Adoption of Amendment to Prohibited Transaction Exemption (PTE)
99-29 Involving Bankers Trust Company, Deutsche Bank Trust Company
Americas (DBTCA), and Deutsche Bank, AG
[11/09/2005]
Volume 70, Number 216, Page 68092-68093
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Exemption Application No. D-11246]
Adoption of Amendment to Prohibited Transaction Exemption (PTE)
99-29 Involving Bankers Trust Company, Deutsche Bank Trust Company
Americas (DBTCA), and Deutsche Bank, AG
SUMMARY: This document contains an amendment to PTE 99-29 (64 FR 40623,
July 27, 1999), an exemption granted to Bankers Trust Company. PTE 99-
29 permits DBTCA (formerly known as Banker's Trust Company) to continue
to function as a qualified professional asset manager (QPAM) under PTE
84-14 (49 FR 9494, March 13, 1994). The amendment affects participants
and beneficiaries and fiduciaries of employee benefit plans to which
DBTCA served as custodian.
Effective Date: The amendment is effective as of January 31, 2003.
FOR FURTHER INFORMATION CONTACT: Allison Padams Lavigne, Office of
Exemption Determinations, Employee Benefits Security Administration, US
Department of Labor, Washington, DC 20210 at (202) 693-8540. This is
not a toll-free number.
SUPPLEMENTARY INFORMATION: On February 3, 2005, the Department
published a notice of proposed exemption that would amend PTE 99-29.
The amendment was requested in an application filed on behalf of DBTCA.
DBTCA is a New York banking, fiduciary, record keeping custodial,
brokerage and investment services to corporations, institutions,
governments, employee benefit plans, governmental retirement plans, and
private investors worldwide, Deutsche Bank, AG indirectly wholly owns
DBTCA.
The proposed amendment invited interested persons to submit
comments to the Department on or before March 21, 2005. On February 17,
2005, the applicant notified the Department that the names and
addresses of certain individuals who may be entitled to receive notice
of the proposed amendment were contained in records that were destroyed
by the events that occurred on September 11, 2001. As a result, the
applicant did not notify interested persons within the three-day period
specified in the proposed amendment. The applicant requested that the
comment period be extended to ensure that interested persons would have
a sufficient amount of time in which to provide their comments to the
Department. In addition, the applicant stated that it had the names and
addresses of custody clients of DBTCA as of December 31, 2002. The
applicant believed that this list of clients would reasonably include
all parties that would have an interest in the proposed amendment. The
Department concurred with the applicant. Accordingly, on March 29,
2005, the applicant sent notice to all custody clients of DBTCA as of
December 31, 2002. This notice informed interested persons of their
right to comment on the proposed amendment, and informed these persons
that comments were due to the Department on or before May 27, 2005.
Written Comments
The Department received one written comment. No requests for a
public hearing were received. The comment was submitted by the
applicant who wished to clarify that check ledgers, cancelled checks
and class action records that are described in the notice of proposed
amendment continue to be the property of the applicant, but such
materials can only be effectively searched using State Street's record
keeping systems. In this regard, State Street currently serves as
inquiry response and information agent for the applicant, and maintains
information on its systems. The applicant relies upon State Street to
answer inquiries related to these records. Under the terms of the
applicant's arrangement with State Street, State Street may resign from
its inquiry response and information retrieval duties on or after April
28, 2007. The applicant represents that in the event of State Street's
resignation, the applicant will locate another agent who will create a
similar retrieval system, or re-establish an in-house information
retrieval system. Under either arrangement, records will be maintained
in accordance with the terms specified under the amendment to PTE 99-
29.
For further information regarding the comment or other matters
discussed herein, interested persons are encouraged to obtain copies of
the exemption application file (Exemption Application No. D-11246). The
complete application file and all supplemental submissions received by
the Department, are available for public inspection in the Public
Disclosure Room of the Employee Benefits Security Administration, Room
N-1513, U.S. Department of Labor, 200 Constitution Avenue, NW.,
Washington, DC 20210.
Accordingly, after giving full consideration to the entire record,
including the written comment received, the Department has decided to
adopt the amendment to PTE 99-29.
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
granted under section 408(a) of the Act and/or 4975(c)(2) of the
Internal Revenue Code of 1986 (the Code) does not relieve a fiduciary
or other party in interest with respect to a plan to which the
exemption is applicable from certain other provisions of the Act and/or
the Code. These provisions include any prohibited transaction
provisions to which the exemption does not apply and the general
fiduciary provisions of section 404 of the Act which, among other
things, requires a fiduciary to discharge his or her duties respecting
the plan solely in the interests of the participants and beneficiaries
of the plan and in a prudent fashion in accordance with section
404(a)(1)(B) of the Act; nor does it affect the requirement of section
401(a) of the Code that the plan must operate for the exclusive benefit
of the employees of the employer maintaining the plan and their
beneficiaries.
(2) The exemption is supplemental to, and not in derogation of, any
other provisions of the Act and/or Code, including statutory or
administrative exemptions and transitional rules. Furthermore, the fact
that a transaction is subject to an administrative or
[[Page 68093]]
statutory exemption is not dispositive of whether the transaction is in
fact a prohibited transaction;
(3) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application are true and complete and accurately describe all material
terms of the transaction which is the subject of this exemption. In the
case of continuing transactions, if any of the material facts or
representations described in the application change, the exemption will
cease to apply as of the date of such change. In the event of any such
change, an application for a new exemption must be made to the
Department; and
(4) Under section 408(a) of ERISA, the Department finds 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 such plan.
Exemption
Accordingly, PTE 99-29 is amended under the authority of section
408(a) of the Act and section 4975(c)(2) of the Code, and in accordance
with the procedures set forth in 29 CFR part 2570, subpart B (55 32836,
August 10, 1990), as set forth below:
Section I is amended to read as follows: ``Bankers Trust Company
(now known as DBTCA) shall not be precluded from functioning as
``qualified professional asset manager'' pursuant to Prohibited
Transaction Exemption 84-14 (49 FR 9494, March 13, 1994) (PTE 94-14)
for the period beginning on the date of sentencing with respect to the
charges to which Bankers Trust Company pled guilty on March 11, 1999
and ending July 27, 2009, solely because of a failure to satisfy
section I(g) of PTE 84-14 as a result of the conviction of Bankers
Trust Company for felonies described in the March 11, 1999 felony
information (the Information) entered in the U.S. District Court for
the Southern District of New York, provided that:''
Section I(c) is amended to read as follows: ``The custody
operations that were part of Bankers Trust Company at the time of the
March 11, 1999 information, and which have subsequently been
reorganized as part of Global Institutional Services (GIS), are subject
to an annual examination of its abandoned property and escheatment
policies, procedures and practices by an independent public accounting
firm. the examination required by this condition shall determine
whether the written procedures adopted by Bankers Trust Company are
properly designed to assure compliance with the requirements of ERISA.
The annual examination shall specifically require a determination by
the auditor as to whether the Bank has developed and adopted internal
policies and procedures that achieve appropriate control objectives and
shall include a test of a representative sample of transactions, fifty
percent of which must involve ERISA covered plans, to determine
operational compliance with such policies and procedures. The auditor
shall issue a written report describing the steps performed by the
auditor during the course of its examination. The report shall include
the auditor's specific findings and recommendations. This requirement
shall continue to be applicable to the dustody operations that were
part of Bankers Trust Company as of March 11, 1999, notwithstanding any
subsequent reorganization of the custody operation function during the
term of the exemption. Such audit requirements shall be applicable for
any year or part thereof in which DBTCA held ERISA covered plan assets
in custody.''
Section III(a) is amended to read as follows: ``For purposes of
this exemption, the term `Bankers Trust Company' includes Bankers Trust
Company, and any entity that was affiliated with Bankers Trust Company
prior to the date of the acquisition of Bankers Trust Corporation by
Duetsche Bank AG, other than BT Alex. Brown Incorporated and its
subsidiaries. This term also refers to Deutsche Bank Trust Company
Americas (DBTCA).''
For a more complete statement of facts and representations
supporting the Department's decision to grant PTE 99-29, refer to the
proposed exemption (64 FR 30360, July 7, 1999), and the grant notice
(64 FR 30360, June 7, 1999), and the grant notice (64 FR 40623, July
27, 1999). For a more complete statement of fact and representations
supporting the Department's decision to amend PTE 99-29, refer to the
notice of proposed amendment to PTE 99-29 (70 FR 5699, February 3,
2005).
Signed at Washington, DC, this 31st day of October, 2005.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations, Employee Benefits
Security Administration, Department of Labor.
[FR Doc. 05-21962 Filed 11-8-05; 8:45 am]
BILLING CODE 4520-29-M
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