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