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‘‘(3) For purposes of paragraph (1)— 
‘‘(A) Except as provided in subparagraphs (C) 
and (D), the term ‘amount involved’ means, with re-
spect to a prohibited transaction, the greater of— 
‘‘(i) the amount of money and the fair 
market value of the other property given, or 
‘‘(ii) the amount of money and the fair 
market value of the other property received. 
‘‘(B) For purposes of subparagraph (A), fair 
market value shall be determined as of the date on 
which the prohibited transaction occurs, except that 
in the case described in paragraph (2) fair market 
value shall be the highest fair market value during 
the period between the date of the transaction and 
the date of correction. 
‘‘(C) In the case of services described in sub-
section (b)(2) or (c)(2) of section 408, the term 
‘amount involved’ means only the amount of excess 
compensation. 
‘‘(D) In the case of principal transactions pro-
hibited under section 406(a) involving securities or 
commodities, the term ‘amount involved’ means only 
the amount received by the disqualified person in ex-
cess of the amount such person would have received
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in an arm’s length transaction with an unrelated 
party as of the same date. 
‘‘(E) For the purposes of this paragraph— 
‘‘(i) the term ‘security’ has the meaning 
given such term by section 475(c)(2) of the In-
ternal Revenue Code of 1986 (without regard to 
subparagraph (F)(iii) and the last sentence 
thereof), and 
‘‘(ii) the term ‘commodity’ has the mean-
ing given such term by section 475(e)(2) of 
such Code (without regard to subparagraph 
(D)(iii) thereof).’’. 
(b) EXEMPTION FOR BLOCK TRADING.— 
(1) AMENDMENTS TO EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—Section 408(b) of 
such Act (29 U.S.C. 1108(b)), as amended by sec-
tion 601, is further amended by adding at the end 
the following new paragraph: 
‘‘(15)(A) Any transaction involving the pur-
chase or sale of securities between a plan and a 
party in interest (other than a fiduciary described in 
section 3(21)(A)(ii)) with respect to a plan if— 
‘‘(i) the transaction involves a block trade, 
‘‘(ii) at the time of the transaction, the in-
terest of the plan (together with the interests of
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any other plans maintained by the same plan 
sponsor), does not exceed 10 percent of the ag-
gregate size of the block trade, and 
‘‘(iii) the terms of the transaction, includ-
ing the price, are at least as favorable to the 
plan as an arm’s length transaction. 
‘‘(B) For purposes of this paragraph, the term 
‘block trade’ includes any trade which will be allo-
cated across two or more client accounts of a fidu-
ciary.’’. 
(2) AMENDMENTS
TO
INTERNAL
REVENUE 
CODE OF 1986.— 
(A) IN GENERAL.—Subsection (d) of sec-
tion 4975 of the Internal Revenue Code of 1986 
(relating to exemptions) is amended by striking 
‘‘or’’ at the end of paragraph (15), by striking 
the period at the end of paragraph (16) and in-
serting ‘‘, or’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(17) any transaction involving the purchase or 
sale of securities between a plan and a party in in-
terest (other than a fiduciary described in subsection 
(e)(3)(B)) with respect to a plan if— 
‘‘(A) the transaction involves a block trade,
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‘‘(B) at the time of the transaction, the in-
terest of the plan (together with the interests of 
any other plans maintained by the same plan 
sponsor), does not exceed 10 percent of the ag-
gregate size of the block trade, and 
‘‘(C) the terms of the transaction, includ-
ing the price, are at least as favorable to the 
plan as an arm’s length transaction. 
‘‘(D) For purposes of this paragraph, the term 
‘block trade’ includes any trade which will be allo-
cated across two or more client accounts of a fidu-
ciary.’’. 
(B) SPECIAL RULE RELATING TO BLOCK 
TRADE.—Subsection (f) of section 4975 of such 
Code (relating to other definitions and special 
rules) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) BLOCK
TRADE.—For purposes of sub-
section (d)(17), the term ‘block trade’ includes any 
trade which will be allocated across two or more cli-
ent accounts of a fiduciary.’’. 
(c) BONDING RELIEF.—Section 412(a) of such Act 
(29 U.S.C. 1112(a)) is amended— 
(1) by redesignating paragraph (2) as para-
graph (3);
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(2) by striking ‘‘and’’ at the end of paragraph 
(1); and 
(3) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) no bond shall be required of an entity 
which is subject to regulation as a broker or a dealer 
under section 15 of the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) or an entity registered 
under the Investment Advisers Act of 1940 (15 
U.S.C. 80b-1 et seq.), including requirements im-
posed by a self-regulatory organization (within the 
meaning of section 3(a)(26) of such Act (15 U.S.C. 
78c(a)(26)), or any affiliate with respect to which 
the broker or dealer agrees to be liable to the same 
extent as if they held the assets directly.’’. 
(d) EXEMPTION FOR ELECTRONIC COMMUNICATION 
NETWORK.— 
(1) IN GENERAL.—Section 408(b) of such Act 
(as amended by subsection (b)) is further amended 
by adding at the end the following: 
‘‘(16) Any transaction involving the purchase or 
sale of securities, or other property (as determined 
in regulations of the Secretary) between a plan and 
a fiduciary or a party in interest if—