The DOL reopened the comment period on proposed amendments that would remove references to credit ratings from six class prohibited transaction exemptions ("PTEs").
Originally published in June 2013, the proposed amendments are intended to satisfy the provision of Dodd-Frank Section 939A ("Review of reliance on ratings"), which requires the DOL to remove references to or any reliance on credit ratings from its class exemptions. After its review, the DOL identified PTE 75-1, 80-83, 81-8, 95-60, 97-41 and 2006-16 as containing such references.
For these PTEs, the DOL focused on alternatives to credit ratings requirements as set forth in:
- proposed amendments to Rules 2a-7 ("Money market funds") and 5b-3 ("Acquisition of repurchase agreement or refunded security treated as acquisition of underlying securities") under the Investment Company Act ("ICA");
- a final amendment to ICA Rule 10f-3 ("Exemption for the acquisition of securities during the existence of an underwriting or selling syndicate"); and
- ICA Rule 6a-5 ("Purchase of certain debt securities by companies relying on section 6(a)(5) of the Act").
Comments on the proposal must be submitted by August 9, 2021.
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