JP Morgan Lands Four-Year Retirement Management Legal Exemption

JP Morgan Chase & Co. can continue managing US retirement assets despite its involvement in a years-long overseas price fixing scheme, according to the Labor Department.

DOL’s Employee Benefits Security Administration has renewed the firm’s qualified professional asset manager exemption for a period of four years, allowing it to engage in trades on behalf of workplace retirement savers that would otherwise be banned for conflicts of interest.

JP Morgan pleaded guilty to antitrust charges on behalf of one of its euro/dollar traders in 2017. The Labor Department has since granted the company two individual exemptions that would have expired Tuesday.

Regulators are also weighing a proposed QPAM exemption for TT International Asset Management Ltd., a global hedge fund with more than $11 trillion in assets under management. TT International’s Japanese affiliate was charged with illegally stabilizing securities rates.

QPAMs are large asset managers with millions of dollars in assets that are broadly considered independent of trades that would otherwise run afoul of sweeping conflict-of-interest laws the US has for workplace retirement accounts. The department is finalizing a rule that would make it clear that foreign convictions disqualify firms of their QPAM status the same way domestic judgments do.

The Trump administration had attempted to separate foreign and domestic convictions, but the Biden rule rolls that back and would institute stricter compliance standards for firms wishing to use what’s considered the “gold standard” management exemption.