The US Department of Labor (DOL) published in the July 27, 2022, Federal Register a number of proposed changes to Prohibited Transaction Class Exemption (PTE) 84-14, the so-called “QPAM Exemption.” Investment managers of US employee benefit plan and retirement account assets commonly rely on this exemption to avoid potential violations of the prohibited transaction rules under the Employee Retirement Income Security Act of 1974 (ERISA) and parallel provisions in the Internal Revenue Code. As such, these changes, if adopted as proposed, will impact financial institutions such as SEC-registered investment advisers, banks, and insurance companies that manage the assets of ERISA plans and/or individual retirement accounts (IRAs) in, for example, separately managed accounts, collective investment trusts (CITs), and private investment funds (such as hedge funds) that are treated as holding “plan assets” of ERISA plans and/or IRAs.

If the changes go forward, they would, among other things,

 expand the scope of conduct that could disqualify a financial institution from being able to rely on the QPAM Exemption, including not only through criminal convictions but also through DOL administrative action;