FR 2025-05324

The document published by the Department of Labor (DOL) serves as a formal announcement regarding a request for public comments on an information collection process related to the Prohibited Transaction Class Exemption 2002-12. This exemption allows certain pension plans and the Federal Thrift Savings Plan to engage in the buying and selling of securities among investment funds through passive or model-driven cross-trading programs. The document outlines the procedural aspects of this proposal under the Paperwork Reduction Act, requiring approval from the Office of Management and Budget (OMB), and invites feedback until April 28, 2025.

General Summary

The notice outlines that the OMB is reviewing the DOL's proposed information collection, which is necessary for the administration of specific buy-sell activities between investment funds. The proposal is oriented toward ensuring that cross-trading activities adhere to objective criteria that limit the discretion of managers involved. Public and stakeholders are invited to comment on several aspects, including the necessity, accuracy, and practical utility of this information collection.

Significant Issues or Concerns

Several concerns emerge from the document:

1. Cost Breakdown Ambiguity: The document estimates an "other costs" burden of $1,738 annually but falls short of providing a detailed breakdown. This leaves respondents questioning what specific expenditures this figure entails.

2. Time Burden Explanation: It mentions an annual time burden of 855 hours, distributed among 60 respondents, yet does not clarify how these hours are allocated. This lack of detail might challenge the clarity and perceived accuracy of the time burden estimation.

3. Complex Language: The purpose and utility of the information collection are described in a technical manner, potentially obscuring understanding for those not familiar with legal or bureaucratic jargon.

4. Minimizing Burden on Respondents: While the document calls for suggestions to minimize burden, it lacks a proactive approach, not detailing any predefined measures the DOL might consider implementing to reduce the impact on participants.

Impact on the Public

For the general public, the most significant aspect of this proposal is its potential to affect the transparency and efficiency of financial practices involving pension plans. By ensuring rigorous standards for cross-trading practices, the DOL aims to protect the economic interests of those reliant on pension funds.

Impact on Specific Stakeholders

Positive Impacts:

• Pension Plan Participants: Increased oversight and clear guidelines could lead to more secure handling of funds and potentially better returns within legal frameworks.

• Financial Managers: For those adhering to these guidelines, this initiative offers a clear structure to operate within, ensuring compliance with federal standards.

Negative Impacts:

• Businesses and Not-for-Profit Institutions: They may incur additional costs and time burdens related to compliance with new information collection requirements, especially if the processes aren't implemented efficiently.

The DOL's notice is a significant step towards refining cross-trading processes, inviting crucial feedback that could shape the regulatory landscape of investment fund operations. However, to truly benefit all stakeholders, the issues raised need to be addressed, ensuring transparency, feasibility, and minimal disruption during the implementation phase.

The document references a Total Estimated Annual Other Costs Burden of $1,738. This figure reflects the anticipated financial costs associated with the information collection activities discussed in the Federal Register notice. However, the notice does not provide a detailed breakdown of what specific expenditures are included in this total. Consequently, readers may find it challenging to understand what elements contribute to this cost burden, and how these expenses are distributed or calculated.

Financial Allocation Summary

The document uses the $1,738 figure to represent additional costs that respondents may incur, aside from their time spent, in complying with the data collection requirements. This may encompass various indirect costs, such as administrative charges, technology expenses related to data submission, or any additional resources needed to fulfill the obligations of the exemption requirements. However, the absence of a detailed breakdown means it is unclear how much each component contributes to the overall sum, making it difficult for stakeholders to assess the legitimacy or reasonableness of these estimated costs.

Financial References and Related Issues

This financial reference is closely linked to identified issues regarding the clarity and transparency of the document. For instance:

1. Lack of Cost Breakdown: The lack of itemization within the $1,738 burden compromises the transparency of financial obligations expected from the respondents. Without clarity, stakeholders, especially smaller entities, might struggle to anticipate their exact financial obligations.

2. Accuracy of Burden Estimation: While the document outlines a total estimated time burden of 855 hours, it doesn't clarify how these hours are spread across the 60 respondents. Similarly, without a breakdown of the $1,738 cost, it is difficult to evaluate the accuracy of the overall financial burden per respondent.

3. Simplification Requests: Simplified language or clearer presentation of financial data could aid in better understanding and potentially increase the utility of the information collection by enabling more informed feedback from a broader audience.

4. Burden Minimization Suggestions: The general solicitation for ideas to reduce the information collection burden lacks specificity regarding financial burdens. Detailing how financial burdens, like the $1,738 cost, could be minimized would have demonstrated a more proactive approach by the Department of Labor in reducing compliance costs.

In conclusion, while the document provides a financial estimate of other costs burdens, the lack of transparency and detail surrounding this figure may hinder stakeholders' ability to provide constructive feedback or understand the full scope of their obligations under the proposed information collection activities.