Proposed Amendment to Prohibited Transaction Exemption (PTE) 84-
14 for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers
[08/23/2005]
Volume 70, Number 162, Page 49312-49317
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Application Number D-11270]
Proposed Amendment to Prohibited Transaction Exemption (PTE) 84-
14 for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers
AGENCY: Employee Benefits Security Administration, DOL.
ACTION: Notice of proposed amendment to PTE 84-14.
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SUMMARY: This document contains a notice of pendency before the
Department of Labor (the Department) of a proposed amendment to PTE 84-
14. The exemption permits various parties that are related to employee
benefit plans to engage in transactions involving plan assets if, among
other
[[Page 49313]]
conditions, the assets are managed by ``qualified professional asset
managers'' (QPAMs), which are independent of the parties in interest
and which meet specified financial standards. Additional exemptive
relief is provided for employers to furnish limited amounts of goods
and services to a managed fund in the ordinary course of business.
Limited relief is also provided for leases of office or commercial
space between managed funds and QPAMs or contributing employers.
Finally, relief is provided for transactions involving places of public
accommodation owned by a managed fund.
Currently, PTE 84-14 requires the QPAM managing the assets of a
plan in an investment fund to be independent of, and unrelated to, the
employer sponsoring such plan. However, as described in the notice of
final amendment to PTE 84-14 contained in this issue of the Federal
Register, limited retroactive and transitional relief is provided for
financial service entities to act as QPAMS for their own plans. If this
proposed amendment is granted, a QPAM may prospectively manage an
investment fund containing the assets of its own plan or the plan of an
affiliate, to the extent the conditions of the proposal are met.
The proposed amendment would affect participants and beneficiaries
of employee benefit plans, the sponsoring employers of such plans, and
other persons engaging in the described transactions.
DATES: Written comments must be received by the Department on or before
October 7, 2005.
ADDRESSES: All written comments (preferably three copies) should be
addressed to the U.S. Department of Labor, Office of Exemption
Determinations, Employee Benefits Security Administration, Room N-5649,
200 Constitution Avenue, NW., Washington, DC 20210 (attention: PTE 84-
14 Amendment). Interested persons are also invited to submit comments
to EBSA via e-mail or fax. Any such comments should be sent either by
e-mail to motta.christopher@dol.gov or by fax to (202) 219-0204 by the
end of the scheduled comment period. All comments received will be
available for public inspection at the Public Documents Room, Employee
Benefits Security Administration, Room N-1513, 200 Constitution Avenue,
NW., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Christopher Motta, Office of Exemption
Determinations, Employee Benefits Security Administration, U.S.
Department of Labor, Room N-5649, 200 Constitution Avenue, NW.,
Washington DC 20210, (202) 693-8540 (not a toll-free number).
SUPPLEMENTARY INFORMATION: Notice is hereby given of the pendency
before the Department of a proposed amendment to PTE 84-14 (49 FR 9494,
March 13, 1984, as corrected at 50 FR 41430, October 10, 1985, and
amended elsewhere in this issue of the Federal Register). PTE 84-14
provides an exemption from certain of the restrictions of section 406
of ERISA, and from certain taxes imposed by section 4975(a) and (b) of
the Code, by reason of section 4975(c)(1) of the Code. The Department
is proposing this amendment to PTE 84-14 on its own motion, pursuant to
section 408(a) of ERISA 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, 32847, August 10, 1990).\1\
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\1\ Section 102 of the Reorganization Plan No. 4 of 1978, 5
U.S.C. App. 1 (1996), generally transferred the authority of the
Secretary of Treasury to issue administrative exemptions under
section 4975(c)(2) of the Code to the Secretary of Labor.
For purposes of this exemption, references to specific
provisions of Title I of the Act, unless otherwise specified, refer
also to the corresponding provisions of the Code.
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Economic Analysis
Executive Order 12866 Statement
Under Executive Order 12866, the Department must determine whether
the regulatory action is ``significant'' and therefore subject to the
requirements of the Executive Order and subject to review by the Office
of Management and Budget (OMB). Under section 3(f), the order defines a
``significant regulatory action'' as an action that is likely to result
in a rule: (1) Having an annual effect on the economy of $100 million
or more, or adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
Pursuant to the terms of the Executive Order, it has been
determined that this action is a ``significant regulatory action.''
Accordingly, this action has been reviewed by OMB.
Paperwork Reduction Act
As part of its continuing effort to reduce paperwork and respondent
burden, the Department of Labor conducts a preclearance consultation
program to provide the general public and Federal agencies with an
opportunity to comment on proposed and continuing collections of
information in accordance with the Paperwork Reduction Act of 1995 (PRA
95) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data
can be provided in the desired format, reporting burden (time and
financial resources) is minimized, collection instruments are clearly
understood, and the impact of collection requirements on respondents
can be properly assessed.
Currently, the Department is soliciting comments concerning the
information collection request (ICR) included in PTE 84-14 and this
Notice of Proposed Amendment to Prohibited Transaction Exemption (PTE)
84-14 for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers. A copy of the ICR may be obtained by
contacting Gerald B. Lindrew, Office of Policy and Research, U.S.
Department of Labor, Employee Benefits Security Administration, 200
Constitution Avenue, NW., Room N-5647, Washington, DC 20210. Telephone
(202) 693-8410; Fax: (202) 219-4745. These are not toll-free numbers.
The Department has submitted a copy of the proposed information
collection to OMB in accordance with 44 U.S.C. 3507(d) for review of
its information collections. The Department and OMB are particularly
interested in comments that:
Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriated
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology,
[[Page 49314]]
e.g., permitting electronic submission of responses.
Comments should be sent to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Room 10235, New Executive
Office Building, Washington, DC 20503; Attention: Desk Officer for the
Employee Benefits Security Administration. Although comments may be
submitted through October 24, 2005. OMB requests that comments be
received within 30 days of publication of the Notice of Proposed
Amendment to ensure their consideration.
The provisions for compliance with PTE 84-14 (49 FR 9494, March 13,
1984, as corrected at 50 FR 41430, October 10, 1985), a final amendment
to PTE 84-14 published in this issue of the Federal Register, and this
proposed amendment have been discussed in greater detail earlier in the
preamble. Briefly, PTE 84-14 permits various parties in interest to
employee benefit plans to engage in transactions involving plan assets
if, among other requirements, the assets are managed by a QPAM. Such
transactions include, for example, the leasing of office space by an
investment fund to a QPAM or the furnishing of services and facilities
by a place of public accommodation owned by an investment fund managed
by a QPAM. The final amendment, among other things, provides limited
retroactive and transitional relief from the sanctions of certain
sections of ERISA and the Code for financial institutions such as
banks, insurance companies, or registered investment advisers, that act
as QPAMs for their own plans. The proposed amendment, if granted, would
provide prospective relief for financial institutions to act as QPAMS
for their own plans.
The Department included in the final amendment published in this
issue of the Federal Register and this proposed amendment certain
requirements intended to preserve plan assets and protect plan
participant benefits with respect to transactions between a party in
interest to a plan and an investment fund containing plan assets
managed by a QPAM. PTE 84-14, as restated and amended in the final
amendment, includes a requirement for a written agreement between a
plan and the QPAM it has retained, and written guidelines between a
QPAM and a property manager that a QPAM has retained. Because it is
customary business practice for agreements related to the investment of
plan assets or transactions relating to the leasing of space to be
described in writing, no burden was estimated for these provisions of
the final amendment. Accordingly, this ICR includes only the burden for
provisions in the proposed amendment.
In order for a transaction to qualify for an exemption under the
proposed amendment, a QPAM must, among other requirements, establish
written policies and procedures that are designed to assure compliance
with the conditions of the proposed amendment, including the steps
adopted by the QPAM to measure compliance. Based on information in the
1999 Form 5500 Annual Report, the Department estimates that
approximately 6,500 banks, savings institutions, insurance companies,
and investment advisers currently acting as QPAMs for employee benefit
plans might choose to act as QPAMs for their own plans. QPAMs are
assumed to use a service provider, such as an attorney, to develop the
written policies and procedures required under the proposed amendment.
To meet the Department's requirements regarding written policies and
procedures, service providers will most likely develop standardized
language that can then be modified to include the specific steps
adopted by a particular QPAM to assure compliance. If all 6,500
financial institutions choose to act as QPAMs for their own plans, the
start-up cost, assuming one hour of a service provider's time, at $84
per hour, would be $546,000. The actual amount of time required, and
the resulting cost burden, may be even lower because the Department has
described the objective requirements of the exemption that are to be
included in the policies and procedures, and because most service
providers will handle multiple QPAMs, thereby reducing per-plan costs.
Going forward, the Department is not aware of a basis for
estimating how many additional QPAMs will choose to handle investments
for their own plans, but assumes the number to be small. Most QPAMs are
believed to be large institutions that will take advantage of the
proposed amendment soon after it is granted. For purposes of this ICR,
the Department has assumed that an additional 1%, or 65 QPAMs,
annually, at a cost of approximately $5,500, will establish policies
and procedures in order to manage investments for their own plans.
Finally, under the proposed amendment, an independent auditor is
required to conduct an exemption audit, on an annual basis, the results
of which are presented in a written report to the plan. Because it is
customary business practice for an independent auditor engaged by an
entity such as a plan to provide a written report, the Department has
not estimated a cost burden for this provision of the proposed
amendment.
Type of Collection: New.
Agency: Department of Labor, Employee Benefits Security
Administration.
Title: Proposed Amendment to PTE 84-14 for Plan Asset Transactions
Determined by Independent Qualified Professional Asset Managers.
OMB Control Number: 1210-NEW.
Affected Public: Business or other for profit; Not-for-profit
institutions.
Respondents: 6,565.
Responses: 6,565.
Frequency of Response: One time.
Estimated Burden Hours: 0.
Estimated Capital/Startup Costs: $546,000.
Estimated Annual Costs (Operating & Maintenance): $5,500.
Estimated Total Annual Cost: $551,500.
The public is not required to respond to a collection of
information that does not display a currently valid OMB control number.
Background
PTE 84-14, which was proposed on the Department's own motion on
December 21, 1982, was granted as part of a continuing effort by the
Department to improve the administration of the prohibited transaction
rules of ERISA. The rules set forth in section 406 of ERISA prohibit
various transactions between a plan and a party in interest (including
a fiduciary) with respect to such plan. Unless a statutory or
administrative exemption applies to the transaction, section 406(a) of
ERISA prohibits, among other things: Sales, leases, loans or the
provision of services between a party in interest and a plan, as well
as a use of plan assets by or for the benefit of, or a transfer of plan
assets to, a party in interest. In addition, unless exempted, a
fiduciary of a plan is not permitted to engage in any acts of self-
dealing or make decisions on behalf of a plan if the fiduciary is in a
conflict of interest situation.
The Department has frequently exercised its statutory authority
under section 408(a) of ERISA to grant both individual and class
exemptions from the prohibited transaction provisions where it has been
able to find that the criteria for granting such exemptions have been
satisfied. Based on its experience considering requests for individual
and class exemptions, and in dealing with instances of abusive
violations of the fiduciary responsibility rules of ERISA, the
Department determined that as a general matter, transactions entered
into on behalf of plans with parties in interest are most
[[Page 49315]]
likely to conform to ERISA's general fiduciary standards where the
decision to enter into the transaction is made by an independent
fiduciary. As granted, PTE 84-14 provides broad relief for various
party in interest transactions that involve plan assets that are
transferred to a qualified professional asset manager (QPAM) for
discretionary management.
Description of Existing Relief
The relief provided by PTE 84-14 is described in four separate
parts. The General Exemption, set forth in Part I, permits an
investment fund managed by a QPAM to engage in a wide variety of
transactions described in ERISA section 406(a)(1)(A) through (D) with
virtually all parties in interest except the QPAM which manages the
assets involved in the transaction and those parties most likely to
have the power to influence the QPAM.
Part II of the exemption provides limited relief under both section
406(a) and (b) of ERISA for certain transactions involving those
employers and certain of their affiliates which could not qualify for
the General Exemption provided by Part I.
Part III of the exemption provides limited relief under section
406(a) and (b) of ERISA for the leasing of office or commercial space
by an investment fund to the QPAM, an affiliate of the QPAM, or a
person who could not qualify for the General Exemption provided by Part
I because it held the power of appointment described in Part I(a).
Part IV of the exemption provides limited relief under sections
406(a) and 406(b)(1) and (2) of ERISA for the furnishing of services
and facilities by a place of public accommodation owned by an
investment fund managed by a QPAM, to all parties in interest, if the
services and facilities are furnished on a comparable basis to the
general public.
Part V of the exemption contains definitions for certain terms used
in the exemption. In this regard, section V(a) defines the term
``QPAM'' as an ``independent fiduciary which is a bank, savings and
loan association, insurance company, or registered investment adviser,
that meets certain financial conditions.'' Section V(o) of PTE 84-14,
as adopted in the final amendment to PTE 84-14 published in this issue
of the Federal Register, defines the term ``independent fiduciary'' to
mean a fiduciary managing the assets of a plan in an investment fund
that is independent of and unrelated to the employer sponsoring such
plan. The definition additionally provides that a fiduciary will not be
deemed to be independent of and unrelated to the employer sponsoring
the plan if such fiduciary directly or indirectly controls, is
controlled by, or is under common control with the employer sponsoring
the plan. Lastly, section V(o) provides that, for the period from
December 21, 1982, through the date on which the Department grants a
final amendment which addresses relief for financial institutions that
serve as investment managers for their own plans, a QPAM managing the
assets of a plan in an investment fund will not fail to qualify as a
QPAM solely because such fiduciary is the employer sponsoring the plan
or directly or indirectly controls, is controlled by, or is under
common control with the employer sponsoring the plan.
Description of the Proposed Amendment
The Department is proposing this amendment on its own motion in
connection with its determination that the existing QPAM class
exemption does not permit financial services entities to act as QPAMs
for their own plans.\2\ The proposed amendment, if granted, would
provide prospective relief for a financial institution to act as QPAM
for its own plan. This relief is set out in a newly designated Part V,
which specifically provides relief for transactions described in Parts
I, III and IV of PTE 84-14 that involve a QPAM-managed investment fund
containing the assets of a plan sponsored by such QPAM. For purposes of
this proposed amendment, the exemption's ``Definitions'' section has
been re-designated as Part VI.
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\2\ As described in the notice of final amendment to PTE 84-14
that appears elsewhere in this issue of the Federal Register.
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PTE 84-14 was developed and granted based on the essential premise
that broad relief could be afforded for all types of transactions in
which a plan engages only if the commitments and the investments of
plan assets and the negotiations leading thereto are the sole
responsibility of an independent, discretionary, manager. As noted
above, however, the proposed amendment described herein involves the
investment of the assets of a QPAM's own plan in an investment fund
managed by such QPAM. In the Department's view, retention of
discretionary authority by the plan sponsor/QPAM would be inconsistent
with the underlying concept of the QPAM exemption as originally
adopted. In addition, there is no independent fiduciary present in this
situation that would be responsible for monitoring the activities of
the QPAM with respect to its own in-house plan.
In order to address this lack of independence, the proposed
amendment relies on an ``exemption audit,'' in addition to the other
safeguards currently contained in the exemption. This audit is
substantially similar to the audit required under PTE 96-23 (61 FR
15975 (Apr. 10, 1996)), which provides relief for various party in
interest transactions that involve the assets of a plan managed by an
in-house manager (INHAM). The proposed amendment requires that an
independent auditor conduct an annual exemption audit to determine
whether the written procedures adopted by the QPAM are designed to
assure compliance with the conditions of the exemption. The Department
believes that the involvement of an independent party in overseeing
compliance with the exemption would serve as a meaningful safeguard
without interfering with the QPAM's investment decisions. The audit is
further intended to protect plans by ensuring that an investment
manager, who may not otherwise have experience managing ERISA plan
assets, complies with the provisions of ERISA and the requirements of
this exemption.
Accordingly, section V(c) of the proposed amendment requires that
the independent auditor conduct an exemption audit on an annual basis
to review the written policies and procedures adopted by the QPAM. The
purpose of this review is to ensure that such policies and procedures
are consistent with the exemption's objective requirements. The
independent auditor must also test a representative sample of
transactions involving the QPAM's plan in order to make findings
regarding whether the QPAM's is in operational compliance with the
written policies and procedures adopted by the QPAM and the objective
requirements of the exemption. The exemption further requires that the
independent auditor make a determination as to whether the QPAM has
satisfied the definition of a QPAM under the exemption, and issue a
written report describing the steps performed by the auditor during the
course of its review and the auditor's findings.\3\ Although the
proposed amendment limits the auditor's
[[Page 49316]]
responsibilities to make findings on the QPAM's compliance with the
objective requirements of the proposal, the QPAM remains responsible
for assuring compliance with all of the applicable conditions of the
exemption. Accordingly, the failure of the QPAM to comply with a
condition of the exemption not described in Section VI(q) would, with
respect to a specific transaction, render the exemption unavailable for
that transaction.
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\3\ The Department also notes that an adverse finding in the
auditor's report would not, in itself, render the exemption
unavailable for any transaction engaged in by the QPAM on behalf of
the plan. The Department cautions that the failure of the QPAM to
take appropriate steps to address any adverse findings in an
unsatisfactory audit would raise issues under ERISA's fiduciary
responsibility provisions.
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As noted above, an independent auditor must review the written
policies and procedures adopted by the QPAM for consistency with the
exemption's objective requirements that apply to such transactions.
These written policies and procedures must describe, for example, the
requirements to qualify as a QPAM and the requirement that, with
respect to transactions described in Part V, the QPAM must have
discretionary authority or control over the plan assets that are
involved in the transaction.
In addition, if a QPAM manages an investment fund that contains the
assets of a plan sponsored by such QPAM, and the QPAM seeks to engage
in a transaction described in Part I of the exemption on behalf of the
fund, the QPAM's written policies and procedures must describe the
objective requirements contained in Part I of the exemption. In this
regard, the QPAM's written policies and procedures must describe the
exemption's requirements that: (1) The transaction may not be entered
into with any party in interest that has the power to appoint or
terminate the QPAM as a manager of the plan assets involved in the
transaction or negotiate the terms of the management agreement with
such QPAM; (2) the transaction may not be entered into with the QPAM or
a person related to the QPAM; and (3) the transaction is not described
in any of the class exemptions listed in section I(b). The written
policies and procedures must also describe the exemption's objective
requirements regarding the QPAM's responsibility for: (1) Negotiating
the terms of the transaction; and (2) deciding to enter into the
transaction on behalf of the investment fund.
The class exemption contains certain other objective requirements
that are applicable to transactions described in Part III of PTE 84-14,
relating to the leasing of office or commercial space by an investment
fund managed by a QPAM to the QPAM or other specified persons.
Accordingly, the objective requirements applicable to Part III
transactions include: (1) that the amount of space that may be covered
by the lease does not exceed the limitation described in section
III(a); and (2) that no commission or other fee may be paid by the
investment fund to the QPAM or the persons specified in section III(d).
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 ERISA and section 4975(c)(2) of the Code does
not relieve a fiduciary or other party in interest or disqualified
person with respect to a plan from certain other provisions of ERISA
and the Code, including any prohibited transaction provisions to which
the exemption does not apply and the general fiduciary responsibility
provisions of section 404 of ERISA which require, among other things,
that a fiduciary discharge his or her duties respecting the plan solely
in the interests of the participants and beneficiaries of the plan.
Additionally, the fact that a transaction is the subject of an
exemption does not affect the requirement of section 401(a) of the Code
that the plan must operate for the exclusive benefit of the employees
of the employer maintaining the plan and their beneficiaries;
(2) Before an exemption may be granted under section 408(a) of
ERISA and 4975(c)(2) of the Code, the Department must find that the
exemption is administratively feasible, in the interests of the plan
and of its participants and beneficiaries, and protective of the rights
of participants and beneficiaries of the plan;
(3) If granted, the proposed amendment is applicable to a
particular transaction only if the transaction satisfies the conditions
specified in the amendment; and
(4) The proposed amendment, if granted, will be supplemental to,
and not in derogation of, any other provisions of ERISA and the Code,
including statutory or administrative exemptions and transitional
rules. Furthermore, the fact that a transaction is subject to an
administrative or statutory exemption is not dispositive of whether the
transaction is in fact a prohibited transaction.
Written Comments
The Department invites all interested persons to submit written
comments on the proposed amendment to the address and within the time
period set forth above. All comments received will be made a part of
the record. Comments should state the reasons for the writer's interest
in the proposed exemption. Comments received will be available for
public inspection at the above address.
Proposed Amendment
Under 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, 32847, August 10, 1990), the Department
proposes to amend PTE 84-14 as set forth below:
Part V--Specific Exemption Involving QPAM-Sponsored Plan
Effective as of the date of publication of the final amendment to
PTE 84-14 in the Federal Register, the relief provided by Parts I, III
or IV of PTE 84-14 from the applicable restrictions of section 406(a),
section 406(b)(1) and (2), and section 407(a) of ERISA and the taxes
imposed by Code section 4975(a) and (b), by reason of Code section
4975(c)(1)(A) through (E), shall apply to a transaction involving the
assets of a plan sponsored by the QPAM if:
(a) The QPAM has discretionary authority or control with respect to
the plan assets involved in the transaction;
(b) The QPAM adopts written policies and procedures that are
designed to assure compliance with the conditions of the exemption;
(c) An independent auditor, who has appropriate technical training
or experience and proficiency with ERISA's fiduciary responsibility
provisions and so represents in writing, conducts an exemption audit
(as defined in section VI(p)) on an annual basis. Following completion
of the exemption audit, the auditor shall issue a written report to the
plan presenting its specific findings regarding the level of compliance
with the policies and procedures adopted by QPAM in accordance with
section V(b);
(d) The transaction meets the applicable requirements set forth in
Parts I, III, or IV of the exemption.
Section VI. Definitions
(o) For purposes of section V(a), the term ``independent
fiduciary'' means a fiduciary managing the assets of a plan in an
investment fund that is independent of and unrelated to the employer
sponsoring such plan. For purposes of this exemption, the independent
fiduciary will not be deemed to be independent of and unrelated to the
employer sponsoring the plan if such fiduciary directly or indirectly
controls, is controlled by, or is under common control with the
employer sponsoring the plan. Notwithstanding the foregoing, a QPAM
acting as a manager for its own plan or the plan of an affiliate (as
defined in
[[Page 49317]]
section VI(c)(1)) will be deemed to satisfy the requirements of this
section VI(o) if the requirements of Part V are met.
(p) Exemption Audit. An ``exemption audit'' of a plan must consist
of the following:
(1) A review of the written policies and procedures adopted by the
QPAM pursuant to section V(b) for consistency with each of the
objective requirements of this proposed exemption (as described in
section VI(q)).
(2) A test of a representative sample of the plan's transactions in
order to make findings regarding whether the QPAM is in compliance with
(i) the written policies and procedures adopted by the QPAM pursuant to
section VI(q) of the exemption and (ii) the objective requirements of
the exemption.
(3) A determination as to whether the QPAM has satisfied the
definition of an QPAM under the exemption; and
(4) Issuance of a written report describing the steps performed by
the auditor during the course of its review and the auditor's findings.
(q) For purposes of section VI(p), the written policies and
procedures must describe the following objective requirements of the
exemption and the steps adopted by the QPAM to assure compliance with
each of these requirements:
(1) The definition of a QPAM in section V(a).
(2) The requirement of sections V(a) and I(c) regarding the
discretionary authority or control of the QPAM with respect to the plan
assets involved in the transaction, in negotiating the terms of the
transaction and with respect to the decision on behalf of the
investment fund to enter into the transaction.
(3) For a transaction described in Part I:
(A) That the transaction is not entered into with any person who is
excluded from relief under section I(a), section I(d), or section I(e),
(B) That the transaction is not described in any of the class
exemptions listed in section I(b),
(4) If the transaction is described in section III,
(i) That the amount of space covered by the lease does not exceed
the limitations described in section III(a); and
(ii) That no commission or other fee is paid by the investment fund
as described in section III(d).
Signed at Washington, DC, this 11th day of August, 2005.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations, Employee Benefits
Security Administration, Department of Labor.
[FR Doc. 05-16681 Filed 8-22-05; 8:45 am]
BILLING CODE 4510-29-P
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