EBSA
Notices
Grant of Individual Exemption Involving Renaissance Technologies, LLC (Renaissance, or the Applicant) Located in New York, NY
[ 4/20/2012]
[ PDF]
Federal Register, Volume 77 Issue 77 (Friday, April 20, 2012)
[Federal Register Volume 77, Number 77 (Friday, April 20, 2012)]
[Notices]
[Pages 23756-23764]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9496]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2012-10; Exemption Application No. D-
11655]
Grant of Individual Exemption Involving Renaissance Technologies,
LLC (Renaissance, or the Applicant) Located in New York, NY
AGENCY: Employee Benefits Security Administration, U.S. Department of
Labor.
ACTION: Grant of individual exemption.
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SUMMARY: This document contains an individual exemption from certain
prohibited transaction restrictions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA or the Act) and the Internal
Revenue Code of 1986, as amended (the Code). The transactions involve
Renaissance and certain of Renaissance's privately offered collective
investment vehicles managed by Renaissance, comprised almost
exclusively of proprietary funds. The individual exemption affects the
individual retirement accounts beneficially owned by Renaissance's
employees, certain of Renaissance's owners, and the spouses of such
employees and owners.
DATES: Effective Date: The individual exemption is effective as of
January 1, 2012.
FOR FURTHER INFORMATION CONTACT: Warren Blinder of the Department,
telephone (202) 693-8553. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On January 20, 2012, the Department of Labor
(the Department) published a notice of proposed individual exemption in
the Federal Register at 77 FR 3038 from the restrictions of section
406(a)(1)(A) and (D) of the Act and the sanctions resulting from the
application of section 4975 of the Code, by reason
[[Page 23757]]
of section 4975(c)(1)(A) and (D) of the Code.\1\ The proposed exemption
was requested by Renaissance pursuant to 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 (76 FR 66637, October 27,
2011). Effective December 31, 1978, section 102 of the Reorganization
Plan No. 4 of 1978, (5 USC App. 1 (1996)) transferred the authority of
the Secretary of the Treasury to issue exemptions of the type requested
to the Secretary of Labor. Accordingly, this final individual exemption
is being issued solely by the Department.
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\1\ For purposes of this exemption, references to the provisions
of Title I of the Act, unless otherwise specified, refer also to the
corresponding provisions of the Code.
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Written Comments
The Department invited all interested persons to submit written
comments with respect to the proposed exemption on or before February
24, 2012. During the comment period, the Department received no
comments or inquiries from Participants. However, the Department
received a written comment from the Applicant, which supported the
exemption and requested certain modifications and/or clarifications to
the General Conditions and the Definitions sections of the proposed
exemption and to the Summary of Facts and Representations (the Summary)
of the proposed exemption.
Following is a discussion of the Applicant's comments, including
the responses made by the Department to address the issues raised
therein. Any capitalized terms herein not otherwise defined have the
meanings ascribed to them in the Summary.
A. Clarifications Concerning Certain Conditions of Relief
The Applicant requested modifications and/or corrections to certain
General Conditions of the proposed exemption relating to: (1) The
descriptions of the investor restrictions for individuals investing in
the New Medallion Funds; (2) New Kaleidoscope's redemption policy; (3)
the description of the valuation policy for the Funds' investment
holdings; (4) the operation of a Participant's Investment Allocation;
(5) the disclosures required to be given by Renaissance to Participants
in connection with their investment in the New Medallion Vehicles; and
(6) the legal, jurisdictional, venue, and service requirements
attributable to Renaissance in connection with a Participant's
investment in the New Medallion Vehicles.
1. Descriptions of Investor Restrictions. Section III(c) of the
proposed exemption provides that ``[a]n interest in a New Medallion
Vehicle is only available to IRA Holders who satisfy the securities
law-based investor qualifications applicable to all investors in such
New Medallion Vehicle.'' However, in its comment, the Applicant
suggested a modification of Section III(c) to clarify that some
relevant investor restrictions come from other sources, such as the
Commodity Futures Trading Act, in order to be more precise. Therefore,
the Applicant suggests that the phrase ``and other regulatory'' should
be inserted after ``securities law.'' In addition, the Applicant
suggests a corresponding change to the last sentence of Representation
61 of the Summary, in order to reflect the foregoing modification made
to Section III(c) of the proposed exemption.
The Department has revised Section III(c) of the final exemption to
reflect the Applicant's suggested revision, to read as follows: ``An
interest in a New Medallion Vehicle is only available to IRA Holders
who satisfy the securities law and other regulatory-based investor
qualifications applicable to all investors in such New Medallion
Vehicle.'' Furthermore, the Department takes note of the Applicant's
suggested corresponding change to Representation 61 of the Summary.
2. Redemption Policy for New Kaleidoscope. Section III(f) of the
proposed exemption provides that, ``[a]n IRA's interest in a New
Medallion Vehicle is redeemable, in whole or in part, without the
payment of any redemption fee or penalty, no less frequently than on a
quarterly basis upon no less than 10 days advance written notice.''
However, the Applicant notes that such condition, as written, does not
reflect the actual operation of New Kaleidoscope, which requires 45
days' notice. Therefore, the Applicant's comment requested that the
following phrase be appended to the end of the sentence: ``Except in
the case of New Kaleidoscope, where 45 days' notice is required.'' In
addition, the Applicant's comment suggested a corresponding change to
Representation 76(f) in order to conform the Summary to the foregoing
modification made to Section III(f) of the proposed exemption.
The Department has modified Section III(f) of the final exemption
to reflect the Applicant's suggested revision, to read as follows: ``An
IRA's interest in a New Medallion Vehicle is redeemable, in whole or in
part, without the payment of any redemption fee or penalty, no less
frequently than on a quarterly basis upon no less than 10 days advance
written notice, except in the case of New Kaleidoscope, for which 45
days' notice is required.'' Furthermore, the Department takes note of
the Applicant's suggested corresponding modification to Representation
76(f) of the Summary.
3. Funds' Valuation Policy. Section III(g) of the proposed
exemption provides that ``[a]n acquisition or redemption of an IRA's
interest in a New Medallion Vehicle is made for fair market value,''
and Subparagraphs (1) through (4) of Section III(g) further describe
how fair market value is to be determined for each of equity
securities, fixed-income securities, options, and investments for which
current market quotations are not readily available, respectively. In
its comment, the Applicant requested modifications to Section III(g)
relating to the determination of ``fair market value'' for equity
securities and fixed-income securities.
The Applicant states that, with respect to equity securities, there
was a change to the Applicant's valuation policy that occurred in June
2011 that corrected a flaw for the valuation of illiquid equity
securities. According to the Applicant, although Renaissance seldom
holds illiquid equity securities for the Medallion Funds, immediately
prior to making this change, a few securities became illiquid, and did
not generate any bids or offers on days when valuations were needed; so
that the methodology described in Section III(g) of the proposed
exemption was difficult to apply.\2\
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\2\ The Applicant notes that a security may become illiquid, for
example, if trading in it is suspended.
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The Applicant states that the valuation policy described in Section
III(g) of the proposed exemption contemplates the potential need to
value an illiquid security, and provides for the use of the last bid or
ask price for the security on the day of the valuation. However, the
Applicant notes that the standard is flawed in that it does not work if
there is no bid or ask on the valuation date. The Applicant represents
that, after Renaissance encountered this flaw in 2011, it adopted a
policy of using the last price at which the security traded, discounted
depending on the time between the trade date and the valuation date.\3\
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\3\ The Applicant states that Renaissance solicited the opinion
of two major independent audit firms, which advised that this was an
appropriate solution to the issue.
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Accordingly, the Applicant's comment suggested that Section
III(g)(1) pertaining to equity securities, should
[[Page 23758]]
be modified as follows in order to describe Renaissance's current
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valuation policy more accurately:
Equity securities are valued at their last reported sale price
or official closing price on the market on which such securities
primarily trade using sources independent of Renaissance and the
issuer. If no sale of such equity security was reported on that
date, the market value will be the last reported sale price on the
most recent date for which a price is available, and will reflect a
discount if such date occurred more than 30 days before.
According to the Applicant, since Renaissance generally does not
invest in illiquid securities, the modification of the valuation policy
for illiquid equity securities is, as a practical matter, a de minimis
change with an immaterial effect on the operation of Medallion and the
valuation of any of its investments.\4\ The Applicant notes that the
change to the valuation policy simply solves a minor problem that had
come to light through actual experience. Furthermore, the Applicant
maintains that the change is wholly to the benefit of investors, since
it provides a methodology which can always be applied to illiquid
equity securities. Since bid and ask prices are generally not available
for these securities, they could not have been valued at all but for
this change in policy.
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\4\ The Applicant represents that, on a monthly basis, from the
implementation of the above policy in June 2011 through the end of
2011, illiquid securities in the Medallion Funds, at the most,
represented less than 8/100ths of one percent of the number of
positions (December) and slightly over 5/100ths of one percent of
the value of the portfolio (June).
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The Applicant represents that the language describing the valuation
of fixed income securities in Section III(g)(2) of the proposed
exemption is a more general description of the valuation policy, and
its comment suggested changes that are intended to clarify certain
aspects concerning the determination of the prices of such securities.
The Applicant notes that this suggested modification does not reflect a
change in the substance of this policy.
The Applicant explains that Renaissance's valuation policy that is
applicable to fixed income securities has been in effect since August
2008. According to the Applicant, this policy provides more specificity
concerning the determination of ``bid'' prices in various circumstances
than that which the proposed exemption describes. In this regard, the
Applicant notes that the valuation policy prioritizes the use of
independent pricing services, where possible, as distinguished from the
use of independent providers. The Applicant maintains that its
suggested modification is intended to illuminate this prioritization.
Accordingly, in order to clarify the prioritization of the sources of
bid prices and avoid creating the impression that there is no
prioritization between the use of independent pricing services and
providers, the Applicant suggests a clarifying modification to Section
III(g)(2), as follows:
Fixed income securities are valued at the ``bid'' price of such
securities at the close of business on the relevant valuation date.
These prices are determined (i) where available, on the basis of
prices provided by independent pricing services that determine
valuations based on market transactions for comparable securities;
and (ii) if independent pricing services are not available, on the
basis of quotes obtained from multiple independent providers that
are either U.S.-registered or foreign broker-dealers, which are
registered and subject to the laws of their respective jurisdiction,
or banks.
The Applicant states that this suggested modification is a
clarification of methodology but not a change from the valuation policy
as described in the proposed exemption, i.e., fixed income securities
are valued on the basis of their bid prices where possible.\5\ The
Applicant explains that the use of ``bids'' in pricing fixed income
instruments is the relevant point being made in its description of how
fixed income securities are valued and that the methodology by which
those bids are determined is secondary. Further, the Applicant asserts
that these changes would make the description of the valuation policy
clearer.
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\5\ The Applicant notes that, in the context of fixed income
securities, a ``firm quote'' or the ``price'' of a security given by
a dealer or pricing service is equivalent to the ``bid price'' of
such security.
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In addition, the Applicant's comment suggested an additional,
corresponding change to Representation 67 in the Summary, in order to
conform the Summary to the foregoing modifications made to Section
III(g) of the proposed exemption.
The Department has modified the final exemption to reflect the
Applicant's suggested revisions to Section III(g)(1) and (2), to read
as described above. Furthermore, the Department takes note of the
Applicant's suggested corresponding changes to Representation 67 of the
Summary.
4. Participant's Investment Allocation. Section III(i) of the
proposed exemption provides that ``[i]n the event that a redemption of
any portion of an IRA Holder's interest in any of the Medallion Funds
becomes necessary as the result of a reduction of the Investment
Allocation applicable to an IRA Holder, then, at such IRA Holder's
election, a redemption is first made of the IRA Holder's taxable
investments (if any) prior to his or her IRA's interest in a New
Medallion Vehicle.'' The Applicant's comment requested a change to
Section III(i) in order to clarify that only Participants (i.e.,
employees and certain former employees who remain owners of
Renaissance) have Investment Allocations, which can be shared with
their spouses. In this regard, the Applicant's comment suggested that
Section III(i) should read as follows:
In the event that a redemption of any portion of an interest in
a New Medallion Vehicle held by an IRA becomes necessary as the
result of a reduction of the Investment Allocation applicable to a
Participant, then, at an IRA Holder's election, a redemption may
first be made of the IRA Holder's taxable investments (if any) prior
to his or her IRA's interest in a New Medallion Vehicle.
The Department has modified the final exemption to reflect the
Applicant's suggested revision, to read as described above.
5. Participant Disclosures. Section III(l) of the proposed
exemption provides that, in advance of the initial investment by an IRA
in a New Medallion Vehicle, IRA Holders will generally receive (1) a
copy of the proposed exemption and the final exemption, (2) a private
offering memorandum (and the same disclosures and information provided
to other investors in such Funds), and (3) all reasonably available
relevant information as such IRA Holder may request. In its comment,
the Applicant explained that it is concerned about the operation of
subparagraph (3) of Section III(l), as it could be read to require
Renaissance to solicit requests for additional information from IRA
Holders, and to distribute such information with the materials
described in subparagraphs (1) and (2) of Section III(l). Therefore,
the Applicant's comment requested that subparagraph (3) of Section
III(l) should be revised to read as follows:
Following receipt of the information in (1) and (2), an IRA
Holder will receive all reasonably available relevant information as
such IRA Holder may request.
The Department has modified the final exemption to reflect the
Applicant's suggested revision to Section III(l)(3) of the proposed
exemption, to read as described above.
6. Legal and Other Requirements. Section III(n) of the proposed
exemption provides that Renaissance, the New Medallion Vehicles, and
each Fund or
[[Page 23759]]
vehicle in which, or through which, a New Medallion Vehicle invests,
will agree to certain legal, jurisdictional, service of process, and
venue requirements. The Applicant's comment suggested that the language
of Section III(n) of the proposed exemption should be modified in order
to reflect requested modifications to the definitions of the New
Medallion Vehicles in Sections IV(j) through (m) of the proposed
exemption.
Furthermore, the Applicant notes that the definition of ``Funds''
in Section IV(d) includes the existing collective investment vehicles
managed by Renaissance, but not the New Medallion Vehicles or New RIEF/
RIFF. The Applicant explains that two of the New Medallion Vehicles,
New Medallion FF and New Medallion FF RMPRF, will invest in the
Medallion Master Funds, and the other, New Kaleidoscope, will invest in
New Medallion FF RMPRF, and New RIEF/RIFF. Accordingly, the Applicant
suggests that the consent described in Section III(n) of the proposed
exemption should be given by those Funds managed by Renaissance in
which IRAs may invest, directly or indirectly, under the proposed
exemption. Thus, to avoid obtaining consents from collective investment
vehicles managed by Renaissance that are not involved in the covered
transactions, the Applicant suggests that the introductory language of
Section III(n) should be revised to read as follows:
Prior to the acquisition by an IRA of an interest in a New
Medallion Vehicle or each Medallion Master Fund, another New
Medallion Vehicle, or New RIEF/RIFF in which, or through which, a
New Medallion Vehicle invests, Renaissance or the applicable New
Medallion Vehicle manager (the New Medallion Vehicle Manager), with
respect to any such acquisition by an IRA * * *.
In addition, the Applicant's comment suggested additional,
corresponding changes to the last sentence of Representation 75 and
Representation 76(m) of the Summary, in order to conform the Summary to
the foregoing modification made to Section III(n) of the proposed
exemption.
The Department has revised the final exemption to reflect the
Applicant's suggested revisions to Section III(n) of the proposed
exemption. The Department also notes the suggested corresponding change
to Representation 75 of the Summary.
B. Clarifications Relating to Certain Definitions in the Proposed
Exemption
The Applicant's requested clarifications and/or corrections to the
Definitions section of the proposed exemption related to: (1) An update
in the number of Funds managed by Renaissance; (2) the description of
the Participants' Investment Allocation; (3) an update to the
definition of ``Kaleidoscope Fund'' to conform to its offering
documents; (4) an update to the definitions of the ``New Medallion
Vehicles'' to conform to their offering documents and the addition of a
defined term for another new Medallion investment vehicle; (5) the
inclusion of any current employee of Renaissance in the definition of
``Participant;'' (6) the inclusion of an additional individual in the
definition of ``Permitted Owners;'' and (7) the composition of the
Renaissance Valuation Committee.
1. Funds' Update. Section IV(d) of the proposed exemption provides
that the term ``Fund'' or ``Funds'' means, ``* * * the nine privately
offered U.S. and non-U.S. collective investment vehicles managed by
Renaissance * * * and the five privately offered U.S. and non-U.S.
collective investment vehicles * * *.'' The Applicant's comment stated
that Renaissance currently manages six, not five, non-Proprietary
Funds, and further requested that the definition of ``Fund'' or
``Funds'' should be modified to reflect such change.
The Department notes the Applicant's suggested revision to Section
IV(d) of the proposed exemption and has modified the final exemption to
read as follows:
The term ``Fund'' or ``Funds'' means, individually or
collectively, the nine privately offered U.S. and non-U.S.
collective investment vehicles managed by Renaissance, comprised
almost exclusively of assets of Renaissance and its owners and
employees (the Proprietary Funds) and the six privately offered U.S.
and non-U.S. collective investment vehicles, consisting primarily of
assets of clients of Renaissance (the non-Proprietary Funds).
Furthermore, the Department notes a corresponding change to
Representation 3 of the Summary, wherein the Applicant represented that
Renaissance is the investment manager of fourteen privately offered
U.S. and non-U.S. collective investment vehicles, comprised of 9
Proprietary Funds and 5 non-Proprietary Funds.
2. Participant's Investment Allocation Description. Section IV(e)
of the proposed exemption provides that the term ``Investment
Allocation'' means ``the permitted investment allocation in the
Medallion Funds applicable to a Renaissance employee, which such
employee and his or her Spouse may utilize to make investments in a
Medallion FF or Kaleidoscope, or in an applicable New Medallion Vehicle
investing in such Funds, subject to each such employee's overall
Investment Allocation limit.'' The Applicant's comment stated that the
definition of Investment Allocation is not clear, and suggested that
the definition of ``Investment Allocation'' should be revised to read
as follows:
The term ``Investment Allocation'' means the permitted
investment allocation limit in the Medallion Funds applicable to a
Renaissance employee, which such employee and his or her Spouse may
utilize to make investments in a Medallion FF or Kaleidoscope, or in
an applicable New Medallion Vehicle.
In addition, the Applicant's comment suggested a corresponding
change to Representations 63 and 64 of the Summary in order to conform
the Summary to the foregoing modification made to Section IV(e) of the
proposed exemption.
The Department has modified the final exemption as described above,
to reflect the Applicant's suggested revisions to Section IV(e) of the
proposed exemption. In addition, the Department notes the suggested
corresponding change to Representation 64 of the Summary.
3. Kaleidoscope Fund Update. Section IV(h) of the proposed
exemption provides that the term ``Kaleidoscope'' means ``Kaleidoscope
Fund LLC, a Delaware limited liability company established by
Renaissance to facilitate the investment by certain employees of
Renaissance in the other Proprietary Funds.'' The Applicant's comment
suggested that the definition of ``Kaleidoscope'' in Section IV(h)
should be revised as follows, to describe more accurately the name of
the Fund and the eligible employees for whom such Fund is established:
The term ``Kaleidoscope'' means Renaissance Kaleidoscope Fund
LLC, a Delaware limited liability company established by Renaissance
to facilitate the investment by employees of Renaissance who are not
Accredited Investors under the Securities Act of 1933, as amended
(the 1933 Act) or otherwise do not meet the financial requirements
in the other Proprietary Funds.
In addition, the Applicant suggests a corresponding change to
Representation 14 in the Summary in order to conform the Summary to the
foregoing modification made to Section IV(h) of the proposed exemption.
The Department has modified the final exemption as described above
to reflect the Applicant's suggested revisions to Section IV(h) of the
proposed exemption. In addition, the Department notes the suggested
corresponding change to Representation 14 of the Summary.
[[Page 23760]]
4. New Medallion Vehicles Update. Sections IV(j), (k), and (m) of
the proposed exemption provide definitions of the terms ``New Medallion
Vehicle,'' ``New Kaleidoscope,'' and ``New Medallion FF.'' The
Applicant's comment suggests modifications to these definitions, in
order to conform the definitions of the New Medallion Vehicles more
closely to their respective offering documents, and to more fully
describe their characteristics, including the eligible employees for
whom such Funds are established.
Moreover, the Applicant explains that the New Medallion Conduit
(New Medallion FF RMPRF), defined in Section IV(l) of the proposed
exemption, is designed to permit IRA Holders who do not meet the
eligibility requirements of New Medallion FF to invest in the Medallion
Master Funds, and thus will accept investment by IRA Holders in
addition to investment by New Kaleidoscope. The Applicant explains that
New Medallion FF RMPRF is organized under section 3(c)(1) of the 1940
Act and has a 100 investor limit thereunder, and New Kaleidoscope will
itself be an Accredited Investor for purposes of investing in New
Medallion FF RMPRF. Therefore, the Applicant suggests that the
definition of ``New Medallion Conduit'' in Section IV(l) of the
proposed exemption be stricken and replaced with the definition of
``New Medallion FF RMPRF,'' which more accurately describes such Fund.
Accordingly, the Applicant suggests that Sections IV(j), (k), (l),
and (m) of should be revised, respectively, to read as follows:
The term ``New Medallion Vehicle'' or ``New Medallion Vehicles''
means, individually or collectively, New Medallion FF, New Medallion
FF RMPRF, and New Kaleidoscope.
The term ``New Kaleidoscope'' means Renaissance Kaleidoscope RF
Fund LLC, the Delaware limited liability company established by
Renaissance in order to facilitate an investment by IRA Holders who
are not ``Accredited Investors'' under the 1933 Act in New Medallion
FF RMPRF and New RIEF/RIFF, through their IRAs.
The term ``New Medallion FF'' means Medallion Fund RF LP, the
Bermuda Limited Partnership that is treated as a corporation for US
Federal Income Tax purposes, established by Renaissance in order to
facilitate an investment by an IRA Holder who is a ``Qualified
Purchaser'' or ``Knowledgeable Employee'' under the Investment
Company Act of 1940, as amended (the 1940 Act) in the Medallion
Master Funds, through his or her IRA.
The term ``New Medallion FF RMPRF'' means Medallion RMPRF Fund
LP, the Bermuda Limited Partnership that is treated as a corporation
for US Federal Income Tax purposes established by Renaissance in
order to facilitate the investment by IRA Holders who are neither
Qualified Purchasers nor ``Knowledgeable Employees'' as defined in
the 1940 Act, but who are Accredited Investors, in the Medallion
Master Funds, through their IRAs.
In addition, in order to more fully describe New Kaleidoscope, and
to provide additional context for its investments, the Applicant in its
comment letter suggests the addition of a definition for ``New RIEF/
RIFF.'' Accordingly, the Applicant suggests that new Section IV(n) be
added to the proposed exemption as follows:
The term ``New RIEF/RIFF'' means a newly organized series of
RIEF RMP LLC and a newly created Bermuda limited partnership to be
known as RIFF RF Fund LP, respectively, each of which has been
established to facilitate investments of IRAs in RIEF RMP LLC and
RIFF RMP LLC.
Finally, the Applicant suggests that Sections IV(n)-(q) of the
proposed exemption should be re-designated in the final exemption as
Sections IV(o)-(r), to accommodate the addition of the definition of
``New RIEF/RIFF.''
The Department has modified Sections IV(j), (k), (l), and (m), and
added new Section IV(n) in the final exemption, as described above, to
reflect the Applicant's suggested revisions. Furthermore, Sections
IV(n)-(q) of the proposed exemption have been re-designated in the
final exemption as Sections IV(o)-(r).
5. Participant Update. Section IV(n) of the proposed exemption
defines the term ``Participant,'' as ``a former participant in the
Renaissance Technologies, LLC 401(k) Plan (the 401(k) Plan) who
received a distribution of their entire account balance in the 401(k)
Plan prior to December 31, 2010 as a result of the termination of such
plan, and is either an employee or a Permitted Owner of Renaissance at
the time of such individual's investment in the New Medallion
Vehicles.'' However, the Applicant's comment requested that the
definition of ``Participant'' be expanded to cover all employees of
Renaissance, not just those who received Proceeds prior to December 31,
2010.
The Applicant explains that, since the termination of the 401(k)
Plan, several new employees who were not participants in that plan have
joined (and left) Renaissance, through the normal process of employee
turnover. As a result, according to the Applicant, the definition of
``Participant'' provided in the proposed exemption would cause
Renaissance to have ``two classes'' of employees--those who have the
opportunity to make IRA investments in New Vehicles and those who do
not, a result that the Applicant desires to avoid. The Applicant
represents that it does not foresee any substantive changes in the size
or educational characteristics of its employee group, as a result of
the normal employee turnover process.
Accordingly, the Applicant requested that the definition of
Participant be revised to read as follows:
The term ``Participant'' means a person who is either an
employee or a Permitted Owner of Renaissance at the time of such
individual's investment in the New Medallion Vehicles.
The Department has modified the final exemption as described above
in order to reflect the Applicant's suggested revisions to Section
IV(n) of the proposed exemption and has re-lettered Section IV(n) as
Section IV(o).
6. Permitted Owners Update. Section IV(o) of the proposed exemption
defines the term ``Permitted Owner'' to mean ``the seven individuals
permitted to invest in the Medallion Funds following the termination of
their Renaissance employment, comprised of three Renaissance
``founders,'' and four former employees who are owners of
Renaissance.'' The Applicant's comment explained that, although
Renaissance had previously indicated that there are seven persons
constituting ``Permitted Owners,'' in reality there are eight such
individuals. Therefore, the Applicant's comment suggested that the
definition of ``Permitted Owner'' be revised to read as follows:
The term ``Permitted Owners'' means the eight individuals
permitted to invest in the Medallion Funds following the termination
of their Renaissance employment, comprised of three Renaissance
``founders'' each of whom is a current owner of Renaissance and one
of whom is a current employee, and five former employees who are
current owners of Renaissance.
In addition, the Applicant suggests an additional, corresponding
change to Footnote 41 in the Summary, in order to conform the Summary
to the foregoing modification made to Section IV(o) of the proposed
exemption.
The Department has modified the final exemption as described above
to reflect the Applicant's suggested revisions to Section IV(o) of the
proposed exemption and has re-lettered Section IV(o) as Section IV(p).
In addition, the Department notes the Applicant's suggested
corresponding revision to Footnote 41 in the Summary.
7. Renaissance Valuation Committee Update. Section IV(p) of the
proposed exemption provides that the term ``Renaissance Valuation
Committee,'' or ``RVC'' means ``the committee,
[[Page 23761]]
established by Renaissance in 2008, that oversees and monitors the
valuation process, and establishes the methods of, and procedures for,
valuing various instruments traded by Renaissance (e.g., the
Proprietary Funds), composed of high-level Renaissance employees who
also are Fund investors.'' The Applicant's comment suggested certain
modifications to Section IV(p) in order to more accurately describe the
RVC.
In this regard, the Applicant requests that the parenthetical
``(e.g., the Proprietary Funds)'' be deleted, because, as the Applicant
explains, a Proprietary Fund is not an instrument that is traded by
Renaissance. Furthermore, the Applicant suggests that the word ``are''
before ``Fund investors'' at the end of the definition should be
changed to ``may be,'' because, as the Applicant explains,
classification as a Fund investor is not a requirement for membership
in the RVC. Thus, Section IV(p) would read as follows:
The term ``Renaissance Valuation Committee,'' or ``RVC,'' means
the committee, established by Renaissance in 2008, that oversees and
monitors the valuation process, and establishes the methods of, and
procedures for, valuing various instruments traded by Renaissance,
composed of high-level Renaissance employees who also may be Fund
investors.
The Department has modified Section IV(p) of the proposed exemption
to read as described above, to reflect the Applicant's suggested
revision. Furthermore, Section IV(p) has been re-designated as Section
IV(q) in the final exemption.
C. Clarifications and/or Corrections of Representations Made in the
Summary
The Applicant's requested modifications to the Summary generally
relate to: (1) The description of Renaissance and the Funds; (2) the
description of the Medallion Funds master/feeder structure; (3)
Renaissance's ownership and investment structure; (4) the timing of the
termination of the 401(k) Plan; (5) the avoidance of a performance
guarantee implication; (6) the suggested modifications to Sections III
and IV of the proposed exemption, relating to the descriptions of the
New Medallion Vehicles and investors' qualifications required to invest
therein; and (7) the lack of investment advice or employment-related
incentives concerning an IRA Holder's investment in the New Medallion
Vehicles.
1. Description of Renaissance and the Funds. The Applicant notes
that the paragraph captioned SUMMARY that is found on page 3038 of the
proposed exemption contains an erroneous description of the Applicant.
In this regard, the Applicant explains that it is incorrectly referred
to as ``Renaissance Technologies, Inc.'' rather than as ``Renaissance
Technologies LLC.'' The Department notes this correction to the
SUMMARY.
2. Medallion Funds Structure. Representation 17 of the Summary
explains that, ``Renaissance is the general partner of the Medallion
FFs and Medallion Master Funds that are organized as limited
partnerships, and certain of Renaissance's owners serve as directors of
the Medallion FFs and Medallion Master Funds that are organized as non-
U.S. corporations.'' The Applicant notes in its comment letter that
some of the Medallion FFs and Medallion Master Funds are organized as
limited liability companies. Accordingly, the Applicant suggests that
the first sentence of Representation 17 of the Summary should read as
follows:
Renaissance is the general partner or managing member of the
Medallion FFs and Medallion Master Funds that are organized as
limited partnerships or limited liability companies, respectively,
and certain of Renaissance's owners serve as directors of the
Medallion FFs and Medallion Master Funds that are organized as non-
U.S. corporations.
The Department takes note of the Applicant's requested
clarification of Representation 17.
3. Renaissance's Ownership and Investment Structure. In
Representation 19 of the Summary, Footnote 9 states that ``Renaissance
directly owns 28.41% of the combined Medallion FFs, but Kaleidoscope,
which invests directly in the Medallion FFs, is owned approximately
94.6% by Renaissance and 5.4% by its owners, directors, and
employees.'' The Applicant notes that Kaleidoscope invests directly in
only one of the Medallion FFs, and suggests that, for the sake of
accuracy, Footnote 9 of the Summary be modified, accordingly. The
Department takes note of the Applicant's requested clarification of
Footnote 9.
4. Timing of 401(k) Plan Termination. In Representation 30 of the
Summary, describing the Applicant's termination of the 401(k) Plan, the
Applicant notes that Renaissance terminated the 401(k) Plan in October
2010, so that Participants could receive distributions of their
Proceeds prior to the end of that year. However, in its comment letter,
the Applicant notes that the 401(k) Plan was actually terminated in
December 2010, not October 2010. The Department takes note of the
Applicant's requested clarification.
5. Performance Guarantee Implication. In Representation 26 of the
Summary, Footnote 13 reads, ``[a]s the New Medallion Vehicles will not
charge fees or profit participations in the form of performance
allocations, Renaissance anticipates that their returns to IRA
investors will exceed the historical net returns of the existing
Proprietary Funds.'' The Applicant, in its comment letter, suggests
that, in order to avoid any implication of a performance guarantee,
Footnote 13 should be modified to read as follows:
As the New Medallion Vehicles will not charge management fees or
profit participations in the form of performance allocations,
Renaissance expects the returns to IRA investors in the New
Medallion Vehicles will exceed the returns of the parallel
Proprietary Funds for the same periods in which they invest and
trade on a going forward basis.
The Department takes note of the Applicant's requested modification
of Footnote 13.
6. New Medallion Vehicles' Descriptions/Investors' Qualifications.
Representations 33 through 41 of the Summary describe in detail the New
Medallion Vehicles and the IRA Holders' qualifications required to
invest in such Funds. The Applicant, in its comment letter, suggests
that such Representations and their accompanying footnotes should be
modified to reflect the corresponding revisions to the definitions of
the New Medallion Vehicles, as well as the existence of an additional
Permitted Owner, as were requested in the comment letter. Furthermore,
the Applicant suggests modifications to the descriptions of the New
Medallion Vehicles and New RIEF/RIFF where they are discussed in
Footnotes 26 and 30, in Representations 58 and 59, and in
Representations 63 through 65, corresponding to the requested revisions
of such terms' definitions in Section IV of the proposed exemption. The
Department takes note of the Applicant's requested clarifications of
Representations 33 through 41, 58, 59, and 63 through 65, and of
Footnotes 26 and 30.
7. Lack of Investment Advice/Employment-Related Incentives/Funds
References. In Representation 54 of the Summary, the Applicant
represents that ``it has not provided, nor will it at any time provide,
investment advice concerning an IRA Holder's investment of their IRA in
the New Medallion Vehicles or offer any financial or employment-related
incentives to invest in the Funds.'' Furthermore, the Applicant notes
that ``there have been no official communications with
[[Page 23762]]
Participants regarding the opportunity to invest in the Funds through
IRAs since the termination of the 401(k) Plan * * *.''
In its comment letter, the Applicant also states that it would be
appropriate for the Department to clarify that the two references to
``Funds'' in the Representation above should more appropriately refer
to the ``New Medallion Vehicles.'' The Applicant explains that, in
Section IV(d) of the proposed exemption, ``Funds'' is defined to
include a total of fifteen existing collective investment vehicles
managed by Renaissance, comprised of both Proprietary and non-
Proprietary funds. Furthermore, in Section IV(i) of the proposed
exemption, the term ``Medallion Funds'' is defined to include a subset
of the Funds, specifically, the Medallion FFs and Medallion Master
Funds. The Applicant notes that the proposed exemption only addresses
investments by IRA Holders in Medallion Funds, as that is where the
prohibited transaction occurs. Therefore, according to the Applicant,
it is appropriate to limit the statement in Representation 54 to the
New Medallion Vehicles, so that it is consistent with the scope of the
relief granted. The Department takes note of the Applicant's requested
clarifications of Representation 54.
After giving full consideration to the entire record, including the
Applicant's written comment, the Department has decided to grant the
exemption, subject to the terms and conditions, as described above. For
further information regarding the individual exemption, interested
persons are encouraged to obtain copies of the exemption application
file (Application No. D-11655) that the Department maintains with
respect to the individual exemption. The complete application file, as
well as supplemental submissions received by the Department, 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 Ave. 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 proposed exemption published in the Federal Register on January 20,
2012 at 77 FR 3038.
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 ERISA does not relieve a fiduciary or other
party in interest from certain other provisions of ERISA, including any
prohibited transaction provisions to which the exemption does not apply
and the general fiduciary responsibility provisions of section 404 of
ERISA, 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 ERISA;
(2) In accordance with section 408(a) of ERISA and/or section
4975(c)(2) of the Code, the Department makes the following
determinations:
(a) The exemption is administratively feasible;
(b) The exemption is in the interests of a Participant's or
Spouse's IRA; and
(c) The exemption is protective of the rights of a Participant's or
Spouse's IRA;
(3) The exemption is supplemental to, and not in derogation of, any
other provisions of ERISA, 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 availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describe all material terms of the transaction
which is the subject of the exemption.
Accordingly, the following exemption is granted under the authority
of section 408(a) of ERISA 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).
Exemption
Section I. Covered Transactions Involving IRAS Subject to Title I and
Title II of ERISA
The restrictions of section 406(a)(1)(A) and (D) 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 (D) of the Code,\6\ shall not
apply, effective January 1, 2012, to:
---------------------------------------------------------------------------
\6\ For purposes of this exemption, references to the provisions
of Title I of the Act, unless otherwise specified, refer also to the
corresponding provisions of the Code.
---------------------------------------------------------------------------
(a) The direct or indirect acquisition by a Participant's IRA of an
interest in a Medallion Fund through such IRA's acquisition of an
interest in a New Medallion Vehicle;
(b) The acquisition of an additional interest by a Participant's
IRA in a New Medallion Vehicle; and
(c) The redemption of all or a portion of a Participant's IRA's
interest in a New Medallion Vehicle.
This exemption is subject to the general conditions set forth below
in Section III.
Section II. Covered Transactions Involving IRAs Subject to Title II of
ERISA Only
The sanctions resulting from the application of section 4975 of the
Code, by reason of section 4975(c)(1)(A) and (D) of the Code, shall not
apply, effective January 1, 2012, to: \7\
---------------------------------------------------------------------------
\7\ Pursuant to 29 CFR 2510.3-2(d), the Spouses' IRAs are not
within the jurisdiction of Title I of the Act. However, there is
jurisdiction under Title II of the Act pursuant to section 4975 of
the Code.
---------------------------------------------------------------------------
(a) The direct or indirect acquisition by a Spouse's IRA of an
interest in a Medallion Fund through such IRA's acquisition of an
interest in a New Medallion Vehicle;
(b) The acquisition of an additional interest by a Spouse's IRA in
a New Medallion Vehicle; and
(c) The redemption of all or a portion of a Spouse's IRA's interest
in a New Medallion Vehicle.
This exemption is subject to the general conditions set forth below
in Section III.
Section III. General Conditions
(a) An IRA's acquisition of an interest in a New Medallion Vehicle
is made at the specific direction of an IRA Holder.
(b) Renaissance renders no investment advice (within the meaning of
29 CFR 2510.3-21(c)) to IRA Holders concerning a potential acquisition
of an interest in a New Medallion Vehicle and does not engage in
marketing activities or offer employment-related incentives of any kind
intended to cause IRA Holders to consider such acquisition.
(c) An interest in a New Medallion Vehicle is only available to IRA
Holders who satisfy the securities law and other regulatory-based
investor qualifications applicable to all investors in such New
Medallion Vehicle.
(d) No commissions, sales charges, or other fees or profit
participations in the form of performance allocations or otherwise,
direct or indirect, are assessed against an IRA in connection with its
acquisition and holding of an interest in a New Medallion Vehicle.
(e) An IRA pays no more and receives no less for its particular
interest in any of the New Medallion Vehicles than
[[Page 23763]]
they would in an arm's length transaction with an unrelated party.
(f) An IRA's interest in a New Medallion Vehicle is redeemable, in
whole or in part, without the payment of any redemption fee or penalty,
no less frequently than on a quarterly basis upon no less than 10 days
advance written notice, except in the case of New Kaleidoscope, for
which 45 days' notice is required.
(g) An acquisition or redemption of an IRA's interest in a New
Medallion Vehicle is made for fair market value, determined as follows:
(1) Equity securities are valued at their last reported sale price
or official closing price on the market on which such securities
primarily trade using sources independent of Renaissance and the
issuer. If no sale of such equity security was reported on that date,
the market value will be the last reported sale price on the most
recent date for which a price is available, and will reflect a discount
if such date occurred more than 30 days before.
(2) Fixed income securities are valued at the ``bid'' price of such
securities at the close of business on the relevant valuation date.
These prices are determined (i) where available, on the basis of prices
provided by independent pricing services that determine valuations
based on market transactions for comparable securities; and (ii) if
independent pricing services are not available, on the basis of quotes
obtained from multiple independent providers that are either U.S.-
registered or foreign broker-dealers, which are registered and subject
to the laws of their respective jurisdiction, or banks.
(3) Options are valued at the mean between the current independent
``bid'' price and the current independent ``asked'' price or, where
such prices are not available, are valued at their fair value in
accordance with Fair Value Pricing Practices by the Renaissance
Valuation Committee, which utilizes a set of defined rules and an
independent review process.
(4) If current market quotations are not readily available for any
investments, such investments are valued at their fair value by the
Renaissance Valuation Committee in accordance with Fair Value Pricing
Practices.
(h) Redemption of an IRA's interest in a New Medallion Vehicle, in
whole or in part, is made in cash.
(i) In the event that a redemption of any portion of an interest in
a New Medallion Vehicle held by an IRA becomes necessary as the result
of a reduction of the Investment Allocation applicable to a
Participant, then, at an IRA Holder's election, a redemption may first
be made of such IRA Holder's taxable investments (if any) prior to his
or her IRA's interest in a New Medallion Vehicle.
(j) With respect to the investment by Participants in the New
Medallion Vehicles through IRAs, Renaissance acknowledges that such
investments may constitute investments by a ``pension plan'' within the
meaning of section 3(2) of the Act, and the Applicant represents that,
with respect to such investments, it will comply with all applicable
requirements of Title I of the Act.
(k) Renaissance does not use the fact of IRAs' investments in the
Funds for any marketing activities or publicity materials for the
Funds.
(l) In advance of the initial investment by an IRA in a New
Medallion Vehicle, the IRA Holder receives:
(1) A copy of the proposed exemption and the final exemption,
following the publication of the final exemption in the Federal
Register;
(2) A private offering memorandum (with all related exhibits)
describing the relevant investment vehicles, including its investment
objectives, risks, conflicts, operating expenses and redemption and
valuation policies, and any IRA Holder whose IRA owns an interest in a
New Medallion Vehicle receives the same disclosures and information
provided to other investors with respect to the Fund in which he or she
invests; and
(3) Following receipt of the information described in (1) and (2),
above, an IRA Holder will receive all reasonably available relevant
information as such IRA Holder may request.
(m) On an on-going basis, Renaissance provides each IRA Holder
whose IRA owns an interest in a New Medallion Vehicle with the
following information:
(1) Unaudited performance reports at the end of each month; and
(2) Audited annual financial statements following the end of each
calendar year.
(n) Prior to the acquisition by an IRA of an interest in a New
Medallion Vehicle or each Medallion Master Fund, other New Medallion
Vehicle, or New RIEF/RIFF in which, or through which, a New Medallion
Vehicle invests, Renaissance or the applicable New Medallion Vehicle
manager (the New Medallion Vehicle Manager), with respect to any such
acquisition by an IRA:
(1) Agrees to submit to the jurisdiction of the federal and state
courts located in the State of New York;
(2) Agrees to appoint an agent for service of process for the New
Medallion Vehicle, and any other Fund described in this section, in the
United States (the Process Agent);
(3) Consents to service of process on the Process Agent; and
(4) Agrees that any enforcement by an IRA Holder of his or her
rights pursuant to this exemption will, at the option of the IRA
Holder, occur exclusively in the United States courts.
(o) Renaissance maintains or causes to be maintained for a period
of six years from the date of any covered transaction such records as
are necessary to enable the persons described in paragraph (p)(1) below
to determine whether the conditions of this proposed exemption, if
granted, have been met, provided that (1) a separate prohibited
transaction will not be considered to have occurred if, due to
circumstances beyond the control of Renaissance, the records are lost
or destroyed prior to the end of the six-year period, and (2) no party
in interest or disqualified person other than Renaissance 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 by
paragraph (p)(1) below; and
(p)(1) Except as provided below in paragraph (p)(2), and
notwithstanding any provisions of subsections (a)(2) and (b) of section
504 of the Act, the records referred to above in paragraph (o) 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, the Commodity Futures Trading
Commission (CFTC), or the U.S. Securities and Exchange Commission
(SEC), and
(B) Any IRA Holder or any duly authorized representative or
beneficiary of an IRA; and
(2) None of the persons described above in paragraph (p)(1)(B)
shall be authorized to examine trade secrets of Renaissance, or
commercial or financial information which is privileged or
confidential, and should Renaissance refuse to disclose information on
the basis that such information is exempt from disclosure, Renaissance
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 23764]]
Section IV. Definitions
For purposes of this exemption:
(a) The term ``Renaissance'' means Renaissance Technologies, LLC,
and its affiliates.
(b) An ``affiliate'' of a person includes--
(1) Any person directly or indirectly through one or more
intermediaries, controlling, controlled by, or under common control
with such entity (for purposes of this paragraph, the term ``control''
means the power to exercise a controlling influence over the management
or policies of a person other than an individual); and
(2) Any officer of, director of, or partner in such person.
(c) The term ``Fair Value Pricing Policies'' means the Official
Pricing Policy established in good faith by the Renaissance Valuation
Committee for valuing an instrument, which is subject to the approval
of the Renaissance Technologies LLC Board of Directors.
(d) The term ``Fund'' or ``Funds'' means, individually or
collectively, the nine privately offered U.S. and non-U.S. collective
investment vehicles managed by Renaissance, comprised almost
exclusively of assets of Renaissance and its owners and employees (the
Proprietary Funds) and the six privately offered U.S. and non-U.S.
collective investment vehicles, consisting primarily of assets of
clients of Renaissance (the non-Proprietary Funds).
(e) The term ``Investment Allocation'' means the permitted
investment allocation limit in the Medallion Funds applicable to a
Renaissance employee, which such employee and his or her Spouse may
utilize to make investments in a Medallion FF or Kaleidoscope, or in an
applicable New Medallion Vehicle.
(f) The term ``IRA'' means an ``individual retirement account'' as
defined under section 408(a) of the Code or a ``Roth IRA'' as defined
under section 408A of the Code that is beneficially owned by an IRA
Holder.
(g) The term ``IRA Holder'' means a Participant, or the Spouse of a
Participant, who is eligible to invest in a New Medallion Vehicle
through his or her IRA.
(h) The term ``Kaleidoscope'' means Renaissance Kaleidoscope Fund
LLC, a Delaware limited liability company established by Renaissance to
facilitate the investment by employees of Renaissance who are not
Accredited Investors under the Securities Act of 1933, as amended (the
1933 Act) or otherwise do not meet the financial requirements to invest
in the other Proprietary Funds.
(i) The term ``Medallion Funds'' means six of the nine Proprietary
Funds, organized in a ``master-feeder'' investment structure, comprised
of six Medallion Fund feeder funds (Medallion FFs) engaging in their
investment and trading activities only through certain master funds and
their subsidiaries (the Medallion Master Funds).
(j) The term ``New Medallion Vehicle'' or ``New Medallion
Vehicles'' means, individually or collectively, New Medallion FF, New
Medallion FF RMPRF, and New Kaleidoscope.
(k) The term ``New Kaleidoscope'' means Renaissance Kaleidoscope RF
Fund LLC, the Delaware limited liability company established by
Renaissance in order to facilitate an investment by IRA Holders who are
not ``Accredited Investors'' under the 1933 Act in New Medallion FF
RMPRF and New RIEF/RIFF, through their IRAs.
(l) The term ``New Medallion FF'' means Medallion Fund RF LP, the
Bermuda Limited Partnership that is treated as a corporation for US
Federal Income Tax purposes, established by Renaissance in order to
facilitate an investment by an IRA Holder who is a ``Qualified
Purchaser'' or ``Knowledgeable Employee'' under the Investment Company
Act of 1940, as amended (the 1940 Act) in the Medallion Master Funds,
through his or her IRA.
(m) The term ``New Medallion FF RMPRF'' means Medallion RMPRF Fund
LP, the Bermuda Limited Partnership that is treated as a corporation
for US Federal Income Tax purposes established by Renaissance in order
to facilitate the investment by IRA Holders who are neither Qualified
Purchasers nor ``Knowledgeable Employees'' as defined in the 1940 Act,
but who are Accredited Investors, in the Medallion Master Funds,
through their IRAs.
(n) The term ``New RIEF/RIFF'' means a newly organized series of
RIEF RMP LLC and a newly created Bermuda limited partnership to be
known as RIFF RF FUND LP, each of which has been established to
facilitate investments of IRAs in RIEF RMP LLC and RIFF RMP LLC.
(o) The term ``Participant'' means a person who is either an
employee or a Permitted Owner of Renaissance at the time of such
individual's investment in the New Medallion Vehicles.
(p) The term ``Permitted Owners'' means the eight individuals
permitted to invest in the Medallion Funds following the termination of
their Renaissance employment, comprised of three Renaissance
``founders,'' and five former employees who are current owners of
Renaissance.
(q) The term ``Renaissance Valuation Committee,'' or ``RVC,'' means
the committee, established by Renaissance in 2008, that oversees and
monitors the valuation process, and establishes the methods of, and
procedures for, valuing various instruments traded by Renaissance,
composed of high-level Renaissance employees who also may be Fund
investors.
(r) The term ``Spouse'' means a person who is (1) married to a
Participant, or (2) to the extent not prohibited by applicable law, in
a civil union or similar marriage-equivalent institution established
pursuant to State law of the State where the Participant resides (or
otherwise recognized by the State where the Participant resides) with a
Participant.
Section IV. Effective Date
This exemption is effective as of January 1, 2012.
Signed at Washington, DC, this 13th day of April 2012.
Lyssa Hall,
Acting Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. 2012-9496 Filed 4-19-12; 8:45 am]
BILLING CODE 4510-29-P
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