Notice2026-11065
Proposed Exemption From Certain Prohibited Transactions Involving Liberty Puerto Rico 401(k) Savings Plan (the Plan or the Applicant) Located in San Juan, Puerto Rico
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 3, 2026
Effective
September 10, 2020
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
This proposed exemption would permit the Plan's prior acquisition, holding, and sale of certain stock rights to purchase shares of stock in Liberty Latin America Ltd. Absent an exemption, these transactions would be prohibited by the Employee Retirement Income Security Act of 1974 (ERISA) and/or the Internal Revenue Code of 1986 (the Code).
Full Text
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<title>Federal Register, Volume 91 Issue 106 (Wednesday, June 3, 2026)</title>
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[Federal Register Volume 91, Number 106 (Wednesday, June 3, 2026)]
[Notices]
[Pages 33195-33200]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11065]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Exemption Application No. D-12062]
Proposed Exemption From Certain Prohibited Transactions Involving
Liberty Puerto Rico 401(k) Savings Plan (the Plan or the Applicant)
Located in San Juan, Puerto Rico
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of proposed exemption.
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SUMMARY: This proposed exemption would permit the Plan's prior
acquisition, holding, and sale of certain stock rights to purchase
shares of stock in Liberty Latin America Ltd. Absent an exemption,
these transactions would be prohibited by the Employee Retirement
Income Security Act of 1974 (ERISA) and/or the Internal Revenue Code of
1986 (the Code).
DATES:
Exemption date: If granted, the exemption will be in effect as of
September 10, 2020, through September 16, 2020.
Comments due: Written comments and requests for a public hearing on
the proposed exemption must be received by the Department by July 10,
2026.
ADDRESSES: All written comments and requests for a hearing must be
submitted to the Employee Benefits Security Administration (EBSA),
Office of Exemption Determinations, Attention: Application No. D-12062:
<bullet> via email to <a href="/cdn-cgi/l/email-protection#b9dc94f6fcfdf9ddd6d597ded6cf"><span class="__cf_email__" data-cfemail="7e1b53313b3a3e1a111250191108">[email protected]</span></a>; or
<bullet> Electronically at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the
``Submit a comment'' instructions.
Any such comments or requests must be received by the end of the
scheduled comment period. The application for exemption and the
comments received will be available for public inspection in the Public
Disclosure Room of the Employee Benefits Security Administration, U.S.
Department of Labor, Room N-1515, 200 Constitution Avenue NW,
Washington, DC 20210, reachable by telephone at 1-866-444-3272. See
SUPPLEMENTARY INFORMATION
[[Page 33196]]
below for additional information regarding comments.
FOR FURTHER INFORMATION CONTACT: Anna Vaughan of the Department at
(202) 693-8565. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION:
Comments: Persons are encouraged to submit all comments
electronically and not to follow with paper copies. Comments should
state the nature of the person's interest in the proposed exemption and
how the person would be adversely affected by the exemption, if
granted. Any person who may be adversely affected by an exemption can
request a hearing on the exemption if their request includes: (1) the
name, address, telephone number, and email address of the person making
the request; (2) the nature of the person's interest in the exemption
and the manner in which the person would be adversely affected by the
exemption; and (3) a statement of the issues to be addressed and a
general description of the evidence to be presented at the hearing. The
Department will grant a hearing request made in accordance with the
requirements above when it finds that a hearing is necessary to fully
explore material factual issues identified by the requestor, and will
publish a hearing notice in the Federal Register. The Department may
decline to hold a hearing if it finds that: (1) the request for the
hearing does not meet the requirements stated above; (2) the only
issues identified for exploration at the hearing are matters of law; or
(3) the factual issues identified in the request can be fully explored
through the submission of evidence in written (including electronic)
form.
Warning: The Department will include all comments received in the
public record without change and will make them available online at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. The Department notes that it will include
any personal information provided in the public record and online,
unless the commenter claims that any of the information included is
confidential, or the disclosure of such information is restricted by
statute. If you submit a comment, EBSA recommends that you include your
name and other contact information in the body of your comment, but DO
NOT submit information that you consider to be confidential or
otherwise protected (such as a Social Security number or an unlisted
phone number), or confidential business information that you do not
want publicly disclosed. If EBSA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EBSA
might not be able to consider your comment.
Additionally, the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website is an
``anonymous access'' system, which means EBSA will not know your
identity or contact information unless you provide them in the body of
your comment. If you send an email directly to EBSA without going
through <a href="https://www.regulations.gov">https://www.regulations.gov</a>, your email address will be
automatically captured and included as part of the comment that is
placed in the public record and made available on the internet.
Proposed Exemption
The proposed exemption would permit, for the period beginning
September 10, 2020, and ending September 16, 2020: (1) the acquisition
by the Plan from Liberty Latin America Ltd. (LLA), a party in interest
to the Plan, of certain stock rights (the Rights) to purchase shares of
Series C Liberty Latin America Ltd. common stock (the Series C LLA
Stock), in connection with a rights offering by LLA of Series C LLA
Stock (the Rights Offering); (2) the Plan's holding of the Rights
during the subscription period of the Rights Offering (the Rights
Offering Period); and (3) the sale of Rights held by Plan participants,
at the sole direction of the 401(k) Committee of Liberty Communications
of Puerto Rico LLC (the Committee) during the Rights Offering Period,
provided that the conditions in Section II below are met.
The Department is considering granting this exemption under the
authority of ERISA section 408(a) and Code section 4975(c)(2) and in
accordance with the Department's exemption procedures regulation.\1\
This proposed exemption would provide relief from certain restrictions
set forth in ERISA sections 406(a)(1)(E), 406(a)(2), 406(b)(1) and
407(a), and the excise tax imposed by Code section 4975(a) and (b) (due
to the operation of parallel prohibited transaction provisions
contained in Code section 4975(c)(1)). However, this exemption, if
granted, would not provide relief from any other violation of law.
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\1\ 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27,
2011). Effective December 31, 1978, section 102 of the
Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996),
transferred the authority of the Secretary of the Treasury to issue
administrative exemptions under the Code Section 4975(c)(2) to the
Secretary of Labor. Accordingly, the Department is proposing this
exemption under its sole authority. Any references hereinafter to
sections of ERISA shall be deemed to refer to the corresponding
sections of the Code, unless indicated otherwise.
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Benefits of the Proposed Exemption: The Applicant represents that
Plan participants acquired the Rights at no additional cost. The Plan
trustee then sold the Rights at their fair market value, and Plan
participants received the proceeds from the sale.
Summary of Facts and Representations <SUP>2</SUP>
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\2\ The Summary of Facts and Representations is based on the
Applicant's representations and does not reflect factual findings or
opinions of the Department, unless indicated otherwise. The
Department notes that the availability of this exemption, if
granted, is subject to the express condition that the material facts
and representations made by the Applicant in Application D-12062 are
true and complete, and accurately describe all material terms of the
transactions covered by the exemption. If there is any material
change in a transaction covered by the exemption, or in a material
fact or representation described in the application, the exemption
may cease to be effective, with such determination made at the
Department's sole discretion. See 29 CFR 2570.49.
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Background
1. LLA is a telecommunications services provider. Liberty
Communications of Puerto Rico LLC (LCPR), a subsidiary of LLA, sponsors
the Plan, which is a defined contribution plan. At the time of the
Rights Offering, the Plan had 328 participants and beneficiaries, and
approximately $31,671,364.62 in assets.
2. The Plan trustee is Oriental Bank and Trust (the Trustee). The
Trustee executes investment directions in accordance with Plan
participants' written instructions.
3. The Plan permits participants to direct the investment of their
Plan accounts into several investment alternatives. At the time of the
Rights Offering, the investment alternatives included employer
securities issued by LLA. As of September 8, 2020, the Plan held
$15,908 in Series A LLA common stock (the Series A LLA Stock), which
represented approximately 0.05% of total Plan assets. As of the same
date, the Plan held $201,434.23 in Series C LLA Stock, which
represented approximately 0.636% of total Plan assets.\3\
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\3\ However, participants were not permitted to acquire
additional shares of Series C LLA Stock at the time of the Rights
Offering.
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Description of LLA Stock
4. The Applicant states that unlike some companies where the value
of a particular class or series of common stock is based on the assets,
businesses, and investments that the issuing company has assigned to
the class or series (also known as a ``tracking stock''), Series A LLA
Stock and Series C LLA Stock (together or individually,
[[Page 33197]]
LLA Stock) are intended to reflect the value of LLA's business as a
whole.\4\
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\4\ The Applicant states that although LLA issued Series B LLA
Stock, no Plan participant accounts held Series B LLA Stock.
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Prior to the Rights Offering
5. The Applicant represents that Plan participants who held LLA
Stock (and thus would receive the Rights) were notified of the Rights
Offering by: (a) a two-page disclosure, titled ``Liberty Puerto Rico
401(k) Savings Plan--Important Information on the Liberty Latin America
LTD. Rights Offering''; and (b) a prospectus provided to all LLA
shareholders. The disclosure noted in (a) informed Plan participants
that no action was required on their part to receive proceeds from the
sale of the Rights.
The Rights Offering
6. On September 10, 2020, LLA issued Rights to all holders of LLA
Stock, including the Plan.\5\ Each holder of LLA Stock received Rights
equal to the number of shares of LLA Stock held by the shareholder,
multiplied by 0.2690. Each Right gave each recipient shareholder the
right to purchase one share of Series C LLA Stock for $7.14. This
represented an approximately 25% discount to the volume weighted
average trading price (the VWAP) of the Series C LLA Stock, beginning
on August 31, 2020 and ending on and including September 2, 2020.\6\
The Applicant states that the Rights permitted the purchase of only a
whole number of shares, and any fractional shares were rounded up to
the next whole share.\7\
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\5\ Holders of all series of LLA Stock received Rights, but
because Plan participants were not permitted to hold Series B LLA
Stock, they only received Rights in respect of Series A and Series C
LLA Stock.
\6\ The Applicant states that the subscription price was based
on advice from JPMorgan and was set at a discount to the theoretical
ex-rights price (TERP) of the shares. A TERP is the market price
that a stock will theoretically have following the completion of a
rights offering, taking into account any changes in the company's
overall value due to the issuance of additional shares at a
discount. The Applicant represents that the actual subscription
price of $7.14, was equal to a 25% discount to the VWAP of the
Series C LLA Stock over a three-day period beginning on August 31,
2020, and ending on (and including) September 2, 2020.
\7\ The Applicant states that since no fractional Rights were
issued, it was not possible to purchase a fractional share in the
Rights Offering and there would have been no fractional shares to
round.
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7. The following table shows: the total number of shares of LLA
Stock eligible to receive the Rights, and the market closing prices of
Series A and C LLA Stock on September 10, 2020, September 16, 2020, and
September 25, 2020.
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Shares outstanding from
September 8, 2020, the record Market closing price on Market closing price on Market closing price on
date of the offering, through September 10, 2020 \9\ September 16, 2020 \10\ September 25, 2020 \11\
September 10, 2020 \8\
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Series A LLA Stock.......................... 48,891,293 (1,640 shares held $9.51 $8.15 $7.85
by the Plan).
Series C LLA Stock.......................... 131,375,442 (21,270 shares held 9.31 8.02 7.75
by the Plan).
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8. The following table summarizes the Stock held by the Plan on
September 10, 2020, and the Rights received by the Plan on September
10, 2020, on behalf of all participant shareholders of Series A and C
LLA Stock.
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\8\ As reported in the Rights Offering prospectus, September 8,
2020, was the Rights distribution record date. The Applicant
represents that, as described in the Rights Offering prospectus,
because of ``due bill'' trading procedures required by NASDAQ in
connection with the Rights Offering, the number of Rights received
was actually calculated based on shares of LLA Stock held by
participants on September 10, 2020.
\9\ As discussed herein, LLA stockholders of record were issued
Rights on September 10, 2020. The market closing price for each
Right on September 11, 2020 was $1.76.
\10\ As reported by the Applicant and discussed herein, the
Trustee sold the Plan's Rights on September 16, 2020.
\11\ As stated in the Rights Offering prospectus, the Rights
Offering expired on September 25, 2020, 5:00 p.m., New York City
time.
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Number of shares held
Series of stock by plan \12\
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Series A LLA Stock held on the ex-dividend date 1,640
Series C LLA Stock held on the ex-dividend date 21,270
Total Series A LLA Stock and Series C LLA Stock 22,910
held on the ex-dividend date..................
Number of Rights Received by Plan (total LLA 6,164
Stock multiplied by 0.2690, including rounding
up to the nearest whole share for each
participant)..................................
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Acquisition of the Rights
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\12\ Because Plan participants' accounts may own fractional
shares, the Plan relied on its stock purchase account to round the
number of Shares to whole numbers, since only whole shares can be
traded on the open market. The number of shares of Series A and
Series C stock includes shares in the Plan's stock purchase account.
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9. The Applicant states that the Committee did not exercise
discretion regarding the Plan's acquisition of the Rights. The Rights
were automatically provided to all holders of LLA stock, including Plan
participants, in a manner that was consistent with provisions of the
Plan for the individually directed investment of participant accounts.
Disposition of the Rights: Sale Directed by the Committee
10. The Applicant represents that at the time of the Rights
Offering, the Plan document did not permit Plan participants to acquire
additional shares of Series C LLA Stock in their Plan accounts beyond
those previously acquired by the Plan participants. The Applicant
states that because the exercise of the Rights to purchase additional
shares of Series C LLA Stock was not permitted, the Committee
determined that it would be prudent and in the best interests of Plan
participants to direct the Trustee to sell the Rights on the open
market prior to the end of the Rights Offering Period, in order to
allow participants to benefit from the value of the Rights. Further,
the Applicant states that the Committee directed the Trustee to sell
the Rights as soon as possible during the Rights Offering Period in
order to secure a higher return for the Plan participants. The
Applicant states that, as the price for Rights such as these generally
declines toward the end of the offering
[[Page 33198]]
period, this was a prudent decision by the Committee to secure a
meaningful return for their participants. Further, the Applicant
represents that: as a result of the Committee's direction to the
Trustee, the participants received at least fair market value for the
sale of their Rights; and if the Committee had not sold the Rights, the
participants would have received no benefit in connection with the
Rights Offering since the Plan did not permit acquisition of additional
shares of Series C LLA Stock.
11. The Rights were received by the Trustee on September 16, 2020,
and held in a separate fund established under the Plan to hold the
Rights when they were issued. The Rights were credited to participants'
Plan accounts based on participants' respective holdings of LLA
Stock.\13\
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\13\ The Department presumes that the Committee could have
passed the Rights through to participants. However, because the Plan
document prohibited participants from acquiring additional shares of
Series C LLA Stock, the participants in that scenario would have
only had one option: selling the Rights on the open market.
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12. On September 16, 2020, the Trustee sold a total of 6,164 Rights
on behalf of 328 participants over the Nasdaq Global Select Market in
``blind transactions'' for $1.1227 per Right (pre-commission) for total
proceeds of $6,920.3228 (pre-commission).\14\ The settlement from the
sale of the Plan's Rights was also completed by September 16, 2020.\15\
The Applicant states that the custodian of the Plan's assets, American
Trust Custody (formerly known as MidAtlantic Trust Company), effected
the sale of the Rights through National Financial Services, LLC (NFS),
an unrelated broker, and that NFS was not an affiliate of the Trustee
at the time of the sale of the Rights.\16\
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\14\ The average sale price per Right received by Plan
participants (post-commission) was $1.062675, and the total proceeds
received by Plan participants for sale of Rights (post-commission)
was $6,550.33.
\15\ The Department notes that a transaction generally will not
be a prohibited transaction if that transaction is an ordinary
``blind'' purchase or sale of securities through an exchange where
neither the buyer nor the seller (nor the agent of either) knows the
identity of the other party involved. In this regard the Department
notes that the ERISA Conference Report states that ``[i]n general,
it is expected that a transaction will not be a prohibited
transaction (under either the labor or tax provisions) if the
transaction is an ordinary ``blind'' purchase or sale of securities
through an exchange where neither buyer nor seller (nor the agent of
either) knows the identity of the other party involved.'' See H.R.
Rep. 93-1280, 93rd Cong., 2d Sess. 307 (1974); see also ERISA
Advisory Opinion 2004-05A (May 24, 2004).
\16\ In connection with the sale of the Rights, the Plan only
paid the Securities Exchange Commission fee and NFS received a fee
of $370.00 ($0.06 per Right sold) for the sale of the Plan's Rights.
The Applicant states that this was a trade-driven fee generated from
trading on the open market and that neither the Trustee, nor
Oriental Pension Consultants (the Plan's third-party administrator
in 2020), nor American Trust Custody benefited from this fee.
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13. The Applicant states that proceeds from the sale of the Rights
were allocated proportionally to the relevant participants' accounts
based on the amount of Rights owned by each such participant and
invested in one of the Plan's default alternatives. The Applicant
states that Plan participants were informed through the disclosure
materials of this default investment and of their ability to contact
the recordkeeper to change the investment of the proceeds.
14. The Applicant states that the Committee prudently and loyally
determined on behalf of the Plan that: (a) the Plan's acquisition,
holding and sale of the Rights could proceed on the terms established
by the Committee; and (b) the Plan's participants received at least the
fair market value for the sale of the Rights. The Department notes that
this exemption requires that the material facts and representations set
forth in the Summary of Facts and Representations must be true and
accurate at all times, and the Plan must retain for six years the
records necessary for the Department to ascertain whether the
conditions for relief have been adhered to.
15. The Applicant represents that it filed the exemption
application after the Rights Offering, when the appropriate review and
approvals were concluded.
ERISA Analysis
16. ERISA section 406(a)(1)(E) provides that a fiduciary with
respect to a plan shall not cause the plan to engage in a transaction
if they know or should know that such transaction constitutes the
acquisition, on behalf of the plan, of any employer security in
violation of ERISA section 407(a). ERISA section 406(a)(2) provides
that a fiduciary of a plan shall not permit the plan to hold any
employer security if they know or should know that holding such
security violates ERISA section 407(a).
17. ERISA section 407(a)(1)(A) provides that a plan may not acquire
or hold any ``employer security'' which is not a ``qualifying employer
security.'' ERISA section 407(d)(1) defines ``employer securities,'' in
relevant part, as securities issued by an employer of employees covered
by the plan, or by an affiliate of such employer. ERISA section
407(d)(5) provides, in relevant part, that ``qualifying employer
securities'' are stock or marketable obligations.
18. The Applicant represents that the Plan was a holder of record
of Series A and Series C LLA Stock issued by LLA on the date the Rights
were acquired by the Plan, so the acquisition of the Rights by the Plan
was an acquisition of an ``employer security'' under ERISA section
407(d)(1). The Applicant represents that since the Rights did not
constitute either stock or marketable obligations for indebtedness, the
Rights were not ``qualifying employer securities'' under ERISA section
407(d)(5). Therefore, the Applicant represents that the Plan's
acquisition and holding of the Rights would violate ERISA sections
406(a)(1)(E), 406(a)(2), and 407(a)(1)(A), unless an exemption is
granted by the Department.
19. In addition, ERISA section 406(b)(l) prohibits a plan fiduciary
from dealing with the assets of a plan in their own interest or own
account. Further, ERISA section 406(b)(2) prohibits a fiduciary from
acting in any transaction involving a plan on behalf of a party whose
interests are adverse to those of the plan or the plan's participants
or beneficiaries. The Applicant requested relief from ERISA section
406(b)(1) and (2) as a precaution in the event the Committee's
direction to the Trustee to sell the Plan's Rights, in accordance with
a prior fiduciary decision to prohibit additional acquisitions of LLA
Stock, could be construed as dealing with the assets of the Plan in its
own interest or for its own account or acting on behalf of a party
whose interests are adverse to those of the Plan.\17\ If granted, the
exemption will be effective for the period September 10, 2020, through
September 16, 2020.
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\17\ The Department notes that the determination whether the
Committee exercised its fiduciary authority in a manner that
violated ERISA section 406(b)(1) and (b)(2) when it directed the
sale of Rights held by the Plan on behalf of participants is subject
to a factual inquiry that is outside the scope of this proposed
exemption. Nevertheless, if the Committee's exercise of discretion
also benefitted the Applicant, an entity in which the Committee has
an interest that may affect the Committee's best judgment as a
fiduciary, then such exercise of discretion may raise questions
about whether the Committee acted in a manner that complies with
ERISA section 406(b)(1) and (b)(2).
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Statutory Findings
The Department has tentatively made the following required findings
under ERISA section 408(a) with respect to the proposed exemption:
20. ``Administratively Feasible.'' The Department has tentatively
determined that the proposal is administratively feasible for the
Department because, among other things, the Plan participants received
their Rights pursuant to LLA's independent
[[Page 33199]]
corporate act in which all shareholders, including the Plan
participants, were treated in a like manner with respect to the
acquisition and holding of the Rights, with the exception that Plan
participants were not permitted to exercise the Rights because, in
accordance with the Plan document at the time of the Rights Offering,
Plan participants were not permitted to acquire additional shares of
Series C LLA Stock.
21. ``In the Interest of the Plan.'' The Department has tentatively
determined that the proposed exemption is in the interest of the Plan
and its participants and beneficiaries because, among other things, (a)
each Plan participant received their Rights at no additional cost, and
(b) each Plan participant received an average price of $1.1227 for each
Right.\18\
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\18\ In other words, each share of Stock owned by participants
prior to the Rights Offering yielded an additional benefit of $0.33.
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22. ``Protective of the Plan.'' The Department has tentatively
determined that the proposed exemption is protective of the rights of
the Plan's participants and beneficiaries because, among other things,
(a) the Rights were sold by the Trustee on the Nasdaq Global Select
Market for market value in blind transactions on the NASDAQ; (b) the
Plan did not pay any fees or commissions in connection with the
acquisition or holding of the Rights; (c) in connection with the sale
of the Rights, the Plan only paid the Securities Exchange Commission
fee and a commission to an unrelated third party broker, which were
charged solely against the price received by the Plan participant for
whom the Trustee sold the Right; and (d) the Plan did not pay any fees
in connection with the exemption request.\19\
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\19\ The Applicant represents that the Committee did not
exercise any additional discretion with respect to the acquisition
and holding of the Rights.
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Notice to Interested Persons
The Applicant will provide notification to interested persons
(NTIP) as agreed to with the Department: (1) by posting the NTIP on the
LLA intranet site and in the LLA's sites customarily used for posting
notices to employees regarding employment matters; and (2) via a
return-receipt email that links to the information posted on the LLA
intranet site within 7 days of the publication of the notice of
proposed exemption in the Federal Register. The NTIP will include a
copy of the notice of proposed exemption, as it appears in the Federal
Register, plus a copy of the Supplemental Statement required pursuant
to 29 CFR 2570.43(a)(2), which advises interested persons of their
right to comment and to request a hearing.
The Department will not consider comments and requests for a
hearing received by the Department after 37 days of the publication of
the notice of proposed exemption in the Federal Register.
All comments will be made available to the public.
Warning: Do not include any personally identifiable information
(such as name, address, or other contact information) or confidential
business information that you do not want publicly disclosed. All
comments become part of the disclosable administrative record. Further,
comments may be posted on the internet and can be retrieved by most
internet search engines.
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under ERISA section 408(a) and/or Code section 4975(c)(2) does not
relieve a fiduciary or other party in interest or disqualified person
from certain other provisions of ERISA and/or the Code, including any
prohibited transaction provisions to which the exemption does not apply
and the general fiduciary responsibility provisions of ERISA section
404, which, among other things, require a fiduciary to discharge their
duties respecting the plan solely in the interest of the plan and its
participants and beneficiaries and in a prudent manner in accordance
with ERISA section 404(a)(1)(B); nor does it affect the requirement of
Code section 401(a) that the plan must operate for the exclusive
benefit of the employees of the employer maintaining the plan and their
beneficiaries;
(2) Before an exemption may be granted under ERISA section 408(a)
and/or Code section 4975(c)(2), the Department must find that the
exemption is administratively feasible, in the interests of the plan
and of its participants and beneficiaries, and protective of the rights
of plan participants and beneficiaries;
(3) The proposed exemption, if granted, would be supplemental to,
and not in derogation of, any other provisions of ERISA and/or the
Code, including statutory or administrative exemptions and transitional
rules. Furthermore, the fact that a transaction is subject to an
administrative or statutory exemption is not dispositive of whether the
transaction is, in fact, a prohibited transaction; and
(4) The proposed exemption, if granted, would be subject to the
express condition that the material facts and representations contained
in the application are true and complete at all times and that the
application accurately describes all material terms of the transactions
which are the subject of the exemption.
Proposed Exemption
The Department is considering granting an exemption under the
authority of ERISA section 408(a) and Code section 4975(c)(2) in
accordance with the Department's exemption procedures regulation.\20\
Effective December 31, 1978, section 102 of Reorganization Plan No. 4
of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the
Secretary of the Treasury to issue exemptions of the type requested by
the Applicant to the Secretary of Labor. Therefore, this notice of
proposed exemption is issued solely by the Department.
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\20\ 29 CFR part 2570, subpart B (76 FR 66637, 66644, October
27, 2011). For purposes of this proposed exemption, references to
ERISA section 406, unless otherwise specified, should be read to
refer as well to the corresponding provisions of Code section 4975.
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Section I. Transactions
This exemption would provide relief from the prohibited
transactions provisions of ERISA sections 406(a)(1)(E), 406(a)(2),
406(b)(1), 406(b)(2), and 407(a)(1)(A), and the excise tax imposed by
Code section 4975(a) and (b) (due to the operation of a parallel
prohibited transaction provision contained in Code section 4975(c)(1)),
for the period beginning September 10, 2020, and ending September 16,
2020, with respect to:
(a) The acquisition by the Liberty Puerto Rico 401(k) Savings Plan
(the Plan) of certain stock subscription rights (the Rights), pursuant
to a stock rights offering (the Rights Offering) by Liberty Latin
America Ltd. (LLA), for the purchase of shares of Series C LLA common
stock (Series C LLA Stock);
(b) the holding of the Rights by the Plan during the subscription
period of the Rights Offering (the Rights Offering Period); and
(c) the sale of the Rights held by Plan participants, at the
direction of the 401(k) Committee of Liberty Communications of Puerto
Rico LLC (the Committee), prior to the expiration of the Rights
Offering Period; provided the conditions set forth below in Section II
are always satisfied.
Section II. Conditions
(a) The Plan's acquisition of the Rights resulted solely from an
independent corporate act of LLA as a
[[Page 33200]]
corporate entity, without the exercise of any discretion on the part of
the Committee;
(b) All holders of Series A LLA common stock (Series A LLA Stock)
or Series C LLA Stock (individually or together, LLA Stock), including
the Plan, were issued the same proportionate number of Rights based on
the number of shares of LLA Stock held by each shareholder;
(c) For purposes of the Rights Offering, all holders of Series A
LLA Stock or Series C LLA Stock, including the Plan, were treated in a
like manner, with the exception that the Plan participants were not
permitted to exercise the Rights due to the fact that new investments
in LLA Stock were not permitted under the Plan;
(d) The acquisition of the Rights by the Plan was made in a manner
that was consistent with provisions of the Plan for the individually
directed investment of participant accounts;
(e) The Committee directed the Plan trustee, Oriental Bank and
Trust (the Trustee), to sell the Rights and did not exercise any
additional discretion with respect to the acquisition and holding of
the Rights;
(f) The sale of the Rights was effected in a prudent manner on the
open market so that the Plan participants received at least fair market
value for the Rights sold;
(g) The Plan did not pay any brokerage fees, commissions,
subscription fees, or other charges in connection with the acquisition
and holding of the Rights. In connection with the sale of the Rights,
the Plan only paid the Securities Exchange Commission fee and a
commission paid to National Financial Services, LLC, a broker that is
unrelated to the Trustee or its affiliates, which were charged solely
against the price received by the Plan participant for whom the Trustee
sold the Right. The Committee's decision to allow this fee and
commission must have been prudent, consistent with their duties under
ERISA Section 404, and the fee and commission must have been
reasonable, consistent with ERISA Section 408(b)(2);
(h) The Plan did not pay any fees in connection with the
Applicant's request for this exemption;
(i) The Committee prudently and loyally determined on behalf of the
Plan that: (1) the Plan's acquisition, holding and sale of the Rights
could proceed, and (2) the Plan's participants received at least the
fair market value for the sale of the Rights;
(j) The LLA maintains for a period of six (6) years from the date
of the publication of the exemption, in a manner that is convenient and
accessible for audit and examination, the records necessary to enable
the persons described in paragraph (k)(1)--(4) below to determine
whether conditions of this exemption have been met, except that (1) a
prohibited transaction will not be considered to have occurred if, due
to circumstances beyond the control of LLA, the records are lost or
destroyed prior to the end of the six-year period, and (2) no party in
interest other than LLA shall be subject to the civil penalty that may
be assessed under ERISA section 502(i) if the records are not
maintained, or are not available for examination as required by
paragraph (k) below;
(k) Notwithstanding any provisions of subsections (a)(2) and (b) of
ERISA section 504, the records referred to in paragraph (j) above shall
be unconditionally available at their customary location during normal
business hours to:
(1) any duly authorized employee or representative of the
Department or the Internal Revenue Service;
(2) Liberty Communications of Puerto Rico LLC (LCPR) or any duly
authorized representative of LCPR;
(3) the Plan fiduciary or any duly authorized representative of the
Plan fiduciary; and
(4) any participant or beneficiary of the Plan, or any duly
authorized representative of such participant or beneficiary;
(l) For a period of six (6) years from the date of the publication
of the exemption, the Plan must provide to the Department the records
necessary to demonstrate that the conditions of this exemption, as
amended, have been met, within 30 days from the date the Department
requests such records; and
(m) All of the material facts and representations made by the Plan
that are set forth in the Summary of Facts and Representations are true
and accurate at all times. If there is any material change in a
transaction covered by the exemption, or in a material fact or
representation described by the Applicant in the application, the
exemption will cease to apply as of the date of the change.
Exemption date: If granted, the exemption will be effective from
September 10, 2020, the date that the Plan received the Rights, through
September 16, 2020, the last date the Rights were sold on the Nasdaq
Global Select Market.
Signed at Washington, DC, this 27th day of May 2026.
Christopher Motta,
Acting Director, Office of Exemption Determinations, Employee Benefits
Security Administration, U.S. Department of Labor.
[FR Doc. 2026-11065 Filed 6-2-26; 8:45 am]
BILLING CODE 4510-29-P
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</html>Indexed from Federal Register on June 3, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.