The Department of Labor issued a proposal Wednesday that would significantly amend the requirements for banks and other investment managers of retirement assets to rely on Prohibited Transaction Exemption 84-14, known as the Qualified Professional Asset Manager Exemption. Investment managers rely on the QPAM Exemption in order to engage in a variety of investment and other transactions that otherwise would be prohibited under the Employee Retirement Income Retirement Act.
Under the proposal, a bank or other investment manager would, among other things, be required to notify DOL of its reliance on the QPAM Exemption; be subject to expanded QPAM ineligibility requirements for criminal convictions and for prohibited misconduct of the QPAM or an affiliate; be required to include certain contractual provisions, including indemnification language, in the investment management agreement; and be subject to recordkeeping, and recordkeeping inspection and examination, requirements.
Comments to the DOL proposal are due Sept. 26. The American Bankers Association has formed a QPAM Task Force to respond to the proposal.
