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Secretary of Labor Thomas E. Perez
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EBSA Notices

Notice of Proposed Exemptions   [5/6/2009]
[PDF]
FR Doc E9-10361
[Federal Register: May 6, 2009 (Volume 74, Number 86)]
[Notices]               
[Page 20974-20990]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06my09-101]                         

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Application Nos. and Proposed Exemptions; D-11498, MarkWest Energy 
Partners, L.P.; D-11508, Barclays Global Investment, N.A. and Its 
Affiliates and Successors (BGI) and Barclays Capital Inc. and Its 
Affiliates and Successors (BarCap) (collectively Applicants); and D-
11523, The Bank of New York Mellon Corporation (BNYMC) and Its 
Affiliates (Collectively, BNY Mellon), et al.]

 
 Notice of Proposed Exemptions

AGENCY: Employee Benefits Security Administration, Labor

ACTION: Notice of Proposed Exemptions.

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[[Page 20975]]

SUMMARY: This document contains notices of pendency before the 
Department of Labor (the Department) of proposed exemptions from 
certain of the prohibited transaction restrictions of the Employee 
Retirement Income Security Act of 1974 (ERISA or the Act) and/or the 
Internal Revenue Code of 1986 (the Code).

Written Comments and Hearing Requests

    All interested persons are invited to submit written comments or 
requests for a hearing on the pending exemptions, unless otherwise 
stated in the Notice of Proposed Exemption, within 45 days from the 
date of publication of this Federal Register Notice. Comments and 
requests for a hearing should state: (1) The name, address, and 
telephone number of the person making the comment or request, and (2) 
the nature of the person's interest in the exemption and the manner in 
which the person would be adversely affected by the exemption. A 
request for a hearing must also state the issues to be addressed and 
include a general description of the evidence to be presented at the 
hearing.

ADDRESSES: All written comments and requests for a hearing (at least 
three copies) should be sent to the Employee Benefits Security 
Administration (EBSA), Office of Exemption Determinations, Room N-5700, 
U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 
20210. Attention: Application No. ------, stated in each Notice of 
Proposed Exemption. Interested persons are also invited to submit 
comments and/or hearing requests to EBSA via e-mail or FAX. Any such 
comments or requests should be sent either by e-mail to: 
moffitt.betty@dol.gov, or by FAX to (202) 219-0204 by the end of the 
scheduled comment period. The applications for exemption and the 
comments received will be available for public inspection in the Public 
Documents Room of the Employee Benefits Security Administration, U.S. 
Department of Labor, Room N-1513, 200 Constitution Avenue, NW., 
Washington, DC 20210.

Notice to Interested Persons

    Notice of the proposed exemptions will be provided to all 
interested persons in the manner agreed upon by the applicant and the 
Department within 15 days of the date of publication in the Federal 
Register. Such notice shall include a copy of the notice of proposed 
exemption as published in the Federal Register and shall inform 
interested persons of their right to comment and to request a hearing 
(where appropriate).

SUPPLEMENTARY INFORMATION: The proposed exemptions were requested in 
applications filed pursuant to section 408(a) of the Act and/or section 
4975(c)(2) of the Code, and in accordance with procedures set forth in 
29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990). 
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 requested to 
the Secretary of Labor. Therefore, these notices of proposed exemption 
are issued solely by the Department.
    The applications contain representations with regard to the 
proposed exemptions which are summarized below. Interested persons are 
referred to the applications on file with the Department for a complete 
statement of the facts and representations.
MarkWest Energy Partners, L.P. Located in Denver, Co
[Application No. D-11498]

Proposed Exemption

    The Department is considering granting an exemption 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 FR 32836, 32847, August 10, 1990).

 I. Retroactive Transactions

    If the proposed exemption is granted, the restrictions of sections 
406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 406(b)(1), and 406(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) and 4975(c)(1)(E) of the 
Code,\1\ shall not apply, effective February 21, 2008:
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    \1\ For purposes of this proposed exemption, references to 
specific provisions of Title I of the Act, unless otherwise 
specified, refer also to the corresponding provisions of the Code.
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    (a) To the acquisition by the individually, directed accounts (the 
Account(s)) of participants in the MarkWest Hydrocarbon, Inc. 401(k) 
Savings and Profit-Sharing Plan (the Plan), of publicly traded 
partnership units (the Units) issued by MarkWest Energy Partners, LP 
(Partners), the parent of MarkWest Hydrocarbon Inc. (Hydrocarbon), 
which is the sponsor of the Plan, as a result of the conversion of the 
common stock of Hydrocarbon (the Stock) held by the Plan into Units, 
pursuant to a plan of Redemption and Merger (the Merger); and
    (b) to the holding of such Units by the Accounts in the Plan; 
provided that the conditions, as set forth, below, in this section 
I(b)(1) through (13), and the general conditions, as set forth, below, 
in section III of this proposed exemption, were satisfied at the time 
the transaction, described, above, in sections I(a) of this proposed 
exemption, was entered into and the transaction, described, above, in 
section I(b) of this proposed exemption occurred:
    (1) The past acquisition and holding of the Units by the Accounts 
in the Plan occurred in connection with the conversion of the Stock, 
pursuant to the terms of the Merger, which was the result of an 
independent act of Hydrocarbon, as a corporate entity;
    (2) All shareholders of the Stock, including the participants in 
the Accounts in the Plan, were treated in a like manner with respect to 
all aspects of the redemption and conversion of the Stock, pursuant to 
the terms of the Merger;
    (3) The past acquisition and holding of the Units by the Accounts 
in the Plan occurred in accordance with provisions in the Plan for 
individual participant direction of the investment of the assets of 
such Accounts;
    (4) The past acquisition and holding of the Units were each one-
time transactions, and the dispositions of the Units by the Accounts in 
the Plan occurred in a series of transactions for cash on the New York 
Stock Exchange (NYSE);
    (5) The participants in the Accounts in the Plan were provided with 
all shareholder rights and with the opportunity to direct the trustee 
of the Plan to vote ``for'', ``against,'' or ``abstain'' with regard to 
the redemption and conversion of the Stock held in the Accounts in the 
Plan, pursuant to the terms of the Merger.
    (6) The decision as to which compensation package to accept, in 
connection with the redemption and conversion of the Stock held in 
Accounts in the Plan, was made in accordance with the directions of the 
individual participants in whose Accounts such Stock was held, or, in 
the case of Accounts in the Plan for which no participant direction was 
given, the decision as to which compensation package to accept, in 
connection with the redemption and conversion of the Stock held in such 
Accounts in the Plan, was made in accordance with the directions of an 
independent, qualified fiduciary (the I/F), acting on behalf of such 
Accounts;
    (7) The Units acquired, as a result the conversion of the Stock 
held in the Accounts in the Plan, pursuant to the

[[Page 20976]]

terms of the Merger, were held in such Accounts for no more than a 
period of sixty (60) days after such Units were acquired by such 
Accounts;
    (8) The Accounts in the Plan disposed of all of the Units that such 
Accounts acquired as a result of the conversion of the Stock; and such 
dispositions occurred on the NYSE in a series of blind transactions for 
cash resulting in a weighted average price per Unit of no less than 
$32.394,
    (9) The cash proceeds from such dispositions of the Units by the 
Accounts in the Plan were distributed thereafter to each of the 
Accounts based on the number of Units held in each such Account;
    (10) The decision to dispose of the Units, acquired by the Accounts 
in the Plan as a result of the conversion of the Stock was made by the 
I/F, acting on behalf of each such Account;
    (11) The Accounts in the Plan did not pay any fees, commissions, 
transaction costs, or other expenses in connection with the redemption 
of the Stock by Hydrocarbon, the conversion of the Stock into Units, 
the acquisition and holding of such Units by such Accounts in the Plan, 
or the disposition of the Units on the NYSE ;
    (12) At the time each of the transactions, described, above, in 
sections I(a) and I(b) of this proposed exemption occurred, the 
individual participants whose Accounts in the Plan engaged in each such 
transaction, or the I/F, acting on behalf of Accounts in the Plan for 
which no participant direction was given, determined that each such 
transaction was in the interest of the participants and beneficiaries 
of such Accounts; and
    (13) The I/F took all appropriate actions necessary to safeguard 
the interests of the Accounts in the Plan, in connection with the 
transactions, described, above, in sections I(a)and I(b) of this 
proposed exemption.

II. Prospective Transactions

    If the proposed exemption is granted, the restrictions of sections 
406(a)(1)(E) and 406(a)(2) of the Act shall not apply, effective, as of 
the date a final exemption is published in the Federal Register, to:
    (a) The purchase of Units in the future by the Accounts in the 
Plan, and
    (b) The holding of such Units by the Accounts in the Plan, provided 
that the conditions, as set forth below, in this section II(b)(1) 
through (8), and the general conditions, as set forth, below, in 
section III of this proposed exemption, are satisfied at the time the 
transaction, described, above, in section II(a) of this proposed 
exemption is entered into, and at the time the transaction, described, 
above, in section II(b) of this proposed exemption occurs:
    (1) The decision by the Accounts in the Plan as to whether to 
engage in the purchase, the holding, or the sale of the Units shall be 
made by the individual participants of the Accounts in the Plan which 
engage in such transactions;
    (2) Hydrocarbon, rather than the Accounts in the Plan, shall bear 
any fees, commissions, expenses, or transaction costs, with respect to 
the purchase, holding, or sale of the Units;
    (3) Each purchase and each sale of any of the Units shall occur 
only in blind transactions for cash on the NYSE at the fair market 
value of such Units on the date of each such purchase and each such 
sale;
    (4) Each purchase and each sale of any of the Units shall occur on 
the same day (or if such day is not a trading day, the next day) as the 
direction to purchase or to sell the Units is received by the 
administrator of the Plan from the applicable participant of an Account 
which is engaging in such purchase or such sale;
    (5) The terms of each purchase and each sale are at least as 
favorable to the Account as terms generally available in comparable 
arm's-length transactions between unrelated parties;
    (6) Prior to the purchase by an Account in the Plan of any Units, 
Partners provides the participant who is directing the investment of 
such Account in the Units with the most recent prospectus describing 
the Units, and the most recent quarterly statement, and annual report, 
concerning Partners, and thereafter, provides such participant with 
updated prospectuses on the Units, and updated quarterly statements, 
and annual reports of Partners, as published;
    (7) Prior to a participant of an Account in the Plan engaging in 
the purchase of any Units, Partners must provide the following 
disclosures to such participant. The disclosure must contain the 
following information regarding the transactions and a supplemental 
disclosure must be made to the participant directing the covered 
investments if material changes occur. This disclosure must include:
    (A) Information relating to the exercise of voting, tender, and 
similar rights with respect to the Units;
    (B) The exchange or market system where the Units are traded; and
    (C) A statement that a copy of the proposed and final exemption 
shall be provided to participants upon request.
    (8) Each participant in an Account in the Plan shall have 
discretionary authority to direct the investment of such Account:
    (A) To sell the Units purchased by such Account no less frequently 
than monthly, and
    (B) to vote, tender, and exercise similar rights with respect to 
the Units held in such Account.

III. General Conditions

    (a) Partners or its affiliates maintain, or cause to be maintained, 
for a period of six (6) years from the date of each of the covered 
transactions such records as are necessary to enable the persons 
described, below, in section III(b)(1), to determine whether the 
conditions of this exemption have been met, except that--
    (1) No party in interest with respect to the Plan which engages in 
the covered transactions, other than Partners and its affiliates, shall 
be subject to a civil penalty under section 502(i) of the Act or the 
taxes imposed by section 4975(a) and (b) of the Code, if such records 
are not maintained, or are not available for examination, as required, 
below, by section III(b)(1); and
    (2) A separate prohibited transaction shall not be considered to 
have occurred solely because, due to circumstances beyond the control 
of Partners and its affiliates, such records are lost or destroyed 
prior to the end of the six-year period.
    (b)(1) Except as provided, below, in section III(b)(2), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to, above, in section III(a) are 
unconditionally available at their customary location for examination 
during normal business hours by--
    (A) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service, or the Securities and 
Exchange Commission; or
    (B) Any fiduciary of the Plan that engages in the covered 
transactions, or any duly authorized employee or representative of such 
fiduciary; or
    (C) Any employer of participants and beneficiaries and any employee 
organization whose members are covered by the Plan that engages in the 
covered transactions, or any authorized employee or representative of 
these entities; or
    (D) Any participant or beneficiary of the Plan that engages in the 
covered transactions, or duly authorized employee or representative of 
such participant or beneficiary;
    (2) None of the persons described, above, in section III(b)(1)(B)-
(D) shall be authorized to examine trade secrets of Partners and its 
affiliates, or commercial

[[Page 20977]]

or financial information which is privileged or confidential; and
    (3) Should Partners or its affiliates refuse to disclose 
information on the basis that such information is exempt from 
disclosure, Partners or its affiliates shall, by the close of the 
thirtieth (30th) day following the request, provide a written notice 
advising that person of the reasons for the refusal and that the 
Department may request such information.

Summary of Facts and Representations

    1. The Plan is a 401(k) defined contribution profit-sharing plan, 
established on August 1, 1993. Fidelity Management Trust Company 
(Fidelity) with offices in Boston, Massachusetts is the trustee for the 
Plan.
    Full-time permanent employees of Hydrocarbon are eligible to 
participate in the Plan. There are an estimated 441 participants and 
beneficiaries in the Plan. Individual Accounts are maintained for each 
participant in the Plan. Each participant's Account is credited with 
the participant's contribution, non-discretionary matching 
contributions made by Hydrocarbon, any allocations of discretionary 
contributions made by Hydrocarbon, and any earnings or losses and 
expenses, which are allocated based on the balance in each 
participant's Account.
    Participants direct the investment of their contributions into 
various investment options offered by the Plan. The Plan currently 
offers mutual funds and a collective trust fund as investment options. 
As of September 9, 2008, the approximate aggregate fair market value of 
the total assets of the Plan was $23,058,075.
    Prior to the consummation of the Merger, discussed in greater 
detail below, the Plan permitted investments in shares of the common 
Stock of Hydrocarbon, which at that time was publicly traded. It is 
represented that shares of such Stock are ``qualifying employer 
securities,'' pursuant to section 407(d)(5) of the Act.\2\
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    \2\ The Department, herein, is not opining as to whether the 
Hydrocarbon Stock satisfies the definition of ``qualifying employer 
securities'', as set forth in section 407(d)(5) of the Act, nor is 
the Department, herein, providing any relief from Title I or Title 
II of the Act for the acquisition and holding of such Stock by the 
Plan.
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    Immediately prior to the Merger, the Plan held approximately 137 
million shares of Hydrocarbon Stock, representing 2 percent (2%) of the 
outstanding shares of such Stock. As of December 31, 2007, the value of 
the Hydrocarbon Stock represented approximately 49 percent (49%) of the 
aggregate value of the assets of the Plan. After the effective date of 
the Merger, Hydrocarbon Stock was delisted from the American Stock 
Exchange, and the Stock was eliminated as an investment option under 
the Plan.
    2. Hydrocarbon, the sponsor and named fiduciary of the Plan, is the 
applicant (the Applicant) for this proposed exemption. Hydrocarbon was 
founded in 1988 as a partnership and later incorporated in the state of 
Delaware. Currently, Hydrocarbon has offices located in Denver 
Colorado. Hydrocarbon completed an initial public offering of its 
common Stock in 1996.
    3. On January 25, 2002, Hydrocarbon formed Partners, a master 
limited partnership with MarkWest Energy, GP, L.L.C., as the general 
partner (the GP). As of December 31, 2006, Hydrocarbon owned a 17 
percent (17%) interest in Partners and an 89.7 percent (89.7%) 
ownership interest in the GP.
    Partners is a Delaware limited partnership, engaged in the 
gathering, transportation and processing of natural gas, the 
transportation, fractionation, and storage of natural gas liquids, and 
the gathering and transportation of crude oil. Partners conducts 
business in the southwest, northeast, and the Gulf Coast of the United 
States.
    Partners does not have any employees. Employees of Hydrocarbon 
operate Partner's facilities and provide general and administrative 
services. As of September 28, 2007, Hydrocarbon employed approximately 
318 people for these purposes.
    4. On September 5, 2007, Hydrocarbon entered into a Plan of 
Redemption and Merger with Partners and with MWEP, L.L.C. (MWEP), which 
is a wholly-owned subsidiary of Partners. The terms of the Merger were 
negotiated between Hydrocarbon and Partners. It is represented that no 
shareholder was treated in a different manner, pursuant to the terms of 
the Merger. On February 21, 2008, the Merger was consummated. 
Accordingly, as a result of the Merger, MWEP merged with and into 
Hydrocarbon, and Hydrocarbon became a direct wholly-owned subsidiary of 
Partners.
    It is represented that, as minority shareholders, the Accounts in 
the Plan did not have the ability to materially influence the structure 
of the Merger. It is represented that under the terms of the Plan, 
voting rights to the Stock were passed through to participants in 
Accounts in the Plan. Accordingly, the participants in the Accounts in 
the Plan were provided with shareholder rights to vote ``for'' or 
``against,'' or ``abstain'' with regard to the Merger and to elect the 
form of consideration such Accounts would receive as a result of the 
Merger. The deadline for the exercise of such rights was February 13, 
2008.
    Under the terms of the Merger, shareholders of the Stock, including 
the participants of Accounts in the Plan, were permitted to elect to 
receive consideration for their shares of Stock in the form of: (a) An 
exchange of all shares of Stock attributable to an Account in the Plan 
for a stated consideration of $20 in cash and 1.285 Units per share of 
Stock; (b) an exchange of all shares of Stock attributable to an 
Account in the Plan for 1.905134 Units per share of Stock, (c) an 
exchange of all shares of Stock attributable to an Account in the Plan 
for $61.442663 of cash per each share of Stock, or (d) an exchange of a 
specific portion of the shares of Stock attributable to an Account in 
the Plan for cash and the balance in Units. It is represented that 
Stock exchanged for cash was redeemed by Hydrocarbon immediately prior 
to the Merger.
    As a result of the Merger, it is represented that shareholders of 
the Hydrocarbon Stock received in the aggregate consideration of 
approximately 15,400,000 Units and $240,000,000 in cash. Specifically, 
the Accounts in the Plan exchanged 229,372 shares of Stock for 294,743 
Units and received approximately $4.6 million in cash.\3\
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    \3\ In the opinion of the Applicant, the cash portion of the 
consideration received by the Accounts in the Plan, as a result of 
the redemption of the Stock held by such Accounts in the Plan, is 
statutorily exempt, pursuant to section 408(e) of the Act. Section 
408(e) of the Act provides that a plan may sell ``qualifying 
employer securities,'' to a party in interest, provided the plan 
receives adequate consideration, and no commission is charged. The 
Department, herein, is offering no view, as to whether the cash 
redemption of the Hydrocarbon Stock held in the Accounts in the Plan 
satisfied the requirements of the statutory exemption provided under 
section 408(e) of the Act. The Department, herein, is not providing 
any exemptive relief, with respect to such redemption of such Stock 
by the Accounts in the Plan.
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    It is represented that the cash payments were made to the Accounts 
in the Plan through a redemption process in which no brokerage fees 
were paid. In order to accommodate the redemption of the Stock, the 
Plan adopted an amendment to add a money market fund, Fidelity 
Retirement Money Market Portfolio, as an investment option. All cash 
proceeds from the redemption of the Stock were directed into this money 
market fund for each participant in the Accounts in the Plan.
    Units acquired by the Accounts in the Plan as a result of the 
Merger were permitted to remain in the Plan for up to sixty (60) days 
from the date of such

[[Page 20978]]

acquisition. During this period of time, it is represented that the 
Units in the Accounts in the Plan were held by an independent trustee, 
other than Fidelity. In this regard, Banker's Trust Company (Banker's) 
was appointed to act as directed trustee to receive the Units on behalf 
of the Accounts in the Plan. It is further represented that the 
participants in the Accounts in the Plan were not permitted to direct 
any activity with respect to these Units during this sixty (60) day 
period.
    Hydrocarbon retained an independent, qualified, fiduciary, as 
discussed in greater detail below, to direct the dispositions of the 
Units within the 60 day period from the date such Units were acquired 
by such Accounts. It is represented that all Units in the Accounts in 
the Plan had been sold by April 4, 2008. The proceeds from the 
dispositions of the Units received by each participant's Account 
equaled the number of Units previously held in each such participant's 
Account, multiplied by $32.394, which is the weighted average sales 
price of all Units sold from the Plan in a series of blind transactions 
for cash on the NYSE. The proceeds from the sale of the Units were 
directed to the money market fund in the appropriate participants' 
Accounts. The participants in the Account in the Plans did not pay any 
fees, commissions or similar charges with respect to the disposition of 
the Units on the NYSE.
    6. The Units of Partners are limited partnership units. Such Units 
are publicly traded on the NYSE under the symbol MWE. As of the date 
the application for exemption was submitted to the Department, there 
were 56,639,952 Units outstanding. The average daily trading volume for 
the Units is approximately 120,000. The Applicant maintains that for 
purposes of regulation by the Securities and Exchange Commission and 
the rules of the NYSE, the Units are similar to publicly traded 
securities.
    It is represented that the Units are securities under federal 
securities law and constitute ``employer securities'' under section 
407(d)(1) of the Act.\4\ However, the Units do not satisfy the 
definition of ``qualifying employer securities'' under the section 
407(d)(5) of the Act.\5\ Because the Units are not qualifying employer 
securities, the Plan could not have acquired the Units in the past, in 
connection with the conversion of the Stock into Units, pursuant to the 
Merger, without violating section 406(a)(1)(A) and 406(a)(1)(E) of the 
Act and 4975(c)(1)(A) of the Code and cannot purchase the Units on the 
NYSE in the future without violating sections 406(a)(1)(E) the Act. For 
the same reason, the Plan could not have held the Units in the past and 
cannot hold the Units in the future, without violating section 
406(a)(2) of the Act.
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    \4\ Section 407(d)(1) of the Act defines the term, ``employer 
security,'' as ``a security issued by an employer of employees 
covered by the plan, or by an affiliate of such employer.''
    \5\ Section 407(d)(5) of the Act defines the term, ``qualifying 
employer security,'' as an employer security which is stock, a 
marketable obligation (as defined in subsection (e)), or an interest 
in certain publicly traded partnerships.
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    It is represented that qualifying employer security investments are 
commonly offered by employers when designing 401(k) plans. In the 
opinion of the Applicant, there is no valid public policy reason to 
deny employees of a publicly traded partnership a similar investment 
opportunity. It is represented that, if the requested exemption is 
granted, Hydrocarbon will amend the Plan in all necessary respects to 
provide for the prospective purchase and holding of the Units.\6\
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    \6\ \\ Section 29 CFR 2550.404c-1(d)(2)(ii)(E)(4)(i) provides 
that in order for the limitation on liability of plan fiduciaries 
under section 404(c) of the Act to apply, the securities must be 
qualifying employer securities, as defined in section 407(d)(5) of 
the Act. Because the Units are not qualifying employer securities, 
as defined in section 407(d)(5) of the Act, the relief afforded by 
section 404(c) of the Act would not be available to Hydrocarbon, the 
sponsor of the Plan. The Department notes that the fact that a 
transaction is the subject of an exemption under section 408(a) of 
the Act does not relieve a fiduciary from the general fiduciary 
responsibility provisions of section 404 of the Act.
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    8. As the employer any of whose employees are covered by the Plan, 
Hydrocarbon is a party in interest with respect to the Plan, pursuant 
to section 3(14)(C) of the Act. As the owner of Hydrocarbon, Partners 
is a party in interest with respect to the Plan, pursuant to section 
3(14)(E). Fidelity, as trustee, Hydrocarbon, the named fiduciary, and 
Banker's, the directed trustee, are fiduciaries with respect to the 
Plan, pursuant to section 3(14)(A) of the Act.
    9. Hydrocarbon is seeking an exemption, effective February 21, 
2008, for the past acquisition by the Accounts of the Units issued by 
Partners, as a result of the conversion of the Stock into Units, 
pursuant to the Merger, and the holding of such Units by the Accounts 
in the Plan. Accordingly, Hydrocarbon has requested retroactive relief 
from the restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 
406(a)(2), 406(b)(1), and 406(b)(2) of the Act.
    Further, Hydrocarbon and the Plan desire an exemption in order to 
make the Units available in the future to the employees of Hydrocarbon 
through the Accounts of participants in the Plan. Specifically, the 
Applicant requests relief to permit the Accounts in the future to 
purchase Units for cash in blind transactions on the NYSE and to hold 
such Units. Accordingly, prospective relief from the restrictions of 
406(a)(1)(E) and 406(a)(2) of the Act has been requested.
    10. It is represented that the past acquisition and holding of the 
Units, pursuant to the Merger were feasible in that the past 
acquisition and holding of the Units were each one-time transactions.
    11. It is represented that the past acquisition and holding of the 
Units by the Accounts in the Plan provided sufficient safeguards for 
such Accounts and for the participants and beneficiaries of such Plan. 
In this regard, the past transactions occurred, in connection with the 
Merger, in which all shareholders of the Stock, including the Accounts 
in the Plan, were treated in like manner with respect to all aspects of 
the redemption and conversion of the Stock. The participants in the 
Accounts in the Plan were provided with shareholder rights and with the 
opportunity to direct the trustee of the Plan to vote ``for,'' 
``against,'' or ``abstain'' with regard to the redemption and 
conversion of the Stock held in the Accounts in the Plan, pursuant to 
the Merger. The decision as to which compensation package to accept, in 
connection with the redemption of the Stock held in Accounts in the 
Plan, was made in accordance with the directions of the individual 
participants in whose Accounts such Stock was held. Furthermore, the 
decision to redeem for cash the Stock held in Accounts in the Plan for 
which no participant direction was received, and the decision to 
dispose of all of the Units in the Accounts in the Plan for cash on the 
NYSE within a period of no more than sixty (60) days was made by the I/
F.
    12. It is represented that on August 17, 2007, well in advance of 
the Merger, Hydrocarbon retained Consulting Fiduciaries, Inc. (CFI), 
located in Northbrook, Illinois, to serve as the I/F acting on behalf 
of the Plan. When hired, CFI acknowledged that it is a fiduciary with 
respect to the Plan, as that term is defined in the Act.
    CFI is registered as an investment adviser under the Investment 
Advisers Act of 1940. CFI is qualified in that it provides professional 
independent fiduciary decision making, consultation, and alternative 
dispute resolution services to plans, plan sponsors, trustees, and 
investment advisers. David L. Heald, JD (Mr. Heald) and Mr. Seymour R. 
Zilberstein (Mr. Zilberstein)

[[Page 20979]]

are the founding principals of CFI. It is represented that Mr. Heald's 
and Mr. Zilberstein's qualifications include over 37 years and 35 
years, respectively, of legal and management experience with trust 
companies and institutional investment advisers. Mr. Heald is also a 
Charter Fellow of the American College of Employee Benefits Counsel. 
Both Mr. Heald and Mr. Zilberstein are active in professional 
associations.
    CFI was retained to: (a) Review and evaluate the Merger, (b) direct 
the trustee of the Plan to take appropriate action (including the 
execution of any pass-through voting procedures, if necessary), (c) 
make an election on the form of consideration for those Accounts in the 
Plan for which no participant direction was received, and (d) to the 
extent any Units were acquired in the Merger, to ensure that such Units 
were disposed of in a timely and prudent manner. It is represented that 
CFI had full discretion and was fully empowered to act on behalf of the 
Plan in determining what action to take with respect to the Merger, and 
to direct the trustee. In the event of a pass-through vote, CFI had 
discretion to determine how to vote any unallocated shares of Stock and 
any allocated shares of Stock held in the Plan for which no participant 
direction was received and to direct the trustee accordingly. Upon 
completion of its assignment, CFI provided a written report to the Plan 
summarizing its activities, including, but not limited to, a review of 
the process undertaken by CFI, the issues considered, and the 
information reviewed in formulating the conclusions reached.
    It is represented that in addition to the proxy package provided to 
each participant of the Accounts in the Plan, CFI provided a notice to 
each such participant that described CFI's role, its process of 
consideration, and the position it would take with respect to voting 
and to electing the form of consideration to be received from the 
Merger. CFI also informed participants that any Units received as a 
result of the Merger consideration would be sold on the public market 
and that there could be no guarantee as to the price that would be 
received in such sale. It is represented that participants returned 
voting directions with respect to 69,742 shares of Stock, leaving 
165,733 shares of Stock to be voted by CFI. It is represented that on 
February 19, 2008, CFI directed the vote on behalf of the Plan in favor 
of the Merger and elected to receive the maximum amount of cash 
consideration for the Stock. On February 21, 2008, it was announced 
that the Merger had been approved. On February 26, 2008, it was 
announced that the cash consideration had not been oversubscribed, so 
any shareholder, including the Accounts in the Plan, electing all cash 
would receive all cash. Subsequently, CFI received information from 
Fidelity that the Plan had received approximately 71,994 Units, as part 
of the Merger consideration elected by participants. Pursuant to CFI's 
direction, the Units were sold in the open market receiving total 
proceeds of $2,332,176 or $32.394 per Unit which was the equivalent of 
$61.71 per each share of Stock converted into Units.
    13. CFI, acting as independent fiduciary for the Plan, determined 
that the Merger was fair and in the best interest of the Plan. In 
reaching this decision, CFI undertook a process of review which 
included visits with the management of Hydrocarbon, review of relevant 
documents regarding the business of Hydrocarbon, and the Merger, 
discussions with outside advisors and consultants to Hydrocarbon, and 
an analysis of the terms of the Merger. In addition, CFI on September 
2, 2007, retained the services of Stout Risius Ross, Inc. (SRR) to act 
as independent financial advisor in connection with the Merger, to 
perform a financial analysis, and to issue a fairness opinion with 
respect to the Merger.
    SRR is a financial advisory firm specializing in business 
valuations, investment banking, and restructuring and performance 
improvement. SRR's business valuation practice provides valuations of 
privately held business and business interests for all purposes. It is 
represented that SRR is qualified in that it has provided financial 
advisory services for more than 100 employee benefit plan clients.
    SRR represents that it is independent in that the professional fees 
for the services rendered in connection with the transactions described 
in section I(a) and I(b) of this proposed exemption were not contingent 
upon the opinion expressed in their report. Further, neither SRR nor 
any of its employees has a present or intended financial relationship 
with or interest in the Plan, Hydrocarbon, or Partners.
    In order to assess the fairness of the terms and conditions of the 
Merger, SRR prepared a valuation analysis of Hydrocarbon and Partners 
(ignoring the effects of the Merger) to determine if the publicly 
traded price of each entity was a reasonable representation of its 
value. In addition, SRR prepared a valuation analysis of Partners on a 
post-merger basis, to assess the value of the Units following the 
Merger, because part of the consideration was in the form of Units.
    In performing its valuation analysis, SRR considered several 
valuation approaches, including the Income Approach, the Market 
Approach, and the Asset-Based Approach. Specifically, after giving 
consideration to the facts and circumstances surrounding Hydrocarbon 
and Partners, it is represented that SRR relied on the Guideline 
Company Method (a form of the Market Approach) and the Discounted Cash 
Flow Method (a form of the Income Approach).
    In a written report issued September 28, 2007, SRR concluded that: 
(a) The consideration received by the Plan for its Hydrocarbon Stock 
was not less than the fair market value of such shares; and (b) the 
overall terms and conditions of the Merger were fair to the Plan from a 
financial point of view. In the opinion of SRR, the Merger would create 
value for the Plan, because the consideration received for the shares 
of Stock held by the Plan was worth at least 20 percent (20%) more than 
the publicly traded value of those shares (prior to the announcement of 
the Merger).
    14. It is represented that the prospective transactions are 
feasible in that Hydrocarbon will amend the Plan in all necessary 
respects to provide for the purchase and holding of the Units in the 
future. Further, Hydrocarbon will bear the cost of filing the 
application and the cost of notifying interested persons.
    15. It is represented that there are sufficient safeguards to 
permit the transactions for which prospective relief is requested. In 
this regard, future decisions to purchase, to hold, and to sell the 
Units will be made by the participants of the Accounts in the Plan no 
less frequently than monthly. Prior to the purchase of Units by the 
Account in the Plan, participants who are directing such investment in 
Units will receive the most recent copies of the prospectus of the 
Units, and the most recent quarterly statements, and annual report of 
Partners and updates, as published. Prior to purchase, and subsequent 
to purchase, if material changes occur, disclosures to participants in 
the Accounts of the Plan who are directing the investment in the Units 
will include information relating to the exercise of voting, tender, 
and similar rights with respect to the Units, the exchange on which the 
Units are traded, and a copy of the proposed and final exemption, upon 
request. In addition, participants in the Account in the Plan which 
holds Units shall have the same rights as all other holders of Units. 
These rights include voting rights, as set forth in the

[[Page 20980]]

Third Amended and Restated Agreement of Limited Partnership of MarWest 
Energy Partners, L.P.
    The imposition of a 20 percent (20%) limitation on the amount of 
assets of each Account in the Plan which can be comprised of Units will 
also insure that each Account will not become unduly concentrated in 
Units.
    It is further represented that because the Units are publicly 
traded on the NYSE, a ready market for the Units exists. Accordingly, 
in the opinion of the Applicant the Units have sufficient liquidity and 
market-pricing protections. It is represented that the fact that the 
Units are traded on the NYSE will insure that each participant's 
Account in the Plan will receive arm's length terms. Further, the fair 
market value for the Units, whether the Plan purchases or sells such 
Units, will be determined by the price of such Units on the NYSE.
    Hydrocarbon, rather than the Accounts in the Plan, shall bear any 
fees, commissions, expenses, or transaction costs, with respect to the 
purchase, holding, or sale of the Units. It is represented that when 
the Accounts in the Plan previously provided for the purchase of Stock 
and when the Accounts in the Plan disposed of the Units in the past, 
the broker was Fidelity. Fidelity is not an affiliate of Partners and 
no fees or other amounts were shared with Partners. A broker has not 
yet been selected for the purpose of future purchases or sales of the 
Units on the NYSE by the Accounts in the Plan. If the proposed 
exemption is granted and the Accounts in the Plan are permitted to 
purchase and sell Units on the NYSE, it is represented that no 
affiliate of Partners will be used as a broker, and no fees or other 
amounts will be shared with Partners.
    16. In the opinion of the Applicant, the purchase and holding of 
the Units, for which prospective relief is requested, are in the 
interest of Accounts in the Plan. In this regard, such transactions in 
the future will enable employees of Hydrocarbon to share in the growth 
of Partners and provide such employees with a more generally efficient 
and inexpensive means to participate in the growth of and profitability 
of the energy sector of the economy.
    17. In summary, the Applicant represents that the retroactive 
transactions and the prospective transactions which are the subject of 
this proposed exemption satisfy the statutory criteria of section 
408(a) of the Act and section 4975 of the Code because:
    (a) The past acquisition and holding of the Units by the Accounts 
in the Plan occurred in connection with the conversion of the Stock, 
pursuant to the terms of the Merger, which was the result of an 
independent act of Hydrocarbon, as a corporate entity;
    (b) All shareholders of the Stock, including the participants in 
the Accounts in the Plan, were treated in like manner with respect to 
all aspects of the redemption and conversion of the Stock, pursuant to 
the terms of the Merger;
    (c) The past acquisition and holding of the Units by the Accounts 
in the Plan occurred in accordance with Plan provisions for individual 
participant direction of investments of the assets of such Accounts;
    (d) The past acquisition and holding of the Units were each one-
time transactions, and the dispositions of the Units by the Accounts in 
the Plan occurred in a series of transactions on the NYSE;
    (e) The participants in the Accounts in the Plan were provided with 
all shareholder rights and with the opportunity to direct the trustee 
of the Plan to vote ``for,'' ``against,'' or ``abstain'' with regard to 
the redemption and conversion of the Stock held in the Accounts in the 
Plan, pursuant to the Merger;
    (f) The decision as to which compensation package to accept, in 
connection with the redemption and conversion of the Stock held in 
Accounts in the Plan, was made in accordance with the directions of the 
individual participants in whose Accounts such Stock was held, or, in 
accordance with the directions of the I/F, acting on behalf of Accounts 
for which no participant direction was given;
    (g) The Units acquired, as a result of the conversion of the Stock 
held in the Accounts in the Plan, pursuant to the terms of the Merger, 
were held in such Accounts for no more than a period of sixty (60) days 
after such Units were acquired by such Accounts;
    (h) The Accounts in the Plan disposed of all of the Units that such 
Accounts acquired as a result of the conversion of the Stock; and such 
dispositions occurred on the NYSE in a series of blind transactions for 
cash resulting in a weighted average price per Unit of no less than 
$32.394;
    (i) The cash proceeds from such dispositions of the Units by the 
Accounts in the Plan were distributed thereafter to each of the 
Accounts based on the number of Units held in each such Account;
    (j) The decision to dispose of the Units, acquired by the Accounts 
in the Plan as a result of the conversion of the Stock was made by the 
I/F, acting on behalf of each such Account;
    (k) The Accounts in the Plan did not pay any fees, commissions, 
transaction costs, or other expenses in connection with the redemption 
of the Stock by Hydrocarbon, the conversion of the Stock into Units, 
and acquisition and holding of such Units by such Accounts in the Plan 
or the disposition of the Units on the NYSE;
    (l) At the time each of the transactions, described, above, in 
sections I(a) and I(b) of this proposed exemption occurred, the 
individual participants of the Account that engaged in each such 
transaction, or the I/F, acting on behalf of the Accounts for which no 
participant direction was given, determined that each such transaction 
was in the interest of the participants and beneficiaries of such 
Accounts;
    (m) The I/F took all appropriate actions necessary to safeguard the 
interests of the Accounts in the Plan, in connection with the 
transactions, described, above, in sections I(a) and I(b) of this 
proposed exemption;
    (n) Hydrocarbon, rather than the Accounts in the Plan, will bear 
any fees, commissions, expenses, transaction costs, or other expenses 
with respect to the prospective purchase, holding, or sale of the 
Units;
    (o) The decision by the Accounts in the Plan as to whether to 
engage in the prospective purchase, holding, or sale of the Units will 
be made by the individual participants of the Accounts in the Plan 
which engage in such transactions;
    (p) Each purchase and each sale of any of the Units in the future 
will occur only in blind transactions on the NYSE for cash at the fair 
market value of such Units on the date of each such purchase and each 
such sale;
    (q) Each purchase and each sale of any of the Units in the future 
will occur on the same day (or if such day is not a trading day, on the 
next day) as the direction to purchase or to sell the Units is received 
by the administrator of the Plan from the applicable participant of an 
Account which is engaging in such purchase or such sale;
    (r) Immediately following a purchase of Units in the future by an 
Account, the fair market value of all of the Units held in such Account 
will not exceed twenty percent (20%) of the aggregate fair market value 
of the assets in such Account;
    (s) The terms of each prospective purchase and each prospective 
sale of the Units are at least as favorable to the

[[Page 20981]]

Account as terms generally available in comparable arm's-length 
transactions between unrelated parties;
    (t) Prior to the purchase by an Account in the Plan of any Units, 
Partners will provide the participant who is directing the investment 
of such Account with the most recent prospectuses, quarterly 
statements, and annual reports, and thereafter provides updated 
prospectuses, quarterly statements, and annual reports, as published;
    (u) Prior to a participant of an Account in the Plan engaging in 
the purchase of any Units, Partners will provide the certain 
disclosures to such participant and a supplemental disclosure must be 
made to the participant directing, if material changes occur;
    (v) Each participant in an Account in the Plan will have 
discretionary authority to direct the investment of such Account to 
sell the Units purchased by such Account no less frequently than 
monthly, and to vote, tender, and exercise similar rights with respect 
to the Units held in such Account; and
    (w) Partners or its affiliates will maintain, or cause to be 
maintained, for a period of six (6) years from the date of any of the 
covered transactions such records as are necessary to determine whether 
the conditions of this exemption have been met.

Notice to Interested Persons

    The persons who may be interested in the publication in the Federal 
Register of the Notice of Proposed Exemption (the Notice) include the 
participants of the Plan, the fiduciaries of the Plan, and the trustees 
of Plan.
    It is represented that each of these classes of interested persons 
will be notified of the publication of the Notice by mail, within 
fifteen (15) calendar days of publication of the Notice in the Federal 
Register. Such mailing will contain a copy of the Notice, as it appears 
in the Federal Register on the date of publication, plus a copy of the 
Supplemental Statement, as required, pursuant to 29 CFR 2570.43(b)(2), 
which will advise all interested persons of their right to comment and 
to request a hearing.
    Any written comments and/or requests for a hearing must be received 
by the Department from interested persons within 45 days of the 
publication of this proposed exemption in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Ms. Angelena C. Le Blanc of the 
Department, telephone (202) 693-8540. (This is not a toll-free number.)
    Barclays Global Investors, N.A. and its affiliates and successors 
(BGI) and Barclays Capital Inc. and its affiliates and successors 
(BarCap) (collectively Applicants); Located in San Francisco, CA, and 
New York, NY
[Application No. D-11508]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Act, section 8477(c)(3) of the 
Federal Employees' Retirement System Act of 1986 (FERSA) and section 
4975(c)(2) of the Code, and in accordance with the procedures set forth 
in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990).

Section I--Temporary Exemption for Securities Lending Transactions 
Involving Index and Model-Driven Funds That Are Based on BarCap-Lehman 
Indices

    If the exemption is granted, for the period from September 22, 
2008, through the earlier of (i) the effective date of an individual 
exemption granting permanent relief for the following transactions or 
(ii) one year from the grant date of this individual exemption (the 
Relief Period), the restrictions of section 406(a)(1)(A) through (D) 
and 406(b)(1) and (2) of the Act, section 8477(c)(2)(A) and (B) of 
FERSA, 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 lending of securities carried out on 
behalf of Client Plans in reliance on Prohibited Transaction Exemption 
(PTE) 2002-46 \7\, where the applicable Index or Model-Driven Fund 
managed by BGI meets the definition of an ``Index Fund'' or a ``Model-
Driven Fund'' as set forth in Section III of PTE 2002-46 but for the 
fact that the underlying index is a BarCap-Lehman Index, provided that 
all of the other conditions of PTE 2002-46 and the conditions set forth 
in Section IV of this proposed exemption are met.
---------------------------------------------------------------------------

    \7\ 67 FR 59569, September 23, 2002.
---------------------------------------------------------------------------

Section II--Temporary Exemption for Transactions Involving Exchange-
Traded Funds That Are Index and Model-Driven Funds Based on BarCap-
Lehman Indices

    If the exemption is granted, effective for the Relief Period, the 
restrictions of section 406(a) and (b) of the Act, section 8477(c)(2) 
of FERSA, and the taxes imposed by section 4975(a) and (b) of the Code, 
by reason of section 4975(c)(1)(A) through (F) of the Code, shall not 
apply to transactions carried out on behalf of Client Plans in reliance 
upon Prohibited Transaction Exemption (PTE) 2008-01 \8\, where the 
applicable Index or Model-Driven Fund would meet the definition of an 
``Index Fund'' or a ``Model-Driven Fund'' as set forth in Section V of 
PTE 2008-01 but for the fact that the underlying index is a BarCap-
Lehman Index, provided that all of the other conditions of PTE 2008-01 
and the conditions set forth in Section IV of this proposed exemption 
are met.
---------------------------------------------------------------------------

    \8\ 73 FR 3274, January 17, 2008.
---------------------------------------------------------------------------

Section III--Temporary Exemption for Principal Transactions With the 
BarCap-Lehman Broker-Dealer

    If the exemption is granted, effective for the Relief Period, the 
restrictions of section 406(a) and 406(b)(1) and (2) of the Act, 
section 8477(c)(2)(A) and (B) of FERSA, and the taxes imposed by 
section 4975(a) and (b) of the Code by reason of section 4975(c)(1)(A) 
through (E) of the Code, shall not apply to the purchase or sale of 
fixed income securities between BGI on behalf of Client Plans and the 
BarCap-Lehman Broker-Dealer (Covered Principal Transactions) provided 
that the conditions set forth in Section V are met.

Section IV--Conditions Applicable to Sections I and II

    (a) Each BarCap-Lehman Index is a published Index widely used in 
the market by independent institutional investors other than pursuant 
to an investment management or advisory relationship with BGI and is 
prepared or applied in the same manner for non-affiliated customers as 
for BGI.
    (b) Prior to the use of a BarCap-Lehman Index in connection with 
the exemption and on an annual basis thereafter (but in no event prior 
to the date that is 90 days following the date of the publication of 
this proposed exemption in the Federal Register), BGI will provide 
BarCap with a list of BarCap Lehman Indices proposed to be used by BGI 
in connection with the exemption. BarCap will certify to BGI whether, 
in its reasonable judgment, each such index is widely used in the 
market. In making this determination, BarCap shall take into 
consideration factors such as (i) publication by Bloomberg, or a 
similar institution involved in the dissemination of financial 
information, (ii) hits on relevant websites including LehmanLive (or 
any successor website maintained by BarCap or its affiliate(s)) and 
Bloomberg.com (or similar website), and (iii) delivery of index 
information to

[[Page 20982]]

clients by means other than through Web site access.
    (c) Any fees charged for the use of the BarCap-Lehman Index are 
paid by BGI and not Client Plans.
    (d) Information barriers are in place throughout the Relief Period 
between BGI and BarCap such that BGI is not provided access to 
information regarding the rules, decisions and data underlying the 
BarCap-Lehman Indices before such information is provided to users of 
such Indices who are independent of BarCap and such rules, decisions 
and data are determined objectively without regard to BGI's use of such 
BarCap-Lehman Indices.
    (e) At the end of the Relief Period, a Qualified Independent 
Reviewer, as defined in Section VII(n), shall issue a written report 
(the Compliance Report), following its review of relevant BarCap-Lehman 
Indices and the underlying rules, certifying to each of the following:
    (i) Each BarCap-Lehman Index was operated in accordance with 
objective rules, in the ordinary course of business as would be 
conducted between unaffiliated parties;
    (ii) No manipulation of any BarCap-Lehman Index for the purpose of 
benefiting BGI, BarCap, or their affiliates occurred;
    (iii) In the event that any rule change occurred in connection with 
the rules underlying any BarCap-Lehman Index, such rule change was not 
made for the purpose of benefiting BGI, BarCap, or their affiliates;
    (iv) Based on a review of the factors cited in condition (b) above, 
each BarCap-Lehman Index was widely used in the market during the 
Relief Period;
    (v) Based on the result of the Qualified Independent Reviewer's 
factual inquiries to the Applicants, condition (d) above was met; and
    (vi) Based on the Qualified Independent Reviewer's review of paid 
bills or invoices, condition (c) above was met with respect to the fee 
or fees paid in connection with each transaction.
    The Compliance Report shall be issued no later than 90 days 
following the end of the Relief Period describing the steps performed 
during the course of the Qualified Independent Reviewer's review, the 
level of compliance with conditions (e)(i) through (vi), and any 
specific instances of non-compliance. The Compliance Report shall be 
included in the records maintained by BGI pursuant to Section VI of 
this proposed exemption, and BGI shall notify the independent 
fiduciary(ies) of each Client Plan, as part of its regular disclosure 
with respect to the applicable Fund(s), that the Compliance Report is 
available for their review.
    (f) The Index or Model-Driven Funds described in Sections I and II 
meet the definition of Index Fund or Model-Driven Fund in Sections 
VII(k) or (l) of this proposed exemption.

Section V--Conditions Applicable to Section III

    (a) BGI exercises discretionary authority or control or renders 
investment advice with respect to the Client Plan assets involved in 
the Covered Principal Transaction solely in connection with an Index 
Fund or Model-Driven Fund in which Client Plans invest.\9\
---------------------------------------------------------------------------

    \9\ This does not preclude, in the case of a BGI Plan that is a 
defined contribution plan under which participants direct the 
investment of their accounts among various investment options, the 
discretionary authority to select and offer investment options under 
the plan.
---------------------------------------------------------------------------

    (b) Each Covered Principal Transaction occurs as a direct result of 
a Triggering Event, as defined in Section VII(o), and is executed no 
later than the close of the third business day following such 
Triggering Event.
    (c) Each Covered Principal Transaction is a purchase or sale, for 
no consideration other than cash payment against prompt delivery of a 
security.
    (d) Each Covered Principal Transaction is on terms that BGI 
reasonably determines to be more favorable to the Client Plan than the 
terms of an arm's length transaction with an unaffiliated counterparty 
would have been.
    (e) Each Covered Principal Transaction is executed either:
    (i) through an automated routing system reasonably designed to 
ensure execution at the best available net price to the Client Plan for 
the number of securities to be purchased or sold in the Covered 
Principal Transaction; or
    (ii) at a net price to the Client Plan for the number of securities 
to be purchased or sold in the Covered Principal Transaction which is 
as favorable or more favorable to the Client Plan as the prices at 
which at least two independent Approved Counterparties, who are ready 
and willing to trade the relevant security, offer to purchase or sell 
such security.
    (f) The Covered Principal Transaction does not involve any security 
issued by Barclays PLC.
    (g) At the end of the Relief Period, a Qualified Independent 
Reviewer shall issue a Compliance Report certifying to each of the 
following:
    (i) Based on a review of execution policies and procedures during 
the Relief Period and a sample of Covered Principal Transactions, that 
the policies and execution procedures used in connection with Covered 
Principal Transactions were reasonably designed to obtain best 
execution for the securities to be purchased or sold in the Covered 
Principal Transaction; and
    (ii) Each sampled Covered Principal Transaction occurred in 
accordance with conditions (a), (b), (c) and (e) above. The Compliance 
Report shall be issued no later than 90 days following the end of the 
Relief Period describing the steps performed during the course of the 
Qualified Independent Reviewer's review, the level of compliance with 
conditions (g)(i) and (ii), and any specific instances of non-
compliance. The Compliance Report shall be included in the records 
maintained by BGI pursuant to Section VI of this proposed exemption, 
and BGI shall notify the independent fiduciary(ies) of each Client 
Plan, as part of its regular disclosure with respect to the applicable 
Fund(s), that the Compliance Report is available for their review.
    (h) In the case of any Covered Principal Transaction in connection 
with an Index Fund or a Model-Driven Fund with respect to which the 
underlying Index is a BarCap-Lehman Index, each of conditions (a) 
through (f) set forth in Section IV above is met.

Section VI--Recordkeeping Conditions Applicable to Sections I, II and 
III

    (a) BGI maintains, or causes to be maintained, for a period of six 
(6) years following the end of the Relief Period the records necessary 
to enable the persons described in paragraph (b) below to determine 
whether the conditions of the exemption have been met, including the 
Compliance Reports described in Sections IV(e) and V(g), and records 
which identify with respect to the Covered Principal Transactions:
    (i) On a Fund by Fund basis, the specific Triggering Events which 
result in the creation of the index or model prescribed output 
describing the characteristics of the securities to be traded; \10\
---------------------------------------------------------------------------

    \10\ Characteristics of the securities used in rebalancing a 
fixed income index would include changes in (a) amount of 
securities, (b) duration, (c) yield curve, and (d) convexity.
---------------------------------------------------------------------------

    (ii) On a Fund by Fund basis, the index or model prescribed output 
which described the characteristics of the securities to be traded in 
detail sufficient to allow an independent plan fiduciary or the 
Qualified Independent Reviewer to verify that each of the above 
decisions for the Fund was made in response to specific Triggering 
Events; and

[[Page 20983]]

    (iii) On a Fund by Fund basis, the actual trades executed by the 
Fund on a particular day, the identity of the counterparty, the prices 
offered by the Approved Counterparties, if relevant, and which of those 
trades resulted from Triggering Events.
    Such records must be readily available to assure accessibility and 
maintained so that an independent fiduciary, the Qualified Independent 
Reviewer, or other persons identified below in paragraph (b) of this 
Section, may obtain them within a reasonable period of time. However, a 
prohibited transaction will not be considered to have occurred if, due 
to circumstances beyond the control of BGI, the records are lost or 
destroyed prior to the end of the six-year period; and no party in 
interest other than BGI and its affiliates shall be subject to the 
civil penalty that may be assessed under section 502(i) of the Act, or 
to the taxes imposed by section 4975(a) and (b) of the Code, if the 
records are not maintained, or are not available for examination as 
required by paragraph (b) below.
    (b) (1) Except as provided in Section (2) of this paragraph and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to in paragraph (a) are 
unconditionally available at their customary location during normal 
business hours by:
    (A) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service or the Securities and Exchange 
Commission;
    (B) Any fiduciary of a participating Client Plan or any duly 
authorized representative of such fiduciary;
    (C) Any contributing employer to any participating Client Plan or 
any duly authorized employee representative of such employer;
    (D) Any participant or beneficiary of any participating Client 
Plan, or any duly authorized representative of such Client Plan 
participant or beneficiary; and
    (E) The Qualified Independent Reviewer.
    (2) None of the persons described above in subparagraphs (B)-(E) of 
paragraph (b)(1) are authorized to examine the trade secrets of BGI or 
its affiliates or commercial or financial information that is 
privileged or confidential.
    (3) Should BGI refuse to disclose information on the basis that 
such information is exempt from disclosure, BGI shall, by the close of 
the thirtieth (30th) day following the request, provide written notice 
advising that person of the reason for the refusal and that the 
Department may request such information.

Section VII--Definitions

    (a) Approved Counterparty: A dealer that (x) is either (i) 
registered in accordance with section 15(b) of the Exchange Act or (ii) 
exempt from the requirement to register as a dealer under the Exchange 
Act because it is a bank that buys and sells government securities (as 
such terms are defined in the Exchange Act) and (y) meets the credit 
and execution standards of BGI as described in paragraph 20 of the 
Summary of Facts and Representations herein.
    (b) Barclays: Barclays PLC and its direct and indirect 
subsidiaries.
    (c) BarCap: Barclays Capital Inc. and its successors.
    (d) BarCap-Lehman Broker-Dealer: BarCap's U.S. broker-dealer 
business, including the broker-dealer business acquired by BarCap from 
Lehman on September 22, 2008.
    (e) BarCap-Lehman Index: A generally accepted standardized 
securities Index created by Lehman prior to the closing of the Asset 
Purchase Agreement on September 22, 2008, and maintained by its 
successor, BarCap.
    (f) BGI: Barclays Global Investors, N.A., its investment advisory 
affiliates and their respective successors.
    (g) BGI Plan: A Plan maintained by BGI or an affiliate for the 
benefit of its own employees.
    (h) Client Plan: An employee benefit plan subject to the Act, FERSA 
and/or the Code, whose assets are managed by or which is advised by 
BGI, or a BGI-managed fund or separate account in which assets of such 
plans are invested.
    (i) Exchange Act: The Securities Exchange Act of 1934, as amended.
    (j) Index: A securities index that represents the investment 
performance of a specific segment of the public market for equity or 
debt securities in the United States and/or foreign countries, but only 
if--
    (1) The organization creating and maintaining the index is--
    (A) Engaged in the business of providing financial information, 
evaluation, advice or securities brokerage services to institutional 
clients;
    (B) A publisher of financial news or information; or
    (C) A public stock exchange or association of securities dealers; 
and
    (2) The index is either (i) created and maintained by an 
organization independent of Barclays or (ii) a BarCap-Lehman Index; and
    (3) The index is a generally accepted standardized index of 
securities which is not specifically tailored for the use of BGI.
    (k) Index Fund: Any investment fund, account or portfolio 
sponsored, maintained, trusteed or managed by BGI in which one or more 
investors invest, and--
    (1) Which is designed to track the rate of return, risk profile and 
other characteristics of an Index by either (i) replicating the same 
combination of securities which compose such Index or (ii) sampling the 
securities which compose such Index based on objective criteria and 
data;
    (2) For which either (i) BGI or its affiliate does not use its 
discretion, or data within its control, to affect the identify or 
amount of securities to be purchased or sold or (ii) the underlying 
Index is a BarCap-Lehman Index;
    (3) That contains ``plan assets'' subject to the Act; and
    (4) That involves no agreement, arrangement or understanding 
regarding the design or operation of the Fund which is intended to 
benefit BGI its affiliate or any party in which BGI or its affiliate 
may have an interest.\11\
---------------------------------------------------------------------------

    \11\ This requirement does not preclude BGI's payment of fees to 
BarCap for use of the Indices.
---------------------------------------------------------------------------

    (l) Model-Driven Fund: Any investment fund, account or portfolio 
sponsored, maintained, trusteed or managed by BGI in which one or more 
investors invest and--
    (1) Which is composed of securities the identity of which and the 
amount of which are selected by a computer model that is based on 
prescribed objective criteria to transform an Index using either (i) 
independent third-party data not within the control of BGI or an 
affiliate or (ii) data provided by the BarCap-Lehman Broker-Dealer that 
is commercially available on a widespread basis to unaffiliated end 
users such as mutual funds and collective investment funds on the same 
terms and conditions;
    (2) Which contains ``plan assets'' subject to the Act; and
    (3) That involves no agreement, arrangement or understanding 
regarding the design or operation of the Fund or the utilization of any 
specific objective criteria which is intended to benefit BGI or its 
affiliate or any party in which BGI or its affiliate may have an 
interest.\12\
---------------------------------------------------------------------------

    \12\ This requirement does not preclude BGI's payment of fees to 
BarCap for use of the Indices or data.
---------------------------------------------------------------------------

    (m) Lehman: Lehman Brothers Holdings Inc. and, as the context 
requires, its subsidiaries and affiliates prior to September 15, 2008.
    (n) Qualified Independent Reviewer: A third party appointed by BGI 
that is independent of Barclays and its

[[Page 20984]]

affiliates and has extensive experience in reviewing and/or auditing 
transactions and procedures involving assets of plans subject to the 
Act, FERSA and/or the Code for the purpose of confirming that the 
applicable transactions or procedures serve the best interests of such 
plans.
    (o) Triggering Event: Any of the following events in connection 
with an Index Fund or a Model-Driven Fund (together, ``Funds''):
    (1) A change in the composition or weighting of the Index 
underlying a Fund by either (i) the independent organization creating 
and maintaining the Index or (ii) in the case of a BarCap-Lehman Index, 
by the BarCap-Lehman Broker-Dealer. In the case of a change described 
in clause (ii) of the preceding sentence, the change is uniformly 
applied to all customers using the Index, including non-affiliated 
customers, and is not adopted for the purpose of benefiting BGI.
    (2) A material amount of net change in the overall level of assets 
in a Fund, as a result of investments in and withdrawals from the Fund, 
provided that:
    (A) Such material amount has either been identified in advance as a 
specified amount of net change relating to such Fund and disclosed in 
writing as a ``triggering event'' to an independent fiduciary of each 
Client Plan having assets held in the Fund prior to, or within ten (10) 
days following, its inclusion as a ``triggering event'' for such Fund 
or BGI has otherwise disclosed to the independent fiduciary the 
parameters for determining a material amount of net change, including 
any amount of discretion retained by the BGI that may affect such net 
change; and
    (B) Investments or withdrawals as a result of BGI's discretion to 
invest or withdraw assets of a BGI Plan, other than a BGI Plan which is 
a defined contribution plan under which participants direct the 
investment of their accounts among various investment options, 
including the applicable Fund, will not be taken into account in 
determining the specified amount of net change;
    (3) An accumulation in the Fund of a material amount of either:
    (A) Cash which is attributable to interest or dividends on, and/or 
tender offers for, portfolio securities; or
    (B) Stock attributable to dividends on portfolio securities; 
provided that such material amount has been identified in advance as a 
specified amount relating to such Fund and disclosed in writing as a 
``triggering event'' to an independent fiduciary of each Client Plan 
having assets held in the Fund prior to, or within ten (10) days 
following, its inclusion as a ``triggering event'' for such Fund, or 
BGI has otherwise disclosed to the independent fiduciary the parameters 
for determining a material amount of accumulated cash or securities, 
including any amount of discretion retained by the BGI that may affect 
such net change.
    (4) A change in the composition of the portfolio of a Model-Driven 
Fund mandated solely by operation of the formulae contained in the 
computer model underlying the Fund where the basic factors for making 
such changes (and any fixed frequency for operating the computer model) 
have been disclosed in writing to an independent fiduciary of each 
Client Plan having assets held in the Fund prior to, or within ten (10) 
days following, its inclusion as a ``triggering event'' for such Fund; 
or
    (5) A change in the composition or weighting of a portfolio for an 
Index or Model-Driven Fund which results from an independent 
fiduciary's direction to exclude certain securities or types of 
securities from the Fund, notwithstanding that such securities are part 
of the Index used by the Fund.

Summary of Facts and Representations

Background

    1. BGI is a national banking association headquartered in San 
Francisco, California. BGI is the largest asset manager in the U.S., 
with over $1.9 trillion in assets under management worldwide and over 
$1.1 trillion in assets under management in the U.S. as of June 30, 
2008. A significant amount of BGI's assets under management in the U.S. 
consists of assets of employee benefit plans subject to ERISA, FERSA 
and/or the Code, including assets managed by BGI for the Federal Thrift 
Savings Fund established pursuant to the provisions of FERSA (the 
``Federal Thrift Savings Fund''). BGI is also a market leader in index 
and model-driven investment products.
    2. BarCap is a U.S. registered securities broker-dealer and futures 
commission merchant headquartered in New York, with registered domestic 
branch offices in Boston, Chicago, Miami, Los Angeles and San 
Francisco. BarCap's broker-dealer activities include significant 
participation in the market in U.S. Treasury securities, one of the 
most liquid and transparent fixed income securities markets; BarCap had 
approximately 10.2% of the overall Treasury securities market as of the 
close of the third quarter of 2008. BarCap is also a market leader in 
the market for inflation-protected U.S. Treasury securities, with a 
market share of approximately 28.5% of the market as of the close of 
the third quarter of 2008.
    3. Both BGI and BarCap are indirect subsidiaries of Barclays PLC, a 
public limited company organized under the laws of England and Wales.
    4. On September 16, 2008, BarCap, Lehman Brothers Holdings Inc. 
(``Lehman Parent'') and certain subsidiaries of Lehman Parent \13\ 
entered into an Asset Purchase Agreement (the ``Asset Purchase 
Agreement'') pursuant to which BarCap acquired most of Lehman's U.S. 
broker-dealer business (the U.S. broker-dealer business of BarCap, 
including the acquired broker-dealer business of Lehman, is referred to 
herein as the ``BarCap-Lehman Broker-Dealer''). The acquisition 
contemplated by the Asset Purchase Agreement (the ``Sale'') closed on 
Monday, September 22, 2008.
---------------------------------------------------------------------------

    \13\ Lehman Parent and its affiliates and subsidiaries 
(including former subsidiaries acquired by BarCap in the Sale) are 
collectively referred to herein as ``Lehman''.
---------------------------------------------------------------------------

    5. The assets acquired by BarCap in the Sale include rights to all 
Lehman indices and the analytics that support such indices. Prior to 
the Sale, Lehman was the world's largest provider of fixed income 
indices. Lehman published the first total return bond index, the U.S. 
Aggregate Index, and was the leading fixed income index provider since 
the 1970s. Lehman produced many of the most widely followed benchmarks 
in the global and U.S. debt markets. Prior to the Sale, approximately 
$4 trillion in assets worldwide was benchmarked to Lehman's Global 
Aggregate Index and its subcomponents. Approximately $1.5 trillion of 
that amount was benchmarked to Lehman's U.S. Aggregate Index and its 
subcomponents. The entire U.S. debt market covered by the U.S. 
Aggregate Index is valued at approximately $10.5 trillion; fully one 
seventh (14%) of that market was benchmarked to Lehman's U.S. Aggregate 
Index. Lehman estimated that more than 90% of fixed income investors in 
the U.S. used Lehman indices. BGI used Lehman indices for the vast 
majority of its fixed income index and model driven investment 
products. Nearly $70 billion (99%) of BGI's U.S. fixed income indexed 
assets were indexed to a Lehman index.
    6. In addition, prior to the Sale, Lehman was a significant 
participant in the fixed income markets as a broker-dealer and was 
frequently used by BGI for fixed income principal trades, participating 
in approximately 13% of BGI's client trades in fixed income

[[Page 20985]]

securities. Following the Sale, the BarCap-Lehman Broker-Dealer has an 
increased presence in the market for U.S. Treasury securities and in 
particular inflation-protected securities. Combining the market shares 
of Bar-Cap as it existed prior to the Sale with the additional market 
share added as a result of the Sale, the BarCap-Lehman Broker-Dealer 
had a total share of approximately 12.4% of the overall market for U.S. 
Treasury securities and approximately 41.7% of the market for 
inflation-protected Treasuries as of October 1, 2008.
    7. The Sale took place under extraordinary circumstances for the 
U.S. financial services industry generally, and on an unusually 
expedited time frame that was dictated by those exigent circumstances. 
Accordingly, the Applicants state that it was not practicable to submit 
a formal application for exemptive relief for the transactions in 
advance of the closing of the Sale. However, the Applicants contacted 
the Department on several occasions (in writing and by telephone) in 
advance of and immediately after the closing of the Sale to discuss the 
transactions, the unusual circumstances of the Sale and the interim 
relief that the Applicants expected to seek, which is materially the 
same as the relief requested herein.
    8. The Applicants state that the advantages to Client Plans and 
their participants and beneficiaries of engaging in the transactions, 
and the harm to Client Plans and their participants and beneficiaries 
that would result if the transactions were prohibited, will continue to 
apply in the long term. Accordingly, Applicants expect to submit a 
further application at a later date for permanent relief.

Description of the Transactions

Use of BarCap-Lehman Indices

    9. Prior to the Sale, Lehman was virtually the sole provider of 
standardized fixed income indices used by BGI in the U.S. market. BGI 
selected Lehman indices, which are widely regarded as preeminent in the 
market, for the vast majority of its fixed income index and model 
driven investment products. With these products, BGI either attempted 
to replicate the return on the relevant indices or to provide an 
enhanced return benchmarked against the indices. The majority of BGI's 
largest fixed income clients used Lehman indices, including the Federal 
Thrift Savings Fund and a large number of private-sector and other 
governmental pension plans.
    10. On behalf of Client Plans, BGI effects various transactions 
involving Index Funds and Model-Driven Funds (Funds) in reliance on 
prohibited transaction exemptions that require the indices underlying 
the Funds to be created and maintained by an independent third party. 
These transactions include (x) the lending of securities to BarCap and 
other affiliates of BGI and the receipt of compensation by BGI in 
connection with such transactions where BGI acts as a fiduciary with 
respect to the Client Plan assets involved in the transaction in 
connection with an Index Fund or a Model-Driven Fund, in reliance on 
PTE 2002-46 and (y) the acquisition, sale or exchange by Client Plans 
of shares of exchange-traded funds advised by BGI that are Index Funds 
or Model-Driven Funds, and the receipt of fees by BGI for acting as an 
investment adviser to such funds and for providing certain secondary 
services, in reliance on PTE 2008-1. As a result of BarCap's 
acquisition of Lehman's indices, the Index Funds and Model-Driven Funds 
involved in these transactions that are based on Lehman indices no 
longer meet the requirements set forth in the respective exemptions 
that the underlying indices must be created and maintained by an 
organization independent of BGI and its affiliates.
    11. The Applicants request relief, retroactive to September 22, 
2008 (the closing date of the Sale), and for a period until the earlier 
of (i) effective date of an individual exemption granting permanent 
relief for the following transactions or (ii) one year from the grant 
date of this individual exemption (the ``Relief Period'') to permit 
transactions carried out in reliance on PTEs 2002-46 and 2008-1 
involving Client Plan assets invested in Index Funds and Model-Driven 
Funds, where the underlying index is a BarCap-Lehman Index, to continue 
on a ``business as usual'' basis as if there were no affiliate 
relationship between BGI and the entity creating and maintaining the 
BarCap-Lehman Indices.
    12. As a condition of the exemption, each BarCap-Lehman Index is 
required to be a published index widely used in the market by 
independent institutional investors other than pursuant to an 
investment management or advisory relationship with BGI, and such index 
must be prepared or applied in the same manner for non-affiliated 
customers as for BGI.
    Prior to the use of a BarCap-Lehman Index in connection with the 
exemption and on an annual basis thereafter (but in no event prior to 
the date that is 90 days following the date of the publication of this 
proposed exemption in the Federal Register), BGI will provide BarCap 
with a list of BarCap Lehman Indices proposed to be used by BGI in 
connection with the exemption. BarCap will certify to BGI whether, in 
its reasonable judgment, each such index is widely used in the market. 
In making this determination, BarCap shall take into consideration 
factors such as (i) publication by Bloomberg, or similar institution 
involved in the dissemination of financial information, (ii) hits on 
relevant websites including LehmanLive (or any successor website 
maintained by BarCap or its affiliate(s)) and Bloomberg.com (or similar 
website), and (iii) delivery of index information to clients by means 
other than through website access.
    Any fees charged for the use of the BarCap-Lehman Index will be 
paid by BGI and not Client Plans.
    13. Additionally, information barriers will be in place throughout 
the Relief Period between BGI and BarCap such that BGI is not provided 
access to information regarding the rules, decisions and data 
underlying the BarCap-Lehman Indices before such information is 
provided to parties outside of BarCap and such rules, decisions and 
data must be determined objectively without regard to BGI's use of such 
BarCap-Lehman Indices.
    14. At the end of the Relief Period, a Qualified Independent 
Reviewer will issue a written report (the Compliance Report) following 
its review of the relevant BarCap-Lehman Indices and the underlying 
rules, certifying to each of the following: (i) Each BarCap-Lehman 
Index was operated in accordance with objective rules, in the ordinary 
course of business as would be conducted between unaffiliated parties; 
(ii) no manipulation of any BarCap-Lehman Index for the purpose of 
benefiting BGI, BarCap, or their affiliates occurred; (iii) in the 
event that any rule change occurred in connection with the rules 
underlying any BarCap-Lehman Index, such rule change was not made for 
the purpose of benefiting BGI, BarCap, or their affiliates; (iv) based 
on a review of the factors considered by BarCap in its certification 
described in paragraph 12 above, each BarCap-Lehman Index was widely 
used in the market during the relief period; and (v) certain conditions 
of the exemption were met.
    The Compliance Report shall be issued no later than 90 days 
following the end of the Relief Period describing the steps performed 
during the course of the Qualified Independent Reviewer's review, the 
level of compliance with the

[[Page 20986]]

applicable conditions ((i)-(v) described in the previous paragraph), 
and any specific instances of non-compliance. In addition, the 
Compliance Report shall be included in the records maintained by BGI 
pursuant to Section VI of this proposed exemption, and BGI shall notify 
the independent fiduciary(ies) of each Client Plan, as part of its 
regular disclosure with respect to the applicable Fund(s), that the 
Compliance Report is available for their review.
    15. The Qualified Independent Reviewer will be a third party 
appointed by BGI that is independent of Barclays and its affiliates, 
and has extensive experience in reviewing and/or auditing transactions 
and procedures involving assets of plans subject to the Act, FERSA and/
or the Code for the purpose of confirming that the applicable 
transactions or procedures serve the best interests of such plans.

Principal Transactions With the BarCap-Lehman Broker-Dealer

    16. Prior to the Sale, Lehman was a significant participant in the 
fixed income markets as a broker-dealer. BGI frequently used Lehman as 
a dealer for fixed income securities trades on a principal basis based 
on a determination that Lehman provided best execution for the 
applicable trade, including trades for Index Funds and Model-Driven 
Funds in which Client Plans invest. Lehman was the second most 
frequently used dealer by BGI for fixed income principal trades, 
participating in approximately 13% of BGI' s client trades.
    17. The Applicants state that obtaining the best available purchase 
or sale price for a particular trade presents special challenges in the 
fixed income market, which trades a very large array of different 
securities with specific features including some securities issued in 
relatively small numbers and/or in which markets are made by only a 
small number of dealers. The diminution in the number of market makers 
due to the recent exit of several major participants from the financial 
services industry through bankruptcies or acquisitions has heightened 
these challenges.
    18. BGI's ability to obtain best execution of fixed income trades 
for Client Plans would be significantly curtailed without the ability 
to trade with the BarCap-Lehman Broker-Dealer, according to the 
Applicants. The interests of Client Plans and their participants and 
beneficiaries would be better served if such trades were permitted 
where the BarCap-Lehman Broker-Dealer provides the best available 
purchase or sale price for the security being traded, in accordance 
with conditions designed to safeguard the interests of Client Plans. 
Accordingly, the Applicants are requesting relief to permit principal 
trades of fixed income securities on behalf of Client Plans with the 
BarCap-Lehman Broker-Dealer, where such trades are carried out in 
connection with Index Funds and Model-Driven Funds and pursuant to 
``Triggering Events''--that is, events identified in advance as 
triggers for purchasing and selling the Fund's portfolio.\14\ 
Accordingly, the decision to purchase or sell a security would not be 
at BGI's discretion but would be made in accordance with pre-determined 
objective rules governing the composition of the Fund's portfolio.
---------------------------------------------------------------------------

    \14\ Applicants note that in-house plans of BGI (BGI Plans) are 
currently invested indirectly through a master-feeder structure in 
two U.S. fixed income Index Funds that participate in transactions 
for which retroactive relief is requested in the exemption 
application. As of September 30, 2008, approximately 0.03% of the 
assets of one of these Funds, and approximately 0.61% of the assets 
of the other Fund, consist of BGI Plan assets.
---------------------------------------------------------------------------

    19. Each Covered Transaction would be a purchase or sale, for no 
consideration other than cash payment against prompt delivery of a 
security. Each Covered Principal Transaction would be on terms that BGI 
reasonably determines in good faith to be more favorable to the Client 
Plan than the terms of an arm's length transaction with an unaffiliated 
counterparty would have been, for the number of shares to be purchased 
or sold, at the time of the transaction. Covered Principal Transactions 
will not involve any security issued by Barclays PLC.
    20. Such trades would take place with the BarCap-Lehman Broker-
Dealer only pursuant to procedures designed to ensure that best 
execution would be obtained for the Client Plan either through an 
automated routing system reasonably designed to ensure execution at the 
best available net price to the Client Plan for the number of 
securities to be purchased or sold, or at a price at least as favorable 
to the Client Plan as the prices at which at least two independent 
``Approved Counterparties'' who are ready and willing to trade the 
relevant security offer to purchase or sell the security. BGI will keep 
records of the prices offered by the Approved Counterparties.
    The Applicants provide the following description of the process 
used by BGI in approving counterparties. BGI's Global Credit Group 
(CGC) monitors counterparty exposures arising from the trading on a 
principal basis by BGI's clients/funds and is responsible for 
counterparty evaluation, exposure analysis and the management of 
trading limits. All counterparties must be formally approved by GCG 
prior to engaging in the trading on a principal basis, and trading 
limits for such trading are based on metrics which may include the 
following: asset class being traded, Ratings (S&P, Moody's, Fitch) book 
and market capital, published financials (for qualitative and 
quantitative review), due diligence visits covering business and risk 
management practices, and credit default swap (``CDS'') spreads (real 
time measure of default likelihood). In the case of ``delivery versus 
payment'' principal securities transactions and Qualified Forward 
Delivery Transactions, Counterparty exposure is controlled and 
monitored by establishing specific trading limits for the total amount 
of ``delivery versus payment'' exposure and Qualified Forward Delivery 
Transaction exposure for the particular counterparty. Exposure to a 
particular counterparty, including a counterparty that is a BGI 
affiliate, is monitored daily against the counterparty's individual 
trading limit and against any updates to GCG's assessment of such 
counterparty's credit quality or market volatility over the settlement 
period, and any changes to the applicable limit will be made as deemed 
appropriate by GCG.
    21. At the end of the Relief Period, a Qualified Independent 
Reviewer will issue a written Compliance Report certifying to the 
following: (i) Based on a review of execution policies procedures 
during the Relief Period and a sample of the Covered Principal 
Transactions, that the policies and execution procedures used in 
connection with the transactions were reasonably designed to obtain 
best execution for the securities to be purchased or sold in the 
Covered Principal Transaction; and (ii) each sampled transaction 
occurred in accordance with certain conditions of the exemption. The 
Compliance Report will be issued no later than 90 days following the 
end of the Relief Period describing the steps performed during the 
course of the Qualified Independent Reviewer's review, the level of 
compliance with conditions (i) and (ii) described above, and any 
specific instances of non-compliance; and the Compliance Report shall 
be included in the records maintained by BGI pursuant to Section VI of 
this proposed exemption. In addition, BGI shall notify the independent 
fiduciary(ies) of each Client Plan, as part of its regular disclosure 
with respect to the applicable

[[Page 20987]]

Fund(s), that the Compliance Report is available for their review.
    22. Section VI requires that BGI maintain records necessary to 
allow a determination of whether the conditions of the exemption have 
been met. Those records must be maintained for a period of six (6) 
years from the end of the Relief Period. The records include the 
Compliance Reports as well as records which identify with respect to 
the Covered Principal Transactions:
    (i) On a Fund by Fund basis, the specific Triggering Events which 
result in the creation of the index or model prescribed output 
describing the characteristics of the securities to buy or sell;
    (ii) On a Fund by Fund basis, the index or model prescribed output 
which described the characteristics of the securities to buy or sell in 
detail sufficient to allow an independent plan fiduciary or Qualified 
Independent Reviewer to verify that each of the above decisions for the 
Fund was made in response to specific Triggering Events; and
    (iii) On a Fund by Fund basis, the actual trades executed by the 
Fund on a particular day, the identity of the counterparty, the prices 
offered by the Approved Counterparties, if relevant, and which of those 
trades resulted from Triggering Events.
    23. In summary, the Applicants represent that the transactions will 
satisfy the statutory criteria of section 408(a) of the Act and section 
4975(c)(2) of the Code because:
    a. Administratively feasible. With respect to the use of BarCap-
Lehman Indices for transactions that were covered prior to the Sale by 
PTE 2002-46 and 2008-1, the transactions that would be covered by the 
requested exemption are essentially identical to those permitted under 
those exemptions, except that additional procedures and protections 
would be in place to ensure that use of the BarCap-Lehman Indices is 
not disadvantageous to Client Plans or manipulated to benefit the 
Applicants. With respect to principal transactions with the BarCap-
Lehman Broker-Dealer pursuant to Index Funds and Model-Driven Funds, 
the transactions that would be covered by the requested exemption are 
substantially similar to the transactions permitted under PTE 75-1, 
Part IV (40 FR 50845, Oct. 31, 1975) (Market Maker Exemption). The 
Applicants will follow procedures similar to those set forth in the 
Market Maker Exemption to ensure that best execution is obtained on 
behalf of Client Plans. In addition, at the end of the Relief Period a 
Qualified Independent Reviewer will review procedures with respect to 
the transactions, and a sample of the transactions for compliance with 
the procedures, at the expense of Barclays. Granting the exemption will 
require no additional monitoring by the Department.
    b. In the interests of plans and participants and beneficiaries. As 
discussed above, the Applicants state that the exemption would permit 
Client Plans to continue to invest in Index Funds and Model-Driven 
Funds based on the leading fixed income indices and to obtain best 
execution in purchases and sales of fixed income securities.
    c. Protective of the rights of participants and beneficiaries of 
such plan. The requested exemption would require the Applicants to: (i) 
Obtain certification from a Qualified Independent Reviewer at the end 
of the Relief Period that each BarCap-Lehman Index was operated in 
accordance with objective rules, in the ordinary course of business as 
would be conducted between unaffiliated parties, no manipulation of any 
BarCap-Lehman Index for the purpose of benefiting the Applicants 
occurred, any change in the rules underlying any BarCap-Lehman Index 
was not made for the purpose of benefiting the Applicants, and that 
each BarCap-Lehman Index was widely used in the market during the 
Review Period; (ii) obtain certification from a Qualified Independent 
Reviewer at the end of the Relief Period that execution procedures used 
in connection with Covered Principal Transactions were reasonably 
designed to obtain best execution for the Client Plans and, based on a 
review of a sampling of Covered Principal Transactions, occurred in 
accordance with the conditions of the exemption; and (iii) maintain and 
comply with information barriers between BGI and BarCap such that BGI 
is not provided access to information regarding the rules, decisions or 
data underlying any BarCap-Lehman Index used during the Relief Period 
before such information is provided to parties outside of BarCap.

Notice to Interested Persons

    Written notice will be provided to the Federal Retirement Thrift 
Investment Board and will be published in the Federal Register. Any 
written comments and/or requests for a hearing must be received by the 
Department from interested persons within 30 days of the publication of 
this proposed exemption in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Karen E. Lloyd of the Department, 202-
693-8554. (This is not a toll-free number.)
The Bank of New York Mellon Corporation (BNYMC) and its Affiliates 
(collectively, BNY Mellon) Located in New York, New York
Exemption Application Number D-11523

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Employee Retirement Income Security 
Act of 1974 (ERISA or the Act) and section 4975(c)(2) of the Internal 
Revenue Code of 1986, as amended (the Code), and in accordance with the 
procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 
32847, August 10, 1990).\15\
---------------------------------------------------------------------------

    \15\ For purposes of this proposed exemption, references to 
section 406 of ERISA should be read to refer as well to the 
corresponding provisions of section 4975 of the Code.
---------------------------------------------------------------------------

Section I. Transactions

    If the proposed exemption is granted, the restrictions of section 
406(a) 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 
(D) of the Code, shall not apply, effective October 3, 2008, to the 
cash sale (the Sale) by a Plan (as defined in section II(d)) of certain 
Auction Rate Securities (as defined in section II(b)) to BNY Mellon, 
provided that the following conditions are met:
    (a) The Sale was a one-time transaction for cash payment made on or 
before December 31, 2008 on a delivery versus payment basis in the 
amount described in paragraph (b);
    (b) The Plan received an amount equal to the par value of the 
Auction Rate Securities (the Securities) plus accrued but unpaid income 
(interest or dividends, as applicable) as of the date of the Sale;
    (c) The last auction for the Securities was unsuccessful;
    (d) The Sale was made in connection with a written offer by BNY 
Mellon containing all of the material terms of the Sale;
    (e) The Plan did not bear any commissions or transaction costs with 
respect to the Sale;
    (f) A Plan fiduciary independent of BNY Mellon (in the case of a 
Plan that is an IRA, the individual for whom the IRA is maintained) 
determined that the Sale of the Securities was appropriate for, and in 
the best interests of, the Plan at the time of the transaction, and the 
Plan's decision to enter into the transaction was affirmatively made by 
such independent fiduciary on behalf of the Plan;

[[Page 20988]]

    (g) BNY Mellon took all appropriate actions necessary to safeguard 
the interests of each Plan in connection with the Sale;
    (h) The Plan does not waive any rights or claims in connection with 
the Sale;
    (i) The Sale is not part of an arrangement, agreement or 
understanding designed to benefit a party in interest to the Plan;
    (j) If the exercise of any of BNY Mellon's rights, claims or causes 
of action in connection with its ownership of the Securities results in 
BNY Mellon recovering from the issuer of the Securities, or any third 
party, an aggregate amount that is more than the sum of:
    (1) The purchase price paid to the Plan for the Securities by BNY 
Mellon; and
    (2) the income (interest or dividends, as applicable) due on the 
Securities from and after the date BNY Mellon purchased the Securities 
from the Plan, at the rate specified in the respective offering 
documents for the Securities or determined pursuant to a successful 
auction with respect to the Securities, BNY Mellon will refund such 
excess amount promptly to the Plan (after deducting all reasonable 
expenses incurred in connection with the recovery);
    (k) Neither BNYMC nor any affiliate exercises investment discretion 
or renders investment advice (within the meaning of 29 CFR 2510.3-
21(c)) with respect to the decision to accept the written offer or 
retain the Security;
    (l) BNY Mellon maintains, or causes to be maintained, for a period 
of six (6) years from the date of any covered transaction such records 
as are necessary to enable the person described below in paragraph 
(m)(i), to determine whether the conditions of this exemption have been 
met, except that--
    (i) No party in interest with respect to a Plan which engages in 
the covered transactions, other than BNY Mellon, shall be subject to a 
civil penalty under section 502(i) of the Act or the taxes imposed by 
section 4975(a) and (b) of the Code, if such records are not 
maintained, or not available for examination, as required, below, by 
paragraph (m)(i);
    (ii) A separate prohibited transaction shall not be considered to 
have occurred solely because due to circumstances beyond the control of 
BNY Mellon, such records are lost or destroyed prior to the end of the 
six-year period.
    (m)(i) Except as provided, below, in paragraph (m)(ii), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to, above, in paragraph (l) are 
unconditionally available at their customary location for examination 
during normal business hours by--
    (A) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service, or the Securities and 
Exchange Commission; or
    (B) Any fiduciary of any Plan that engages in the covered 
transactions, or any duly authorized employee or representative of such 
fiduciary; or
    (C) Any employer of participants and beneficiaries and any employee 
organization whose members are covered by a Plan that engages in the 
covered transactions, or any authorized employee or representative of 
these entities; or
    (D) Any participant or beneficiary of a Plan that engages in a 
covered transaction, or duly authorized employee or representative of 
such participant or beneficiary;
    (ii) None of the persons described, above, in paragraph (m)(i)(B)-
(D) shall be authorized to examine trade secrets of BNY Mellon, or 
commercial or financial information which is privileged or 
confidential; and
    (iii) Should BNY Mellon refuse to disclose information on the basis 
that such information is exempt from disclosure, BNY Mellon shall, by 
the close of the thirtieth (30th) day following the request, provide a 
written notice advising that person of the reasons for the refusal and 
that the Department may request such information.

Section II. Definitions

    (a) The term ``affiliate'' means: any person directly or 
indirectly, through one or more intermediaries, controlling, controlled 
by, or under common control with such other person;
    (b) The term ``Auction Rate Security'' or ``Security'' means a 
security:
    (1) That is either a debt instrument (generally with a long-term 
nominal maturity) or preferred stock; and
    (2) with an interest rate or dividend that is reset at specific 
intervals through a ``Dutch auction'' process;
    (c) The term ``Independent'' means a person who is not BNYMC or an 
affiliate (as defined in Section II(a)); and
    (d) The term ``Plan'' means: any plan described in section 3(3) of 
the Act and/or section 4975(e)(1) of the Code.
    Effective Date: This proposed exemption, if granted, will be 
effective from October 3, 2008 through December 31, 2008.

Summary of Facts and Representations

    1. The Bank of New York Mellon Corporation (BNYMC and, together 
with its affiliates, BNY Mellon), is a Delaware financial services 
company that provides a wide range of banking and fiduciary services to 
a broad array of clients, including employee benefit plans subject to 
the Act and plans subject to Section 4975 of the Code.
    2. The plans that are the subject of this proposed exemption 
(Plans) consist of four Individual Retirement Accounts (IRAs), two 
``SEP IRAs'' and a defined contribution profit sharing plan. The Plans 
are employee benefit plans or other plans subject to section 4975 of 
the Code and/or ERISA for which BNY Mellon currently serves as the 
custodian and/or trustee.
    3. On October 3, 2008, BNY Mellon communicated in writing to its 
clients, including the Plans, its offer to purchase certain auction 
rate securities (i.e., the Securities) for an amount equal to the par 
value of the applicable Security, plus any accrued and unpaid income 
(interest or dividends, as applicable) thereon. The purchase 
transactions occurred on the first regular auction date for the 
applicable Security that followed the Plan's submission to BNY Mellon 
of its written acceptance of the offer. The applicant represents that 
no purchase transaction involving plan assets subject to ERISA or 
section 4975 of the Code occurred after December 31, 2008.
    4. BNY Mellon represents that the Securities are debt or preferred 
equity auction rate securities issued with an interest or dividend rate 
that is reset on a regular basis (generally between every 7 and 35 
days) through a ``Dutch auction'' process. Historically, by means of 
such auction process, the interest or dividend rate was periodically 
adjusted to a level at which demand for the Security depleted the 
available supply at a purchase price equal to the par value of the 
Securities. In this way, the auctions served as a form of secondary 
market for the Securities, by providing liquidity at par on a regular, 
periodic basis to any holder who wished to sell the Securities. The 
applicant represents that the Securities were frequently purchased by, 
or for the benefit of, clients seeking a reasonable short-term return 
and a high degree of liquidity.
    5. If an auction for one of the Securities fails (e.g., because 
there is insufficient demand for the Security), the interest or 
dividend rate will be reset to the ``maximum rate'' or ``failed auction 
rate'' (in either case, ``default rate'') for that Security as 
specified in the offering documents for such Security. In some cases, 
the default rate changes from time to time as specified in the relevant 
documents. For the Securities that are the subject of this

[[Page 20989]]

exemption, such rates ranged from .168% to 4.8% per annum as of the 
date the purchase offer was made.
    6. BNY Mellon states that auctions for the Securities have failed 
consistently since approximately February, 2008, with the result that 
the interest or dividend rate for each of the Securities presently 
equals the default rate and holders of the Securities have been unable 
to sell the Securities at their par value. As of the date the purchase 
offer was made, the default rate for three of the six Securities held 
by the Plans was higher than the rate set by the last successful 
auction for such Securities, while the last auction rate for the 
remaining three Securities held by Plans exceeded the default rate, 
determined as of such date, with respect to such Securities. In 
addition, because the auctions have failed consistently since February, 
2008 and given the absence of any other meaningful secondary market for 
the Securities, the Securities no longer provide the liquidity that had 
been anticipated when they were acquired.
    7. BNY Mellon represents that the following Securities were held by 
Plans and covered by BNY Mellon's offer described in Representation 3, 
above: (1) Minnesota St. Higher Ed., (2) Iowa Student Loan, (3) Brazos 
Texas Higher Ed., (4) Nuveen Quality PFD Income FDARP, (5) Nuveen PFD & 
CVT INC FD2 and (6) Northstar Ed. Fin Inc.
    8. Generally, the Plans purchased the Securities through an 
underwriter unaffiliated with BNY Mellon. In all of those cases, BNY 
Mellon acted as discretionary trustee and caused the Plan to purchase 
the Securities. Only one Plan purchased Securities through a capital 
markets affiliate of BNYMC. In that one case, BNY Mellon was a non-
discretionary custodian of the Plan and was directed to purchase the 
Securities by an independent fiduciary of that Plan.\16\
---------------------------------------------------------------------------

    \16\ The Department is expressing no opinion in this proposed 
exemption regarding whether the acquisition and holding of the 
Securities by any Plan, that is subject to Title I of the Act, 
violated any of the fiduciary responsibility provisions of Part 4 of 
Title I of ERISA. In this regard, the Department notes that section 
404(a) of the Act requires, among other things, that a fiduciary of 
a plan act prudently, solely in the interest of the plan's 
participants and beneficiaries, and for the exclusive purpose of 
providing benefits to participants and beneficiaries when making 
investment decisions on behalf of a plan. Accordingly, a Plan 
fiduciary must act prudently with respect to, among other things, 
the decision to engage (or to not engage) in a Sale. Section 404(a) 
of the Act also states that a plan fiduciary should diversify the 
investments of a plan so as to minimize the risk of large losses, 
unless under the circumstances it is clearly prudent not to do so. 
Moreover, the Department is not providing any opinion as to whether 
a particular category of investments or investment strategy would be 
considered prudent or in the best interests of a plan as required by 
section 404 of the Act. The determination of the prudence of a 
particular investment or investment course of action must be made by 
a plan fiduciary after appropriate consideration of those facts and 
circumstances that, given the scope of such fiduciary's investment 
duties, the fiduciary knows or should know are relevant to the 
particular investment or investment course of action involved, 
including a plan's potential exposure to losses and the role the 
investment or investment course of action plays in that portion of 
the plan's portfolio with respect to which the fiduciary has 
investment duties (see 29 CFR 2550.404a-1). The Department also 
notes that in order to act prudently in making investment decisions, 
a plan fiduciary must consider, among other factors, the 
availability, risks and potential return of alternative investments 
for the plan. Thus, a particular investment by a plan, which is 
selected in preference to other alternative investments, would 
generally not be prudent if such investment involves a greater risk 
to the security of a plan's assets than other comparable investments 
offering a similar return or result.
---------------------------------------------------------------------------

    9. BNY Mellon states that the terms of the offer expressly provided 
that a client is not obligated to sell Securities and must 
affirmatively agree to enter into a sale of Securities to BNY Mellon 
(i.e., a Sale). BNY Mellon represents that any Plan's decision to sell 
the Securities to BNY Mellon pursuant to its offer has been made by 
such Plan's fiduciary, who in all cases was independent of BNY Mellon. 
In the case of a Plan that is an IRA, such fiduciary was the individual 
for whom the IRA is maintained.
    10. BNY Mellon estimates that the total aggregate par value plus 
accrued and unpaid income (interest or dividends, as applicable) 
thereon for all Securities held by clients subject to the offer is 
approximately $192,840,000. Securities held by the Plans represent 
approximately $1,050,000 of such total aggregate amount.
    11. BNY Mellon represents that the Sale of the Securities by a Plan 
benefited the Plan because of the Plan's inability to sell the 
Securities at par as a result of the continuing failed auctions. In 
addition, BNY Mellon states that each transaction was a one-time Sale 
for cash in connection with which such Plan did not bear any brokerage 
commissions, fees or other expenses. BNY Mellon represents that it took 
all appropriate actions necessary to safeguard the interests of the 
Plans in connection with the Sale of the Securities by the Plans.
    12. BNY Mellon states that, pursuant to the terms of the offer, the 
sale of Securities by a Plan to BNY Mellon resulted in an assignment of 
all of the Plan's rights, claims, and causes of action against an 
issuer or any third party arising in connection with or out of the 
client's purchase, holding or ownership of the Securities. This 
assignment did not include any rights, claims or other causes of action 
against BNY Mellon. Rather, such assignment was limited to rights, 
claims and causes of action against the issuers of the Securities and 
any third parties unrelated to BNY Mellon. This has been the case at 
all times from the date as of which retroactive relief has been 
requested. BNY Mellon states further that if the exercise of any of the 
foregoing rights, claims or causes of action results in BNY Mellon 
recovering from the issuer or any third party an aggregate amount that 
is more than the sum of (a) the purchase price paid for the Securities 
by BNY Mellon and (b) the income (interest or dividends, as applicable) 
due on the Securities from and after the date BNY Mellon purchased 
Securities from a Plan, at the rate specified in the respective 
offering documents for the Securities or determined pursuant to a 
successful auction with respect to the Securities, BNY Mellon will 
refund such excess amount promptly to the Plan (after deducting all 
reasonable expenses incurred in connection with the recovery).
    13. In summary, BNY Mellon represents that the transactions 
satisfied the statutory criteria of section 408(a) of the Act and 
section 4975 of the Code because: (a) Each Sale was a one-time 
transaction for cash; (b) each Plan received an amount equal to the par 
value of the Securities, plus accrued but unpaid income (interest or 
dividends, as applicable), which was beneficial to the Plan due to the 
Plan's inability to sell the Securities at par because of continuing 
failed auctions; (c) no Plan paid any commissions or other transaction 
expenses with respect to the Sale; (d) each Plan voluntarily entered 
into the Sale, as determined in the discretion of the Plan's 
independent fiduciary; (e) BNY Mellon took all appropriate actions 
necessary to safeguard the interests of the Plans in connection with 
the transactions; and (f) BNY Mellon will promptly refund to the 
applicable Plan any amounts recovered from the issuer or any third 
party in connection with its exercise of any rights, claims or causes 
of action as a result of its ownership of the Securities, if such 
amounts are in excess of the sum of (i) the purchase price paid for the 
Securities by BNY Mellon and (ii) the income (interest or dividends, as 
applicable) due on the Securities from and after the date BNY Mellon 
purchased the Securities from the Plan, at the rate specified in the 
respective offering documents for the Securities or determined pursuant 
to a successful auction with respect to the Securities.

[[Page 20990]]

Notice to Interested Persons

    Written notice will be provided to an independent representative of 
each Plan that elected to sell the Securities to BNY Mellon. The notice 
shall contain a copy of the proposed exemption as published in the 
Federal Register and an explanation of the rights of interested parties 
to comment regarding the proposed exemption. Such notice will be 
provided by first class mail within 15 days of the issuance of the 
proposed exemption. Any written comments must be received by the 
Department from interested persons within 45 days of the publication of 
this proposed exemption in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department, 
telephone (202) 693-8546. (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 of the Act and/or the Code, 
including any prohibited transaction 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) Before an exemption may be granted under section 408(a) of the 
Act and/or section 4975(c)(2) of the Code, the Department must find 
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 the plan;
    (3) The proposed exemptions, if granted, will be supplemental to, 
and not in derogation of, any other provisions of the Act and/or the 
Code, including statutory or administrative exemptions and transitional 
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
    (4) The proposed exemptions, if granted, will be subject to the 
express condition that the material facts and representations contained 
in each application are true and complete, and that each application 
accurately describes all material terms of the transaction which is the 
subject of the exemption.

    Signed at Washington, DC, this 30th day of April , 2009.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. E9-10361 Filed 5-5-09; 8:45 am]

BILLING CODE 4510-29-P