Department of Labor will reopen comment period on proposed amendment to Qualified Professional Asset Manager Exemption

The Employee Benefits Security Administration (EBSA) has published a press statement to announce that it is reopening its comment period on proposed amendments to the Qualified Professional Asset Managers (QPAM) exemption – the so-called transaction class exemption 84-14 – up to April 6, 2023.
To recall the exemption provides relief to QPAMs from certain transactions that would otherwise be prohibited under the ERISA, the Employee Retirement Income Security Act (ERISA), to permit an investment fund managed by a QPAM to engage in a broad range of transactions with parties „in interest“ with respect to a plan, subject to certain conditions.
EBSA thereby primarily seeks amendments that affect these conditions to take advantage of the QPAM exemption by
– clarifying that foreign convictions are included in the scope of the exemption’s ineligibility provision;
– expanding the ineligibility provision to include additional types of serious misconduct as set out in the proposal;
– providing a transitional period upon a QPAM becoming ineligible due to a conviction or participates in other serious misconduct that permits the management company to find an alternative fund manager (one year);
– updating asset management and equity thresholds in the definition of “Qualified Professional Asset Manager” to accommodate for inflation;
– adding a standard recordkeeping obligation to require QPAMs to administer and store for six years documents that verify that they have met the conditions of the exemption; and
– „clarifying the requisite independence and control that a QPAM must have with respect to investment decisions and transactions“.