Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Notices 5699

1On June 4, 1999, Deutsche Bank, AG acquired 

Bankers Trust Corporation. DBTA is indirectly 

wholly owned by Deutsche Bank, AG. Thus, any 

reference to Bankers Trust Company should be read 

to mean DBTCA.

2For additional information regarding the 

Information, interested persons should refer to the 

notice of proposed exemption at 64 FR 30360, June 

7, 1999.

annual burden for this collection is 

1,222 hours. 

If additional information is required 

contact: Brenda E. Dyer, Department 

Clearance Officer, United States 

Department of Justice, Justice 

Management Division, Policy and 

Planning Staff, Patrick Henry Building, 

Suite 1600, 601 D Street NW., 

Washington, DC 20530.

Dated: January 31, 2005. 

Brenda E. Dyer, 

Department Clearance Officer, Department of 

Justice.

[FR Doc. 05–2033 Filed 2–2–05; 8:45 am] 

BILLING CODE 4410–09–P

DEPARTMENT OF LABOR

Employee Benefits Security 

Administration 

Notice of Proposed Amendment; 

Prohibited Transaction Exemption 

(PTE) 99–29 Involving Bankers Trust 

Company, Deutsche Bank Trust 

Company Americas (DBTCA), and 

Deutsche Bank, AG 

[Application No. D–11246]

SUMMARY: This document contains a 

notice of pendency before the 

Department of Labor (the Department) of 

a proposed individual exemption, 

which, if granted, would amend PTE 

99–29 (64 FR 40623, July 27, 1999), an 

exemption granted to Bankers Trust 

Company. PTE 99–29 permits DBTCA 

(formerly known as Bankers Trust 

Company) to continue to function as a 

qualified professional asset manager 

(QPAM) under PTE 84–14 (49 FR 9494, 

March 13, 1994). If granted, the 

proposed exemption would affect 

participants and beneficiaries and 

fiduciaries of employee benefit plans to 

which DBTCA served as custodian.

EFFECTIVE DATE: If adopted, the proposed 

amendment will be effective as of 

January 31, 2003.

DATES: Written comments and requests 

for a public hearing should be received 

by the Department on or before March 

21, 2005.

ADDRESSES: All written comments and 

requests for a public hearing should be 

sent to the Office of Exemption 

Determinations, Employee Benefits 

Security Administration, Room N–5649, 

U.S. Department of Labor, 200 

Constitution Ave., NW., Washington, 

DC 20210, (Attention D–11246), by fax 

to (202) 219–0204, or by e-mail to 

moffitt.betty@dol.gov. The application 

pertaining to the proposed exemption 

and the comments received will be 

available for public inspection in 

EBSA’s Public Documents Room, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Ave., NW., 

Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Allison Padams Lavigne, Office of 

Exemption Determinations, Employee 

Benefits Security Administration, U.S. 

Department of Labor, Washington, DC 

20210 at (202) 693–8540. This is not a 

toll-free number.

SUPPLEMENTARY INFORMATION: Notice is 

hereby given of the pendency before the 

Department of a proposed exemption 

that would amend PTE 99–29. Section 

I of PTE 99–29 conditionally permits 

Banks Trust Company 1 to continue to 

function as a QPAM pursuant to PTE 

84–14, notwithstanding its failure to 

satisfy section I(g) of PTE 84–14. Section 

I(g) specifies that:

Neither the QPAM nor any affiliate thereof 

(as defined in section V(d)), nor any owner, 

direct or indirect, 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: Any felony involving 

abuse or misuse of such person’s employee 

benefit plan position or employment, or 

position or employment with a labor 

organization; any felony arising out of the 

conduct of the business of a broker, dealer, 

investment adviser, bank, insurance 

company or fiduciary; income tax evasion; 

any felony involving the larceny, theft, 

robbery, extortion, forgery, counterfeiting, 

fraudulent concealment, embezzlement, 

fraudulent conversion, or misappropriation 

of funds or securities; conspiracy or attempt 

to commit any such crimes or a crime in 

which any of the foregoing crimes is an 

element; or any other crime described in 

section 411 of the Employee Income 

Retirement Security Act of 1974 (ERISA or 

the Act). For purposes of this section (g), 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.

Section I of PTE 99–29 was effective 

for the period beginning on the date of 

sentencing with respect to the charges to 

which Bankers Trust Company pled 

guilty on March 11, 1999 and ending on 

July 27, 2004, as a result of the 

conviction of Bankers Trust Company 

for felonies described in the March 11, 

1999 felony information entered in the 

U.S. District Court for the Southern 

District of New York (the Information), 

provided that the conditions of the PTE 

99–29 were met.2

The conditions of section I of PTE 99–

29 include the following: 

(a) The exemption is not applicable if 

Bankers Trust Company becomes 

affiliated with any person or entity 

convicted of any of the crimes described 

in section I(g) of PTE 84–14; 

(b) The exemption is not applicable if 

Bankers Trust Company is convicted of 

any crimes described in section I(g) of 

PTE 84–14, other than those felonies 

discussed in the Information;

(c) The custody operations that were 

part of Bankers Trust Company at the 

time of the March 11, 1999 information, 

and which have subsequently been 

reorganized as part of Global 

Institutional Services (GIS), are subject 

to an annual examination of its 

abandoned property and escheatment 

policies, procedures and practices by an 

independent public accounting firm. 

The examination required by this 

condition shall determine whether the 

written procedures adopted by Bankers 

Trust Company are properly designed to 

assure compliance with the 

requirements of ERISA. The annual 

examination shall specifically require a 

determination by the auditor as to 

whether the Bank has developed and 

adopted internal policies and 

procedures that achieve appropriate 

control objectives and shall include a 

test of a representative sample of 

transactions, fifty percent of which must 

involve ERISA covered plans, to 

determine operational compliance with 

such policies and procedures. The 

auditor shall issue a written report 

describing the steps performed by the 

auditor during the course of its 

examination. The report shall include 

the auditor’s specific findings and 

recommendations. This requirement 

shall continue to be applicable to the 

custody operations that were part of 

Bankers Trust Company as of March 11, 

1999, notwithstanding any subsequent 

reorganization of the custody operation 

function during the term of the 

exemption. 

(d) With respect to the independent 

audit report described in section I(c) 

above: (1) Bankers Trust Company shall 

provide notice to the Department of any 

instances of the Bank’s noncompliance 

with the written policies and 

procedures reviewed by the auditor 

within 10 business days after such 

noncompliance is determined by the 

auditor notwithstanding the fact that the 

examination may not have been 

completed as of that date. Upon request, 

the auditor shall provide the 

Department with all of the relevant 

5700 Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Notices 

3 DB states that it will maintain copies of these 

of audits for the time period required under ERISA.

4The Department noted in footnote 4 of PTE 99–

29, ‘‘Prior to the expiration of this exemption, 

Bankers Trust Company may apply for an extension 

of the exemption.’’ (64 FR 40625, July 27, 1999)

5 It is the Department’s understanding that copies 

of the audits that were conducted pursuant to PTE 

99–29 will be maintained by DBTCA for the time 

period specified by section 107 of ERISA.

work papers reflecting the instances of 

noncompliance. The work papers 

should identify whether and to what 

extent the assets of ERISA plans were 

involved in the instances of 

noncompliance, and (2) any information 

relating to the Bank’s noncompliance 

with the written policies and 

procedures that is required by Federal 

and/or State banking authorities to be 

reported to the State and/or Federal 

banking agencies shall also be reported 

by Bankers Trust Company to the 

Department within the same time 

frames that such information is 

otherwise required to be reported to 

those agencies. 

(e) The annual examination described 

in section I(c) above will be provided to 

the Department not later than 90 days 

following the 12 month period to which 

it relates, and will be unconditionally 

available for examination by any duly 

authorized employee or representative 

of the Department, Internal Revenue 

Service, Securities and Exchange 

Commission or Department of Justice or 

other relevant regulators and any 

fiduciary of a plan for which Bankers 

Trust Company performs services.

The proposed amendment has been 

requested in an application filed on 

behalf of DBTCA. DBTCA is a New York 

banking corporation providing a wide 

range of banking, fiduciary, record 

keeping custodial, brokerage and 

investment services to corporations, 

institutions, governments, employee 

benefit plans, governmental retirement 

plans, and private investors worldwide. 

Deutsche Bank, AG indirectly wholly 

owns DBTCA. 

In its application for an amendment to 

PTE 99–29, the applicant represents that 

on January 23, 2003, Deutsche Bank 

sold its global custody business to State 

Street. Deutsche Bank’s sale of its 

custody operations to State Street 

included the books and records 

underlying the business, as well as its 

employees. Except as discussed below, 

the applicant represents that as of 

January 15,2004, DBTCA no longer is a 

custodian for ERISA covered plans. 

The applicant represents that the 

Private Bank of Deutsche Bank will 

continue to serve as custodian for 

certain small ERISA covered plans. 

State Street will serve as subcustodian 

and perform all recordkeeping on behalf 

of these plans. The Private Bank is a 

division of DBTCA. Prior to the sale of 

DBTCA’s custody business to State 

Street, the assets of the Private Bank’s 

ERISA clients were custodied by 

DBTCA. That custody was transferred to 

State Street in 2003. In this regard, the 

applicant states that DBTCA has no 

ability to influence the operations and 

procedures of State Street’s custodial 

operations. Like DBTCA, the Private 

Bank no longer has any direct custody 

functions. To the extent that it holds the 

title of custodian for any ERISA 

account, it does not have control (except 

as an investment manager, without 

possession or record ownership) over 

any of that plan’s assets. All Private 

Bank plan assets are subcustodied at 

State Street. No securities, cash or other 

assets of ERISA plans are custodied at 

DBTCA, in the Private Bank, or 

otherwise. 

In addition, the applicant represents 

that Deutsche Bank did not sell its 

foreign branches. The Deutsche Bank 

AG branches provide worldwide 

subcustody for other global custodians 

and are not subject to the five-year 

limited exemption granted to Bankers 

Trust Company in Section I of PTE 99–

29. The applicant states that these 

branches were not involved in the 

felony (and indeed were unrelated to 

Bankers Trust Company when the 

felony occurred), and their relationship 

with other global custodians is not 

governed by, subject to, or otherwise 

related to, DBTCA and never has been. 

These Deutsche Bank branches are 

independent of, and have never been 

supervised or controlled by, DBTCA. 

Deutsche Bank seeks an amendment 

of PTE 99–29 that would modify section 

I(c) of PTE 99–29. The applicant has 

requested this condition be modified to 

remove the annual audit requirement 

after the date on which DBTCA ceased 

to have custody of ERISA plan assets.3

The applicant also seeks a five-year 

extension of the relief provided by the 

exemption.4 The Department has 

proposed to modify the exemption such 

that DBTC shall be subject to the audit 

requirements through January 15, 2004. 

The Department has also proposed that 

the effective date of the exemption be 

extended to July 27, 2009.

Lastly, the applicant seeks 

clarification on whether the relief 

provided by the exemption will 

continue to be available now that 

records are maintained by State Street, 

and if so, whether or not State Street 

must maintain these records for fifteen 

years. As noted in the summary of facts 

and representations of the notice of 

proposed exemption for PTE 99–29, (64 

FR 30360, 30364, June 7, 1999), the 

applicant represented that check 

ledgers, cancelled checks and class 

action records are to be maintained for 

15 years. Further, all escheatment 

records are to be kept indefinitely.

In its application for amendment of 

PTE 99–29, Deutsche Bank states that it 

continues to maintain escheatment 

records indefinitely, but it no longer has 

access to check ledgers, cancelled 

checks and class actions records 

because they are now owned and 

maintained by State Street. The 

applicant states that it would be 

burdensome for State Street to maintain 

the records for the fifteen-year period 

because that time period is inconsistent 

with State Street’s own seven-year 

record retention policies. The applicant 

requests that the record-keeping 

requirements be made consistent with 

the six-year time period found in 

section 107 of ERISA. The Department 

concurs with the applicant that as a 

result of Deutsche Bank’s sale to State 

Street, the fifteen-year record retention 

policy described in PTE 99–29 is no 

longer feasible. The Department believes 

that the six-year period described in 

section 107 of ERISA would provide a 

sufficient time period to enable 

individuals to obtain the information 

contained in these records. In this 

regard, Deutsche Bank should take 

reasonable steps to ensure that such 

records are maintained by State Street 

for the time specified in ERISA section 

107, and are available to those 

individuals seeking such information.5

Notice to Interested Persons 

With respect to notification of 

interested persons, the applicant will 

distribute notice of the proposed 

amendment by first class mail to an 

independent plan fiduciary for each 

ERISA covered plan for which DBTCA 

and its subsidiaries provide or provided 

fiduciary services, including trustee 

services and/or the provision of 

investment advice, at the time DBTCA 

sold its custodial business to State 

Street, and each owner of an IRA 

account to which DBTCA and its 

subsidiaries provide or provided 

investment advisory services at the time 

DBTCA sold its custody business to 

State Street. The applicant will 

distribute the notice to all participants 

in its own ERISA pension plans, either 

by return receipt of electronic mail or by 

first class mail. All notification will be 

mailed or electronically mailed within 

three business days after publication of 

this proposed amendment in the 

Federal Register. The applicant will 

also use its best efforts to notify an 

Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Notices 5701

independent fiduciary for each ERISA 

pension plan client of DBTCA.

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption granted under 

section 408(a) of the Act and/or 

4975(c)(2) of the Internal Revenue Code 

of 1986 (the Code) does not relieve a 

fiduciary or other party in interest with 

respect to a plan to which the 

exemption is applicable from certain 

other provisions of the Act and/or the 

Code. These provisions include any 

prohibited transaction provisions to 

which the exemption does not apply 

and the general fiduciary provisions of 

section 404 of the Act which, among 

other things, requires a fiduciary to 

discharge his or her duties respecting 

the plan solely in the interests 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) The proposed exemption, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act and/or 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; 

(3) The availability of this exemption, 

if granted, is subject to the express 

condition that the material facts and 

representations contained in the 

application are true and complete and 

accurately describe all material terms of 

the transaction which is the subject of 

this exemption. In the case of 

continuing transactions, if any of the 

material facts or representations 

described in the application change, the 

exemption will cease to apply as of the 

date of such change. In the event of any 

such change, an application for a new 

exemption must be made to the 

Department; and 

(4) Before an exemption may be 

granted under section 408(a) of ERISA, 

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

beneficiaries and protective of the rights 

or participants and beneficiaries of the 

plan. 

Proposed Exemption 

Based on the facts set forth in the 

application, and under the authority of 

section 408(a) of the Act and section 

4975(c)(2) of the Code, and in 

accordance with the procedures set 

forth in 29 CFR part 2570, subpart B (55 

FR 32836, August 10, 1990), the 

Department proposes to modify PTE 99–

29 as set forth below: 

Section I is amended to read as 

follows: ‘‘Bankers Trust Company (now 

known as DBTCA) shall not be 

precluded from functioning as a 

‘‘qualified professional asset manager’’

pursuant to Prohibited Transaction 

Exemption 84–14 (49 FR 9494, March 

13, 1994) (PTE 84–14) for the period 

beginning on the date of sentencing 

with respect to the charges to which 

Bankers Trust Company pled guilty on 

March 11, 1999 and ending July 27, 

2009, solely because of a failure to 

satisfy section I(g) of PTE 84–14 as a 

result of the conviction of Bankers Trust 

Company for felonies described in the 

March 11, 1999 felony information (the 

Information) entered in the U.S. District 

Court for the Southern District of New 

York, provided that:’’

Section I(c) is amended to read as 

follows: ‘‘The custody operations that 

were part of Bankers Trust Company at 

the time of the March 11, 1999 

information, and which have 

subsequently been reorganized as part of 

Global Institutional Services (GIS), are 

subject to an annual examination of its 

abandoned property and escheatment 

policies, procedures and practices by an 

independent public accounting firm. 

The examination required by this 

condition shall determine whether the 

written procedures adopted by Bankers 

Trust Company are properly designed to 

assure compliance with the 

requirements of ERISA. The annual 

examination shall specifically require a 

determination by the auditor as to 

whether the Bank has developed and 

adopted internal policies and 

procedures that achieve appropriate 

control objectives and shall include a 

test of a representative sample of 

transactions, fifty percent of which must 

involve ERISA covered plans, to 

determine operational compliance with 

such policies and procedures. The 

auditor shall issue a written report 

describing the steps performed by the 

auditor during the course of its 

examination. The report shall include 

the auditor’s specific findings and 

recommendations. This requirement 

shall continue to be applicable to the 

custody operations that were part of 

Bankers Trust Company as of March 11, 

1999, notwithstanding any subsequent 

reorganization of the custody operation 

function during the term of the 

exemption. Such audit requirements 

shall be applicable for any year or part 

thereof in which DBTCA held ERISA 

covered plan assets in custody.’’

Section III(a) is amended to read as 

follows: ‘‘For purposes of this 

exemption, the term ‘‘Bankers Trust 

Company’’ includes Bankers Trust 

Company, and any entity that was 

affiliated with Bankers Trust Company 

prior to the date of the acquisition of 

Bankers Trust Corporation by Deutsche 

Bank AG, other than BT Alex. Brown 

Incorporated and its subsidiaries. This 

term also refers to Deutsche Bank Trust 

Company Americas (DBTCA).’’

For a more complete statement of 

facts and representations supporting the 

Department’s decision to grant PTE 99–

29, refer to the proposed exemption (64 

FR 30360, June 7, 1999) and the grant 

notice (64 FR 40623, July 27, 1999).

Signed at Washington, DC, this 31st day of 

January 2005. 

Ivan L. Strasfeld, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor.

[FR Doc. 05–2077 Filed 2–2–05; 8:45 am] 

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Employee Benefits Security 

Administration 

Prohibited Transaction Exemption 

2005–01; [Exemption Application No. 

D–11211] et al.; Grant of Individual 

Exemptions; J.C.O., Inc. Retirement 

Plan and Trust (the Plan)

AGENCY: Employee Benefits Security 

Administration, Labor.

ACTION: Grant of individual exemptions.

SUMMARY: This document contains 

exemptions issued by the Department of 

Labor (the Department) from certain of 

the prohibited transaction restrictions of 

the Employee Retirement Income 

Security Act of 1974 (the Act) and/or 

the Internal Revenue Code of 1986 (the 

Code). 

A notice was published in the Federal 

Register of the pendency before the 

Department of a proposal to grant such 

exemption. The notice set forth a 

summary of facts and representations 

contained in the application for 

exemption and referred interested 

persons to the application for a 

complete statement of the facts and 

representations. The application has 

been available for public inspection at 

the Department in Washington, DC. The