July 8, 2002
Mr. Alan D. Pauw
Reed, Weitkamp, Schell, & Vice PLLC
500 West
Jefferson Street, Suite 2400
Louisville, KY 40202-2812
Re: Granting of No-Action Request of Kentucky Public Employees' Deferred
Compensation Authority
Dear Mr. Pauw:
In your letters dated June 13, 2001 and November 28, 2001, on behalf of
the Kentucky Public Employees' Deferred Compensation Authority
("Authority"), you have asked for assurances that the Division of Market
Regulation ("Division") would not recommend enforcement action to the
Commission under Section 15(a) of the Securities Exchange Act of 1934
("Exchange Act") if the Authority or its employees engage in the
activities described in your letters without the Authority or its
employees registering as broker-dealers in accordance with Section 15(b)
of the Exchange Act.
Response:
While taking no position regarding whether interests in the Kentucky
Public Employees' 401(k) Deferred Compensation Plan and the Kentucky
Employees' 457 Deferred Compensation Plan (collectively, the "Plans")
offered by the Authority and its employees are securities, based on the
facts presented and the representations you have made, and particularly on
the representations that (1) the Plans were created pursuant to Kentucky
statute and the Authority was created pursuant to executive order of the
Governor of Kentucky for the purpose of increasing Plan availability to
all eligible employees; (2) neither the Authority nor the employees will
handle funds or securities of the Plans; (3) employees will not provide
specific investment advice or recommend the selection of any investment
option; (4) cost savings from the receipt of 12b-1 fees by the Authority
will be passed through to participants of the Plans; and (5) the employees
will all meet the conditions of Rule 3a4-1(a)1-3 and 4(i)(D),1 the staff of the Division will not recommend
enforcement action to the Commission under Section 15(a) of the Exchange
Act if the Authority and its employees engage in the activities described
in your letters without registering as broker-dealers under Section 15(b).
Finally, we note that the Authority and its employees are already
engaging in some of the activities that are the subject of your
request.2 As a matter of policy, the staff grants
no-action relief only prospectively, not retroactively.3 Therefore, no-action relief covers only those
activities occurring subsequent to this letter's issuance.
This position concerns enforcement action only and does not represent a
legal conclusion regarding the applicability of statutory or regulatory
provisions of the federal securities laws. Moreover, this position is
based on strict adherence by the Authority and its employees with the
representations you have made, and any different facts or conditions might
require a different response.
Sincerely,
Catherine McGuire
Chief Counsel
1 In particular, (a) the employees of the
Authority will not be subject to a statutory disqualification as that term
is defined in Section 3(a)(39) of the Exchange Act, at the time of their
participation, (b) the employees of the Authority will not receive
transaction-based compensation in connection with their activities, (c)
the employees of the Authority will not be associated persons of a
broker-dealer at the time of their participation, (d) and the employees of
the Authority will restrict their participation to transactions involving
offers and sales of interests in the Plans.
2 We assume these activities were conducted in
reliance on the 3a4-1 safe harbor.
3 See Letter re: Oil-N-Gas (June 8,
2000); Letter re: The PNC Financial Common (May 24, 1989).
Incoming Letter 1
June 13, 2001
1934 Act/3(a)(4)
1934 Act/15(a)(1)
CERTIFIED MAIL —
RETURN RECEIPT REQUESTED
Catherine McGuire, Chief Counsel
Division of Market
Regulation
Securities and Exchange Commission
450 5th Street
NW
Washington, DC 20549
Re: Securities Exchange Act Sections 3(a)(4),
15(a)(1)
Investment Company Act Section 2(b)
Investment Advisers Act
Section 202(b)
Dear Ms. McGuire:
On behalf of the Kentucky Public Employees' Deferred Compensation
Authority ("Authority"), this is to seek confirmation of our view that
neither the Authority nor its employees should be deemed to be a "broker"
required to register under Section 15(a)(1) of the Securities Exchange Act
of 1934 (the "Exchange Act") in performing services described in this
letter for eligible employees and participants of two state-sponsored
retirement plans. We respectfully request that the staff of the Securities
and Exchange Commission ("Commission") (1) advise us that the Commission
will not recommend any enforcement action if the activities described
below by the Authority and its employees are conducted without
registration under Section 15(a)(1) of the Exchange Act; and (2) agree not
to recommend enforcement action to the Commission if the retirement plans
conduct activities described below by the Authority and its employees
without registration under the Investment Company Act of 1940 and the
Investment Advisers Act of 1940.
In accordance with 17 CFR 200.81 as modified pursuant to Commission
Release No. 6269, enclosed are eight copies of this no action request.
BACKGROUND
The Authority is the plan administrator of two voluntary
participant-funded tax-sheltered retirement plans sponsored by the
Commonwealth of Kentucky: Kentucky Public Employees' 401(k) Deferred
Compensation Plan ("401(k) Plan") and Kentucky Employees' 457 Deferred
Compensation Plan ("457 Plan") (together, the "Plans"). The Authority
administers the terms of the Plans in compliance with Kentucky statutory
requirements and pursuant to the requirements of Sections 401(k) and 457
of the Internal Revenue Code of 1986, as amended ("Code"). The Plans were
created pursuant to state statute, and the 457 Plan was initially
effective June 21, 1974. The 401(k) Plan was originally adopted as of
January 1, 1985.
Eligibility for participation in the Plans begins on date of hire, and
employees of the Commonwealth of Kentucky and its agencies and local
governments and public school districts and universities may elect to
contribute salary deferrals under the 401(k) Plan and deferred
compensation under the 457 Plan on a before-tax basis as a way to save for
retirement. Employee contributions are held in two exclusive benefit
trusts, the 401(k) Trust and 457 Trust (together, the "Trusts"), and the
Trusts are trusteed by a Board of Trustees, members of which serve
ex-officio (Personnel and Finance and Administration Cabinets) and upon
appointment by the Governor of Kentucky. Trust assets representing
participant contributions and related earnings are segregated from assets
of participating employers. Currently, there are 618 participating
employers, and the Plans benefit approximately 52,000 participants.
The Authority was created pursuant to executive order of the Governor
of Kentucky which established its status as a state authority to
administer the benefits of the Plans, and the Authority staff serves at
the direction of the Board of Trustees to interpret and implement the
terms of the Plans. The Authority's main purpose and objective is the
proper implementation of the Plans and dissemination of information about
the benefits offered by the Plans so as to increase Plan availability to
all eligible employees; this is accomplished by explaining the eligibility
of benefits and distributions and by providing investment materials for
participants' selection of investment of their account balances.
The Authority's budget is supported from participant-based fees paid
from assets of the Plans and expense reimbursements from mutual fund
providers. Participants in the Plans may elect from a menu of 31
investment options; please see enclosed Plan Spectrum of Investment
Options identifying all such investment options of the Plans. Certain
mutual fund investments of the Plans return a portion or all of the
"12b-1" (distribution/marketing) fees taken at the mutual fund level as
cash payments to the Authority pursuant to written agreement. In addition
to 12b-1 fees, cash payments representing savings on recordkeeping fees
(e.g., accounting of individual participant contributions and allocation
of earnings) are made by certain mutual funds to the Authority. That is,
certain providers price their mutual fund fees to include recordkeeping
services, and since recordkeeping for the Plans is performed by a third
party administrator, some of these providers offset their full price by an
amount representing recordkeeping expenses. For at least one mutual fund
provider, expense reimbursements increase (and hence cost savings to the
Plans increase) if certain asset levels representing Plan investments
directed by participants into such mutual fund — or combined affiliated
funds offered by such provider are reached. Payments of 12b-1 fees and
recordkeeping offsets totalled approximately $670,000 for the nine-month
period ending March 31, 2001, compared to total Authority revenue during
such period of approximately $3.2 million. The Authority contemplates that
expense reimbursements of this sort will increase in the future and
thereby constitute a larger percentage of the Authority's budget. Should
that happen, the Authority plans to reduce aggregate participant fees (as
has been done over the past six years) and, in effect, pass through such
cost savings to participants of the Plans.
The Authority currently employs 21 full-time staff members and has in
the past engaged and currently engages third parties to conduct marketing
and communication efforts for the Plans. Presently, the third party
providing marketing services is under contract which expires June 30,
2003, and the contract is subject to termination upon 30 days' prior
notice of the Authority. In order to improve administrative efficiency and
generate cost savings for the participants of the Plans, the Authority is
considering hiring sufficient staff to provide marketing and communication
services directly to participants and eligible employees of the Plans
(i.e., state and local government employees and employees of Kentucky
public school districts and universities). If adopted, this would bring
such services "in-house" so that Authority employees would perform the
following services and activities:
- distribute informational materials relating to Plan provisions and
benefits
- assist with enrollment into the Plans
- communicate benefits and terms of the Plans and investment
options
- assist with deferral election and change requests
- explain investment procedures and respond to questions regarding
investment option changes/exchanges and beneficiary
designations
- explain eligibility requirements and limitations and risks
associated with Plan investments
- assist and participate in investment education and retirement
planning seminars
- explain investment fundamentals
- distribute investment materials explaining Plan investments and
historical rates of return of Plan investment options
- explain the provisions of the Plans to potential participating
employers for the adoption of the Plans for the benefit of their
employees
(altogether, defined for the purpose of this request, as "In-house
Marketing Services")
The Authority expects to employ a minimum of eight employees working
"in the field" and three to four office administrators for the performance
of In-house Marketing Services. All of these individuals will be state
employees and paid salary in accordance with state pay and benefits
requirements; they will not be paid any form of commission-based or
transaction-based compensation. Field employees will be based from their
home offices and serve eligible employees and prospective Plan
participants by covering identified regions throughout Kentucky. Also,
they will perform In-house Marketing Services by conducting employee group
meetings at employer sites, meeting one-on-one with Plan participants, and
participating in Plan-sponsored "expos" (both on- and off-employer sites)
at which eligible employees and participants attend.
In their performance of In-house Marketing Services, Authority
employees will be explaining investment options of the Plans and
distributing investment materials including, in part, historical rates of
returns published by third party investment managers and mutual funds.
Authority employees, however, will not recommend any investment option or
provide any investment advisory services to participants of the Plans.
Authority employees will, furthermore, be instructed not to render
specific advice or suggest a selection of any investment option or
recommend one option in preference to another. The Authority anticipates
that In-house Marketing Services will include providing generic investment
education relating to risk and return, asset allocation, inflation risk,
investment horizon and other related investment topics in generality — not
specific advice regarding any individual investment option.
The Authority does not take custody or control over assets of the
Plans. For instance, Authority employees do not now nor is it contemplated
that they will ever collect or hold any contributions of the Plans; in
contrast, Plan participants directly authorize their employers to initiate
payroll deduction by way of a "participation agreement" completed by
participants and forwarded to their employers. Employers transfer
participant payroll deductions to the Trusts for investment upon receipt
of a participation agreement. Plan assets are held in trust by custodial
banks which produce trust account reports which are used for allocation of
participant account balances by a third party administrator. Plan
investments are handled by a 1-800 voice-response telephone service to a
third party administrator and also by direct phone call to Authority
staff. Web-based e-directions of participants are also used to direct
investments. The third party administrator instructs bank custodians to
execute buy-sell orders based upon the direct, private and confidential
instructions of Plan participants for investment of their Plan
balances.
DISCUSSION
Section 3(a)(4) of the Exchange Act defines the term "broker" as "any
person engaged in the business of effecting transactions in securities for
the account of others, but does not include a bank." Section 15(a)(1) of
the Exchange Act makes it unlawful for a broker to effect transactions in
securities or to induce or attempt to induce the purchase or sale of any
security, other than exempted securities, without registration. As
discussed below, it is the position of the Authority that neither it nor
its employees should be required by Section 15(a)(1) to register as a
broker in connection with their performance of In-house Marketing Services
since in their performance of In-house Marketing Services they do not meet
the statutory definition of "broker."
Based on our analysis of Commission no action letters, an appropriate
interpretation of the definition of broker, for this no action request, is
that a "broker" is someone who (1) takes custody or exercises direct or
indirect control over Plan securities or otherwise handles Plan
securities; (2) renders specific investment advice meant for a
participant's disposition or retention of securities under the Plans; (3)
holds himself out to the public as a broker; (4) receives
transaction-based or commission compensation which is contingent upon
purchases and sales of Plan securities; or (5) induces or attempts to
induce a Plan participant to purchase or sell Plan investments.
These five factors are determinative and supported by the following
Commission no action letters. First, the Commission ruled that the phrase
"engaged in the business of effecting transactions in securities" under
Section 3(a)(4) of the Exchange Act means the offering and selling of
securities and the supervision of such activities, in Commission No Action
Letter, American Leisure Associates, Inc. (September 13, 1973) . Also, in
Commission No Action Letter Urrutia, Carlos M. (August 27, 1980), the
Commission ruled that a person who merely accepts a telephone order from a
customer for transmittal to a registered representative is considered to
be performing a ministerial or clerical function; however, a person whose
compensation is based, directly or indirectly, on securities transactions
is likely to be engaged in sales of securities. The Commission, in No
Action Letter, Standard Insurance Company (January 26, 1999), recommended
no enforcement under Exchange Act Section 15(a) because, in the context of
demutualization of an insurance company, (i) no employee is compensated,
directly or indirectly, for his efforts in connection with explaining
demutualization to existing policyholders; (ii) employees' activities are
strictly limited and supervised; and (iii) employees do not handle
customer funds and securities. This construction of the definition of
"broker" is further supported by Commission No Action Letter, Union Texas
Petroleum Corp. (April 27, 1987), in which the Commission recommended no
enforcement where (i) employees do not render specific investment advice,
(ii) investment decisions are made at the direction of participants
without involvement by employees of the plan sponsor, (iii) amounts
withheld from pay are forwarded directly to investment providers, and (iv)
securities' trades are not effected by such employees.
The Authority should not be considered a broker under Section 3(a)(4)
of the Exchange Act because the Authority is not in the business of
effecting transactions in securities. Our request with respect to
Authority employees is discussed below. The Authority does not act as nor
does it hold itself out to the public in such capacity. Under state law
and the terms of the Plans, the Authority does not retain the authority to
direct or modify the investment options of the Plans — that authority
rests with the Board of Trustees which determines investment options.
Pursuant to agreements with certain mutual fund providers of investment
options of the Plans, mutual funds return a portion of 12b-1 fees assessed
at the mutual fund level as a cost savings to the Plans. Also, the
Authority receives payments from certain mutual funds to offset
recordkeeping fees taken at the fund level. These reimbursements have
assisted the Authority in reducing participant asset-based fees for the
past several years; for instance, participant fees have declined more than
40% over the past several years. Reimbursements of this type are not
passed on to employees of the Authority in the form of remuneration or
otherwise. Accordingly, the Authority does not receive any separate
compensation by virtue of participant purchases or sales of securities.
The Governor of Kentucky by executive order created the Authority to
administer the benefits of the Plans, and Authority staff serves at the
direction of the Board of Trustees to interpret and implement the terms of
the Plans. The Authority's main purpose and objective is the proper
implementation of the Plans and dissemination of information about the
benefits offered by the Plans so as to increase Plan availability to all
eligible employees; this is accomplished by explaining the eligibility of
benefits and the form and timing of distributions and by providing
investment materials for participants' selection of investment of their
account balances. In sum, the Authority is an administrator of the two
employee benefit Plans, not a "broker" effecting trades of securities.
Likewise, employees of the Authority will not be in the business of
effecting securities transactions in their performance of In-house
Marketing Services. Authority employees will be explaining the various
investment options of the Plans and distributing investment materials
including, in part, historical rates of returns published by third party
investment managers and mutual funds. Authority employees, however, will
not recommend any specific investment option or provide any investment
advisory services to participants of the Plans. Authority employees will,
furthermore, be instructed not to render specific advice or suggest a
selection of any investment option or recommend one option in preference
to another. Generic investment education relating to risk and return,
asset allocation, inflation risk, investment horizon and other related
investment topics will be provided in generality — not specific advice
regarding any individual investment option. Finally, Authority employees
will be paid salary and benefits of a state employee appropriate to their
individual salary grades; no compensation will be based on commission,
transaction-based, or based on whether any participant invests in any
individual investment option.
Moreover, the Authority does not take custody or control over assets of
the Plans. For instance, Authority employees do not now nor is it
contemplated that they will ever collect or hold any contributions of the
Plans; in contrast, Plan participants directly authorize their employers
to initiate payroll deduction by way of a participation agreement
completed by participants and forwarded to their employers. Employers
transfer participant payroll deductions to the Trusts for investment upon
receipt of a participation agreement. Plan assets are held in trust by
custodial banks which produce trust account reports which are used for
allocation of participant account balances by a third party administrator.
Plan investments are handled by a 1-800 voice-response telephone service
and also by direct phone call to Authority staff, and, finally, by
web-based e-directions of participants to a third party administrator; the
third party administrator instructs bank custodians to execute buy-sell
orders based upon these direct, private and confidential instructions of
Plan participants for investment of their Plan balances.
Based on the foregoing description of relevant facts and applicable law
and regulatory authorities, the Authority concludes that In-house
Marketing Services should not be considered activities of a broker as
defined under Section 3(a)(4) of the Exchange Act. Accordingly, the
Authority and its employees should not be required under Section 15(a)(1)
of the Exchange Act to register as a broker. Therefore, we respectfully
request that the staff of the Division of Market Regulation advise us that
it will not recommend to the Commission that any enforcement action will
be taken if the Authority and its employees perform In-house Marketing
Services without registration as a broker under the Exchange Act.
Investment Company Act
Section 2(b) of the Investment Company Act of 1940 ("ICA") generally
provides that, unless otherwise specified, the provisions of the ICA shall
not apply to a state, any political subdivision of a state, or any agency,
authority or instrumentality of a state or any officer, agent or employee
of the foregoing. It is the position of the Authority that it may rely on
the Section 2(b) exclusion from ICA applicability because it is an
authority or instrumentality of the Commonwealth of Kentucky. For example,
the creation, authorization and control of the Authority was and will be
entirely under the auspices of the Commonwealth of Kentucky. In support of
our request, we reference similar ruling of the Commission in No Action
Letter, Public Employees' Retirement Board of the State of Oregon, March
3, 1998, in which the Commission concluded, for purposes of the
applicability of exemption under Section 2(b) of the ICA, that whether an
entity is a political subdivision or instrumentality of a state is
determined by reference to state law. Further, the Authority believes that
this request does not raise a novel or unique issue of federal law, and
accordingly, we respectfully request that the Division of Investment
Management conclude that it would not recommend enforcement action to the
Commission under Section 7 of the ICA if the Authority and the Plans do
not register with the Commission under the ICA in reliance on ICA Section
2(b).
Investment Advisers Act
Similarly, Section 202(b) of the Investment Advisers Act of 1940
("Advisers Act") generally exempts from application of registration under
the Advisers Act a state, any political subdivision of a state, or an
agency, authority or instrumentality of a state or any officer, agent or
employee of the foregoing. Since it is the position of the Authority that
the Authority qualifies as such a state authority or instrumentality and
consistent with similar ruling of No Action Letter, Public Employees'
Retirement Board of the State of Oregon, March 3, 1998, the Authority
requests a ruling of no enforcement action under the Advisers Act by
application of the exemption available under Section 202(b) in the event
of the Authority's implementation of In-house Marketing Services without
registration by the Authority and its employees under the Advisers
Act.
The matters described in this letter have not been made public.
Publication of the matters set forth in this letter prior to
implementation of In-house Marketing Services would have an adverse effect
on the proposed activities of the Authority. Accordingly, pursuant to 17
C.F.R. '200.83, on behalf of the Authority, we request that the
Commission, pursuant to 17 C.F.R. '200.81, grant this letter confidential
treatment under the Freedom of Information Act for a period of 120 days
from the date of this letter or until such earlier date on which
information contained in this letter relating to the proposed activities
of the Authority, described herein, is publicly announced.
We look forward to hearing from you regarding this matter and request a
phone conference with staff representatives in view of any anticipated
adverse ruling. Please address any questions to the undersigned.
Sincerely,
Alan D. Pauw
ADP:pjh
Enclosures
cc: Robert C. Brown, Executive Director,
Kentucky
Public Employees' Deferred Compensation Authority
Robert
B. Vice, Esq.
Incoming Letter 2
November 28, 2001
VIA FACSIMILE
Fax: (202) 942-9645
Phone: (202) 942-0784
Dan Fischer
Securities and Exchange Commission
450 5th Street
NW
Washington, DC 20549
Re: Kentucky Public Employees' Deferred Compensation
Authority
Dear Dan:
On behalf of the Kentucky Public Employees' Deferred Compensation
Authority ("Authority"), this is to follow-up to your request and
supplement the no-action request of the Authority, initially submitted
June 22, 1999, and further supplemented by my correspondence dated June
20, 2000 and June 13, 2001.
Capitalized terms used herein shall have the same meaning as defined in
the Authority's no-action request.
Additional Background. Employees of the Authority currently
perform the following activities and services for participants of the
Plans on an occasional and as-needed basis:
- distribute informational materials relating to Plan provisions and
benefits
- assist with deferral election and change requests
- explain investment procedures and respond to questions regarding
investment option changes/exchanges and beneficiary designations
- assist and participate in investment education and retirement
planning seminars
- distribute investment materials explaining Plan investments and
historical rates of return and Plan investment options
In-house marketing services (in addition to those identified in the
Authority's no-action request) which are not currently being rendered by
Authority employees but are anticipated to be performed in-house include
performance of the following:
- direct person-to-person solicitations and assistance with enrollment
into the Plans
- personal individualized (one-on-one) marketing to encourage Plan
participation
- individualized investment discussions and explanations of Plan
investment options and provision of general investment information and
materials
- communication of generic investment education materials relating to
risk and return, asset allocation, inflation risk, and investment
horizon
- provision of investment-specific information with respect to
individual Plan fund options, via delivery of prospectuses and
disclosure materials including, without limitation, performance history,
management style and philosophy, style of investment, and investment
management composition
Additional Discussion. Authority employees should not be deemed
brokers by application of Rule 3a4-1 of the Exchange Act ("Rule 3a4-1").
According to Rule 3a4-1,
(a) an associated person of an issuer of securities shall not
be deemed to be a broker solely by reason of his participation in the sale
of the securities of such issuer if the associated person:
(1) is not subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Exchange Act, at the time of
his participation; and
(2) is not compensated in connection with his participation
by the payment of commissions or other remuneration based either directly
or indirectly on transactions in securities; and
(3) is not at the time of his participation an associated
person of a broker or dealer; and
(4) meets the conditions of any one of paragraph (a)(4)(i),
(ii) or (iii), of this rule:
(i) the associated person restricts his participation to
transactions involving offers and sales of securities: ... (D) that are
made pursuant to a bonus, profit sharing, pension, retirement, thrift,
savings, incentive, stock purchase, stock ownership, stock appreciation,
stock option, dividend reinvestment or similar plan for employees of an
issuer or a subsidiary of the issuer.
(ii) [Not applicable]
(iii) [Not applicable]
The term "associated person" is defined pursuant to Rule 3a4-1(c)(1) to
mean any natural person who is a partner, officer, director, or employee
of: (i) the issuer; (ii) a corporate general partner of a limited
partnership that is the issuer; (iii) a company or partnership that
controls, is controlled by, or is under common control with, the issuer;
or (iv) an investment adviser registered under the Investments Advisers
Act of 1940 to an investment company registered under the Investment
Company Act of 1940 which is the issuer. And, for purposes of Rule 3a4-1,
the term "associated person of a broker or dealer" means any partner,
officer, director, or branch manager of such broker or dealer (or any
person occupying a similar status or performing similar functions), any
person directly or indirectly controlling, controlled by, or under common
control with such broker or dealer, or any employee of such broker or
dealer, except that any person associated with a broker or dealer whose
functions are solely clerical or ministerial and any person who is
required under the laws of any state to register as a broker or dealer in
that state solely because such person is an issuer of securities or
associated person of an issuer of securities shall not be included in the
meaning of such term for purposes of this rule. Rule 3a4-1(c)(2).
As indicated, employees of the Authority are government employees who
will undertake In-house Marketing Services in the course of their official
duties as employees of the Authority. Therefore, to the extent the
Authority is considered an "issuer" under Rule 3a4-1(c)(1), then Authority
employees would constitute "associated persons" for purposes of Rule
3a4-1. For determining the applicability of Rule 3a4-1 in this case, the
Authority represents and warrants that none of its employees are or will
be subject to statutory disqualification under Exchange Act Section
3(a)(39), and they will not be compensated in connection with performance
of In-house Marketing Services by payment of commissions or other
remuneration based directly or indirectly on securities transactions with
respect to the Plans. Further, the Authority represents that none of its
employees will be an "associated person of a broker or dealer at the time
of performance of In-house Marketing Services." Lastly, Authority
employees will be performing In-house Marketing Services solely in
connection with and involving offers and sales of securities pursuant to
the Plans, and both Plans constitute a "profit sharing, pension,
retirement, thrift, savings, ..., or similar plan for employees of an
issuer ..." within the meaning of Rule 3a4-1(a)(4)(i)(D). In summary, by
application of Rule 3a4-1 and based on the representations made herein by
the Authority, Authority employees performing In-house Marketing Services
will not constitute broker/dealers subject to registration under the
Exchange Act.
Please contact me with any questions regarding this matter.
Sincerely,
Alan D. Pauw
ADP:pjh
cc: Kentucky Public Employees' Deferred Compensation
Authority
http://www.sec.gov/divisions/marketreg/mr-noaction/kycompauth070802.htm
