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Employee Benefits Security Administration

EBSA Federal Register Notice

Grant of Individual Exemptions; Deutsche Bank AG [06/10/2003]

[PDF Version]

Volume 68, Number 111, Page 34646-34651

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Prohibited Transaction Exemption 2003-11; Exemption Application No. D-
10840 et al.]

 
Grant of Individual Exemptions; Deutsche Bank AG

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Grant of individual exemptions.

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SUMMARY: This document contains exemptions issued by the Department of 
Labor (the Department) from certain of the prohibited transaction 
restrictions of the Employee Retirement Income Security Act of 1974 
(the Act) and/or the Internal Revenue Code of 1986 (the Code).
    A notice was published in the Federal Register of the pendency 
before the Department of a proposal to grant such exemption. The notice 
set forth a summary of facts and representations contained in the 
application for exemption and referred interested persons to the 
application for a complete statement of the facts and representations. 
The application has been available for public inspection at the 
Department in Washington, DC. The notice also invited interested 
persons to submit comments on the requested exemption to the 
Department. In addition the notice stated that any interested person 
might submit a written request that a public hearing be held (where 
appropriate). The applicant has represented that it has complied with 
the requirements of the notification to interested persons. No requests 
for a hearing were received by the Department. Public comments were 
received by the Department as described in the granted exemption.
    The notice of proposed exemption was issued and the exemption is 
being granted solely by the Department because, effective December 31, 
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 
(1996), transferred the authority of the Secretary of the Treasury to 
issue exemptions of the type proposed to the Secretary of Labor.
Statutory Findings
    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29 CFR part 
2570, subpart B (55 FR 32836, 32847, August 10, 1990) and based upon 
the entire record, the Department makes the following findings:
    (a) The exemption is administratively feasible;
    (b) The exemption is in the interests of the plan and its 
participants and beneficiaries; and
    (c) The exemption is protective of the rights of the participants 
and beneficiaries of the plan.

Deutsche Bank AG, located in New York, New York.

[Prohibited Transaction Exemption 2003-11; Exemption Application Number 
D-10840.]

Exemption
Section I--Retroactive Relief
    For the period from June 4, 1999, until June 10, 2003, the 
restrictions of section 406(a) and (b)(1) and (b)(2) 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 (E) of the Code, shall not 
apply to the investment of the assets of a Bank Plan or a Client Plan 
(either, a Plan) in deposits of Deutsche Bank AG, its current or future 
branches, and/or its current or future subsidiaries, if--
    (a) Deutsche Bank AG is supervised by the Deutsche Bundesbank and/
or the Bundesanstalt fur Finanzdienstleistungsaufsicht (the BAFin),\1\ 
and, in the case of a subsidiary of Deutsche Bank AG, is also 
supervised by similar local government authorities;
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    \1\ For purposes of this exemption, supervision of Deutsche Bank 
AG by the BAFin is deemed to include supervision of Deutsche Bank AG 
by the Federal Banking Supervisory Authority (das Bundesaufsichtsamt 
fuer das Kreditwesen), the predecessor to the BAFin.
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    (b) The deposit bears a rate of interest that is reasonable, as 
defined in section III(f);
    (c) The investment is:
    (i) Made by a Bank Plan; or
    (ii) Made by a Client Plan and expressly authorized pursuant to a 
provision of such Plan (or trust thereof) or expressly authorized by an 
independent fiduciary,\2\ as defined in

[[Page 34647]]

section III(g), with respect to such Plan; and
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    \2\ The Department notes that the Act's general standards of 
fiduciary conduct apply to arrangements involving the investment of 
Plan assets permitted by this exemption. In this regard, section 404 
of the Act requires, among other things, a fiduciary to discharge 
his duties respecting a plan solely in the interest of the plan's 
participants and beneficiaries and in a prudent manner. Accordingly, 
an independent fiduciary with respect to a Plan must act prudently 
with respect to: (1) The decision to enter into an arrangement 
described herein; and (2) the negotiation of the terms of such an 
arrangement, including, among other things, the specific terms by 
which Plan assets will be invested in the deposits of Deutsche Bank 
AG. The Department further emphasizes that it expects plan 
fiduciaries, prior to allowing or authorizing the transactions 
described herein, to fully understand the benefits and risks 
associated with such transactions, following disclosure by Deutsche 
Bank AG of all relevant information. In addition, the Department 
notes that such plan fiduciaries must periodically monitor, and have 
the ability to so monitor, the services provided by Deutsche Bank 
AG.
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    (d) In situations where Deutsche Bank AG, or any of its affiliates 
that are banks or registered investment advisors, acts as an investment 
manager on behalf of a Plan, the amount of such Plan's assets invested 
in the deposits of Deutsche Bank AG does not average, over any six 
month period, more than 5% of the total amount of the plan's assets 
managed by such investment manager.
Section II--Prospective Relief
    Effective after June 10, 2003, the restrictions of section 406(a) 
and (b)(1) and (b)(2) 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 (E) of the Code, shall not apply to the 
investment of the assets of a Plan in deposits of Deutsche Bank AG, its 
current or future branches, and/or its current or future subsidiaries, 
if--
    (a) Deutsche Bank AG is supervised by the Deutsche Bundesbank and/
or the BAFin, and, in the case of a subsidiary of Deutsche Bank AG, is 
also supervised by similar local government authorities;
    (b) The deposit bears a rate of interest that is reasonable, as 
defined in section III(f);
    (c) Prior to: (i) an investment of Plan assets in bank deposits; or 
(ii) the commencement of any Deutsche Bank AG program that invests Plan 
assets in such deposits, an independent fiduciary (other than with 
respect to a Bank Plan) receives a written disclosure describing:
    (A) The circumstances pursuant to which Plan assets will be 
invested in deposits of Deutsche Bank AG or its subsidiaries or 
branches; and
    (B) A description of the applicable sovereign regulatory authority/
authorities governing the activities of Deutsche Bank AG;
    (d) A fiduciary independent of Deutsche Bank AG and its affiliates 
(other than with respect to a Bank Plan) receives, upon request, copies 
of the most recent financial statement of Deutsche Bank AG and/or its 
subsidiaries;
    (e) Immediately after any material adverse change in the financial 
condition of Deutsche Bank AG, Deutsche Bank AG will notify each Plan 
fiduciary of such material adverse change and will not use its 
authority to continue the program of deposits with respect to the Plans 
without the consent of a Bank Plan fiduciary or an independent Client 
Plan fiduciary;
    (f) In situations where Deutsche Bank AG, or any of its affiliates 
that are banks or registered investment advisors, acts as an investment 
manager on behalf of a Plan, the amount of such Plan's assets invested 
in the deposits of Deutsche Bank AG does not average, over any six 
month period, more than 1% of the total amount of the plan's assets 
managed by such investment manager;
    (g) Deutsche Bank AG-
    (1) Agrees to submit to the jurisdiction of the United States;
    (2) Agrees to appoint an agent for service of process in the United 
States, which may be an affiliate (the Process Agent);
    (3) Consents to service of process on the Process Agent;
    (4) Agrees that it may be sued in the United States Courts in 
connection with the transactions described in this proposed exemption;
    (5) Agrees that any judgment may be collectable by an employee 
benefit plan in the United States from Deutsche Bank AG; and
    (6) Agrees to comply with, and be subject to, all relevant 
provisions of the Act.
    (h) The investment is:
    (i) Made by a Bank Plan and authorized by a Bank Plan fiduciary; or
    (ii) Made by a Client Plan and authorized by an independent 
fiduciary with respect to such Client Plan. Notwithstanding (h)(i) and 
(h)(ii) above, authorization for the investment by a Plan in the 
deposits of Deutsche Bank AG may be presumed notwithstanding that 
Deutsche Bank AG does not receive any response from such Plan pursuant 
to two written requests by Deutsche Bank AG (one request by a certified 
mailing that contains only such request) for the authorization, 
provided that: (A) with respect to Plans that invest in the deposits of 
Deutsche Bank AG prior to June 10, 2003, the first request occurs not 
later than July 25, 2003, and the second request occurs within 30 days 
thereafter; and (B) with respect to Plans that invest in the deposits 
of Deutsche Bank AG following June 10, 2003, the first request occurs 
at least 45 days prior to such investment and the second request occurs 
within 30 days thereafter;
    (i) Investments in the deposits of a subsidiary of Deutsche Bank AG 
will be backed by the full faith and credit of Deutsche Bank AG;
    (j) Short-term debt issued by Deutsche Bank AG is rated in one of 
the three highest categories by an independent rating agency such as 
Standard & Poors, Moody's or a similar institution;
    (k) Deutsche Bank AG maintains or causes to be maintained within 
the United States for a period of six years from the date of such 
transaction, in a manner that is convenient and accessible for audit 
and examination, such records as are necessary to enable the persons 
described below in paragraph (l) of this exemption to determine whether 
the conditions of this exemption have been met, except that a 
prohibited transaction will not be considered to have occurred if, due 
to circumstances beyond the control of Deutsche Bank AG, the records 
are lost or destroyed prior to the end of the six-year period; and
    (l)(1) Except as provided in paragraph (2) of this section (l) and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to in paragraph (k) are 
unconditionally available at their customary location in the United 
States for examination during normal business hours by--
    (i) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service,
    (ii) Any fiduciary of a Plan, or any duly authorized employee or 
representative of such fiduciary, and
    (iii) Any participant or beneficiary of a Plan or duly authorized 
employee or representative of such participant or beneficiary;
    (2) None of the persons described in paragraphs (l)(1)(ii) and 
(iii) shall be authorized to examine trade secrets of Deutsche Bank AG, 
or commercial or financial information that is privileged or 
confidential.
Section III--Definitions
    (a) The term ``bank'' means a bank supervised by the United States, 
a state, or a sovereign government.
    (b) An ``affiliate'' of a person includes:
    (1) Any person that directly, or indirectly through one or more 
intermediaries, controls or is controlled by, or is under common 
control with, such person;
    (2) Any officer, director, employee or relative of such person, or 
partner of any such person; and
    (3) Any corporation or partnership of which such person is an 
officer, director, partner or employee.
    (c) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.

[[Page 34648]]

    (d) A ``Client Plan'' refers to an employee benefit plan as 
described in section 3(3) with respect to which Deutsche Bank AG acts 
as a trustee or custodian.
    (e) A ``Bank Plan'' means a plan sponsored or maintained by: (1) 
Deutsche Bank AG or any person that directly, or indirectly through one 
or more intermediaries, controls or is controlled by, or is under 
common control with, Deutsche Bank AG or; (2) any entity in which 
Deutsche Bank AG holds more than a ten percent equity interest.
    (f) A ``reasonable'' rate of interest means a rate of interest 
determinable by reference to short-term rates available to other 
customers of the bank, those offered by other banks, those available 
from money market funds, those applicable to short-term instruments 
such as repurchase agreements, or by reference to a benchmark such as 
sovereign short term debt (e.g., in the U.S., treasury bills), all in 
the jurisdiction where the rate is being evaluated. The requirement 
that an interest rate be ``reasonable'' does not preclude the payment 
of no interest in situations where the deposit is with a branch or 
subsidiary of Deutsche Bank AG that acts as a local subcustodian and no 
interest is paid to similarly situated custody clients of the global 
custodian so long as, prior any investment in deposits that pays no 
interest, Deutsche Bank AG discloses to the appropriate Plan fiduciary 
that no interest may be paid with respect to an arrangement described 
above. Notwithstanding the foregoing, no interest may be paid if local 
law is changed to preclude the payment of interest, and Deutsche Bank 
AG discloses such fact to the appropriate Plan fiduciary as soon as 
reasonably possible.
    (g) An ``independent fiduciary'' means a fiduciary independent of 
Deutsche Bank AG and its affiliates who has the authority to make the 
investments described herein, or to instruct the trustee or other 
fiduciary with respect to such investments, and who has no interest in 
the transaction which may affect the exercise of such authorizing 
fiduciary's best judgment as a fiduciary so as to cause such 
authorization to constitute an act described in section 406(b) of the 
Act.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on March 3, 2003, at 68 FR 
10035.

FOR FURTHER INFORMATION CONTACT: Christopher Motta of the Department, 
telephone (202) 693-8544. (This is not a toll-free number.)

Deutsche Bank AG (Deutsche Bank), located in Germany, with Affiliates 
in New York, New York and other locations.

[Prohibited Transaction Exemption 2003-12; Exemption Application Number 
D-11055]

Exemption
Section I. Covered Transactions
    The restrictions of section 406(a)(1)(A) through (D) and 406(b)(1) 
and (b)(2) of the Act, and the taxes imposed by section 4975(a) and (b) 
of Code, by reason of section 4975(c)(1)(A) through (E) of the Code, 
shall not apply, effective December 11, 2001, to the following foreign 
exchange transactions between Deutsche Bank or a foreign affiliate 
thereof that is a bank or broker-dealer (collectively, DBAG), and an 
employee benefit plan with respect to which DBAG is a trustee, 
custodian, fiduciary or other party in interest, pursuant to a standing 
instruction, if the conditions set forth in section II below are met:
    (1) An income item conversion; or
    (2) A de minimis purchase or sale transaction.
Section II. Conditions
    (a) At the time the foreign exchange transaction is entered into, 
the terms of the transaction are not less favorable to the plan than 
the terms generally available in comparable arm's-length foreign 
exchange transactions between unrelated parties.
    (b) At the time the foreign exchange transaction is entered into, 
the terms of the transaction are not less favorable to the plan than 
the terms afforded by DBAG in comparable arm's-length foreign exchange 
transactions involving unrelated parties.
    (c) DBAG does not have any discretionary authority or control with 
respect to the investment of the plan assets involved in the 
transaction and does not render investment advice (within the meaning 
of 29 CFR 2510.3-21(c)) with respect to the investment of those assets.
    (d) DBAG maintains at all times written policies and procedures 
regarding the handling of foreign exchange transactions for plans with 
respect to which DBAG is a trustee, custodian, fiduciary or other party 
in interest or disqualified person which assure that the person acting 
for DBAG knows that he or she is dealing with a plan.
    (e) The covered transaction is performed under a written 
authorization executed in advance by a fiduciary of the plan whose 
assets are involved in the transaction, which plan fiduciary is 
independent of DBAG. The written authorization must specify:
    (1) The identities of the currencies in which covered transactions 
may be executed; and
    (2) That the authorization may be terminated by either party 
without penalty on no more than 10 days notice.
    (f)(1) Income item conversions are executed within no more than one 
business day from the date of receipt of notice by DBAG that such items 
are good funds, and a foreign custodian which is an affiliate of DBAG, 
provides such notice to DBAG within ``one business day'' of its receipt 
of good funds;
    (2) De minimis purchase and sale transactions are executed within 
no more than one business day from the date that either DBAG receives 
notice from a foreign custodian that the proceeds of a sale of foreign 
securities dominated in foreign currency are good funds, or the 
direction to acquire foreign currency was received by DBAG and a 
foreign custodian which is an affiliate of DBAG provides such notice to 
DBAG within one business day of its receipt of good funds from a sale.
    (g)(1) At least once each day, at the time(s) specified in its 
written policies and procedures, DBAG establishes either a rate of 
exchange or a range of rates to be used for income item conversions and 
de minimis purchase and sale transactions covered by this exemption.
    (2) Income item conversions are executed at the next scheduled time 
for conversions following receipt of notice by DBAG from the foreign 
custodian that such funds are good funds. If it is the policy of DBAG 
to aggregate small amounts of foreign currency until a specified 
minimum threshold amount is received, then the conversion may take 
place at a later time but in no event more than 24 hours after such 
receipt of notice.
    (3) De minimis purchase and sale transactions are executed at the 
next scheduled time for such transactions following receipt of either 
notice that the sales proceeds denominated in foreign currency are good 
funds, or a direction to acquire foreign currency. If it is the policy 
of DBAG to aggregate small transactions until a specified threshold 
amount is received, then the execution may take place at a later time 
but in no event more than 24 hours after receipt of either notice that 
the sales proceeds have been received by the foreign custodian as good 
funds, or a direction to acquire foreign currency.

[[Page 34649]]

    For purposes of this paragraph (g), the range of exchange rates 
established by DBAG for a particular foreign currency cannot deviate by 
more than three percent [above or below] the interbank bid and asked 
rates as displayed on Reuters or another nationally recognized 
independent service in the foreign exchange market (provided that the 
independent service chosen will be consistently used in determining 
whether the deviation limitation has been met) for such currency at the 
time such range or rates is established by DBAG;
    (h) Prior to the execution of the authorization referred to in 
paragraph (e), DBAG provides the independent fiduciary with a copy of 
DBAG's written policies and procedures regarding the handling of 
foreign exchange transactions involving income item conversions and de 
minimis purchase and sale transactions. The policies and procedures 
must, at a minimum, contain the following information:
    (1) Disclosure of the time(s) each day that DBAG will establish the 
specific rate of exchange or the range of exchange rates for the 
covered transactions to be executed and the time(s) that such covered 
transactions will take place. DBAG shall include a description of the 
methodology that DBAG uses to determine the specific exchange rate or 
range of exchange rates;
    (2) Disclosure that income item conversions and de minimis purchase 
and sale transactions will be executed at the first scheduled 
transaction time after notice that good funds from an income item 
conversion or a sale have been received, or a direction to purchase 
foreign currency has been received. To the extent that DBAG aggregates 
small amounts of foreign currency until a specified minimum threshold 
amount is met, a description of this practice and disclosure of the 
threshold amount; and
    (3) A description of the process by which DBAG's foreign exchange 
policies and procedures for income item conversions and de minimis 
purchase and sale transactions may be amended and disclosed to plans.
    (i) DBAG furnishes to the independent fiduciary a written 
confirmation statement with respect to each covered transaction not 
more than five business days after execution of the transaction.
    (1) With respect to income item conversions, the confirmation shall 
disclose the following information:
    (A) Account name;
    (B) Date of notice that good funds were received;
    (C) Transaction date;
    (D) Exchange rate;
    (E) Settlement date;
    (F) Identity of foreign currency;
    (G) Amount of foreign currency sold;
    (H) Amount of U.S. dollars or other currency credited to the plan; 
and
    (2) With respect to de minimis purchase and sale transactions, the 
confirmation shall disclose the following information:
    (A) Account name;
    (B) Date of notice that sales proceeds denominated in foreign 
currency are received as good funds or direction to acquire foreign 
currency was received;
    (C) Transaction date;
    (D) Exchange rate;
    (E) Settlement date;
    (F) Currencies exchanged:
    i. Identity of the currency sold;
    ii. Amount sold;
    iii. Identity of the currency purchased; and
    iv. Amount purchased.
    (j) DBAG--
    (1) Agrees to submit to the jurisdiction of the United States;
    (2) Agrees to appoint an agent for service of process in the United 
States, which may be an affiliate (the Process Agent);
    (3) Consents to service of process on the Process Agent;
    (4) Agrees that it may be sued in the United States Courts in 
connection with the transactions described in this exemption;
    (5) Agrees that any judgment may be collectable by an employee 
benefit plan in the United States from Deutsche Bank; and
    (6) Agrees to comply with, and be subject to, all relevant 
provisions of the Act.
    (k) DBAG maintains, within territories under the jurisdiction of 
the United States Government, for a period of six years from the date 
of the transaction, the records necessary to enable the persons 
described in paragraph (l) of this section to determine whether the 
applicable conditions of this exemption have been met, including a 
record of the specific exchange rate or range of exchange rates DBAG 
established each day for foreign exchange transactions effected under 
standing instructions for income item conversions and de minimis 
purchase and sale transactions. However, a prohibited transaction will 
not be considered to have occurred if, due to circumstances beyond 
DBAG's control, the records are lost or destroyed prior to the end of 
the six-year period, and no party in interest other than DBAG shall be 
subject to the civil penalty that may be assessed under section 502(i) 
of the Act, or the taxes imposed by section 4975(a) and (b) of the 
Code, if the records, are not maintained by DBAG, or are not made 
available for examination by DBAG, or its affiliate as required by 
paragraph (l) of this section.
    (l)(1) Except as provided in subparagraph (2) of this paragraph and 
notwithstanding any provisions of subsection (a)(2) and (b) of section 
504 of the Act, the records referred to in paragraph (k) of this 
section are available at their customary location for examination, upon 
reasonable notice, during normal business hours by:
    (A) Any duly authorized employee or representative of the 
Department of Labor or the Internal Revenue Service.
    (B) Any fiduciary of a plan who has authority to acquire or dispose 
of the assets of the plan involved in the foreign exchange transaction 
or any duly authorized employee or representative of such fiduciary.
    (C) Any contributing employer to the plan involved in the foreign 
exchange transaction or any duly authorized employee or representative 
of such employer.
    (2) None of the persons described in subparagraphs (B) and (C) 
shall be authorized to examine DBAG's trade secrets or commercial or 
financial information of DBAG, which is privileged or confidential.
Section III. Definitions and General Rules
    For purposes of this exemption,
    (a) A ``foreign exchange'' transaction means the exchange of the 
currency of one nation for the currency of another nation.
    (b) The term ``standing instruction'' means a written authorization 
from a plan fiduciary, who is independent of DBAG, to DBAG to effect 
the transactions specified therein pursuant to the instructions 
provided in such authorization.
    (c)(1) The term ``independent of DBAG'' means a plan fiduciary who 
is unrelated to, and independent of, DBAG. For purposes of this 
exemption, a plan fiduciary will be deemed to be unrelated to, and 
independent of, DBAG if such fiduciary represents that neither such 
fiduciary, nor any individual responsible for the decision to authorize 
or terminate authorization for transactions described in section I, is 
an officer, director, or highly compensated employee (within the 
meaning of section 4975(e)(2)(H) of the Code) of DBAG and represents 
that such fiduciary shall advise DBAG if those facts change.
    (2) Notwithstanding anything to the contrary in this section III 
(c), a fiduciary is not independent if:

[[Page 34650]]

    (i) Such fiduciary directly or indirectly controls, is controlled 
by, or is under common control with DBAG;
    (ii) Such fiduciary directly or indirectly receives any 
compensation or other consideration from DBAG for his own personal 
account in connection with any transaction described in this exemption;
    (iii) Any officer, director, or highly compensated employee (within 
the meaning of section 4975(e)(2)(H) of the Code) of DBAG, responsible 
for the transactions described in section I, is an officer, director, 
or highly compensated employee (within the meaning of section 
4975(e)(2)(H) of the Code) of the plan sponsor or of the fiduciary 
responsible for the decision to authorize or terminate authorization 
for transactions described in section I. However, if such individual is 
a director of the plan sponsor or of the responsible fiduciary, and if 
he or she abstains from participation in (A) the choice of DBAG as a 
directed trustee or custodian and (B) the decision to authorize or 
terminate authorization for transactions described in section I, then 
section III(c)(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 the entity.
    (d) The term ``control'' means the power to exercise a controlling 
influence over the management of policies of a person other than an 
individual.
    (e) An ``income item conversion'' means: (1) The conversion into 
U.S. dollars of an amount which is the equivalent of no more than 
300,000 U.S. dollars of interest, dividends or other distributions or 
payments with respect to a security, tax reclaims, proceeds from 
dispositions of rights, fractional shares or other similar items 
denominated in the currency of another nation that are received by DBAG 
on behalf of the plan from the plan's foreign investment portfolio; or 
(2) the conversion into any currency as required and specified by the 
standing instruction of an amount which is the equivalent of no more 
than 300,000 U.S. dollars of interest, dividends, or other 
distributions or payments with respect to a security, tax reclaims, 
proceeds from dispositions of rights, fractional shares or other 
similar items denominated in the currency of another nation that are 
received by DBAG on behalf of the plan from the plan's foreign 
investment portfolio, provided that the converted funds are either 
transferred to an interest bearing account which provides a reasonable 
rate of interest within 24 hours of the conversion and held therein 
pending reinvestment by the plan or the bank reinvests such proceeds 
within 24 hours of the conversion at the direction of the plan.
    (f) A ``de minimis purchase or sale transaction'' means the 
purchase or sale of foreign currencies in an amount of no more than 
300,000 U.S. dollars or the equivalent thereof in connection with the 
purchase or sale of foreign securities by a plan.
    (g) For purposes of this exemption the term ``employee benefit 
plan'' refers to a pension plan described in 29 CFR 2510.3-2 and/or a 
welfare benefit plan described in 29 CFR 2510.3-1.
    (h) For purposes of this exemption, the term ``good funds'' means 
funds immediately available in cash with no sovereign or other 
governmental impediments or restrictions to the exchange or transfer of 
such funds.
    (i) For purposes of this exemption, the term ``business day'' means 
a banking day as defined by federal or state banking regulations.
    (j) For purposes of this exemption, a ``foreign affiliate'' of 
Deutsche Bank means any non-U.S. entity that is directly or indirectly, 
through one or more intermediaries, controlling, controlled by, or 
under common control with Deutsche Bank.
    (k) For purposes of this exemption, the term ``bank'' means a 
foreign affiliate of Deutsche Bank: (1) That is a banking institution 
supervised and examined by the German banking authorities (currently, 
the Bundesanstalt fur Finanzdienstleistungsaufsicht (the BAFin), in 
cooperation with the Deutsche Bundesbank (the Bundesbank)), or is 
subject to regulation by similar governmental banking authorities 
located in the same country as such affiliate; and (2) whose activities 
are monitored and controlled pursuant to the statutory and regulatory 
standards of German law applicable to the foreign affiliates of 
Deutsche Bank engaged in banking activities.
    (l) For purposes of this exemption, the term ``broker-dealer'' 
means a foreign affiliate of Deutsche Bank: (1) Engaged in the business 
of effecting transactions in securities for the account of others, or 
regularly engaged in the business of buying and selling securities for 
its own account through a broker or otherwise; and (2) supervised by 
the German authorities responsible for regulating the activities 
described in (1) of this paragraph, or subject to regulation by similar 
governmental authorities located in the country in which such affiliate 
is located.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice of Proposed Exemption published on December 30, 2002 at 67 
FR 79649.

FOR FURTHER INFORMATION CONTACT: Christopher Motta, Office of Exemption 
Determinations, Employee Benefits Security Administration, U.S. 
Department of Labor, telephone (202) 693-8544. (This is not a toll-free 
number.)

Law Offices of Richard D. Gorman Pension & Profit Sharing Plan (the 
Plan), located in Monterey, California.

[Prohibited Transaction Exemption No. 2003-13; Application No. D-11104]

Exemption
    The restrictions of sections 406(a) and 406(b)(1) and (b)(2) 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 (E) of the Code, 
shall not apply to the sale of unimproved real property (the Property) 
by the Plan to Mr. Richard Gorman, a trustee of the Plan, and a party 
in interest with respect to the Plan. This exemption is conditioned 
upon the adherence to the material facts and representations described 
herein and upon the satisfaction of the following requirements:
    (a) The sale is a one-time cash transaction;
    (b) The Plan receives the greater of either: (i) $290,000; or (ii) 
the fair market value for the Property established at the time of the 
sale by an independent, qualified appraiser; and
    (c) The Plan pays no commissions or other expenses associated with 
the sale.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice of Proposed Exemption published on March 21, 2003, at 68 FR 
13964.

FOR FURTHER INFORMATION CONTACT: Khalif I. Ford of the Department at 
(202) 693-8540. (This is not a toll-free number.)

ACR Homes, Inc. Employee Stock Ownership Plan and Trust (the ESOP), 
located in Roseville, Minnesota.

[Prohibited Transaction Application 2003-14: Exemption Application No. 
D-11146]

Exemption
    The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the 
Act and the sanctions resulting from the application of section 4975 of 
the Code, by reason

[[Page 34651]]

of section 4975(c)(1)(A) through (E) of the Code, shall not apply to 
the past sale on August 28, 2001 (the Stock Redemption), by the ESOP to 
the ACR Homes, Inc., the sponsoring employer (the Employer), of 3,600 
shares of the Employer's class A common stock (the Shares) for $511,250 
in cash; provided that the following conditions were satisfied:
    (a) The Stock Redemption was a one-time cash transaction;
    (b) The ESOP received the fair market value of the Shares as 
determined by an independent, qualified appraiser on the date of the 
Stock Redemption; and
    (c) The ESOP paid no commissions or other expenses associated with 
the Stock Redemption.

EFFECTIVE DATE: This exemption is effective as of August 28, 2001.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on April 16, 2003, at 68 FR 
18686 (the notice).
Written Comments
    The Department received one written comment (the Comment) with 
respect to the notice and no requests for a hearing. The Comment was 
filed by the attorney for the applicant. The Comment states that the 
chart contained in Paragraph 2 of the Summary of Facts and 
Representations in the notice erroneously lists the number of shares 
owned by Dorothy Nelson (Mrs. Nelson) before the Stock Redemption as 
10,400. The correct amount owned by Mrs. Nelson before the Stock 
Redemption was 10,000 shares.
    The Department acknowledges the applicant's correction to the 
notice, as stated in the Comment. Accordingly, based on the entire 
record, the Department has determined to grant the exemption as 
proposed.

FOR FURTHER INFORMATION CONTACT: Ekaterina A. Uzlyan of the Department 
at (202) 693-8540. (This is not a toll-free number.)
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 and/or section 4975(c)(2) of the Code 
does not relieve a fiduciary or other party in interest or disqualified 
person from certain other provisions to which the exemption does not 
apply and the general fiduciary responsibility provisions of section 
404 of the Act, which among other things require a fiduciary to 
discharge his 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; 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) This exemption is supplemental to and not in derogation of, any 
other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional 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; and
    (3) The availability of this exemption is subject to the express 
condition that the material facts and representations contained in the 
application accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed in Washington, DC, this 5th day of June, 2003.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security 
Administration, Department of Labor.
[FR Doc. 03-14594 Filed 6-9-03; 8:45 am]

BILLING CODE 4510-29-P