DOL denies BNP Paribas exemption to manage U.S. retirement assets



Regulation









The Department of Labor has notified BNP Paribas that it will no longer be eligible for an ERISA exemption that allowed the bank to act as a qualified professional asset manager and therefore engage in transactions involving U.S. retirement assets from 401(k) plans and corporate pension plans that would otherwise be prohibited.

The Paris-based bank said in a statement that the DOL reviewed and declined its request to continue to use the QPAM exemption when using certain investment instruments in managing portfolios for ERISA plan clients. Such exemptions are required whenever a money manager’s affiliate or parent is convicted on criminal charges.

In May, the DOL granted BNP Paribas a one-year QPAM exemption that is in effect until June 3, 2019. In January 2018, BNP Paribas USA pleaded guilty to federal charges of price-fixing in the foreign-exchange market and paid $90 million in criminal fines. According to the filing from U.S. District Court in New York, BNP Paribas manipulated prices in an electronic FX trading platform by creating false trades and taking other actions to suppress prices and eliminate competition. The manipulation of prices between September 2011 and July 2013 involved Central and Eastern European, Middle Eastern and African currencies.



According to a BNP Paribas filing with the Securities and Exchange Commission last month, the DOL notified the bank on Oct. 26 that its request for further exemption was denied.

The DOL did not immediately respond to a request for comment.

BNP Paribas said in a statement that the DOL’s decision will have minimal effect on its business. Assets under management potentially affected represent less than 0.3% out of €416 billion ($482.6 billion) managed globally by the firm as of Sept. 30, according to BNP Paribas. “The DOL’s decision does not restrict BNP Paribas’ ability to perform asset management or other services for its clients,” it said in the statement.

BNP Paribas said it is actively reviewing all available options to have the decision reconsidered.

“BNP Paribas operates under the highest possible standards of conduct and is a responsible and ethical business,” the company said in its statement. “Since 2013, the bank has instituted many comprehensive programs that have enhanced its conduct culture and control framework.”













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