Patrick J. Tiberi: “H.R. 4 provides significant reforms of ERISA prohibited transaction rules. These new exemptions are in addition to…”

“H.R. 4 provides significant reforms of ERISA prohibited transaction rules. These new exemptions are in addition to exemptions that have already been granted by the Secretary of Labor or are included in the ERISA statute. I am supportive of the relief for the use of electronic communication networks and similar trading venues. This reflects the availability of new technology to make trading more efficient. ERISA plans are incurring higher execution costs because of the difficulty of sending ERISA plan trades to electronic trading systems. Greater access to electronic trading can provide ERISA plan participants with the same benefits that are available to non-ERISA plans and other institutional investors. The legislation requires plan fiduciary authorization and prior notice before an ECN or similar trading venue can be used if the manager or his affiliate has an ownership interest in the trading venue. However, it recognizes that prior notice and authorization is not required for exchanges or venues where a manager or its affiliate have an ownership interest that is insignificant, such as under 10 percent. In addition, as under current law, a transaction executed on an exchange or automated public quotation system will not result in a prohibited transaction, even if it is owned in part by an affiliate of an investment manager. The SPEAKER pro tempore. All time for debate has expired.…”