FDIC Reminds Banks of New Compliance Obligations under QPAM Exemption

The FDIC reminded all supervised financial institutions on their compliance obligations under the Department of Labor's ("DOL") recently amended Prohibited Transaction Class Exemption rule (PTE 84-14) for Qualified Professional Asset Manager ("QPAM") exemptions. The amendments became effective on June 17, 2024.

In a Financial Institution Letter, the FDIC highlighted that a financial institution must now notify the DOL of its intent to rely on the QPAM Exemption. FDIC said that the "one-time notice" must be submitted by email to the DOL at QPAM@dol.gov within 90 days of the Exemption's effective date, with an additional 90-day period allowed for curing inadvertent failures to report. The FDIC said that banks generally "have until September 15, 2024, to notify the DOL of their intent to rely on the exemption."

The FDIC said that the amended PTE 84-14 rule introduces adjusted asset management and equity thresholds for QPAMs, which will phase in through 2024, 2027 and 2030. The FDIC said the amended rule imposes new recordkeeping requirements, mandating that institutions maintain records for six years to demonstrate compliance with the exemption.

The FDIC advised institutions to "carefully review the final DOL rule" to ensure continued compliance with the QPAM exemption and reminded institutions to familiarize themselves with the "expanded list of types of misconduct and entities that may cause ineligibility" for the exemption.