectly wholly-owned 

subsidiary of Mitsubishi UJF Trust and 

Banking Corporation (collectively, 

Mitsubishi Bank or the Applicant). 

Mitsubishi Bank may act as the sole 

lender (a Lender) or agent for a Lender 

(an Agent) in arranging revolving lines 

of credit (Credit Facilities) that are used 

by certain investment vehicles (the 

Funds). The Funds may be structured as 

limited partnerships, limited liability 

companies, or other business entities 

organized under applicable law. 

Investors in the Funds (the Investors) 

include employee benefit plans subject 

to ERISA and plans subject to Code 

section 4975 (the Covered Plans). The 

Covered Plans invest in the Funds, and 

the Funds, in turn, may invest directly 

or indirectly in private equity 

investments, real estate or real estate 

related investments, non-real estate 

operating company ventures, or other 

investment opportunities.3

2. The Funds may use capital calls to 

facilitate Fund investments. A capital 

call (Capital Call) is when a Fund 

exercises its right to call on Investors to 

make cash capital contributions to the 

Fund. These cash capital contributions 

from Investors to a Fund (Capital 

Contributions) enable the Fund to make 

its investments. Investors typically have 

10 to 15 days after a Capital Call to 

make a Capital Contribution. A Fund’s 

use of Capital Calls to make investments 

can take days, thereby reducing a 

Fund’s investing flexibility and 

increasing costs to the Fund’s Investors, 

including the Covered Plans. 

3. In addition to Capital Calls, a Fund 

may use a Credit Facility to facilitate 

investments. For purposes of this 

proposed exemption, a Credit Facility is 

a secured revolving line of credit 

between Mitsubishi Bank, as sole 

Lender, or as Agent, and one or more 

Funds (or an entity through which a 

Fund invests). The Fund may use its 

credit under the Credit Facility for: (a) 

Direct or indirect borrowings; (b) 

requesting letters of credit; (c) other 

similar forms of credit arrangements; or 

(d) a combination of any of the 

foregoing.4


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34050 Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 

example, banker’s acceptances, which are similar to 

letters of credit and are commonly used in some 

non-U.S. jurisdictions. 

5 In most cases, all Investors will make Capital 

Contributions into the Collateral Account. However, 

in some cases, investors that are not Covered Plans 

may be directed to make Capital Contributions to 

the sole Lender or the Agent, for the benefit of the 

Lenders, after an event of default, in some other 

manner. 

4. Mitsubishi may be a party in 

interest to a Covered Plan investing in 

a Fund that uses a Credit Facility with 

respect to which Mitsubishi is a Lender 

or Agent for one or more Lenders. 

However, Mitsubishi will not be a 

fiduciary with respect to the Covered 

Plan when relying on the exemption. 

5. In most instances, the Credit 

Facility will be a recourse obligation of 

a Covered Plan to the Fund that will not 

exceed the Covered Plan’s capital 

commitment. The following will secure 

the Fund’s repayments to the Credit 

Facility: (a) A pledge and assignment of 

all the rights of the Fund and its general 

partner (General Partner) or manager 

(Manager), including the right to call for 

and receive payments of capital 

committed by Investors, and rights 

against defaulting Investors; (b) the right 

to make Capital Calls on Investors, and 

apply the proceeds to the repayment 

obligations of the Fund under the Credit 

Facility, in the event of a default under 

the Credit Facility; (c) a pledge or first 

priority security interest in an account 

(the Collateral Account) that the Fund 

maintains with a financial institution or 

entity into which capital contributions 

are made; and (d) Investor agreements 

evidencing, among other things, the 

Investor’s acknowledgement of the 

assignment of rights to the Lenders by 

the General Partner (or the Manager) 

and the Fund (the Investor Consent). 

6. In connection with securing a 

Credit Facility, and to the extent 

Mitsubishi Bank requests or requires, 

either as sole Lender or Agent, an 

Investor will execute an Investor 

Consent consenting to, acknowledging, 

and confirming certain aspects of the 

Credit Facility. The Investor Consent 

may include the following 

documentation: (a) An acknowledgment 

and confirmation of the Investor’s 

obligation to deliver the Investor’s 

financial information statements to 

Mitsubishi Bank, as sole Lender or 

Agent; (b) an acknowledgment, and 

confirmation, of the Investor’s unpaid, 

and owing, capital commitment amount, 

and of the Investor’s obligation to 

contribute capital (up to its unfunded 

capital commitment amount) to satisfy 

the indebtedness the Fund incurred 

under the Credit Facility; (c) an 

Investor’s acknowledgment of the 

Fund’s, and its General Partner’s (or 

Manager’s), assignment and pledge to 

Mitsubishi Bank as sole Lender or 

Agent, of the right to make Capital Calls 

upon the Investors, and to collect and 

enforce the same; (d) an Investor’s 

agreement to make Capital 

Contributions to the Fund without 

setoff, reduction, counterclaim, or 

defense of any kind or nature, for the 

purpose of repayment of the Credit 

Facility; (e) a representation that the 

Investor has no knowledge of claims, 

offsets, or defenses that would adversely 

affect its obligation to fund Capital 

Contributions under the Fund 

Agreements, or events, which with the 

passage of time would constitute a 

default, or would constitute a defense 

to, or right of offset against the 

Investor’s obligation to fund its capital 

commitment to the Fund; and (f) an 

agreement that the Investor will fund 

Capital Contributions only into the 

Collateral Account (except in certain 

limited circumstances). 

7. With respect to the Fund and its 

activities, the only direct contractual 

relationship between an Investor and 

Mitsubishi Bank, or any Lender, will be 

the execution of the Investor Consent. 

The Investor will separately agree in an 

‘‘Agreement to Fund’’ that, in the event 

of default under the Credit Facility, the 

Investor will make its Capital 

Contribution to the Collateral Account 

in response to a Capital Call for 

repayment of the Credit Facility, 

without setoff, reduction, counterclaim, 

or defense of any kind or nature. 

8. The Investor Consent 

acknowledges, and confirms, existing 

rights of the Lenders that are created by 

operation of the Fund Agreements. The 

Agreement to Fund does not limit the 

Investor’s right to assert any claim, or 

defense, in a separate action against 

either the Fund or the General Partner 

(or Manager). 

9. An executed Investor Consent is 

integral to the Credit Facility, and the 

Credit Facility is an integral part of the 

Fund’s investment program. Prior to, or 

at the time of, a plan fiduciary’s 

decision to invest in the Fund, the plan 

fiduciaries will be aware that the Fund 

will have: (a) The power to borrow 

money; (b) enter into a loan agreement 

in which the Fund may pledge its 

assets, including the capital 

commitments of the Investors; and (c) 

have the right to make Capital Calls, 

thereby giving the secured party the 

right, under certain circumstances, to 

make Capital Calls, directly. 

10. A Fund Agreement is the written 

organizing and governing document 

forming a Fund that obligates each 

Investor to make Capital Contributions, 

with respect to capital commitments, 

upon receipt of a Capital Call from 

Mitsubishi Bank, either as sole Lender 

or as Agent. The Fund Agreement will 

also allow the Fund, or its general 

partner (the General Partner), or its 

manager (the Manager), to make Capital 

Calls for any lawful purpose of the Fund 

that is consistent with the terms of the 

Fund Agreement and other governing 

documents. 

11. Generally, the Fund Agreement 

will allow the Fund to: (a) Incur 

indebtedness (including indebtedness 

related to a Credit Facility) for the 

acquisition of investments, and to 

provide the Fund with working capital, 

among other things; and (b) 

consummate investments quickly 

without having to finalize the debt/ 

equity structure for an investment, or 

arrange, for interim or permanent 

financing, prior to making an 

investment, and will have additional 

advantages to the Investors and the 

Fund. 

12. Some Fund Agreements contain 

an Agreement to Fund (or similar 

language) in which case the Investor 

Consent merely acknowledges and 

confirms the Investor’s funding 

obligation. All other aspects of the 

transaction, including the negotiation of 

all terms of the Credit Facility, will be 

exclusively between Mitsubishi Bank, as 

sole Lender or Agent, and the Fund. 

Exemption Request 

13. The Applicant is requesting an 

exemption that would permit: 

(a) The granting by the Funds to 

Mitsubishi Bank, as sole Lender or 

Agent for one or more Lenders 

(including Mitsubishi Bank) that will 

fund a Credit Facility, of a security 

interest in and lien on the Capital 

Commitments, reserve amounts, and 

Capital Contributions of Investors that 

are Covered Plans investing in the Fund; 

(b) Any Fund’s collateral assignment 

and pledge to Mitsubishi Bank, as sole 

Lender or Agent, of the Fund’s security 

interest in an Investor/Covered Plan’s 

equity interest in such Fund; 

(c) The Fund’s granting to Mitsubishi 

Bank, as sole Lender or Agent, of a 

security interest in a collateral account 

(Collateral Account) to which all Capital 

Contributions in the Fund will be 

deposited when paid (except in certain 

limited circumstances that do not 

involve Covered Plans); 5

(d) The granting by the Fund and/or 

its General Partner or Manager to 

Mitsubishi Bank, as sole Lender or 

Agent, of its right to make Capital Calls 

under the operative Fund Agreements, 

to enforce the Capital Calls, collect the 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 34051 

6The Plan Assets Regulation describes what 

constitutes assets of a plan with respect to a plan’s 

investment in another entity for purposes of subtitle 

A, and Parts 1 and 4 of subtitle 1 of ERISA, and 

Code section 4975. Should the Department approve 

this proposed exemption, such approval would not 

constitute an opinion regarding whether the 

underlying assets of any Fund would be considered 

the assets of a plan under such regulations. Further, 

this exemption, if granted, does not provide relief 

for either the internal transactions involving the 

operation of the Fund, or for transactions involving 

the Fund and third parties other than the specific 

relief proposed herein. Covered Plan Investors, and 

their independent fiduciaries, should examine 

Continued 

Capital Contributions, and apply them 

to any amount due under the Credit 

Facility; and 

(e) A Covered Plan’s execution of the 

Investor Consent, consenting to the 

assignment by the Fund and General 

Partner (or Manager) to Mitsubishi 

Bank, as sole Lender or Agent, of their 

right to make Capital Calls. 

Prohibited Transactions 

14. Absent an administrative 

exemption, these transactions may 

violate ERISA section 406(a)(l)(A) 

through (D), and the corresponding 

provisions of the Code. The Applicant 

represents that since the Lenders, 

including Mitsubishi Bank, will be 

generally large, national, and 

international financial institutions, it is 

likely that, in any given Credit Facility, 

one or more Lenders will have a 

relationship with a Covered Plan, 

making it a party in interest with respect 

to the Covered Plan. However, as a 

condition of this exemption, no Lender, 

including Mitsubishi Bank, will be a 

fiduciary for any of the Covered Plans 

in connection with their investment in 

the Fund. 

15. ERISA section 406(a)(l)(A) 

prohibits a sale, exchange, or lease, of 

any property between a plan and a party 

in interest. Pursuant to the Investor 

Consent, a Covered Plan will make cash 

contributions to the Collateral Account 

for the benefit of a Lender. Because the 

cash contribution may come from the 

Covered Plan’s assets, the execution of 

the Investor Consent agreement involves 

an exchange of property between the 

Covered Plan and the Lender, which 

includes Mitsubishi Bank, as sole 

Lender or Agent, in violation of section 

406(a)(1)(A) of ERISA. 

16. In addition, ERISA section 

406(a)(1)(B) prohibits the lending of 

money, or other extension of credit, 

between a plan and a party in interest. 

The Credit Facility’s direct extension of 

credit to the Fund, resulting in an 

indirect extension of credit to Covered 

Plans investing in that Fund, pursuant 

to the Investor Consent, violates section 

ERISA 406(a)(1)(B). 

17. Further, ERISA section 

406(a)(1)(C) prohibits the furnishing of 

goods, services, or facilities between a 

plan and a party in interest. By servicing 

the loans under the Credit Facility, 

Mitsubishi Bank provides indirect 

services to the Covered Plan Investor. 

Furthermore, from time to time, there 

may be interactions between Mitsubishi 

Bank Lenders and the Covered Plan 

Investors which involve Mitsubishi’s 

provision of services. For example, 

Covered Plan Investors may inquire 

about the status and/or request 

information from Mitsubishi Bank 

Lenders with respect to the Credit 

Facility and the outstanding obligations 

thereunder, although, typically, such 

communications would be relayed by 

the Covered Plan Investors through the 

Fund to Mitsubishi Bank Lenders, and 

not made directly. 

18. Finally, ERISA section 406(a)(l)(D) 

prohibits, the transfer to, or use by, or 

for the benefit of a party in interest of 

any assets of a plan. Because an Investor 

will make cash contributions to the 

Collateral Account for the benefit of the 

Lender, which includes Mitsubishi 

Bank, as sole Lender or Agent, cash 

contribution from Plan assets would be 

considered a transfer of Plan assets to a 

party in interest, in violation of ERISA 

section 406(a)(1)(D). 

Benefits of the Credit Facility and 

Investor Consent 

19. According to the Applicant, 

absent the requested exemption, the 

inability to use the financing structure 

described above will result in economic 

loss to Investors that are Covered Plans, 

and their participants and beneficiaries, 

due to more onerous, and expensive, 

financing terms and conditions that 

would be required for Plans to invest in 

these types of investment ventures. In 

this regard, the types of Funds involved 

in the Covered Transactions are an 

important element of a Covered Plan’s 

diversified investment portfolio. Real 

estate investments can be valuable 

components of plan portfolios. 

However, investments in a large, 

diversified limited partnership or 

similar entity may have advantages over 

direct ownership of real estate 

properties, and other securities, 

including limited liability with respect 

to such property, if risks are minimized. 

Most diversified real estate and other 

investment programs are carried out 

through partnerships or limited liability 

companies that are substantially-similar 

to the Funds. 

20. According to the Applicant, a 

Credit Facility will allow a Fund to 

manage its Capital Calls on a scheduled 

basis and to move quickly to fund 

desired investments likely resulting in a 

more favorable investment portfolio for 

the Fund and its Investors, and a 

potentially higher return, without 

appreciably higher risk. In addition, the 

ability of the Investors to delay payment 

on capital commitments allows such 

amounts to remain in other investments 

of the Investor and allows the Investor 

to achieve greater overall investment 

returns. 

21. Mitsubishi Bank, as sole Lender or 

Agent, may receive a pledge of the 

Investors’ capital commitments, and 

rights to make Capital Calls and to 

collect and enforce the same, in the 

event of default. The Investor Consent is 

an important component of the Credit 

Facility arrangement. Absent the 

Investor Consent, Mitsubishi Bank may 

be required to foreclose on the collateral 

in order to effect a Capital Call for 

repayment of the Credit Facility. The 

Investor Consent, which would be 

required by this exemption, enables 

Mitsubishi Bank, as sole Lender or 

Agent, to make a Capital Call 

immediately on the Investors for 

repayment, without the need to first 

foreclose on the collateral. 

22. When the Fund Agreements do 

not contain the agreement of the 

Investors to make capital commitments 

without setoff, reduction, counterclaim, 

or defense of any kind or nature, the 

Investor Consent will contain this 

agreement, thereby permitting Lenders 

to be repaid for amounts that have been 

extended to the Fund prior to the time 

Capital Contributions are called, 

without the risk of repayment being 

challenged, or delayed, by claims the 

Investors may have against the Fund. 

This arrangement will keep the risk of 

the Fund’s investment transactions 

between the Fund and the Investors. 

Conditions for Exemptive Relief 

23. The proposed exemption will be 

subject to a number of substantive 

conditions. The decision to invest in the 

Fund on behalf of each Covered Plan 

and to execute an Investor Consent in 

favor of Mitsubishi Bank, as sole Lender 

or Agent, will be made by fiduciaries of 

the Covered Plan that are not included 

among, are independent of, and are 

unaffiliated with, the Lenders 

(including Mitsubishi Bank) and the 

Fund. Further, in each Credit Facility 

covered under this proposed exemption, 

no Lender, including Mitsubishi Bank, 

will be a fiduciary for any of the 

Covered Plans in connection with their 

investment in the Fund. Relief in this 

proposed exemption does not extend to 

Funds that contain ‘‘plan assets’’ for 

purposes of ERISA or Code section 

4975.6


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carefully all aspects of the Fund’s organization, 

operation, and investment programs in order to 

determine whether the requirements of the 

Department’s regulations will be met. See 29 CFR 

part 2510.3–101 (51 FR 41280, Nov. 13, 1986), as 

amended at 51 FR 47226, (Dec. 31, 1986). 

24. Each transaction must be on terms 

that are no less favorable to the Covered 

Plans than those which the Covered 

Plans could obtain in arm’s-length 

transactions with unrelated parties. At 

the time of the execution of an Investor 

Consent, the Covered Plan must have 

assets of not less than $100 million. Not 

more than 5% of the assets of any 

Covered Plan, measured at the time of 

the execution of an Investor Consent, 

may be invested in the Fund. 

25. The proposed exemption requires 

that the applicable fiduciaries for 

Covered Plans that are Investors provide 

a representation to Mitsubishi Bank, 

including a statement, that such 

fiduciary is responsible for making the 

Covered Plan’s decision to invest in the 

Fund, and is and will be independent 

of, and unaffiliated with, the Lenders. 

26. In addition, no Lender may have 

any influence, authority, or control over 

a Client Plan’s investment in the Fund. 

No Covered Transaction may be part of 

an arrangement, agreement or 

understanding, designed to benefit a 

party in interest or disqualified person 

with respect to a Covered Plan. Finally, 

any service covered by the exemption 

must be necessary for the establishment 

or operation of the plan, and no more 

than reasonable compensation may be 

paid therefor. Finally, all the facts and 

representations set forth in the 

Summary of Facts and Representations 

must be true and accurate. 

Statutory Findings 

27. ‘‘The Proposed Exemption is 

Administratively Feasible.’’ The 

Department has tentatively determined 

that the requested exemption is 

administratively feasible because it 

would cover a class of transactions 

between Covered Plans and Lenders 

when each Covered Plan will be 

independently represented by a 

fiduciary and will have an independent 

investment advisor. 

28. ‘‘The Proposed Exemption is in 

the Interests of.’’ The Department has 

tentatively determined that the 

proposed exemption is in the interest of 

Covered Plans because, absent the 

exemption, a Fund’s use of Capital Calls 

to make investments may take days, 

thereby reducing the Fund’s investing 

flexibility and increasing costs to the 

Fund’s Investors, including the Covered 

Plans. 

28. ‘‘The Proposed Exemption is 

Protective of.’’ The Department has 

tentatively determined that the 

proposed exemption is protective of the 

rights of the Plan participants and 

beneficiaries because, among other 

things, a fiduciary independent of 

Mitsubishi Bank and any other Lender 

will make the decision to invest in the 

Fund and determine whether to accept 

the credit facility arrangement and 

terms. 

Summary 

30. Based on the record developed in 

connection with this proposed 

exemption, the Department has 

tentatively determined that the relief 

sought by the Applicant satisfies the 

statutory requirements for an exemption 

under ERISA section 408(a). 

Notice to Interested Persons 

Notice of the proposed exemption 

will be given to all interested persons 

within 15 days of the publication of the 

notice of proposed exemption in the 

Federal Register, by electronic mail (if 

electronic mail is the usual and 

customary method by which Mitsubishi 

Bank corresponds with the interested 

person) and/or first class U.S. mail to 

the last known address of these 

individuals. The notice will contain a 

copy of the notice of proposed 

exemption, as published in the Federal 

Register, and a supplemental statement, 

as required pursuant to 29 CFR 

2570.43(a)(2). The supplemental 

statement will inform interested persons 

of their right to comment on the 

pending exemption. Written comments 

are due within 45 days of the 

publication of the notice of 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 section 

408(a) of the Act and/or section 

4975(c)(2) of the Code does not relieve 

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions of the Act and/or the Code, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which, among other things, 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(b) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) Before an exemption may be 

granted under section 408(a) of the Act 

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

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemption, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transitional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(4) The proposed exemption, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in each 

application are true and complete, and 

that each application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Proposed Exemption 

Section I. Transactions 

If the proposed exemption is granted, 

the restrictions of ERISA sections 

406(a)(1)(A)–(D), and the sanctions 

resulting from the application of Code 

section 4975, by reason of section Code 

section 4975(c)(l)(A)–(D), shall not 

apply to: 

(a) The granting by the Funds to 

Mitsubishi UFJ Trust and Banking 

Corporation (Mitsubishi Bank), as an 

agent (Agent) for one or more financial 

institutions (Lender(s)), which may 

include, without limitation, Mitsubishi 

Bank) or as sole Lender, that will fund 

a credit facility (Credit Facility) 

providing credit to certain investment 

funds (Fund(s)), of a security interest in 

and lien on the capital commitments 

(Capital Commitments), reserve 

amounts, and capital contributions 


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Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 34053 

7 In most cases, all Investors will make Capital 

Contributions into the Collateral Account. However, 

in some cases, Investors that are not Covered Plans 

may be directed to make Capital Contributions to 

the sole Lender or the Agent, for the benefit of the 

Lenders, after an event of default, in some other 

manner. 

(Capital Contributions) of certain 

investors (Investors) that are employee 

benefit plans (Covered Plan(s), as 

defined in Section II(a)), investing in the 

Fund; 

(b) Any Fund’s collateral assignment 

and pledge to Mitsubishi Bank, as sole 

Lender or Agent, of the Fund’s security 

interest in an Investor Covered Plan’s 

equity interest in such Fund; 

(c) The Fund’s grant to Mitsubishi 

Bank, as sole Lender or Agent, of a 

security interest in a collateral account 

(Collateral Account) to which all Capital 

Contributions in the Fund will be 

deposited when paid (except in certain 

limited circumstances that do not 

involve Covered Plans); 7

(d) The granting by the Fund and/or 

its general partner (General Partner) or 

manager (Manager) to Mitsubishi Bank, 

as sole Lender or Agent, of its right to 

make calls on Covered Plan Investors for 

Capital Contributions (the Capital Call), 

which shall be in cash, under the 

operative Fund Agreements (as defined 

in Section II(d)), enforce the Capital 

Calls, collect the Capital Contributions, 

and apply them to any amount due 

under the Credit Facility; and 

(e) A Covered Plan’s execution of an 

agreement (the Investor Consent) 

consenting to the assignment by the 

Fund and General Partner (or Manager) 

to Mitsubishi Bank, as sole Lender or 

Agent, of their right to make Capital 

Calls. 

Section II. Definitions 

(a) The terms ‘‘Covered Plan’’ or 

‘‘Covered Plans’’ means an investor in a 

Fund (as defined below) that is an 

employee benefit plan, as defined in 

ERISA section 3(3) and that is covered 

by Title I, Part 4 of ERISA, and/or a plan 

defined in Code section 4975, that 

satisfies the conditions set forth herein 

in Section II; 

(b) The terms ‘‘Covered Transaction’’ 

or ‘‘Covered Transactions’’ mean any 

combination of transactions described 

in Section I(a) through (d), in 

conjunction with the Investor Consent 

described in Section I(e); 

(c) The terms ‘‘Fund’’ or ‘‘Funds’’ 

means an investment or venture capital 

fund (organized as a corporation, 

limited partnership, limited liability 

company, or another business entity 

authorized by applicable law) in which 

one or more investors invest, including 

employee benefit plans or special 

purpose entities holding ‘‘plan assets’’ 

subject to ERISA, as described herein, 

by making capital contributions in cash 

to such Fund, pursuant to specific 

Capital Commitments as established by 

the Fund Agreement(s) and other 

operative documents executed by the 

parties, for purposes of making certain 

real estate investments (including real 

estate-related investments, such as 

venture capital investments) or non-real 

estate investments (including, without 

limitation, assets and/or interests 

relating to infrastructure, maritime, 

energy, etc.). 

Each Covered Plan investing in such 

special purpose entity must satisfy the 

conditions set forth herein in Section II. 

The term ‘‘Fund’’ includes an entity 

created by the Fund that may borrow, or 

receive, funds from the Credit Facility, 

provided that such entity is considered 

an affiliate of the Fund as a subsidiary 

or other controlled entity; 

(d) The terms ‘‘Fund Agreement’’ or 

‘‘Fund Agreements’’ mean the written 

agreements under which a Fund (as 

defined above) is formed (such as a 

limited partnership agreement, a limited 

liability company agreement, trust 

agreement, or articles of incorporation, 

together with ancillary related 

agreements, such as subscription 

agreements) that obligate each Investor 

to make cash contributions of capital 

with respect to Capital Commitments, 

upon receipt of a call for Capital 

Contributions; 

(e) The term ‘‘officer’’ means a 

president, any vice president in charge 

of a principal business unit, division or 

function (such as sales, administration 

or finance), or any other officer who 

performs a policy-making function for 

the entity; 

(f) The term ‘‘Mitsubishi Bank’’ means 

Mitsubishi UJF Trust and Banking 

Corporation, which is a foreign banking 

corporation organized under the laws of 

Japan, and its indirectly wholly-owned 

subsidiary named MUFG Alternative 

Fund Services (Cayman) Limited, an 

ordinary resident company incorporated 

and existing under the laws of the 

Cayman Islands. This exemption is 

intended to cover Mitsubishi Bank, and 

all of its current and future branches; 

(g) For purposes of determining 

whether a fiduciary is not included 

among, is independent of, and 

unaffiliated with, a Fund, the term Fund 

shall be deemed, as appropriate, to 

include the governing entity of the 

Fund, or a member of the governing 

body of the Fund, as appropriate, e.g., 

a general partner of a partnership, a 

manager of a limited liability company, 

a member of a member-managed limited 

liability company, or a member of the 

board of directors of a corporation. For 

purposes of this exemption request, a 

fiduciary of a Covered Plan is not 

included among, is independent of, and 

unaffiliated with, a Lender (including 

Mitsubishi Bank) or a Fund, as 

applicable, if: 

(i) The fiduciary is not, directly or 

indirectly, through one or more 

intermediaries, controlling, controlled 

by, or under common control with such 

Lender or Fund; 

(ii) The fiduciary is not an officer, 

director, employee or relative of, or 

partner in, such Lender or Fund; and 

(iii) No officer, director, highlycompensated employee (within the 

meaning of Code Section 4975(e)(2)(H)), 

or partner of the Fund, or any officer, 

director or highly-compensated 

employee, or partner of the Lender who 

is involved in the transactions described 

in Section I of the exemption request, is 

also an officer, director, highlycompensated employee, or partner of 

the fiduciary. However, if such 

individual is a director of the Lender, 

and if he or she abstains from 

participation in, and is not otherwise 

involved with, the decision made by the 

Covered Plan to invest in the Fund, then 

this condition shall be deemed satisfied. 

Section III. Conditions 

(a) The decision to invest in the Fund 

on behalf of each Covered Plan and to 

execute an Investor Consent in favor of 

Mitsubishi Bank, as sole Lender or 

Agent, is made by fiduciaries of the 

Covered Plan that are not included 

among and are independent of and 

unaffiliated with, the Lenders 

(including Mitsubishi Bank) and the 

Fund; 

(b) The transaction is on terms that 

are no less favorable to the Covered 

Plans than those which the Covered 

Plans could obtain in arm’s-length 

transactions with unrelated parties; 

(c) At the time of the execution of an 

Investor Consent, the Covered Plan has 

assets of not less than $100 million. In 

the case of multiple plans maintained 

by the same employer, or by members 

of a controlled group of corporations 

(within the meaning of Code Section 

414(b)), or members of a group of trades 

or businesses under common control 

(within the meaning of Code Section 

414(c)) (hereafter, referred to as 

‘‘members of a controlled group’’), 

whose assets are invested on a 

commingled basis (e.g., through a 

master trust), this $100 million 

threshold applies to the aggregate assets 

of the commingled entity; 

(d) Not more than 5% of the assets of 

any Covered Plan, measured at the time 

of the execution of an Investor Consent, 


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8See the Department’s Plan Assets Regulation. 29 

CFR part 2510.3–101 (51 FR 41280, Nov. 13, 1986), 

as amended at 51 FR 47226, (Dec. 31, 1986). 

1The Department made several attempts to 

contact the requestor for further information. 

However, no response was received. 

is invested in the Fund. In the case of 

multiple plans maintained by the same 

employer, or by members of a controlled 

group, whose assets are invested on a 

commingled basis (e.g., through a 

master trust), the 5% limit applies to the 

aggregate assets of the commingled 

entity; 

(e) Neither Mitsubishi Bank, nor any 

Lender, has discretionary authority or 

control with respect to a Covered Plan’s 

investment in the Fund nor renders 

investment advice (within the meaning 

of 29 CFR 2510.3–21(c)) with respect to 

such investment; 

(f) Upon request, the Covered Plan 

fiduciaries must receive from Mitsubishi 

Bank, a copy of this notice of proposed 

exemption and a copy of the final 

exemption, as published in the Federal 

Register; 

(g) Mitsubishi Bank receives from the 

Covered Plan fiduciaries a written 

representation, or a written 

authorization, that permits Mitsubishi 

Bank to rely on a written representation 

made to the Fund, that the conditions 

set forth above in Section III(a), (c), and 

(d) are satisfied for such transaction 

with respect to the Covered Plan for 

which they are fiduciaries; 

(h) No Covered Transaction is part of 

an arrangement, agreement or 

understanding, designed to benefit a 

party in interest or disqualified person 

with respect to a Covered Plan. 

(i) The Funds will not hold ‘‘plan 

assets’’ for purposes of ERISA or Code 

section 4975; 8

(j) Any service covered by the 

exemption must be necessary for the 

establishment or operation of the plan, 

and no more than reasonable 

compensation may be paid; 

(k) No Lender will have any 

influence, authority, or control over a 

Client Plan’s investment in the Fund; 

and 

(l) All the facts and representations 

set forth in the Summary of Facts and 

Representations are true and accurate. 

Effective Date: The proposed 

exemption, if granted, will be effective 

as of the date that the notice of final 

exemption is published in the Federal 

Register. 

Signed at Washington, DC, this 22nd day 

of June, 2021. 

Christopher Motta, 

Chief, Division of Individual Exemptions, 

Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2021–13676 Filed 6–25–21; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Prohibited Transaction Exemption 2021– 

03; Exemption Application Nos. L–12000 & 

L–12001] 

Exemption From Certain Prohibited 

Transaction Restrictions Involving the 

Electrical Insurance Trustees 

Insurance Fund and the Electrical Joint 

Apprenticeship and Training Trust (the 

Plans or the Applicants) Located in 

Alsip, Illinois 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of Exemption. 

SUMMARY: This document contains a 

notice of an exemption issued by the 

Department of Labor (the Department) 

from certain of the prohibited 

transaction restrictions of the Employee 

Retirement Income Security Act of 1974 

(ERISA or the Act). The exemption 

permits: (a) The sale (the Sale) by the 

Electrical Joint Apprenticeship and 

Training Trust (the EJAT Trust) of 5.11 

acres of unimproved real property (the 

Property) to the Electrical Insurance 

Trustees Insurance Fund (the EIT Fund), 

a party in interest with respect to the 

EJAT Trust; and (b) the EIT Fund’s 

granting of a right of first offer (the Right 

of First Offer) to the EJAT Trust to 

purchase the Property back from the EIT 

Fund, provided all of the conditions 

described below are satisfied. 

DATES: This exemption will be in effect 

on the date that this grant notice is 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Joseph Brennan of the Department at 

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

number.) 

SUPPLEMENTARY INFORMATION: On March 

22, 2021, the Department published a 

notice of proposed exemption in the 

Federal Register at 86 FR 15258, 

permitting: (a) The Sale by the EJAT 

Trust of the Property to the EIT Fund, 

a party in interest with respect to the 

EJAT Trust; and (b) the EIT Fund’s 

granting of the Right of First Offer to the 

EJAT Trust to purchase the Property 

back from the EIT Fund. 

This exemption provides only the 

relief specified in the text of the 

exemption. It provides no relief from 

violations of any law other than the 

prohibited transaction provisions of 

ERISA. 

The Department makes the requisite 

findings under ERISA section 408(a) 

based on adherence to all of the 

conditions of the exemption. 

Accordingly, affected parties should be 

aware that the conditions incorporated 

in this exemption are, taken as a whole, 

necessary for the Department to grant 

the relief requested by the Applicants. 

Absent these or similar conditions, the 

Department would not have granted this 

exemption. 

The Applicants requested an 

individual exemption pursuant to 

ERISA section 408(a) 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 the 

Reorganization Plan No. 4 of 1978, 5 

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

authority of the Secretary of the 

Treasury to issue administrative 

exemptions under section 4975(c)(2) of 

the Code to the Secretary of Labor. 

Accordingly, the Department grants this 

exemption under its sole authority. 

Written Comments 

In the proposed exemption, the 

Department invited all interested 

persons to submit written comments 

and/or requests for a public hearing 

with respect to the notice of proposed 

exemption. All comments and requests 

for a hearing were due to the 

Department by May 6, 2021. The 

Department received one written 

comment and one request for a public 

hearing. The commenter raised no 

substantive issues regarding the 

proposed transactions, and the hearing 

requestor provided no reasons for 

requesting the hearing.1 Accordingly, 

after considering the entire record 

developed in connection with the 

Applicants’ exemption requests, the 

Department has determined to grant the 

exemption described below. The 

exemption contains minor clarifications 

to the proposal. 

The complete application files 

(L–12000 & L–12001) are available for 

public inspection in the Public 

Disclosure Room of the Employee 

Benefits Security Administration, Room 

N–1515, U.S. Department of Labor, 200 

Constitution Avenue NW, Washington, 

DC 20210. For a more complete 

statement of the facts and 

representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published on 

March 22, 2021, at 86 FR 15258. 

General Information 

The attention of interested persons is 

directed to the following: 


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