The U.S. Department of Labor (DOL)
issued final amendments (Amendments) on April 3 to Prohibited Transaction Class Exemption 84-14, commonly referred to as the “QPAM Exemption.” The effective date of the Amendments is June 17, 2024.
Summary of the Amendments
The Amendments change existing conditions and add entirely new ones to the QPAM Exemption. The Amendments include the following key changes:
- Requirement to Notify DOL of Reliance on Exemption
The Amendments require a qualified professional asset manager (QPAM) to notify the DOL within 90 days of first reliance on the QPAM Exemption. The notification must be sent via email to QPAM@dol.gov with the legal name of the entity relying upon the exemption and any name the QPAM may be operating under. Notice also must be provided to the DOL in the event of a change to legal or operating names. Additionally, a QPAM may, but is not legally required to, notify the DOL if it is no longer relying upon the exemption at any time.
- Increased Minimum Asset and Equity Thresholds
The Amendments increase the equity capital threshold and the assets under management (AUM) threshold for registered investment advisers that a QPAM must satisfy to rely on the exemption. The thresholds are increased in 2025, 2028 and 2031. The Amendments provide that the DOL will make subsequent annual adjustments for inflation to the AUM and equity thresholds no later than January 31 of each year.
- Scope: Sole Authority
The DOL was concerned that QPAMs may be hired to rubber-stamp transactions proposed by parties-in-interest to a plan. The Amendments require that the QPAM, among other things, ensure that any transaction is based on its own independent judgment and free from bias in favor of a party-in-interest.
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