Clifford Chance

The Final Amendment to the QPAM Exemption (the “Final Amendment”)

June 17, 2024

The U.S. Employee Retirement Income Security Act of 1974 ("ERISA") and the U.S. Internal Revenue Code of 1986 (the "Code") prohibit typical commercial transactions, such as sales, purchases, leases, loans and services, between "Plans" and their "Parties in Interest" in order to prevent potential abuse and unfair dealings. However, there are exemptions that may allow for such transactions to proceed under certain, specific conditions. One prominent exemption is Prohibited Transaction Class Exemption 84-14, commonly known as the “QPAM Exemption.” Under the QPAM Exemption, investment funds that are treated as the assets of Plans can engage in most commercial transactions with their Parties in Interest that would otherwise be per se prohibited, provided that the transactions are overseen and managed by sophisticated independent fiduciaries known as “qualified professional asset managers” (“QPAMs”).

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