[Federal Register Volume 66, Number 135 (Friday, July 13, 2001)]
[Notices]
[Pages 36805-36806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17551]


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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration


Proposed Extension of Information Collection Request; Comment 
Request; Prohibited Transaction Class Exemption 77-4

ACTION: Notice.

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SUMMARY: The Department of Labor, as part of its continuing effort to 
reduce paperwork and respondent burden conducts a preclearance 
consultation program to provide the general public and other Federal 
agencies with an opportunity to comment on proposed and continuing 
collections of information in accordance with the Paperwork Reduction 
Act of 1995 (PRA 95) (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

[[Page 36806]]

financial resources) is minimized, collection instruments are clearly 
understood, and the impact of collection requirements on respondents 
can be properly assessed. Currently, the Pension and Welfare Benefits 
Administration is soliciting comments concerning the proposed extension 
of a currently approved collection of information, Class Exemption 77-4 
for certain transactions between investment companies and employee 
benefit plans. A copy of the proposed information collection request 
(ICR) can be obtained by contacting the person listed below in the 
addresses section.

DATES: Written comments must be submitted on or before September 11, 
2001.

ADDRESSES: Gerald B. Lindrew, Office of Policy and Research, U.S. 
Department of Labor, Pension and Welfare Benefits Administration, 200 
Constitution Avenue, NW., Room N-5647, Washington, DC 20210. Telephone: 
(202) 219-4782; FAX (202) 219-4745. These are not toll-free numbers.

SUPPLEMENTARY INFORMATION:

I. Background

    Prohibited Transaction Class Exemption 77-4 permits the purchase 
and sale by an employee benefit plan of shares of a registered, open-
end investment company (mutual fund) when a fiduciary with respect to 
the plan (e.g., investment manager) is also the investment advisor for 
the investment company. In the absence of the exemption, certain 
aspects of these transactions might be prohibited by section 406 of the 
Employee Retirement Income Security Act (ERISA).

II. Desired Focus of Comments

    The Department of Labor 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 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 submission of responses.

III. Current Actions

    Without the relief provided by this exemption, an open-end mutual 
fund would be unable to sell shares to or purchase shares from a plan 
when the fiduciary with respect to the plan is also the investment 
advisor for the mutual fund. As a result, plans would be compelled to 
liquidate their existing investments involving such transactions and to 
amend their plan documents to establish new investment structures and 
policies.
    In order to insure that the exemption is not abused and that the 
rights of participants and beneficiaries are protected, the Department 
has included in the exemption three basic disclosure requirements. The 
first requires at the time of the purchase or sale of such mutual fund 
shares that the plan's independent fiduciary receive a copy of the 
current prospectus issued by the open-end mutual fund and a full and 
detailed written statement of the investment advisory fees charges to 
or paid by the plan and the open-end mutual fund to the investment 
advisor. The second requires that the independent fiduciary approve in 
writing such purchases and sales. The third requires that the 
independent fiduciary, once notified of changes in the fees, re-approve 
in writing the purchase and sale of mutual fund shares.
    Type of Review: Extension of a currently approved collection.
    Agency: Department of Labor, Pension and Welfare Benefits 
Administration.
    Title: Prohibited Transaction Class Exemption 77-4 for Certain 
Transactions Between Investment Companies and Employee Benefit Plans.
    OMB Numbers: 1210-0049.
    Affected Public: Individuals or households; Business or other for-
profit; Not-for-profit institutions.
    Total Respondents: 431.
    Frequency of Response: On occasion.
    Total Responses: 82,000.
    Average Time Per Response: 5 minutes.
    Total Annual Burden: 7,000 hours.
    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: July 9, 2001.
Gerald B. Lindrew,
Deputy Director, Pension and Welfare Benefits Administration, Office of 
Policy and Research.
[FR Doc. 01-17551 Filed 7-12-01; 8:45 am]
BILLING CODE 4510-29-P