Q: How does section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), 15 USC 78o7 note, which requires federal agencies to review and modify existing regulations referring to, or requiring reliance on, credit ratings by July 21, 2011, affect prohibited transaction exemptions granted for an individual fiduciary or transaction under section 408(a) of ERISA?
A: It is the Department's view that individual prohibited transaction exemptions are not federal regulations. As a result, the Department has concluded that section 939A of the Dodd-Frank Act does not require their review and modification. Accordingly, notwithstanding the deadline for compliance with section 939A, individual prohibited transaction exemptions will remain in force with no modifications. All conditions of such exemptions, including those referring to or relying on credit ratings, will continue to apply.
The Department is cognizant, however, of the Congressional intent to reduce reliance on credit ratings and is considering alternative standards for use instead of, or in addition to, existing requirements for credit ratings in granted individual prohibited transaction exemptions. The Department welcomes public input on this issue. Interested persons may call the Office of Exemption Determinations at 202-693-8540 or email OED@dol.gov.