According to an announcement from the US Department of Labor’s Employee Benefits Security Administration (EBSA), the proposal would combine Prohibited Transaction Exemptions 81-6 and 82-63 into one and expand certain restrictions.
>Among the changes: permission for securities-lending collateral to include:
- the currency of the United Kingdom
- the Euro
- sovereign debt of member countries of the European Monetary Union
- irrevocable letters of credit by a UK bank.
Comments on the proposal or requests for a hearing should be submitted to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5649, US Department of Labor, 200 Constitution Ave., NW, Washington, DC 20210 by email to or by fax to (202) 219-0204.
The proposal is scheduled to be published in the October 23, 2003 Federal Register.
Defined benefit plans can lend securities from their portfolios to banks and brokers dealers as a way to earn additional income and to pay plan fiduciaries for services related to securities lending.