Compliance February 9, 2007

PPA Allows Investment Managers of Pension Plans to Cross Trade

February 9, 2007 (PLANSPONSOR.com) - The Department of Labor (DoL) has announced that investment managers of Employee Retirement Income Security Act (ERISA) plans can execute cross-trades if certain conditions are met.
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The conditions that must be met include the adoption of written cross-trading policies and procedures, the requirements of which will be set by the interim rule.

“This rule implements a key provision of the (Pension Protection Act) PPA that allows plans to reap the benefits of cross-trading, while ensuring that fair and equitable procedures are in place to protect workers’ retirement assets,” said Assistant Secretary of Labor Bradford Campbell, in a DoL news release.

The interim regulation will be published in the February 12, 2007 Federal Register and the rule will be effective 60 days after the publication. 

Cross-trading is a transaction in which an investment manager uses its authority to sell a security on behalf of one client and to buy that same security on behalf of another client.

Public comments may be mailed to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, Washington, D.C. 20210, Attention: Cross-Trading Policies and Procedures Interim Final Rule.  Public comments may also be submitted by e-mail to e-OED@dol.gov or through the federal e-rulemaking portal at www.regulations.gov.  

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