News Release

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Release Date: February 9, 2007
Release Number: 07-232-NAT
Contact Name: Gloria Della/Peter Hong
Phone Number: 202.693.8664/202.693.4676

U.S. Labor Department Announces New Rule Implementing Pension Protection Act Cross-Trading Exemption

Washington - The U.S. Department of Labor today announced publication in the Federal Register of an interim final rule regarding the new statutory exemption on cross-trading in the Pension Protection Act (PPA).

“The department is working very hard to implement the Pension Protection Act,” said Acting Assistant Secretary of Labor Bradford P. Campbell. “This rule implements a key provision of the PPA that allows plans to reap the benefits of cross-trading, while ensuring that fair and equitable procedures are in place to protect workers’ retirement assets.”

Cross-trading is a transaction in which an investment manager uses its authority to sell a security on behalf of one client and to buy that same security on behalf of another client. The statutory exemption allows investment managers of plans governed by the Employee Retirement Income Security Act to execute cross-trades if certain conditions are met, including the adoption of written cross-trading policies and procedures. The interim rule establishes the requirements for the policies and procedures investment managers must adopt to engage in cross-trades.

The interim regulation is to be published in the February 12, 2007 Federal Register. While the rule will be effective 60 days after publication in the Federal Register, the public is invited to submit written comments on the interim final rule. Public comments may be mailed to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, Washington, D.C. 20210, Attention: Cross-Trading Policies and Procedures Interim Final Rule. Public comments may also be submitted by e-mail to e-OED@dol.gov or through the federal e-rulemaking portal at www.regulations.gov.

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