UBS Seeks Asset Manager Exemption Despite Affiliate’s Crimes

By Sean Forbes

Nov. 16 — UBS AG is seeking permission from the Department of Labor to continue as a pension asset manager despite a pending conviction for wire fraud in connection with the bank’s submission of Yen London Interbank Offered Rates and other benchmark interest rates between 2001 and 2010.

The proposed temporary exemption from the Employee Retirement Income Security Act’s requirements for qualified professional asset managers (QPAMs) would be effective for 12 months beginning on the 2016 conviction date and ending on the earlier of 12 months after such effective date or until the effective date of a final agency action made by the DOL, the department said. The conviction is scheduled to be entered in the U.S. District Court for the District of Connecticut on or about Nov. 29.

This is UBS’s second request in three years for a prohibited transaction exemption. The department granted an exemption in 2013 ( PTE 2013-09) allowing UBS’s Global Asset Management and Wealth Management Americas divisions to continue as QPAMs despite a conviction of an affiliate, UBS Securities Japan, for manipulating certain benchmark interest rates.


One of the conditions of the 2013 exemption was that if UBS or any of its affiliates were convicted of another crime, the relief under the PTE would be unavailable. The pending conviction would therefore mean that UBS QPAMs couldn’t rely on PTE 2013-09.

The proposed PTE would grant UBS a single new exemption providing relief despite both the 2013 and 2016 convictions, the DOL said.

If the current PTE request isn’t granted, UBS estimates that aggregate transition costs for liquidating and re-investing of assets in UBS’s ERISA plans and for individual retirement account clients would be about $280 million.

The DOL saidit’s also considering a five-year proposed exemption subject to enhanced protective conditions.

To contact the reporter on this story: Sean Forbes in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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