The Department of Labor granted TT International Asset Management an exemption to continue providing asset management services to U.S. retirement plans.
The exemptions for qualified professional asset managers, known as QPAMs, are required whenever a money manager’s affiliates or parent is convicted on criminal charges. In 2022, TTI’s affiliate, SMBC Nikko Securities Inc., was convicted in Japan of attempting to peg, fix or stabilize the prices of certain Japanese equity securities that Nikko Securities was attempting to place in a block offering, according to a Labor Department notice published Thursday.
In support of its exemption request, TTI asserted that Nikko Securities is a foreign affiliate and had wholly separate businesses, operations, management, systems, premises, and legal and compliance personnel; that TTI was not involved in any way in the misconduct; and that the misconduct did not involve any ERISA assets, the notice said.
The exemption, which comes with specific conditions, was granted because it was considered administratively feasible, in the interests of plans served by London-based TTI, and “protective of the rights of the participants and beneficiaries” of those plans, according to the Labor Department notice.
The exemption will be in effect until February 2024.
A TTI representative could not immediately be reached for comment.
The QPAM exemption was created in 1984 and allows institutions to engage in transactions involving U.S. retirement assets from 401(k) plans, individual retirement accounts and corporate pension plans that are otherwise prohibited under the Employee Retirement Income Security Act.
The Labor Department in July unveiled a proposed amendment to modify its QPAM exemption by, among other items, expanding the types of misconduct that disqualify financial institutions from using the exemption.