Foreign Exchange Class Exemption Proposal

The Employee Retirement Income Security Act (ERISA) Committee of the Securities Industry Association (SIA)* provides comments to the Pension & Welfare Benefits Administration of the U.S. Department of Labor on the foreign exchange class exemption proposal, which involves a class exemption from certain restrictions in Section 406 of  ERISA and companion sections of the Internal Revenue Code of 1986 for transactions involving the acquisition and disposition by employee benefit plans of foreign exchange through banks and broker-dealers pursuant to standing instructions.  SIA believes that the proposed exemption should be expanded to provide an additional limited type of standing instruction to permit transactions to occur at market prices within one business day after the instruction is given without the requirement that a specific amount of foreign currency and a specific exchange rate be directed.

*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Market Association (TBMA) in 2006.