[Federal Register Volume 68, Number 55 (Friday, March 21, 2003)]
[Notices]
[Pages 13954-13965]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6851]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Application Nos. D-11062, et al.]


Proposed Exemptions; The JPMorgan Chase Bank

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of proposed exemptions.

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SUMMARY: This document contains notices of pendency before the 
Department of Labor (the Department) of proposed exemptions from 
certain of the prohibited transaction restrictions of the Employee 
Retirement Income Security Act of 1974 (the Act) and/or the Internal 
Revenue Code of 1986 (the Code).

Written Comments and Hearing Requests

    All interested persons are invited to submit written comments or 
requests for a hearing on the pending exemptions, unless otherwise 
stated in the Notice of Proposed Exemption, within 45 days from the 
date of publication of this Federal Register Notice. Comments and 
requests for a hearing should state: (1) The name, address, and 
telephone number of the person making the comment or request, and (2) 
the nature of the person's interest in the exemption and the manner in 
which the person would be adversely affected by the exemption. A 
request for a hearing must also state the issues to be addressed and 
include a general description of the evidence to be presented at the 
hearing.

ADDRESSES: All written comments and requests for a hearing (at least 
three copies) should be sent to the Employee Benefits Security 
Administration (EBSA), Office of Exemption Determinations, Room N-5649, 
U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 
20210. Attention: Application No.------ stated in each Notice of 
Proposed Exemption. Interested persons are also invited to submit 
comments and/or hearing requests to EBSA via e-mail or fax. Any such 
comments or requests should be sent either by e-mail to: 
``[email protected]'', or by fax to (202) 219-0204 by the end of 
the scheduled comment period. The applications for exemption and the 
comments received will be available for public inspection in the Public 
Documents Room of the Employee Benefits Security Administration, U.S. 
Department of Labor, Room N-1513, 200 Constitution Avenue, NW., 
Washington, DC 20210.

Notice to Interested Persons

    Notice of the proposed exemptions will be provided to all 
interested persons in the manner agreed upon by the applicant and the 
Department within 15 days of the date of publication in the Federal 
Register. Such notice shall include a copy of the notice of proposed 
exemption as published in the Federal Register and shall inform 
interested persons of their right to comment and to request a hearing 
(where appropriate).

SUPPLEMENTARY INFORMATION: The proposed exemptions were requested in 
applications filed pursuant to section 408(a) of the Act and/or section 
4975(c)(2) of the Code, and in accordance with procedures set forth in 
29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990). 
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 requested to 
the Secretary of Labor. Therefore, these notices of proposed

[[Page 13955]]

exemption are issued solely by the Department.
    The applications contain representations with regard to the 
proposed exemptions which are summarized below. Interested persons are 
referred to the applications on file with the Department for a complete 
statement of the facts and representations.

The JPMorgan Chase Bank (Located in New York, New York)

[Application No. D-11062]

Proposed Exemption

    Based on the facts and representations set forth in the 
application, the Department is considering granting an exemption 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 part 
2570, subpart B (55 FR 32836, August 10, 1990).

Section I--Transactions

    If the exemption is granted, the restrictions of sections 406(a), 
406(b)(1) and 406(b)(2) of the Act and the sanctions resulting from the 
application of section 4975 of the Code, by reason of section 
4975(c)(1)(A)-(E) of the Code, shall not apply as of December 31, 2000, 
to:
    (A) The continuation of a lease (the Lease), by the Commingled 
Pension Trust Fund (Strategic Property) of JPMorgan Chase Bank (the 
Fund) with respect to which JPMorgan Chase Bank (JPMCB) is the trustee 
(the Trustee), of office space in a certain commercial office building 
(the Property) to Chase Global Funds Service Company (CGF), a party in 
interest with respect to employee benefit plans whose assets are 
invested in the Fund (Plans) and an affiliate of JPMCB; and
    (B) the continued and future provision by JPMCB or its affiliates 
of letters of credit (Letter(s) of Credit) to guarantee the obligations 
of unrelated third-party tenants to pay rent to the Fund under 
commercial real estate leases.
    This exemption is subject to the conditions set forth in Section 
II.

Section II--Conditions

    (A) The Fund is represented by a fiduciary independent of JPMCB and 
its affiliates (the independent fiduciary) with respect to the Lease to 
perform the following functions:
    (1) Confirm that when the Lease originally was entered into, and as 
modified to date, all the terms and conditions of the Lease, including 
those relating to renewal options and rights of first refusal, were 
commercially reasonable and at least as favorable to the Plans as those 
terms and conditions which could have been obtained at arm's length 
with an unrelated third party;
    (2) Determine, based upon a written appraisal report by a qualified 
appraiser independent of JPMCB and its affiliates, that the leasing 
renewal rate the Fund will charge CGF if CGF elects to exercise its 
renewal options under the Lease, effective in 2004 and thereafter, and 
that the leasing rate with respect to any space leased by CGF in the 
Property pursuant to any rights of first refusal CGF has under the 
Lease, accurately reflect at least fair market rental value;
    (3) Negotiate and approve, subject to the appropriate ERISA 
fiduciary standards, such amendments to the Lease upon renewal(s) as it 
deems appropriate, including, for example: (i) A shorter renewal term 
than the current five year term; (ii) additional renewal period(s) 
(provided that the rent paid in any time periods after February 28, 
2009, under any newly granted renewal option(s) would be at 100% of 
fair rental value, as opposed to the 95% of fair rental value that 
applies for periods through February 28, 2009); (iii) the lease of less 
square footage than the current square footage covered under the Lease; 
(iv) the lease of more square footage than the current square footage 
covered under the Lease (provided that the rent paid for any square 
footage in excess of the current square footage would also be leased at 
100% of fair rental value, and not 95% of fair rental value); (v) using 
a ``base year'' under the Lease (upon which certain periodic increases 
such as taxes are calculated) updated to the year 2004, and (vi) 
allowing CGF to install shatter-proof glass in the space it leases; 
provided that all such amendments are not more favorable to the lessee 
than the terms generally available in arm's length transactions between 
unrelated parties, as determined by the independent fiduciary; and
    (4) Represent the Fund and the participants (Participants) in the 
Plans as independent fiduciary in any circumstances in addition to 
those described in subsection (3) above while the Lease (including any 
periods of renewal) is in effect which would present a conflict of 
interest for the Trustee, including but not limited to: default by CGF 
or disagreement on an economic computation under the Lease.
    (B) The Fund is represented by an independent fiduciary with 
respect to any existing or future Letters of Credit to perform the 
following functions:
    (1) Monitor monthly reports of rental payments of tenants utilizing 
a Letter of Credit issued by JPMCB or any affiliate to guarantee their 
lease payments;
    (2) Confirm whether an event has occurred that calls for the Letter 
of Credit to be drawn upon; and
    (3) Represent the Fund and the Participants as an independent 
fiduciary in any circumstances with respect to the Letters of Credit 
which would present a conflict of interest for the Trustee, including 
but not limited to: the need to enforce a remedy against itself or an 
affiliate with respect to its obligations under a Letter of Credit.
    (C) Future Letters of Credit are issued by JPMCB or an affiliate to 
guarantee the obligations of third-party tenants to pay rent to the 
Fund under commercial real estate leases only if the following 
additional conditions are met:
    (1) JPMCB or its affiliate, as the issuer of a Letter of Credit, 
has at least an ``A'' credit rating by at least one nationally 
recognized statistical rating service at the time of the issuance of 
the Letter of Credit;
    (2) The Letter of Credit has objective market drawing conditions 
and states precisely the documents against which payment is to be made;
    (3) JPMCB does not ``steer'' the Fund's tenants to itself or its 
affiliates in order to obtain the Letter of Credit;
    (4) Letters of Credit are issued only to tenants which are 
unrelated to JPMCB; and
    (5) The terms of any future Letters of Credit are not more 
favorable to the tenants than the terms generally available in 
transactions with other similarly situated unrelated third-party 
commercial clients of JPMCB or its affiliates.

Section III--Definitions

    (A) The term ``independent fiduciary'' means Aon Fiduciary 
Counselors, Inc. (AFC) or any successor independent fiduciary, provided 
that AFC or the successor independent fiduciary is: (1) Independent of 
and unrelated to JPMCB and its affiliates, and (2) appointed to act on 
behalf of the Fund for the purposes described in conditions II(A) and 
(B) above. For purposes of this exemption, a fiduciary will not be 
deemed to be independent of and unrelated to JPMCB if: (1) Such 
fiduciary directly or indirectly controls, is controlled by or is under 
common control with JPMCB, (2) such fiduciary directly or indirectly 
receives any compensation or other consideration in connection with any 
transaction described in this exemption, except that an independent 
fiduciary may receive compensation for acting as an

[[Page 13956]]

independent fiduciary from JPMCB in connection with the transactions 
contemplated herein if the amount or payment of such compensation is 
not contingent upon or in any way affected by the independent 
fiduciary's ultimate decision and (3) more than 5 percent of such 
fiduciary's annual gross revenue in its prior tax year will be paid by 
JPMCB and its affiliates in the fiduciary's current tax year.
    (B) The term ``affiliate'' means:
    (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.
    (C) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    Effective Date: The exemption, if granted, will be effective as of 
December 31, 2000.

Summary of Facts and Representations

    1. The applicant, JPMorgan Chase Bank (JPMCB), is a subsidiary of 
J.P. Morgan Chase & Co. and is based in New York, NY. J.P. Morgan Chase 
& Co. is the resulting company from a merger (the Merger) of J.P. 
Morgan & Co. Incorporated and The Chase Manhattan Corporation, 
effective as of December 31, 2000. As of the date of the Merger, which 
was accounted for as a pooling of interests, J.P. Morgan Chase & Co. 
became the second largest banking institution in the United States, 
with approximately $715 billion in assets and $42 billion in 
stockholders' equity. J.P. Morgan Chase & Co. is now a global financial 
services firm with operations in over 60 countries. Prior to November 
10, 2001, it had as its principal subsidiaries: The Chase Manhattan 
Bank and Morgan Guaranty Trust Company (MGT), each a New York banking 
corporation headquartered in New York City, and Chase Manhattan Bank 
USA, National Association, headquartered in Delaware. On November 10, 
2001, MGT merged into The Chase Manhattan Bank and changed its name to 
JPMorgan Chase Bank.
    J.P. Morgan Chase & Co. is internally organized for management 
reporting purposes into five major business groups: (i) Investment 
banking, (ii) Treasury and securities services, (iii) J.P. Morgan 
Partners (a private equity investment firm), (iv) retail and middle-
market banking and (v) investment management and private banking. Only 
the fifth business group is relevant to the applicant's exemption 
request.
    2. JPMCB serves as trustee (the Trustee) to the Commingled Pension 
Trust Fund (Strategic Property) of JPMorgan Chase Bank (the Fund).\1\ 
The Fund has net assets of approximately $4.5 billion invested in 74 
developed real estate properties, primarily office buildings, 
industrial parks, multi-family properties and retail properties. The 
applicant represents that approximately 126 employee benefit plans have 
invested in the Fund, both employee benefit plans subject to Title I of 
ERISA and section 4975 of the Code (Plans) and those not so subject, 
such as governmental plans within the meaning of section 3(32) of 
ERISA. The average investment per Plan is approximately $35.3 million. 
Currently, no Plan has an interest exceeding 10% of the Fund. The 
applicant represents that one pension plan invested in the Fund is 
sponsored by JPMCB and its investment represents 2.2% of the Fund's 
interests as of December 31, 2002.
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    \1\ Prior to December 31, 2000, MGT served as trustee of the 
Fund.
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    The applicant represents that prior to December 31, 2000, in order 
to avoid triggering prohibited transactions under section 406 of the 
Act or section 4975 of the Code, the trustee, as the ERISA fiduciary of 
the Fund, relied on Prohibited Transaction Exemption (PTE) 84-14 (49 FR 
9494, March 13, 1984) or Prohibited Transaction Exemption (PTE) 91-38 
(56 FR 31966, July 12, 1991), as the circumstances dictated, in order 
to conduct the real estate activities of the Fund. The applicant 
represents that the Fund is a bank collective investment fund within 
the meaning of PTE 91-38, and an investment fund within the meaning of 
PTE 84-14. The applicant further represents that the Trustee, JPMCB, is 
a ``bank'' maintaining the Fund within the meaning of PTE 91-38 and 
meets the definition of a qualified professional asset manager (QPAM) 
under PTE 84-14.
    As a result of the Merger, the applicant represents that the 
Trustee's ability to rely on PTE 84-14 and PTE 91-38 was affected with 
respect to two transactions discussed herein (the Lease Transaction and 
the Letters of Credit), as entities which may be parties in interest 
with respect to Plans became affiliates of the Trustee. Therefore, the 
applicant represents that conditions in both exemptions requiring that 
the party in interest involved in the transaction not be related to the 
qualified professional asset manager (QPAM) of the investment fund in 
the case of PTE 84-14, or the trustee of the bank collective investment 
fund in the case of PTE 91-38, could no longer be met.
    With respect to the JPMCB plan invested in the Fund, the applicant 
represents that JPMCB has been, and is, operating the Fund in 
accordance with the conditions of PTE 91-38 except for the conditions 
it is unable to meet due to the Merger.

The Lease Transaction

    3. The applicant represents that the Fund owns a rehabilitated 
office building located at 73 Tremont Street in Boston, Massachusetts 
(the Property). The Property represents 1.92% of the net asset value of 
the Fund. Chase Global Funds Service Company (CGF) is currently the 
largest tenant, occupying 136,010 square feet or 44.75% of the 
Property, pursuant to a lease (the Lease) executed on December 31, 
1992, with a predecessor of CGF. The current Lease term commenced on 
March 1, 1994. CGF pays rent of $24.50 per square foot on 131,469 
square feet and $20.50 per square foot on the remaining 4,541 square 
feet. CGF reimburses the Fund for a prorated share of common area 
maintenance, real estate taxes and property insurance over a 1994 
``base year,'' including its share of any increases for those costs 
over the base year. CGF is separately metered for electricity which is 
not included in the rent. If CGF sublets the space, any profits earned 
are split 50/50 with the Fund.
    The Lease currently expires on February 28, 2004, and CGF gave 
notice on or before December 31, 2002 of its intent to renew the Lease 
for a period of five years which would begin on March 1, 2004, and end 
on February 28, 2009, at a rent of ``95% of fair market rent.'' The 
applicant represents that while the Lease renewal rate is expressed in 
terms of ``95% of fair market rent,'' this rate constitutes fair market 
rental value for space leased pursuant to a renewal option when the 
terms of the original Lease were negotiated as a package. The 5% 
discount is intended to reflect the cost savings to the Fund for not 
having to grant the normal concessions to the tenant that are typically 
given for initial free rent, so-called ``workout allowances,'' and the 
costs saved by the Fund for not having to advertise for a new tenant 
and pay real estate brokers. The Lease also provides that if any other 
space in the building occupied by another tenant becomes available, the 
Fund has the obligation to offer such space to CGF at the then fair 
market rent but otherwise pursuant to the terms of the Lease. CGF has 
five days from

[[Page 13957]]

receiving notice of the space becoming available to notify the Fund 
whether it will take such space and then proceed to negotiate the 
rental rate. The applicant represents that both the renewal option and 
the right of first refusal option features in the Lease are 
advantageous to the Fund because they provide a potential captive 
market for space in the building as it becomes available without the 
Fund having to advertise for another tenant, negotiate a new lease, 
incur legal fees and closing costs or risk periods of vacancy.
    4. In connection with CGF's election to renew its option to extend 
the term of the Lease beyond February 28, 2004, it may elect to 
negotiate for an amendment of the Lease to permit: (a) A shorter 
renewal term than the current five-year term, (b) additional renewal 
option period(s), (c) the lease of less square footage then the current 
square footage covered under the Lease and/or (d) the lease of more 
such square footage. The rent paid by CGF for any time periods after 
February 28, 2009, under any newly granted renewal option, would be at 
100% of fair rental value, as opposed to the 95% of fair rental value 
that applies for periods through February 28, 2009. Similarly, any 
square footage leased in excess of the current square footage would 
also be leased at 100% of fair rental value. (As a practical matter, 
any such space necessarily would become available from space given up 
from other tenants, so would be subject to the terms of CGF's right of 
first refusal which provides for rent at 100% of fair rental value.)
    CGF may, in the course of electing to review its option to extend 
the term of the Lease beyond February 28, 2004, elect to negotiate with 
the independent fiduciary for other amendments to the Lease. Examples 
of the anticipated type of amendments to the Lease include using a 
``base year'' under the Lease (upon which certain periodic increases 
such as taxes are calculated) updated to 2004 and allowing CGF to 
install shatter-proof glass in the space it leases.
    5. The predecessor of CGF, Mutual Fund Service Company (MSFC), 
originally negotiated the Lease. The primary business of MSFC was to 
act as a third-party service provider to 401(k) plans, providing 
customer service personnel to answer questions to plan participants 
about their investment funds in 401(k) plans sponsored by their 
employers. MSFC also generated computerized monthly and quarterly 
statements as well as mailings to their customers. MSFC moved in 
September of 1993 and occupied the space rent free for six months, 
paying rent beginning on March 1, 1994. In 1997, CGF purchased the 
assets of MSFC, and the Fund consented to assumption of the Lease by 
CGF. After the purchase, CGF retained the personnel and business 
activities of MSFC. Thus, the applicant represents that the original 
Lease was negotiated by a party unrelated to both the Trustee and CGF.
    6. The applicant represents that Aon Fiduciary Counselors, Inc. 
(AFC) is an independent fiduciary which has been retained by the 
Trustee on behalf of the Fund and the Plans. AFC is an investment 
adviser registered with the Securities and Exchange Commission under 
the Investment Advisers Act of 1940. AFC has acknowledged its duties, 
responsibilities and obligations to the Fund and the Plans' 
participants and beneficiaries as a fiduciary under the Act. AFC acts 
primarily as independent fiduciary for large pension plans. Nell 
Hennessy, President of AFC, will lead the project. Ms. Hennessy has 
been involved in a variety of transactions involving pension plan 
investment in real estate, including acquisition of individual 
properties, creation of real estate holding companies, and obtaining 
prohibited transaction exemptions for real estate syndications designed 
for pension plan investors. Ms. Hennessy represents that AFC is 
independent of J.P. Morgan Chase & Co. and its affiliates and the 
sponsors of the Plans. Ms. Hennessy further represents that AFC has 
never previously performed any services for J.P. Morgan Chase & Co. or 
its affiliates, and, as of the date of the applicant's submission, 
AFC's affiliates derived less than 1% of their annual gross income from 
J.P. Morgan Chase & Co. and its affiliates. Ms. Hennessy represents 
that no more than 5 percent of AFC's annual gross revenue in its prior 
tax year will be paid by JPMCB and its affiliates in AFC's current tax 
year. The applicant represents that AFC will remain on retainer for the 
entire term of the Lease; additionally, in the event that AFC 
terminates its services as independent fiduciary, the applicant will 
notify the Department, and any successor will be as independent, of 
equal experience, and have responsibilities similar to those of AFC and 
will assume its responsibilities prior to AFC's departure.
    The applicant represents that AFC, as the independent fiduciary, 
will:
    (a) Confirm that when the Lease was originally entered into, and as 
modified to date, all the terms and conditions of the Lease, including 
those relating to the renewal option and any rights of first refusal, 
were commercially reasonable and at least as favorable to the Plans as 
those terms and conditions which could have been obtained at arm's 
length with an unrelated third party;
    (b) Determine, based upon a written appraisal report by an 
independent qualified appraiser, that the leasing renewal rate the Fund 
will charge CGF if CGF elects to renew its option(s) under the Lease, 
effective in 2004 and thereafter, and the leasing rate with respect to 
any space taken by CGF in the Property, pursuant to any rights of first 
refusal that CGF has under the Lease, accurately reflect at least fair 
market rental value;
    (c) Negotiate and approve, subject to the appropriate ERISA 
fiduciary standards, such amendments to the Lease upon renewal(s) as it 
deems appropriate, including, for example: (i) A shorter renewal term 
than the current five year term; (ii) additional renewal period(s) 
(provided that the rent paid in any time periods after February 28, 
2009, under any newly granted renewal option(s) would be at 100% of 
fair rental value, as opposed to the 95% of fair rental value that 
applies for periods through February 28, 2009); (iii) the lease of less 
square footage than the current square footage covered under the Lease; 
(iv) the lease of more square footage than the current square footage 
covered under the Lease (provided that the rent paid for any square 
footage in excess of the current square footage would also be leased at 
100% of fair rental value, and not 95% of fair rental value); (v) using 
a ``base year'' under the Lease (upon which certain periodic increases 
such as taxes are calculated) updated to the year 2004, and (vi) 
allowing CGF to install shatter-proof glass in the space it leases; 
provided that all such amendments are not more favorable to the lessee 
than the terms generally available in arm's length transactions between 
unrelated parties, as determined by AFC as independent fiduciary; and
    (d) Represent the Fund and the Plans' participants as independent 
fiduciary in any circumstances in addition to those described 
immediately above while the Lease (including any periods of renewal) is 
in effect which would present a conflict of interest for the Trustee, 
including but not limited to: default by CGF or disagreement on an 
economic computation under the Lease.

The Letters of Credit

    7. The applicant represents that prior to the Merger, The Chase 
Manhattan Bank issued a series of letters of credit (the Letters of 
Credit) to guarantee rent payment obligations of unrelated third-party 
tenants of buildings owned by the Fund. The tenants were not affiliates 
of J.P. Morgan & Co., Incorporated or The

[[Page 13958]]

Chase Manhattan Corporation prior to the Merger and are not affiliates 
of J.P. Morgan Chase & Co., post-Merger.
    The applicant represents that a letter of credit is an instrument 
issued by a bank or other lending institution, whose function is 
similar to that of a guaranty and is used in commercial leasing 
transactions as a substitute for a security deposit. The applicant 
represents that the lending institution, upon issuing a letter of 
credit, promises that if actions of the tenant trigger certain default 
events set forth in the lease, such as bankruptcy of the tenant, it 
will make such lease payments directly to the Fund up to the face 
amount of the letter of credit. The beneficiary of the letter of 
credit, the Fund, is issued a redeemable instrument that it may take 
directly to the lending institution and demand payment merely by 
stating that payment is due pursuant to the terms of the lease. The 
bank is obligated to pay without further inquiry and generally cannot 
be sued by the tenant for having paid under the letter of credit, 
absent fraud on its part. The Fund is not required to have any further 
involvement with the tenant in order to receive payment under the 
letter of credit from the bank. The letters of credit automatically 
renew annually until their final stated expiration date, and are either 
cash collateralized by the tenants or, in the case of particularly 
creditworthy tenants, the tenants enter into a reimbursement agreement 
with the bank. The applicant represents that ``cash collateralized'' 
does not mean that cash is deposited as collateral. Rather, the 
collateral is a security interest in cash held by the bank in the name 
of the tenant. The applicant represents that the terms of the Letters 
of Credit are governed by the 1993 Uniform Customs and Practice for 
Documentary Credits (Customs and Practice) that contain standard 
provisions widely accepted in the banking industry promulgated by the 
International Chamber of Commerce Commission on Banking Technique and 
Practice which most banking institutions incorporate by reference in 
their letters of credit.
    8. One Letter of Credit, P-398582, was issued by Chase Manhattan 
Bank with respect to property referred to in the application as the 
Glendale Plaza property. The Letter of Credit currently has an 
aggregate amount of $500,000 and names Glendale Plaza Realty Holding 
Co., (a wholly-owned subsidiary of the Fund) as beneficiary. The 
Glendale Plaza property was acquired by Glendale Plaza Realty Holding 
Company from an unrelated third party on November 30, 2000. The tenant 
subsequently directed that the Letter of Credit be transferred to 
Glendale Plaza Realty Holding Co., as beneficiary. The letter 
automatically renews, without action by JPMCB, through its final 
expiration date of March 22, 2004.
    9. A second Letter of Credit, P-264349, was issued by Chase 
Manhattan Bank with respect to property referred to by the applicant as 
the 303 Wacker Drive property, located in Chicago, Il. The property was 
purchased from Metropolitan Life Insurance Co (MetLife) in December 
1997 by the Fund's wholly-owned subsidiary 303 Wacker Realty, LLC. The 
letter of credit was purchased by the tenant in favor of the original 
landlord, MetLife, in an amount of $18,845. The Letter of Credit 
provided that the face amount of the letter could be reduced over the 
course of the lease in proportion to the tenant's remaining obligations 
thereunder and was accordingly reduced to a face amount of $12,563 as 
of October 1, 1998. The applicant represents that this type of 
reduction for a tenant in good standing is traditional in the real 
estate industry. The letter expired on September 30, 2001, and was not 
reissued in the name of 303 Wacker Realty, LLC and was not renewed. The 
applicant represents that the tenant is currently in bankruptcy and had 
rent in arrears discharged in the bankruptcy in the amount of 
$17,733.87. On the recommendation of the independent fiduciary, the 
property manager has reimbursed the Fund for $12,563, the full face 
amount of the Letter of Credit.
    The applicant represents that on July 5, 2000, a new Letter of 
Credit was issued with respect to the same tenant in favor of 303 
Wacker Realty, LLC, in the amount of $6,990. This letter covers 
additional space leased by the tenant with final annual automatic 
renewal dates until June 30, 2005, the final expiration date. The 
applicant requests relief for both Letters of Credit associated with 
the property owned by 303 Wacker Realty, LLC.
    10. The applicant also requests exemptive relief for any future 
Letters of Credit issued by JPMCB or its affiliates to third-party 
tenants in Fund-owned buildings. The applicant represents that such 
future Letters of Credit would be structured similarly to the current 
outstanding Letters of Credit.
    The applicant represents that the Letters of Credit function to 
ensure continuous and timely rental payments in the case of default by 
one of the tenants in the buildings owned by the Fund and their use is 
customary in the real estate and banking industries. The applicant 
represents that it is generally difficult for tenants to obtain a 
Letter of Credit from an institution with which they do not otherwise 
have a business banking relationship. Therefore, if JPMCB or its 
affiliate is the tenant's commercial bank, it may be the tenant's only 
source to obtain a Letter of Credit. In addition, the applicant 
represents that given the increasing number of bank mergers, there are 
fewer banks available from which to purchase a Letter of Credit. The 
applicant represents that eliminating JPMCB or its affiliates from the 
available pool of Letters of Credit providers would be disadvantageous 
to the Fund and the Plans.\2\
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    \2\ The applicant states that several more Letters of Credit 
were issued to joint ventures in which the Fund has an interest. The 
applicant represents that such ventures constitute ``real estate 
operating companies'' within the meaning of the plan asset 
regulations set forth in 29 CFR section 2510.3-101. The applicant 
notes the existence of these other Letters of Credit to show that 
the ability of JPMCB and its affiliates to provide such Letters of 
Credit are an important source of economic protection for the Fund.
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    11. The applicant represents that AFC has been retained as 
independent fiduciary to determine whether it is appropriate to draw on 
any currently outstanding or future Letter of Credit. AFC will be given 
periodic (monthly) reports of rental payments by the tenant so it can 
confirm whether the Letter of Credit should be called. In addition, AFC 
will act in place of the Trustee in any situation which presents a 
conflict of interest for the Trustee, including but not limited to: the 
need to enforce a remedy against itself or an affiliate with respect to 
its obligations under a Letter of Credit.
    Future Letters of Credit issued by JPMCB or its affiliates will be 
permitted only if: (a) JPMCB or its affiliate, as the issuer of a 
Letter of Credit, has at least an ``A'' credit rating by at least one 
nationally recognized statistical rating service at the time of the 
issuance of the Letter of Credit; (b) the Letter of Credit has 
objective market drawing conditions; (c) JPMCB does not ``steer'' the 
Fund's tenants to itself or its affiliates in order to obtain the 
Letter of Credit; (d) Letters of Credit are issued only to tenants 
which are unrelated to JPMCB; and (e) the terms of any future Letters 
of Credit are not more favorable to the tenants than the terms 
generally available in transactions with other similarly situated 
unrelated third-party commercial clients of JPMCB or its affiliates.
    12. The applicant represents that prior to the Merger, affiliates 
of The Chase Manhattan Corporation leased space in the Park Central 
office complex owned by the Fund in Dallas, Texas. Since December 31, 
2000, the Fund has leased

[[Page 13959]]

office space to J.P. Morgan Chase & Co. affiliates under four separate 
leases in the Park Central office complex. The complex is comprised of 
Park Central Buildings VII, VIII, and IX, although all of the space 
leased to J.P. Morgan Chase & Co. affiliates is located in building 
VII.
    The leases in question are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                            Rate (psf/   Execution
       J.P. Morgan Chase & Co. Affiliate            Suite      Size  (sf)      yr)          date      Expiration
----------------------------------------------------------------------------------------------------------------
The Chase Manhattan Bank (now JPMCB)...........          102        6,536       $16.50      10/1/96      9/30/01
Chase Manhattan Mortgage Corp..................         1400        7,845        23.50       6/1/99      3/31/04
Chase Manhattan Mortgage Corp..................         1440        1,798        23.50       4/1/99      3/31/04
Chase Manhattan Mortgage Corp..................          750        2,500        21.00       7/9/01       (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Month to month.

    The applicant represents that each lease meets the conditions of 
Part III of PTE 84-14 for real estate leases, and therefore a 
prohibited transaction exemption is not necessary to cover the leases. 
Specifically, the applicant represents that the following conditions of 
PTE 84-14, Part III, are met: First, the unit of space subject to the 
lease is suitable (or adaptable without excessive cost) for use by 
different tenants. Second, at the time the transaction is entered into 
(and at the time of any subsequent renewal or modification that 
requires the consent of the Trustee as QPAM), the terms of the 
transaction may not be more favorable to the lessee than the terms 
generally available in arm's-length transactions between unrelated 
parties. Third, no commission or other fee is paid by the Fund in 
connection with the lease to the Trustee, or to any person or entity 
(or any affiliate) who made the decision to have, or had the direct 
authority to direct, any Plan to invest in the Fund. The applicant 
represents that the fourth condition of Part III also is met which 
requires that the amount of space covered by the lease does not exceed 
the greater of 7,500 square feet or one percent (1%) of the available 
space of the office building, integrated office park or commercial 
center in which the Fund has the investment. In this latter regard, the 
applicant represents that Park Central Buildings VII, VIII and IX owned 
by the Fund constitute one commercial center or integrated office park 
and that all of the leases constitute less than 1% of the square 
footage of the Park Central commercial center or office park.\3\
---------------------------------------------------------------------------

    \3\ The applicant is not requesting exemptive relief in this 
proposed exemption for the leases in the Park Central office 
complex, nor is the Department providing any views in this proposed 
exemption as to whether the conditions of PTS 84-14 would be met for 
such transactions.
---------------------------------------------------------------------------

    13. In summary, with respect to the Lease transaction, the 
applicant represents that the exemption will satisfy the statutory 
criteria under section 408(a) of the Act for the following reasons:
    (a) The Fund was represented by a qualified independent fiduciary 
(i.e., the Trustee, who was not then affiliated with the tenant, CGF) 
when the original Lease and all amendments thereto were negotiated and 
executed; and
    (b) The Fund at all times on or after December 31, 2000, will be 
represented by a qualified independent fiduciary (i.e., AFC) to perform 
the following functions:
    (i) Confirm that when the Lease was originally entered into, and as 
modified to date, all the terms and conditions of the Lease, including 
those relating to renewal options and rights of first refusal, were 
commercially reasonable and at least as favorable to the Plans as those 
terms and conditions which could have been obtained at arm's length 
with an unrelated third party;
    (ii) Determine, based upon a written appraisal report by an 
independent qualified appraiser, that the leasing renewal rate the Fund 
will charge CGF if CGF elects to renew its option(s) under the Lease, 
effective in 2004 and thereafter, and the leasing rate with respect to 
any space leased by CGF in the Property, pursuant to any rights of 
first refusal CGF has under the Lease, accurately reflect at least fair 
market rental value;
    (iii) Negotiate and approve, subject to the appropriate ERISA 
fiduciary standards, such amendments to the Lease upon renewal(s) as it 
deems appropriate, including, for example: (i) A shorter renewal term 
than the current five year term; (ii) additional renewal period(s) 
(provided that the rent paid in any time periods after February 28, 
2009, under any newly granted renewal option(s) would be at 100% of 
fair rental value, as opposed to the 95% of fair rental value that 
applies for periods through February 28, 2009); (iii) the lease of less 
square footage than the current square footage covered under the Lease; 
(iv) The lease of more square footage than the current square footage 
covered under the Lease (provided that the rent paid for any square 
footage in excess of the current square footage would also be leased at 
100% of fair rental value, and not 95% of fair rental value); (v) using 
a ``base year'' under the Lease (upon which certain periodic increases 
such as taxes are calculated) updated to the year 2004, and (vi) 
allowing CGF to install shatter-proof glass in the space it leases; 
provided that all such amendments are not more favorable to the lessee 
than the terms generally available in arm's length transactions between 
unrelated parties, as determined by the independent fiduciary; and
    (iv) Represent the Fund and the Plans' participants as an 
independent fiduciary in any circumstances in addition to those 
described above while the Lease (including any periods of renewal) is 
in effect which would present a conflict of interest for the Trustee, 
including but not limited to: default by CGF or disagreement on an 
economic computation under the Lease.
    14. With respect to the Letters of Credit, the applicant represents 
that the exemption will meet the statutory criteria under section 
408(a) of the Act for the following reasons:
    (a) The Fund was represented by a qualified independent fiduciary 
(i.e., the Trustee, who was not then affiliated with The Chase 
Manhattan Bank, the issuer of the Letters of Credit) when the existing 
Letters of Credit were executed;
    (b) The Fund at all times on or after December 31, 2000, will be 
represented by a qualified independent fiduciary with respect to any 
existing or future Letters of Credit to perform the following 
functions:
    (i) Monitor monthly reports of rental payments of tenants utilizing 
a Letter of Credit issued by JPMCB or any affiliate to guarantee their 
lease payments;
    (ii) Confirm whether an event has occurred that calls for the 
Letter of Credit to be drawn upon; and
    (iii) Represent the Fund and the Participants as an independent 
fiduciary in any circumstances with respect to the Letter of Credit 
which would present a conflict of interest for the Trustee, including 
but not limited to: the need to enforce a remedy against itself or an

[[Page 13960]]

affiliate with respect to its obligations under a Letter of Credit; and
    (c) Future Letters of Credit may be issued by JPMCB or an affiliate 
only if the following additional conditions are met:
    (i) JPMCB or its affiliate, as the issuer of a Letter of Credit, 
has at least an ``A'' credit rating by at least one nationally 
recognized statistical rating service at the time of the issuance of 
the Letter of Credit;
    (ii) The Letter of Credit has objective market drawing conditions;
    (iii) JPMCB does not ``steer'' the Fund's tenants to itself or its 
affiliates in order to obtain the Letter of Credit;
    (iv) Letters of Credit are issued only to tenants which are 
unrelated to JPMCB; and
    (v) The terms of any future Letters of Credit are not more 
favorable to the tenants than the terms generally available in 
transactions with other similarly situated unrelated third-party 
commercial clients of JPMCB or its affiliates.
    For Further Information Contact: Karen E. Lloyd of the Department, 
telephone (202) 693-8540. (This is not a toll-free number).

Deutsche Bank AG (Deutsche Bank)

[Application Nos. D-11086; D-11087; D-11088; D-11089; and D-11090]

Proposed Exemption

    Based on the facts and representations set forth in the 
application, the Department is considering granting an exemption 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 part 
2570, subpart B (55 FR 32836, August 10, 1990).

Section I: Basic Transaction

    If the exemption is granted, the restrictions of section 
406(a)(1)(A) through (D) of the Act and the taxes imposed by section 
4975 (a) and (b) of the Code, by reason of 4975(c)(1)(A) through (D) of 
the Code, shall not apply to a transaction between a party in interest 
with respect to a plan (as defined in section (V(h)) and such plan, 
provided that the Deutsche Bank In-house Manager (DBIM) (as defined in 
section IV(a)) has discretionary authority or control with respect to 
the plan assets involved in the transaction and the following 
conditions are satisfied:
    (a) The terms of the transaction are negotiated on behalf of the 
plan by, or under the authority and general direction of, the DBIM, and 
either the DBIM, or (so long as the DBIM retains full fiduciary 
responsibility with respect to the transaction) a property manager 
acting in accordance with written guidelines established and 
administered by the DBIM, makes the decision on behalf of the plan to 
enter into the transaction. Notwithstanding the foregoing, a 
transaction involving an amount of $5,000,000 or more, which has been 
negotiated on behalf of the plan by the DBIM will not fail to meet the 
requirements of this section I(a) solely because the plan sponsor or 
its designee retains the right to veto or approve such transaction;
    (b) The transaction is not described in--
    (1) Prohibited Transaction Exemption 81-6 \4\ (relating to 
securities lending arrangements),
---------------------------------------------------------------------------

    \4\ 46 FR 7527; January 23, 1981.
---------------------------------------------------------------------------

    (2) Prohibited Transaction Exemption 83-1 \5\ (relating to 
acquisitions by plans of interests in mortgage pools), or
---------------------------------------------------------------------------

    \5\ 48 FR 895; January 7, 1983.
---------------------------------------------------------------------------

    (3) Prohibited Transaction Exemption 88-59 \6\ (relating to certain 
mortgage financing arrangements);
---------------------------------------------------------------------------

    \6\ 53 FR 24811; June 30, 1988.
---------------------------------------------------------------------------

    (c) The transaction is not part of an agreement, arrangement or 
understanding designed to benefit a party in interest;
    (d) At the time the transaction is entered into, and at the time of 
any subsequent renewal or modification thereof that requires the 
consent of the DBIM, the terms of the transaction are at least as 
favorable to the plan as the terms generally available in arm's length 
transactions between unrelated parties;
    (e) The party in interest dealing with the plan: (1) Is a party in 
interest with respect to the plan (including a fiduciary) solely by 
reason of providing services to the plan, or solely by reason of a 
relationship to a service provider described in section 3(14)(F), (G), 
(H), or (I) of the Act; and (2) does not have discretionary authority 
or control with respect to the investment of the plan assets involved 
in the transaction and does not render investment advice (within the 
meaning of 29 CFR 2510.3-21(c)) with respect to those assets;
    (f) The party in interest dealing with the plan is neither the DBIM 
nor a person related to the DBIM (within the meaning of section IV(d));
    (g) The DBIM adopts written policies and procedures that are 
designed to assure compliance with the conditions of the exemption;
    (h) An independent auditor, who has appropriate technical training 
or experience and proficiency with ERISA's fiduciary responsibility 
provisions and so represents in writing, conducts an exemption audit 
(as defined in section IV(f)) on an annual basis. Following completion 
of the exemption audit, the auditor shall issue a written report to the 
plan presenting its specific findings regarding the level of compliance 
with the policies and procedure adopted by the DBIM in accordance with 
section I(g); and
    (i) In addition to the above:
    (1) The DBIM is a bank that has the power to manage, acquire or 
dispose of assets of a plan, which bank has, as of the last day of its 
most recent fiscal year, equity capital in excess of $1,000,000 and is 
either supervised by a state or federal agency, or by the German 
Federal Banking Supervisory Authority, Bundesanstalt fur 
Finanzdienstleistungsaufsicht (BAFin) in cooperation with the Deutsche 
Bundesbank (Bundesbank);
    (2) Prior to entering into any transaction described in the 
exemption, the DBIM agrees in writing:
    (A) To submit to the jurisdiction of the United States;
    (B) To appoint an agent for service of process in the United 
States, which may be an affiliate (the Process Agent);
    (C) To consent to service of process on the Process Agent;
    (D) That it may be sued in the United States courts in connection 
with the transactions described in this proposed exemption;
    (E) To comply with, and be subject to, all relevant provisions of 
the Act; and
    (F) That enforcement of any claim arising between a plan(s) and the 
DBIM, resulting from a transaction described in the proposed exemption, 
will occur in the United States courts.

Section II: Leasing of Office Space

    If the exemption is granted, the restrictions of sections 406(a), 
406(b)(1), 406(b)(2) and 407(a) of the Act and the taxes imposed by 
section 4975 (a) and (b) of the Code, by reason of section 
4975(c)(1)(A) through (E) of the Code, shall not apply to:
    (a) The leasing of office or commercial space owned by a plan 
managed by a DBIM to an employer any of whose employees are covered by 
the plan or an affiliate of such an employer (as defined in section 
407(d)(7) of the Act), if--
    (1) The plan acquires the office or commercial space subject to an 
existing lease with an employer, or its affiliate as a result of 
foreclosure on a mortgage or deed of trust;
    (2) The DBIM makes the decision on behalf of the plan to foreclose 
on the mortgage or deed of trust as part of the exercise of its 
discretionary authority;
    (3) The exemption provided for transactions engaged in with a plan

[[Page 13961]]

pursuant to section II(a) is effective until the later of the 
expiration of the lease term or any renewal thereof which does not 
require the consent of the plan lessor;
    (4) The amount of space covered by the lease does not exceed 
fifteen (15) percent of the rentable space of the office building or 
the commercial center; and
    (5) The requirements of sections I(c), I(g), and I(h) are satisfied 
with respect to the transaction.
    (b) The leasing of residential space by a plan to a party in 
interest if--
    (1) The party in interest leasing space from the plan is an 
employee of an employer any of whose employees are covered by the plan 
or an employee of an affiliate of such employer (as defined in section 
407(d)(7) of the Act);
    (2) The employee who is leasing space does not have any 
discretionary authority or control with respect to the investment of 
the assets involved in the lease transaction and does not render 
investment advice (within the meaning of 29 CFR 2510.3-21(c)) with 
respect to those assets;
    (3) The employee who is leasing space is not an officer, director, 
or a ten percent (10%) or more shareholder of the employer or an 
affiliate of such employer;
    (4) At the time the transaction is entered into, and at the time of 
any subsequent renewal or modification thereof that requires the 
consent of the DBIM, the terms of the transaction are not less 
favorable to the plan than the terms afforded by the plan to other, 
unrelated lessees in comparable arm's length transactions;
    (5) The amount of space covered by the lease does not exceed five 
percent (5%) of the rentable space of the apartment building or multi-
unit residential subdivision, and the aggregate amount of space leased 
to all employees of the employer or an affiliate of such employer does 
not exceed ten percent (10%) of such rentable space; and
    (6) The requirements of section I(a), I(c), I(d), I(g), and I(h) 
are satisfied with respect to the transaction.

Section III: Places of Public Accommodation

    If the exemption is granted, the restrictions of sections 
406(a)(1)(A) through (D) and 406(b) (1) and (2) of the Act and the 
taxes imposed by section 4975 (a) and (b) of the Code, by reason of 
section 4975(c)(1)(A) through (E) of the Code, shall not apply to the 
furnishing of services and facilities (and goods incidental thereto) by 
a place of public accommodation owned by a plan and managed by an DBIM 
to a party in interest with respect to the plan, if the services and 
facilities (and incidental goods) are furnished on a comparable basis 
to the general public.

Section IV: Definitions

    For the purposes of this exemption:
    (a) The term ``Deutsche Bank In-house Manager'' or ``DBIM'' means 
an organization which is--
    (1) Deutsche Bank, or a direct or indirect wholly-owned bank or 
trust company subsidiary of Deutsche Bank, supervised under the laws of 
the United States, a State, or Germany, that (A) Has the power to 
manage, acquire, or dispose of assets of a plan, (B) has, as of the 
last day of its most recent fiscal year, equity capital (i.e., common 
and preferred stock, surplus, undivided profits, contingency reserves, 
group contingency reserves, and other capital reserves) in excess of 
$1,000,000,\7\ and (C) has as of the last day of its most recent fiscal 
year under its management and control total assets attributable to 
plans maintained by affiliates of the DBIM (as defined in section 
IV(b)) in excess of $50 million; provided that if it has no prior 
fiscal year as a separate legal entity as a result of it constituting a 
division or group within the employer's organizational structure, then 
this requirement will be deemed met as of the date during its initial 
fiscal year as a separate legal entity that responsibility for the 
management of such assets in excess of $50 million was transferred to 
it from the employer.
---------------------------------------------------------------------------

    \7\ The condition in Part IV(a) of the proposed exemptioin that 
the INHAM have in excess of $1 million in equity capital mirrors the 
parallel requirement in Part IV(a) of QPAM, PTE 84-14.
---------------------------------------------------------------------------

    In addition, plans maintained by affiliates of the DBIM and/or the 
DBIM, must have, as of the last day of each plan's reporting year, 
aggregate assets of at least $250 million.
    (b) For purposes of section IV(a) and section IV(h), an 
``affiliate'' of an DBIM means a member of either: (1) a controlled 
group of corporations (as defined in section 414(b)) of the Code of 
which the DBIM is a member; or (2) a group of trades or businesses 
under common control (as defined in section 414(c))of the Code of which 
the DBIM is a member; provided that ``50 percent'' shall be substituted 
for ``80 percent'' wherever ``80 percent'' appears in section 414(b) or 
414(c) of the Code or the rules thereunder.
    (c) The term ``party in interest'' means a person described in 
section 3(14) of the Act and includes a ``disqualified person'' as 
defined in section 4975(e)(2) of the Code.
    (d) An DBIM is ``related'' to a party in interest for purposes of 
section I(f) of this exemption if the party in interest (or a person 
controlling, or controlled by, the party in interest) owns a five 
percent (5%) or more interest in the DBIM or if the DBIM (or a person 
controlling, or controlled by, the DBIM) owns a five percent (5%) or 
more interest in the party in interest. For purposes of this 
definition:
    (1) The term ``interest'' means with respect to ownership of an 
entity--
    (A) The combined voting power of all classes of stock entitled to 
vote or the total value of the shares of all classes of stock of the 
entity if the entity is a corporation.
    (B) The capital interest or the profits interest of the entity if 
the entity is a partnership, or
    (C) The beneficial interest of the entity if the entity is a trust 
or unincorporated enterprise;
    (2) A person is considered to own an interest held in any capacity 
if the person has or shares the authority--
    (A) To exercise any voting rights or to direct some other person to 
exercise the voting rights relating to such interest, or
    (B) To dispose or to direct the disposition of such interest; and
    (3) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (e) For purposes of this exemption, the time as of which any 
transaction occurs is the date upon which the transaction is entered 
into. In addition, in the case of a transaction that is continuing, the 
transaction shall be deemed to occur until it is terminated. If any 
transaction is entered into on or after April 8, 2002, or any renewal 
that requires the consent of the DBIM occurs on or after April 8, 2002, 
and the requirements of this exemption are satisfied at the time the 
transaction is entered into or renewed, the requirements will continue 
to be satisfied thereafter with respect to the transaction. Nothing in 
this paragraph shall be construed as exempting a transaction entered 
into by a plan which becomes a transaction described in section 406 of 
the Act or section 4975 of the Code while the transaction is 
continuing, unless the conditions of the exemption were met either at 
the time the transaction was entered into or at the time the 
transaction would have become prohibited but for this exemption. In 
determining compliance with the conditions of the exemption at the time 
that the transaction was entered into for purposes of the preceding 
sentence, section I(e) will be

[[Page 13962]]

deemed satisfied if the transaction was entered into between a plan and 
a person who was not then a party in interest.
    (f) Exemption Audit. An ``exemption audit'' of a plan must consist 
of the following:
    (1) A review of the written policies and procedures adopted by the 
DBIM pursuant to Section I(g) for consistency with each of the 
objective requirements of this exemption (as described in Section 
IV(g)).
    (2) A test of a representative sample of the plan's transactions in 
order to make findings regarding whether the DBIM is in compliance with 
(i) the written policies and procedures adopted by the DBIM pursuant to 
section I(g) of the exemption and (ii) the objective requirements of 
the exemption.
    (3) A determination as to whether the DBIM has satisfied the 
definition of an DBIM under the exemption; and
    (4) Issuance of a written report describing the steps performed by 
the auditor during the course of its review and the auditor's findings.
    (g) For purposes of section IV(f), the written policies and 
procedures must describe the following objective requirements of the 
exemption and the steps adopted by the DBIM to assure compliance with 
each of these requirements:
    (1) The definition of an DBIM in section IV(a).
    (2) The requirements of Part I and section I(a) regarding the 
discretionary authority or control of the DBIM with respect to the plan 
assets involved in the transaction, in negotiating the terms of the 
transaction, and with regard to the decision on behalf of the plan to 
enter into the transaction.
    (3) That any procedure for approval or veto of the transaction 
meets the requirements of section I(a).
    (4) For a transaction described in section I:
    (A) That the transaction is not entered into with any person who is 
excluded from relief under section I(e)(1), section I(e)(2), to the 
extent such person has discretionary authority or control over the plan 
assets involved in the transaction, or section I(f), and
    (B) That the transaction is not described in any of the class 
exemptions listed in section I(b).
    (5) For a transaction described in Part II:
    (A) If the transaction is described in section II(a),
    (i) That the transaction is with a party described in section 
II(a);
    (ii) That the transaction occurs under the circumstances described 
in section II(a)(1) and (2);
    (iii) That the transaction does not extend beyond the period of 
time described in section II(a)(3); and
    (iv) That the percentage test in section II(a)(4) has been 
satisfied or
    (B) If the transaction is described in section II(b),
    (i) That the transaction is with a party described in section 
II(b)(1);
    (ii) That the transaction is not entered into with any person 
excluded from relief under section II(b)(2) to the extent such person 
has discretionary authority or control over the plan assets involved in 
the lease transaction or section II(b)(3); and
    (iii) That the percentage test in section II(b)(5) has been 
satisfied.
    (h) The term ``plan'' means a plan maintained by the DBIM or an 
affiliate of the DBIM which is an employee benefit plan described in 
ERISA section 3(3) and/or a plan described in section 4975(e)(1) of the 
Code. Notwithstanding the foregoing, the term ``plan'' includes a plan 
maintained by any entity in which the DBIM, or an affiliate of the DBIM 
(as defined in section IV(b) of the proposal), holds more than a 20 
percent equity interest, provided that such plan's assets are 
commingled for investment purposes in an entity the assets of which are 
plan assets under 29 CFR 2510.3-101 and 50 percent or more of the units 
of beneficial interest in such entity are held by plans maintained by 
the DBIM or affiliates of the DBIM.
    Effective Date of Exemption: The effective date of this exemption 
is April 8, 2002.

Summary of Facts and Representations

    1. The affected plans will consist of employee benefit plans that 
are covered under the provisions of Title I of the Act, as amended, 
and/or subject to section 4975 of the Code and that are sponsored by 
the applicant or its affiliates.
    2. Deutsche Bank, a German banking corporation and a leading 
commercial bank, provides a wide range of banking, fiduciary, record 
keeping, custodial, brokerage and investment services to corporations, 
institutions, governments, employee benefit plans, governmental 
retirement plans and private investors worldwide. Deutsche Bank has a 
physical presence worldwide. Deutsche Bank is currently one of the 
largest financial institutions in the world in terms of assets. As of 
2001, total assets of Deutsche Bank were 928,994 million Euros. 
Shareholders equity equaled 43,683 million Euros. Deutsche Bank manages 
over $585 billion in assets either through collective trusts, 
separately managed accounts or mutual funds.
    Under PTE 84-14, which provides conditional relief for transactions 
with a plan that are managed by a qualified professional asset manager 
(QPAM), the Department explicitly provided for banks to act as 
QPAMs.\8\ Deutsche Bank, which is in the business of managing assets, 
and supervised in that business by a variety of governmental 
regulators, including the German banking authorities, the Federal 
Reserve Board and other foreign local bank regulators, may manage the 
assets of its own plans, and those of its affiliates, and, therefore, 
seeks section 406(a) relief for dealing with parties in interest to its 
own plans, other than parties affiliated with it.
---------------------------------------------------------------------------

    \8\ See Section V(a)(1) of PTE 84-14, 49 FR at 9506.
---------------------------------------------------------------------------

    3. Outside the United States, Deutsche Bank, as a whole, is not 
supervised by a state or by the United States. However, Deutsche Bank 
is regulated and supervised globally by the Bundesanstalt fur 
Finanzdienstleistungsaufsicht--BAFin (BAFin) in cooperation with the 
Deutsche Bundesbank, (Bundesbank).\9\
---------------------------------------------------------------------------

    \9\ In addition, Deutsche Bank, New York Branch, is regulated 
and supervised by the New York State Banking Department. Certain 
activities of Deutsche Bank's New York branch are also regulated and 
supervised by the Federal Reserve Bank of New York. Bankers Trust 
Company, an indirect wholly owned subsidiary of Deutsche Bank, is a 
New York State bank and a member of the Federal Reserve System.
---------------------------------------------------------------------------

    The BAFin is a federal institution with ultimate responsibility to 
the German Ministry of Finance.\10\ The Deutsche Bundesbank is the 
central bank of the Federal Republic of Germany and an integral part of 
the European Central Banks. The BAFin supervises the operations of 
banks, banking groups, financial holding groups and foreign bank 
branches in Germany, and has the authority to (a) Issue and withdraw 
banking licenses, (b) issue regulations on capital and liquidity 
requirements of banks, (c) request information and conduct

[[Page 13963]]

investigations, (d) intervene in cases of inadequate capital or 
liquidity endangered deposits, or bankruptcy by temporarily prohibiting 
certain banking transactions. The BAFin ensures that Deutsche Bank has 
procedures for monitoring and controlling its worldwide activities 
through various statutory and regulatory standards. Among these 
standards are requirements for adequate internal controls, oversight, 
administration, and financial resources. The BAFin reviews compliance 
with these operational and internal control standards through an annual 
audit performed by the year-end auditor and through special audits 
ordered by the BAFin. The supervisory authorities require information 
on the condition of Deutsche Bank and its branches through periodic, 
consolidated financial reports and through a mandatory annual report 
prepared by the auditor. The supervisory authorities also require 
information from Deutsche Bank regarding capital adequacy, country risk 
exposure, and exposures. German banking law mandates penalties to 
ensure correct reporting to the supervisory authorities, and auditors 
face penalties for gross violations of their duties.
---------------------------------------------------------------------------

    \10\ Following the adoption on April 22, 2002 of the Law on 
Integrated Financial Services Supervision (Gesetz uber die 
integrierte Finanzaufsicht--FinDAG), the German Financial 
Supervisory Authority, BAFin was established on 1 May 2002. The 
functions of the former offices for banking supervision 
(Bundesaufsichtsamt fur das Kreditwesen--BAKred), insurance 
supervision (Bundesaufsichtsamt fur das Versicherungswesen--BAV) and 
securities supervision (Bundesaufsichtsamt fur den 
Wertpapierhandel--BAWe) have been combined in a single state 
regulator that supervises banks, financial services institutions and 
insurance undertakings across the entire financial market and 
comprises all the key functions of consumer protection and solvency 
supervision. The BAFin is a federal institution governed by public 
law that belongs to the portfolio of the Federal Ministry of Finance 
and as such, has a legal personality. Its two offices are located in 
Bonn and Frankfurt/Main. The BAFin supervises about 2,700 banks, 800 
financial services institutions and over 700 insurance undertakings.
---------------------------------------------------------------------------

    Additionally, the BAFin, in cooperation with the Bundesbank 
supervises all branches of Deutsche Bank, wherever located, subjecting 
them to announced and unannounced on-site audits, and all other 
supervisory controls applicable to German banks.\11\ With respect to 
branches located in the member states, such audits are carried out 
consistent with the applicable European Directives, and with respect to 
branches outside the EEA, consistent with applicable international 
agreements, memoranda of understanding, or other arrangements with the 
relevant foreign supervisory authorities.\12\
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    \11\ Deutsche Bank's branches domiciled outside the European 
Economic Area (EEA) are also subject to local regulation and 
supervision by the host country's supervisory authority, e.g., the 
Ministry of Finance in Japan, the Swiss Federal Banking Commission 
in Switzerland, the Australian Prudential Regulation Authority in 
Australia, and the Office of the Superintendent of Financial 
Institutions in Canada. For Deutsche Bank's branches domiciled in 
EEA member states, the BAFin is the lead supervisory authority 
pursuant to the rules on the ``European passport'', and only some 
aspects are subject to complementary supervision by the host 
country's supervisory authority (e.g., the Securities and Futures 
Authority in the United Kingdom supervises the conduct of the 
investment business of Deutsche Bank in the United Kingdom).
    \12\ As a result of meetings between the U.S. and German 
regulators in October 1993, the U.S. Department of Treasury has 
accorded national treatment to German bank branches, and the German 
Ministry of Finance has granted relief to branches of U.S. banks in 
Germany, in particular with respect to ``dotation'' or endowment 
capital requirements and capital adequacy standards. Since the 
German Banking Act (s. 53c) allows such exemptions only insofar as 
branches of German companies are afforded equal exemptions in the 
foreign state, this confirms indirectly the recognition of the 
German banking supervisory standards by the U.S. regulators.
---------------------------------------------------------------------------

    Deutsche Bank's subsidiaries that pursue banking and other 
financial activities (other than insurance) or activities that are 
closely related thereto are consolidated with Deutsche Bank and form a 
banking group for purposes of the capital ratios and the large exposure 
limits that the bank is required to meet also on a group-wide basis. In 
conformity with European Directives,\13\ the BAFIN supervises such 
banking groups (where their parent institution is domiciled in Germany) 
on a consolidated basis.
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    \13\ See, e.g., Council Directive 92/30/EEC of 6 April 1992 on 
the supervision of credit institutions on a consolidated basis, 
Council Directive 92/121/EEC of 21 December 1992 on the monitoring 
and control of large exposures of credit.
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    While oversight is less individualized for subsidiaries than for 
branches, the supervision extends to adequacy of equity capital of 
banking and financial holding groups and compliance with the 
regulations regarding large loans granted by such groups. Thus, 
Deutsche Bank is subject to comprehensive supervision and regulation on 
a consolidated basis by its home country supervisor.\14\
---------------------------------------------------------------------------

    \14\ This is also the conclusion reached by the Board of 
Governors of the Federal Reserve System in its Order approving 
Deutsche Bank's application to become a bank holding company, 
effective May 20, 1999.
---------------------------------------------------------------------------

    There are two deposit insurance programs that cover Deutsche Bank 
and its foreign branches. The first is a European Union required 
mandatory deposit insurance system established in 1998 that insures 
deposits denominated in the currency of an EEA member state up to the 
lesser of 90% of the deposit amount or 20,000 euros. This statutory 
deposit protection scheme is maintained, as far as private commercial 
banks like Deutsche Bank are concerned, by a separate institution 
(Entschaedigungseinrichtung deutscher Banken mbH) that is subject to 
supervision by the BAFIN. In addition, since 1976, the Association of 
German Banks (Bundesverband deutscher Banken e.V.) has maintained a 
voluntary deposit protection program called the Deposit Protection Fund 
(Einlagensicherungsfonds) that safeguards liabilities in excess of the 
thresholds guaranteed by the European Union program, up to a protection 
ceiling for each creditor of 30% of the liable capital of the bank.\15\
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    \15\ Liable Capital means the sum of core capital and 
supplementary capital as defined in section 10, subsection (2) of 
the German Banking Act. However, for measurement of the protection 
ceiling, the supplementary capital, as defined in section 10, 
subsection (2b) of the German Banking Act, shall only be taken into 
account up to an amount of 25% of the core capital, as defined in 
section 10, subsection (2a) of the German Banking Act. Financial 
data on the date of the last published annual financial statements 
of the bank shall be determinative.
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    The Deposit Protection Fund was created to give assistance, in the 
interest of depositors, in the event of imminent or actual financial 
difficulties of banks, particularly when the suspension of payments is 
threatened, and to prevent the impairment of public confidence in 
private banks. The Deposit Protection Fund is funded by regular 
contributions paid by every German bank that has elected to participate 
in the Deposit Protection Fund. Participating banks may be required to 
make special contributions to the extent requested by the Deposit 
Protection Fund to enable it to fulfill its purpose.
    The Deposit Protection Fund relies on the Auditing Association of 
German Banks (Pruefungsverband deutscher Banken e.V. or Auditing 
Association) to audit banks and make recommendations to the banks. 
Following those recommendations is a requirement for all banks covered 
by the Deposit Protection Fund. Banks are no longer permitted to be 
part of the Deposit Protection Fund if, inter alia, they give 
incomplete or incorrect information to the Federal Association of 
German Banks in connection with the Fund; if they are in default with 
the payment of contributions for more than two months after a written 
reminder; if they do not support the Auditing Association in its 
auditing activity or do not promptly fulfill any condition set by the 
Auditing Association; if they fail to make correct disclosure to 
depositors; or if they make incorrect statements or incorrectly 
advertise the deposit insurance program. Thus, the German deposit 
protection system protects deposits throughout the world wherever a 
branch of a participating German bank is located.
    4. The proposed exemption is similar to PTE 96-23.\16\ Generally, 
PTE 96-23 conditionally permits: (1) Plans whose assets are managed by 
an in-house asset manager (INHAM) to enter into transactions with 
parties in interest where the INHAM directs the transaction; (2) the 
leasing of office or commercial space owned by a plan managed by an 
INHAM to an employer whose employees are covered under the plan (or the 
employer's affiliate), where the plan acquires the office or commercial 
space subject to an existing

[[Page 13964]]

lease with an employer, or its affiliate, as a result of foreclosure on 
a mortgage or deed of trust directed by the INHAM; (3) the leasing of 
residential space by a plan to a party in interest who is an employee 
of a covered employer or affiliate thereof, but not an officer, 
director, or a 10% or more shareholder of the employer or affiliate or 
a fiduciary with respect to the leased assets; and (4) the furnishing 
of services and facilities (and goods incidental thereto) by a place of 
public accommodation owned by a plan and managed by an INHAM to a party 
in interest with respect to the plan, if the services and facilities 
(and incidental goods) are furnished on a comparable basis to the 
general public.
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    \16\ 61 FR 15,975 (Apr. 10, 1996).
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    One of the requirements of PTE 96-23 is that the INHAM meet the 
definition of INHAM under section IV(a). In pertinent part, Part 
IV(a)(2) of PTE 96-23 requires an ``INHAM'' to be:

    An investment adviser registered under the Investment Advisers 
Act of 1940 that, as of the last day of its most recent fiscal year, 
has under its management and control total assets attributable to 
plans maintained by affiliates of the INHAM (as defined in section 
IV(b)) in excess of $50 million; provided that if it has no prior 
fiscal year as a separate legal entity as a result of it 
constituting a division or group within the employer's 
organizational structure, then this requirement will be deemed met 
as of the date during its initial fiscal year as a separate legal 
entity that responsibility for the management of such assets in 
excess of $50 million was transferred to it from the employer.\17\
---------------------------------------------------------------------------

    \17\ 61 FR at 15982.

    The registered investment adviser requirement ``assure[s] that the 
INHAM is in the business of investment management and, thus, in a 
position to develop experience and sophistication in dealing with 
investment issues.''\18\ The requirement also assures that the INHAM is 
subject to government supervision. Registration of the INHAM as an 
investment adviser assures that the INHAM is subject to regulation 
under the Investment Advisers Act of 1940 and oversight by the 
Securities and Exchange Commission. In granting the final PTE 96-23, 
the Department noted that ``oversight by the Securities and Exchange 
Commission as a result of registration as an investment adviser under 
the Investment Advisers Act of 1940 provides an important safeguard 
under the exemption.''\19\ Additionally, the Department explained that 
the $50 million in plan assets requirement provides further protection 
by ensuring that the INHAM is well qualified:
---------------------------------------------------------------------------

    \18\ 60 FR at 15599.
    \19\ 61 FR at 15980.

* * * INHAMs of large plans are more likely to have an appropriate 
level of expertise in financial and business matters. In this 
regard, the Department believes that the requirement that the INHAM 
have a significant dollar amount of assets under its management and 
control attributable to plans maintained by affiliates which are 
separately accountable for the operation of their respective plans 
provides an additional safeguard under the exemption.\20\
---------------------------------------------------------------------------

    \20\ 61 FR at 15980.

Like registered investment advisers, banks may also be experienced 
investment managers.
    Domestic banks, such as Bankers Trust Company, like registered 
investment advisers, are also subject to government regulation. Bankers 
Trust Company is a bank supervised by New York State and the Federal 
Reserve Bank.
    In developing the QPAM class exemption, the Department noted that 
each of the categories of asset manager [e.g., banks] is subject to 
regulation by Federal or State agencies.\21\
---------------------------------------------------------------------------

    \21\ Preamble to Proposed PTE 84-14, 47 FR 56945, 56947 (Dec. 
21, 1982).
---------------------------------------------------------------------------

    For these reasons, it is represented that the proposed exemption is 
similar to PTE 96-23. The proposed exemption treats Bankers Trust, 
Deutsche Bank, or any affiliated bank regulated under the laws of the 
United States, or Germany as an INHAM under Part IV. To this end, the 
following subparagraph will replace subparagraphs (1) and (2) of 
section IV(a) of PTE 96-23:

    (1) Deutsche Bank, or a direct or indirect wholly-owned bank or 
trust company subsidiary of Deutsche Bank, supervised under the laws 
of the United States, a State, or Germany, (A) has the power to 
manage, acquire, or dispose of assets of a plan and (B) has, as of 
the last day of its most recent fiscal year, equity capital (i.e., 
common and preferred stock, surplus, undivided profits, contingency 
reserves, group contingency reserves, and other capital reserves) in 
excess of $1,000,000.

    5. The applicant represents that the proposed exemption would be 
protective of participants and beneficiaries because it essentially 
contains the same protective conditions found in PTE 96-23. 
Additionally, the proposed exemption would be protective because 
regulation under the laws of Germany is comparable to regulation under 
the laws of the United States or a State.
    6. In summary, it is represented that the subject transactions will 
satisfy the statutory criteria for an exemption under section 408(a) of 
the Act because the proposed exemption: (a) Will benefit in-house plans 
by ensuring that plans have greater flexibility in choosing among 
expert, experienced investment managers; (b) will not be detrimental to 
plans because banks have proven expertise and experience in managing 
plan assets and the banking laws and regulations of Germany provide 
protection and oversight that is comparable to those of the United 
States or a State; (c) would allow plans to take greater advantage of 
the investment management expertise and experience of the world's 
largest bank in terms of assets and one of the world's largest asset 
managers; and (d) would allow a plan's DBIM to consider existing 
service providers when seeking goods, services, and facilities, thus 
increasing the plan's choices (which may afford greater quality at 
lower costs) and eliminating the compliance costs of ensuring that a 
counter-party is not a party in interest (i.e., as a service provider 
or as related to a service provider).
    Notice to Interested Persons: The applicant represents that because 
those potentially interested participants and beneficiaries cannot all 
be identified, the only practical means of notifying such participants 
and beneficiaries of this proposed exemption is by publication in the 
Federal Register. Therefore, comments and requests for a hearing must 
be received by the Department not later than 45 days from the date of 
publication of this notice of proposed exemption in the Federal 
Register.
    For Further Information Contact: Mr. Khalif I. Ford of the 
Department, telephone (202) 693-8540. (This is not a toll-free number.)

Law Offices of Richard D. Gorman Pension & Profit Sharing Plan (the 
Plan) Located in Monterey, California

[Application No. D-11104]

Proposed Exemption

    The Department is considering granting an exemption 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 part 
2570, subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption 
is granted, the restrictions of sections 406(a), 406(b)(1) and (b)(2) 
of the Act and the sanctions resulting from the application of section 
4975 of the Code, by reason of section 4975(c)(1)(A) through (E) of the 
Code, shall not apply to the proposed sale of unimproved real property 
(the Property) by the Plan to Mr. Richard Gorman (Mr. Gorman), a 
trustee of the Plan, and a party in interest with respect to the Plan, 
provided that the following conditions are satisfied:

[[Page 13965]]

    (a) The sale is a one-time cash transaction;
    (b) The Plan receives the greater of either: (i) $290,000; or (ii) 
the fair market value for the Property established at the time of the 
sale by an independent, qualified appraiser; and
    (c) The Plan pays no commissions or other expenses associated with 
the sale.

(B) Summary of Facts and Representations

    1. The Plan is a discretionary profit sharing plan. The Plan's 
current trustee is Mr. Gorman. The Plan sponsor is a single 
practitioner law firm, with one secretary as an employee. The Plan has 
2 participants. As of July 8, 2002, the Plan had approximately 
$408,567.64 in total assets.
    2. On August 20, 1996, the Plan purchased the Property from Bruce 
Munro and Shirley G. Mackintosh, unrelated third parties, for $143,000. 
Mr. Gorman propose to pay the fair market value of the Property, which 
would be paid in full in cash at a closing to be held subsequent to the 
granting of the proposed exemption.
    The applicant states that the Property has not been an income-
producing asset and has been held for possible appreciation. The Plan 
has paid for taxes, insurance and maintenance on the Property since the 
acquisition (the Holding Costs). Specifically, the Plan has paid the 
following Holding Costs since its acquisition of the Property: (i) Real 
estate taxes, $9,600; (ii) Insurance, $1,500; (iii) Maintenance fees, 
$3,000. The applicant states that the Holding Costs for the Property 
have been approximately $14,100. Therefore, the total cost for the 
Property (i.e., the acquisition price of $143,000, plus the Holding 
Costs of approximately $14,100) is approximately $157,100 as of July 
2002.
    3. The Property is an unimproved 909 square foot parcel of land 
located at 19 Yankee Point Drive, Carmel, California. The Property was 
appraised on April 15, 2002. The appraisal was prepared by Raymond A. 
Elarmo (Mr. Elarmo), who is an independent, licensed real estate 
appraiser in the state of California.
    Mr. Elarmo represents that although the Property is adjacent to the 
home of Mr. Gorman, the Property may or may not increase the value of 
Mr. Gorman's home due to concerns regarding water availability for the 
Property.
    Mr. Elarmo states that consideration was given in the appraisal to 
three approaches to value, i.e., the cost approach, sales comparison 
approach, and income approach. Mr. Elarmo relied on the sales 
comparison approach to determine the fair market value of the Property. 
Mr. Elarmo has determined that the fair market value of the Property is 
$290,000.
    4. The applicant now proposes that the sale of the Property would 
provide liquidity to the Plan. Plan assets would then not be locked 
into a piece of land that has little foreseeable use. The Plan will pay 
no commissions or other expenses associated with the sale. The 
applicant will pay the Plan in cash, the greater of either:(a) 
$290,000; or (b) the fair market value of the Property, as established 
by a qualified, independent appraiser at the time of the transaction.
    5. In summary, the applicant represents that the transaction will 
satisfy the statutory criteria of section 408(a) of the Act and section 
4975(c)(2) of the Code because: (a) The proposed sale will be a one-
time cash transaction; (b) the Plan will receive the greater of either: 
(i) $290,000; or (ii) the current fair market value for the Property, 
as established at the time of the sale by an independent, qualified 
appraiser; (c) the Plan will pay no fees, commissions or other expenses 
associated with the sale; and (d) the sale will enable the Plan to 
divest itself of a non-income producing asset and acquire investments 
which may yield higher returns.
    Notice to Interested Persons: Notice of the proposed exemption 
shall be given to all interested persons in the manner agreed upon by 
the applicant and Department within 15 days of the date of publication 
in the Federal Register. Comments and requests for a hearing are due 
forty-five (45) days after publication of the notice in the Federal 
Register.
    For Further Information Contact: Khalif I. Ford of the Department 
at (202) 693-8540. (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 of the Act and/or the Code, 
including any prohibited transaction 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) Before an exemption may be granted under section 408(a) of the 
Act and/or section 4975(c)(2) of the Code, the Department must find 
that the exemption is administratively feasible, in the interests of 
the plan and of its participants and beneficiaries, and protective of 
the rights of participants and beneficiaries of the plan;
    (3) The proposed exemptions, if granted, will be supplemental to, 
and not in derogation of, any other provisions of the Act and/or 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; and
    (4) The proposed exemptions, if granted, will be subject to the 
express condition that the material facts and representations contained 
in each application are true and complete, and that each application 
accurately describes all material terms of the transaction which is the 
subject of the exemption.

    Signed at Washington, DC this 18th day of March, 2003.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security 
Administration, Department of Labor.
[FR Doc. 03-6851 Filed 3-20-03; 8:45 am]
BILLING CODE 4510-29-P