Page:United States Statutes at Large Volume 120.djvu/998

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 967

not in any manner alter existing individual or class exemptions, provided by statute or administrative action.

Subtitle B—Prohibited Transactions SEC. 611. PROHIBITED TRANSACTION RULES RELATING TO FINANCIAL INVESTMENTS.

(a) EXEMPTION FOR BLOCK TRADING.— (1) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.—Section 408(b) of such Act (29 U.S.C. 1108(b)), as amended by section 601, is amended by adding at the end the following new paragraph: ‘‘(15)(A) Any transaction involving the purchase or sale of securities, or other property (as determined by the Secretary), between a plan and a party in interest (other than a fiduciary described in section 3(21)(A)) with respect to a plan if— ‘‘(i) the transaction involves a block trade, ‘‘(ii) at the time of the transaction, the interest of the plan (together with the interests of any other plans maintained by the same plan sponsor), does not exceed 10 percent of the aggregate size of the block trade, ‘‘(iii) the terms of the transaction, including the price, are at least as favorable to the plan as an arm’s length transaction, and ‘‘(iv) the compensation associated with the purchase and sale is not greater than the compensation associated with an arm’s length transaction with an unrelated party. ‘‘(B) For purposes of this paragraph, the term ‘block trade’ means any trade of at least 10,000 shares or with a market value of at least $200,000 which will be allocated across two or more unrelated client accounts of a fiduciary.’’. (2) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.— (A) IN GENERAL.—Subsection (d) of section 4975 of the Internal Revenue Code of 1986 (relating to exemptions), as amended by section 601, is amended by striking ‘‘or’’ at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting ‘‘, or’’, and by adding at the end the following new paragraph: ‘‘(18) any transaction involving the purchase or sale of securities, or other property (as determined by the Secretary of Labor), between a plan and a party in interest (other than a fiduciary described in subsection (e)(3)(B)) with respect to a plan if— ‘‘(A) the transaction involves a block trade, ‘‘(B) at the time of the transaction, the interest of the plan (together with the interests of any other plans maintained by the same plan sponsor), does not exceed 10 percent of the aggregate size of the block trade, ‘‘(C) the terms of the transaction, including the price, are at least as favorable to the plan as an arm’s length transaction, and ‘‘(D) the compensation associated with the purchase and sale is not greater than the compensation associated with an arm’s length transaction with an unrelated party.’’. (B) SPECIAL RULE RELATING TO BLOCK TRADE.—Subsection (f) of section 4975 of such Code (relating to other

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