Statutory Exemption for Cross-Trading of Securities

The Regulation on Statutory Exemption for Cross-Trading of Securities (29 CFR 2550.408b-19) implements the content requirements for the written cross-trading policies and procedures required under section 408(b)(19)(H) of the Employee Retirement Income Security Act of 1974 (ERISA), as added by section 611(g) of the Pension Protection Act of 2006, Pub. L. 109-280 (PPA). Section 611(g)(1) of the PPA created a statutory exemption, added to section 408(b) of ERISA as subsection 408(b)(19), that exempts from the prohibitions of sections 406(a)(1)(A) and 406(b)(2) of ERISA those cross-trading transactions involving the purchase and sale of a security between a account holding assets of a pension plan and any other account managed by the same investment manager, provided that certain conditions are satisfied. The information collection provisions of the Department's final cross-trading policies and procedure regulation (29 CFR 2550.408b-19) carry out the Congressional directive to specify the contents of the policies and procedures required under the statutory exemption. The Department believes the collections are necessary to safeguard plan assets by requiring that investment managers relying on the statutory exemption effect cross-trades in accordance with policies and procedures that are fair and equitable to all accounts participating in the cross-trading program. The information collection provisions of the regulation, along with other requirements of the statutory exemption, are also intended to ensure that plan fiduciaries have adequate information to make an informed decision regarding the plan's initial and continued participation in the investment manager's cross-trading program.

The latest form for Statutory Exemption for Cross-Trading of Securities expires 2023-01-31 and can be found here.