On June 21, 2013, the Department of Labor (DOL) published proposed amendments to certain class exemptions required by Section 939 A of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which directs federal agencies to remove from their regulations any references to, or requirements of reliance on, credit ratings and to replace those requirements with substitute standards of creditworthiness.

DOL has determined that its class exemptions constitute regulations for this purpose and has proposed amendments to applicable exemptions. As described in more detail in the attached overview, the proposal affects six existing class exemptions dealing with financial and investment transactions. DOL proposes to substitute for the credit rating previously specified in the exemption a comparable standard of credit quality to be determined, generally, by a responsible fiduciary for the plan that is engaging in the exempted transaction. For example, an existing requirement that a debt security be rated in the four highest categories by a national credit rating firm would become a determination that the security is subject to no more than moderate credit risk and is reasonably liquid.