Exemption From Certain Prohibited Transaction Restrictions Involving J.P. Morgan Securities LLC, J.P. Morgan Investment Management Inc., J.P. Morgan Advisors (Formerly, J.P. Morgan Securities; JPMS Brokerage), and Chase Wealth Management Located in New York, New York

As Enacted ( Federal Register)

Cited in

Published date	31 July 2023
Record Number	2023-16129
Citation	88 FR 49497
Court	Employee Benefits Security Administration
Section	Notices

49497

Federal Register / Vol. 88, No. 145 / Monday, July 31, 2023 / Notices

JPMS Brokerage and CWM are lines of business

within JPMS.

86 FR 57446 (October 15, 2021).

See 67 FR 15062 (March. 28, 2002), as updated

at 71 FR 20262 (April 19, 2006).

As described more fully in the proposed

exemption and in Section II, below.

These trades involved 3,784 Non-ERISA Plan

Clients.

These trades involved two Non-ERISA Plan

Clients.

86 FR 57446, 57448.

ENRD, P.O. Box 7611, Washington, DC

20044–7611.

Henry S. Friedman,

Assistant Section Chief, Environmental

Enforcement Section, Environment and

Natural Resources Division.

[FR Doc. 2023–16191 Filed 7–28–23; 8:45 am]

BILLING CODE 4410–15–P

DEPARTMENT OF LABOR

Employee Benefits Security

Administration

[Prohibited Transaction Exemption 2023–

17; Exemption Application No. D–11963]

Exemption From Certain Prohibited

Transaction Restrictions Involving J.P.

Morgan Securities LLC, J.P. Morgan

Investment Management Inc., J.P.

Morgan Advisors (Formerly, J.P.

Morgan Securities; JPMS Brokerage),

and Chase Wealth Management

Located in New York, New York

AGENCY

: Employee Benefits Security

Administration, Labor.

ACTION

: Notice of exemption.

SUMMARY

: This document contains a

notice of exemption issued by the

Department of Labor (the Department)

from certain of the prohibited

transaction restrictions of the Internal

Revenue Code of 1986 (the Code). This

exemption involves certain principal

trades involving J.P. Morgan Securities

LLC (JPMS), J.P. Morgan Investment

Management Inc. (JPMIM), J.P. Morgan

Advisors (formerly, J.P. Morgan

Securities; JPMS Brokerage), and Chase

Wealth Management (CWM)

(collectively, the Applicants), and

certain of their client plans that are

subject to Code section 4975 but not

covered by Title I of ERISA (the Non-

ERISA Plan Clients).

These principal

transactions resulted in the Non-ERISA

Plan Clients purchasing or selling

securities from or to the Applicants.

DATES

: The exemption will be in effect

from December 14, 2010, until

September 16, 2013.

FOR FURTHER INFORMATION CONTACT

: Ms.

Anna Vaughan of the Department,

telephone (202) 693–8565. (This is not

a toll-free number.)

SUPPLEMENTARY INFORMATION

: The

Applicants requested an individual

exemption pursuant to Code section

4975(c)(2) in accordance with the

procedures set forth in 29 CFR part

2570, subpart B (76 FR 66637, 66644,

October 27, 2011). Effective December

31, 1978, section 102 of the

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.

Accordingly, this exemption is being

issued solely by the Department.

On October 15, 2021, the Department

published a notice of proposed

exemption in the Federal Register.

After considering the entire record

developed in connection with the

Applicants’ exemption application,

including the information discussed

below, the Department has determined

to grant the exemption subject to the

conditions described below. The

exemption provides only the relief

specified in its text and does not

provide relief from violations of any law

other than the prohibited transaction

provisions of ERISA expressly stated

herein. The Department makes the

requisite findings under Code section

4975(c)(2) that the exemption is (1)

administratively feasible, (2) in the

interest of the plans and their

participants and beneficiaries, and (3)

protective of the rights of the plans’

participants and beneficiaries, so long as

all of the exemption conditions are met.

Accordingly, affected parties should be

aware that the conditions incorporated

in this exemption are, taken as a whole,

necessary for the Department to grant

the relief requested by the Applicants.

Absent these or similar conditions, the

Department would not have granted this

exemption.

Background

1. As discussed in further detail in the

notice of proposed exemption, and

described below, JPMS and JPMIM

previously caused or executed

prohibited principal transactions on

behalf of certain plan clients covered by

the Employee Retirement Income

Security Act of 1974 (ERISA Plan

Clients) and on behalf of certain plan

clients covered only by the Internal

Revenue Code of 1986 (Non-ERISA Plan

Clients).

The Applicants previously

corrected the ERISA Plan Client-related

prohibited transactions under the

Department’s Voluntary Fiduciary

Compliance Program (the VFC Program)

and received ‘‘no action letters.’’

2. The VFC Program is not available

to correct prohibited transactions

involving non-ERISA plans. Therefore,

the Applicants requested an exemption

for JPMS and JPMIM to correct the

prohibited principal transactions that

involved their Non-ERISA Plan Clients

(the Covered Transactions).

The Covered Transactions Involving

JPMIM

3. A total of 3,989 trades of securities

issued by third parties were executed

for the Chase Wealth Management line

of business (the CWM Wrap Program)

on a principal basis. According to the

Applicants, 3,985 of the trades were

sales by a Non-ERISA Plan Client to a

counterparty (a JPM Counterparty)

affiliated with JPMorgan Chase & Co.

(JPMorgan), with an aggregate sales

price of $2,682,332.34 (the JPMIM Sales

Transactions),

and four trades were

purchases by a Non-ERISA Plan Client

from a JPM Counterparty (the JPMIM

Purchase Transactions) with an

aggregate purchase price of $46,940.55.

The purchased shares had not been re-

sold by the Non-ERISA Plan Client as of

the date the transactions were

corrected.

The Applicants represent

that JPMIM and JPMS endeavored to

correct the prohibited transactions as

quickly as possible in the manner

described under the ‘‘Covered

Transaction Corrections’’ heading of the

proposed exemption.

4. The Applicants represent that the

trades did not result in any

commissions being paid by the Non-

ERISA Plan Clients to JPMIM or its

affiliates. Rather, the trades were

executed under the CWM Wrap

Program, under which all clients pay a

wrap fee (i.e., a comprehensive charge)

that covered all of the investment

advisory-related and transactional

services provided by JPMorgan to such

accounts. As a result, no additional

compensation was paid in connection

with either the JPMIM Sales

Transactions or the JPMIM Purchase

Transactions. The Applicants represent

that JPMIM is no longer enabled to

execute trades on JPM–X, an

‘‘alternative trading system’’ owned and

operated by JPMS.

5. Further, the Applicants represent

that there were no identifiable profits

received by JPMIM or its affiliates in

connection with any of the

aforementioned transactions, because

the securities traded were liquid

securities that JPMorgan and its

affiliates regularly hold in inventory,

deal in or make a market in. In this

regard, because JPMorgan is a market

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49498

Federal Register / Vol. 88, No. 145 / Monday, July 31, 2023 / Notices

As described in the proposed exemption and in

Section II, below.

These trades involved two non-ERISA Plan

Clients.

These trades involved seven Non-ERISA Plan

Clients.

86 FR 57446, 57448.

The Applicant notes that the Covered

Transactions involving JPMS Brokerage were

technically executed under a different wrap fee

program that does not have an official name but is

similar to the CWM Wrap Program.

86 FR 57446.

Evercore sold its institutional trust and

independent fiduciary business to Newport Group

Inc. and its subsidiary, Newport Trust Company

(NTC). Since October 19, 2017, NTC has served as

the independent fiduciary in connection with this

proposed exemption.

maker in the liquid securities that were

traded with the Non-ERISA Plan

Clients, JPMorgan keeps a regular

inventory of such securities to facilitate

the purchase and sale of such securities,

as well as other types of transactions

involving such securities, with various

counterparties. To illustrate, the

Applicants present the following

example:

Assume that there was a principal trade

between JPMorgan and a Non-ERISA Plan

Client involving a sale by JPMorgan of ten

shares of a stock (Stock X) to the Non-ERISA

Plan Client, at a fair market value of $50 per

share. On the day of the sale, JPMorgan

would hold thousands (and likely many

times more) of Stock X shares in its

inventory, and this inventory would change

constantly throughout the day and from day

to day as a result of transactions involving

Stock X between JPMorgan and various

counterparties. When JPMorgan sells ten

Stock X shares to the Non-ERISA Plan Client,

JPMorgan will deduct 10 Stock X shares from

its inventory. However, because all of the

Stock X shares in the JPMorgan inventory are

the same and are fungible, it does not match

the shares sold or disposed of with any

previously acquired shares.

6. In the example above, it is not

possible to identify the cost to JPMorgan

of the specific shares that were sold to

the Non-ERISA Plan Client because: (i)

the Stock X shares in the JPMorgan

inventory were all acquired at different

prices and at different times (could be

above, below or at $50 per share), and

(ii) JPMorgan does not distinguish the

Stock X shares sold to the Non-ERISA

Plan Client from the rest of the Stock X

shares in the inventory. Therefore, it is

not possible to determine whether

JPMorgan has earned any profit from the

sale of such shares to the Non-ERISA

Plan Client at $50 per share.

The Covered Transactions Involving

JPMS Brokerage

7. According to the Applicants, fifteen

(15) trades involving JPMS Brokerage

were mistakenly executed on a principal

basis, although not on JPM–X. Of the

fifteen (15) trades, two (2) were sales of

securities

by a Non-ERISA Plan Client

to a JPM Counterparty (the JPMS

Brokerage Sales Transactions) with an

aggregate sales price of $61,854.54, and

thirteen (13) trades were purchases of

securities by a Non-ERISA Plan Client

from a JPM Counterparty (the JPMS

Brokerage Purchase Transactions) with

an aggregate purchase price of

$557,232.08.

The purchased securities

were subsequently sold by the Non-

ERISA Plan Client before the prohibited

transactions were discovered. The

Applicants state that JPMS Brokerage

endeavored to correct the prohibited

transactions as quickly as possible in

the manner described under the

‘‘Covered Transaction Corrections’’

heading of the proposed exemption.

8. The Applicants represent that the

trades in question did not result in any

commissions being paid by the Non-

ERISA Plan Clients to JPMS or its

affiliates. Rather, the trades were

executed under a wrap fee program,

under which all clients pay a wrap fee

(i.e., a comprehensive charge) that

covered all of the investment advisory-

related and transactional services

provided by JPMorgan to such

accounts.

As a result, no additional

compensation was paid in connection

with either the JPMS Brokerage Sales

Transactions or the JPMS Brokerage

Purchase Transactions.

9. Further, the Applicants represent

that there were no identifiable profits

received by JPMS or its affiliates in

connection with any of the

aforementioned transactions, because

the securities traded were liquid

securities that JPMorgan and its

affiliates regularly hold in inventory,

deal in or make a market in. The

Applicants state their explanation above

(as to why there were no identifiable

profits received by JPMIM or its

affiliates with respect to the JPMIM

Sales Transactions) also applies here (as

to why there were no identifiable profits

paid to JPMS with respect to the JPMS

Brokerage Sales Transactions and JPMS

Brokerage Purchase Transactions).

No Intent To Profit From Trades

10. The Applicants represent that

JPMorgan did not cause the principal

trades in question with the Non-ERISA

Plan Clients with an intent to profit

from such trades. The Applicants

represent that the trades were executed

by mistake and the execution was not

motivated by the receipt of any profit or

other compensation by JPMorgan.

11. The Applicants state that all

principal trades with the Non-ERISA

Plan Clients were executed at fair

market value and achieved best

execution, and, as a result of the

correction process that JPMorgan

undertook, all of the affected Non-

ERISA Plan Clients were restored

economically to the positions that they

would have been in had the principal

trades not occurred (or, in certain cases,

to positions that are more economically

favorable than the positions they would

have been in).

12. In addition, the Applicants

represent that with respect to the trades

executed by JPM–X, which represented

the vast majority of the principal trades

in question, JPM–X was set up

structurally so that all executions must

be at or within the National Best Bid

and Offer (NBBO) and there was a less

than 1% chance (based on volume of

shares traded) that any execution would

be against a JPMorgan principal

account, further indicating that there

was no intention on the part of

JPMorgan to take advantage of the Non-

ERISA Plan Clients in connection with

these trades.

The Proposed Exemption

13. On October 15, 2021, the

Department of Labor (the Department)

published a proposed exemption that

would permit the Covered Transactions

if the conditions therein were met.

Among these conditions, the Applicants

were required to apply the same

conditions to correct the Covered

Transactions that they applied to correct

the transactions involving their ERISA

Plan Clients under the VFC Program. In

addition, an independent fiduciary,

Evercore Trust Company, N.A.

(Evercore),

was required to determine

that that the correction methodologies

utilized to correct the transactions: (a)

were sufficient to return each affected

Non-ERISA Plan Client to at least the

position it would have been in had the

Covered Transaction not occurred; (b)

provided Non-ERISA Plan Clients with

a greater benefit than other correction

methodology alternatives, consistent

with the VFC Program; and (c) were

properly applied based on a review of

a representative sample of the

corrections selected at random by

Evercore.

14. The proposed exemption invited

all interested persons, including current

participants and beneficiaries of the

Plans, to submit comments or requests

for a hearing to the Department within

90 days of the date of publication. The

Applicants agreed to provide notice to

interested persons (NTIP) by U.S. mail

to the beneficial owner of each Non-

ERISA Plan Client affected by the

Covered Transactions, as defined in

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Federal Register / Vol. 88, No. 145 / Monday, July 31, 2023 / Notices

The Department considers the Second NTIP

delivery to be completed three days following the

March 14, 2022, mailing via U.S. first-class mail.

Because the requisite 30-day comment period

would end on the weekend (Saturday, March 16,

2022), the Department added an additional two

days to the comment period to ensure that

interested persons had a sufficient opportunity to

comment.

86 FR 57446,57450. Please note that all

references to page numbers of the proposed

exemption refer to the version that was published

in the Federal Register on October 15, 2021.

Section II, below, within 60 days of the

publication of the notice of proposed

exemption in the Federal Register

(Notice of Proposed Exemption) and

that the NTIP would include a copy of

the Notice of Proposed Exemption.

Throughout the comment period, the

Department received several requests

from the recipients of the NTIP to

explain the proposed transactions. It

was during these conversations that the

Department was informed that the

Notice of Proposed Exemption had not

been included in the NTIP. The

Department contacted the Applicants

who confirmed that there was an error

in the mailing which excluded the

Notice of Proposed Exemption from the

NTIP.

15. To ensure interested persons

would receive full notice and have

sufficient time to provide their

comments to the Department, the

Applicants agreed that a second notice

to interested persons (the Second NTIP)

would be delivered to all Non-ERISA

Plan Clients along with a copy of the

Notice of Proposed Exemption. On

March 22, 2022, the Applicants

informed the Department that the

Second NTIP dated March 14, 2022, was

mailed via U.S. first-class mail to the

beneficial owner of each Non-ERISA

Plan Client affected by the Covered

Transactions.

Accordingly, the

Department extended the comment

period through April 18, 2022.

Comments

16. During the comment period, the

Department received one written

comment from the Applicants that

requested certain changes to the

proposed exemption’s operative

language and Summary of Facts and

Representations. The Applicants’

comments and the Department’s

responses thereto are discussed below.

The Department did not receive any

requests for a public hearing.

Applicants’ Requested Revisions to

Operative Language

17. Requested Clarification and

Change to Section I of the Proposed

Exemption. On page 57450 of the

proposed exemption, the first sentence

of Section I states that: ‘‘If the proposed

exemption is granted, the sanctions

resulting from the application of Code

section 4975, by reason of Code section

4975(c)(1)(A), (D) and (E), shall not

apply, effective December 14, 2010,

until September 16, 2013, to certain

principal trades involving J.P. Morgan

Securities LLC (JPMS), J.P. Morgan

Investment Management Inc. (JPMIM),

J.P. Morgan Securities (JPMS Brokerage),

and Chase Wealth Management (CWM)

(collectively, the Applicants), and

certain of their client plans that are

subject to Code section 4975 but

covered by not Title I of ERISA (the

Non-ERISA Plan Clients).’’

The Applicants request that the

Department clarify that JPMS Brokerage

and CWM are lines of business within

JPMS to be consistent with how JPMS

Brokerage and CWM are introduced in

the proposed exemption’s Summary of

Facts and Representations. Further, the

Applicants request that the phrase: ‘‘but

covered by not Title I of ERISA’’ be

changed to read: ‘‘but not covered by

Title I of ERISA,’’ for clarity.

Department’s Response: After

considering the Applicants’ comments,

the Department has revised Section I of

the grant notice as requested.

18. Requested Change to Section II of

the Proposed Exemption. On page 57450

of the proposed exemption, the first

sentence of Section II(a) states that: ‘‘For

purposes of this proposed exemption,

the term ‘‘Covered Transaction means:

. . .,’’ and then lists a series of

transactions.

The Applicants suggest changing the

term, ‘‘Covered Transaction’’ in the

sentence, which is the introductory

paragraph of this section, to ‘‘Covered

Transactions’’ (i.e., from singular to

plural), because there was more than

one transaction.

Department’s Response: After

considering the Applicants’ comment,

the Department has made a

corresponding revision to the

introductory paragraph of Section II of

the grant notice as requested.

19. Requested Change to Section II(a)

of the Proposed Exemption. On page

57450 of the proposed exemption, the

first sentence of Section II(a) states:

‘‘3,989 trades of securities issued by

third-parties that were executed on a

principal basis for certain JPMS-

sponsored wrap fee programs under the

Chase Wealth Management line of

business (i.e., the CWM Wrap Program)

on or about July 27 and July 30, 2012.’’

The Applicants request changing the

phrase: ‘‘on or about’’ to the word: ‘‘on,’’

as the dates listed are the exact dates on

which the transactions occurred.

Department’s Response: After

considering the Applicant’s request, the

Department has revised Section II(a) of

the grant notice to reflect this change.

20. Requested Change to Section III(g)

of the Proposed Exemption. On page

57450 of the proposed exemption,

Section III(g) states: ‘‘The Covered

Transactions were conducted using

trading systems and procedures

designed to result in trades being

conducted at prices that are as favorable

as possible to the Non-ERISA Plan

Clients under prevailing market

conditions, and were in fact conducted

at terms and prices no less favorable to

the Non-ERISA Plan Clients than the

prices the financial advisers could have

obtained for the Non-ERISA Plan Clients

by conducting trades in arm’s-length

transactions with third-party market

participants; . . .’’

The Applicants suggest changing the

phrase in Section III(g) of the proposal

that reads ‘‘than the prices the financial

advisers’’ to the phrase: ‘‘than [the

prices] the Applicants’’ to be more

precise.

Department’s Response: After

considering the Applicants’ comment,

the Department has revised Section

III(g) of the grant notice to reflect this

change as requested.

21. Change to Section IV of the

Proposed Exemption. The Applicants

and the Department discussed making

certain changes to the recordkeeping

provision in Section IV of this

exemption, which requires the

Applicants to maintain, or cause to be

maintained, for a period of six (6) years

from the date of any Covered

Transaction, such records as are

necessary to enable the persons

described in Section IV(b) to determine

whether the conditions of this

exemption have been met. Specifically,

the Applicants requested a modification

to the verb tense in Section IV of the

proposed exemption to reflect that, in

their view, the recordkeeping period

had passed. In response, the Department

informed the Applicants that it intended

to modify Section IV so that the

recordkeeping requirement would be

effective for six (6) years from the

publication date of the exemption.

The Applicants raised several

concerns in response, including that the

Applicants may not have all the records

required under Section IV, because of

the passage of time between the Covered

Transactions and the publication date of

the exemption. In this regard, the

Applicants were not aware such records

would be required to be maintained for

a longer period than is required in

similar, prior granted retroactive

exemptions, which is typically six (6)

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NTC confirmed to the Department that it has

maintained the records associated with the services

it provided to the Applicants in accordance with its

own record retention policies and procedures and

would provide them to the Applicants if necessary

to satisfy the exemption conditions.

The complete application file (D–11963) is

available for public inspection in the Public

Disclosure Room of the Employee Benefits Security

Administration, Room N–1515, U.S. Department of

Labor, 200 Constitution Avenue NW, Washington,

DC 20210.

years from the date of the covered

transactions. Nor did the Applicants

learn about the Department’s intended

modification until after the Applicants

submitted their comment during the

comment period. Finally, the

Applicants state that most of the

individuals who are familiar with the

records associated with the Covered

Transactions are no longer employed

with the Applicants, and it would be

logistically challenging to locate and

retrieve such records as more time

progresses.

In light of the Department’s intent for

the recordkeeping period to begin on the

publication date of the exemption, the

Applicants request that Section IV(a) be

modified slightly to require the

Applicants to ‘‘use commercially

reasonable efforts to (i) identify such

records, to the extent they are available

to the Applicants as of the date of

publication of this final exemption in

the Federal Register, as are necessary to

enable the persons described in Section

IV(b)(1) to determine whether the

conditions of this exemption have been

met and (ii) maintain, or cause to be

maintained (including on behalf of the

Applicants by any agent, advisor or

other service provider to the Applicants)

such records, for a period of six (6) years

from the date this final exemption is

published in the Federal Register.’’

Furthermore, the Applicants request

that the exemption requires that record

requests be made ‘‘upon reasonable

advance request,’’ due to the logistical

challenges the Applicant may confront

in making such records available for

review.

Department’s Response: The

Department views the change to the

recordkeeping requirement in Section

IV, requiring the Applicants to maintain

such records for six (6) years beginning

on the publication date of the

exemption, as necessary to allow the

individuals referenced in Section IV(b)

to verify the Applicants’ compliance

with the exemption conditions and their

representations submitted to support the

application. The present-tense language

in Section IV of the proposed exemption

could have had the effect of rendering

the recordkeeping requirement

meaningless and frustrated the ability of

the parties described in Section IV(b)(1)

to verify that the Applicants have

adhered to the exemption conditions.

However, the Department is also

cognizant that the Applicants may not

have retained all of the records

referenced in Section IV(a) due solely to

the passage of time since the Covered

Transactions occurred, and that the

Applicants did not anticipate the

Department would include a

recordkeeping requirement that would

extend the period the records were

required to be maintained from the

publication date of the final exemption

rather than the date the Covered

Transactions covered transactions

occurred.

Based on conversations with NTC, the

independent fiduciary in connection

with the exemption, the Department

understands that NTC has retained the

records it relied on to review the

Applicants’ corrections of the Covered

Transactions and make any

determinations required under the

exemption.

Based upon this

understanding, as well as

representations by the Applicants

regarding the challenges they

confronted in maintaining the records

several years after the Covered

Transactions occurred, the Department

views the Applicants’ proposed change

of the recordkeeping provision as a

reasonable modification to the proposed

exemption, provided that, if the

Applicants do not themselves possess

any records necessary to comply with

Section IV of the exemption, the

Applicants will obtain such records

from the independent fiduciary.

Other Requested Revisions

22. Minor Revisions. At the

Applicants’ request, the Department

made several minor, non-substantive

revisions to the proposed exemption’s

title and Summary of Facts and

Representations. The Department does

not discuss the revisions in this grant

notice but notes that the requested

revisions may be found in the

exemption application file which is

available through the Department’s

Public Disclosure Office.

23. Other Clarifications. On its own

motion, the Department made several

minor and non-substantive revisions

that are intended to clarify the operative

language of the exemption.

24. Accordingly, after considering the

entire record developed in connection

with the Applicant’s exemption request,

and in consideration of: (a) the

exemption’s protective conditions; (b)

the corrective payments made to the

Non-ERISA Plan Clients; and (c)

Evercore’s review of the corrections to

the Covered Transactions, the

Department has determined to grant this

exemption consistent with the

requirements of Code section 4975(c)(2).

25. The complete application file (D–

11963) is available for public inspection

in the Public Disclosure Room of the

Employee Benefits Security

Administration, Room N–1515, U.S.

Department of Labor, 200 Constitution

Avenue NW, Washington, DC 20210.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption, refer to the notice of

proposed exemption published on

October 15, 2021, at 86 FR 57446.

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 requirements of

other ERISA and/or Code provisions,

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 the plan solely in the

interest of the plan’s participants and

beneficiaries and in a prudent fashion in

accordance with ERISA section

404(a)(1)(B); nor does it affect the

requirement of Code section 401(a) that

requires plans to operate for the

exclusive benefit of the employees of

the employer maintaining the plan and

their beneficiaries.

(2) As required by ERISA section

408(a) and/or Code section 4975(c)(2),

the Department hereby finds that the

exemption is: (a) administratively

feasible; (b) in the interests of the

affected plan and its participants and

beneficiaries; and (c) protective of the

rights of the participants and

beneficiaries of such plan.

(3) This exemption is supplemental

to, and not in derogation of, any other

applicable ERISA and/or Code

provisions, 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 determining whether

the transaction is in fact a prohibited

transaction.

(4) The availability of this exemption

is subject to the express condition that

the material facts and representations

contained in the application accurately

describe all material terms of the

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49501

Federal Register / Vol. 88, No. 145 / Monday, July 31, 2023 / Notices

JPMS Brokerage and CWM are lines of business

within JPMS.

PTE 2002–51 Section II. F(1) provides that

‘‘[w]ith respect to any transaction described in

Section I., the applicant has not taken advantage of

the relief provided by the VFC Program and this

exemption for a similar type of transaction(s)

identified in the current application during the

period which is three years prior to submission of

the current application’’. 67 FR 70623 (November

25, 2002), as amended, 71 FR 20135 (April 19,

2006).

transactions that are the subject of the

exemption are true and accurate at all

times.

Accordingly, the Department grants

the following exemption under the

authority of Code section 4975(c)(2) and

in accordance with the procedures set

forth in 29 CFR part 2570, subpart B (76

FR 66637, 66644, October 27, 2011):

Exemption

Section I. Covered Transactions

The sanctions resulting from the

application of Code section 4975, by

reason of Code section 4975(c)(1)(A), (D)

and (E), shall not apply, effective

December 14, 2010, until September 16,

2013, to certain principal trades

involving J.P. Morgan Securities LLC

(JPMS), J.P. Morgan Investment

Management Inc. (JPMIM), J.P. Morgan

Advisors (formerly, J.P. Morgan

Securities; JPMS Brokerage), and Chase

Wealth Management (CWM)

(collectively, the Applicants), and

certain of their client plans that are

subject to Code section 4975 but not

covered by Title I of ERISA (the Non-

ERISA Plan Clients).

These principal

transactions resulted in the Non-ERISA

Plan Clients purchasing or selling

securities from or to the Applicants (the

Covered Transactions, as defined in

Section II, below).

This exemption is subject to the

conditions set forth below in Sections III

and IV.

Section II. Definition of Covered

Transactions

For purposes of this proposed

exemption, the term ‘‘Covered

Transactions’’ means:

(a) 3,989 trades of securities issued by

third parties that were executed on a

principal basis for certain JPMS-

sponsored wrap fee programs under the

Chase Wealth Management line of

business (i.e., the CWM Wrap Program)

on July 27 and July 30, 2012. Of these

trades: (1) 3,985 of the trades involved

sales by a Non-ERISA Plan Client to a

counterparty affiliated with JPMorgan

Chase & Co. (a JPM Counterparty), with

an aggregate sales price of $2,682,332.34

(i.e., the JPMIM Sales Transactions); and

(2) four (4) of the trades involved

purchases by a Non-ERISA Plan Client

from a JPM Counterparty (i.e., the

JPMIM Purchase Transactions) and the

purchased shares, with an aggregate

purchase price of $46,940.55, had not

been re-sold by the Non-ERISA Plan

Client as of the date the transactions

were corrected; and

(b) fifteen (15) trades involving JPMS

Brokerage that were executed on a

principal basis on December 14, 2010,

January 13, 2011, February 3, 2012,

December 31, 2012, August 22, 2013,

and September 16, 2013. Of these

trades: (1) two (2) involved sales of

securities with an aggregate sales price

of $61,854.54 by a Non-ERISA Plan

Client to a JPM Counterparty (i.e., the

JPMS Brokerage Sales Transactions);

and (2) thirteen (13) involved purchases

of securities by a Non-ERISA Plan Client

from a JPM Counterparty (i.e., the JPMS

Brokerage Purchase Transactions), with

an aggregate purchase price of

$557,232.08, that were purchased and

subsequently sold by the Non-ERISA

Plan Client before the prohibited

transactions were discovered.

Section III. Specific Conditions

(a) The Applicants corrected the

Covered Transactions in a manner that

was: (1) consistent with the relevant

requirements set forth in the

Department’s Voluntary Fiduciary

Correction Program (the VFC Program);

and (2) consistent with the Applicants’

corrections of similar prohibited

transactions involving its ERISA plan

clients, as described in their VFC

Program applications, dated December

31, 2014 (the VFC Program

Applications);

(b) The Applicants received ‘‘no

action letters’’ from the Department in

connection with their VFC Program

Applications;

Evercore Trust Company, N.A.

(Evercore), reviewed the Applicants’

corrections of the Covered Transactions;

(d) Evercore confirmed that the

methods utilized to correct the Covered

Transactions were properly applied to

the Covered Transactions and sufficient

to return each affected Non-ERISA Plan

Client to at least the same position it

would have been in had the Covered

Transactions not occurred;

(e) The Non-ERISA Plan Clients did

not pay any additional compensation

with respect to the Covered

Transactions, because such transactions

were executed under a wrap program

under which all clients pay a

comprehensive wrap fee covering all the

investment advisory-related and

transactional services provided to such

accounts (the Wrap Program);

(f) The Applicants promptly credited

or issued a check to each Non-ERISA

Plan Client to whom a corrective

payment was due after discovering the

Covered Transactions;

(g) The Covered Transactions were

conducted using trading systems and

procedures designed to result in trades

being conducted at prices that are as

favorable as possible to the Non-ERISA

Plan Clients under prevailing market

conditions, and were in fact conducted

at terms and prices no less favorable to

the Non-ERISA Plan Clients than the

prices the Applicants could have

obtained for the Non-ERISA Plan Clients

by conducting trades in arm’s-length

transactions with third-party market

participants;

(h) The Covered Transactions were

not part of an agreement, arrangement or

understanding designed to benefit a

disqualified person as defined in Code

section 4975(e)(2);

(i) The Applicants did not take

advantage of the relief provided by the

VFC Program and Prohibited

Transaction Exemption 2002–51 for

three (3) years before the date the

Applicants’ submitted the VFC Program

Applications;

(j) The Applicants and their affiliates

did not receive any additional direct or

indirect fee or commission in

connection with the Covered

Transactions, because such transactions

were executed under a Wrap Program;

(k) The JPM Counterparties to the

Non-ERISA Plan Clients did not receive

any identifiable direct or indirect profit

or compensation from the Covered

Transactions;

(l) The Covered Transactions were

inadvertent, executed at fair market

value, and achieved best execution, and

were not motivated by the receipt of any

profit or other compensation;

(m) All of the securities traded were

liquid securities that JPMorgan and its

affiliates regularly held in inventory,

dealt in, or made a market in;

(n) No contractual provisions

purported to give Evercore or Newport

Trust Company (i.e., NTC) a right to

indemnification, in whole or part, by a

party related to the Applicants, for

negligence or breach of federal or state

law responsibilities by Evercore or NTC,

with respect to any task performed by

Evercore or NTC pursuant to the

Applicants’ exemption request; and

(o) All of the facts and representations

set forth in the Summary of Facts and

Representations are true and accurate.

Section IV. General Conditions

(a) The Applicants shall use

commercially reasonable efforts to (i)

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Federal Register / Vol. 88, No. 145 / Monday, July 31, 2023 / Notices

identify such records as are necessary to

enable the persons described in Section

IV(b)(1) to determine whether the

conditions of this exemption have been

met, to the extent such records are

available to the Applicants or NTC, the

independent fiduciary, as of the date of

publication of this final exemption in

the Federal Register, and (ii) maintain,

or cause to be maintained (including to

be maintained on behalf of the

Applicants by any agent, advisor or

other service provider to the

Applicants), such records for a period of

six (6) years from the date of publication

of this final exemption in the Federal

(1) A separate prohibited transaction

shall not be considered to have occurred

if the records identified in Section IV(a)

are lost or destroyed before the end of

the six-year period due to circumstances

beyond the control of Applicants; and

(2) No disqualified person with

respect to a Non-ERISA Plan Client,

other than the Applicants, is subject to

excise taxes imposed by Code section

4975 if such records are not maintained

or made available for examination as

required by section IV(b)(1).

(b)(1) Except as provided in section

IV(b)(2), the records referred to in

section IV(a) are unconditionally

available upon reasonable advance

request at their customary location for

examination during normal business

hours by:

(A) any duly authorized employee or

representative of the Department, the

Internal Revenue Service, or the

Securities and Exchange Commission;

(B) any fiduciary of any Non-ERISA

Plan Client that engaged in a Covered

Transaction, or any duly authorized

employee or representative of such

fiduciary; or

ERISA Plan Client that engaged in a

Covered Transaction or a representative

of such owner or beneficiary.

(2) None of the persons described in

sections IV(b)(1)(B) and (C) shall be

authorized to examine the Applicants’

trade secrets or privileged or

confidential commercial and financial

information.

(3) If the Applicants refuse to disclose

records referred to in section IV(a) to

any persons described in sections

IV(b)(1)(B), and (C) on the basis that

such information is exempt from

disclosure, the Applicants shall provide

a written notice advising such persons

of the reasons for the refusal and that

the Department may request such

information within 30 days after their

request.

Effective Date: This exemption is in

effect from December 14, 2010, until

September 16, 2013.

Signed at Washington, DC, this 24th day of

July 2023.

George Christopher Cosby,

Director, Office of Exemption Determinations,

Employee Benefits Security Administration,

U.S. Department of Labor.

[FR Doc. 2023–16129 Filed 7–28–23; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Employment and Training

Administration

Agency Information Collection

Activities; Comment Request; O*NET

Data Collection Program

ACTION

: Notice.

SUMMARY

: The Department of Labor’s

(DOL) Employment and Training

Administration (ETA) is soliciting

comments concerning a revision to a

previously approved information

collection request (ICR) titled ‘‘O*NET

Data Collection Program.’’ This

comment request is part of continuing

Departmental efforts to reduce

paperwork and respondent burden in

accordance with the Paperwork

Reduction Act of 1995 (PRA).

DATES

: Consideration will be given to all

written comments received by

September 29, 2023.

ADDRESSES

: A copy of this ICR with

applicable supporting documentation,

including a description of the likely

respondents, proposed frequency of

response, and estimated total burden,

may be obtained free by contacting

Lauren Fairley by telephone at (202)

693–3731 (this is not a toll-free

number), TTY 1–877–889–5627 (this is

not a toll-free number), or by email at

fairley.lauren@dol.gov or by accessing

http://www.onetcenter.org/

ombclearance.html.

Submit written comments about, or

requests for a copy of, this ICR by mail

or courier to the U.S. Department of

Labor, Employment and Training

Administration—Division of National

Programs Tools and Technical

Assistance, 200 Constitution Avenue

NW, C4526, Washington, DC 20210; by

email: fairley.lauren@dol.gov; or by fax

(202) 693–3015.

FOR FURTHER INFORMATION CONTACT

Lauren Fairley by telephone at (202)

693–3731 (this is not a toll-free number)

or by email at fairley.lauren@dol.gov.

Authority: 44 U.S.C. 3506(c)(2)(A).

SUPPLEMENTARY INFORMATION

: DOL, as

part of continuing efforts to reduce

paperwork and respondent burden,

conducts a pre-clearance consultation

program to provide the general public

and Federal agencies an opportunity to

comment on proposed and/or

continuing collections of information

before submitting them to the Office of

Management and Budget (OMB) for final

approval. This program helps to ensure

requested data can be provided in the

desired format, reporting burden (time

and financial resources) is minimized,

collection instruments are clearly

understood, and the impact of collection

requirements can be properly assessed.

The O*NET Data Collection Program

ICR 1205–0421 received OMB Clearance

on November 22, 2021.

This revision to the previously-

approved ICR proposes to collect

updated occupational characteristics

and requirements information on an

ongoing basis. Under this proposal, both

selected sample sizes of business

establishments and use of the

Occupation Expert Methodology have

been increased to offset declining

response rates and the potentially

lasting impacts of COVID–19 on

business eligibility (see Section 15).

Selected respondents will be offered

varying incentive amounts to assess the

impact for reducing the potential for

nonresponse bias, increasing response

rates, and minimizing follow-up data

collection efforts; and contacted

Occupation Expert source organizations

will be presented with the opportunity

of a recognition program for their

participation (Section 9).

Informational materials have been

condensed to reduce redundancy and

burden (Appendix F).

Appendix G in this ICR package

differs from the 2021 Appendix G

submission: the look and format of the

questionnaires have been modernized to

reflect current best practices for surveys,

including standardization of similar

background questions between the

Establishment and Occupation Expert

questionnaires; and updating the

instructions and questions for level

items to add additional clarity.

This information collection is subject

to the PRA. A Federal agency generally

cannot conduct or sponsor a collection

of information, and the public is

generally not required to respond to an

information collection, unless it is

approved by OMB under the PRA and

displays a currently valid OMB Control

Number. In addition, notwithstanding

any other provisions of law, no person

shall generally be subject to penalty for

failing to comply with a collection of

information that does not display a

valid Control Number. See 5 CFR

1320.5(a) and 1320.6.

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Exemption From Certain Prohibited Transaction Restrictions Involving J.P. Morgan Securities LLC, J.P. Morgan Investment Management Inc., J.P. Morgan Advisors (Formerly, J.P. Morgan Securities; JPMS Brokerage), and Chase Wealth Management Located in New York, New York

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