Skip to page content
Employee Benefits Security Administration

EBSA Federal Register Notice

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]

[PDF Version]

Volume 70, Number 216, Page 68092-68093

=======================================================================
-----------------------------------------------------------------------

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