Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60325 

the presentation. Requesters will 

ordinarily be allowed up to 15 minutes 

to present a topic. 

Dates and Times: The Council will 

meet in open session from 9 a.m. until 

5 p.m., on November 19–20, 2008. 

ADDRESSES: The meeting will take place 

at the Hyatt Regency La Jolla at 

Aventine, 3777 La Jolla Village Drive, 

San Diego, California, telephone (858) 

552–1234. 

FOR FURTHER INFORMATION CONTACT: 

Inquiries may be addressed to Mr. Gary 

S. Barron, FBI Compact Officer, 

Compact Council Office, Module D3, 

1000 CusterHollow Road, Clarksburg, 

West Virginia 26306, telephone (304) 

625–2803, facsimile (304) 625–2868. 

Dated: September 25, 2008. 

Robert J. Casey, 

Section Chief, Liaison, Advisory, Training and 

Statistics Section, Criminal Justice 

Information Services Division, Federal Bureau 

of Investigation. 

[FR Doc. E8–24096 Filed 10–9–08; 8:45 am] 

BILLING CODE 4410–02–M 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Application No. D–11453] 

Notice of Proposed Individual 

Exemption Involving BlackRock, Inc. 

(BlackRock), and the PNC Financial 

Services Group, Inc. (PNC) 

(Collectively, the Applicants) Located 

in New York, NY 

AGENCY: Employee Benefits Security 

Administration, U.S. Department of 

Labor. 

ACTION: Notice of proposed individual 

exemption. 

SUMMARY: This document contains a 

notice of 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 or 

the Act) and the Internal Revenue Code 

of 1986 (the Code). If granted, the 

proposed exemption would permit the 

purchase of certain securities (the 

Securities), during the existence of an 

underwriting or selling syndicate with 

respect to such Securities, by PNC or 

BlackRock or a related entity 

(collectively, a PNC/BlackRock Related 

Entity), which is acting as a fiduciary 

(Asset Manager) on behalf of certain 

employee benefit plans (Client Plans 

and In-House Plans), including such 

plans invested in pooled funds, from 

any person other than such Asset 

Manager or any other PNC/BlackRock 

Related Entity, under the following 

circumstances: (a) Where a related 

broker-dealer (a PNC/BlackRock Related 

Broker-Dealer) is a manager or member 

of such syndicate (AUT)); or (b) where 

a PNC/BlackRock Related Broker-Dealer 

is a manager or member of such 

syndicate and an affiliated servicer 

(Affiliated Servicer) serves as servicer of 

a trust that issued the Securities 

(whether or not debt securities) (AUT 

and AST); or (c) where an Affiliated 

Servicer serves as servicer of a trust that 

issued the Securities (whether or not 

debt securities) (AST); provided certain 

conditions as set forth below are 

satisfied. The proposed exemption, if 

granted, would affect Client Plans and 

In-House Plans and their participants 

and beneficiaries. 

EFFECTIVE DATE: If granted, this proposed 

exemption will be effective as of the 

date the final exemption is published in 

the Federal Register. 

DATES: Written comments and requests 

for a public hearing on the proposed 

exemption should be submitted to the 

Department November 24, 2008. 

ADDRESSES: All written comments and 

requests for a public hearing concerning 

the proposed exemption should be sent 

to the Office of Exemptions 

Determinations, Employee Benefits 

Security Administration, Room N–5700, 

U.S. Department of Labor, 200 

Constitution Avenue, NW., Washington, 

DC 20210, Attention: Application No. 

D–11453. Alternatively, interested 

persons are invited to submit comments 

or hearing requests to the Department by 

e-mail to moffitt.betty@dol.gov or by 

facsimile at (202) 219–0204. 

SUPPLEMENTARY INFORMATION: This 

document contains a notice of proposed 

individual exemption from the 

restrictions of section 406 of the Act and 

section 4975(c)(1)(A)–(F) of the Code. 

The proposed exemption has been 

requested in an application filed by PNC 

and BlackRock, pursuant to 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). Effective December 31, 1978, 

section 102 of Reorganization Plan No. 

4 of 1978, (43 FR 47713, October 17, 

1978) transferred the authority of the 

Secretary of the Treasury to issue 

exemptions of the type requested to the 

Secretary of Labor. Accordingly, this 

proposed exemption is being issued 

solely by the Department. 

The application pertaining to the 

proposed exemption contains 

representations with regard to the 

proposed exemption which are 

summarized below. Interested persons 

are referred to the application on file 

with the Department for a complete 

statement of the facts and 

representations. The application 

pertaining to the proposed 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–1513, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Angelena C. Le Blanc, Office of 

Exemption Determinations, Employee 

Benefits Security Administration, U.S. 

Department of Labor, telephone (202) 

693–8540. (This is not a toll-free 

number.) 

Summary of Facts and Representations 

1. BlackRock, based in New York, NY, 

is a publicly traded investment 

management firm. BlackRock, through 

its investment advisor subsidiaries 

registered with the Securities and 

Exchange Commission (SEC), currently 

manages assets for institutional and 

individual investors worldwide through 

a variety of equity, fixed income, cash 

management, and alternative investment 

products. As of September 30, 2007, 

BlackRock, through its advisor 

subsidiaries, had approximately $1.3 

trillion in assets under management. 

Furthermore, BlackRock’s asset 

managers satisfy the definition of the 

term Asset Manager, as set forth in 

Section IV(f) of this proposed 

exemption. 

PNC, based in Pittsburgh, PA, is a 

diversified financial services company, 

with $131.4 billion in assets as of 

September 30, 2007. PNC engages in 

retail banking, institutional banking, 

asset management, broker-dealer, and 

global fund processing services and 

providing related products through its 

bank and non-bank subsidiaries. Its 

principal subsidiary bank, PNC Bank, 

National Association (PNC Bank), 

located in Pittsburgh, PA has branches 

in the District of Columbia, Florida, 

Indiana, Kentucky, Maryland, New 

Jersey, Ohio, Pennsylvania, and 

Virginia. PNC also has two other 

subsidiary banks, which are located, 

and have branches, in Delaware and 

Pennsylvania, as well as a number of 

non-bank subsidiaries. As of September 

30, 2007, PNC had approximately $77 

billion in assets under management. 

Furthermore, PNC’s asset managers 

satisfy the definition of the term Asset 

Manager, as set forth in Section IV(f) of 

this proposed exemption. 

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60326 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

2. On September 29, 2006, Merrill 

Lynch & Co. (Merrill Lynch) combined 

its asset management business with 

BlackRock (the Merger). The resulting 

entity retained the BlackRock name and 

continues to trade on the New York 

Stock Exchange under the symbol 

‘‘BLK’’. Prior to the Merger, PNC owned 

approximately 70.6 percent (70.6%) of 

BlackRock. As a result of the Merger, 

Merrill Lynch now owns a 50.3 percent 

(50.3%) economic interest and an 

approximate 45 percent (45%) voting 

interest in BlackRock, and PNC’s 

ownership interest has been reduced to 

approximately 34 percent (34%) of 

BlackRock. The remaining interest in 

BlackRock is owned by the public and 

by BlackRock employees. 

Merrill Lynch and PNC each have two 

seats on the Board of Directors of 

BlackRock, as a result of the Merger. 

The remaining seats on the Board of 

Directors, which include a majority of 

the total board seats, are held by 

independent directors. The Applicants 

represent that each of Merrill Lynch and 

PNC has agreed to vote all of its shares 

of BlackRock stock on all matters, 

including the election of directors, in 

accordance with the recommendations 

of the Board of Directors of BlackRock 

so long as voting in such a manner is 

consistent with the terms of the 

respective stockholder agreements 

between BlackRock and each of Merrill 

Lynch and PNC. 

3. It is represented that the BlackRock 

Related Entities, as defined in Section 

IV(d), below, and the PNC Related 

Entities, as defined in Section IV(e), 

below, to which the proposed 

exemption applies are regulated by 

federal government agencies, such as 

the SEC, as well as state government 

agencies and industry self-regulatory 

organizations (e.g., the Financial 

Industry Regulatory Authority). 

4. The Applicants request an 

individual administrative exemption 

that would permit the purchase of 

securities, including Rule 144A 

Securities, by an Asset Manager acting 

as a fiduciary on behalf of Client Plans, 

as defined in Section IV(h), below, and 

In-House Plans, as defined in Section 

IV(o), below, including such plans 

invested in Pooled Funds, from any 

person other than the Asset Manager or 

PNC/BlackRock Related Entities, as 

defined in Section IV(c), below, during 

the existence of an initial offering of 

such Securities in which a PNC/ 

BlackRock Related Broker-Dealer, as 

defined in Section IV(b), below, is a 

member or a manager of the 

underwriting syndicate for such 

Securities. Such a transaction is 

described, herein, as an AUT. A PNC/ 

BlackRock Related Broker-Dealer would 

receive no selling concessions in 

connection with the Securities sold to 

such plans. 

In addition, the Applicants seek an 

exemption to deal with the situation 

where a PNC/BlackRock Related BrokerDealer is a manager or member of such 

syndicate and an Affiliated Servicer, as 

defined in Section IV(p), below, serves 

as servicer of a trust that issued the 

Securities (whether or not debt 

securities). Such transaction is 

described, herein, as an AUT and AST. 

Further, the Applicants have requested 

an exemption where an Affiliated 

Servicer serves as servicer of a trust that 

issued the Securities (whether or not 

debt securities) and whether or not a 

PNC/BlackRock Related Entity is a 

manager or member of the syndicate. 

Such transaction is described, herein, as 

an AST. 

5. With regard to the Asset Managers 

under the control of BlackRock and 

Asset Managers under the control of 

PNC, the Applicants represent that since 

the effective date of the Merger, 

BlackRock has had a general policy with 

respect to Client Plans not to purchase 

securities, including Rule 144A 

Securities, from underwriting or selling 

syndicates with respect to which a PNC/ 

BlackRock Related Broker-Dealer is a 

member or manager out of concern that 

such purchases may give rise to 

prohibited transactions under the Act. 

After the Merger, notwithstanding 

PNC’s sizable equity stakes in 

BlackRock, it is not clear that PNC or 

any subsidiaries of PNC will be 

considered ‘‘affiliates’’ of BlackRock. 

Among the reasons for this uncertainty 

are the stockholder agreements between 

BlackRock and PNC and BlackRock and 

Merrill Lynch, each of which severely 

restricts the ability of Merrill Lynch and 

PNC, individually or in combination, to 

control the activities of BlackRock. For 

example, Merrill Lynch and PNC each 

has agreed to vote all of its shares of 

BlackRock stock on all matters, 

including the election of directors, in 

accordance with the recommendations 

of the Board of Directors of BlackRock, 

so long as voting in such a manner is 

consistent with the terms of the 

respective stockholder agreements 

between BlackRock and Merrill Lynch 

and BlackRock and PNC. In addition, 

PNC and its affiliates are permitted to 

hold no more than the greater of: (i) 

35% of the total voting power of 

BlackRock issued and outstanding; and 

(ii) the ownership of PNC immediately 

after the closing of the Merger. Merrill 

Lynch has agreed to cap its ownership 

in BlackRock such that it is permitted to 

hold no more than 45 percent (45%) of 

the voting shares of BlackRock. 

Therefore, an argument can be made 

that neither Merrill Lynch nor PNC are 

or will be in a position to ‘‘control’’ 

BlackRock. Nevertheless, when an Asset 

Manager is a fiduciary with investment 

discretion with respect to a Client Plan, 

and such Asset Manager is deciding 

whether to purchase securities in an 

underwriting or selling syndicate in 

which a PNC/BlackRock Related BrokerDealer is a manager or member, it might 

be argued that the ownership interest of 

PNC in BlackRock could affect such 

Asset Manager’s best judgment as a 

fiduciary, raising issues under section 

406(b) of the Act. Accordingly, the 

Applicants seek the requested relief to 

cover PNC/BlackRock Related BrokerDealers. The Applicants represent that 

the failure to provide the requested 

relief will result in Client Plans being 

unfairly precluded from participating in 

a significant amount of investment 

opportunities. 

6. With regard to the Asset Manager 

under the actual control of PNC, the 

Applicants represent that, in accordance 

with Prohibited Transaction Class 

Exemption 75–1, 40 FR 50845 (Oct. 31, 

1975) (PTE 75–1), such Asset Managers 

may purchase underwritten securities 

for plans when a broker-dealer that is a 

PNC Related Entity is a member of the 

underwriting or selling syndicate. In 

this regard, Part III of PTE 75–1 provides 

limited relief from the prohibited 

transaction provisions of the Act for 

plan fiduciaries that purchase securities 

from an underwriting or selling 

syndicate with respect to which the 

fiduciary or an affiliate is a member. 

However, such relief is not available if 

the affiliated broker-dealer is a manager 

of the underwriting or selling syndicate. 

Further, PTE 75–1 does not provide 

relief for the purchase of unregistered 

securities. Unregistered securities 

include securities purchased by a 

broker-dealer for resale to a ‘‘qualified 

institutional buyer’’ (QIB) pursuant to 

the SEC’s Rule 144A under the 1933 

Act. It is represented that Rule 144A is 

commonly utilized in connection with 

sales of debt securities issued by 

domestic and foreign corporations and 

equity securities issued by foreign 

corporations to U.S. investors that are 

QIBs. The Applicants represent that 

many plans have expanded their 

investment portfolios in recent years to 

include securities sold under Rule 

144A. Notwithstanding the unregistered 

status of such securities, it is 

represented that syndicates selling Rule 

144A Securities are the functional 

equivalent of syndicates selling 

registered securities. 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60327 

1Commercial mortgage-backed securities are nonconvertible debt securities, pass-through certificates 

or trust certificates that represent a beneficial 

ownership interest in the assets of an issuer which 

is a trust and which entitles the holder to payments 

of principal, interest and/or other payments made 

with respect to the assets of such trust and the 

corpus or assets of which consist solely of 

obligations that bear interest or are purchased at a 

discount and which are secured by commercial real 

property including obligations secured by leasehold 

interests on commercial real property that are rated 

in one of the four highest rating categories by the 

Rating Organizations (such CMBS are described as 

‘‘investment grade’’). 

2The Applicant notes that this is true for primary 

and secondary market purchases and regardless of 

whether or not the Asset Manager buying on behalf 

of the plan is related to an underwriter. In primary 

market transactions, the Asset Manager/underwriter 

relationship would necessitate compliance with the 

proposed exemption, if granted by the Department. 

If the Asset Manager/underwriter relationship did 

not exist but an Asset Manager/servicer relationship 

were present, only the provisions of the proposed 

exemption applicable to such a relationship would 

apply. 

7. The Applicants represent that PNC/ 

BlackRock Related Broker-Dealers 

regularly serve as managers of 

underwriting or selling syndicates for 

registered securities, and as managers or 

members of underwriting or selling 

syndicates for Rule 144A Securities. 

Accordingly, Asset Managers are 

currently refraining from purchasing on 

behalf of Client Plans securities where 

a PNC/BlackRock Related Broker-Dealer 

is the manager of the underwriting or 

selling syndicate, including Rule 144A 

Securities sold in such offerings, 

resulting in such Client Plans being 

unable to participate in significant 

investment opportunities. 

8. The Applicants represent that Asset 

Managers make their respective 

investment decisions on behalf of, or 

render investment advice to, Client 

Plans pursuant to the governing 

document of the particular Client Plan 

or pooled fund and the investment 

guidelines and objectives set forth in the 

management or advisory agreement. 

Because the Client Plans are covered by 

Title I of the Act, such investment 

decisions are subject to the fiduciary 

responsibility provisions of the Act. 

9. The Applicants state, therefore, that 

the decision to invest in a particular 

offering is made on the basis of price, 

value, and the investment criteria of a 

Client Plan, not on whether the 

securities are currently being sold 

through an underwriting or selling 

syndicate. The Applicants further state 

that, because an Asset Manager’s 

compensation for its services is 

generally based upon assets under 

management, such Asset Manager has 

little incentive to purchase securities in 

an offering in which a PNC/BlackRock 

Related Broker-Dealer is an underwriter 

unless such a purchase is in the 

interests of Client Plans. If the assets 

under management do not perform well, 

the Asset Manager will receive less 

compensation and could lose clients, 

costs which far outweigh any gains from 

the purchase of underwritten securities. 

The Applicants point out that under the 

terms of the proposed exemption, a 

PNC/BlackRock Related Broker-Dealer 

may receive no selling concessions, 

direct or indirect, that are attributable to 

the amount of securities purchased by 

the Asset Manager on behalf of Client 

Plans. 

10. The Applicants state that the 

Asset Managers generally purchase 

securities in large blocks because the 

same investments will be made across 

several accounts. If there is a new 

offering of an equity or fixed income 

security that an Asset Manager wishes 

to purchase, it may be able to purchase 

the security through the offering 

syndicate at a lower price than it would 

pay in the open market, without 

transaction costs and with reduced 

market impact if it is buying a relatively 

large quantity. This is because a large 

purchase in the open market can cause 

an increase in the market price and, 

consequently, in the cost of the 

securities. Purchasing from an offering 

syndicate can thus reduce the costs to 

Client Plans. 

11. The Applicants point out that 

absent this proposed exemption, if a 

PNC/BlackRock Related Broker-Dealer is 

a manager of a syndicate that is 

underwriting an offering of securities, 

the Asset Managers will be foreclosed 

from purchasing any securities on 

behalf of Client Plans from that 

underwriting syndicate. In this regard, 

an Asset Manager would have to 

purchase the same securities in the 

secondary market. In such a 

circumstance, the Client Plans may 

incur greater costs both because the 

market price is often higher than the 

offering price, and because there are 

transaction and market impact costs. In 

turn, this will cause the Asset Manager 

to forego other investment opportunities 

because the purchase price of the 

underwritten security in the secondary 

market exceeds the price that the Asset 

Manager would have paid to the selling 

syndicate. 

12. The Applicants, by letter, dated 

August 13, 2008, amended their 

exemption application to request 

clarification from the Department that 

PNC’s origination of a loan in a 

commercial mortgage-backed securities 

(CMBS) 1 pool or the servicing of a loan 

in a CMBS pool by Midland Loan 

Services, Inc. (Midland), a PNC Related 

Entity, will not prevent a PNC/ 

BlackRock Related Entity from 

purchasing securities issued by the 

CMBS pool for a Client Plan. 

Specifically, the Applicants assert that 

the timing of events relating to the 

formation of the pool and the marketing 

of the securities is such that a plan 

fiduciary purchaser could not provide 

additional income or otherwise confer 

any additional benefit on PNC or 

Midland. The Applicants observed that 

these issues can arise both in situations 

that happen to need an AUT exemption 

(i.e., where the Asset Manager is related 

to a managing underwriter or member of 

the syndicate and a servicer of the 

CMBS pool), as well as in situations 

where the AUT issue was not present 

(i.e., where the Asset Manager is not 

related to a managing underwriter or 

member of the syndicate but is related 

to a servicer of the CMBS pool). 

In this regard, the Applicants 

discussed with the Department whether 

there was a need for additional relief 

from the Department for situations in 

which the Asset Manager, a PNC/ 

BlackRock Related Entity, wishes to 

purchase, on behalf of Clients Plans, 

investment grade securities backed by 

commercial mortgages originated or 

serviced by any PNC/BlackRock Related 

Entity if such purchases meet the 

conditions of an exemption 

substantially identical to PTE 2007–05, 

72 FR 13130 (March 20, 2007) (an 

Underwriter Exemption(s)). The 

Applicants stated that the CMBS are not 

sold to plans unless an individual 

Underwriter Exemption is complied 

with.2 The Underwriter Exemptions 

require that any CMBS purchased for 

plans be investment grade at the time of 

purchase. Consequently, for these 

transactions, no below-investment grade 

securities are purchased on behalf of 

plans. 

The Applicants affirmed to the 

Department that only investment grade 

CMBS are purchased for ERISA plans 

and that the ERISA plan fiduciary 

purchasers of securities issued by a 

CMBS pool do not affect the selection or 

compensation of a servicer of the loans 

in the CMBS pool. Moreover, the 

process of setting fees for the various 

parties to a CMBS transaction is not 

influenced by the fiduciary of an ERISA 

plan purchasing CMBS in the issuance. 

The Applicants provided a timeline to 

the Department, which demonstrated 

that pool formation, selection of the 

servicers and details of the servicers’ 

compensation were finalized before the 

printing of the preliminary offering 

materials and, thus, before solicitations 

were made to potential purchasers of 

the higher rated classes of securities that 

plans can purchase under an 

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60328 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

3The Applicants state that this special case is the 

type of transaction where all classes of offered 

securities are investment grade. This somewhat 

unusual situation comes about from having a 

transaction done with a small number of loans that 

are themselves highly rated by a rating agency. A 

tranche’s rating is a function of (a) the ratings of the 

loans and (b) the position of the tranche (in terms 

of subordination) within the structure of the 

transaction. When all of the loans in a transaction 

receive investment grade ratings, all of the tranches, 

including the controlling classes, will be rated 

investment grade. Thus, in this special case, under 

the Underwriter Exemptions and the AUT 

exemptions, fiduciaries theoretically could buy 

such controlling classes on behalf of plans. 

Nonetheless, the Applicants assert that as a matter 

of policy, they do not buy first-loss pieces for plans. 

Further, the Applicants state that the subordinate 

classes are usually too small in size to be a useful 

purchase for plan fiduciaries. 

4See, March 11, 2008 Department letter to 

Barbara D. Klippert. In an Information letter, the 

Department noted that a mortgage loan originator 

would not be considered a sponsor of the trust in 

an Underwriter Exemption transaction if the 

originator has no responsibility for the organization 

of the issuer, does not deposit the mortgage 

obligations in the issuer in exchange for securities, 

and is not a signatory to the Mortgage Loan Sale and 

Assignment Agreement and the related Trust 

Agreement. Similarly, a mortgage loan originator 

does not become a ‘‘sponsor’’ of the issuer merely 

because the originator makes representations and 

warranties and incurs repurchase obligations in a 

mortgage loan purchase agreement with the sponsor 

or an affiliate, or because the rights to enforce such 

representations, warranties and obligations are 

assigned into an issuer. 

Underwriter Exemption. In other words, 

the timing of purchases of CMBS on 

behalf of plans is beyond the point 

where such purchases could affect 

either the choice of loans for the 

securitization pool or the choice of or 

compensation of any servicer. Thus, the 

Applicants maintained that, in these 

CMBS transactions, there is no 

opportunity, except as explained in 

footnote 3, below, for a buyer of an 

investment grade tranche of CMBS to 

influence the selection of loans in a 

pool, the appointment of a master, 

primary or special servicer, or the 

compensation of a master, primary or 

special servicer. 

The Applicants noted that although 

the steps necessary to form a CMBS pool 

generally ensure that the above timeline 

is accurate, there are rare cases where 

even the most junior tranches are 

investment grade and could in theory be 

purchased on behalf of plans.3 In this 

instance, the Applicant stated that both 

PNC and BlackRock have indicated that 

they do not purchase such junior 

tranches on behalf of ERISA plan clients 

and do not intend to do so in the future 

in such circumstances. 

Based on these facts, the Department 

believes that no additional relief is 

needed for PNC or BlackRock to 

purchase investment-grade CMBS 

securities on behalf of plans during the 

existence of an underwriting syndicate, 

solely due to PNC’s or BlackRock’s 

relationship to an originator of one or 

more loans in the CMBS pool if, once 

the loan originator has transferred the 

loans to the pool, the loan originator has 

no other responsibilities to the pool 

other than a limited repurchase 

obligation.4 Based upon the information 

provided by the Applicants, the 

Department has determined to provide 

limited additional relief, subject to 

modified conditions described in this 

proposed exemption, for transactions 

where a PNC/BlackRock Related Entity 

is a servicer of loans in the CMBS pool. 

Registered Securities Offerings 

13. The Applicants represent that 

PNC/BlackRock Related Broker-Dealers 

currently manage and participate in firm 

commitment underwriting syndicates 

for registered offerings of both equity 

and debt securities. While equity and 

debt underwritings may operate 

differently with regard to the actual 

sales process, the basic structures are 

the same. In a firm commitment 

underwriting, the underwriting 

syndicate purchases the securities from 

the issuer and then resells the securities 

to investors. 

14. The Applicants represent that 

while, as a legal matter, a selling 

syndicate assumes the risk that the 

underwritten securities might not be 

fully sold, as a practical matter, this risk 

is reduced in marketed deals, through 

‘‘building a book’’ (i.e., taking 

indications of interest from potential 

purchasers) prior to pricing the 

securities. Accordingly, there is 

generally no incentive for the 

underwriters to use their discretionary 

accounts (or the discretionary accounts 

of their affiliates) to buy up the 

securities as a way to avoid 

underwriting obligations. 

15. It is represented that each selling 

syndicate has one or more lead 

managers, who are the principal contact 

between the syndicate and the issuer 

and who are responsible for organizing 

and coordinating the syndicate. The 

syndicate may also have co-managers, 

who generally assist in distributing the 

underwritten securities. While equity 

syndicates may include additional 

underwriters that are not managers, 

more recently, membership in many 

debt syndicates has been limited to lead 

and co-managers. 

16. It is represented that if more than 

one underwriter is involved in a selling 

syndicate, the lead manager and the 

underwriters enter into an ‘‘Agreement 

among Underwriters’’ in the form 

designated by one of the lead managers 

selected by the issuer. Most lead 

managers have a standing form of 

agreement. This master agreement is 

then commonly supplemented for the 

particular deal by sending an 

‘‘invitation wire’’ or ‘‘terms telex’’ that 

sets forth particular terms to the other 

underwriters. 

17. The arrangement between the 

syndicate and the issuer of the 

underwritten securities is embodied in 

an underwriting agreement, which is 

signed on behalf of the underwriters by 

one or more of the managers. In a firm 

commitment underwriting, the 

underwriting agreement provides, 

subject to certain closing conditions, 

that the underwriters are obligated to 

purchase all of the underwritten 

securities from the issuer in accordance 

with their respective commitments, if 

any securities are not purchased. This 

obligation is met by using the proceeds 

received from investors purchasing 

securities in the offering, although there 

is a risk that the underwriters will have 

to pay for a portion of the securities in 

the event that not all of the securities 

are sold or an investor defaults on its 

obligation. 

18. The Applicants represent that, 

generally, it is unlikely that in marketed 

deals all offered securities will not be 

sold. In marketed deals, the 

underwriting agreement is not executed 

until after the underwriters have 

obtained sufficient indications of 

interest to purchase the securities from 

a sufficient number of investors to 

assure that all the securities being 

offered will be acquired by investors. 

Once the underwriting agreement is 

executed, the underwriters promptly 

begin contacting the investors to 

confirm the sales, at first by oral 

communication and then by written 

confirmation. Sales may be finalized 

within hours and sometimes minutes, 

but in any event prior to the opening of 

the market for trading the next day. In 

registered transactions, the underwriters 

have a strong interest in completing the 

sales as soon as possible because, until 

they ‘‘break syndicate,’’ they cannot 

recommence normal trading activity, 

which includes buying and selling the 

securities for their customers or own 

account. 

19. The Applicants represent that the 

process of ‘‘building a book’’ or 

soliciting indications of interest occurs 

in a registered equity offering, after a 

registration statement is filed with the 

SEC. While it is under review by the 

SEC staff, representatives of the issuer of 

the securities and the selling syndicate 

managers conduct meetings with 

potential investors, who learn about the 

company and the underwritten 

securities. Potential investors also 

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5The Applicants maintain that Rule 415 permits 

an issuer to sell debt as well as equity securities 

under an effective registration statement previously 

filed with the SEC by filing a post-effective 

amendment or supplemental prospectus. 

6This procedure was put into place by PNC and 

BlackRock in order to facilitate BlackRock’s 

affiliated investment advisers’ compliance with 

certain provisions of the 1940 Act, as amended. 

These provisions permit such investment advisers 

to purchase securities for registered investment 

companies they advise in underwritten offerings in 

which a PNC/BlackRock Related Broker-Dealer is 

acting as a co-manager or otherwise participating so 

long as an order is not directed to a PNC/BlackRock 

Related Broker-Dealer. 

7The Applicants represent that no BlackRock 

Related Entity is currently in the business of 

underwriting or placing securities for third parties. 

In the event a BlackRock Related Entity engages in 

such activities, the Applicants represent that 

appropriate business separation policies and 

procedures would be instituted. 

receive a preliminary prospectus. The 

underwriters cannot make any firm 

sales until the registration statement is 

declared effective by the SEC. Prior to 

the effective date, while the investors 

cannot become legally obligated to make 

a purchase, such investors indicate 

whether they have an interest in buying, 

and the lead managers compile a ‘‘book’’ 

of investors who are willing to ‘‘circle’’ 

a particular portion of the issue. 

Although investors cannot be legally 

bound to buy the securities until the 

registration statement is effective, 

investors generally follow through on 

their indications of interest. 

20. Assuming that the marketing 

efforts have produced sufficient 

indications of interest, the Applicants 

represent that the issuer of the 

securities, after consultation with the 

lead manager, will set the price of the 

securities upon being declared effective 

by the SEC. After the registration 

statement has been declared effective by 

the SEC and the underwriting agreement 

is executed, the underwriters contact 

those investors that have indicated an 

interest in purchasing securities in the 

offering to execute the sales. The 

Applicants represent that offerings are 

often oversubscribed, and many have an 

over-allotment option that the 

underwriters can exercise to acquire 

additional shares from the issuer. Where 

an offering is oversubscribed, the 

underwriters decide how to allocate the 

securities among the potential 

purchasers. However, if the offering is 

an initial public offering of an equity 

security, then the underwriters may not 

sell the securities to (among others) any 

person that is a broker-dealer, an 

associated person of a broker-dealer, a 

portfolio manager, or an owner of a 

broker-dealer. Additionally, 

underwriters may not withhold for their 

own account any initial public offering 

of an equity security. 

21. The Applicants represent that debt 

offerings and certain equity offerings 

may be ‘‘negotiated’’ offerings, 

‘‘competitive bid’’ offerings, or ‘‘bought 

deals.’’ ‘‘Negotiated’’ offerings are 

conducted in the same manner as 

marketed equity offerings with regard to 

when the underwriting agreement is 

executed and how the securities are 

offered. ‘‘Competitive bid’’ offerings, in 

which the issuer determines the price 

for the securities through competitive 

bidding rather than negotiating the price 

with the underwriting syndicate, are 

often performed under ‘‘shelf’’ 

registration statements pursuant to the 

SEC’s Rule 415 under the 1933 Act 

(Rule 415) (17 CFR 230.415).5

22. In a competitive bid offering, 

prospective lead underwriters will bid 

against one another to purchase debt 

securities, based upon their 

determinations of the degree of investor 

interest in the securities. Depending on 

the level of investor interest and the size 

of the offering, a bidding lead 

underwriter may bring in co-managers 

to assist in the sales process. Most of the 

securities are frequently sold within 

hours, or sometimes even less than an 

hour, after the securities are made 

available for purchase. 

23. It is represented that because of 

market forces and the requirements of 

Rule 415, the competitive bid process is 

generally, though not exclusively, 

available only to issuers who have been 

subject to the reporting requirements of 

the 1934 Act for at least one (1) year. 

24. Occasionally, underwriters ‘‘buy’’ 

the entire deal off of a ‘‘shelf 

registration’’ or in a Rule 144A offering 

before obtaining indications of interest. 

These ‘‘bought’’ deals involve issuers 

whose securities enjoy a deep and 

liquid secondary market, such that an 

underwriter has confidence without premarketing that it can identify purchasers 

for the securities. 

Information Barriers 

25. Prior applicants for similar relief 

have represented that there are internal 

policies in place that restrict contact 

and the flow of information between 

investment management personnel and 

non-investment management personnel 

in the same or affiliated financial 

service firms. The Applicants represent 

that, notwithstanding the concerns 

raised herein pertaining to the level of 

ownership in BlackRock by PNC, the 

firms are independent businesses, each 

with policies restricting the distribution 

of proprietary and other non-public 

information, and each subject to 

restrictions on disclosure under the U.S. 

securities laws. Further, each has a 

fiduciary obligation not to share 

proprietary and non-public information 

outside the firm. PNC and BlackRock 

also represent that they do not share 

information with each other which is 

not generally available to the public that 

may affect the market price of securities, 

although it should be noted that PNC 

does notify BlackRock when it is going 

to be a manager or a member of an 

underwriting syndicate at a time that 

such information may not be publicly 

known.6

26. Prior applicants for substantially 

similar relief have further represented 

that their business separation policies 

and procedures are also structured to 

restrict the flow of any information to or 

from the Asset Manager that could limit 

its flexibility in managing client assets, 

and of information obtained or 

developed by the Asset Manager that 

could be used by other parts of the 

organization, to the detriment of the 

Asset Manager’s clients. Because 

BlackRock and PNC are independent 

businesses, no such policies are 

required.7

27. The Applicants represent that 

major clients of PNC/BlackRock Related 

Broker-Dealers include investment 

management firms that are competitors 

of the Asset Manager. Similarly, an 

Asset Manager deals on a regular basis 

with broker-dealers that compete with 

PNC/BlackRock Related Broker-Dealers. 

If special consideration was shown to a 

PNC/BlackRock Related Broker-Dealer, 

such conduct would likely have an 

adverse effect on the relationships of the 

Asset Manager with firms that compete 

with such PNC/BlackRock Related 

Broker-Dealer. Each of the prior 

applicants for similar relief have 

represented that a goal of its business 

separation policies is to avoid any 

possible perception of improper flows of 

information in order to prevent any 

adverse impact on client and business 

relationships. Because BlackRock and 

PNC are independent businesses, it is 

represented that no such policies are 

required. 

Underwriting Compensation 

28. The Applicants represent that the 

underwriters are compensated through 

the ‘‘spread,’’ or difference, between the 

price at which the underwriters 

purchase the securities from the issuer 

and the price at which the securities are 

sold to the public. The spread is divided 

into three components. 

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29. The first component includes the 

management fee, which generally 

represents an agreed upon percentage of 

the overall spread and is allocated 

among the lead manager and comanagers. Where there is more than one 

managing underwriter, the way the 

management fee will be allocated among 

the managers is generally agreed upon 

between the managers and the issuer 

prior to soliciting indications of interest. 

Thus, the allocation of the management 

fee is not reflective of the amount of 

securities that a particular manager sells 

in an offering. 

30. The second component is the 

underwriting fee, which represents 

compensation to the underwriters 

(including the non-managers, if any) for 

the risks they assume in connection 

with the offering and for the use of their 

capital. This component of the spread is 

also used to cover the expenses of the 

underwriting that are not otherwise 

reimbursed by the issuer of the 

securities. 

31. The first and second components 

of the ‘‘spread’’ are received without 

regard to how the underwritten 

securities are allocated for sales 

purposes or to whom the securities are 

sold. The third component of the spread 

is the selling concession, which 

generally constitutes 60 percent (60%) 

or more of the spread. The selling 

concession compensates the 

underwriters for their actual selling 

efforts. The allocation of selling 

concessions among the underwriters 

generally follows the allocation of the 

securities for sales purposes. However, 

a buyer of the underwritten securities 

may designate other broker-dealers 

(selling group members) to receive the 

selling concessions arising from the 

securities they purchase. 

32. Securities are allocated for sales 

purposes into two categories. The first 

and larger category is the ‘‘institutional 

pot,’’ which is the pot of securities from 

which sales are made to institutional 

investors. Selling concessions for 

securities sold from the institutional pot 

are generally designated by the 

purchaser to go to particular 

underwriters or other broker-dealers. If 

securities are sold from the institutional 

pot, the selling syndicate managers 

sometimes receive a portion of the 

selling concessions, referred to as a 

‘‘fixed designation’’ or an ‘‘auto pot 

split’’ attributable to securities sold in 

this category, without regard to who 

sold the securities or to whom they were 

sold. For securities covered by this 

proposed exemption, however, a PNC/ 

BlackRock Related Broker-Dealer may 

not receive, either directly or indirectly, 

any compensation or consideration that 

is attributable to the fixed designation 

generated by purchases of securities by 

an Asset Manager on behalf of its Client 

Plans. 

33. The second category of allocated 

securities is ‘‘private client’’ or ‘‘retail,’’ 

which are the securities retained by the 

underwriters for sale to their customers. 

The underwriters receive the selling 

concessions from their respective retail 

retention allocations. Securities may be 

shifted between the two categories 

based upon whether either category is 

oversold or undersold during the course 

of the offering. 

34. The Applicants represent that the 

inability of a PNC/BlackRock Related 

Broker-Dealer to receive any selling 

concessions, or any compensation 

attributable to the fixed designations 

generated by purchases of securities by 

an Asset Manager on behalf of Client 

Plans, removes the primary economic 

incentive for an Asset Manager to make 

purchases that are not in the interests of 

such Client Plans from offerings for 

which a PNC/BlackRock Related BrokerDealer is an underwriter. 

Rule 144A Securities 

35. The Applicants represent that a 

number of the offerings of Rule 144A 

Securities in which a PNC/BlackRock 

Related Broker-Dealer participates 

represent good investment opportunities 

for the Asset Manager’s Client Plans. 

Particularly with respect to foreign 

securities, a Rule 144A offering may 

provide the least expensive and most 

accessible means for obtaining these 

securities. However, as discussed above, 

PTE 75–1, Part III, does not cover Rule 

144A Securities. Therefore, absent an 

exemption, the Asset Manager is 

foreclosed from purchasing such 

securities for its Client Plans in offerings 

in which a PNC/BlackRock Related 

Broker-Dealer participates. 

36. The Applicants state that Rule 

144A acts as a ‘‘safe harbor’’ exemption 

from the registration provisions of the 

Securities Act of 1933 (the 1933 Act) for 

re-sales of certain types of securities to 

QIBs. QIBs include several types of 

institutional entities, such as employee 

benefit plans and commingled trust 

funds holding assets of such plans, 

which own and invest on a 

discretionary basis at least $100 million 

in securities of unaffiliated issuers. 

37. Any securities may be sold 

pursuant to Rule 144A except for those 

of the same class or similar to a class 

that is publicly traded in the United 

States, or certain types of investment 

company securities. This limitation is 

designed to prevent side-by-side public 

and private markets developing for the 

same class of securities and is the 

reason that Rule 144A transactions are 

generally limited to debt securities. 

38. Buyers of Rule 144A Securities 

must be able to obtain, upon request, 

basic information concerning the 

business of the issuer and the issuer’s 

financial statements, much of which is 

the same information as would be 

furnished if the offering were registered. 

This condition does not apply, however, 

to an issuer filing reports with the SEC 

under the Securities Exchange Act of 

1934 (the 1934 Act), for which reports 

are publicly available. The condition 

also does not apply to a ‘‘foreign private 

issuer’’ for whom reports are furnished 

to the SEC under Rule 12g3–2(b) of the 

1934 Act (17 CFR 240.12g3–2(b)), or to 

issuers who are foreign governments or 

political subdivisions thereof and are 

eligible to use Schedule B under the 

1933 Act (which describes the 

information and documents required to 

be contained in a registration statement 

filed by such issuers). 

39. Sales under Rule 144A, like sales 

in a registered offering, remain subject 

to the protections of the anti-fraud rules 

of federal and state securities laws. 

These provisions include section 10(b) 

of the 1934 Act and Rule 10b–5 

thereunder (17 CFR 240.10b–5) and 

section 17(a) of the 1933 Act (15 U.S.C. 

77a). Through these and other 

provisions, the SEC may use its full 

range of enforcement powers to exercise 

its regulatory authority over the market 

for Rule 144A Securities, in the event 

that it detects improper practices. 

40. The Applicants represent that this 

potential liability for fraud provides a 

considerable incentive to the issuer of 

the securities and the members of the 

selling syndicate to insure that the 

information contained in a Rule 144A 

offering memorandum is complete and 

accurate in all material respects. Among 

other things, the lead manager typically 

obtains an opinion from a law firm, 

commonly referred to as a ‘‘10b–5’’ 

opinion, stating that the law firm has no 

reason to believe that the offering 

memorandum contains any untrue 

statement of material fact or omits to 

state a material fact necessary in order 

to make sure the statements made, in 

light of the circumstances under which 

they were made, are not misleading. 

41. The Applicants represent that 

Rule 144A offerings generally are 

structured in the same manner as 

underwritten registered offerings. They 

may be ‘‘negotiated’’ offerings, 

‘‘competitive bid’’ offerings or ‘‘bought 

deals.’’ One difference is that a Rule 

144A offering uses an offering 

memorandum rather than a prospectus 

that is filed with the SEC. The 

marketing process is substantially 

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similar, except that the selling efforts 

are limited to contacting QIBs and there 

are no general solicitations for buyers 

(e.g., no general advertising). In 

addition, contracts for sale may be 

entered into with investors and 

securities may be priced before a selling 

agreement is executed (and this is 

typically the case with respect to sales 

of asset-backed securities). Further, 

generally, there are no non-manager 

members in a Rule 144A selling 

syndicate. The Applicants nonetheless 

request that the proposed exemption 

extend to authorization for situations 

where a PNC/BlackRock Related BrokerDealer acts as manager or as a member. 

42. The proposed exemption is 

administratively feasible. In this regard, 

compliance with the terms and 

conditions of the proposed exemption 

will be verifiable and subject to audit. 

43. The Applicants represent that the 

proposed exemption is in the interest of 

participants and beneficiaries of Client 

Plans that engage in the covered 

transactions. In this regard, it is 

represented that the proposed 

exemption will increase the investment 

opportunities and will reduce 

administrative costs for Client Plans. 

Further, the Applicants represent that 

the proposed exemption is protective of 

the rights of participants and 

beneficiaries of affected Client Plans. In 

this regard, the notification provisions 

and other requirements in the proposed 

exemption are similar to the conditions 

set forth in other exemptions published 

by the Department in similar 

circumstances. 

44. In summary, it is represented that 

the proposed transactions meet the 

statutory criteria for an exemption 

under section 408(a) of the Act and 

section 4975(c)(2) of the Code because: 

(a) The Client Plans will gain access to 

desirable investment opportunities; (b) 

in each offering, an Asset Manager will 

purchase the Securities for its Client 

Plans from an underwriter or brokerdealer other than a PNC/BlackRock 

Related Entity; (c) conditions of the 

proposed exemption will restrict the 

types of Securities that may be 

purchased, the types of underwriting or 

selling syndicates and issuers involved, 

and the price and timing of the 

purchases; (d) the amount of Securities 

that an Asset Manager may purchase on 

behalf of Client Plans will be subject to 

percentage limitations; (e) a PNC/ 

BlackRock Related Broker-Dealer will 

not be permitted to receive, either 

directly, indirectly or through 

designation, any selling concession with 

respect to the Securities sold to an Asset 

Manager on behalf of an account of a 

Client Plan; (f) prior to any purchase of 

Securities, an Asset Manager will make 

the required disclosures to an 

Independent Fiduciary of each Client 

Plan and obtain authorization in 

accordance with the procedures in the 

proposed exemption; (g) an Asset 

Manager will provide regular reporting 

to an Independent Fiduciary of each 

Client Plan with respect to all Securities 

purchased pursuant to the proposed 

exemption, if granted; (h) each Client 

Plan will be subject to net asset 

requirements, with certain exceptions 

for Pooled Funds; and (i) an Asset 

Manager must have total assets under 

management in excess of $5 billion and 

shareholders’ or partners’ equity in 

excess of $1 million, in addition to 

qualifying as a QPAM, pursuant to Part 

V(a) of PTE 84–14. 

Notice to Interested Persons 

Notice of the proposed exemption 

will be provided to all interested 

persons in the manner agreed upon by 

the Applicants and the Department 

within 15 days of the date of publication 

in the Federal Register. Such notice 

shall include a copy of the notice of 

proposed exemption as published in the 

Federal Register and shall inform 

interested persons of their right to 

comment and to request a hearing 

(where appropriate). 

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 does not relieve a 

fiduciary or other party in interest or 

disqualified person from certain other 

provisions of the Act, 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 require, among other things, a 

fiduciary to discharge his or her 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; 

(2) The proposed exemption, if 

granted, will not extend to transactions 

prohibited under section 406(b)(3) of the 

Act; 

(3) Before an exemption can be 

granted under section 408(a) of the Act, 

the Department must find that the 

exemption is administratively feasible, 

in the interest of the plan and of its 

participants and beneficiaries and 

protective of the rights of participants 

and beneficiaries of the plan; and 

(4) The proposed exemption, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act, including 

statutory or administrative exemptions. 

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. 

Written Comments and Hearing 

Requests 

All interested persons are invited to 

submit written comments and/or 

requests for a public hearing on the 

pending exemption to the address, as set 

forth below, within the time frame, as 

set forth below. All comments and 

requests for a public hearing will be 

made a part of the record. Comments 

and hearing requests should state the 

reasons for the writer’s interest in the 

proposed exemption. A request for a 

public hearing must also state the issues 

to be addressed and include a general 

description of the evidence to be 

presented at the hearing. Comments and 

hearing requests received will also be 

available for public inspection with the 

referenced application at the address, as 

set forth below. 

Proposed Exemption 

Based on the facts and representations 

set forth in the application, the 

Department of Labor (the Department) is 

considering granting an exemption 

under the authority of section 408(a) of 

the Employee Retirement Income 

Security Act of 1974 (the Act or ERISA) 

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

Revenue Code of 1986 (the Code) and in 

accordance with the procedures set 

forth in 29 CFR Part 2570, Subpart B (55 

FR 32836, 32847, August 10, 1990) as 

follows: 

Section I—Covered Transactions 

If the proposed exemption is granted, 

the restrictions of section 406 of the Act 

and the sanctions resulting from the 

application of section 4975 of the Code, 

by reason of section 4975(c)(1)(A) 

through (F) of the Code, shall not apply 

to the purchase of certain securities (the 

Securities), as defined, below in Section 

IV(k), by an Asset Manager, as defined, 

below, in Section IV(f), from any person 

other than the Asset Manager or PNC/ 

BlackRock Related Entities, as defined, 

below, in Section IV(c), during the 

existence of an underwriting or selling 

syndicate with respect to such 

Securities, where the Asset Manager 

purchases such Securities, as a fiduciary 

on behalf of an employee benefit plan or 

employee benefit plans (Client Plan(s)), 

as defined, below, in Section IV(h); or 

on behalf of Client Plans, and/or InHouse Plans, as defined, below, in 

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Section IV(o), which are invested in a 

pooled fund or in pooled funds (Pooled 

Fund(s)), as defined, below, in Section 

IV(i) under the following circumstances: 

(a) Where a PNC/BlackRock Related 

Broker-Dealer, as defined, below, in 

Section IV(b), is a manager or member 

of such syndicate (an affiliated 

underwriter transaction (AUT)); or 

(b) Where a PNC/BlackRock Related 

Broker-Dealer, as defined, below, in 

Section IV(b), is a manager or member 

of such syndicate and an Affiliated 

Servicer, as defined below in Section 

IV(p), serves as servicer of a trust that 

issued the Securities (whether or not 

debt securities) (an affiliated servicer 

transaction (AUT and AST); or 

(c) Where an Affiliated Servicer serves 

as servicer of a trust that issued the 

Securities (whether or not debt 

securities) (AST). 

This proposed exemption applies to 

transactions, as described, above, in 

Section I(a) and (b) of this exemption 

only if the applicable conditions as set 

forth, below, in Section II, are satisfied. 

This proposed exemption applies to the 

transaction, as described, above, in 

Section I(c) of this exemption, only if all 

of the conditions, as set forth, below, in 

Section III are satisfied. 

Section II—Conditions for Transactions 

Described in Section I(a) and (b) 

The proposed exemption is 

conditioned upon satisfaction of the 

following requirements: 

(a)(1) The Securities to be purchased 

are either— 

(i) Part of an issue registered under 

the Securities Act of 1933 (the 1933 Act) 

(15 U.S.C. 77a et seq.). If the Securities 

to be purchased are part of an issue that 

is exempt from such registration 

requirement, such Securities: 

(A) Are issued or guaranteed by the 

United States or by any person 

controlled or supervised by and acting 

as an instrumentality of the United 

States pursuant to authority granted by 

the Congress of the United States, 

(B) Are issued by a bank, 

(C) Are exempt from such registration 

requirement pursuant to a federal 

statute other than the 1933 Act, or 

(D) Are the subject of a distribution 

and are of a class which is required to 

be registered under section 12 of the 

Securities Exchange Act of 1934 (the 

1934 Act) (15 U.S.C. 781), and are 

issued by an issuer that has been subject 

to the reporting requirements of section 

13 of the 1934 Act (15 U.S.C. 78m) for 

a period of at least ninety (90) days 

immediately preceding the sale of such 

Securities and that has filed all reports 

required to be filed thereunder with the 

Securities and Exchange Commission 

(SEC) during the preceding twelve (12) 

months; or 

(ii) Part of an issue that is an Eligible 

Rule 144A Offering, as defined in SEC 

Rule 10f–3 (17 CFR 270.10f 3(a)(4)). 

Where the Eligible Rule 144A Offering 

of the Securities is of equity securities, 

the offering syndicate shall obtain a 

legal opinion regarding the adequacy of 

the disclosure in the offering 

memorandum; 

(2) The Securities to be purchased are 

purchased prior to the end of the first 

day on which any sales are made, 

pursuant to that offering, at a price that 

is not more than the price paid by each 

other purchaser of the Securities in that 

offering or in any concurrent offering of 

the Securities, except that— 

(i) If such Securities are offered for 

subscription upon exercise of rights, 

they may be purchased on or before the 

fourth day preceding the day on which 

the rights offering terminates; or 

(ii) If such Securities are debt 

securities, they may be purchased at a 

price that is not more than the price 

paid by each other purchaser of the 

Securities in that offering or in any 

concurrent offering of the Securities and 

may be purchased on a day subsequent 

to the end of the first day on which any 

sales are made, pursuant to that offering, 

provided that the interest rates, as of the 

date of such purchase, on comparable 

debt securities offered to the public 

subsequent to the end of the first day on 

which any sales are made and prior to 

the purchase date are less than the 

interest rate of the debt Securities being 

purchased; and 

(3) The Securities to be purchased are 

offered pursuant to an underwriting or 

selling agreement under which the 

members of the syndicate are committed 

to purchase all of the Securities being 

offered, except if— 

(i) Such Securities are purchased by 

others pursuant to a rights offering; or 

(ii) Such Securities are offered 

pursuant to an over-allotment option. 

(b) The issuer of the Securities to be 

purchased pursuant to this proposed 

exemption must have been in 

continuous operation for not less than 

three (3) years, including the operation 

of any predecessors, unless the 

Securities to be purchased— 

(1) are non-convertible debt securities 

rated in one of the four highest rating 

categories by Standard & Poor’s Rating 

Services, Moody’s Investors Service, 

Inc., Fitch Ratings, Inc., DBRS Limited, 

DBRS, Inc., or any successors thereto 

(collectively, the Rating Organizations); 

provided that none of the Rating 

Organizations rates such securities in a 

category lower than the fourth highest 

rating category; or 

(2) are debt securities issued or fully 

guaranteed by the United States or by 

any person controlled or supervised by 

and acting as an instrumentality of the 

United States pursuant to authority 

granted by the Congress of the United 

States; or 

(3) are debt securities which are fully 

guaranteed by a person (the Guarantor) 

that has been in continuous operation 

for not less than three (3) years, 

including the operation of any 

predecessors, provided that such 

Guarantor has issued other securities 

registered under the 1933 Act; or if such 

Guarantor has issued other securities 

which are exempt from such registration 

requirement, such Guarantor has been 

in continuous operation for not less 

than three (3) years, including the 

operation of any predecessors, and such 

Guarantor: 

(A) Is a bank, or 

(B) Is an issuer of securities which are 

exempt from such registration 

requirement, pursuant to a Federal 

statute other than the 1933 Act; or 

(C) Is an issuer of securities that are 

the subject of a distribution and are of 

a class which is required to be registered 

under section 12 of the 1934 Act (15 

U.S.C. 781), and are issued by an issuer 

that has been subject to the reporting 

requirements of section 13 of the 1934 

Act (15 U.S.C. 78m) for a period of at 

least ninety (90) days immediately 

preceding the sale of such securities and 

that has filed all reports required to be 

filed hereunder with the SEC during the 

preceding twelve (12) months. 

(c) The aggregate amount of Securities 

of an issue purchased, pursuant to this 

proposed exemption, by the Asset 

Manager with: (i) The assets of all Client 

Plans; and (ii) the assets, calculated on 

a pro rata basis, of all Client Plans and 

In-House Plans investing in Pooled 

Funds managed by the Asset Manager; 

and (iii) the assets of plans to which the 

Asset Manager renders investment 

advice within the meaning of 29 CFR 

2510.3 21(c) does not exceed: 

(1) 10 percent (10%) of the total 

amount of the Securities being offered 

in an issue, if such Securities are equity 

securities; 

(2) 35 percent (35%) of the total 

amount of the Securities being offered 

in an issue, if such Securities are debt 

securities rated in one of the four 

highest rating categories by at least one 

of the Rating Organizations; provided 

that none of the Rating Organizations 

rates such Securities in a category lower 

than the fourth highest rating category; 

or 

(3) 25 percent (25%) of the total 

amount of the Securities being offered 

in an issue, if such Securities are debt 

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securities rated in the fifth or sixth 

highest rating categories by at least one 

of the Rating Organizations; provided 

that none of the Rating Organizations 

rates such Securities in a category lower 

than the sixth highest rating category; 

and 

(4) The assets of any single Client 

Plan (and the assets of any Client Plans 

and any In-House Plans investing in 

Pooled Funds) may not be used to 

purchase any Securities being offered, if 

such Securities are debt securities rated 

lower than the sixth highest rating 

category by any of the Rating 

Organizations; 

(5) Notwithstanding the percentage of 

Securities of an issue permitted to be 

acquired, as set forth in Section II(c)(1), 

(2), and (3), above, of this proposed 

exemption, the amount of Securities in 

any issue (whether equity or debt 

securities) purchased, pursuant to this 

proposed exemption, by the Asset 

Manager on behalf of any single Client 

Plan, either individually or through 

investment, calculated on a pro rata 

basis, in a Pooled Fund may not exceed 

three percent (3%) of the total amount 

of such Securities being offered in such 

issue, and; 

(6) If purchased in an Eligible Rule 

144A Offering, the total amount of the 

Securities being offered for purposes of 

determining the percentages, described, 

above, in Section II(c)(1)–(3) and (5), is 

the total of: 

(i) The principal amount of the 

offering of such class of Securities sold 

by underwriters or members of the 

selling syndicate to ‘‘qualified 

institutional buyers’’ (QIBs), as defined 

in SEC Rule 144A (17 CFR 

230.144A(a)(1)); plus 

(ii) The principal amount of the 

offering of such class of Securities in 

any concurrent public offering. 

(d) The aggregate amount to be paid 

by any single Client Plan in purchasing 

any Securities which are the subject of 

this proposed exemption, including any 

amounts paid by any Client Plan or InHouse Plan in purchasing such 

Securities through a Pooled Fund, 

calculated on a pro rata basis, does not 

exceed three percent (3%) of the fair 

market value of the net assets of such 

Client Plan or In-House Plan, as of the 

last day of the most recent fiscal quarter 

of such Client Plan or In-House Plan 

prior to such transaction. 

(e) The covered transactions are not 

part of an agreement, arrangement, or 

understanding designed to benefit any 

PNC/BlackRock Related Entity. 

(f) If the transaction is an AUT, no 

PNC/BlackRock Related Broker-Dealer 

receives, either directly, indirectly, or 

through designation, any selling 

concession, or other compensation or 

consideration that is based upon the 

amount of Securities purchased by any 

single Client Plan, or that is based on 

the amount of Securities purchased by 

Client Plans or In-House Plans through 

Pooled Funds, pursuant to this 

proposed exemption. In this regard, a 

PNC/BlackRock Related Broker-Dealer 

may not receive, either directly or 

indirectly, any compensation or 

consideration that is attributable to the 

fixed designations generated by 

purchases of the Securities by the Asset 

Manager on behalf of any single Client 

Plan or any Client Plan or In-House Plan 

in Pooled Funds. 

(g)(1) If the transaction is an AUT, the 

amount a PNC/BlackRock Related 

Broker-Dealer receives in management, 

underwriting, or other compensation or 

consideration is not increased through 

an agreement, arrangement, or 

understanding for the purpose of 

compensating such PNC/BlackRock 

Related Broker-Dealer for foregoing any 

selling concessions for those Securities 

sold pursuant to this proposed 

exemption. Except as described above, 

nothing in this Section II(g)(1) shall be 

construed as precluding a PNC/ 

BlackRock Related Broker-Dealer from 

receiving management fees for serving 

as manager of an underwriting or selling 

syndicate, underwriting fees for 

assuming the responsibilities of an 

underwriter in the underwriting or 

selling syndicate, or other compensation 

or consideration that is not based upon 

the amount of Securities purchased by 

the Asset Manager on behalf of any 

single Client Plan, or on behalf of any 

Client Plan or In-House Plan 

participating in Pooled Funds, pursuant 

to this proposed exemption; and 

(2) Each PNC/BlackRock Related 

Broker-Dealer shall provide to the Asset 

Manager a written certification, signed 

by an officer of such PNC/BlackRock 

Related Broker-Dealer, stating the 

amount that each such PNC/BlackRock 

Related Broker-Dealer received in 

compensation or consideration during 

the past quarter, in connection with any 

offerings covered by this proposed 

exemption, was not adjusted in a 

manner inconsistent with Section II(e), 

(f), or (g) of this proposed exemption. 

(h) The covered transactions are 

performed under a written authorization 

executed in advance by an independent 

fiduciary of each single Client Plan (the 

Independent Fiduciary), as defined, 

below, in Section IV(j). 

(i) Prior to the execution by an 

Independent Fiduciary of a single Client 

Plan of the written authorization 

described, above, in Section II(h), the 

following information and materials 

(which may be provided electronically) 

must be provided by the Asset Manager 

to such Independent Fiduciary: 

(1) A copy of the Notice of Proposed 

Exemption (the Notice) and a copy of 

the final exemption (the Grant) as 

published in the Federal Register, 

provided that the Notice and the Grant 

are supplied simultaneously; and 

(2) Any other reasonably available 

information regarding the covered 

transactions that such Independent 

Fiduciary requests the Asset Manager to 

provide. 

(j) Subsequent to the initial 

authorization by an Independent 

Fiduciary of a single Client Plan 

permitting the Asset Manager to engage 

in the covered transactions on behalf of 

such single Client Plan, the Asset 

Manager will continue to be subject to 

the requirement to provide within a 

reasonable period of time any 

reasonably available information 

regarding the covered transactions that 

the Independent Fiduciary requests the 

Asset Manager to provide. 

(k)(1) In the case of an existing 

employee benefit plan investor (or 

existing In-House Plan investor, as the 

case may be) in a Pooled Fund, such 

Pooled Fund may not engage in any 

covered transactions pursuant to this 

proposed exemption, unless the Asset 

Manager provides the written 

information, as described, below, and 

within the time period described, 

below, in this Section II(k)(2), to the 

Independent Fiduciary of each such 

plan participating in such Pooled Fund 

(and to the fiduciary of each such InHouse Plan participating in such Pooled 

Fund). 

(2) The following information and 

materials, (which may be provided 

electronically) shall be provided by the 

Asset Manager not less than 45 days 

prior to such Asset Manager engaging in 

the covered transactions on behalf of a 

Pooled Fund, pursuant to this proposed 

exemption; and provided further that 

the information described, below, in 

this Section II(k)(2)(i) and (iii) is 

supplied simultaneously: 

(i) A notice of the intent of such 

Pooled Fund to purchase Securities 

pursuant to this proposed exemption, a 

copy of this Notice, and a copy of the 

Grant, as published in the Federal 

Register, provided that the Notice and 

the Grant are supplied simultaneously; 

(ii) Any other reasonably available 

information regarding the covered 

transactions that the Independent 

Fiduciary of a plan (or fiduciary of an 

In-House Plan) participating in a Pooled 

Fund requests the Asset Manager to 

provide; and 

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(iii) A termination form expressly 

providing an election for the 

Independent Fiduciary of a plan (or 

fiduciary of an In-House Plan) 

participating in a Pooled Fund to 

terminate such plan’s (or In-House 

Plan’s) investment in such Pooled Fund 

without penalty to such plan (or InHouse Plan). Such form shall include 

instructions specifying how to use the 

form. Specifically, the instructions will 

explain that such plan (or such InHouse Plan) has an opportunity to 

withdraw its assets from a Pooled Fund 

for a period of no more than 30 days 

after such plan’s (or such In-House 

Plan’s) receipt of the initial notice of 

intent, described, above, in Section 

II(k)(2)(i), and that the failure of the 

Independent Fiduciary of such plan (or 

fiduciary of such In-House Plan) to 

return the termination form to the Asset 

Manager in the case of a plan (or InHouse Plan) participating in a Pooled 

Fund by the specified date shall be 

deemed to be an approval by such plan 

(or such In-House Plan) of its 

participation in the covered transactions 

as an investor in such Pooled Fund. 

Further, the instructions will identify 

the Asset Manager and the PNC/ 

BlackRock Related Broker-Dealer and 

the Affiliated Servicer, if applicable, 

and will provide the address of the 

Asset Manager. The instructions will 

state that this proposed exemption may 

be unavailable, unless the fiduciary of 

each plan participating in the covered 

transactions as an investor in a Pooled 

Fund is, in fact, independent of the 

PNC/BlackRock Related Entities. The 

instructions will also state that the 

fiduciary of each such plan must advise 

the Asset Manager, in writing, if it is not 

an ‘‘Independent Fiduciary,’’ as that 

term is defined, below, in Section IV(j). 

For purposes of this Section II(k), the 

requirement that the fiduciary 

responsible for the decision to authorize 

the transactions described, above, in 

Section I of this proposed exemption for 

each plan be independent of the PNC/ 

BlackRock Related Entities shall not 

apply in the case of an In-House Plan. 

(l)(1) In the case of each plan (and in 

the case of each In-House Plan) whose 

assets are proposed to be invested in a 

Pooled Fund after such Pooled Fund has 

satisfied the conditions set forth in this 

proposed exemption to engage in the 

covered transactions, the investment by 

such plan (or by such In-House Plan) in 

the Pooled Fund is subject to the prior 

written authorization of an Independent 

Fiduciary representing such plan (or the 

prior written authorization by the 

fiduciary of such In-House Plan, as the 

case may be), following the receipt by 

such Independent Fiduciary of such 

plan (or by the fiduciary of such InHouse Plan, as the case may be) of the 

written information described, above, in 

Section II(k)(2)(i) and (ii); provided that 

the Notice and the Grant, described, 

above, in Section II(k)(2)(i) are provided 

simultaneously. 

(2) For purposes of this Section II(l), 

the requirement that the fiduciary 

responsible for the decision to authorize 

the transactions described, above, in 

Section I of this proposed exemption for 

each plan proposing to invest in a 

Pooled Fund be independent of the 

PNC/BlackRock Related Entities shall 

not apply in the case of an In-House 

Plan. 

(m) Subsequent to the initial 

authorization by an Independent 

Fiduciary of a plan (or by a fiduciary of 

an In-House Plan) to invest in a Pooled 

Fund that engages in the covered 

transactions, the Asset Manager will 

continue to be subject to the 

requirement to provide within a 

reasonable period of time any 

reasonably available information 

regarding the covered transactions that 

the Independent Fiduciary of such plan 

(or the fiduciary of such In-House Plan, 

as the case may be) requests the Asset 

Manager to provide. 

(n) At least once every three months, 

and not later than 45 days following the 

period to which such information 

relates, the Asset Manager shall furnish: 

(1) In the case of each single Client 

Plan that engages in the covered 

transactions, the information described, 

below, in this Section II(n)(3)–(7), to the 

Independent Fiduciary of each such 

single Client Plan. 

(2) In the case of each Pooled Fund in 

which a Client Plan (or in which an InHouse Plan) invests, the information 

described, below, in this Section 

II(n)(3)–(6) and (8), to the Independent 

Fiduciary of each such Client Plan (and 

to the fiduciary of each such In-House 

Plan) invested in such Pooled Fund. 

(3) A quarterly report (the Quarterly 

Report) (which may be provided 

electronically) which discloses all the 

Securities purchased pursuant to this 

proposed exemption during the period 

to which such report relates on behalf 

of the Client Plan, In-House Plan, or 

Pooled Fund to which such report 

relates, and which discloses the terms of 

each of the transactions described in 

such report, including: 

(i) The type of Securities (including 

the rating of any Securities which are 

debt securities) involved in each 

transaction; 

(ii) The price at which the Securities 

were purchased in each transaction; 

(iii) The first day on which any sale 

was made during the offering of the 

Securities; 

(iv) The size of the issue of the 

Securities involved in each transaction; 

(v) The number of Securities 

purchased by the Asset Manager for the 

Client Plan, In-House Plan, or Pooled 

Fund to which the transaction relates; 

(vi) The identity of the underwriter 

from whom the Securities were 

purchased for each transaction; 

(vii) The underwriting spread in each 

transaction (i.e., the difference, between 

the price at which the underwriter 

purchases the securities from the issuer 

and the price at which the securities are 

sold to the public); 

(viii) The price at which any of the 

Securities purchased during the period 

to which such report relates were sold; 

(ix) The market value at the end of the 

period to which such report relates of 

the Securities purchased during such 

period and not sold; and 

(x) In the case of an AST, the basis 

upon which the Affiliated Servicer is 

compensated; 

(4) The Quarterly Report contains: 

(i) A representation that the Asset 

Manager has received a written 

certification signed by an officer of each 

PNC/BlackRock Related Broker-Dealer, 

as described, above, in Section II(g)(2), 

affirming that, as to each AUT covered 

by this proposed exemption during the 

past quarter, such PNC/BlackRock 

Related Broker-Dealer acted in 

compliance with Section II(e), (f), and 

(g) of this proposed exemption. In the 

case of an AST, a representation of the 

asset Manager affirming that, as to each 

AST, the transaction was not part of an 

arrangement or understanding designed 

to benefit the Affiliated Servicer; and 

(ii) A representation that copies of 

such certifications will be provided 

upon request; 

(5) A disclosure in the Quarterly 

Report that states that any other 

reasonably available information 

regarding a covered transaction that an 

Independent Fiduciary (or fiduciary of 

an In-House Plan) requests will be 

provided, including, but not limited to: 

(i) The date on which the Securities 

were purchased on behalf of the Client 

Plan (or the In-House Plan) to which the 

disclosure relates (including Securities 

purchased by Pooled Funds in which 

such Client Plan (or such In-House Plan) 

invests; 

(ii) The percentage of the offering 

purchased on behalf of all Client Plans 

(and the pro rata percentage purchased 

on behalf of Client Plans and In-House 

Plans investing in Pooled Funds); and 

(iii) The identity of all members of the 

underwriting syndicate; 

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(6) The Quarterly Report discloses any 

instance during the past quarter where 

the Asset Manager was precluded for 

any period of time from selling 

Securities purchased under this 

proposed exemption in that quarter 

because of its relationship to a PNC/ 

BlackRock Related Broker-Dealer or of 

an Affiliated Servicer and the reason for 

this restriction; 

(7) Explicit notification, prominently 

displayed in each Quarterly Report sent 

to the Independent Fiduciary of each 

single Client Plan that engages in the 

covered transactions that the 

authorization to engage in such covered 

transactions may be terminated, without 

penalty to such single Client Plan, 

within five (5) days after the date that 

the Independent Fiduciary of such 

single Client Plan informs the person 

identified in such notification that the 

authorization to engage in the covered 

transactions is terminated; and 

(8) Explicit notification, prominently 

displayed in each Quarterly Report sent 

to the Independent Fiduciary of each 

Client Plan (and to the fiduciary of each 

In-House Plan) that engages in the 

covered transactions through a Pooled 

Fund that the investment in such 

Pooled Fund may be terminated, 

without penalty to such Client Plan (or 

such In-House Plan), within such time 

as may be necessary to effect the 

withdrawal in an orderly manner that is 

equitable to all withdrawing plans and 

to the non-withdrawing plans, after the 

date that the Independent Fiduciary of 

such Client Plan (or the fiduciary of 

such In-House Plan, as the case may be) 

informs the person identified in such 

notification that the investment in such 

Pooled Fund is terminated. 

(o) For purposes of engaging in 

covered transactions, each Client Plan 

(and each In-House Plan) shall have 

total net assets with a value of at least 

$50 million (the $50 Million Net Asset 

Requirement). For purposes of engaging 

in covered transactions involving an 

Eligible Rule 144A Offering, each Client 

Plan (and each In-House Plan) shall 

have total net assets of at least $100 

million in securities of issuers that are 

not affiliated with such Client Plan (or 

such In-House Plan, as the case may be) 

(the $100 Million Net Asset 

Requirement). 

For purposes of a Pooled Fund 

engaging in covered transactions, each 

Client Plan (and each In-House Plan) in 

such Pooled Fund shall have total net 

assets with a value of at least $50 

million. Notwithstanding the foregoing, 

if each such Client Plan (and each such 

In-House Plan) in such Pooled Fund 

does not have total net assets with a 

value of at least $50 million, the $50 

Million Net Asset Requirement will be 

met, if 50 percent (50%) or more of the 

units of beneficial interest in such 

Pooled Fund are held by Client Plans (or 

by In-House Plans) each of which has 

total net assets with a value of at least 

$50 million. For purposes of a Pooled 

Fund engaging in covered transactions 

involving an Eligible Rule 144A 

Offering, each Client Plan (and each InHouse Plan) in such Pooled Fund shall 

have total net assets of at least $100 

million in securities of issuers that are 

not affiliated with such Client Plan (or 

such In-House Plan, as the case may be). 

Notwithstanding the foregoing, if each 

such Client Plan (and each such InHouse Plan) in such Pooled Fund does 

not have total net assets of at least $100 

million in securities of issuers that are 

not affiliated with such Client Plan (or 

In-House Plan, as the case may be), the 

$100 Million Net Asset Requirement 

will be met if 50 percent (50%) or more 

of the units of beneficial interest in such 

Pooled Fund are held by Client Plans (or 

by In-House Plans) each of which have 

total net assets of at least $100 million 

in securities of issuers that are not 

affiliated with such Client Plan (or such 

In-House Plan, as the case may be), and 

the Pooled Fund itself qualifies as a 

QIB, as determined pursuant to SEC 

Rule 144A (17 CFR 230.144A(a)(F)). 

For purposes of the net asset 

requirements described, above, in this 

Section II(o), where a group of Client 

Plans is maintained by a single 

employer or controlled group of 

employers, as defined in section 

407(d)(7) of the Act, the $50 Million Net 

Asset Requirement (or in the case of an 

Eligible Rule 144A Offering, the $100 

Million Net Asset Requirement) may be 

met by aggregating the assets of such 

Client Plans, if the assets of such Client 

Plans are pooled for investment 

purposes in a single master trust. 

(p) No more than 20 percent of the 

assets of a Pooled Fund, at the time of 

a covered transaction, are comprised of 

assets of In-House Plans for which the 

Asset Manager, a PNC/BlackRock 

Related Entity or the Affiliated Servicer 

exercises investment discretion. 

(q) The Asset Manager and the PNC/ 

BlackRock Related Broker-Dealer, as 

applicable, maintain, or cause to be 

maintained, for a period of six (6) years 

from the date of any covered transaction 

such records as are necessary to enable 

the persons, described, below, in 

Section II(r), to determine whether the 

conditions of this proposed exemption 

have been met, except that— 

(1) No party in interest with respect 

to a plan which engages in the covered 

transactions, other than the Asset 

Manager, and the PNC/BlackRock 

Related Broker-Dealer or Affiliated 

Servicer, as applicable, shall be subject 

to a civil penalty under section 502(i) of 

the Act or the taxes imposed by section 

4975(a) and (b) of the Code, if such 

records are not maintained, or not 

available for examination, as required, 

below, by Section II(r); and 

(2) A prohibited transaction shall not 

be considered to have occurred if, due 

to circumstances beyond the control of 

the Asset Manager, or the PNC/ 

BlackRock Related Broker-Dealer, or the 

Affiliated Servicer, as applicable, such 

records are lost or destroyed prior to the 

end of the six year period. 

(r)(1) Except as provided, below, in 

Section II(r)(2), and notwithstanding 

any provisions of subsections (a)(2) and 

(b) of section 504 of the Act, the records 

referred to, above, in Section II(q) are 

unconditionally available at their 

customary location for examination 

during normal business hours by— 

(i) Any duly authorized employee or 

representative of the Department, the 

Internal Revenue Service, or the SEC; or 

(ii) Any fiduciary of any plan that 

engages in the covered transactions, or 

any duly authorized employee or 

representative of such fiduciary; or 

(iii) Any employer of participants and 

beneficiaries and any employee 

organization whose members are 

covered by a plan that engages in the 

covered transactions, or any authorized 

employee or representative of these 

entities; or 

(iv) Any participant or beneficiary of 

a plan that engages in the covered 

transactions, or duly authorized 

employee or representative of such 

participant or beneficiary; 

(2) None of the persons described, 

above, in Section II(r)(1)(ii)–(iv) shall be 

authorized to examine trade secrets of 

the Asset Manager, or the PNC/ 

BlackRock Related Broker-Dealer, or the 

Affiliated Servicer, or commercial or 

financial information which is 

privileged or confidential; and 

(3) Should the Asset Manager, or the 

PNC/BlackRock Related Broker-Dealer 

or the Affiliated Servicer refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure, pursuant to Section II(r)(2), 

above, the Asset Manager shall, by the 

close of the thirtieth (30th) day 

following the request, provide a written 

notice advising that person of the 

reasons for the refusal and that the 

Department may request such 

information. 

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Section III—Conditions for Transactions 

Described in Section I(c) 

The proposed exemption is 

conditioned upon satisfaction of the 

following requirements: 

(a) The Securities to be purchased are 

pass-through certificates or trust 

certificates that represent a beneficial 

ownership interest in the assets of an 

issuer which is a trust and which 

entitles the holder to payments of 

principal, interest and/or other 

payments made with respect to the 

assets of such trust and the corpus or 

assets of which consist solely of 

obligations that bear interest or are 

purchased at a discount and which are 

secured by commercial real property 

(including obligations secured by 

leasehold interests on commercial real 

property) that are rated in one of the 

four highest rating categories by the 

Rating Organizations; provided that 

none of the Rating Organizations rates 

such securities in a category lower than 

the fourth highest rating category 

(CMBS). 

(b) The purchase of the CMBS meets 

the conditions of an applicable 

underwriter exemption (the Underwriter 

Exemption(s)). The Underwriter 

Exemptions are a group of individual 

exemptions granted by the Department 

to provide relief for the origination and 

operation of certain asset pool 

investment trusts and the acquisition, 

holding, and disposition by plans of 

certain asset-backed pass-through 

certificates representing undivided 

interests in those investment trusts. The 

most recent amendment to the 

Underwriter Exemptions is PTE 2007– 

05, 72 FR 13130 (March 20, 2007), 

Technical Correction at 72 FR 16385 

(April 4, 2007) (PTE 2007–05). 

(c)(1) The aggregate amount of CMBS 

of an issue purchased, pursuant to this 

proposed exemption, by the Asset 

Manager with: 

(i) The assets of all Client Plans; and 

(ii) The assets, calculated on a pro 

rata basis, of all Client Plans and InHouse Plans investing in Pooled Funds 

managed by the Asset Manager; and 

(iii) The assets of plans to which the 

Asset Manager renders investment 

advice within the meaning of 29 CFR 

§ 2510.3–21(c) does not exceed 35 

percent (35%) of the total amount of the 

CMBS being offered in an issue. 

(2) Notwithstanding the percentage of 

CMBS of an issue permitted to be 

acquired, as set forth in Section III(c)(1) 

of this proposed exemption, the amount 

of CMBS in any issue purchased, 

pursuant to this proposed exemption, by 

the Asset Manager on behalf of any 

single Client Plan, either individually or 

through investment, calculated on a pro 

rata basis, in a Pooled Fund may not 

exceed three percent (3%) of the total 

amount of such CMBS being offered in 

such issue, and; 

(3) If purchased in an Eligible Rule 

144A Offering, the total amount of the 

CMBS being offered for purposes of 

determining the percentages, described 

in this Section III(c), is the total of: 

(i) The principal amount of the 

offering of such class of CMBS sold by 

underwriters or members of the selling 

syndicate to QIBs; plus 

(ii) The principal amount of the 

offering of such class of CMBS in any 

concurrent public offering. 

(d) The aggregate amount to be paid 

by any single Client Plan in purchasing 

any CMBS which are the subject of this 

proposed exemption, including any 

amounts paid by any Client Plan or InHouse Plan in purchasing such CMBS 

through a Pooled Fund, calculated on a 

pro rata basis, does not exceed three 

percent (3%) of the fair market value of 

the net assets of such Client Plan or InHouse Plan, as of the last day of the 

most recent fiscal quarter of such Client 

Plan or In-House Plan prior to such 

transaction. 

(e) The covered transactions are not 

part of an agreement, arrangement, or 

understanding designed to benefit any 

PNC/BlackRock Related Entity. 

(f) The covered transactions are 

performed under a written authorization 

executed in advance by an Independent 

Fiduciary of each single Client Plan, as 

defined, below, in Section IV(j). 

The written authorization 

requirement of this paragraph shall be 

deemed satisfied with respect to the 

covered transactions involving ASTs if 

the Asset Manager provides to the 

Independent Fiduciary the materials 

described in Section III(g), below, 

together with a termination form 

expressly providing an election for the 

Independent Fiduciary to terminate the 

authorization with respect to the 

covered transactions and a statement to 

the effect that the Asset Manager 

proposes to engage in the covered 

transactions on a specified date (that 

shall be not less than 45 days after the 

notice is sent to the Independent 

Fiduciary) unless the Independent 

Fiduciary signs and returns the 

termination form to the Asset Manager 

prior to such date. 

(g) The following information and 

materials (which may be provided 

electronically) must be provided by the 

Asset Manager to the Independent 

Fiduciary not less than 45 days prior to 

such Asset Manager engaging in the 

covered transactions pursuant to this 

proposed exemption: 

(1) A notice of the intent of the Asset 

Manager to purchase CMBS pursuant to 

Section I(c) of this exemption, a copy of 

the Notice, and a copy of the Grant, as 

published in the Federal Register, 

provided that the Notice and the Grant 

are supplied simultaneously; 

(2) A notice describing the 

relationship of the Affiliated Servicer to 

the Asset Manager. 

(3) The basis upon which the 

Affiliated Servicer is compensated and 

a representation by the Asset Manager 

affirming that, the transaction was not 

part of an agreement, arrangement, or 

understanding designed to benefit the 

Affiliated Servicer; and 

(4) Any other reasonably available 

information regarding the covered 

transactions that the Independent 

Fiduciary requests the Asset Manager to 

provide. 

(h) Subsequent to the initial 

authorization by an Independent 

Fiduciary of a single Client Plan 

permitting the Asset Manager to engage 

in the covered transactions on behalf of 

such single Client Plan, the Asset 

Manager will continue to be subject to 

the requirement to provide within a 

reasonable period of time any other 

reasonably available information 

regarding the covered transactions that 

the Independent Fiduciary requests the 

Asset Manager to provide. 

(i)(1) In the case of an existing 

employee benefit plan investor (or 

existing In-House Plan investor, as the 

case may be) in a Pooled Fund, such 

Pooled Fund may not engage in any 

covered transactions pursuant to 

Section I(c) of this proposed exemption, 

unless the Asset Manager provides the 

written information, as described, 

below, and within the time period 

described, below, in this Section 

III(i)(2), to the Independent Fiduciary of 

each such plan participating in such 

Pooled Fund (and to the fiduciary of 

each such In-House Plan participating 

in such Pooled Fund). 

(2) The following information and 

materials, (which may be provided 

electronically) shall be provided by the 

Asset Manager not less than 45 days 

prior to such Asset Manager engaging in 

the covered transactions on behalf of a 

Pooled Fund, pursuant to this proposed 

exemption; and provided further that 

the information described, below, in 

this Section III(i)(2)(i) and (iii) is 

supplied simultaneously: 

(i) A notice of the intent of such 

Pooled Fund to purchase CMBS 

pursuant to this proposed exemption, a 

copy of this Notice, and a copy of the 

Grant, as published in the Federal 

Register; 

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Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60337 

(ii) A notice describing the 

relationship of the Affiliated Servicer to 

the Asset Manager; 

(iii) Information on the basis upon 

which the Affiliated Servicer is 

compensated and a representation by 

the Asset Manager affirming that the 

transaction was not part of an 

agreement, arrangement, or 

understanding designed to benefit the 

Affiliated Servicer; and 

(iv) Any other reasonably available 

information regarding the covered 

transactions that the Independent 

Fiduciary of a plan (or fiduciary of an 

In-House Plan) participating in a Pooled 

Fund requests the Asset Manager to 

provide; and 

(v) A termination form expressly 

providing an election for the 

Independent Fiduciary of a plan (or 

fiduciary of an In-House Plan) 

participating in a Pooled Fund to 

terminate such plan’s (or In-House 

Plan’s) investment in such Pooled Fund 

without penalty to such plan (or InHouse Plan). Such form shall include 

instructions specifying how to use the 

form. Specifically, the instructions will 

explain that such plan (or such InHouse Plan) has an opportunity to 

withdraw its assets from a Pooled Fund 

for a period of no more than 30 days 

after such plan’s (or such In-House 

Plan’s) receipt of the initial notice of 

intent, described, above, in Section 

III(i)(2)(i), and that the failure of the 

Independent Fiduciary of such plan (or 

fiduciary of such In-House Plan) to 

return the termination form to the Asset 

Manager in the case of a plan (or InHouse Plan) participating in a Pooled 

Fund by the specified date shall be 

deemed to be an approval by such plan 

(or such In-House Plan) of its 

participation in the covered transactions 

as an investor in such Pooled Fund. 

Further, the instructions will identify 

the Asset Manager and the Affiliated 

Servicer and will provide the address of 

the Asset Manager. 

For purposes of this Section III(i), the 

requirement that the fiduciary 

responsible for the decision to authorize 

the transactions described, above, in 

Section I(c) of this proposed exemption 

for each plan be independent of the 

PNC/BlackRock Related Entities shall 

not apply in the case of an In-House 

Plan. 

(j)(1) In the case of each plan (and in 

the case of each In-House Plan) whose 

assets are proposed to be invested in a 

Pooled Fund after such Pooled Fund has 

satisfied the conditions set forth in this 

proposed exemption to engage in the 

covered transactions, the investment by 

such plan (or by such In-House Plan) in 

the Pooled Fund is subject to the prior 

written authorization of an Independent 

Fiduciary representing such plan (or the 

prior written authorization by the 

fiduciary of such In-House Plan, as the 

case may be), following the receipt by 

such Independent Fiduciary of the plan 

(or by the fiduciary of the In-House 

Plan, as the case may be) of the written 

information described, above, in Section 

III(i)(2); provided that the Notice and 

the Grant, described, above, in Section 

III(i)(2)(i) are provided simultaneously. 

The written authorization requirement 

of this paragraph shall be deemed 

satisfied with respect to the covered 

transactions involving ASTs if the Asset 

Manager provides to the Independent 

Fiduciary the materials described in 

Section III(i)(2) above, together with a 

termination form expressly providing an 

election for the Independent Fiduciary 

to terminate the authorization with 

respect to the covered transactions and 

a statement to the effect that the Asset 

Manager proposes to engage in the 

covered transactions on a specified date 

(that shall be not less than 45 days after 

the notice is sent to the Independent 

Fiduciary) unless the Independent 

Fiduciary signs and returns the 

termination form to the Asset Manager 

prior to such date. 

(2) For purposes of this Section III(j), 

the requirement that the fiduciary 

responsible for the decision to authorize 

the transactions described, above, in 

Section I(c) of this proposed exemption 

for each plan proposing to invest in a 

Pooled Fund be independent of the 

PNC/BlackRock Related Entities shall 

not apply in the case of an In-House 

Plan. 

(k) Subsequent to the initial 

authorization by an Independent 

Fiduciary of a plan (or by a fiduciary of 

an In-House Plan) to invest in a Pooled 

Fund that engages in the covered 

transactions, the Asset Manager will 

continue to be subject to the 

requirement to provide within a 

reasonable period of time any 

reasonably available information 

regarding the covered transactions that 

the Independent Fiduciary of such plan 

(or the fiduciary of such In-House Plan, 

as the case may be) requests the Asset 

Manager to provide. 

(l) The requirements of Section II(o), 

(p) and (q) are met. 

Section IV—Definitions 

(a) The term, ‘‘the Applicants,’’ means 

BlackRock Inc. and the PNC Financial 

Services Group, Inc. 

(b) The term, ‘‘PNC/BlackRock 

Related Broker-Dealer,’’ means any 

broker dealer that is a PNC/BlackRock 

Related Entity that meets the 

requirements of this proposed 

exemption. Such PNC/BlackRock 

Related Broker-Dealer may participate 

in an underwriting or selling syndicate 

as a manager or member. The term, 

‘‘manager,’’ means any member of an 

underwriting or selling syndicate who, 

either alone or together with other 

members of the syndicate, is authorized 

to act on behalf of the members of the 

syndicate in connection with the sale 

and distribution of the Securities, as 

defined, below, in Section IV(k), being 

offered or who receives compensation 

from the members of the syndicate for 

its services as a manager of the 

syndicate. 

(c) The term, ‘‘PNC/BlackRock 

Related Entity(s)’’ includes all entities 

listed in this Section IV(c)(i) and (ii): 

(i) PNC and any person directly or 

indirectly, through one or more 

intermediaries, controlling, controlled 

by, or under common control with PNC, 

and 

(ii) BlackRock and any person directly 

or indirectly, through one or more 

intermediaries, controlling, controlled 

by, or under common control with, 

BlackRock. For purposes of this 

proposed exemption, the definition of a 

PNC/BlackRock Related Entity shall 

include any entity that satisfies such 

definition in the future. 

(d) The term, ‘‘BlackRock Related 

Entity’’ or ‘‘BlackRock Related Entities,’’ 

means BlackRock and any person 

directly or indirectly, through one or 

more intermediaries, controlling, 

controlled by, or under common control 

with BlackRock. 

(e) The term, ‘‘PNC Related Entity’’ or 

‘‘PNC Related Entities,’’ means PNC and 

any person directly or indirectly, 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with PNC. 

(f) The term, ‘‘Asset Manager,’’ means 

a BlackRock Related Entity, as defined, 

above, in Section IV(d) or a PNC Related 

Entity, as defined above, in Section 

IV(e). For purposes of this proposed 

exemption, the Asset Manager must 

qualify as a ‘‘qualified professional asset 

manager’’ (QPAM), as that term is 

defined under section V(a) of PTE 84– 

14. In addition to satisfying the 

requirements for a QPAM under section 

V(a) of PTE 84–14, (49 FR 9494 (Mar. 

13, 1984), as amended, 70 FR 49305 

(Aug. 23, 2005)), the Asset Manager 

must also have total client assets under 

its management and control in excess of 

$5 billion, as of the last day of its most 

recent fiscal year and shareholders’ or 

partners’ equity in excess of $1 million. 

(g) The term, ‘‘control,’’ means the 

power to exercise a controlling 

influence over the management or 

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60338 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

policies of a person other than an 

individual. 

(h) The term, ‘‘Client Plan(s),’’ means 

an employee benefit plan or employee 

benefit plans that are subject to the Act 

and/or the Code, and for which plan(s) 

an Asset Manager exercises 

discretionary authority or discretionary 

control respecting management or 

disposition of some or all of the assets 

of such plan(s), but excludes In-House 

Plans, as defined, below, in Section 

IV(o). 

(i) The term, ‘‘Pooled Fund(s),’’ means 

a common or collective trust fund(s) or 

a pooled investment fund(s): 

(1) In which employee benefit plan(s) 

subject to the Act and/or Code invest, 

(2) Which is maintained by an Asset 

Manager, and 

(3) For which such Asset Manager 

exercises discretionary authority or 

discretionary control respecting the 

management or disposition of the assets 

of such fund(s). 

(j)(1) The term, ‘‘Independent 

Fiduciary,’’ means a fiduciary of a plan 

who is unrelated to, and independent of 

any PNC/BlackRock Related Entity. For 

purposes of this proposed exemption, a 

fiduciary of a plan will be deemed to be 

unrelated to, and independent of any 

PNC/BlackRock Related Entity, if such 

fiduciary represents that neither such 

fiduciary, nor any individual 

responsible for the decision to authorize 

or terminate authorization for the 

transactions described, above, in 

Section I of this proposed exemption, is 

an officer, director, or highly 

compensated employee (within the 

meaning of section 4975(e)(2)(H) of the 

Code) of any PNC/BlackRock Related 

Entity, and represents that such 

fiduciary shall advise the Asset Manager 

within a reasonable period of time after 

any change in such facts occurs. 

(2) Notwithstanding anything to the 

contrary in this Section IV(j), a fiduciary 

of a plan is not independent: 

(i) If such fiduciary, directly or 

indirectly, through one or more 

intermediaries, controls, is controlled 

by, or is under common control with 

any PNC/BlackRock Related Entity; 

(ii) If such fiduciary directly or 

indirectly receives any compensation or 

other consideration from any PNC/ 

BlackRock Related Entity for his or her 

own personal account in connection 

with any transaction described in this 

proposed exemption; 

(iii) If any officer, director, or highly 

compensated employee (within the 

meaning of section 4975(e)(2)(H) of the 

Code) of the Asset Manager responsible 

for the transactions described, above, in 

Section I of this proposed exemption, is 

an officer, director, or highly 

compensated employee (within the 

meaning of section 4975(e)(2)(H) of the 

Code) of the sponsor of a plan or of the 

fiduciary responsible for the decision to 

authorize or terminate authorization for 

the transactions described, above, in 

Section I. However, if such individual is 

a director of the sponsor of a plan or of 

the responsible fiduciary, and if he or 

she abstains from participation in: (A) 

The choice of such plan’s investment 

manager/adviser; and (B) the decision to 

authorize or terminate authorization for 

transactions described, above, in 

Section I, then Section IV(j)(2)(iii) shall 

not apply. 

(3) 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 a 

PNC/BlackRock Related Entity. 

(k) The term, ‘‘Securities,’’ shall have 

the same meaning as defined in section 

2(36) of the Investment Company Act of 

1940 (the 1940 Act), as amended (15 

U.S.C. 80a 2(36) (1996)). For purposes of 

this proposed exemption, mortgagebacked or other asset backed securities 

rated by one of the Rating 

Organizations, as defined, below, in 

Section IV(n), will be treated as debt 

securities. 

(l) The term, ‘‘Eligible Rule 144A 

Offering,’’ shall have the same meaning 

as defined in SEC Rule 10f–3(a)(4) (17 

CFR 270.10f–3(a)(4)) under the 1940 

Act. 

(m) The term, ‘‘qualified institutional 

buyer,’’ or the term, ‘‘QIB,’’ shall have 

the same meaning as defined in SEC 

Rule 144A (17 CFR 230.144A(a)(1)) 

under the 1933 Act. 

(n) The term, ‘‘Rating Organizations,’’ 

means Standard & Poor’s Rating 

Services, Moody’s Investors Service, 

Inc., Fitch Ratings Inc., DBRS Limited, 

or DBRS, Inc., or any successors thereto. 

(o) The term, ‘‘In-House Plan(s),’’ 

means an employee benefit plan(s) that 

is subject to the Act and/or the Code, 

and that is sponsored by: 

(1) A PNC Related Entity, as defined, 

above, in Section IV(e), or 

(2) A BlackRock Related Entity, as 

defined, above, in Section IV(d), for 

their respective employees. 

(p) The term ‘‘Affiliated Servicer’’ 

means a PNC/BlackRock Related Entity 

that serves as a servicer of one or more 

of the commercial mortgage loans in a 

Pooled Fund that issues commercial 

mortgage-backed securities. 

The availability of this proposed 

exemption is subject to the express 

condition that the material facts and 

representations contained in the 

application for exemption are true and 

complete and accurately describe all 

material terms of the transactions. In the 

case of continuing transactions, if any of 

the material facts or representations 

described in the applications 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. 

Signed at Washington, DC, this 6th day of 

October 2008. 

Ivan L. Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. E8–24100 Filed 10–9–08; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–63,758] 

Lear Corporation, Quality Control and 

Inspection Department, 950 Loma 

Verde Drive, El Paso, Texas; Notice of 

Affirmative Determination Regarding 

Application for Reconsideration 

In an application post-marked 

September 4, 2008 a worker requested 

administrative reconsideration of the 

negative determination regarding 

workers’ eligibility to apply for Trade 

Adjustment Assistance (TAA) and 

Alternative Trade Adjustment 

Assistance (ATAA) applicable to 

workers and former workers of Lear 

Corporation, Quality Control and 

Inspection Department, located at 950 

Loma Verde Drive, El Paso, Texas 

(subject firm). 

The negative determination was 

issued on August 21, 2008. The 

Department’s Notice of determination 

was published in the Federal Register 

on September 3, 2008 (73 FR 51530). 

Workers performed testing and 

inspection of component parts 

(terminals, connectors, wires, and 

grommets) for wire harnesses. The 

determination stated that the subject 

firm does not produce an article within 

the meaning of Section 222(a)(2) of the 

Act. The determination further stated 

that because the subject workers are 

denied eligibility to apply for TAA, the 

workers cannot be certified eligible for 

ATAA. 

The request for reconsideration stated 

that subject firm ‘‘held two very 

different departments * * * the Quality 

Control and Inspection Dept. * * * and 

the other one was the PPAP Dept. 

(Production Part Approval Process). The 

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