Employee Retirement Income Security Act Prohibited Transaction Exemption 1986-128 For Securities Transactions Involving Employee Benefit Plans and Broker-Dealers

Federal Register / Vol. 67, No. 201 / Thursday, October 17, 2002 / Notices
Dated: October 4, 2002.
Robert F. Diegelman,
Acting Assistant Attorney General for
Administration.

[FR Doc. 02–26263 Filed 10–16–02; 8:45 am]

JUSTICE/INS–004

BILLING CODE 4410–10–M

Immigration and Naturalization Service,
188 Harvest Lane, Williston, VT 05495.
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SYSTEM NAME:

The Asset Management Information
System (AMIS).
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AUTHORITY FOR MAINTENANCE OF THE SYSTEM:

(1) 40 U.S.C. 486; (2) 41 CFR part 101;
(3) 41 CFR part 128; and (4) 41 CFR part
102.
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POLICIES AND PRACTICES FOR STORING,
RETRIEVING, ACCESSING, RETAINING AND
DISPOSING OF RECORDS IN THE SYSTEM:

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RETRIEVABILITY:

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SAFEGUARDS:

INS offices are located in buildings
under security guard, and access to the
premises is by official identification. All
records are stored in space which is
locked outside of normal office hours. In
addition, paper records with social
security numbers are stored in locked
cabinets or machines. Access to the
automated system is controlled by
restricted password for use at remote
terminals in secured areas.
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JUSTICE/INS–023
SYSTEM NAME:

Law Enforcement Support Center
Database.
SYSTEM LOCATION:

Immigration and Naturalization
Service (INS), Law Enforcement Support
Center (LESC), Eastern Regional Office
Building, 188 Harvest Lane, Williston,
Vermont 05495.
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POLICIES AND PRACTICES FOR STORING,
RETRIEVING, ACCESSING, RETAINING, AND
DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:

These records are stored in electronic
format. Electronic records are stored on
magnetic or optical media (i.e.,
computer hard drives, floppy disks,
tapes and optical disks).
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SYSTEM MANAGER(S) AND ADDRESS:

Director, Law Enforcement Support
Center, Eastern Regional Office,

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Pension and Welfare Benefits
Administration
[Application Number D–10845]

Amendment to Prohibited Transaction
Exemption 86–128 (PTE 86–128) For
Securities Transactions Involving
Employee Benefit Plans and BrokerDealers
AGENCY: Pension and Welfare Benefits
Administration, U.S. Department of
Labor.
ACTION: Adoption of Amendment to PTE
86–128.

STORAGE:

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DEPARTMENT OF LABOR

SUMMARY: This document amends PTE
86–128, a class exemption that permits
certain persons who serve as fiduciaries
for employee benefit plans to effect or
execute securities transactions on behalf
of those plans, provided that specified
conditions are met. The exemption also
allows sponsors of pooled separate
accounts and other pooled investment
funds to use their affiliates to effect or
execute securities transactions for such
accounts when certain conditions are
met. The amendment affects
participants and beneficiaries of
employee benefit plans, fiduciaries with
respect to such plans, and other persons
engaging in the described transactions.
DATES: The amendment is effective
October 17, 2002.
FOR FURTHER INFORMATION CONTACT:
Christopher Motta, Office of Exemption
Determinations, Pension and Welfare
Benefits Administration, U.S.
Department of Labor, (202) 693–8544,
(this is not a toll-free number); or
Charles Jackson, Plan Benefits Security
Division, Office of the Solicitor, U.S.
Department of Labor, (202) 693–5600,
(this is not a toll-free number).
SUPPLEMENTARY INFORMATION: On May
10, 2002, notice was published in the
Federal Register (67 FR 31838) of the
pendency before the Department of a
proposed amendment to PTE 86–128 (51
FR 41686, Nov. 18, 1986). PTE 86–128
provides an exemption from the
restrictions of section 406(b)1 of the
Employee Retirement Income Security
1 References to section 406 of ERISA as they
appear throughout this amendment should be read
to refer as well to the corresponding provisions of
section 4975 of the Internal Revenue Code of 1986
(the Code).

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Act of 1974 (ERISA or the Act) and from
the taxes imposed by section 4975(a)
and (b) of the Code, by reason of section
4975(c)(1)(E) or (F) of the Code.
The amendment to PTE 86–128
adopted by this notice was requested in
an application, dated October 29, 1999,
on behalf of the Securities Industry
Association (the SIA), a trade
association for securities broker-dealers.
The Department proposed the
amendment to PTE 86–128 pursuant to
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).2
The notice of pendency gave
interested persons an opportunity to
comment on the proposed amendment
or request a hearing. The Department
received one comment on the proposed
amendment which subsequently was
withdrawn. The amendment adopted in
this document is identical to the
proposed amendment.
Paperwork Reduction Act
In accordance with the provisions of
the Paperwork Reduction Act of 1995,
the Department submitted the proposed
revision of the information collection
provisions of Prohibited Transaction
Exemption 86–128 to the Office of
Management and Budget (OMB) at the
time of publication of the proposed
amendment. OMB approved the revised
information collection request on June
20, 2002 under OMB control number
1210–0059. An application for
continuing approval will be made before
the currently scheduled expiration date
of June 30, 2005.
Description of the Exemption
PTE 86–128 provides relief from the
restrictions of section 406(b) for a plan
fiduciary to use its authority to cause a
plan to pay a fee to such fiduciary for
effectuating or executing securities
transactions as agent for the plan.
Section I of PTE 86–128 contains
definitions and special rules. Notably,
for purposes of the class exemption, a
‘‘person’’ is defined to include ‘‘the
person and affiliates of the person’’, and
an ‘‘affiliate’’ of a ‘‘person’’ is defined,
in part, to include: (1) Any person
directly or indirectly controlling,
controlled by, or under common control
with, the person; (2) any officer,
director, partner, employee, relative (as
defined in section 3(15) of ERISA),
brother, sister, or spouse of a brother or
2 Section 102 of the Reorganization Plan No. 4 of
1978 (5 U.S.C. App. 1 [1996] generally transferred
the authority of the Secretary of the Treasury to
issue administrative exemptions under section 4975
of the Code to the Secretary of Labor.

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Federal Register / Vol. 67, No. 201 / Thursday, October 17, 2002 / Notices

sister, of the person; and (3) any
corporation or partnership of which the
person is an officer, director or partner.
Section II describes the transactions
covered under PTE 86–128 to include:
a plan fiduciary using his or her
authority to cause a plan to pay a fee for
effecting or executing securities
transactions to that person as agent for
the plan, but only to the extent that such
transactions are not excessive, under the
circumstances, in either amount or
frequency; a plan fiduciary acting as the
agent in an agency cross transaction for
both the plan and one or more other
parties to the transaction; and the
receipt by a plan fiduciary of reasonable
compensation for effecting or executing
an agency cross transaction to which a
plan is a party from one or more other
parties to the transaction.
Section III contains conditions
designed to protect the interests of plan
participants and beneficiaries. These
conditions require prior authorization to
engage in covered transactions and
periodic disclosure of the fiduciary’s
activities to the authorizing plan
fiduciary. Section III(a), prior to this
amendment, provided that the person
engaging in a covered transaction may
not be a trustee (other than a
nondiscretionary trustee) or an
administrator of the plan, or an
employer any of whose employees are
covered by the plan. The term ‘‘person’’
is defined to include ‘‘affiliates’’ of the
person, thus discretionary trustees, plan
administrators, sponsoring employers,
and their affiliates are generally
precluded from relying on the relief
provided by the exemption.
Section IV contains exceptions to
several of the conditions in section III.
Specifically, section IV provides that the
conditions of section III do not apply to
covered transactions to the extent such
transactions are engaged in on behalf of
individual retirement accounts which
meet the requirements set forth in 29
CFR 2510.3–2(d) or plans, other than
training programs, that do not cover any
employees within the meaning of 29
CFR 2510.3–3. In addition, section IV
provides that the conditions of section
III do not apply in the case of agency
cross transactions to the extent that the
person effecting or executing the
transaction: does not render investment
advice to any plan for a fee with respect
to the transaction; is not otherwise a
fiduciary who has investment discretion
with respect to any plan assets involved
in the transaction; and does not have the
authority to engage, retain or discharge
any person who is, or is proposed to be,
a fiduciary regarding any such plan
assets. Section IV also provides that a
plan trustee, plan administrator, or

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sponsoring employer may engage in a
covered transaction if he or she returns
or credits to the plan all profits earned
by that person in connection with the
securities transactions associated with
the covered transaction. Finally, section
IV contains special rules for pooled
investment funds.
Description of the Exemption as
Amended
The amendment to PTE 86–128
granted pursuant to this notice enables
a discretionary trustee of an ERISA
covered plan, or an affiliate of such
trustee, to use its fiduciary authority to
cause the plan to pay a fee to such
trustee for effectuating or executing
securities transactions as agent for the
plan. In so doing, the trustee (other than
a nondiscretionary trustee) must furnish
to the authorizing fiduciary of each
plan, at least annually, the information
specified in section III(i) of the
exemption, as amended. In general
terms, this section requires the trustee to
provide to such fiduciary the aggregate
and the average brokerage commissions
paid by the plan to brokerage firms
affiliated and unaffiliated with the
trustee.
In addition, as described in section
III(h) of the exemption, a trustee (other
than a nondiscretionary trustee) may
only engage in a covered transaction on
behalf of a plan to the extent such plan
has at least $50 million in total net
assets. This section provides further
that, in the case of a pooled fund, the
$50 million requirement will be met if
50 percent or more of the units of
beneficial interest in such pooled fund
are held by plans having total net assets
with a value of at least $50 million.
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 and section 4975(c)(2)
of the Code does not relieve a fiduciary,
or other party in interest or disqualified
person with respect to a plan, from
certain other provisions of ERISA and
the Code, including any prohibited
transaction provisions to which the
exemption does not apply and the
general fiduciary responsibility
provisions of section 404 of ERISA
which require, among other things, that
a fiduciary discharge his or her duties
respecting the plan solely in the
interests of the participants and
beneficiaries of the plan. Additionally,
the fact that a transaction is the subject
of an exemption does not affect the
requirement of section 401(a) of the
Code that the plan must operate for the

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exclusive benefit of the employees of
the employer maintaining the plan and
their beneficiaries;
(2) This exemption does not extend to
transactions prohibited under section
406(a) of the Act;
(3) In accordance with section 408(a)
of ERISA and 4975(c)(2) of the Code, the
Department makes the following
determinations:
(i) the amendment set forth herein is
administratively feasible;
(ii) the amendment set forth herein is
in the interests of plans and of their
participants and beneficiaries; and
(iii) the amendment set forth herein is
protective of the rights of participants
and beneficiaries of plans;
(4) The amendment is applicable to a
particular transaction only if the
transaction satisfies the conditions
specified in the exemption; and
(5) The amendment is supplemental
to, and not in derogation of, any other
provisions of ERISA and the Code,
including statutory or administrative
exemptions and transitional rules.
Furthermore, the fact that a transaction
is subject to an administrative or
statutory exemption is not dispositive of
whether the transaction is in fact a
prohibited transaction.
Exemption
Accordingly, PTE 86–128 is amended
as follows under the authority of section
408(a) of the Act and section 4975(c)(2)
of the Code and in accordance with the
procedures set forth in 29 CFR 2570,
Subpart B (55 FR 32836, 32847, August
10, 1990):
(1) Section III(a) is amended to read:
‘‘The person engaging in the covered
transaction is not an administrator of
the plan or an employer any of whose
employees are covered by the plan.’’
(2) A new paragraph (h) is added to
section III which reads:
‘‘(h) A trustee [other than a
nondiscretionary trustee] may only engage in
a covered transaction with a plan that has
total net assets with a value of at least $50
million and in the case of a pooled fund, the
$50 million requirement will be met if 50
percent or more of the units of beneficial
interest in such pooled fund are held by
plans having total net assets with a value of
at least $50 million.
For purposes of the net asset tests
described above, where a group of plans is
maintained by a single employer or
controlled group of employers, as defined in
section 407(d)(7) of the Act, the $50 million
net asset requirement may be met by
aggregating the assets of such plans, if the
assets are pooled for investment purposes in
a single master trust.’’

(3) A new paragraph (i) is added to
section III which reads:

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Federal Register / Vol. 67, No. 201 / Thursday, October 17, 2002 / Notices
‘‘(i) The trustee (other than a
nondiscretionary trustee) engaging in a
covered transaction furnishes, at least
annually, to the authorizing fiduciary of each
plan the following:
(1) the aggregate brokerage commissions,
expressed in dollars, paid by the plan to
brokerage firms affiliated with the trustee;
(2) the aggregate brokerage commissions,
expressed in dollars, paid by the plan to
brokerage firms unaffiliated with the trustee;
(3) the average brokerage commissions,
expressed as cents per share, paid by the plan
to brokerage firms affiliated with the trustee;
and
(4) the average brokerage commissions,
expressed as cents per share, paid by the plan
to brokerage firms unaffiliated with the
trustee.

For purposes of this paragraph (i), the
words ‘‘paid by the plan’’ shall be
construed to mean ‘‘paid by the pooled
fund’’ when the trustee engages in
covered transactions on behalf of a
pooled fund in which the plan
participates.’’
Signed at Washington, DC, this 11th day of
October, 2002.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations,
Pension and Welfare Benefits Administration,
U.S. Department of Labor.
[FR Doc. 02–26424 Filed 10–16–02; 8:45 am]
BILLING CODE 4510–29–P

DEPARTMENT OF LABOR
Mine Safety and Health Administration
Proposed Information Collection
Request Submitted for Public
Comment and Recommendations;
Independent Contractor Register
ACTION:

Notice.

SUMMARY: The Department of Labor, as
part of its continuing effort to reduce
paperwork and respondent burden
conducts a pre-clearance consultation
program to provide the general public
and Federal agencies with an
opportunity to comment on proposed
and/or continuing collections of
information in accordance with the
Paperwork Reduction Act of 1995
(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This
program helps to ensure that requested
data can be provided in the desired
format, reporting burden (time and
financial resources) is minimized,
collection instruments are clearly
understood, and the impact of collection
requirements on respondents can be
properly assessed.
Currently, the Mine Safety and Health
Administration (MSHA) is soliciting
comments concerning the proposed
extension of the information collection

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related to the Independent Contractor
Register.
DATES: Submit comments on or before
December 16, 2000.
ADDRESSES: Send comments to David
Meyer, Director, Administration and
Management, 1100 Wilson Boulevard,
Room 2125, Arlington, VA 22209–3939.
Commenters are encouraged to send
their comments on a computer disk, or
via e-mail to [email protected],
along with an original printed copy. Mr.
Meyer can be reached at (202) 693–9802
(voice), or (202) 693–9801 (facsimile).
FOR FURTHER INFORMATION CONTACT: Jane
E. Tarr, Program Analyst, Records
Management Group, U.S. Department of
Labor, Mine Safety and Health
Administration, Room 2171, 1100
Wilson Boulevard, Arlington, VA
22209–3939. Ms. Tarr can be reached at
[email protected] (Internet E-mail),
(202) 693–9824 (voice), or (202) 693–
9801 (facsimile).
SUPPLEMENTARY INFORMATION:
I. Background
Independent contractors performing
services or construction at mines are
subject to the Federal Mine Safety and
Health Act of 1977. 30 CFR 45.4(b)
requires mine operators to maintain a
written summary of information
concerning each independent contractor
present on the mine site. The
information includes the trade name,
business address, and telephone
number; a brief description and the
location on the mine of the work to be
performed; MSHA location on the mine
of the work to be performed; MSHA
identification number, if any; and the
contractor’s business address of record.
This information is required to be
provided for inspection and
enforcement purposes by the mine
operator to any MSHA inspector upon
request.
II. Desired Focus of Comments
MSHA is particularly interested in
comments which:
* Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
* Evaluate the accuracy of the
agency’s estimate of the burden of the
proposed collection of information
including the validity of the
methodology and assumptions used;
* Enhance the quality, utility, and
clarity of the information to be
collected; and
* Minimize the burden of the
collection of information on those who

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are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submissions
of responses. A copy of the proposed
information collection request can be
obtained by contacting the employee
listed below in the ADDRESSES section of
this notice or viewed on the Internet by
accessing the MSHA Home Page
(http://www.msha.gov) and then
choosing ‘‘Statutory and Regulatory
Information’’ and ‘‘Federal Register
Documents.’’
III. Current Actions
The information obtained from the
contractors is used by MSHA during
inspections to determine proper
responsibility for compliance with
safety and health standards.
Type of Review: Extension.
Agency: Mine Safety and Health
Administration.
Title: Independent Contractor
Register.
OMB Number: 1219–0040.
Affected Public: Business or other forprofit.
Cite/Reference/Form/etc: 30 CFR part
45.
Total Respondents: 15,292.
Frequency: On occasion.
Total Responses: 99,398.
Average Time Per Response: 0.87
hours.
Estimated Total Burden Hours: 13,250
hours.
Estimated Total Burden Cost:
$174,789.
Comments submitted in response to
this notice will be summarized and/or
included in the request for Office of
Management and Budget approval of the
information collection request; they will
also become a matter of public record.
Dated at Arlington, Virginia, this 10th day
of October, 2002.
David L. Meyer,
Director, Office of Administration and
Management.
[FR Doc. 02–26384 Filed 10–16–02; 8:45 am]
BILLING CODE 4510–43–M

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