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Secretary of Labor Hilda L. Solis
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EBSA Notices

Prohibited Transaction Exemptions and Grant of Individual Exemptions involving: 2009-18, Robert W. Baird & Co. Incorporated, D- 11488; 2009-19, MarkWest Energy Partners, L.P., D-11498; Morgan Stanley & Co. Incorporated, D-11501, 2009-20; and The Bank of New York Mellon Corporation (BNMC) and Its Affiliates (Collectively, BNY Mellon), D- 11523, 2009-21   [7/24/2009]
[PDF]
FR Doc E9-17468
[Federal Register: July 24, 2009 (Volume 74, Number 141)]
[Notices]               
[Page 36773-36779]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24jy09-138]                         

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

 
Prohibited Transaction Exemptions and Grant of Individual 
Exemptions involving: 2009-18, Robert W. Baird & Co. Incorporated, D-
11488; 2009-19, MarkWest Energy Partners, L.P., D-11498; Morgan Stanley 
& Co. Incorporated, D-11501, 2009-20; and The Bank of New York Mellon 
Corporation (BNMC) and Its Affiliates (Collectively, BNY Mellon), D-
11523, 2009-21

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Grant of individual exemptions.

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SUMMARY: This document contains exemptions issued by the Department of 
Labor (the Department) from certain of the prohibited transaction 
restrictions of the Employee Retirement Income Security Act of 1974 
(ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code).
    A notice was published in the Federal Register of the pendency 
before the Department of a proposal to grant such exemption. The notice 
set forth a summary of facts and representations contained in the 
application for exemption and referred interested persons to the 
application for a complete statement of the facts and representations. 
The application has been available for public inspection at the 
Department in Washington, DC. The notice also invited interested 
persons to submit comments on the requested exemption to the 
Department. In addition the notice stated that any interested person 
might submit a written request that a public hearing be held (where 
appropriate). The applicant has represented that it has complied with 
the requirements of the notification to interested persons. No requests 
for a hearing were received by the Department. Public comments were 
received by the Department as described in the granted exemption.
    The notice of proposed exemption was issued and the exemption is 
being granted solely by the Department because, effective December 31, 
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 
(1996), transferred the authority of the Secretary of the Treasury to 
issue exemptions of the type proposed to the Secretary of Labor.

Statutory Findings

    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29

[[Page 36774]]

CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990) and 
based upon the entire record, the Department makes the following 
findings:
    (a) The exemption is administratively feasible;
    (b) The exemption is in the interests of the plan and its 
participants and beneficiaries; and
    (c) The exemption is protective of the rights of the participants 
and beneficiaries of the plan.

Robert W. Baird & Co. Incorporated; Located in Milwaukee, Wisconsin

[Prohibited Transaction Exemption 2009-18; Exemption Application Number 
D-11488]

Exemption

Section I. Loans Involving Auction Rate Securities

    The restrictions of section 406(a)(1)(A) through (D) and section 
406(b)(1) and (2) of ERISA, 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, effective February 1, 2008, to the lending 
of Auction Rate Securities (as defined in section III(b)) by a Plan (as 
defined in section III(e)) to Robert W. Baird & Co. Incorporated or any 
of its affiliates (Baird), provided that the conditions set forth in 
section II have been met.\1\
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    \1\ For purposes of this exemption, references to section 406 of 
ERISA should be read to refer as well to the corresponding 
provisions of section 4975 of the Code.
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Section II. Conditions

    (a) The last auction for the loaned Auction Rate Security was 
unsuccessful;
    (b) The Plan does not waive any rights or claims in connection with 
the Auction Rate Security as a condition of engaging in the loan (the 
Loan);
    (c) The transaction is not part of an arrangement, agreement or 
understanding designed to benefit a party in interest;
    (d) Baird is and remains a broker-dealer registered under the 
Securities Exchange Act of 1934 (the Exchange Act) or is exempt from 
registration under section 15(a)(1) of the Exchange Act as a dealer in 
exempted government securities (as defined in section 3(a)(12) of the 
Exchange Act);
    (e) The decision to enter into a Loan is made by a Plan fiduciary 
who is Independent (as defined in section III(d)) of Baird. 
Notwithstanding the foregoing, an employee of Baird who is the 
Beneficial Owner (as defined in section III(c)) of a Title II Only Plan 
(as defined in section III(f)) may direct the Title II Only Plan to 
engage in a Loan if all of the other applicable conditions of this 
exemption have been met;
    (f) Prior to any Loan, Baird shall have furnished the Plan 
fiduciary described in paragraph (e) with:
    (1) The most recently available audited statement of Baird's 
financial condition, as audited by a United States certified public 
accounting firm;
    (2) The most recently available unaudited statement of Baird's 
financial condition (if the unaudited statement is more recent than the 
audited statement described above); and
    (3) A representation that, at the time the Loan is negotiated, 
there has been no material adverse change in its financial condition 
since the date of the most recent financial statement furnished to the 
Plan. Such representations may be made by Baird's agreement that each 
Loan shall constitute a representation by Baird that there has been no 
such material adverse change. Notwithstanding the foregoing, an 
employee of Baird who is the Beneficial Owner of a Title II Only Plan 
may receive the information described in this paragraph (f) if all of 
the other applicable conditions of this exemption have been met;
    (g) The Loan is made pursuant to a written loan agreement (the 
Lending Agreement), the terms of which are at least as favorable to the 
Plan as an arm's-length transaction with an unrelated party would be. 
The Lending Agreement must contain all of the material terms of the 
Loan and cover only the lending of Auction Rate Securities by the Plan 
to Baird. Such Lending Agreement may be in the form of a master 
agreement covering a series of Loans;
    (h) With respect to any Loan, Baird credits the lending Plan's 
account with Baird (the Account) with an amount of cash equal to 100 
percent of the total par value of the loaned Auction Rate Securities. 
Baird must credit the Account by the close of business on the day on 
which Baird receives the Auction Rate Securities from the Plan;
    (i) The Plan has the opportunity to derive compensation through the 
investment of the cash collateral described in paragraph (h);
    (j) The Plan pays Baird a rebate fee negotiated in advance of the 
Loan that does not exceed the interest and/or dividends the Plan 
receives in connection with its ownership of the loaned Auction Rate 
Securities;
    (k) The Plan may terminate the Loan at any time and for any reason;
    (l) Baird may terminate the Loan if:
    (1) The Plan closes its Account or reduces the balance thereof to 
less than 100 percent of the total par value of the Auction Rate 
Securities that are the subject of the Loan;
    (2) The Plan is an individual retirement account described in 
section 4975(e)(1)(B)-(F) of the Code (an IRA) and the Beneficial Owner 
of the IRA dies or divides the IRA pursuant to a divorce, annulment or 
marital settlement;
    (3) The Auction Rate Security associated with the Loan is redeemed 
by its issuer or may be sold at auction for its par value, or;
    (4) Baird identifies a secondary market for the Auction Rate 
Security which Baird has a reasonable basis to believe will permit the 
lending Plan to receive no less than 90% of the Security's par value if 
the Auction Rate Security is promptly offered for sale on such market;
    (m) Following any Loan termination as set forth in (k) or (l), 
Baird shall deliver Auction Rate Securities to the Plan which are 
identical (or the equivalent thereof (in the event of a reorganization, 
recapitalization or merger of the issuer of the Auction Rate 
Securities)) to the Auction Rate Securities borrowed by Baird within 
the lesser of:
    (1) The customary delivery period for such securities;
    (2) Five business days; or
    (3) The time negotiated for such delivery by the Plan and Baird;
    (n) Following any Loan termination as set forth in (k) or (l), if 
Baird fails to return all the borrowed Auction Rate Securities (or the 
equivalent thereof (in the event of a reorganization, recapitalization 
or merger of the issuer of the Auction Rate Securities)) within the 
timeframe set forth in paragraph (m), the Plan may keep the full amount 
of cash collateral provided by Baird in connection with the Loan;
    (o) Following any Loan termination as set forth in (k) or (l), if 
the Plan fails to return the full amount of cash collateral:
    (1) Baird may liquidate the borrowed Auction Rate Securities, in 
which case the Plan's obligation to return the cash collateral shall 
terminate. If the amount received by Baird from the liquidation (after 
deducting brokerage commissions and other transaction costs) exceeds 
the amount of cash collateral provided by Baird in connection with the 
Loan, then Baird shall pay such excess to the Plan. If the amount 
received by Baird from the liquidation (after deducting brokerage 
commissions and other transaction costs) is less than the amount of 
cash collateral provided by Baird in connection with the Loan, then the 
Plan shall pay such deficiency to Baird; or

[[Page 36775]]

    (2) If Baird is unable to liquidate the ARS, Baird will retain the 
ARS and reserve its right to sue the Plan;
    (p) (1) Where the Plan, as lender, does not return the full amount 
of cash collateral in connection with a Loan termination, Baird, as 
borrower, can seek interest at the prime rate on the amount of cash 
collateral owed by the Plan;
    (2) Where Baird, as borrower, does not return the excess described 
in (o)(1), if any, the Plan, as lender, can seek interest at the prime 
rate on the amount of excess owed by Baird; and
    (q) If Baird fails to comply with any provision of a loan agreement 
which requires compliance with this exemption the Plan fiduciary who 
caused the Plan to engage in such transaction shall not be deemed to 
have caused the Plan to engage in a transaction prohibited by section 
406(a)(1)(A) through (D) of ERISA solely by reason of Baird's failure 
to comply with the conditions of the exemption.

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 ``ARS'' 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 ``Beneficial Owner'' means: the individual for whose 
benefit a Title II Only Plan is established and includes a relative or 
family trust with respect to such individual;
    (d) The term ``Independent'' means a person who is: (1) Not Baird 
or an affiliate; and (2) not a relative (as defined in ERISA section 
3(15)) of the party engaging in the transaction;
    (e) The term ``Plan'' means: any plan described in section 3(3) of 
the Act and/or section 4975(e)(1)(B)-(F) of the Code; and
    (f) The term ``Title II Only Plan'' means: any plan described in 
section 4975(e)(1) of the Code which is not an employee benefit plan 
covered by Title I of ERISA.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice of Proposed Exemption published in the Federal Register on 
January 21, 2009 at 74 FR 3650.

FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department, 
telephone (202) 693-8540. (This is not a toll-free number.)

MarkWest Energy Partners, L.P.; Located in Denver, CO

[Prohibited Transaction Exemption 2009-19, Application No. D-11498]

Exemption

I. Retroactive Transactions

    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,\2\ shall not apply, 
effective February 21, 2008:
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    \2\ For purposes of this 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 exemption, were satisfied at the time the 
transaction, described, above, in sections I(a) of this exemption, was 
entered into and the transaction, described, above, in section I(b) of 
this 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 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;
    (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;

[[Page 36776]]

    (12) At the time each of the transactions, described, above, in 
sections I(a)and I(b) of this 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 
exemption.

II. Prospective Transactions

    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 exemption, are satisfied at the time the 
transaction, described, above, in section II(a) of this exemption is 
entered into, and at the time the transaction, described, above, in 
section II(b) of this 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 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.
    After giving full consideration to the entire record, the 
Department has decided to grant the exemption, as described above. The 
complete application file is made available for public inspection in 
the Public Documents Room of the Employee Benefits Security 
Administration, Room N-1513, U. S. Department of Labor, 200 
Constitution Avenue, NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption refer to 
the Notice published on May 6, 2009, at 74 FR 20974.

FOR FURTHER INFORMATION CONTACT: Ms. Angelena C. Le Blanc of the 
Department, telephone (202) 693-8540. (This is not a toll-free number.)

[[Page 36777]]

Morgan Stanley & Co. Incorporated; Located in New York, New York

[Prohibited Transaction Exemption 2009-20 Exemption Application Number 
D-11501]

Exemption

Section I. Sales of Auction Rate Securities From Plans to Morgan 
Stanley: Unrelated to a Settlement Agreement

    The restrictions of section 406(a)(1)(A) and (D) and section 
406(b)(1) and (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), (D), and (E) of the Code, shall not apply, effective 
February 1, 2008, to the sale by a Plan (as defined in section V(e)) of 
an Auction Rate Security (as defined in section V(c)) to Morgan Stanley 
& Co. Incorporated (Morgan Stanley), where such sale (an Unrelated 
Sale) is unrelated to, and not made in connection with, a Settlement 
Agreement (as defined in section V(f)), provided that the conditions 
set forth in section II have been met.\3\
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    \3\ For purposes of this exemption, references to section 406 of 
ERISA should be read to refer as well to the corresponding 
provisions of section 4975 of the Code.
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Section II. Conditions Applicable to Transactions Described in Section 
I

    (a) The Plan acquired the Auction Rate Security in connection with 
brokerage or advisory services provided by Morgan Stanley to the Plan;
    (b) The last auction for the Auction Rate Security was 
unsuccessful;
    (c) Except in the case of a Plan sponsored by Morgan Stanley for 
its own employees (a Morgan Stanley Plan), the Unrelated Sale is made 
pursuant to a written offer by Morgan Stanley (the Offer) containing 
all of the material terms of the Unrelated Sale, including, but not 
limited to: (1) The identity and par value of the Auction Rate 
Security; (2) the interest or dividend amounts that are due with 
respect to the Auction Rate Security; and (3) the most recent rate 
information for the Auction Rate Security (if reliable information is 
available). Notwithstanding the foregoing, in the case of a pooled fund 
maintained or advised by Morgan Stanley, this condition shall be deemed 
met to the extent each Plan invested in the pooled fund (other than a 
Morgan Stanley Plan) receives advance written notice regarding the 
Unrelated Sale, where such notice contains all of the material terms of 
the Unrelated Sale, including, but not limited to, the material terms 
described in the preceding sentence;
    (d) The Unrelated Sale is for no consideration other than cash 
payment against prompt delivery of the Auction Rate Security;
    (e) The sales price for the Auction Rate Security is equal to the 
par value of the Auction Rate Security, plus any accrued but unpaid 
interest or dividends;
    (f) The Plan does not waive any rights or claims in connection with 
the Unrelated Sale;
    (g) The decision to accept the Offer or retain the Auction Rate 
Security is made by a Plan fiduciary or Plan participant or IRA owner 
who is Independent (as defined in section V(d)) of Morgan Stanley. 
Notwithstanding the foregoing: (1) In the case of an individual 
retirement account (an IRA, as described in section V(e) below) which 
is beneficially owned by an employee, officer, director or partner of 
Morgan Stanley, the decision to accept the Offer or retain the Auction 
Rate Security may be made by such employee, officer, director or 
partner; or (2) in the case of a Morgan Stanley Plan or a pooled fund 
maintained or advised by Morgan Stanley, the decision to accept the 
Offer may be made by Morgan Stanley after Morgan Stanley has determined 
that such purchase is in the best interest of the Morgan Stanley Plan 
or pooled fund; \4\
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    \4\ The Department notes that the Act's general standards of 
fiduciary conduct also apply to the transactions described herein. 
In this regard, section 404 requires, among other things, that a 
fiduciary discharge his duties respecting a plan solely in the 
interest of the plan's participants and beneficiaries and in a 
prudent manner. Accordingly, a plan fiduciary must act prudently 
with respect to, among other things, the decision to sell the 
Auction Rate Security to Morgan Stanley for the par value of the 
Auction Rate Security. The Department further emphasizes that it 
expects Plan fiduciaries, prior to entering into any of the 
transactions, to fully understand the risks associated with this 
type of transaction following disclosure by Morgan Stanley of all 
relevant information.
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    (h) Except in the case of a Morgan Stanley Plan or a pooled fund 
maintained or advised by Morgan Stanley, neither Morgan Stanley 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 Offer or retain the Auction Rate Security;
    (i) The Plan does not pay any commissions or transaction costs with 
respect to the Unrelated Sale;
    (j) The Unrelated Sale is not part of an arrangement, agreement or 
understanding designed to benefit a party in interest to the Plan;
    (k) Morgan Stanley and its affiliates, as applicable, maintain, or 
cause to be maintained, for a period of six (6) years from the date of 
the Unrelated Sale, such records as are necessary to enable the persons 
described below in paragraph (l)(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 an 
Unrelated Sale, other than Morgan Stanley 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 (l)(i); and
    (ii) A separate prohibited transaction shall not be considered to 
have occurred solely because, due to circumstances beyond the control 
of Morgan Stanley or its affiliates, as applicable, such records are 
lost or destroyed prior to the end of the six-year period;
    (l)(i) Except as provided below in paragraph (l)(ii), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to above in paragraph (k) 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 U.S. Securities and 
Exchange Commission; or
    (B) Any fiduciary of any Plan, including any IRA owner, that 
engages in an Unrelated Sale, or any duly authorized employee or 
representatives 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 
Unrelated Sale, or any authorized employee or representative of these 
entities;
    (ii) None of the persons described above in paragraph (l)(i)(B)-(C) 
shall be authorized to examine trade secrets of Morgan Stanley, or 
commercial or financial information which is privileged or 
confidential; and
    (iii) Should Morgan Stanley refuse to disclose information on the 
basis that such information is exempt from disclosure, Morgan Stanley 
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.

[[Page 36778]]

Section III. Sales of Auction Rate Securities From Plans to Morgan 
Stanley: Related to a Settlement Agreement

    The restrictions of section 406(a)(1)(A) and (D) and section 
406(b)(1) and (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), (D), and (E) of the Code, shall not apply, effective 
August 1, 2008, to the sale by a Plan of an Auction Rate Security to 
Morgan Stanley, where such sale (a Settlement Sale) is related to, and 
made in connection with, a Settlement Agreement, provided that the 
conditions set forth in section IV have been met.

Section IV. Conditions Applicable to Transactions Described in Section 
III

    (a) The terms and delivery of the Offer are consistent with the 
requirements set forth in the Settlement Agreement;
    (b) The Offer specifically describes, among other things:
    (1) How a Plan may determine: The Auction Rate Securities held by 
the Plan with Morgan Stanley; the number of shares and par value of the 
Auction Rate Securities; the interest or dividend amounts that are due 
with respect to the Auction Rate Securities; purchase dates for the 
Auction Rate Securities; and (if reliable information is available) the 
most recent rate information for the Auction Rate Securities;
    (2) The background of the Offer;
    (3) That neither the tender of Auction Rate Securities nor the 
purchase of any Auction Rate Securities pursuant to the Offer will 
constitute a waiver of any claim of the tendering Plan;
    (4) The methods and timing by which Plans may accept the Offer;
    (5) The purchase dates, or the manner of determining the purchase 
dates, for Auction Rate Securities tendered pursuant to the Offer;
    (6) The timing for acceptance by Morgan Stanley of tendered Auction 
Rate Securities;
    (7) The timing of payment for Auction Rate Securities accepted by 
Morgan Stanley for payment;
    (8) The methods and timing by which a Plan may elect to withdraw 
tendered Auction Rate Securities from the Offer;
    (9) The expiration date of the Offer;
    (10) The fact that Morgan Stanley may make purchases of Auction 
Rate Securities outside of the Offer and may otherwise buy, sell, hold 
or seek to restructure, redeem or otherwise dispose of the Auction Rate 
Securities;
    (11) A description of the risk factors relating to the Offer as 
Morgan Stanley deems appropriate;
    (12) How to obtain additional information concerning the Offer; and
    (13) The manner in which information concerning material amendments 
or changes to the Offer will be communicated to the Plan.
    (c) The terms of the Settlement Sale are consistent with the 
requirements set forth in the Settlement Agreement; and
    (d) All of the conditions in section II have been met.

V. Definitions

    For purposes of this exemption:
    (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 ``control'' means: The power to exercise a controlling 
influence over the management or policies of a person other than an 
individual;
    (c) The term ``Auction Rate 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;
    (d) A person is ``Independent'' of Morgan Stanley if the person is: 
(1) Not Morgan Stanley or an affiliate; and (2) not a relative (as 
defined in ERISA section 3(15)) of the party engaging in the 
transaction;
    (e) The term ``Plan'' means: An individual retirement account or 
similar account described in section 4975(e)(1)(B) through (F) of the 
Code (an IRA); an employee benefit plan as defined in section 3(3) of 
ERISA; or an entity holding plan assets within the meaning of 29 CFR 
2510.3-101, as modified by ERISA section 3(42); and
    (f) The term ``Settlement Agreement'' means: A legal settlement 
involving Morgan Stanley and a U.S. state or federal authority that 
provides for the purchase of an ARS by Morgan Stanley from a Plan.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice of Proposed Exemption published in the Federal Register on 
February 25, 2009 at 74 FR 8580.

FOR FURTHER INFORMATION CONTACT: Chris Motta of the Department, 
telephone (202) 693-8540. (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

Prohibited Transaction Exemption 2009-21; Exemption Application Number 
D-11523

Exemption

Section I. Transactions

    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;
    (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

[[Page 36779]]

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.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on May 6, 2009 at 74 FR 
20987.

DATES: Effective Date: This exemption is effective from October 3, 2008 
through December 31, 2008.

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 to which the exemption does not 
apply and the general fiduciary responsibility provisions of section 
404 of the Act, which among other things require a fiduciary to 
discharge his duties respecting the plan solely in the interest of the 
participants and beneficiaries of the plan and in a prudent fashion in 
accordance with section 404(a)(1)(B) of the Act; nor does it affect the 
requirement of section 401(a) of the Code that the plan must operate 
for the exclusive benefit of the employees of the employer maintaining 
the plan and their beneficiaries;
    (2) This exemption is supplemental to and not in derogation of, any 
other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is in fact a 
prohibited transaction; and
    (3) The availability of this exemption is subject to the express 
condition that the material facts and representations contained in the 
application accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed 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. E9-17468 Filed 7-23-09; 8:45 am]

BILLING CODE 4510-29-P