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EBSA Notices

Exemptions from Certain Prohibited Transaction Restrictions   [3/29/2013]
[PDF]
Federal Register, Volume 78 Issue 61 (Friday, March 29, 2013)
[Federal Register Volume 78, Number 61 (Friday, March 29, 2013)]
[Notices]
[Pages 19315-19326]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-07380]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Exemptions from Certain Prohibited Transaction Restrictions

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). 
This notice includes the following: 2013-01, UBS Financial Services 
Inc., D-11610; 2013-02, Atlas Energy, Inc. Employee Stock Ownership 
Plan, D-11664; 2013-03, Central Pacific Bank 401(k) Retirement and 
Savings Plan, D-11666; 2013-04, Silchester International Investors LLP, 
D-11671; 2013-05, EquiLend Holdings LLC, D-11724; and, 2013-06, Coca-
Cola Company and Red Re, Inc., L-11738.

[[Page 19316]]


SUPPLEMENTARY INFORMATION: 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 CFR Part 
2570, Subpart B (76 FR 66637, 66644, October 27, 2011) \1\ and based 
upon the entire record, the Department makes the following findings:
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    \1\ The Department has considered exemption applications 
received prior to December 27, 2011 under the exemption procedures 
set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 
10, 1990).
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    (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.

UBS Financial Services Inc. Located in Weehawken, New Jersey

[Prohibited Transaction Exemption 2013-01; Exemption Application No. D-
11610]

Exemption

Section I: Covered Transactions
    The sanctions resulting from the application of Code section 4975, 
by reason of Code section 4975(c)(1)(A) and (D)-(E), shall not apply, 
effective January 4, 2002, until December 9, 2005, to (1) principal 
trades by UBS Financial Services Inc. (the Applicant) with certain 
plans, subject to Code section 4975, but not subject to Title I of 
ERISA (the IRAs), which resulted in the IRAs purchasing or selling 
securities from the Applicant (collectively, the Transactions); and (2) 
compensation paid by the IRAs to the Applicant in connection with the 
Transactions (the Transaction Compensation).
    This exemption is subject to the conditions set forth below in 
Sections II and III.
Section II: Specific Conditions
    (a) The Transactions and the Transaction Compensation were 
corrected (1) pursuant to the requirements set forth in the 
Department's Voluntary Fiduciary Correction Program (the VFC Program) 
\2\ and (2) in a manner consistent with those transactions described in 
the Applicant's VFC Program application, dated March 5, 2010 (the VFC 
Program Application), that were substantially similar to the 
Transactions but that involved plans described in Code section 
4975(e)(1) and subject to Title I of ERISA (the Qualified Plan 
Transactions).
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    \2\ 71 FR 20262 (April 19, 2006).
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    (b) The Applicant received a ``no-action letter'' from the 
Department in connection with the Qualified Plan Transactions described 
in the VFC Program Application.
    (c) An independent fiduciary confirmed that the methods utilized to 
correct the Transactions and Transaction Compensation were sufficient 
to return each affected IRA to at least the position that it would have 
been in had the Transactions and Transaction Compensation not occurred, 
and that the correction methods were properly applied to the 
Transactions and Transaction Compensation based on a review of a 
representative sample of the corrections, selected at random by the 
independent fiduciary.
    For purposes of this exemption, a fiduciary is ``independent'' if 
it is independent of and unrelated to Applicant and its affiliates. In 
this regard, a fiduciary will not be deemed independent of Applicant 
and its affiliates if: (1) such fiduciary directly or indirectly 
controls, is controlled by, or is under common control with Applicant 
or its affiliates, (2) such fiduciary directly or indirectly receives 
any compensation or other consideration in connection with any 
transaction described in this exemption, except that it may receive 
compensation for acting as an independent fiduciary from Applicant in 
connection with the transactions described herein, if the amount or 
payment of such compensation is not contingent upon, or in any way 
affected by such fiduciary's decision; or (3) the annual gross revenue 
received by the fiduciary and its affiliates, in any fiscal year, from 
Applicant or its affiliates exceeds one percent (1%) of the annual 
gross revenue from all sources (for federal income tax purposes) of the 
fiduciary and its affiliates for their prior tax year.
    (d) The terms of the Transactions and the Transaction Compensation 
were at least as favorable to the IRAs as the terms generally available 
in arm's-length transactions between unrelated parties.
    (e) The Transactions and Transaction Compensation were not part of 
an agreement, arrangement or understanding designed to benefit a 
disqualified person, as defined in Code section 4975(e)(2).
    (f) The Applicant did not take advantage of the relief provided by 
the VFC Program and Prohibited Transaction Exemption 2002-51 \3\ (PTE 
2002-51) for three (3) years prior to the date of the Applicant's 
submission of the VFC Program Application.
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    \3\ 67 FR 70623 (Nov. 25, 2002), as amended, 71 FR 20135 (April 
19, 2006).
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Section III: General Conditions
    (a) The Applicant maintains, or causes to be maintained, for a 
period of six (6) years from the date of any Transaction such records 
as are necessary to enable the persons described in Section III(b)(1) 
to determine whether the conditions of this exemption have been met, 
except that:
    (1) A separate prohibited transaction shall not be considered to 
have occurred if, due to circumstances beyond the control of Applicant, 
the records are lost or destroyed prior to the end of the six-year 
period; and
    (2) No disqualified person with respect to an IRA, other than 
Applicant, shall be subject to excise taxes imposed by Code section 
4975, if such records are not maintained, or are not available for 
examination, as required by Section III(b)(1).
    (b)(1) Except as provided in Section III(b)(2), the records 
referred to in Section III(a) are unconditionally available at their 
customary location for examination during normal business hours by:

[[Page 19317]]

    (A) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service, or the Securities and 
Exchange Commission;
    (B) Any fiduciary of any IRA that engaged in a Transaction, or any 
duly authorized employee or representative of such fiduciary; or
    (C) Any owner or beneficiary of an IRA that engaged in a 
Transaction or a representative of such owner or beneficiary.
    (2) None of the persons described in Sections III(b)(1)(B) and (C) 
shall be authorized to examine trade secrets of Applicant, or 
commercial or financial information which is privileged or 
confidential.
    (3) Should Applicant refuse to disclose information on the basis 
that such information is exempt from disclosure, Applicant shall, by 
the close of the thirtieth (30th) day following the request, provide a 
written notice advising that person of the reasons for the refusal and 
that the Department may request such information.
    Effective Date: This exemption is effective from January 4, 2002 
until December 9, 2005.
    The Department invited all interested persons to submit written 
comments and/or requests for a public hearing with respect to the 
notice of proposed exemption on or before December 16, 2012. During the 
comment period, the Department received one (1) comment on the proposed 
exemption. The sole comment was submitted by the Applicant. The 
Department received no hearing requests during the comment period.
    The Applicant commented that the compensation test for the 
independent fiduciary that is set forth in Section II(c) of the 
proposed exemption did not cover compensation received by the 
independent fiduciary and its ``affiliates'', while item 10 of the 
facts and representations set forth with the proposed exemption 
included the term ``affiliates'' in its discussion of the independent 
fiduciary's compensation. As a result, the Applicant requests that the 
term ``affiliates'' be inserted into Section II(c) of the exemption for 
purposes of clarity. The Department concurs, and, accordingly, the 
final exemption has been amended to include ``affiliates'' in Section 
II(c) of the exemption.
    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 November 16, 2012, at 77 
FR 68835.

FOR FURTHER INFORMATION CONTACT: Mr. Brian Shiker of the Department, 
telephone (202) 693-8552. (This is not a toll-free number.)

Atlas Energy, Inc. Employee Stock Ownership Plan (the Plan) Located in 
Philadelphia, Pennsylvania

[Prohibited Transaction Exemption 2013-02; Exemption Application No. D-
11664]

Exemption

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(D)-(E), 
406(a)(2), 406(b)(1)-(2) and 407(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) and 4975(c)(1)(D)-(E) of the Code, shall not 
apply, as of February 17, 2011, to the past acquisition and holding of 
certain units of Atlas Pipeline Holdings, L.P. (the AHD Units) by the 
Plan in connection with a merger (the Merger) of Arkham Corporation 
with and into Atlas Energy, Inc. (the Company), a party in interest 
with respect to the Plan, provided that the following conditions were 
satisfied:
    (a) The Plan's acquisition and holding of the AHD Units in 
connection with the Merger occurred as a result of an independent act 
of the Company as a corporate entity;
    (b) All shareholders of the Company, including the Plan, were 
treated in a like manner with respect to all aspects of the Merger;
    (c) An independent fiduciary determined that the consideration 
received by the Plan pursuant to the Merger was not less than fair 
market value and that the overall terms and conditions of the Merger 
were fair to the Plan;
    (d) All shareholders of the Company, including the Plan, received 
the same proportionate number of AHD Units based upon the number of 
shares of Company stock held by such shareholders;
    (e) Pursuant to the terms of the Plan and in connection with the 
Merger, each participant was entitled to direct the independent 
fiduciary as to how to vote the Company shares allocated to his or her 
account; and
    (f) No commissions or other fees associated with the Merger were 
paid by the Plan except for brokerage charges and fees with respect to 
the subsequent sale of the AHD Units, which were paid by the Plan to a 
person who is not affiliated with any Plan fiduciary.
    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 December 28, 2012, at 77 
FR 76770.
    Effective Date: This exemption will be effective February 17, 2011.

FOR FURTHER INFORMATION CONTACT: Eric A. Raps of the Department, 
telephone (202) 693-8532. (This is not a toll-free number).

Central Pacific Bank 401(k) Retirement and Savings Plan (the Plan) 
Located in Honolulu, HI

[Prohibited Transaction Exemption 2013-03; Exemption Application No. D-
11666]

Exemption

Section I: Transactions
    Effective for the period beginning April 11, 2011 and ending May 6, 
2011, the restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 
406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(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) and 4975(c)(1)(E) of the Code,\4\ 
shall not apply:
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    \4\ 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 of certain subscription right(s)(the Right 
or Rights) by the individually-directed account(s) (the Account or 
Accounts) of certain participant(s) in the Plan in connection with an 
offering (the Offering) of shares of common stock (the Stock) of 
Central Pacific Financial Corporation (CPFC) by CPFC, a party in 
interest with respect to the Plan; and
    (b) To the holding of the Rights received by the Accounts during 
the subscription period of the Offering; provided that the conditions, 
as set forth in Section II of this exemption, were satisfied for the 
duration of the acquisition and holding.
Section II: Conditions
    The relief provided in this exemption is conditioned upon adherence 
to the material facts and representations described, herein, and as set 
forth in the application file, and upon compliance with the conditions, 
as set forth in this exemption.
    (a) The receipt of the Rights by the Accounts occurred in 
connection with the Offering, and the Rights were made available by 
CPFC to all shareholders of the Stock of CPFC, including the Accounts;
    (b) The acquisition of the Rights by the Accounts resulted from an 
independent corporate act of CPFC;
    (c) Each shareholder of the Stock, including each of the Accounts, 
received the same proportionate number of Rights, and this 
proportionate

[[Page 19318]]

number of Rights was based on the number of shares of Stock held by 
each such shareholder;
    (d) The Rights were acquired pursuant to, and in accordance with, 
provisions under the Plan for individually-directed investment of the 
Accounts by the individual participants in the Plan, all or a portion 
of whose Accounts in the Plan held the Stock (the Invested 
Participant(s));
    (e) The decision with regard to the holding and disposition of the 
Rights by an Account was made by the Invested Participant whose Account 
received the Rights;
    (f) If any of the Invested Participants failed to give instructions 
as to the exercise of the Rights received in the Offering, such Rights 
were sold in blind transactions on the New York Stock Exchange and the 
proceeds from such sales were distributed pro-rata to the Accounts in 
the Plan of such Invested Participants;
    (g) No brokerage fees, no commissions, and no fees or expenses were 
paid by the Plan or by the Accounts to any related broker in connection 
with the sale of any of the Rights or in connection with the exercise 
of any of the Rights, and no brokerage fees, no commissions, no 
subscription fees, and no other charges were paid by the Plan or by the 
Accounts with respect to the acquisition and holding of the Stock; and
    (h) Based on the difference ($1.13) between the average proceeds 
per Right ($6.05) received by other holders who sold Rights during the 
Offering and the average proceeds per Right ($4.92) received by 
Invested Participants whose Accounts sold Rights, between April 26, 
2011 and May 3, 2011, CPFC will make a corrective payment to the Plan 
in the amount of $30,618.48 ($1.13 x 27,096 Rights sold), plus a lost 
earnings component on such amount, calculated at a 2.83% annual rate of 
interest for the period from May 6, 2011, to the date of the grant of 
this exemption, and will distribute such corrective payment, and the 
lost earnings component, pro rata to the Accounts of each of the 186 
Invested Participants whose Accounts in the Plan sold the 27,096 
Rights.
    Effective Date: This exemption is effective for the period 
beginning on April 11, 2011, the commencement date of the Offering, and 
ending on May 6, 2011, the close of the Offering.
    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 November 16, 2012, at 77 
FR 68838.

FOR FURTHER INFORMATION CONTACT: Ms. Angelena C. Le Blanc of the 
Department, telephone (202) 693-8551. (This is not a toll-free number.)

Silchester International Investors LLP (Silchester or the Applicant) 
Located in London, England

[Prohibited Transaction Exemption 2013-04; Exemption Application No. D-
11671]

EXEMPTION

Section I. Covered Transactions
    The restrictions of section 406(a)(1)(A), 406(a)(1)(D), and section 
406(b)(2) of ERISA, and the sanctions resulting from the application of 
section 4975 of the Code, by reason of section 4975(c)(1)(A) and 
section 4975(c)(1)(D) of the Code, shall not apply to the cross trading 
of securities (the cross trades, or the transactions) between various 
Accounts managed by Silchester, where at least one of the Accounts 
involved in the cross trade is an ERISA Account, if the conditions set 
forth in Section II have been met.
Section II. Conditions
    (a) Each cross trade is a purchase or sale of securities by an 
ERISA Account for no consideration other than cash payment against 
prompt delivery of a security for which market quotations are readily 
available.
    (b) A cross trade may only be effected on the first business date 
of the month.
    (c) Each cross trade is effected at a price equal to the security's 
``independent current market price'' (within the meaning of section 
270.17a-7(b) of Title 17, Code of Federal Regulations) on the business 
date that immediately precedes the first business date of the month on 
which the cross trade occurs.
    (d) No brokerage commission, fees or other remuneration is paid in 
connection with a cross trade involving an ERISA Account. 
Notwithstanding the above, customary transfer fees or brokerage fees 
dictated by local market restrictions may be applicable, the fact of 
which is disclosed in advance to an Independent Fiduciary. In the event 
local market restrictions require the use of a broker-dealer, and only 
in such event, broker-dealers that are not Affiliates of Silchester or 
the trustee of any Account that is a commingled fund will be used to 
execute the transaction, and no more than reasonable compensation will 
be paid to such unaffiliated broker-dealer to execute the cross trade. 
In any event, neither Silchester nor the trustee of any ERISA Account 
will receive a commission, fee, or other remuneration directly or 
indirectly from an ERISA Account in connection with a cross trade 
involving an ERISA Account (provided that the trustee of an Account may 
be expected to receive remuneration on foreign exchange transactions in 
the ordinary course that would be received irrespective of whether the 
trade was a cross trade or if the securities were sold in the market).
    (e) Prior to engaging in any cross trade for an ERISA Account or at 
the inception of any new relationship between Silchester and a Plan, 
Silchester shall deliver to the Independent Fiduciary (i) a written 
disclosure regarding the conditions under which cross trades may take 
place (which disclosure will be separate from any other agreement or 
disclosure in respect of the ERISA Account, including the Policies and 
Procedures); (ii) a written copy of the Policies and Procedures; and 
(iii) written instructions (via email correspondence or otherwise) 
directing the Independent Fiduciary to give appropriate consideration 
to: (A) The responsibilities, obligations and duties imposed upon 
fiduciaries by Part 4 of Title I of the Act, (B) whether the terms of 
the cross trades are fair to the Plan and its participants and 
beneficiaries, and to the ERISA Account, and are comparable to, and no 
less favorable than, terms obtainable at arm's-length between 
unaffiliated parties, and (C) whether the cross trades are in the best 
interest of the Plan and its participants and beneficiaries and of the 
ERISA Account. The receipt of the instructions described in clause 
(iii) must be acknowledged in writing (via email correspondence or 
otherwise) by the Independent Fiduciary.
    (f) Prior to engaging in any cross trade for an ERISA Account, 
Silchester must receive authorization from the Independent Fiduciary of 
such ERISA Account to engage in cross trades involving the ERISA 
Account at Silchester's discretion, which authorization must be 
provided in a written document in advance of any such cross trades, and 
must be separate from any other written agreement or disclosure between 
Silchester and the ERISA Account or Plan, as applicable. Such 
authorization will only be effective if the Independent Fiduciary has 
already received the disclosures described in paragraph (e) above.
    (g) The Independent Fiduciary shall represent, in its authorization 
of participation for an ERISA Account, that it has the requisite 
knowledge and experience in financial and business matters to be 
capable of evaluating the merits and risks of investing in the ERISA 
Account and to be capable of

[[Page 19319]]

protecting the Plan's interests in connection with the investment or 
that it has obtained expert advice that allows it to adequately 
evaluate its investment in the ERISA Account. If such Independent 
Fiduciary cannot make the foregoing representations, then the 
authorization described herein will not be effective.
    (h) Both on an annual basis and each time Silchester provides 
notice to the Independent Fiduciary in writing that a new fund or new 
Separately Managed Account may engage in cross trades, a designated 
representative of Silchester will advise each such Independent 
Fiduciary in writing that it can revoke the authorization described in 
paragraph (f) at any time in writing by withdrawing from the ERISA 
Account (or in the case of an ERISA Account that is a Separately 
Managed Account, by written notice to the Applicant).
    (i) On a quarterly basis, Silchester will provide (or cause to be 
provided) to each Independent Fiduciary a written report detailing all 
cross trades in which the ERISA Account participated during such 
quarter, including the following information, as applicable: (i) The 
identity of each security bought or sold; (ii) the number of shares or 
units traded; (iii) the Accounts involved in the cross trade; and (iv) 
the trade price and the total U.S. dollar value of each security 
involved in the cross trade and the method used to establish the trade 
price. The quarterly report will be provided to the Independent 
Fiduciary prior to the end of the next following quarter.
    (j) Silchester will not base its fee schedule on a Plan's consent 
to cross trading, nor is any other service (other than the investment 
opportunities and cost savings available through a cross trade) 
conditioned on the Plan's consent.
    (k) Silchester adopts, and cross trades will be effected in 
accordance with, the Policies and Procedures, which will be made 
further available to an Independent Fiduciary upon request.
    (l) A member of Silchester's compliance group reviews cross trades 
within 10 business days of the cross trades to confirm compliance with 
the Policies and Procedures and report to the compliance group 
regarding such member's findings, and Silchester designates an 
individual member of its compliance group to be responsible for 
annually reviewing a sampling of each ERISA Account's cross trades that 
is sufficient in size and nature to determine compliance with the 
Policies and Procedures described herein with respect to each such 
ERISA Account and, following such review, such individual shall issue 
an annual written report no later than 90 calendar days following the 
end of the ERISA Account's fiscal year to which it relates, signed 
under penalty of perjury, to each Independent Fiduciary describing the 
actions performed during the course of the review, the level of such 
compliance, and any specific instances of non-compliance.
    (m) An Independent Auditor conducts an Exemption Audit on an annual 
basis, the audit period for which will be the ERISA Account's fiscal 
year. Following completion of the Exemption Audit, the Independent 
Auditor shall issue a written report to Silchester (with copies thereof 
delivered to each Independent Fiduciary) presenting its specific 
findings regarding the level of compliance with: (1) The Policies and 
Procedures and (2) the objective requirements of the exemption. The 
written report shall also contain the Independent Auditor's overall 
opinion regarding whether Silchester's program complied with: (1) the 
Policies and Procedures and (2) the objective requirements of the 
exemption. The Exemption Audit and the written report must be completed 
within six months following the end of the fiscal year to which the 
Exemption Audit relates.
    (n) The ERISA Account has at least U.S. $100 million in assets.
    (o) Each underlying investor in a commingled fund ERISA Account and 
each ERISA Account that is a Separately Managed Account shall represent 
in writing (which representation is deemed to be repeated upon each 
subsequent investment in such ERISA Account) that it is a ``qualified 
purchaser,'' as that term is defined in section 2(a)(51)(A) of the 
Investment Company Act of 1940, as amended.
    (p) Silchester will conduct cross trades involving an ERISA Account 
only when triggered by contributions or withdrawals initiated by 
investors in such ERISA Account where:
    (1) Contributions from one Account can be matched against 
withdrawals from another Account and the confirmed net contributions/
withdrawals (as the case may be) from the ERISA Account exceed U.S. $10 
million or 10 basis points or 0.1% of the value of the ERISA Account 
(whichever is less); and
    (2) The ERISA Account's forecasted residual cash balance when 
adjusted for month-end cash flows after the cross trade will be within 
50 basis points or 0.5% of the cash weightings of each such other 
Account.
    (q) Silchester will not include an ERISA Account in a cross trade 
during any period in which the weightings of 14 or more securities in 
the ERISA Account individually differ by more than 50 basis points from 
the weightings of the same securities in the other Accounts; and none 
of the circumstances under which different weightings across the funds 
may arise or increase will be the result of any discretionary or 
opportunistic actions by Silchester.
    (r) The U.S. dollar amount determined for the cross trade will be 
prorated across all of the securities eligible for the cross trade in 
each of the Accounts, based on each Account's relative weighting of 
each security included in the cross trade, subject to the restrictions 
and/or exclusions set forth in the Policies and Procedures.
    (s) No cross trades will be conducted between an ERISA Account and 
any Account in which Silchester and/or its Affiliates (together or 
separately) own 10% or more of the outstanding units in such Account in 
the aggregate.
    (t) Silchester maintains or causes to be maintained for a period of 
six years from the date of any cross trade such records as are 
necessary to enable the persons described in paragraph (u)(i) below to 
determine whether the conditions of this exemption have been met, 
provided that (i) a separate prohibited transaction will not be 
considered to have occurred if, due to circumstances beyond the control 
of Silchester, the records are lost or destroyed prior to the end of 
the six-year period, and (ii) no party in interest other than 
Silchester shall be subject to a civil penalty that may be assessed 
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 (u)(i) below.
    (u)(i) Except as provided below in paragraph (u)(ii), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to above in paragraph (t) are 
unconditionally available at their customary location for examination 
during normal business hours by:
    (A) Any duly authorized employee or representative of the 
Department,
    (B) Any Independent Fiduciary, Plan investing in an Account, or 
such Plan's designated representative, and
    (C) The Independent Auditor; and
    (ii) None of the persons described above in paragraphs (u)(i)(B)-
(C) shall be authorized to examine trade secrets of Silchester, or 
commercial or financial information which is privileged or 
confidential, and should Silchester refuse to disclose information on 
the basis that such information is exempt from disclosure, Silchester 
shall, by the

[[Page 19320]]

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 III. Definitions
    (a) The term ``Account'' is a group trust, a commingled fund, or a 
Separately Managed Account, holding assets over which the Applicant has 
discretion.
    (b) The term ``Affiliate'' of a person includes:
    (1) Any person directly or indirectly, through one or more 
intermediaries, controlling, controlled by, or under common control 
with, the person;
    (2) Any officer, director, employee, relative, or partner of the 
person; or
    (3) Any corporation or partnership of which such person is an 
officer.
    (c) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (d) The term ``ERISA Account'' means an Account the assets of which 
are ``plan assets'' within the meaning of section 3(42) of the Act and 
29 CFR 2510.3-101, as amended.
    (e) The term ``Exemption Audit'' means an engagement with an 
Independent Auditor that consists of the following:
    (1) A review of the Policies and Procedures for consistency with 
each of the objective requirements of this exemption;
    (2) A test of a sample of the ERISA Account's cross trades during 
the audit period that is sufficient in size and nature to afford the 
Independent Auditor a reasonable basis:
    (A) To make specific findings regarding whether the ERISA Account's 
cross trades are in compliance with: (i) The Policies and Procedures; 
and (ii) the objective requirements of this exemption. The findings 
will specifically address the pro rata calculation for a cross trade 
and will ensure that the exclusions set forth in the Policies and 
Procedures have been applied on a reasonable and consistent basis; and
    (B) To render an overall opinion regarding the level of compliance 
with the Policies and Procedures and the objective requirements of the 
exemption.
    (3) Issuance of a written report describing the actions performed 
by the Independent Auditor during the course of its review in 
connection with the Exemption Audit and the Independent Auditor's 
findings with respect thereto.
    (f) The term ``Independent Auditor'' means an auditor with 
appropriate technical training or experience and proficiency with 
ERISA's fiduciary responsibility provisions, capable of issuing the 
written report required in connection with the Exemption Audit, that 
derives less than 5% of its annual gross revenue from Silchester, and 
so represents the foregoing in writing.
    (g) The term ``Independent Fiduciary'' means a plan fiduciary for 
each Plan investor in a commingled fund ERISA Account or, in the case 
of an ERISA Account that is a Separately Managed Account, the plan 
fiduciary for such Separately Managed Account, provided that in either 
case such plan fiduciary is not Silchester or any Affiliate of 
Silchester and has no interest in the subject transactions beyond the 
interest of such Plan.
    (h) The term ``Plan'' means an employee benefit plan described in 
section 3(3) of the Act or a plan described in section 4975(e)(1) of 
the Code.
    (i) The term ``Policies and Procedures'' means written cross 
trading policies and procedures adopted by Silchester that are designed 
to assure compliance with the conditions for the exemption, and provide 
clear guidelines regarding how and under what circumstances cross 
trades will be effected by Silchester on behalf of an ERISA Account, 
including (but not limited to) descriptions of (i) triggering 
transactions for identifying when a cross trade is available, (ii) 
cross trade procedures that must be followed when implementing a cross 
trade, (iii) pricing of securities included in a cross trade, (iv) 
reporting of cross trade transactions and related information, and the 
(v) Exemption Audit.
    (j) The term ``Separately Managed Account'' means a separately 
managed account over which the Applicant has discretion and either: (1) 
Such separately managed account is not subject to Title I of the Act or 
section 4975 of the Code or (2) the Plan whose assets are held in the 
separately managed account has assets of at least U.S. $100 million, 
provided that if the assets of a Plan whose assets are held in the 
separately managed account are invested in a master trust containing 
the assets of Plans maintained by employers in the same controlled 
group, then such master trust has assets of at least U.S. $100 million.
Written Comments
    The Department invited all interested persons to submit written 
comments and/or requests for a public hearing with respect to the 
notice of proposed exemption on or before February 6, 2013. During the 
comment period, the Department received one written comment from the 
Applicant concerning an update to the procedure applicable to Plans 
withdrawing from the Group Trust that is described in the Summary of 
Facts and Representations (the Summary) in the notice of proposed 
exemption. The Applicant's comment and the Department's response 
thereto are described below. The Department received no other written 
comments and no hearing requests.
Applicant's Comment
    The Applicant's comment concerned an update to the procedure for a 
Plan's withdrawal from the Group Trust, as described in the Summary. 
Section II(h) of the proposed exemption provides that, ``[b]oth on an 
annual basis and each time Silchester provides notice to the 
Independent Fiduciary in writing that a new fund or new Separately 
Managed Account may engage in cross trades, a designated representative 
of Silchester will advise each such Independent Fiduciary in writing 
that it can revoke the authorization [for Silchester to engage in cross 
trades on behalf of an ERISA Account] at any time in writing by 
withdrawing from the ERISA Account * * * .'' In Representation 28 of 
the Summary, the Applicant states that ``the Group Trust's withdrawal 
provisions are described in the Group Trust's Confidential Private 
Offering Memorandum and delineated in the Group Trust Agreement * * * 
[which] provides that a Plan may withdraw all or part of its units in 
the Group Trust on the first business day of each calendar month 
(referred to as a dealing day) upon six business days' prior written 
notice.''
    According to the Applicant, Silchester intends to update the Group 
Trust Agreement and the Confidential Private Offering Memorandum, which 
update will include an amendment to the notice period required for an 
ERISA Account's withdrawal from six business days to ten business days. 
The Applicant notes that, in accordance with Silchester's standard 
practice and the Group Trust Agreement, ERISA Accounts participating in 
the Group Trust will be notified 60 days in advance of such amendment 
to the Group Trust Agreement becoming effective. The Department takes 
note of the amendment to the Group Trust Agreement and of the 
corresponding modification to Representation 28.
    After giving full consideration to the entire record, including the 
written comment, the Department has decided to grant the exemption, as 
described

[[Page 19321]]

above. The complete application file is made available for public 
inspection in the Public Disclosure 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 proposed exemption published in the Federal Register on December 
28, 2012 at 77 FR 76784.

FOR FURTHER INFORMATION CONTACT: Warren M. Blinder of the Department, 
telephone (202) 693-8553. (This is not a toll-free number.)

EquiLend Holdings LLC (EquiLend), Located in New York, New York

[Prohibited Transaction Exemption 2013-05; Exemption Application No. D-
11724]

Exemption

Section I. Sale of EquiLend Products to Plans
    The restrictions of ERISA section 406(a)(1)(A) and (D) and the 
sanctions resulting from the application of Code section 4975(a) and 
(b), by reason of Code section 4975(c)(1)(A) and (D), shall not apply, 
effective October 1, 2012, to the sale or licensing of certain data 
and/or analytical tools to a plan by EquiLend, a party in interest with 
respect to such plan.
    This exemption is subject to the following conditions:
    (a) The terms of any such sale or licensing are at least as 
favorable to the plan as the terms generally available in an arm's-
length transaction involving an unrelated party;
    (b) Any data sold/licensed to the plan will be limited to:
    (1) Current and historical data related to transactions, whether or 
not proposed or occurring on EquiLend's electronic securities lending 
platform (the Platform) or,
    (2) Data derived from current and historical data using statistical 
or computational techniques; and
    (c) Each analytical tool sold/licensed to the plan will be an 
objective statistical or computational tool designed to permit the 
evaluation of securities lending activities.
Section II. Use of Platform by Owner Lending Agent/Sale of EquiLend 
Products to Plans Represented by Owner Lending Agent/Provision of 
Securities Lending Data Involving Plans to EquiLend by Owner Lending 
Agent
    The restrictions of ERISA sections 406(a)(1)(A) and (D) and 406(b), 
FERSA section 8477(c)(2), and the sanctions resulting from the 
application of Code section 4975(a) and (b), by reason of Code section 
4975(c)(1)(A) and (D) through (F), shall not apply, effective October 
1, 2012, to: (1) The participation in the Platform by an equity owner 
of EquiLend (an Equity Owner), in its capacity as a securities lending 
agent for a plan (an Owner Lending Agent); (2) the sale or licensing of 
certain data and/or analytical tools by EquiLend to a plan for which an 
Equity Owner acts as a securities lending agent; and (3) the provision 
by an Owner Lending Agent to EquiLend of securities lending data based 
on off-Platform securities lending transactions conducted by an Owner 
Lending Agent on behalf of a plan.
    This exemption is subject to the following conditions:
    (a) In the case of participation in the Platform on behalf of a 
plan, to the extent an applicable exemption is required, the securities 
lending transactions conform to the provisions of Prohibited 
Transaction Class Exemption (PTE) 2006-16 (71 FR 63786 (Oct. 31, 2006)) 
(or its successor), and/or any applicable individual exemption;
    (b) None of the fees imposed by EquiLend for securities lending 
transactions conducted through the use of the Platform at the direction 
of an Owner Lending Agent will be charged to a plan;
    (c) Each securities lender and securities borrower participating in 
a securities lending transaction through EquiLend will be notified by 
EquiLend as to its responsibilities with respect to compliance, as 
applicable, with ERISA, the Code, and FERSA. This requirement may be 
met by including such notification in the participation, subscription 
or other user agreement required to be executed by each participant in 
EquiLend;
    (d) EquiLend will not act as a principal in any securities lending 
transaction involving plan assets;
    (e) Each Owner Lending Agent will provide prior written notice to 
its plan clients of its intention to participate in EquiLend;
    (f)(1) Except as otherwise provided in paragraph (i), the 
arrangement pursuant to which the Owner Lending Agent utilizes the 
services of EquiLend on behalf of a plan for securities lending:
    (A) Is subject to the prior written authorization of an independent 
fiduciary (an authorizing fiduciary) as defined in paragraph (b) of 
Section III). For purposes of subparagraph (f)(1), the requirement that 
the authorizing fiduciary be independent shall not apply in the case of 
an Equity Owner Plan;
    (B) May be terminated by the authorizing fiduciary, without penalty 
to the plan, within the lesser of: (i) The time negotiated for such 
notice of termination by the plan and the Owner Lending Agent, or (ii) 
five business days. Notwithstanding the foregoing, the requirement for 
prior written authorization will be deemed satisfied in the case of any 
plan for which the authorizing fiduciary has previously provided 
written authorization to the Owner Lending Agent pursuant to PTE 2006-
16 (or any predecessor or successor thereto), unless such authorizing 
fiduciary objects to participation in the Platform in writing to the 
Owner Lending Agent within 30 days following disclosure of the 
information described in paragraphs (e) and (g) of this Section to such 
authorizing fiduciary;
    (2) Except as otherwise provided in paragraph (i), each purchase or 
license of a securities lending-related product from EquiLend on behalf 
of a plan by an Owner Lending Agent:
    (A) Is subject to the prior written authorization of an authorizing 
fiduciary. For purposes of subparagraph (f)(2), the requirement for 
prior written authorization shall not apply to any purchase or 
licensing of an EquiLend securities lending-related product by an 
Equity Owner Plan if the fee or cost associated with such purchase or 
licensing is not paid by the Equity Owner Plan; and
    (B) May be terminated by the authorizing fiduciary within: (i) The 
time negotiated for such notice of termination by the plan and the 
Owner Lending Agent; or (ii) five business days, whichever is lesser, 
in either case without penalty to the plan, provided that, such 
authorizing fiduciary shall be deemed to have given the necessary 
authorization in satisfaction of this subparagraph (f)(2) with respect 
to each specific product purchased or licensed pursuant thereto unless 
such authorizing fiduciary objects to the Owner Lending Agent within 15 
days after the delivery of information regarding such specific product 
to the authorizing fiduciary in accordance with paragraph (g) of this 
exemption; and
    (3) Except as otherwise provided in paragraph (i), provision by an 
Owner Lending Agent to EquiLend of securities lending data based on 
off-Platform securities lending transactions conducted on behalf of a 
plan:
    (A) Is subject to the prior written authorization of an authorizing 
fiduciary; and

[[Page 19322]]

    (B) May be terminated by the authorizing fiduciary with respect to 
the future provision of data within the lesser of (i) the time 
negotiated for such notice of termination by the plan and the Owner 
Lending Agent or (ii) five business days, in either case without 
penalty to the plan. Notwithstanding the foregoing, the requirement for 
prior written authorization will be deemed satisfied unless such 
authorizing fiduciary objects to provision by the Owner Lending Agent 
to EquiLend of such data in writing to the Owner Lending Agent within 
30 days following disclosure of the information described in paragraph 
(g) of this Section to such authorizing fiduciary.
    (g) The authorization(s) described in paragraph (f) of this Section 
shall not be deemed to have been made unless the Owner Lending Agent 
has furnished the authorizing fiduciary with any reasonably available 
information that the Owner Lending Agent reasonably believes to be 
necessary for the authorizing fiduciary to determine whether such 
authorization should be made, and any other reasonably available 
information regarding the matter that the authorizing fiduciary may 
reasonably request. This includes, but is not limited to: (1) A 
statement that the Equity Owner, as securities lending agent, has a 
financial interest in the successful operation of EquiLend, (2) a 
statement, provided on an annual basis, that the authorizing fiduciary 
may terminate the arrangement(s) described in (f) above at any time, 
and (3) a statement that the Owner Lending Agent intends to provide to 
EquiLend securities lending data based on off-Platform securities 
lending transactions conducted by the Owner Lending Agent on behalf of 
the plan;
    (h) Any purchase or licensing of data and/or analytical tools with 
respect to securities lending activities by a plan pursuant to this 
Section complies with the relevant conditions of Section I and will be 
authorized in advance by an authorizing fiduciary in accordance with 
the applicable procedures of paragraphs (f), (g) and (i);
    (i) In the case of a pooled separate account maintained by an 
insurance company qualified to do business in a state or a common or 
collective trust fund maintained by a bank or trust company supervised 
by a state or federal agency (Commingled Investment Fund), the 
requirements of paragraph (f) of this Section shall not apply, provided 
that--
    (1) The information described in paragraph (g) (including 
information with respect to any material change in the arrangement) of 
this Section and a description of the operation of the Platform 
(including a description of the fee structure paid by securities 
lenders and borrowers), shall be furnished by the Owner Lending Agent 
to the authorizing fiduciary (described in paragraph (b) of Section 
III) with respect to each plan whose assets are invested in the account 
or fund, not less than 30 days prior to implementation of any such 
arrangement or material change thereto, or, not less than 15 days prior 
to the purchase or license of any specific securities lending-related 
product, and, where requested, upon the reasonable request of the 
authorizing fiduciary. For purposes of this subparagraph, the 
requirement that the authorizing fiduciary be independent shall not 
apply in the case of an Equity Owner Plan;
    (2) In the event any such authorizing fiduciary notifies the Owner 
Lending Agent that it objects to participation in the Platform, or to 
the purchase or license of any EquiLend securities lending-related tool 
or product, or to the further provision by an Owner Lending Agent to 
EquiLend of securities lending data based on off-Platform securities 
lending transactions conducted on behalf of the plan, the plan on whose 
behalf the objection was tendered is given the opportunity to terminate 
its investment in the account or fund, without penalty to the plan, 
within such time as may be necessary to effect the withdrawal in an 
orderly manner that is equitable to all withdrawing plans and to the 
non-withdrawing plans. In the case of a plan that elects to withdraw 
pursuant to the foregoing, such withdrawal shall be effected prior to 
the implementation of, or material change in, the arrangement or 
purchase or license, but any existing arrangement need not be 
discontinued by reason of a plan electing to withdraw; and
    (3) In the case of a plan whose assets are proposed to be invested 
in the pooled account or fund subsequent to the implementation of the 
arrangements and which has not authorized the arrangements in the 
manner described in paragraphs (i)(1) and (i)(2), the plan's investment 
in the account or fund shall be authorized in the manner described in 
paragraph (f)(1)(A), (f)(2)(A), and (f)(3)(A);
    (j) The Equity Owner, together with its affiliates (as defined in 
Section III(a)), does not own at the time of the execution of a 
securities lending transaction on behalf of a plan by the Equity Owner 
(i.e., in its capacity as Owner Lending Agent) through EquiLend or at 
the time of the purchase, or commencement of licensing, of data and/or 
analytical tools by the plan, more than 20% of:
    (1) If EquiLend is a corporation, including a limited liability 
company taxable as a corporation, the combined voting power of all 
classes of stock entitled to vote or the total value of shares of all 
classes of stock of EquiLend, or
    (2) If EquiLend is a partnership, including a limited liability 
company taxable as a partnership, the capital interest or the profits 
interest of EquiLend;
    (k) Any information, authorization, or termination of authorization 
may be provided by mail or electronically; and
    (l) No Equity Owner Plan, as defined in Section III(e), will 
participate in the Platform, other than through a Commingled Investment 
Fund in which the aggregate investment of all Equity Owner Plans at the 
time of the transaction constitutes less than 20% of the total assets 
of such fund. Notwithstanding the foregoing, this prohibition shall not 
apply to the participation by an Equity Owner Plan as of the date that 
the aggregate loan balance of all securities lending transactions 
entered into through EquiLend by all participants outstanding on such 
date (excluding transactions entered into on behalf of Equity Owner 
Plans) is equal to or greater than $10 billion; provided that if such 
aggregate loan balance is later determined to be less than $10 billion, 
no additional participation by an Equity Owner Plan (other than through 
a Commingled Investment Fund) shall occur until such time as the $10 
billion threshold amount is again met.
Section III. Defintions
    For purposes of this exemption:
    (a) An ``affiliate'' of another person means:
    (1) Any person directly or indirectly, through one or more 
intermediaries, controlling, controlled by, or under common control 
with such other person;
    (2) Any officer, director, partner, employee, relative (as defined 
in ERISA section 3(15)) of such other person; and
    (3) Any corporation or partnership of which such other person is an 
officer, director or partner.
    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.
    (b) The term ``authorizing fiduciary'' means, with respect to an 
Owner Lending Agent, a plan fiduciary who is independent of such Owner 
Lending Agent. In this regard, an authorizing

[[Page 19323]]

fiduciary will not be considered independent of an Owner Lending Agent 
if:
    (1) Such fiduciary directly or indirectly controls, is controlled 
by, or is under common control with the Owner Lending Agent; or
    (2) Such fiduciary directly or indirectly receives any compensation 
or other consideration from the Owner Lending Agent or an affiliate for 
his or her own personal account in connection with any securities 
lending transaction described herein; provided that Commingled 
Investment Funds and Equity Owner Plans maintained by such Owner 
Lending Agent or an affiliate will not be deemed affiliates of such 
Owner Lending Agent for purposes of this subparagraph (2).
    For purposes of Section II, no Equity Owner or any affiliate may be 
an authorizing fiduciary except in the case of an Equity Owner Plan. 
Notwithstanding the foregoing, the requirements for consent by an 
authorizing fiduciary with respect to participation in the Platform, 
and the annual right of such fiduciary to terminate such participation, 
shall be deemed met to the extent that the Owner Lending Agent's 
proposed utilization of the services of EquiLend on behalf of a plan 
for securities lending has been approved by an order of a United States 
district court.
    (c) The term ``Owner Lending Agent'' means an Equity Owner in its 
capacity as a fiduciary of a plan acting as securities lending agent in 
connection with the loan of plan assets that are securities.
    (d) The term ``Equity Owner'' means an entity that either directly 
or through an affiliate owns an equity ownership interest in EquiLend.
    (e) The term ``Equity Owner Plan'' means a plan which is 
established or maintained by an Equity Owner of EquiLend as an employer 
of employees covered by such plan, or by its affiliate.
    (f) The terms ``plan'' means:
    (1) An ``employee benefit plan'' within the meaning of ERISA 
section 3(3), subject to Part 4 of Subtitle B of Title I of ERISA,
    (2) A ``plan'' that is within the meaning of Code section 
4975(e)(1) and subject to Code section 4975, or
    (3) The Federal Thrift Savings Fund.
    Effective Date: The exemption is effective October 1, 2012 with 
respect to arrangements entered into on or after that date. The 
provisions of PTE 2002-30 shall continue to apply to arrangements 
entered into before October 1, 2012.
    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 November 16, 2012 at 77 
FR 68844.

FOR FURTHER INFORMATION CONTACT: Brian Shiker of the Department, 
telephone (202) 693-8552. (This is not a toll-free number.)

Coca-Cola Company (TCCC) and Red Re, Inc. (Red Re), Located in Atlanta, 
Georgia and Charleston, South Carolina, respectively

[Prohibited Transaction Exemption 2013-06; Exemption Application No. L-
11738]

Exemption

Section I. Transactions
    The restrictions of sections 406(a)(1)(D) and 406(b) of the Act 
shall not apply to:
    (a) The reinsurance of risks and the receipt of premiums therefrom 
by Red Re, an affiliate of TCCC, as the term ``affiliate'' is defined 
in Section III(a)(1) below, in connection with group term life 
insurance sold by Metropolitan Life Insurance Company or any successor 
insurance company (a Fronting Insurer) to The Coca-Cola Company Health 
and Welfare Benefits Plan (the Actives Plan) and to The Coca-Cola 
Company Retiree Benefits Plan (the Retiree Plan); and
    (b) The reinsurance of risks and the receipt of premiums therefrom 
by Red Re in connection with accidental death and dismemberment 
insurance (AD&D) sold by a Fronting Insurer to the Actives Plan and to 
the Retiree Plan; provided the conditions set forth in Section II, 
below, are satisfied.\5\
---------------------------------------------------------------------------

    \5\ The Actives Plan and the Retiree Plan are, herein, 
collectively referred to as the ``Plans.''
---------------------------------------------------------------------------

Section II. Conditions
    The relief provided in this exemption is conditioned upon adherence 
to the material facts and representations described herein, and as set 
forth in the application file, and upon compliance with the following 
conditions:
    (a) Red Re--
    (1) Is a party in interest with respect to the Plans by reason of a 
stock or partnership affiliation with TCCC that is described in section 
3(14)(E) or 3(14)(G) of the Act;
    (2) Is licensed to sell insurance or conduct reinsurance operations 
in at least one state, as defined in section 3(10) of the Act;
    (3) Has obtained a Certificate of Authority from the Director of 
the Department of Insurance of its domiciliary state (South Carolina), 
which has neither been revoked nor suspended;
    (4)(A) Has undergone and shall continue to undergo an examination 
by an independent certified public accountant for its last completed 
taxable year immediately prior to the taxable year of the reinsurance 
transaction covered by this exemption; or
    (B) Has undergone a financial examination (within the meaning of 
the law of South Carolina) by the Director of the South Carolina 
Department of Insurance within five (5) years prior to the end of the 
year preceding the year in which such reinsurance transaction has 
occurred; and
    (5) Is licensed to conduct reinsurance transactions by South 
Carolina, whose law requires that an actuarial review of reserves be 
conducted annually by an independent firm of actuaries and reported to 
the appropriate regulatory authority;
    (b) The Plans pay no more than adequate consideration for the 
insurance contracts;
    (c) No commissions are paid by the Plans with respect to the direct 
sale of such contracts or the reinsurance thereof;
    (d) In the initial year of every contract involving Red Re and a 
Fronting Insurer, there will be an immediate and objectively determined 
benefit to participants and beneficiaries of the Plans in the form of 
increased benefits, and such benefits will continue in all subsequent 
years of each contract and in every renewal of each contract, and will 
approximate the increase in benefits that are effective January 1, 
2013, as described in the Notice of Proposed Exemption (the Notice);
    (e) In the initial year and in subsequent years of coverage 
provided by a Fronting Insurer, the formula used by the Fronting 
Insurer to calculate premiums will be similar to formulae used by other 
insurers providing comparable coverage under similar programs. 
Furthermore, the premium charge calculated in accordance with the 
formula will be reasonable and will be comparable to the premium 
charged by the Fronting Insurer and its competitors with the same or a 
better rating providing the same coverage under comparable programs;
    (f) The Fronting Insurer has a financial strength rating of ``A'' 
or better from A. M. Best Company (A. M. Best). The reinsurance 
arrangement between the Fronting Insurer and Red Re will be indemnity 
insurance only, (i.e., the Fronting Insurer will not be relieved of 
liability to the Plans should Red Re be unable or unwilling to cover 
any liability arising from the reinsurance arrangement);

[[Page 19324]]

    (g) The Plans retain an independent, qualified fiduciary or 
successor to such fiduciary, as defined in Section III(c), below, (the 
I/F) to analyze the transactions and to render an opinion that the 
requirements of Section II(a) through (f) and (h) of this exemption 
have been satisfied;
    (h) Participants and beneficiaries in the Plans will receive in 
subsequent years of every contract of reinsurance involving Red Re and 
a Fronting Insurer no less than the immediate and objectively 
determined increased benefits such participant and beneficiary received 
in the initial year of each such contract involving Red Re and the 
Fronting Insurer;
    (i) The I/F will: monitor the transactions herein on behalf of the 
Plans on a continuing basis to ensure such transactions remain in the 
interest of the Plans; take all appropriate actions to safeguard the 
interests of the Plans; and enforce compliance with all conditions and 
obligations imposed on any party dealing with the Plans; and
    (j) In connection with the provision to participants in the Plans 
of the group term life insurance and the AD&D coverage provided by a 
Fronting Insurer which is reinsured by Red Re, the I/F will review all 
contracts (and any renewal of such contracts) of the reinsurance of 
risks and the receipt of premiums therefrom by Red Re and must 
determine that the requirements of this exemption and the terms of the 
benefit enhancements continue to be satisfied.
Section III. Definitions
    (a) The term, ``affiliate,'' of a person includes:
    (1) Any person directly or indirectly, through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person;
    (2) Any officer, director, employee, relative, or partner in any 
such person; and
    (3) Any corporation or partnership of which such person is an 
officer, director, partner, or employee.
    (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) For purposes of the exemption, an I/F is a person, or a 
successor to such person, who is not an affiliate of TCCC and:
    (1) Does not have an ownership interest in TCCC, in Red Re, or in 
an affiliate of either;
    (2) Is not a fiduciary with respect to the Plans prior to its 
appointment to serve as the I/F;
    (3) Has acknowledged in writing acceptance of fiduciary 
responsibility and has agreed not to participate in any decision with 
respect to any transaction in which it has an interest that might 
affect its best judgment as a fiduciary; and
    (4) Has appropriate training, experience, and facilities to act on 
behalf of the Plans regarding the subject transactions in accordance 
with the fiduciary duties and responsibilities prescribed by the Act.
    For purposes of this definition of an ``I/F,'' no organization or 
individual may serve as an I/F for any fiscal year if the gross income 
received by such organization or individual (or partnership or 
corporation of which such individual is an officer, director, or 10 
percent or more partner or shareholder) for that fiscal year exceeds 
two percent (2%) of that organization's or individual's annual gross 
income from all sources for the prior fiscal year from TCCC or from Red 
Re, or from an affiliate of either (including amounts received for 
services as I/F under any prohibited transaction exemption granted by 
the Department).
    In addition, no organization or individual who is an I/F, and no 
partnership or corporation of which such organization or individual is 
an officer, director, or 10 percent (10%) or more partner or 
shareholder, may acquire any property from, sell any property to, or 
borrow any funds from TCCC or from Red Re, or from any affiliate of 
either during the period that such organization or individual serves as 
an I/F, and continuing for a period of six (6) months after such 
organization or individual ceases to be the I/F, or negotiates any such 
transaction during the period that such organization or individual 
serves as the I/F.
    In the event a successor I/F is appointed to represent the 
interests of the Plans with respect to the subject transactions, there 
should be no lapse in time between the resignation or termination of 
the former I/F and the appointment of the successor I/F.
    Effective Date:This exemption is effective as of January 1, 2013.
Written Comments
    In the Notice, the Department invited all interested persons to 
submit written comments and requests for a hearing within 35 days of 
the date of the publication on December 28, 2012, of the Notice in the 
Federal Register. The Notice stated that all comments and requests for 
hearing were due by February 1, 2013. In a telephone conversation on 
January 8, 2013, TCCC informed the Department that the notification to 
all interested persons of the publication of the Notice in the Federal 
Register was not completed until January 14, 2013, because the New 
Year's holiday and other issues delayed the first class mailing to all 
such interested persons. In order to ensure that all interested persons 
would have thirty (30) days to submit written comments and requests for 
a hearing, the Department required (and TCCC agreed) to an extension of 
time for the submission of comments and requests for a hearing from 
such interested persons. Accordingly, the deadline for all comments and 
requests for hearing was extended to February 13, 2013. In a letter 
dated February 12, 2013, TCCC confirmed that the required notification 
was sent to all interested persons via first class mail no later than 
January 14, 2013.
    During the comment period, the Department received no requests for 
a hearing. However, the Department did receive two written comments 
from TCCC in letters, dated February 12 and February 15, 2013. In the 
February 12 letter, TCCC requested clarification of the operative 
language of the Notice. In addition, TCCC informed the Department of 
corrections to the information that appeared in the Summary of Facts 
and Representations (SFR) of the Notice. In the February 15 letter, 
TCCC clarified the comments it had made in the February 12 letter, at 
the Department's request. TCCC's comments and the Department's 
amendments are discussed in paragraphs 1-4, below, in an order that 
corresponds to the appearance of the relevant language in the Notice.
    1. TCCC has requested a modification to the language of Section 
I(b), as set forth on page 76779, in column 2, lines 68-73 and in 
column 3, lines 1-4 of the Notice. With regard to Section I(b), TCCC 
requests that the Department make clear that the covered transactions 
include the reinsurance of the group term life insurance benefits 
offered under both the Retiree Plan and the Actives Plan.
    The Department concurs with TCCC's request and has amended the 
language of Section I(b) in the exemption. The Department has also 
corrected the phrase, ``accidental death and disability,'' in Section 
I(b) of the Notice on page 76779, in column 2, lines 70-71, to read 
``accidental death and dismemberment.''
    In addition, in order to make clear that the covered transactions 
include the reinsurance of the AD&D benefits offered under both the 
Retiree Plan and the Actives Plan, the Department has amended the 
language of Section I(a).

[[Page 19325]]

Accordingly, Sections I(a) and (b) of the exemption read as follows:
    (a) The reinsurance of risks and the receipt of premiums therefrom 
by Red Re, an affiliate of TCCC, as the term ``affiliate'' is defined 
in Section III(a)(1) below, in connection with group term life 
insurance sold by Metropolitan Life Insurance Company or any successor 
insurance company (a Fronting Insurer) to The Coca-Cola Company Health 
and Welfare Benefits Plan (the Actives Plan) and to The Coca-Cola 
Company Retiree Benefits Plan (the Retiree Plan); and
    (b) The reinsurance of risks and the receipt of premiums therefrom 
by Red Re in connection with accidental death and dismemberment 
insurance (AD&D) sold by a Fronting Insurer to the Actives Plan and to 
the Retiree Plan; provided the conditions set forth in Section II, 
below, are satisfied.
    2. The Department has also clarified Section II(d) of the 
conditions of the exemption, as set forth in the Notice on page 76780, 
in column 1, line 2, in order to ensure that any benefit enhancements 
that are substituted will approximate those that became effective on 
January 1, 2013. Accordingly, Section II(d), as amended, reads as 
follows:
    (d) In the initial year of every contract involving Red Re and a 
Fronting Insurer, there will be an immediate and objectively determined 
benefit to participants and beneficiaries of the Plans in the form of 
increased benefits, and such benefits will continue in all subsequent 
years of each contract and in every renewal of each contract, and will 
approximate the increase in benefits that are effective January 1, 
2013, as described in the Notice of Proposed Exemption (the Notice).
    3. The Department has also clarified Section II(j) of the 
conditions of the exemption, as set forth in the Notice on page 76780, 
in column 1, lines 56-68, and in column 2, lines 1-2 on its own 
initiative. As published in the Notice, Section II(j) states:
    (j) At the conclusion of the five-year period (the 5-Year Period), 
from January 1, 2013 to December 31, 2017, in which MetLife has 
provided a rate guarantee in connection with the provision to 
participants in the Plans of the group term life insurance and the AD&D 
coverage which is reinsured by Red Re, the I/F will review any renewal 
of the reinsurance of risks and the receipt of premiums therefrom by 
Red Re and must determine that the requirements of this proposed 
exemption and the terms of the benefit enhancements continue to be 
satisfied.

The Department notes that the relief provided by the exemption will 
extend beyond the five year period in which MetLife will provide a rate 
guarantee in connection with the provision to the participants in the 
Plans of the group term life insurance and the AD&D coverage which is 
reinsured by Red Re. In order to clarify the role of the I/F with 
respect to the renewal of the contract with MetLife and all contracts 
and renewals with any Fronting Insurer which are reinsured by Red Re, 
Section II(j) has been revised to read as follows:
    (j) In connection with the provision to participants in the Plans 
of the group term life insurance and the AD&D coverage provided by a 
Fronting Insurer which is reinsured by Red Re, the I/F will review all 
contracts (and all renewals of such contracts) of the reinsurance of 
risks and the receipt of premiums therefrom by Red Re and must 
determine that the requirements of this exemption and the terms of the 
benefit enhancements continue to be satisfied.
    4. In addition to the changes discussed above, TCCC has requested 
clarifications to the SFR of the Notice.
    a. TCCC states that Representation 6, as set forth in the SFR on 
page 76781, in column 1, lines 65-68, omits the fact that the Retiree 
Plan also provides basic life insurance to its participants. Further, 
TCCC indicates with respect to the last sentence of Representation 6, 
as set forth in the SFR on page 76781, in column 2, line 21, the 
conversion period is thirty-one (31) days, not sixty (60) days. 
Finally, TCCC points out that with respect to the second paragraph of 
Representation 6, as set forth in the SFR on page 76781, in column 2, 
line 28, that the ``retiree only'' supplemental AD&D coverage available 
includes increments of $50,000 and $100,000, as well as increments of 
$200,000, $300,000, and $400,000.
    b. TCCC indicates that the proposed new AD&D benefit described in 
Representation 13 of the SFR on page 76782, in column 1, line 58, ends 
at age 70 for retirees.
    c. TCCC points out that in Representation 15 of the SFR on page 
76782, in column 2, line 22, the effective date shown in the second 
sentence should be ``January 1, 2013,'' not ``January 1, 2012.'' In 
addition, TCCC explains that in Representation 13 of the SFR on page 
76782, in column 2, lines 30-35, the coverage maximums in the Plans are 
different. In this regard, the text of the SFR, according to TCCC, 
correctly describes the increase in the maximum to $2 million in the 
Actives Plan. TCCC also states that the maximum coverage applicable to 
the Retiree Plan remains at $1.5 million. Finally, TCCC explains that 
in Representation 13 of the SFR on page 76782, in column 2, lines 54-
55, the Spouse Education Benefit discussed covers four (4) years, 
rather than three (3) years.
    After full consideration and review of the entire record, including 
the written comments filed by TCCC, the Department has determined to 
grant the exemption, as amended, corrected, and clarified above. 
Comments and responses submitted to the Department by TCCC have been 
included as part of the public record of the exemption application. 
Copies of the comments from TCCC have been posted on the Department's 
Web site at http://www.dol.gov/ebsa. The complete application file (L-
11738), including all supplemental submissions received by the 
Department, is 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 December 28, 2012 at 77 FR 76779.

FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the Department, 
telephone (202) 693-8551 (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

[[Page 19326]]

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 26th day of March, 2013.
Lyssa E. Hall,
Acting Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. 2013-07380 Filed 3-28-13; 8:45 am]
BILLING CODE 4510-29-P