[Federal Register Volume 87, Number 220 (Wednesday, November 16, 2022)]
[Notices]
[Pages 68728-68743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25039]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Exemption Application No. D-12067]


Proposed Exemption for Certain Prohibited Transaction 
Restrictions Involving Citigroup, Inc. (Citigroup or the Applicant); 
Located in New York, New York

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of proposed exemption.

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SUMMARY: This document provides notice of the pendency before the 
Department of Labor (the Department) of a proposed exemption extending 
the exemptive relief provided by PTE 2017-05 for an additional four (4) 
years. If this proposed exemption is granted, certain entities with 
specified relationships to Citigroup (hereinafter, the Citigroup 
Affiliated QPAMs and the Citigroup Related QPAMs, as defined in 
Sections I(f) and I(g), respectively) would not be precluded from 
relying on the exemptive relief provided by Prohibited Transaction 
Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption), 
notwithstanding the Conviction (defined in Section I(a)), during the 
Exemption Period (as defined in Section I(d)).

DATES: If granted, this proposed exemption will be in effect for four 
(4) years from January 10, 2023, through January 9, 2027. Written 
comments and requests for a public hearing on the proposed exemption 
should be submitted to the Department by January 3, 2023.

ADDRESSES: All written comments and requests for a hearing should be 
submitted to the Employee Benefits Security Administration (EBSA), 
Office of Exemption Determinations, Attention: Application No. D-12067 
via email to [email protected] or online through https://www.regulations.gov. Any such comments or requests should be sent by 
the end of the scheduled comment period. The application for exemption 
and the comments received will be available for public inspection in 
the Public Disclosure Room of the Employee Benefits Security 
Administration, U.S. Department of Labor, Room N-1515, 200 Constitution 
Avenue NW, Washington, DC 20210. See SUPPLEMENTARY INFORMATION below 
for additional information regarding comments.

FOR FURTHER INFORMATION CONTACT: Anna Mpras Vaughan of the Department 
at (202) 693-8565. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION:

Comments

    Persons are encouraged to submit all comments electronically and 
not to follow with paper copies. Comments should state the nature of 
the person's interest in the proposed exemption and how the person 
would be adversely affected by the exemption, if granted. Any person 
who may be adversely affected by an exemption can request a hearing on 
the exemption. A request for a hearing must state: (1) The name, 
address, telephone number, and email address of the person making the 
request; (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; and (3) a statement of the issues to be addressed and a 
general description of the evidence to be presented at the hearing. The 
Department will grant a request for a hearing made in accordance with 
the requirements above where a hearing is necessary to fully explore 
material factual issues identified by the person requesting the 
hearing. A notice of such hearing shall be published by the Department 
in the Federal Register. The Department may decline to hold a hearing 
if: (1) The request for the hearing does not meet the requirements 
above; (2) the only issues identified for exploration at the hearing 
are matters of law; or (3) the factual issues identified can be fully 
explored through the submission of evidence in written (including 
electronic) form.
    Warning: All comments received will be included in the public 
record without change and may be made available online at https://www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be confidential or 
other information whose disclosure is restricted by statute. If you 
submit a comment, EBSA recommends that you include your name and other 
contact information in the body of your comment, but DO NOT submit 
information that you consider to be confidential, or otherwise 
protected (such as Social Security number or an unlisted phone number) 
or confidential business information that you do not want publicly 
disclosed. However, if EBSA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EBSA might not 
be able to consider your comment.
    Additionally, the https://www.regulations.gov website is an

[[Page 68729]]

``anonymous access'' system, which means EBSA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an email directly to EBSA without going 
through https://www.regulations.gov, your email address will be 
automatically captured and included as part of the comment that is 
placed in the public record and made available on the internet.
    The Department is considering granting this proposed four-year 
exemption under the authority of section 408(a) of the Employee 
Retirement Income Security Act of 1974 (ERISA) and section 4975(c)(2) 
of the Internal Revenue Code of 1986 (the Code), and in accordance with 
the procedures set forth in the Department's regulations.\1\
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    \1\ 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 
2011). For purposes of this proposed four-year exemption, references 
to section 406 of Title I of ERISA, unless otherwise specified, 
should be read to refer as well to the corresponding provisions of 
Code section 4975.
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    Department's Comment: The proposed four-year exemption would 
provide relief from certain of the restrictions set forth in ERISA 
Sections 406 and 407. No relief from a violation of any other law would 
be provided by this exemption, including any criminal conviction 
described herein.
    The Department cautions that the relief in this proposed four-year 
exemption would terminate immediately if, among other things, an entity 
within the Citigroup corporate structure is convicted of a crime 
described in Section I(g) of PTE 84-14 (other than the Conviction) 
during the effective period of the exemption. While such an entity 
could apply for a new exemption in that circumstance, the Department 
would not be obligated to propose such an exemption. The terms of this 
proposed four-year exemption have been designed to permit plans to 
terminate their relationships with the Citigroup Affiliated QPAMs in an 
orderly and cost-effective fashion in the event of an additional 
conviction or a determination that it is otherwise prudent for a plan 
to terminate its relationship with them.

Summary of Facts and Representations \2\
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    \2\ The Summary of Facts and Representations is based on the 
representations the Applicant provided in its exemption application 
and does not reflect factual findings or opinions of the Department, 
unless indicated otherwise. The Department notes that availability 
of this exemption, if granted, is subject to the express condition 
that the material facts and representations contained in Application 
D-12067 are true and complete, and accurately describe all material 
terms of the transactions covered by the exemption. If there is any 
material change in a fact or representation described in the 
application, the exemption will cease to apply as of the date of 
such change.
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Background

    1. Citigroup is a global diversified financial services holding 
company headquartered in New York, New York. As of December 31, 2020, 
Citigroup's investment advisory programs within the United States (the 
Advisory Business) had over 56,700 customer advisory accounts, with 
over $113 billion in assets under management, including over 12,700 
accounts for ERISA-covered pension plans (ERISA Plans) and individual 
retirement accounts (IRAs) (collectively, Retirement Accounts), with 
approximately $4.6 billion in assets under management.\3\
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    \3\ Citigroup's advisory programs within the United States are 
offered primarily by Citi Global Wealth Investments (CGWI). CGWI is 
comprised of various businesses formerly within Citi Private Bank 
(CPB) and Citigroup's Consumer Wealth businesses, acting through 
Citigroup Global Markets Inc. (CGMI) or through Citibank, N.A. 
(Citibank) and Citi Private Advisory, LLC (CPA).
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    2. As described in more detail below, Citigroup affiliates that 
manage plan and IRA assets rely on the exemptive relief described in 
class exemption PTE 84-14 (the Citigroup Affiliated QPAMs).\4\
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    \4\ Certain entities that are owed 5% or more by Citigroup but 
are not ``controlled by, or under common control with'' Citigroup 
may also manage plan assets and rely on the QPAM Exemption. These 
entities are not ``affiliates'' of Citigroup, as defined under Part 
VI(d) of PTE 84-14. They are referred to as ``Citigroup Related 
QPAMs''.
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ERISA and Code Prohibited Transactions and PTE 84-14

    3. The rules set forth in ERISA Section 406 and Code section 
4975(c)(1) proscribe certain ``prohibited transactions'' between plans 
and related parties with respect to those plans. Under ERISA, such 
parties are known as ``parties in interest.'' ERISA Section 3(14) 
defines the term parties in interest with respect to a plan to include, 
among others, (i) the plan fiduciary, (ii) a sponsoring employer of the 
plan, (iii) a union whose members are covered by the plan, service 
providers with respect to the plan, and (iv) certain of their 
affiliates.\5\ The prohibited transaction provisions under ERISA 
Section 406(a) and Code Section 4975(c)(1) prohibit, in relevant part, 
sales, leases, loans or the provision of services between a party in 
interest and a plan (or an entity whose assets are deemed to constitute 
the assets of a plan), as well as the use of plan assets by or for the 
benefit of a party in interest or a transfer of plan assets to a party 
in interest.\6\
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    \5\ Under the Code, such parties, or similar parties, are 
referred to as ``disqualified persons.''
    \6\ The prohibited transaction provisions also include certain 
fiduciary prohibited transactions under ERISA Section 406(b). These 
include transactions involving fiduciary self-dealing, fiduciary 
conflicts of interest, and kickbacks to fiduciaries.
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    4. ERISA Section 408(a) and Code section 4975(c)(2) grant the 
Department with the authority to issue exemptions for such prohibited 
transactions if the Department finds that an exemption is (i) 
administratively feasible, (ii) in the interests of the plan and of its 
participants and beneficiaries, and (iii) protective of the rights of 
participants and beneficiaries. The Department has codified its 
procedures for filing and granting such exemptions in 29 CFR part 2570, 
subpart B.\7\
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    \7\ (76 FR 66637, 66644, October 27, 2011).
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    5. PTE 84-14 exempts certain prohibited transactions between a 
party in interest and an ``investment fund'' (as defined in Section 
VI(b) of PTE 84-14) in which a plan has an interest if the fund's 
investment manager satisfies the definition of ``qualified professional 
asset manager'' (QPAM) and additional exemption conditions. PTE 84-14 
was developed and granted based on the essential premise that broad 
relief from the prohibited transaction provisions could be provided for 
all types of transactions in which a plan engages with parties in 
interest only if the commitments and the investments of plan assets, 
and the negotiations leading thereto, are the sole responsibility of an 
independent, discretionary, manager.\8\
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    \8\ See 75 FR 38837, 38839 (July 6, 2010).
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    6. Section I(g) of PTE 84-14 prevents an entity that may otherwise 
meet requirements of the QPAM definition from utilizing the exemptive 
relief provided by PTE 84-14 for itself and its client plans if that 
entity, an ``affiliate'' thereof, or any direct or indirect owner of a 
five percent or more interest in the QPAM has been either convicted or 
released from imprisonment within 10 years immediately preceding the 
transaction, whichever is later, as a result of criminal activity 
described in that section. The Department included Section I(g) in PTE 
84-14, in part, based on its expectation that QPAMs will maintain a 
high standard of integrity to justify the broad relief the exemption 
provides. This expectation extends not only to the QPAM itself but also 
to parties that may be positioned to influence the QPAM's policies.

[[Page 68730]]

2017 Conviction of Citigroup and PTE 84-14 Ineligibility

    7. The U.S. Department of Justice (DOJ) investigated certain 
conduct and practices of Citigroup and other financial services firms 
in the foreign exchange (FX) spot market. As a result of the DOJ's 
investigation, Citicorp, a Delaware corporation that is a financial 
services holding company and the direct parent company of Citibank, 
entered into a plea agreement with the DOJ (the Plea Agreement) 
pursuant to which Citicorp pleaded guilty to one count of an antitrust 
violation of the Sherman Antitrust Act (15 U.S.C. 1). The plea 
agreement was approved by the U.S. District Court for the District of 
Connecticut (the District Court) on January 10, 2017 (Case Number 3:15-
cr-78-SRU).
    8. As set forth in the Plea Agreement, from at least December 2007 
until at least January 2013, Citicorp, through one London-based Euro/
U.S. dollar (EUR/USD) trader employed by Citibank and other traders at 
unrelated financial services firms acting as dealers in the FX spot 
market, entered into and engaged in a conspiracy to fix, stabilize, 
maintain, increase or decrease the price of, and rig bids and offers 
for, the EUR/USD currency pair exchanged in the FX spot market by 
agreeing to eliminate competition in the purchase and sale of the EUR/
USD currency pair in the United States and elsewhere (the Criminal 
Misconduct). The Criminal Misconduct included almost daily 
conversations, some of which were in code, in an exclusive electronic 
chat room used by certain EUR/USD traders, including the EUR/USD trader 
employed by Citibank. The Criminal Misconduct forms the basis for the 
DOJ's antitrust charge that Citicorp violated 15 U.S.C. 1.
    9. Under the terms of the Plea Agreement, the DOJ and Citicorp 
agreed that the District Court should impose a sentence requiring 
Citicorp to pay a criminal fine of $925 million. The Plea Agreement 
also provided for a three-year term of probation that required, among 
other things, Citigroup's continued implementation of a compliance 
program designed to prevent and detect the Criminal Misconduct 
throughout its operations and the strengthening of its compliance 
program and internal controls as required by other regulatory or 
enforcement agencies that have addressed the Criminal Misconduct. Such 
agencies include:
     the U.S. Commodity Futures Trading Commission, pursuant to 
its settlement with Citibank on November 11, 2014, that required 
Citibank to implement remedial measures to strengthen the control 
framework governing Citigroup's FX trading business;
     the U.S. Office of the Comptroller of the Currency 
pursuant to its settlement with Citibank on November 11, 2014, that 
required Citibank to impose remedial measures to improve the control 
framework governing Citigroup's wholesale trading and benchmark 
activities;
     the U.K. Financial Conduct Authority, pursuant to its 
settlement with Citibank on November 11, 2014; and
     the U.S. Board of Governors of the Federal Reserve System, 
pursuant to its settlement with Citigroup that was entered into 
concurrently with the DOJ resolution and required Citibank to implement 
remedial measures to improve controls for its FX trading and activities 
involving commodities and interest rate products.
    The Applicant represents that Citicorp fulfilled all of these 
obligations during the three-year term of probation, and that neither 
the DOJ nor any of the regulators described above notified the 
Applicant to the contrary.
    As a result of the Conviction, the Citigroup Affiliated QPAMS and 
Citigroup Related QPAMs (throughout this proposal and only when 
applicable, these entities may collectively be referred to as the 
``Citigroup QPAMs'') would be ineligible to rely on the relief provided 
in PTE 84-14 as of the January 10, 2017 sentencing date without an 
administrative individual exemption issued by the Department that would 
allow it to continue relying on such relief. The Citigroup Affiliated 
QPAMs applied for and received the administrative individual exemptions 
described below.

Prior and Existing Exemptions

    10. Following the Conviction, the Citigroup Affiliated QPAMs 
submitted an exemption application to the Department that would allow 
their continued reliance on the relief provided in PTE 84-14 following 
the Conviction. The Citigroup Affiliated QPAMs supported their 
application by representing to the Department that Covered Plans \9\ 
could incur significant costs and other harm if the Citigroup 
Affiliated QPAMs became ineligible to rely on the relief provided in 
PTE 84-14 as of the date of the Conviction.\10\ The Applicant asserted 
that approximately 20,000 of Citigroup's existing Covered Plan clients 
could be compelled to terminate their advisory relationship with 
Citigroup if the Department denies the individual exemption request and 
would incur expenses related to: (a) consultant fees and other due 
diligence expenses for identifying new managers; (b) transaction costs 
associated with a change in investment manager, including the sale and 
purchase of portfolio investments to accommodate the investment 
policies and strategy of the new manager, and the cost of entering into 
new custodial arrangements; and (c) lost investment opportunities as a 
result of the change in investment managers.\11\
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    \9\ The term ``Covered Plan'' means a plan subject to Part 4 of 
Title 1 of ERISA (ERISA-covered plan) or a plan subject to Section 
4975 of the Code (IRA) with respect to which a Citigroup Affiliated 
QPAM relies on PTE 84-14, or with respect to which a Citigroup 
Affiliated QPAM (or any Citigroup affiliate) has expressly 
represented that the manager qualifies as a QPAM or relies on the 
QPAM class exemption (PTE 84-14).
    \10\ A description of the potential costs and harm to Covered 
Plans is provided below.
    \11\ In PTE 2017-05, the Department noted that, if a five-year 
exemption were granted, compliance with the condition in Section 
I(j) of the exemption would require the Citigroup Affiliated QPAMs 
to hold their plan customers harmless for any actual losses 
attributable to, among other things, any prohibited transactions or 
violations of the duty of prudence and loyalty.
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    The Department granted the Applicants an exemption that would allow 
the Citigroup QPAMs to continue relying on the relief provided in PTE 
84-14 for 12 months on December 22, 2016,\12\ and for five years on 
December 29, 2017.\13\ This five-year exemption expires on January 9, 
2023.
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    \12\ PTE 2016-14, 81 FR 94034.
    \13\ PTE 2017-05, 82 FR 61864.
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    11. PTE 2017-05 contains conditions that subject the Citigroup 
Affiliated QPAMs to biennial audits with a one-year look-back period 
and annual certifications that must be submitted to the Department and 
made available to the public. Under PTE 2017-05, a qualified, 
independent auditor, currently Fiduciary Counselors, Inc. (FCI), is 
responsible for: (a) determining whether each Citigroup Affiliated QPAM 
has developed, implemented, maintained and followed written policies 
and procedures in accordance with the exemption conditions and 
developed and implemented the training program in accordance with the 
exemption conditions; (b) testing whether each of the Citigroup 
Affiliated QPAMs is compliant with these policies and training; and (c) 
issuing a written audit report \14\ summarizing its findings

[[Page 68731]]

and recommendations with respect to each Citigroup Affiliated QPAM.\15\
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    \14\ The audit reports required under PTE 2017-05 (the Reports) 
and this proposed exemption, if granted, comprise a part of the 
record supporting PTE 2017-05 and this proposed exemption. 
Therefore, copies of the Reports can be requested by the public by 
contacting the EBSA Public Disclosure Room.
    \15\ The Department notes that the Independent Auditor's methods 
of testing for compliance with the conditions of the exemption 
described herein are specifically tailored to the Applicant's facts 
underlying the Criminal Misconduct, as well as the Applicant's 
corporate organization, business lines, compliance regimes, etc. As 
such, the Department would expect the Independent Auditor to develop 
its audit plan based on the Applicant's specific facts.
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Findings of the Auditor--the First Audit Period

    12. On January 6, 2020, FCI issued a written Audit Report (the 
First Audit Report) covering the twelve-month period from July 10, 
2018, through July 9, 2019 (the First Audit Period). On January 24, 
2020, Citigroup provided the Department with a copy of the 
certifications related to the Audit Report.\16\
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    \16\ The following Citigroup QPAM executive officers made 
certifications: Robert Cole, Chief Compliance Officer for CPB, CGMI 
and CPA; Mary McNiff, Chief Executive Officer of Citibank; Daniel 
Keegan, Chief Executive Officer of CGMI; and Daniel O'Donnell, Chief 
Executive Officer of CPA.
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    13. Policies. FCI reported that by July 9, 2018, the Citigroup 
Affiliated QPAMs developed, implemented, maintained, and followed 
written policies and procedures (Policies) reasonably designed to 
ensure the following:
    Section I(h)(l)(i). Asset management decisions of the Citigroup 
Affiliated QPAMs are conducted independently of the corporate 
management and business activities of Citigroup.
    To make this finding FCI, among other things, reviewed minutes of 
investment committee meetings, Information Barriers Policies and 
Procedures, and held discussions with employees of the Citigroup 
Affiliated QPAMs.\17\ FCI states that there were 112 instances in which 
a Citi Private Bank (CPB) employee and six instances in which a Global 
Consumer Bank (GCB) employee ``wall-crossed.\18\'' FCI notes that in 
these instances, established notification procedures were followed that 
require employees to alert Citigroup's compliance teams when they come 
into contact with material nonpublic information, indicating that the 
Information Barriers Policies and Procedures were complied with. FCI 
states that employees of the Citigroup Affiliated QPAMs were involved 
in three of these 118 incidents, which all were resolved in accordance 
with established procedures.
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    \17\ Citigroup's ``Code of Conduct'' provides that ``Information 
barriers [are used to] Prevent confidential information from being 
shared with individuals who are not authorized to know such 
information, [and] Address actual or potential conflicts of interest 
among business activities.'' See www.citigroup.com/citi/investor/data/codeconduct_en.pdf, Page 35.
    \18\ Wall crossing generally may occur when individuals 
inadvertently gain access to ``insider'' or confidential 
information. Asset management firms have compliance regimes to 
manage wall-crossing events, which generally require the execution 
of non-disclosure agreements by the individual that received such 
information and a range of remedial actions to prevent such 
disclosures from re-occurring.
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    Section I(h)(l)(ii). The Citigroup Affiliated QPAMs fully complied 
with ERISA's fiduciary duties and with ERISA and the Code's prohibited 
transaction provisions, as applicable with respect to each Covered 
Plan, and did not knowingly participate in any violation of these 
duties with respect to Covered Plans.
    In making this finding FCI, among other things, reviewed several 
trade management systems used to support the Citigroup Affiliated QPAMs 
investment compliance and trading process. In its review of trade 
management systems, FCI reviewed the restrictions contained in those 
systems to avoid prohibited transactions, oversight procedures, 
complaint logs, trade error logs, overdraft reports and relevant 
policies and procedures. FCI also reviewed CPB and GCB records of 
employee disciplinary actions in order to determine whether employees 
had committed violations of Title I of ERISA with respect to Covered 
Plans. In this regard, FCI reviewed approximately 82 disciplinary 
actions related to personal trading/trade issues, encryption issues, 
use of personal email address in communicating with a client, Mystery 
Shopper non-disclosures, investment concentration, failure to escalate 
and altered documentation. These violations resulted in a range of 
disciplinary actions including letters of education, letters of 
reprimand, and final written warnings.
    FCI represented that its review of the foregoing information 
enabled it to determine that the mechanisms Citigroup has in place, 
including relevant policies, procedures and training, were designed to 
ensure that the Citigroup Affiliated QPAMs complied with ERISA and the 
Code's prohibited transaction provisions.
    Section I(h)(1)(iii). The Citigroup Affiliated QPAM does not 
knowingly participate in any other person's violation of ERISA or the 
Code with respect to Covered Plans.
    FCI reviewed records of client complaint escalations (including 
completed complaint logs, sample written/email and oral complaints, and 
trade error logs and resolution reports). Based on its review, FCI 
determined that the Citigroup Affiliated QPAMs complied with the 
requirements of Section I(h)(1)(iii).
    Section I(h)(1)(iv). Any filings or statements made by the 
Citigroup Affiliated QPAM to regulators, including, but not limited to, 
the Department, the Department of the Treasury, the Department of 
Justice, and the Pension Benefit Guaranty Corporation, on behalf of or 
in relation to Covered Plans, are materially accurate and complete to 
the best of such QPAM's knowledge at the time.
    FCI planned to review excise tax filings and associated incident 
reports. However, FCI notes that no prohibited transaction excise tax 
filings were submitted to the IRS during the First Audit Period. FCI 
states that it reviewed the Form ADVs filed by the Citigroup Affiliated 
QPAMs, which confirmed the Citigroup Affiliated QPAMs discretionary 
assets under management and confirmed that the Citigroup Affiliated 
QPAMs were registered investment advisers.
    The Department notes that ``filings or statements made by the 
Citigroup Affiliated QPAM to regulators . . . on behalf of or in 
relation to Covered Plans,'' should be interpreted broadly. In this 
regard, the Department's view is that relevant filings or statements 
under this condition may include, among other things, filings made by 
the Citigroup Affiliated QPAMs for pooled funds on behalf of Covered 
Plans such as Forms 5500, statements made by a Citigroup Affiliated 
QPAM in response to regulatory inquiries related to proprietary 
vehicles in which Covered Plans invest, such as target-date funds 
managed by such QPAM, statements made in response to regulatory 
inquiries regarding abandoned plans or missing participants, and 
similar information.\19\
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    \19\ It is the Department's view that FCI is empowered under the 
terms of PTE 2017-05 and Section III(i)(2) of this proposed 
exemption, if granted, to request such materials. FCI should contact 
the Department if the Applicant is unwilling to grant such request.
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    Moreover, the Department expects that FCI should request for its 
review (in addition to the information described above) any policies 
specifically addressing the Citigroup Affiliated QPAMs' government 
filings or responses to regulatory inquiries, including any review 
processes to ensure accuracy and any corrective mechanisms if a 
deficiency is noted.
    In the absence of any of the above-described information, FCI 
should contact the Department in order to determine the course of 
action FCI should take to complete its audit of compliance with Section 
I(h)(1)(iv).

[[Page 68732]]

    Section I(h)(1)(v). To the best of the Citigroup Affiliated QPAM's 
knowledge at the time, the Citigroup Affiliated QPAM does not make 
material misrepresentations or omit material information in its 
communications with the Department, the Department of the Treasury, the 
Department of Justice, and the Pension Benefit Guaranty Corporation 
with respect to Covered Plans or make material misrepresentations or 
omit material information in its communications with Covered Plans.
    In making this finding, FCI reviewed, among other things, 
regulatory filings, billing and performance reports, marketing 
materials, certain other incident reports (including Form ADV 
omissions), client complaints, trade error logs and complaint logs. 
During its review, FCI specifically noted the three following incident 
reports:
    (1) Missing documentation for rollovers required for compliance 
with the now-vacated Department of Labor's Fiduciary Rule. CPB oversaw 
efforts to obtain documentation for the accounts where the information 
was not on file and to train personnel on the documentation 
requirement. Once the Fiduciary Rule was vacated by the Fifth Circuit 
Court of Appeals, no further action was taken to recover the missing 
rollover information, as the requirement to retain the rollover 
information was no longer necessary to comply with ERISA.
    (2) Form ADV omissions involved certain multi-asset investment sub-
accounts with approximately $310 million in assets under management 
that were inadvertently omitted from the Form ADV filed in March 2018. 
The Form ADV was updated on June 20, 2018, with corrected data. CPB 
Advisory Operations, a unit of CPB, conducted a detailed review to 
determine if any other sub-accounts could have been left off the March 
ADV filing. The registration associated with the omitted accounts was 
corrected in the system and CPB Operations scheduled training on the 
revised procedures.
    (3) A technical issue resulted in the firm's website not displaying 
the Summary of QPAM Policies and Procedures. The issue was remediated 
in 24 hours and a quarterly monitoring routine was incepted to ensure 
that the website links remain active and accurate.
    Section I(h)(1)(vi). The Citigroup Affiliated QPAMs comply with the 
terms of PTE 2017-05, including compliance with the conditions of Class 
PTE 84-14.
    FCI reviewed whether each condition of PTE 2017-05 was met, 
including conditions related to timing and adequacy of notices required 
under the exemption; whether training was held in a timely manner; and 
whether the Citigroup Affiliated QPAMs complied with the additional 
contractual undertakings requirements described in Section I(j). 
Specifically, FCI reviewed sample Citigroup investment management 
agreements, assets under management tables with data on a per client 
basis, trading restrictions in Citigroup trade management systems, 
financial statements demonstrating equity capital and shareholder 
equity, Form ADVs, and copies of notices to interested persons.
    14. Correction of Policy Violations. FCI determined that any 
violations of, or failure to comply with an item in subparagraphs (ii) 
though (iv) of Section I(h)(1) were corrected as soon as reasonably 
possible upon discovery or as soon after the QPAM reasonably should 
have known of the noncompliance, and that any violations or failures 
not so corrected were reported in writing to the head of compliance and 
the General Counsel (or the functional equivalent) of the relevant line 
of business that engaged in the violation or failure.
    FCI reviewed, among other things, policies applicable to the 
Citigroup Affiliated QPAMs, including the Information Barriers Policy, 
Restricted Trading List Policy, Escalation Policy, Complaint Policy and 
Procedures, Error Standard for Managed Accounts, Personal Trading and 
Investment Policy, Fiduciary Code of Ethics Standard, the Citigroup 
Code of Conduct, and the Gifts and Entertainment Standard.
    Further, FCI was able to conclude that any violations of items in 
subparagraphs (ii) through (iv) of Section I(h)(1) were corrected in 
compliance with Section I(h)(1)(vii) of PTE 2017-05 through its review 
of certain documents and spreadsheets provided by Citigroup to FCI. 
These documents and spreadsheets included a description of the 
violation or other action, how it was corrected or addressed, and the 
date or dates that action was undertaken. In this regard, FCI reviewed 
incident reports, if any, employee trading violations, employee 
disciplinary actions taken, overdraft reports, and errors and 
complaints.
    15. Training. FCI determined that the Citigroup Affiliated QPAMs 
developed an annual training program (Training) by July 9, 2018, and 
completed the first Training by July 9, 2019, for all relevant 
Citigroup Affiliated QPAM asset/portfolio management, trading, legal, 
compliance, and internal audit personnel:
    Section I(h)(2)(i). The Training, at a minimum, covers the 
Policies, ERISA and Code compliance (including applicable fiduciary 
duties and the prohibited transaction provisions), ethical conduct, the 
consequences of not complying with the conditions of PTE 2017-05 
(including any loss of exemptive relief provided herein), and prompt 
reporting of wrongdoing.
    In making this finding, FCI reviewed a copy of the 2018 ERISA 
Fiduciary Training, proof of training sessions provided by Citigroup 
(including spreadsheets detailing each QPAM employee who took the 
training), conducted interviews with portfolio managers and QPAM 
employees regarding the training, and reviewed the training system and 
process of assigning courses to employees (and governing the completion 
of training).
    16. Annual Compliance Review. FCI reviewed the most recent annual 
review (Annual Review) conducted by a senior compliance officer 
designated by Citigroup (Compliance Officer) in accordance with Section 
I(m) of PTE 2017-05 and specifically validated the adequacy of the 
Annual Review and Citigroup's compliance with Section I(m) of PTE 2017-
05.\20\
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    \20\ Pursuant to Section I(m) of PTE 2017-05, the Compliance 
Officer must conduct an Annual Review for each annual period 
beginning on January 10, 2018. The Annual Review must be completed 
with respect to the annual periods ending January 9, 2019; January 
9, 2020; January 9, 2021; January 9, 2022; and January 9, 2023. The 
Applicant represents that Citigroup has performed all annual reviews 
required by Section I(m) of PTE 2017-05 to date, including during 
the periods not under audit by FCI. The Department notes that in the 
future, FCI will verify that Citigroup performed its annual reviews 
during off-audit year periods.
---------------------------------------------------------------------------

    FCI determined that Citigroup timely appointed the Compliance 
Officer, who prepared a combined annual report for all Citigroup 
Affiliated QPAMs (Annual Report) that complied with the requirement of 
Section I(m)(2)(ii). Based on its review of the Annual Report, FCI 
concluded that Citigroup developed a robust monitoring program with 
several compliance routines that address relevant compliance issues 
under PTE 2017-05 and established committees and meetings that address 
ERISA compliance issues as they arise.

Findings of the Auditor--the Second Audit Period

    17. On January 6, 2022, FCI issued a written Audit Report covering 
the twelve-month period from July 10, 2020, through July 9, 2021 (the 
Second Audit Period). On January 31, 2022, on behalf of each Citigroup 
Affiliated QPAM, Citigroup provided the Department with a copy of the 
certifications related to the Audit Report.\21\
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    \21\ The following Citigroup QPAM executive officers made 
certifications: Daniel Keegan, Chief Executive Officer of CGMI; 
Robert Cole, Chief Compliance Officer for CPB, CGMI, and Citi 
Private Advisory, LLC (CPA); Sunil Garg, Chief Executive Officer of 
Citibank N.A.; and Daniel O'Donnell, Chief Executive Officer of CPA.

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[[Page 68733]]

    18. Policies. FCI reported that the Citigroup Affiliated QPAMs 
timely developed, implemented, maintained, and followed written 
policies and procedures (Policies) reasonably designed to ensure the 
following:
    Section I(h)(l)(i). Asset management decisions of the Citigroup 
Affiliated QPAMs are conducted independently of the corporate 
management and business activities of Citigroup.
    FCI based its conclusions on reviews of marketing materials made 
available to Covered Plans, interviews with portfolio managers, 
investment committee members' affiliations, minutes of investment 
committee meetings, Information Barriers Policies and Procedures, 
restricted trading list policies and procedures, and discussions with 
applicable Citigroup Affiliated QPAM employees. FCI reviewed reports of 
approximately 200 ``wall-crossing \22\'' incidents. In this regard, FCI 
states that there were 169 instances in which a Citi Private Bank (CPB) 
employee and 21 instances in which a Global Consumer Bank (GCB) 
employee ``wall-crossed.'' The reports describe the incident and the 
remedial activity taken that indicate compliance with the Information 
Barriers Policies and Procedures. FCI states that employees of 
Citigroup Affiliated QPAMs were involved in three of these 
approximately 200 incidents, which were resolved pursuant to 
established procedures.
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    \22\ Wall crossing generally may occur when individuals 
inadvertently gain access to ``insider'' or confidential 
information. Asset management firms have compliance regimes to 
manage wall-crossing events, which generally require the execution 
of non-disclosure agreements by the individual that received such 
information and a range of remedial actions to prevent such 
disclosures from re-occurring.
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    Section I(h)(l)(ii). The Citigroup Affiliated QPAMs fully comply 
with ERISA's fiduciary duties (as more fully described above).
    FCI reviewed the trade management systems used to support the 
Citigroup Affiliated QPAMs' investment compliance and trading process. 
FCI reviewed the restrictions contained in those systems to avoid 
prohibited transactions, oversight procedures, complaint logs, trade 
error logs, overdraft reports and relevant policies and procedures. FCI 
also reviewed, among other things, policies and procedures regarding 
client complaints, errors, overdrafts, affiliated broker and/or dealer 
compliance; trading systems hardcoding related to compliance with 
affiliated broker/dealers and cross-trading and block-trading 
compliance; and policies for handling breaches of investment guidelines 
and ERISA restrictions in trading systems. FCI specifically reviewed 
reports of actual instances of breaches of the aforementioned policies 
and procedures and how such breaches were remediated. FCI also reviewed 
records of CPB and GCB employee disciplinary actions in order to 
determine whether employees had committed violations of Title I of 
ERISA with respect to Covered Plans. In this regard, FCI reviewed 
records of approximately 30 disciplinary actions related primarily to 
personal trading issues, failure to obtain preapproval for a gift, 
Mystery Shopper non-disclosures, failure to identify customer 
complaints, personal use of a corporate credit card and altered 
documentation.
    Based on its review of the foregoing information, FCI confirmed 
that the mechanisms Citigroup has in place, including relevant 
policies, procedures and training, were designed to ensure that the 
Citigroup Affiliated QPAMs comply with ERISA and the Code's prohibited 
transaction provisions.
    Section I(h)(1)(iii). The Citigroup Affiliated QPAMs do not 
knowingly participate in any other person's violation of ERISA or the 
Code with respect to Covered Plans.
    FCI reviewed Citigroup's ``Escalation Policy,'' which was revised 
effective December 11, 2020. Under the policy, employees must escalate 
violations or potential violations of law, regulation, rule, or 
breaches of policy, procedure or the Code of Conduct and other relevant 
standards of conduct. The policy also sets forth responsibilities of 
managers involved in the escalation. FCI reviewed records of client 
complaint escalations and error handling (including completed complaint 
logs, sample written/email and oral complaints, and trade error logs 
and resolution reports) and confirmed that Citigroup complied with the 
requirements of Section I(h)(1)(iii).
    Section I(h)(1)(iv). Any filings or statements made by the 
Citigroup Affiliated QPAMs to regulators are materially accurate and 
complete (as more fully described above). FCI's determination of 
compliance with this Section was to be based on a review of excise tax 
filings and associated incident reports. No excise tax filings for 
prohibited transactions were submitted to the IRS during the Second 
Audit Period. FCI states that it reviewed the Form ADV for the 
Citigroup Affiliated QPAM's discretionary assets under management and 
to confirm that the Citigroup Affiliated QPAM is a registered 
investment adviser.
    As noted above, the Department expects that FCI should request for 
its review of any policies specifically addressing a QPAM's government 
filings or responses to regulatory inquiries, including any review 
processes to ensure accuracy and any corrective mechanisms if a 
deficiency is noted. Further, the Department notes that ``filings or 
statements made by the Citigroup Affiliated QPAM to regulators . . . on 
behalf of or in relation to Covered Plans,'' should be interpreted 
broadly.\23\ If FCI cannot identify any such information to review, FCI 
should contact the Department to determine how to complete its audit 
for compliance with Section I(h)(1)(iv).
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    \23\ It is the Department's view that FCI is empowered under the 
terms of PTE 2017-05 and Section III(i)(2) of this proposed 
exemption, if granted, to request such materials. FCI should contact 
the Department if the Applicant is unwilling to grant such request.
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    Section I(h)(1)(v). The Citigroup Affiliated QPAMs do not make 
material misrepresentations or omit material information (as more fully 
described above). FCI reviewed performance reports, marketing 
materials, sample investment management agreements, certain incident 
reports (including a late update to a notice required by ERISA Section 
408(b)(2) and tax withholding errors), and client complaints. The late 
ERISA Section 408(b)(2) notice update involved a description of the 
firm's gift and entertainment disclosure related to brokerage offering 
that was updated three days after the deadline. The tax withholding 
error involved Citigroup's inadvertent failure to withhold Federal and 
state taxes on several customers' IRA accounts but did not impact the 
accounts' required minimum distributions under Code section 401(a)(9) 
due to IRS rules applicable during the COVID-19 pandemic. FCI also 
notes that during an update of Citi Private Bank's public facing 
website on April 26, 2021, a technical issue resulted in the entity's 
Form ADV showing as not found when entered in a particular format on 
the website. According to the incident report reviewed by FCI, the 
issue was identified on the same day and remediated within 48 hours of 
discovery.
    Section I(h)(1)(vi). The Citigroup Affiliated QPAMs comply with the 
terms of PTE 2017-05, including compliance with the conditions of Class 
PTE 84-14.
    FCI reviewed whether each condition of PTE 2017-05 was met, 
including

[[Page 68734]]

conditions related to timing and adequacy of notices required under the 
exemption, whether the Training was held in a timely manner, and 
whether the QPAMs complied with the additional contractual undertakings 
requirements described in Section I(j) of PTE 2017-05. Specifically, 
FCI reviewed sample Citigroup investment management agreements, assets 
under management tables with data on a per client basis, trading 
restrictions in Citigroup trade management systems, financial 
statements demonstrating equity capital and shareholder equity, Form 
ADVs, and copies of notices to interested persons.
    19. Correction of Policy Violations. FCI determined that any 
violations of, or failure to comply with an item in subparagraphs (ii) 
though (iv) of Section I(h)(1) of PTE 2017-05 were corrected as soon as 
reasonably possible upon discovery or as soon after the QPAM reasonably 
should have known of the noncompliance; and that any violations or 
failures not so corrected were reported in writing to the head of 
compliance and the General Counsel (or the functional equivalent) of 
the relevant line of business that engaged in the violation or failure.
    In making its determination, FCI reviewed, among other things, 
policies applicable to the Citigroup Affiliated QPAMs, including the 
Information Barriers Policy, Restricted Trading List Policy, Escalation 
Policy, Complaint Policy and Procedures, Error Standard for Managed 
Accounts, Personal Trading and Investment Policy, Fiduciary Code of 
Ethics Standard, the Citigroup Code of Conduct, and the Gifts and 
Entertainment Standard.
    Further, FCI was able to conclude that any violations of items in 
subparagraphs (ii) through (iv) of Section I(h)(1) were corrected in 
compliance with Section I(h)(1)(vii) of PTE 2017-05 through its review 
of certain documents and spreadsheets provided by Citigroup to FCI. 
These documents and spreadsheets included a description of the 
violation or other action, how it was corrected or addressed, and the 
date or dates that action was undertaken. In this regard, FCI reviewed 
incident reports, if any, employee trading violations, employee 
disciplinary actions taken, overdraft reports, and errors and 
complaints.
    20. Training. FCI determined that the Citigroup Affiliated QPAMs 
developed Training:
    Section I(h)(2)(i). The Training, at a minimum, covers the 
Policies, ERISA and Code compliance, ethical conduct, the consequences 
of not complying with the conditions of PTE 2017-05, and prompt 
reporting of wrongdoing (as more fully described above).
    FCI reviewed a copy of the annual 2020 Citigroup ERISA Fiduciary 
Training and other annual trainings provided to new and current 
employees throughout the year and proof of such trainings (including 
spreadsheets detailing each QPAM employee who took the training); 
conducted interviews with portfolio managers regarding the training; 
reviewed the training system and process of assigning courses to 
employees (and governing the completion of training); and specifically 
interviewed Citigroup Affiliated QPAM employees as to the training 
system and governance process.
    21. Annual Compliance Review. FCI reviewed the most recent annual 
review (Annual Review) conducted by a senior compliance officer 
designated by Citigroup (Compliance Officer) in accordance with Section 
I(m) of PTE 2017-05 and specifically validated the adequacy of the 
Annual Review and Citigroup's compliance with Section I(m) of PTE 2017-
05.\24\
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    \24\ As mentioned above, pursuant to Section I(m) of PTE 2017-
05, the Compliance Officer must conduct an Annual Review for each 
annual period beginning on January 10, 2018. The Annual Review must 
be completed with respect to the annual periods ending January 9, 
2019; January 9, 2020; January 9, 2021; January 9, 2022; and January 
9, 2023. The Applicant represents that Citigroup has performed all 
annual reviews required by Section I(m) of PTE 2017-05 to date, 
including during the periods not under audit by FCI. The Department 
notes that in the future, FCI will verify that Citigroup performed 
its annual reviews during off-audit year periods.
---------------------------------------------------------------------------

    FCI determined that Citigroup timely appointed the Compliance 
Officer, who prepared a combined annual report for all Citigroup 
Affiliated QPAMs (Annual Report) that complies with the requirement of 
Section I(m)(2)(ii). Similar to its findings under the First Audit 
Period, FCI found that the Compliance Officer's Annual Report reviewed 
during the Second Audit Period includes a separate review of the 
information barriers for each Citigroup Affiliated QPAM. The Annual 
Report also includes a review of any compliance matter related to the 
Policies or Training that was identified by, or reported to, the 
Compliance Officer or other relevant parties during the Second Audit 
Period, any material changes to the relevant business activities of the 
Citigroup Affiliated QPAMs, and any changes to ERISA, the Code, or 
regulations, related to fiduciary duties and the prohibited transaction 
provisions that may be applicable to the activities of the Citigroup 
Affiliated QPAMs.
    FCI found that the Annual Report summarizes the Compliance 
Officer's material activities during the Annual Review; sets forth any 
instances of noncompliance discovered during the Annual Review, and any 
related corrective action; details any change to the Policies or 
Training; and makes recommendations, as necessary, for additional 
training, procedures, monitoring, or additional and/or changed 
processes or systems; and describes management's actions taken in 
response to such recommendations.
    Based on its above review of the Compliance Officer's Annual 
Review, FCI concluded that Citigroup developed a robust monitoring 
program with several routines that address relevant compliance issues 
under PTE 2017-05 and established committees and meetings that address 
ERISA compliance issues as they arise.

Current Exemption Request

    22. The Applicant now seeks a four-year exemption that would allow 
the Citigroup QPAMs to continue to rely on PTE 84-14 until the end of 
the ten-year disqualification period in Section I(g). The requested 
exemption is substantially similar to PTE 2017-05.
    This proposed exemption requires each Citigroup Affiliated QPAM to 
continue to maintain, implement and follow written policies and 
procedures (Policies) that are reasonably designed to ensure the 
following, among other things: the asset management decisions of the 
Citigroup Affiliated QPAM are conducted independently of the corporate 
management and business activities of Citigroup; the Citigroup 
Affiliated QPAMs fully comply with ERISA's fiduciary duties, and with 
ERISA and the Code's prohibited transaction provisions, as applicable 
with respect to each Covered Plan; any filings or statements made by 
Citigroup Affiliated QPAMs to regulators, on behalf of Covered plans, 
are materially accurate and complete; and the Citigroup Affiliated 
QPAMs comply with the terms of the proposed exemption, if granted. 
Further, any violation of, or failure to comply with the Policies must 
be corrected promptly upon discovery, and any such violation or 
compliance failure not promptly corrected must be reported, upon the 
discovering of the failure to promptly correct, in writing, to the head 
of compliance and the General Counsel (or their functional equivalent) 
of the relevant line of business that engaged in the violation or 
failure, and the independent auditor response for reviewing compliance 
with the Policies.
    This proposed exemption requires each Citigroup Affiliated QPAM to 
implement or maintain a training

[[Page 68735]]

program (the Training) to be conducted at least annually by a prudently 
selected professional, that covers the Policies, ERISA and Code 
compliance, ethical conduct, the consequences for not complying with 
the conditions of the exemption, and the duty to promptly report 
wrongdoing; and submit to a biennial compliance audit conducted by a 
prudently-selected independent auditor (the Auditor), to evaluate the 
adequacy of, and the Citigroup Affiliated QPAM's compliance with, the 
Policies and Training requirements of the exemption. The Auditor must 
issue a written report (the Audit Report) to Citigroup and the 
Citigroup Affiliated QPAM to which such audit applies that describes 
the procedures performed during the Audit. In its Audit Report, the 
Auditor must assess the adequacy of the Citigroup Affiliated QPAM's 
Policies and Training Program; the Citigroup Affiliated QPAM's 
compliance with the Policies and Training Program; the need, if any to 
strengthen the Policies and Training Program; and any instance of 
noncompliance.
    The proposed exemption requires certain senior Citigroup personnel 
to review the Audit Report and make certain certifications and take 
various corrective actions. In this regard, the General Counsel or one 
of the three most senior executive officers of the Citigroup Affiliated 
QPAM to which the report applies must certify in writing and under 
penalty of perjury that such officer has reviewed the Audit Report, 
addressed, corrected, or remedied any inadequacy identified in the 
Audit Report; and determined that the Policies and Training Program are 
adequate to ensure compliance with the requirements of the exemption 
and applicable provisions of ERISA and the Code. The Audit Report must 
also be provided to the Department's Office of Exemption 
Determinations.
    The proposed exemption requires each Citigroup Affiliated QPAM to 
agree and warrant to each Covered Plan client that they will comply 
with ERISA and the Code, refrain from engaging in non-exempt prohibited 
transactions (and will promptly correct any non-exempt prohibited 
transactions), and comply with standards of prudence and loyalty set 
forth in ERISA Section 404 for the duration of the Exemption. The 
proposed exemption also requires the Citigroup Affiliated QPAM to agree 
and warrant to indemnify and hold their Covered Plan clients harmless 
for any actual losses resulting directly from the QPAM's violation of 
these rules or failure to qualify for relief under PTE 84-14 as a 
result of any other criminal convictions, and that it will not require 
the Covered Plan to waive, limit, or qualify its liability for 
violating ERISA or the Code or engaging in non-exempt prohibited 
transactions. The proposed exemption also prohibits the Citigroup 
Affiliated QPAM from restricting the ability of Covered Plan clients to 
terminate their investment management arrangement with such QPAM or 
from imposing fees, penalties, or other charges upon the client for 
doing so, except for certain reasonable restrictions specifically 
designed to ensure equitable treatment of all investors in a pooled 
fund.
    The proposed exemption contains extensive notice requirements that 
obligate the Citigroup Affiliated QPAMs to provide Covered Plan clients 
regarding the grant of the exemption and the QPAM's obligations 
thereunder, including a separate summary describing the facts that led 
to the Conviction, within specified time periods.
    The proposed exemption also requires Citigroup to continue to 
designate a senior compliance officer (the Compliance Officer) to 
conduct an annual review (the Annual Review) of the adequacy and 
effectiveness of the implementation of the Policies and Training 
Program, and prepare a written report for each Annual Review that, 
among other things, summarizes their material activities during the 
preceding year; and sets forth any instance of noncompliance discovered 
during the preceding year and any related corrective action.
    The proposed exemption requires Citigroup to inform its Covered 
Plan Clients of their right to obtain a copy or summary description of 
the Policies and provided with updated disclosures following any 
changes.\25\
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    \25\ Citigroup maintains a summary of the policies on its 
website, at: https://www.privatebank.citibank.com/pdf/Summary-QPAM-Policies-and-Procedures.pdf.
---------------------------------------------------------------------------

    The proposed exemption also requires Citigroup to immediately 
disclose to the Department any Deferred Prosecution Agreement or Non-
Prosecution Agreement it enters into with the U.S. Department of 
Justice in connection with conduct described in Section I(g) of PTE 84-
14 or ERISA Section 411 of ERISA. Under this condition, the Applicant 
must notify the Department if and when it or any of its affiliates 
enter into a DPA or NPA with the U.S. Department of Justice for conduct 
described in section I(g) of PTE 84-14 or ERISA Section 411 and 
immediately provide the Department with any information requested by 
the Department, as permitted by law, regarding the agreement and/or 
conduct and allegations that led to the agreement. The Department will 
review the information provided and may seek additional information 
from the Department of Justice, in order to determine whether the 
conduct described in the DPA or NPA raises questions about the 
Citigroup Affiliated QPAMs' ability to act with a high standard of 
integrity. The Department retains the right to propose a withdrawal of 
the exemption pursuant to its procedures contained at 29 CFR 2570.50, 
should the circumstances warrant such action.
    Department's Request for Comment: The Department requests comments 
whether the Applicant should be required to provide information 
regarding adverse regulatory actions (e.g., fines, censures, penalties, 
civil lawsuits, settlements of civil or criminal lawsuits), that are 
taken by other regulators against Citigroup and its affiliates. Should 
the Applicant be required to provide information regarding actions 
taken by certain regulators (e.g., IRS, SEC, OCC, UK FCA), and is there 
an appropriate type of information or class of regulatory actions that 
are relevant or irrelevant to the Department's determination whether 
under PTE 84-14 should continue to be permitted notwithstanding the 
Conviction?

Modifications of Conditions for the Proposed Exemption From Those of 
PTE 2017-05

    23. The Department is proposing to modify the terms of PTE 2017-05 
in the proposed exemption, based on the Applicant's request, to reflect 
the following terms the Department has included in recently granted 
individual exemptions providing relief from a violation of Section I(g) 
of PTE 84-14:
     Allow the Training to be conducted electronically.
    Department's Request for Comment Regarding Training: The Department 
views the Training obligation under this exemption as a key protection 
of Covered Plans and expects that Citigroup Affiliated QPAMs and their 
personnel will complete their obligations in good faith. The Department 
requests comments regarding whether the Citigroup Affiliated QPAMs 
should be required to validate the efficacy of Training that is 
provided electronically, through methods such as in-training knowledge 
checks, ``graduation'' tests, and other technological tools designed to 
confirm that personnel fully and in good faith participate in the 
Training.

[[Page 68736]]

     Allow the certifications described in Section I(i)(7) of 
PTE 2017-05 that are required to be made by the General Counsel or one 
of the three most senior executive officers of the Citigroup Affiliated 
QPAM to which an Audit Report applies,\26\ to be made ``to the best of 
such officer's knowledge at the time.'' Similarly, the certification by 
the designated compliance officer as to the accuracy of the written 
report on each Annual Review and certain other matters (including the 
correction of any ``known'' instance of noncompliance) in Section 
I(m)(2)(iii) of PTE 2017-05 may be made to the compliance officer's 
``best knowledge.''
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    \26\ Section I(i)(7) of PTE 2017-05 provides that ``. . . the 
General Counsel, or one of the three most senior executive officers 
of the Citigroup Affiliated QPAM to which [an] Audit Report applies, 
must certify in writing, under penalty of perjury, that the officer 
has reviewed the Audit Report and this exemption; that such 
Citigroup Affiliated QPAM has addressed, corrected or remedied any 
noncompliance and inadequacy or has an appropriate written plan to 
address any inadequacy regarding the Policies and Training 
identified in the Audit Report . . . .''
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    Department's Comment Regarding ``Best Knowledge'' Standard: The 
Department intends for the ``Best Knowledge'' standard described in the 
exemption to require the certifying senior executive to perform its due 
diligence required under the exemption to determine whether the 
information such executive is certifying is complete and accurate in 
all respects.
     Allow the certified Audit Report to be delivered no later 
than 45 days after completion of the report.
    24. Other Conforming Changes. The Department has updated the 
operative language of the proposed exemption to more accurately reflect 
the factual record and the operative language of similar, recently 
granted exemptions. The Department notes further that it has made minor 
formatting changes in the proposed exemption, so that certain operative 
language that is identical or parallel to language in PTE 2017-05 is 
now located in different sections of the proposed exemption.\27\
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    \27\ For example, in the proposed exemption, the definitions are 
now located in Section I, the covered transactions are now located 
in Section II, and the conditions for relief are located in Section 
III.
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    25. Department's Comment Regarding Audit Timing. The Department 
notes that PTE 2017-05 requires the Independent Auditor to conduct 
biennial audits covering the periods from July 10, 2018, through July 
9, 2019, (which must be completed by January 9, 2020); from July 10, 
2020, through July 9, 2021 (which must be completed by January 9, 
2022); and from July 10, 2022, through July 9, 2023 (which must be 
completed by January 9, 2024). As such, the last audit period under PTE 
2017-05 will extend into this proposed exemption's Exemption Period.
    In order to avoid confusion regarding the audit periods under this 
proposed exemption, the Department provides the following 
clarification: The first audit under this proposed four-year exemption 
(the fourth audit under the totality of exemptive relief) would cover 
the period from July 10, 2024 through July 9, 2025, (and must be 
completed by January 9, 2026); and the second audit (the fifth audit 
under the totality of exemptive relief) would cover the period from 
July 10, 2026, through January 9, 2027, (must be completed by July 9, 
2027).
    As described above, the fifth audit period is truncated, so that it 
expires with the expiration of the Exemption Period. However, the 
Department expects the audit report for the fifth audit period to be 
completed and delivered timely to the Department. The failure to 
receive such report would impede Citigroup's ability to claim relief 
under this proposed exemption for transactions entered into during the 
Exemption Period.

Hardship to Covered Plans

    26. Inability to Engage in Transactions that are in the Interest of 
Plans. The Applicant states that it would be difficult for Citigroup to 
engage in a variety of routine transactions on behalf of a Retirement 
Account with counterparties, without the ability to use PTE 84-14, 
because virtually every counterparty may be a service provider to that 
Retirement Account. The Applicant states that because counterparties 
are familiar and comfortable with PTE 84-14, it is generally the most-
commonly used prohibited transaction exemption. In addition, the 
Applicant states that market participants, both clients and 
counterparties, routinely expect an investment adviser or manager of 
Retirement Accounts to represent that it qualifies as a QPAM, even if 
such a representation is not technically required in a particular 
circumstance.
    27. The Applicant represents that disqualification would deprive 
Covered Plans clients of the Citigroup Affiliated QPAMs from receiving 
advisory or sub-advisory services that fiduciaries of the Covered Plans 
have determined to be in the best interests of the Covered Plans. 
According to the Applicant, this would be an undesirable result that 
would extend to asset managers selected by fiduciaries that Citigroup 
does not control and in which it has a non-controlling investment 
(collectively, the Citigroup Related QPAMs).
    28. The Applicant represents that PTE 84-14 is used for investment 
transactions such as the purchase and sale of debt and equity 
securities, both foreign and domestic that are either registered or 
sold under Rule 144A, the purchase and sale of commodities, futures, 
swaps, real estate, foreign exchange and other investments in the U.S. 
and internationally, and the hedging of risk through a variety of 
investment instruments and strategies. The Applicant states that it is 
very difficult for a manager of ERISA assets to manage such assets 
effectively without the ability to rely on PTE 84-14. Therefore, the 
Applicant represents that if the Department does not grant the 
exemption, fiduciaries that otherwise decided to retain Citigroup's 
advisory services pursuant to a prudent process would have to seek an 
alternative service provider.
    29. Alternatively, the Applicant states that fiduciaries of Covered 
Plans have been clearly informed and will, in keeping with their 
fiduciary duties, be able to make their own individualized decisions 
about continuing to utilize Citigroup as an advisor to their plans' 
assets. In this regard, the Applicant states that the Plea Agreement 
has been well-publicized and made readily available. Further, the 
Applicant states that the Plea Agreement is disclosed in Citigroup's 
Form ADVs and is the subject of notice to Covered Plan clients pursuant 
to PTEs 2016-14 and 2017-05 (and will be further disclosed as required 
by this proposed exemption, if granted).
    30. Retirement Accounts Would Incur Significant Costs in 
Transitioning Managers. The Applicant states that any Retirement 
Account that transitions away from a Citigroup Affiliated QPAM if the 
requested exemption is denied would incur quantifiable financial costs 
that fall into three categories:(i) Trading and market impact costs, 
(ii) consultant costs associated with identifying new investment 
managers, and (iii) legal costs, are summarized below.\28\ These 
categories are discussed below.
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    \28\ The Applicant is not including certain costs in its 
summary, such as those incurred to replace custodians, prepare 
employee communications and implement new record-keeping procedures, 
because they depend on a Covered Plan's current service arrangements 
and may vary widely. In addition, the Applicant states that 
estimates below are based on experience with employee pension plans, 
so the costs described may differ for IRAs.
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    31. Trading and Market Risk Costs. The Applicant states that 
trading-related costs consist of brokerage commissions, bid-ask spreads 
of assets traded on a principal basis, and ``market impact''

[[Page 68737]]

costs based on the effects of trading on the price of the particular 
assets.\29\
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    \29\ Market impact costs are generally a function of the size of 
the trade and the liquidity of the particular asset.
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    The Applicant estimates that the trading and market risk costs of 
transitioning a hypothetical $1 billion investment portfolio, 
categorized by asset class and assuming an index-based portfolio, are 
as follows: \30\
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    \30\ Estimates are based on Citigroup's own transition 
management services that are offered to transitioning pension plans.
    \31\ Risk costs measure the potential loss from a portfolio 
being uninvested and ``out of the market'' during the transition, 
which is a function of the daily volatility in the particular 
assets. However, if clients employ a ``transition manager'' to move 
assets from Citigroup into a new target portfolio with a different 
manager, the plan could avoid the full Risk Costs.
    \32\ A portfolio that is not based on an index would likely be 
expected to have higher Bid/Ask Spread and Market Impact costs.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Explicit fees          Implicit costs
                                                                         ------------------------------------------------                    Risk cost
                       Asset class                           Notional                                     Bid ask spread  Total trading-      (daily
                                                                           Commissions*      Stamp and      and market     related costs    volatility)
                                                                                           exchange fees    impact \32\                        \31\
--------------------------------------------------------------------------------------------------------------------------------------------------------
US Large Cap Equity.....................................   1,000,000,000          50,334           5,100         560,000         615,434      13,802,002
US Small Cap Equity.....................................   1,000,000,000         253,897           5,100       1,801,403       2,060,400      15,871,433
ACWI -Ex US Equity......................................   1,000,000,000         568,156       1,050,138       1,030,495       2,648,789       9,713,042
Emerging Markets Equity.................................   1,000,000,000         741,785       1,029,998       2,702,068       4,473,851      10,323,360
US Agg Index Fixed income...............................   1,000,000,000         358,576  ..............       2,273,556       2,632,131       6,299,407
--------------------------------------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
 
------------------------------------------------------------------------
                            Commission rates
------------------------------------------------------------------------
US Equities...............................  0.5 cents per share.
------------------------------------------------------------------------

    32. Investment Consultant Costs. The costs for Pension plans that 
use an investment consultant to advise on selecting a new investment 
manager (including administering the request-for-proposal process) may 
include: \33\
---------------------------------------------------------------------------

    \33\ The Applicant states that these estimates could vary 
depending on the specific circumstances of the particular plan and 
RFP.
---------------------------------------------------------------------------

     $10,000-$50,000 for replacement of an individual manager 
or a single investment option for a defined contribution plan.
     $30,000-$100,000 for replacement of a ``manager of 
managers'' that chooses all investment managers for the plan, such as 
an outsourced chief investment officer.
    33. Legal Costs. The Applicant estimates that the cost of outside 
counsel for a manager transition by a single employer plan is in the 
range of $15,000 to $28,000. As noted above, plans may use a transition 
manager to minimize transaction costs in moving assets to the new 
manager. The Applicant states that the legal work retain a transition 
manager could range from $5,000 to $10,000.

Statutory Findings

    34. ERISA Section 408(a) provides, in part, that the Department may 
not grant an exemption unless the Department finds that the exemption 
is administratively feasible, in the interest of affected plans and of 
their participants and beneficiaries, and protective of the rights of 
such participants and beneficiaries. The Department's findings under 
these criteria are discussed below.
    35. ``Administratively Feasible.'' The Department has tentatively 
determined that the proposal is administratively feasible because, 
among other things, a qualified independent auditor would be required 
to perform an in-depth audit covering each Citigroup Affiliated QPAMs' 
compliance with the terms of the exemption, and a corresponding written 
audit report would be provided to the Department and made available to 
the public.
    The independent audit would help to ensure that the continued 
compliance with the terms of the exemption and ethical behavior of the 
Applicant is subject to on-going oversight by an independent third 
party reporting its findings to the Department.
    36. ``In the Interests of.'' The Department has tentatively 
determined that the proposed exemption is in the interests of the 
participants and beneficiaries of the Covered Plans.
    The primary reason the Department is proposing to provide the 
Applicant with four additional years of exemptive relief, is to prevent 
Covered Plans from incurring the costs and expenses that they would not 
otherwise incur, in the event the Citigroup Affiliated QPAMs lose 
exemptive relief under PTE 84-14, and Covered Plans terminate their 
advisory relationships with Citigroup. As mentioned above, as of 
December 31, 2020, Citigroup's advisory businesses had over 12,700 
Retirement Accounts with approximately $4.6 billion of assets under 
management.
    The Applicant states that it made certain assumptions to quantify 
the specific costs to Retirement Accounts if the exemption request were 
denied, including the portion of those assets would transition away 
from Citigroup if it were to not eligible to rely on the QPAM 
Exemption. The Applicant states that making this assumption depends on 
such factors as the type of account and investment strategy, because it 
may be possible to substantially implement certain investment 
strategies without relying on the QPAM Exemption (although there may be 
clients that nevertheless view ineligibility to rely on the QPAM 
Exemption as a reason to change asset managers).
    The Applicant estimates that if 10% of such assets ($460 million) 
representing 5% of such accounts (635) were to transition away from 
Citigroup as a result of a denial of the exemption, the Quantifiable 
Costs to Retirement Investors, assuming the midpoint level of such 
costs for each category of Quantifiable Costs, would total $36.3 
million.\34\
---------------------------------------------------------------------------

    \34\ The Applicant states that this calculation is based on 
conservative assumptions, so the actual costs could be higher. 
Further, the Applicant states that the calculation is limited to the 
costs it was able to quantify so the actual costs could be higher. 
The assumptions include the following:
     Trading and Market Risk Costs--averaging the figures 
described above (leaving out Emerging Markets Equity, which tends to 
constitute a smaller portion of investment portfolios) and adjusting 
for an aggregate portfolio of $460 million in assets = $6,168,903.
     Investment Consultant Costs--using $30,000, the 
midpoint of the above figures for a single manager search, times 635 
accounts = $19,050,000.
     Legal Costs--using $17,500, the midpoint of the above 
figures for a manager search (assuming either no transition manager 
or a transition manager already in place), times 127 accounts = 
$11,112,500.
---------------------------------------------------------------------------

    The Applicant also represents that any manager transition will 
cause Plans to incur costs in time and attention, which are not able to 
be quantified, but no less disruptive in terms of resources that would 
need to be re-directed away from activities that are otherwise 
necessary for the functioning of a Plan.
    37. ``Protective of.'' The Department has tentatively determined 
that the proposed exemption is protective of the interests of the 
participants and beneficiaries of affected Covered Plans.

[[Page 68738]]

The conditions, which are described in more detail above and in PTE 
2017-05, require continued oversight of Citigroup's compliance with the 
terms and conditions of PTE 2017-05 by the Independent Auditor and a 
robust audit to be completed by the auditor that is reviewed by the 
Department.
    As demonstrated by the Audit Reports for the First and Second Audit 
Periods, the Independent Audit is an important tool to test Citigroup's 
adherence to the conditions of PTE 2017-05 and this proposed exemption 
(if granted), and the audit reports provide transparency and 
accountability to the Department and interested persons regarding 
Citigroup's efforts to maintain a culture of compliance.
    In addition to oversight by an Independent Auditor, the proposed 
exemption is subject to protective conditions that include but not 
limited to: (a) the development and maintenance of the Policies; (b) 
the implementation of the Training Program; (c) the requirement for the 
Citigroup Affiliated QPAMs to make certain agreements and warranties to 
Covered Plan clients; (d) specific notice and disclosure requirements 
concerning the circumstances necessitating the need for exemptive 
relief and the Citigroup Affiliated QPAMs' obligations under this 
proposed exemption; and (e) the designation of a Compliance Officer 
with responsibility to ensure compliance with the Policies and Training 
requirements under this proposed exemption, and the Compliance 
Officer's completion of an Annual Review and corresponding Annual 
Report.

Summary

    38. Based on the representations of the Applicant, the substance of 
the Audit Reports, and Citigroup's required continued compliance with a 
robust set of conditions, the Department has tentatively determined 
that the relief sought by the Applicant satisfies the statutory 
requirements for a four-year exemption under section 408(a) of ERISA.

Notice to Interested Persons

    Notice of the proposed exemption will be provided to all interested 
persons within fifteen (15) days of the publication of the notice of 
proposed four-year exemption in the Federal Register. The notice will 
be provided to all interested persons in the manner described in 
Section III(k)(1) of this proposed four-year exemption and will contain 
the documents described therein and a supplemental statement required 
by 29 CFR 2570.43(a)(2). The supplemental statement will inform 
interested persons of their right to comment on and request a hearing 
with respect to the pending exemption. All written comments and/or 
requests for a hearing must be received by the Department within forty-
five (45) days of the date of publication of this proposed exemption in 
the Federal Register and will be made available to the public. The 
notice may be provided by first-class mail, hand delivery or through 
electronic means, including by an email that has a link to the notice 
documents on Citigroup's website that Covered Plan clients with an 
internet connection can access at any time (except for any periods when 
the website is temporarily unavailable because it is undergoing routine 
maintenance).
    Warning: If you submit a comment, EBSA recommends that you include 
your name and other contact information in the body of your comment, 
but DO NOT submit information that you consider to be confidential, or 
otherwise protected (such as a Social Security number or an unlisted 
phone number) or confidential business information that you do not want 
publicly disclosed. All comments may be posted on the internet and can 
be retrieved by most internet search engines.

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 ERISA Section 408(a) and/or Code Section 4975(c)(2) does not 
relieve a fiduciary or other party in interest or disqualified person 
from certain other provisions of ERISA and/or the Code, including any 
prohibited transaction provisions to which the exemption does not apply 
and the general fiduciary responsibility provisions of ERISA Section 
404, which, among other things, require a fiduciary to discharge their 
duties respecting an ERISA-covered plan solely in the interest of the 
participants and beneficiaries of the plan and in a prudent fashion as 
required by ERISA Section 404(a)(1)(B); nor does it affect the 
requirement of Code Section 401(a), which require a plan to operate for 
the exclusive benefit of the employees of the employer maintaining the 
plan and their beneficiaries;
    (2) Before an exemption may be granted, ERISA Section 408(a) and/or 
Code Section 4975(c)(2) require the Department to 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 exemption, if granted, would be supplemental to, 
and not in derogation of, any other provisions of ERISA 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 exemption, if granted, would be subject to the 
express condition that the material facts and representations contained 
in the application are true and complete at all times, and that the 
application accurately describes all material terms of the transactions 
which are the subject of the exemption.

Proposed Exemption

    The Department is considering granting a four-year exemption under 
the authority of ERISA Section 408(a) and Code section 4975(c)(2), and 
in accordance with the procedures set forth in exemption procedure 
regulation.\35\
---------------------------------------------------------------------------

    \35\ 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 
27, 2011). 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, this notice of proposed exemption is issued solely by the 
Department.
---------------------------------------------------------------------------

Section I: Definitions

    (a) The term ``Citicorp'' means Citicorp, a financial services 
holding company organized and existing under the laws of Delaware and 
does not include any subsidiaries or other affiliates.
    (b) The term ``Citigroup Affiliated QPAM'' means a ``qualified 
professional asset manager'' (as defined in section VI(a) \36\ of PTE 
84-14) that relies on the relief provided by PTE 84-14 and with respect 
to which Citigroup is a current or future ``affiliate'' (as defined in 
section VI(d)(1) of PTE 84-14). The term ``Citigroup Affiliated QPAM'' 
excludes Citicorp, the entity implicated in the criminal conduct that 
is the subject of the Conviction.
---------------------------------------------------------------------------

    \36\ In general terms, a QPAM is an independent fiduciary that 
is a bank, savings and loan association, insurance company, or 
investment adviser that meets certain equity or net worth 
requirements and other licensure requirements and has acknowledged 
in a written management agreement that it is a fiduciary with 
respect to each plan that has retained the QPAM.
---------------------------------------------------------------------------

    (c) The term ``Citigroup Related QPAM'' means any current or future 
``qualified professional asset manager'' (as defined in section VI(a) 
of PTE 84-

[[Page 68739]]

14) that relies on the relief provided by PTE 84-14, and with respect 
to which Citigroup owns a direct or indirect five percent or more 
interest, but with respect to which Citigroup is not an ``affiliate'' 
(as defined in Section VI(d)(1) of PTE 84-14).
    (d) The term ``Conviction'' means the judgment of conviction 
against Citigroup for violation of the Sherman Antitrust Act (15 U.S.C. 
1), entered in the District Court for the District of Connecticut (the 
District Court) (Case Number 3:15-cr-78-SRU). For all purposes under 
this exemption, ``conduct'' of any person or entity that is the 
``subject of [a] Conviction'' encompasses the conduct described in 
Paragraph 4(g)-(i) of the Plea Agreement filed in the District Court in 
Case Number 3:15-cr-78-SRU.
    (e) The term ``Covered Plan'' means a plan subject to Part 4 of 
Title I of ERISA (ERISA-covered plan) or a plan subject to Section 4975 
of the Code (IRA) with respect to which a Citigroup Affiliated QPAM 
relies on PTE 84-14, or with respect to which a Citigroup Affiliated 
QPAM (or any Citigroup affiliate) has expressly represented that the 
manager qualifies as a QPAM or relies on the QPAM class exemption (PTE 
84-14). A Covered Plan does not include an ERISA-covered Plan or IRA to 
the extent the Citigroup affiliated QPAM has expressly disclaimed 
reliance on QPAM status or PTE 84-14 in entering into its contract, 
arrangement, or agreement with the ERISA-covered plan or IRA.
    (f) The term ``Exemption Period'' means January 10, 2023, through 
January 9, 2027.

Section II: Covered Transactions

    If the proposed four-year exemption is granted, the Citigroup 
Affiliated QPAMs and the Citigroup Related QPAMs (as defined in 
Sections I(b) and I(c), respectively) will not be precluded from 
relying on the exemptive relief provided by Prohibited Transaction 
Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption),\37\ 
notwithstanding the Conviction, as defined in Section I(d)), during the 
Exemption Period, provided that the conditions in Section III below are 
satisfied.
---------------------------------------------------------------------------

    \37\ 49 FR 9494 (March 13, 1984), as corrected at 50 FR 41430 
(October 10, 1985), as amended at 70 FR 49305 (August 23, 2005), and 
as amended at 75 FR 38837 (July 6, 2010).
---------------------------------------------------------------------------

Section III: Conditions

    (a) Other than a single individual who worked for a non-fiduciary 
business within Citigroup's Markets and Securities Services business, 
and who had no responsibility for and exercised no authority in 
connection with the management of plan assets, the Citigroup Affiliated 
QPAMs and the Citigroup Related QPAMs (including their officers, 
directors, agents other than Citicorp, and employees of such QPAMs who 
had responsibility for, or exercised authority in connection with the 
management of plan assets) did not know of, did not have reason to know 
of, or participate in the criminal conduct that is the subject of the 
Conviction. For purposes of this paragraph (a), ``participate in'' 
means the knowing approval of the misconduct underlying the Conviction;
    (b) Other than a single individual who worked for a non-fiduciary 
business within Citigroup's Markets and Securities Services business 
and who had no responsibility for and exercised no authority in 
connection with the management of plan assets, the Citigroup Affiliated 
QPAMs and the Citigroup Related QPAMs (including their officers, 
directors, and agents other than Citicorp, and employees of such 
Citigroup QPAMs) did not receive direct compensation or knowingly 
receive indirect compensation in connection with the criminal conduct 
that is the subject of the Conviction;
    (c) The Citigroup Affiliated QPAMs will not employ or knowingly 
engage any of the individuals that participated in the criminal conduct 
that is the subject of the Conviction. For the purposes of this 
paragraph (c), ``participated in'' includes the knowing approval of the 
misconduct underlying Conviction;
    (d) At all times during the Exemption Period, no Citigroup 
Affiliated QPAM will use its authority or influence to direct an 
``investment fund'' (as defined in Section VI(b) of PTE 84-14), that is 
subject to ERISA or the Code and managed by such Citigroup Affiliated 
QPAM in reliance on PTE 84-14, or with respect to which a Citigroup 
Affiliated QPAM has expressly represented to an ERISA-covered plan or 
IRA with assets invested in such ``investment fund'' that it qualifies 
as a QPAM or relies on PTE 84-14, to enter into any transaction with 
Citicorp, or to engage Citicorp to provide any service to such 
investment fund, for a direct or indirect fee borne by such investment 
fund, regardless of whether such transaction or service may otherwise 
be within the scope of relief provided by an administrative or 
statutory exemption;
    (e) Any failure of a Citigroup Affiliated QPAM or a Citigroup 
Related QPAM to satisfy Section I(g) of PTE 84-14 arose solely from the 
Conviction;
    (f) A Citigroup Affiliated QPAM or a Citigroup Related QPAM did not 
exercise authority over the assets of any plan subject to Part 4 of 
Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code 
(an IRA) in a manner that it knew or should have known would: Further 
the criminal conduct that is the subject of the Conviction; or cause 
the Citigroup Affiliated QPAM, the Citigroup Related QPAM or their 
affiliates to directly or indirectly profit from the criminal conduct 
that is the subject of the Conviction;
    (g) Other than with respect to employee benefit plans maintained or 
sponsored for its own employees or the employees of an affiliate, 
Citicorp will not act as a fiduciary within the meaning of section 
3(2l)(A)(i) or (iii) of ERISA, or section 4975(e)(3)(A) and (C) of the 
Code, with respect to ERISA-covered plan and IRA assets; provided, 
however, that Citicorp will not be treated as violating the conditions 
of this exemption solely because it acted as an investment advice 
fiduciary within the meaning of section 3(2l)(A)(ii) or section 
4975(e)(3)(B) of the Code;
    (h)(1) Each Citigroup Affiliated QPAM must continue to maintain, 
adjust (to the extent necessary), implement and follow written policies 
and procedures (the Policies). The Policies must require and be 
reasonably designed to ensure that:
    (i) The asset management decisions of the Citigroup Affiliated QPAM 
are conducted independently of the corporate management and business 
activities of Citigroup;
    (ii) The Citigroup Affiliated QPAM fully complies with ERISA's 
fiduciary duties and with ERISA and the Code's prohibited transaction 
provisions, as applicable with respect to each Covered Plan, and does 
not knowingly participate in any violation of these duties and 
provisions with respect to Covered Plans;
    (iii) The Citigroup Affiliated QPAM does not knowingly participate 
in any other person's violation of ERISA or the Code with respect to 
Covered Plans;
    (iv) Any filings or statements made by the Citigroup Affiliated 
QPAM to regulators, including, but not limited to, the Department, the 
Department of the Treasury, the Department of Justice, and the Pension 
Benefit Guaranty Corporation, on behalf of or in relation to Covered 
Plans, are materially accurate and complete to the best of such QPAM's 
knowledge at the time;
    (v) To the best of the Citigroup Affiliated QPAM's knowledge at the 
time, the Citigroup Affiliated QPAM does not make material 
misrepresentations or omit material information in its communications 
with such regulators with respect to Covered

[[Page 68740]]

Plans, or make material misrepresentations or omit material information 
in its communications with Covered Plans;
    (vi) The Citigroup Affiliated QPAM complies with the terms of this 
exemption; and
    (vii) Any violation of, or failure to comply with an item in 
subparagraphs (ii) through (vi), is corrected as soon as reasonably 
possible upon discovery, or as soon after the QPAM reasonably should 
have known of the noncompliance (whichever is earlier), and any such 
violation or compliance failure not so corrected is reported, upon the 
discovery of such failure to so correct, in writing, to the head of 
compliance, and the General Counsel (or their functional equivalent) of 
the relevant line of business that engaged in the violation or failure, 
and the independent auditor responsible for reviewing compliance with 
the Policies. A Citigroup Affiliated QPAM will not be treated as having 
failed to develop, implement, maintain, or follow the Policies, 
provided that it corrects any instance of noncompliance as soon as 
reasonably possible upon discovery, or as soon as reasonably possible 
after the QPAM reasonably should have known of the noncompliance 
(whichever is earlier), and provided that it adheres to the reporting 
requirements set forth in this subparagraph (vii);
    (2) Each Citigroup Affiliated QPAM must maintain, adjust (to the 
extent necessary), and implement a program of training (the Training) 
to be conducted at least annually for all relevant Citigroup Affiliated 
QPAM asset/portfolio management, trading, legal, compliance, and 
internal audit personnel. The Training must:
    (i) At a minimum, cover the Policies, ERISA and Code compliance 
(including applicable fiduciary duties and the prohibited transaction 
provisions), ethical conduct, the consequences for not complying with 
the conditions of this four-year exemption (including any loss of 
exemptive relief provided herein), and prompt reporting of wrongdoing;
    (ii) Be conducted by a professional who has been prudently selected 
and who has appropriate technical training and proficiency with ERISA 
and the Code; and
    (iii) Be conducted in-person, electronically or via a website;
    (i)(1) Each Citigroup Affiliated QPAM, which Citigroup identifies 
in a certificate signed by the officer who will review and certify the 
Audit Report (as defined in Section I(i)(5)) pursuant to Section 
I(i)(8), submits to an audit conducted every two years by an 
independent auditor, who has been prudently selected and who has 
appropriate technical training and proficiency with ERISA and the Code, 
to evaluate the adequacy of, each Citigroup Affiliated QPAM's 
compliance with the Policies and Training conditions described herein. 
The audit requirement must be incorporated in the Policies. The last 
audit period under PTE 2017-05 will extend into the Exemption Period 
under this proposed exemption; therefore, the audit periods under PTE 
2017-05 and this proposed exemption are as follows:
    (i) Under PTE 2017-05, the first audit covers the period from July 
10, 2018 through July 9, 2019 (and must be completed by January 9, 
2020); the second audit covers the period from July 10, 2020 through 
July 9, 2021 (and must be completed by January 9, 2022); and the third 
audit covers the period from July 10, 2022 through July 9, 2023 (and 
must be completed by January 9, 2024).
    (ii) The first audit under this proposed four-year exemption (the 
fourth audit under the totality of exemptive relief) covers the period 
from July 10, 2024 through July 9, 2025 (and must be completed by 
January 9, 2026); and the second audit (the fifth audit under the 
totality of exemptive relief) covers the period from July 10, 2026 
through January 9, 2027 (must be completed by July 9, 2027). As 
described above, the fifth audit period is truncated, so that it 
expires concurrently with the expiration of the Exemption Period. 
However, the audit report for the fifth audit period must be completed 
and delivered timely and despite such report being due to the 
Department after the expiration of the Exemption Period, the failure to 
receive such report could impact negatively on Citigroup's ability to 
claim relief under this exemption during the Exemption Period, if 
granted.
    (2) Within the scope of the audit and to the extent necessary for 
the auditor, in its sole opinion, to complete its audit and comply with 
the conditions for relief described herein, and only to the extent such 
disclosure is not prevented by State or Federal statute, or involves 
communications subject to attorney client privilege, each Citigroup 
Affiliated QPAM and, if applicable, Citigroup, will grant the auditor 
unconditional access to its business, including, but not limited to: 
Its computer systems; business records; transactional data; workplace 
locations; training materials; and personnel. Such access is limited to 
information relevant to the auditor's objectives as specified by the 
terms of this exemption;
    (3) The auditor's engagement must specifically require the auditor 
to determine whether each Citigroup Affiliated QPAM has developed, 
implemented, maintained, and followed the Policies in accordance with 
the conditions of this exemption, and has developed and implemented the 
Training, as required herein;
    (4) The auditor's engagement must specifically require the auditor 
to test each Citigroup Affiliated QPAM's operational compliance with 
the Policies and Training. In this regard, the auditor must test, for 
each QPAM, a sample of such QPAM's transactions involving Covered 
Plans, sufficient in size and nature to afford the auditor a reasonable 
basis to determine such QPAM's operational compliance with the Policies 
and Training;
    (5) For each audit, on or before the end of the relevant period 
described in Section III(i)(1) for completing the audit, the auditor 
must issue a written report (the Audit Report) to Citigroup and the 
Citigroup Affiliated QPAM to which the audit applies that describes the 
procedures performed by the auditor during the course of its 
examination. The auditor, at its discretion, may issue a single 
consolidated Audit Report that covers all the Citigroup Affiliated 
QPAMs. The Audit Report must include the auditor's specific 
determinations regarding:
    (i) The adequacy of each Citigroup Affiliated QPAM's Policies and 
Training; each Citigroup Affiliated QPAM's compliance with the Policies 
and Training; the need, if any, to strengthen such Policies and 
Training; and any instance of the respective Citigroup Affiliated 
QPAM's noncompliance with the written Policies and Training described 
in Section III(h) above.
    The Citigroup Affiliated QPAM must promptly address any 
noncompliance and promptly address or prepare a written plan of action 
to address any determination by the auditor regarding the adequacy of 
the Policies and Training and the auditor's recommendations (if any) 
with respect to strengthening the Policies and Training of the 
respective Citigroup Affiliated QPAM. Any action taken, or the plan of 
action to be taken, by the respective Citigroup Affiliated QPAM must be 
included in an addendum to the Audit Report (and such addendum must be 
completed before the certification described in Section III(i)(7) 
below). In the event such a plan of action to address the auditor's 
recommendation regarding the adequacy of the Policies and Training is 
not completed by the time the Audit

[[Page 68741]]

Report is submitted, the following period's Audit Report must state 
whether the plan was satisfactorily completed. Any determination by the 
auditor that the respective Citigroup Affiliated QPAM has implemented, 
maintained, and followed sufficient Policies and Training must not be 
based solely or in substantial part on an absence of evidence 
indicating noncompliance. In this last regard, any finding that a 
Citigroup Affiliated QPAM has complied with the requirements under this 
subparagraph must be based on evidence that the particular Citigroup 
Affiliated QPAM has actually implemented, maintained, and followed the 
Policies and Training required by this exemption. Furthermore, the 
auditor must not rely solely on the Annual Report created by the 
compliance officer (the Compliance Officer) as described in Section 
III(m) below, as the basis for the auditor's conclusions in lieu of 
independent determinations and testing performed by the auditor as 
required by Section III(i)(3) and (4) above; and
    (ii) The adequacy of the most recent Annual Review described in 
Section III(m);
    (6) The auditor must notify the respective Citigroup Affiliated 
QPAM of any instance of noncompliance identified by the auditor within 
five (5) business days after such noncompliance is identified by the 
auditor, regardless of whether the audit has been completed as of that 
date;
    (7) With respect to each Audit Report, the General Counsel, or one 
of the three most senior executive officers, of the line of business 
engaged in discretionary asset management services through the 
Citigroup Affiliated QPAM with respect to which the Audit Report 
applies, must certify in writing, under penalty of perjury, that such 
signatory has reviewed the Audit Report and this exemption; and that, 
to the best of such signatory's knowledge at the time, such Citigroup 
Affiliated QPAM has addressed, corrected, or remedied any noncompliance 
and inadequacy or has an appropriate written plan to address any 
inadequacy regarding the Policies and Training identified in the Audit 
Report. Such certification must also include the signatory's 
determination that, to the best of such signatory's knowledge at the 
time, the Policies and Training in effect at the time of signing are 
adequate to ensure compliance with the conditions of this proposed 
exemption, and with the applicable provisions of ERISA and the Code;
    (8) The Risk Management Committee of Citigroup's Board of Directors 
is provided a copy of each Audit Report; and a senior executive officer 
of Citigroup or one of its affiliates who reports directly to, or 
reports to another executive who reports directly to, the highest-
ranking compliance officer of Citigroup must review the Audit Report 
for each Citigroup Affiliated QPAM and must certify in writing, under 
penalty of perjury, that such officer has reviewed each Audit Report;
    (9) Each Citigroup Affiliated QPAM provides its certified Audit 
Report by electronic mail to: [email protected]; or by regular mail to: 
Office of Exemption Determinations (OED), 200 Constitution Avenue NW 
Suite 400, Washington DC 20210; or by private carrier to: 122 C Street 
NW, Suite 400, Washington, DC 20001-2109. This delivery must take place 
no later than forty-five (45) days following completion of the Audit 
Report. The Audit Report will be made part of the public record 
regarding this exemption. Furthermore, each Citigroup Affiliated QPAM 
must make its Audit Report unconditionally available, electronically or 
otherwise, for examination upon request by any duly authorized employee 
or representative of the Department, other relevant regulators, and any 
fiduciary of a Covered Plan;
    (10) Each Citigroup Affiliated QPAM and the auditor must submit to 
OED by electronic mail to: [email protected]: Any engagement agreement(s) 
entered into pursuant to the engagement of the auditor under this 
exemption, no later than two (2) months after the execution of any such 
engagement agreement;
    (11) The auditor must provide the Department, upon request, for 
inspection and review, access to all the workpapers created and 
utilized in the course of the audit, provided such access and 
inspection is otherwise permitted by law; and
    (12) Citigroup must notify the Department of a change in the 
independent auditor no later than two (2) months after the engagement 
of a substitute or subsequent auditor and must provide an explanation 
for the substitution or change including a description of any material 
disputes between the terminated auditor, and Citigroup;
    (j) Throughout the Exemption Period, with respect to any 
arrangement, agreement, or contract between a Citigroup Affiliated QPAM 
and a Covered Plan, the Citigroup Affiliated QPAM agrees and warrants:
    (1) To comply with ERISA and the Code, as applicable with respect 
to such Covered Plan; to refrain from engaging in prohibited 
transactions that are not otherwise exempt (and to promptly correct any 
non-exempt prohibited transactions in accordance with applicable rules 
under ERISA and the Code); and to comply with the standards of prudence 
and loyalty set forth in section 404 of ERISA with respect to each such 
Covered Plan to the extent that section is applicable;
    (2) To indemnify and hold harmless the Covered Plan for any actual 
losses resulting directly from a Citigroup Affiliated QPAM's violation 
of ERISA's fiduciary duties, as applicable, and of the prohibited 
transaction provisions of ERISA and the Code, as applicable; a breach 
of contract by the QPAM; or any claim arising out of the failure of 
such Citigroup Affiliated QPAM to qualify for the exemptive relief 
provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 
84-14 other than the Conviction. This condition applies only to actual 
losses caused by the Citigroup Affiliated QPAM's violations. Actual 
losses include losses and related costs arising from unwinding 
transactions with third parties and from transitioning Plan assets to 
an alternative asset manager as well as costs associated with any 
exposure to excise taxes under Code section 4975 as a result of a 
QPAM's inability to rely upon the relief in the QPAM Exemption.
    (3) Not to require (or otherwise cause) the Covered Plan to waive, 
limit, or qualify the liability of the Citigroup Affiliated QPAM for 
violating ERISA or the Code or engaging in non-exempt prohibited 
transactions;
    (4) Not to restrict the ability of such Covered Plan to terminate 
or withdraw from its arrangement with the Citigroup Affiliated QPAM 
with respect to any investment in a separately managed account or 
pooled fund subject to ERISA and managed by such QPAM, with the 
exception of reasonable restrictions, appropriately disclosed in 
advance, that are specifically designed to ensure equitable treatment 
of all investors in a pooled fund in the event such withdrawal or 
termination may have adverse consequences for all other investors. In 
connection with any of these arrangements involving investments in 
pooled funds subject to ERISA entered into after the effective date of 
this exemption, the adverse consequences must relate to a lack of 
liquidity of the underlying assets, valuation issues, or regulatory 
reasons that prevent the fund from promptly redeeming a Covered Plan's 
investment, and such restrictions must be applicable to all investors 
in the pooled fund on equal terms and effective no longer than 
reasonably necessary to avoid the adverse consequences;
    (5) Not to impose any fees, penalties, or charges for such 
termination or

[[Page 68742]]

withdrawal with the exception of reasonable fees, appropriately 
disclosed in advance, that are specifically designed to prevent 
generally recognized abusive investment practices or specifically 
designed to ensure equitable treatment of all investors in a pooled 
fund in the event such withdrawal or termination may have adverse 
consequences for all other investors, provided that such fees are 
applied consistently and in like manner to all such investors;
    (6) Not to include exculpatory provisions disclaiming or otherwise 
limiting liability of the Citigroup Affiliated QPAM for a violation of 
such agreement's terms. To the extent consistent with ERISA Section 
410, however, this provision does not prohibit disclaimers for 
liability caused by an error, misrepresentation, or misconduct of a 
plan fiduciary or other party hired by the plan fiduciary who is 
independent of Citigroup, and its affiliates, or damages arising from 
acts outside the control of the Citigroup Affiliated QPAM; and
    (7) Each Citigroup Affiliated QPAM must provide a notice of its 
obligations under this Section III(j) to each Covered Plan. For all 
other prospective Covered Plans, the Citigroup Affiliated QPAM will 
agree to its obligations under this Section III(j) in an updated 
investment management agreement between the Citigroup Affiliated QPAM 
and such clients or other written contractual agreement. This condition 
will be deemed met for each Covered Plan that received a notice 
pursuant to PTE 2016-14 or PTE 2017-05 that meets the terms of this 
condition. This condition will also be met where the Citigroup 
Affiliated QPAM has already agreed to the same obligations required by 
this Section III(j) in an updated investment management agreement 
between the Citigroup Affiliated QPAM and a Covered Plan. 
Notwithstanding the above, a Citigroup Affiliated QPAM will not violate 
the condition solely because a Covered Plan client refuses to sign an 
updated investment management agreement;
    (k) Notice to ERISA-covered plan and IRA clients. Within ninety 
(90) days after the effective date of this exemption, each Citigroup 
Affiliated QPAM provides notice of the exemption as published in the 
Federal Register along with a separate summary describing the facts 
that led to the Conviction (the Summary), which has been submitted to 
the Department, and a prominently displayed statement (the Statement) 
that the Conviction results in a failure to meet a condition in PTE 84-
14, to each sponsor and beneficial owner of a Covered Plan, or the 
sponsor of an investment fund in any case where a Citigroup Affiliated 
QPAM acts only as a sub-advisor to the investment fund in which such 
ERISA-covered plan and IRA invests.
    All prospective Covered Plan clients that enter into a written 
asset or investment management agreement with a Citigroup Affiliated 
QPAM (including a participation or subscription agreement in a pooled 
fund managed by a Citigroup Affiliated QPAM) after the date that is 
ninety (90) days after the effective date of this exemption must 
receive the proposed and final exemptions with the Summary and the 
Statement prior to, or contemporaneously with, the client's receipt of 
a written asset management agreement from the Citigroup Affiliated QPAM 
(for avoidance of doubt, all Covered Plan clients of a Citigroup 
Affiliated QPAM during the Exemption Period must receive the 
disclosures described in this Section by the later of (i) 90 days after 
the effective date of the exemption or (ii) the date that a Covered 
Plan client enters into a written asset or investment management 
agreement with a Citigroup Affiliated QPAM). Disclosures required under 
this paragraph (k) may be delivered electronically (including by an 
email that has a link to this exemption);
    (l) The Citigroup Affiliated QPAMs must comply with each condition 
of PTE 84-14, as amended, with the sole exception of the violation of 
Section I(g) of PTE 84-14 that is attributable to the Conviction;
    (m)(1) Citigroup designates a senior compliance officer (the 
Compliance Officer) who will be responsible for compliance with the 
Policies and Training requirements described herein. The Compliance 
Officer must conduct an annual review for each annual period beginning 
on January 10, 2023 (the Annual Review), to determine the adequacy and 
effectiveness of the implementation of the Policies and Training. With 
respect to the Compliance Officer, the following conditions must be 
met:
    (i) The Compliance Officer must be a professional who has extensive 
experience with, and knowledge of, the regulation of financial services 
and products, including under ERISA and the Code; and
    (ii) The Compliance Officer must be a senior compliance officer of 
Citigroup Inc. or one of its affiliates who reports directly to (or 
reports to another compliance officer who reports directly to) 
Citigroup Inc.'s highest ranking compliance officer (whose title is 
currently Global Chief Compliance Officer of Citigroup Inc.);
    (2) With respect to each Annual Review, the following conditions 
must be met:
    (i) The Annual Review includes a review of the Citigroup Affiliated 
QPAM's compliance with and effectiveness of the Policies and Training 
and of the following: Any compliance matter related to the Policies or 
Training that was identified by, or reported to, the Compliance Officer 
or others within the compliance and risk control function (or its 
equivalent) during the previous year; the most recent Audit Report 
issued pursuant to this exemption (or pursuant to PTE 2017-05 if no 
audit report has been issued under this exemption); any material change 
in the relevant business activities of the Citigroup Affiliated QPAMs; 
and any change to ERISA, the Code, or regulations related to fiduciary 
duties and the prohibited transaction provisions that may be applicable 
to the activities of the Citigroup Affiliated QPAMs;
    (ii) The Compliance Officer prepares a written report for each 
Annual Review (each, an Annual Report) that: (A) summarizes their 
material activities during the preceding year; (B) sets forth any 
instance of noncompliance discovered during the preceding year, and any 
related corrective action; (C) details any change to the Policies or 
Training to guard against any similar instance of noncompliance 
occurring again; and (D) makes recommendations, as necessary, for 
additional training, procedures, monitoring, or additional and/or 
changed processes or systems, and management's actions on such 
recommendations;
    (iii) In each Annual Report, the Compliance Officer must certify in 
writing that to the best of their knowledge at the time: (A) The report 
is accurate; (B) the Policies and Training are working in a manner 
which is reasonably designed to ensure that the Policies and Training 
requirements described herein are met; (C) any known instance of 
noncompliance during the preceding year and any related correction 
taken to date have been identified in the Annual Report; and (D) the 
Citigroup Affiliated QPAMs have complied with the Policies and Training 
and/or corrected (or is correcting) any known instances of 
noncompliance in accordance with Section III(h) above;
    (iv) Each Annual Report must be provided to: (A) the person or 
persons who certify as to the current or most recent preceding Audit 
Report provided pursuant to Section III(i)(7) above, and (B) the head 
of compliance and the

[[Page 68743]]

General Counsel (or their functional equivalent) of the relevant 
Citigroup Affiliated QPAM; and must be made unconditionally available 
to the independent auditor described in Section III(i) above;
    (v) Each Annual Review, including the Compliance Officer's written 
Annual Report, must be completed within three (3) months following the 
end of the period to which it relates;
    (n) Citigroup imposes its internal procedures, controls, and 
protocols to reduce the likelihood of any recurrence of conduct that is 
the subject of the Conviction;
    (o) Citigroup complies in all material respects with the 
requirements imposed by a U.S. regulatory authority in connection with 
the Conviction;
    (p) Each Citigroup Affiliated QPAM will maintain records necessary 
to demonstrate that the conditions of this exemption have been met, for 
six (6) years following the date of any transaction for which such 
Citigroup Affiliated QPAM relies upon the relief in the exemption;
    (q) During the Exemption Period, Citigroup:
    (1) Immediately discloses to the Department any Deferred 
Prosecution Agreement (a DPA) or a Non-Prosecution Agreement (an NPA) 
with the U.S. Department of Justice, entered into by Citigroup or any 
of its affiliates in connection with conduct described in Section I(g) 
of PTE 84-14 or section 411 of ERISA; and
    (2) immediately provides the Department any information requested 
by the Department, as permitted by law, regarding the agreement and/or 
conduct and allegations that led to the agreement;
    (r) Each Citigroup Affiliated QPAM, in its agreements with, or in 
other written disclosures provided to Covered Plans, clearly and 
prominently informs Covered Plan clients of the Covered Plan's right to 
obtain a copy of the Policies or a description (Summary Policies), 
which accurately summarizes key components of the QPAM's written 
Policies developed in connection with this exemption. If the Policies 
are thereafter changed, each Covered Plan client must receive a new 
disclosure within six (6) months following the end of the calendar year 
during which the Policies were changed. If the Applicant meets this 
disclosure requirement through Summary Policies, changes to the 
Policies shall not result in the requirement for a new disclosure 
unless, as a result of changes to the Policies, the Summary Policies 
are no longer accurate. With respect to this requirement, the 
description may be continuously maintained on a website, provided that 
such website link to the Policies or the Summary Policies is clearly 
and prominently disclosed to each Covered Plan;
    (s) A Citigroup Affiliated QPAM or a Citigroup Related QPAM will 
not fail to meet the terms of this exemption, solely because a 
different Citigroup Affiliated QPAM or Citigroup Related QPAM fails to 
satisfy a condition for relief described in Sections III(c), (d), (h), 
(i), (j), (k), (l), (p) and (r); or if the independent auditor 
described in Section III(i) fails to comply with a provision of the 
exemption, other than the requirement described in Section III(i)(11), 
provided that such failure did not result from any actions or inactions 
of Citigroup or its affiliates; and
    (t) All the material facts and representations set forth in the 
Summary of Facts and Representations are true and accurate.
    Effective Date: This proposed four-year exemption, will be 
effective from January 10, 2023, through January 9, 2027.

    Signed at Washington, DC.
George Christopher Cosby,
Director, Office of Exemption, Determinations, Employee Benefits 
Security Administration, U.S. Department of Labor.
[FR Doc. 2022-25039 Filed 11-15-22; 8:45 am]
BILLING CODE 4510-29-P