[Federal Register: July 23, 2009 (Volume 74, Number 140)]
[Notices]
[Page 36515-36519]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jy09-80]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Application No. and Proposed Exemption Involving: Bank of New York
Mellon Corporation, D-11553]
Notice of Proposed Exemption
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of proposed exemption.
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SUMMARY: This document contains a notice of pendency before the
Department of Labor (the Department) of a proposed exemption 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 exemption, 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-5649,
U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC
20210. Attention: Application No. D-11553. 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 application 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 exemption 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 exemption was requested in an
application 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, this notice of proposed exemption is
issued solely by the Department.
The application contains representations with regard to the
proposed exemption which is summarized below. Interested persons are
referred to the application on file with the Department for a complete
statement of the facts and representations.
Bank of New York Mellon Corporation
Located in Pittsburgh, PA
[Application No. D-11553]
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).
If the proposed exemption is granted, the restrictions of sections
406(a)(1)(A) through (D), 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) through (E) of the Code,\1\\\ shall
not apply, effective November 25, 2008, to the cash sale of certain
securities (the Securities) issued by Lehman Brothers Holdings Inc. or
its affiliates (Lehman) for an aggregate purchase price of
approximately $5,512,395 by the EB SMAM Securities Lending Temporary
Investment Fund (the Cash Collateral Fund) to the Bank of New York
Mellon Corporation (BNYMC), a party in interest with respect to the
employee benefit plans (the Plan(s)) invested, directly or indirectly,
in the Cash Collateral Fund; provided that the following conditions are
met:
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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) The sale of the Securities was a one-time transaction for cash;
(b) The Cash Collateral Fund received an amount for the sale of the
Securities which was equal to the sum of:
(1) the amortized cost of the Securities, and (2) the accrued but
[[Page 36516]]
unpaid interest on each of the Securities, determined as of the earlier
of: (A) the date of the sale of the Securities, or (B) the maturity
date of each of the Securities;
(c) The amount received by the Cash Collateral Fund for the sale of
the Securities was greater than the aggregate market value of the
Securities at the time of the sale, as determined based on information
regarding the then prevailing trading prices for the Securities
obtained from two independent broker-dealers;
(d) The Cash Collateral Fund did not bear any commissions, fees,
transactions costs, or other expenses in connection with the sale of
the Securities;
(e) The Bank of New York Mellon (BNY Mellon), as trustee of the
Cash Collateral Fund, determined that the sale of the Securities was
appropriate for and in the best interest of the Cash Collateral Fund,
and the Plans invested, directly or indirectly, in the Cash Collateral
Fund, at the time of the transaction;
(f) BNY Mellon took all appropriate actions necessary to safeguard
the interests of the Cash Collateral Fund, and the Plans invested,
directly or indirectly, in the Cash Collateral Fund, in connection with
the transaction, given that Lehman had filed for bankruptcy and that
the value of the Securities had declined substantially;
(g) If the exercise of any of BNYMC's rights, claims, or causes of
action in connection with its ownership of the Securities results in
BNYMC recovering from Lehman, the issuer of the Securities, or from any
third party, an aggregate amount that is more than the sum of:
(1) The purchase price paid for such Securities by BNYMC; and
(2) The interest due on the Securities from and after the date
BNYMC purchased the Securities from the Cash Collateral Fund,
determined at the last-published interest rate on the Securities
preceding Lehman's bankruptcy filing, BNYMC will refund such excess
amount promptly to the Cash Collateral Fund (after deducting all
reasonable expenses incurred in connection with the recovery);
(h) BNY Mellon and its affiliates, as applicable, maintain, or
cause to be maintained, for a period of six (6) years from the date of
the transaction such records as are necessary to enable the persons
described, below, in paragraph (i)(1), to determine whether the
conditions of this exemption have been met, except that--
(1) No party in interest with respect to a Plan which engages in
the transaction, other than BNY Mellon and its affiliates, as
applicable, 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 (i)(1); and
(2) A separate prohibited transaction shall not be considered to
have occurred solely because, due to circumstances beyond the control
of BNY Mellon and its affiliates, as applicable, such records are lost
or destroyed prior to the end of the six-year period.
(i)(1) Except as provided, below, in paragraph (i)(2), and
notwithstanding any provisions of subsections (a)(2) and (b) of section
504 of the Act, the records referred to, above, in paragraph (h) 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 a Plan that engages in the transaction, 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
transaction, or any authorized employee or representative of these
entities; or
(D) Any participant or beneficiary of a Plan that engages in the
transaction, or duly authorized employee or representative of such
participant or beneficiary;
(2) None of the persons described, above, in paragraph (i)(1)(B)-
(D) shall be authorized to examine trade secrets of BNY Mellon and its
affiliates, as applicable, or commercial or financial information which
is privileged or confidential; and
(3) Should BNY Mellon and its affiliates, as applicable, refuse to
disclose information on the basis that such information is exempt from
disclosure, BNY Mellon and its affiliates, as applicable, 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.
Effective Date: This proposed exemption, if granted will be
effective, as of November 25, 2008.
Summary of Facts and Representations
1. BNY Mellon is a state bank subject to regulation by the state of
New York. As of December 31, 2008, BNY Mellon managed assets in excess
of $210 billion, a substantial portion of which consisted of assets of
plans subject to the Act. BNY Mellon is a subsidiary of BNYMC.
2. BNYMC is the parent of BNY Mellon by reason of its 100 percent
(100%) ownership of BNY Mellon. BNYMC has numerous other subsidiaries
and affiliates. BNYMC is a Delaware financial services company that
provides a wide range of banking and fiduciary services to a broad
array of clients, including plans subject to the Act and plans subject
to section 4975 of the Code.
3. The Cash Collateral Fund is a collective investment fund managed
by BNY Mellon. The Cash Collateral Fund is a group trust that is exempt
from federal income tax, pursuant to Rev. Rul. 81-100. BNY Mellon
serves as a discretionary trustee for the Cash Collateral Fund. As of
November 25, 2008, the value of the portfolio of the Cash Collateral
Fund was approximately $486,303,272.
4. The Cash Collateral Fund was established to hold collateral
received in connection with the securities lending activities of three
collective investment funds: (a) The EB SMAM 1-3 Year Government Bond
Index Fund, (b) the EB SMAM 3-10 Year Government Bond Index Fund, and
(c) the EB SMAM Long Government Bond Index Fund (collectively, the
Lending Funds and together with the Cash Collateral Fund (the Funds)).
As of November 25, 2008, the effective date of this proposed exemption,
the Lending Funds were the only investors in the Cash Collateral Fund.
5. Each of the Lending Funds is a group trust that is exempt from
federal income tax, pursuant to Rev. Rul. 81-100. BNY Mellon serves as
a discretionary trustee for the Lending Funds. As of November 25, 2008,
the value of the aggregate portfolios of the Lending Funds was
approximately, $686,048,723.
6. Because the requested exemption involves a transaction with a
collective investment fund in which a large number of Plans have a
direct or indirect interest, the applicant, BNYMC, has not specifically
identified any of the Plans involved in the subject transaction. No
plans maintained by BNYMC or any of its affiliates had an interest,
directly or indirectly, in any of the Funds at the time of the
transaction.
7. BNY Mellon is a fiduciary, pursuant to section 3(14)(A) of the
Act, as the discretionary trustee of the Funds in which the Plans
invest. BNY Mellon is also a party in interest, pursuant to section
3(14)(B) of the Act, as a services
[[Page 36517]]
provider with respect to the Plans invested, directly or indirectly, in
the Funds. Pursuant to section 3(14)(H) of the Act, BNYMC is a party in
interest with respect to the Plans invested, directly or indirectly, in
the Funds, as the 100 percent (100%) owner of BNY Mellon, a service
provider to the Funds.
8. As of November 25, 2008, there were five direct investors in the
Lending Funds, including: (a) Two other collective investment funds
maintained by BNY Mellon (the BNY Mellon Funds), (b) one collective
investment fund maintained by an entity unrelated to BNY Mellon, and
(c) two Plans subject to the Act. In addition, thirty-eight (38) other
Plans subject to the Act were indirect investors in the Lending Funds
by reason of such Plans' interests, directly or indirectly, in the BNY
Mellon Funds. It is represented that none of these Plans owns, directly
or indirectly, greater than 20 percent (20%) of the interests in the
Cash Collateral Fund.
9. The Securities which are the subject of this proposed exemption
are floating rate securities issued by Lehman. Three Securities were
acquired and held by the Cash Collateral Fund, prior to November 25,
2008. At the time the Securities were acquired, the Securities were
rated ``A1'' by Moody's and ``A+'' by S&P rating agencies. These three
Securities are identified as: (a) LEHMAN BROTHERS HLDG-LEH (purchased
12/19/06; maturity date 12/23/08); (b) LEHMAN BROTHERS HLDG-LEH
(purchased 3/21/07; maturity date 3/23/09); and (c) LEHMAN BROTHERS
HLDG-LEH (purchased 3/22/07; maturity date 10/22/08).
The Cash Collateral Fund purchased two of the Securities involved
in the subject transaction from Lehman at par (i.e., $100) in
connection with the initial issuance of such Securities by Lehman. As a
result, there was no premium to amortize and no discount to accrete
with respect to these two Securities. The third of the Securities
involved in the subject transaction was purchased by the Cash
Collateral Fund from Morgan Stanley at a slight premium to par
($100.0528). The premium reflects the fact that this security was
purchased on the secondary market after its initial issuance. In this
regard, it is represented that the purchase occurred at a time when
interest rates had fallen slightly subsequent to the most recent reset
date, thereby causing the value of this security at the time of
purchase to be slightly higher than its par value.
10. The decision for the Cash Collateral Fund to invest in the
Securities was made by BNY Mellon. Prior to the investment by the Cash
Collateral Fund in the Securities, BNY Mellon conducted an
investigation of the potential investment, examining and considering
the economic and other terms of the Securities. BNY Mellon represents
that the investment in the Securities was consistent with the
applicable investment policies and objectives of the Cash Collateral
Fund.\2\
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\2\ The Department is expressing no opinion in this proposed
exemption regarding whether the acquisition and holding of the
Securities by the Cash Collateral Fund violated any of the fiduciary
responsibility provisions of Part 4 of Title I of the Act. 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 such plan's participants and
beneficiaries, and for the exclusive purpose of providing benefits
to participants and beneficiaries when making investment decisions
on behalf of such plan. Section 404(a) of the Act also states that
the fiduciary of a plan should diversify the investments of such
plan so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
In this regard, the Department is not providing an opinion as
to whether a particular category of investments or an 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 of 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.
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11. On September 15, 2008, Lehman filed for Chapter 11 bankruptcy
protection. BNY Mellon represents that following the date of Lehman's
bankruptcy filing, the market value of the Securities decreased
substantially, the Securities became relatively illiquid, and the
Securities traded, if at all, at prices substantially below amortized
cost.
12. It is represented that because the first two Securities were
purchased in connection with the initial issuance of such Securities by
Lehman there was no premium to amortize and no discount with respect to
these two Securities, such that the amortized cost of these two
Securities was at all times equal to their par value (i.e., $100).
Accordingly, the amortized cost for each of these two Securities is
represented as approximately $1,703,424, and $3,407,847, respectively.
However, the premium (i.e., $.0528 per $100) on the third security,
consistent with standard accounting and valuation practice, would have
been amortized on a straight-line, daily basis from the date of
purchase (3/22/07) of this security through its maturity date (10/28/
08). When Lehman filed for bankruptcy on September 15, 2008, the
amortization was discontinued with the result that a tiny portion of
the premium (approximately $12 on the aggregate holding) remained. As a
result, the amortized cost of this security was slightly above par when
it was purchased by BNYMC on November 25, 2008. Accordingly, the par
value and the amortized cost for this security are represented as
approximately $354,744 and $354,756, respectively.
13. BNY Mellon further represents that on or about November 25,
2008, it obtained information from two independent broker-dealers--UBS
and Bank of America Securities--that the market for the Securities was
in extreme distress, with prices for actual trades being substantially
lower than the sum of the amortized cost for the Securities, plus
accrued and unpaid interest thereon. In particular, BNYMC was informed
by each of these broker-dealers that the prevailing prices for the
Securities were in the range of $8.50 to $9.00 per $100 of par value
(i.e., a discount of approximately 90 percent (90%)) from the price
paid by BNYMC.
14. In view of the substantial decrease in the value of the
Securities, BNY Mellon has submitted an application for an individual
exemption requesting relief from sections 406(a)(1)(A) through (D), for
the cash sale of the Securities by the Cash Collateral Fund for a lump
sum payment in the aggregate amount of approximately $5,512,395 by
BNYMC, given that BNYMC is a party in interest by reason of its 100
percent (100%) ownership of BNY Mellon, a service provider to each of
the Plans invested, directly or indirectly, in the Cash Collateral
Fund.
In addition, BNY Mellon has requested relief from 406(b)(1) and
406(b)(2) of the Act for the purchase by BNYMC of the Securities from
the Cash Collateral fund, because BNYMC (an affiliate of BNY Mellon,
the discretionary trustee) would be purchasing the Securities for its
own account.
15. On November 25, 2008, BNYMC purchased the Securities from the
Cash Collateral Fund. In this regard, shortly before the consummation
of the transaction, BNY Mellon sent a written notice to the designated
representative
[[Page 36518]]
of each of the investors having a direct interest in the Lending Funds
of BNY Mellon. The notice informed such investors of BNY Mellon's
intent to cause the Cash Collateral Fund to sell the Securities to
BNYMC. Accordingly, BNYMC, the applicant, has requested that the
exemption provide retroactive relief, effective November 25, 2008.
16. As of November 25, 2008, the effective date of this proposed
exemption, the amortized cost for each of the Securities were
represented as approximately $1,703,424, $3,407,847, and $354,756,
respectively. The Securities had a total amortized cost of
approximately $5,466,027. The accrued but unpaid interest for each of
the Securities is represented as approximately $11,217, $32,568, and
$2,583, respectively. The total accrued but unpaid interest on the
Securities was approximately $46,368. BNYMC purchased the Securities
from the Cash Collateral Fund for a lump sum payment of approximately
$5,512,395, which sum represented the aggregate amortized cost of the
Securities (i.e., $5,466,027), plus the aggregate accrued but unpaid
interest on such Securities (i.e., $46,368) through the earlier of
November 25, 2008, or the maturity date of the Securities. BNY Mellon
notes that, in determining the amount of accrued interest subsequent to
the date preceding Lehman's bankruptcy filing, the last published
interest rate on the Securities prior to the bankruptcy filing was
utilized. With regard to the three (3) Securities which are the subject
of this exemption, the last published interest rates were, respectively
2.52188 percent (2.52188%); and 3.66 percent (3.66%), and 2.88063
percent (2.88063%).
17. BNY Mellon represents that the requested exemption is
administratively feasible, because the transaction was a one-time sale
for cash. Further, the exemption involves an easily identifiable
transaction which does not require on-going monitoring by the
Department.
18. BNY Mellon, as trustee of the Funds, believes that the sale of
the Securities to BNYMC was in the best interest of the Funds, and the
Plans invested, directly, or indirectly, in the Funds, at the time of
the transaction. In this regard, the aggregate value of the assets of
the Funds increased, as a result of the subject transaction, and each
Plan's pro rata share, directly or indirectly, of such value increased
as well.
BNY Mellon states that any sale of the Securities on the open
market would have produced significant losses for the Funds and for the
investors, including the Plans, participating in the Funds, given
Lehman's bankruptcy filing, the resulting distressed market for the
Securities, and the general disruption in the debt markets. In this
regard, BNY Mellon represents that the sale of the Securities by the
Cash Collateral Fund to BNYMC benefited the investors in the Funds,
because the purchase price paid by BNYMC for the Securities
substantially exceeded the aggregate fair market value of the
Securities, as determined based on information regarding the then
prevailing trading prices for the Securities obtained from two (2)
independent broker-dealers. It is represented that the purchase of the
Securities by BNYMC placed the Cash Collateral Fund in substantially
the same position, as would have been the case had Lehman, the issuer
of the Securities, not become insolvent. Further, in connection with
the proposed transaction, the Funds did not bear any brokerage
commissions, fees, transactions costs, or other expenses.
19. It is represented that BNY Mellon determined that the purchase
price of approximately $5,512,395 paid by BNYMC to the Cash Collateral
would be appropriate and in the best interest of the Funds, as such
price would protect the Funds and the investors having an interest in
the Funds, including the Plans, from investment losses with respect to
the Securities. BNY Mellon also determined that the purchase price of
the Securities paid by BNYMC would be permissible under applicable
banking law.
20. BNY Mellon represents that it took all appropriate actions
necessary to safeguard the interests of the Funds and their
participating investors in connection with the sale of the Securities,
given that Lehman had filed for bankruptcy and that the value of the
Securities had declined substantially. In this regard, it is
represented that the exemption is protective of the rights of the
participants and beneficiaries of the Plans, because the requested
exemption contains safeguards that are similar to two (2) other
exemptions previously granted by the Department and are equally
protective as those other exemptions.\3\ In particular, the sale of the
Securities by the Cash Collateral Fund to BNYMC resulted in an
assignment of all of the Cash Collateral Fund's rights, claims, and
causes of action against Lehman or any third party arising in
connection with or out of the issuance of the Securities or the
purchase of the Securities by the Cash Collateral Fund. Further, the
exemption would require that if the exercise of any of the foregoing
rights, claims, or causes of action results in BNYMC recovering from
Lehman or from any third party an aggregate amount that is more than
the sum of: (a) The purchase price paid for the Securities by BNYMC;
and (b) the interest due on the Securities from and after the date
BNYMC purchased the Securities from the Cash Collateral Fund,
determined at the last published rate on the Securities preceding the
Lehman's bankruptcy filings, then BNYMC will refund such excess amount
promptly to the Cash Collateral Fund (after deducting all reasonable
expenses incurred in connection with the recovery).
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\3\ \\Prohibited Transaction Exemption 2008-12, Mellon Bank N.A.
(73 FR 55540, September 25, 2008) and Prohibited Transaction
Exemption 95-98, Boston Safe Deposit and Trust Company (60 FR 53811,
October 17, 1995).
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21. In summary, BNY Mellon, the applicant, represents that the
proposed transaction satisfies the statutory criteria of section 408(a)
of the Act and section 4975 of the Code because:
(a) The sale of the Securities was a one-time transaction for cash;
(b) The Cash Collateral Fund received an amount for the sale of the
Securities which was equal to the sum of:
(1) the amortized cost of the Securities, and
(2) the accrued but unpaid interest on each of the Securities,
determined as of the earlier of: (A) the date of the sale of the
Securities, or (B) the maturity date of the each of the Securities;
(c) The amount paid for the Securities was substantially greater
than the aggregate market value of the Securities at the time of the
sale, as determined based on information regarding the then prevailing
trading prices for the Securities obtained from two (2) independent
broker-dealers;
(d) The Cash Collateral Fund did not bear any commissions, fees,
transactions costs, or other expenses in connection with the sale of
the Securities;
(e) BNY Mellon, as trustee of the Cash Collateral Fund, determined
that the sale of the Securities was appropriate for and in the best
interest of the Cash Collateral Fund, and the Plans invested, directly
or indirectly, in the Cash Collateral Fund, at the time of the
transaction;
(f) BNY Mellon took all appropriate actions necessary to safeguard
the interests of the Cash Collateral Fund, and the Plans invested,
directly or indirectly, in the Cash Collateral Fund, in connection with
the transaction, given that Lehman had filed for bankruptcy and that
the value of the Securities had declined substantially;
(g) BNYMC will promptly refund to the Cash Collateral Fund any
amount recovered from Lehman or any third party in connection with the
exercise of
[[Page 36519]]
any rights, claims, or causes of action in connection as a result of
BNYMC's ownership of the Securities, if such amounts are in excess of
the sum of:
(1) The purchase price paid for the Securities by BNYMC; and
(2) The interest due on the Securities from and after the date
BNYMC purchased the Securities from the Cash Collateral Fund,
determined at the last-published interest rate on the Securities
preceding Lehman's bankruptcy filing (after deducting all reasonable
expenses incurred in connection with the recovery);
(h) BNY Mellon and its affiliates, as applicable, will maintain, or
cause to be maintained, for a period of six (6) years from the date of
any of covered transaction 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 each
of the investors with a direct interest in the Cash Collateral Fund.
It is represented that each of these interested persons will be
notified of the publication of the Notice by personal or express
delivery, 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.)
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 exemption, 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 exemption, 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 16th day of July 2009.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. E9-17467 Filed 7-22-09; 8:45 am]
BILLING CODE 4510-29-P