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News October 17, 2005 Issue

IAA Comments on QPAMs

The Investment Adviser Association recently filed a comment letter on the proposed amendments to PTE 84-14 that would provide a permanent in-house QPAM exemption.

The group asked for two changes to the proposal. First, instead of requiring an annual outside audit of compliance with the exemption, the IAA asked that firms relying on the exemption be required to make annual in-house reviews or audits of compliance, and obtain an outside exemption audit by an independent firm only once every five years. Second, the group asked that in-house QPAMs not be required to meet the 20 percent test, under which assets of the plan (and affiliated plans) engaging in transactions covered by the exemption could not constitute more than 20 percent of the managerís assets under management.