For purposes of the procedures in this subpart, the following definitions apply:

(a) An affiliate of a person means—

(1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with the person. For purposes of this paragraph (a)(1), the term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual;

(2) Any officer, director, partner, employee, or relative (as defined in ERISA section 3(15)) of any such person; or

(3) Any corporation, partnership, trust, or unincorporated enterprise of which such person is an officer, director, partner, or five percent or more owner.

(b) A class exemption is an administrative exemption, granted under ERISA section 408(a), Code section 4975(c)(2), and/or 5 U.S.C. 8477(c)(3), which applies to any transaction and party in interest within the class of transactions and parties in interest specified in the exemption when the conditions of the exemption are satisfied.

(c) Department means the U.S. Department of Labor and includes the Secretary of Labor or their delegate exercising authority with respect to prohibited transaction exemptions to which this subpart applies.

(d) Exemption transaction means the transaction or transactions for which an exemption is requested.

(e) An individual exemption is an administrative exemption, granted under ERISA section 408(a), Code section 4975(c)(2), and/or 5 U.S.C. 8477(c)(3), which applies only to the specific parties in interest and exemption transactions named or otherwise defined in the exemption.

(f) A party in interest means a person described in ERISA section 3(14) or 5 U.S.C. 8477(a)(4) and includes a disqualified person, as defined in Code section 4975(e)(2).

(g) Pooled fund means an account or fund for the collective investment of the assets of two or more unrelated plans, including (but not limited to) a pooled separate account maintained by an insurance company and a common or collective trust fund maintained by a bank or similar financial institution.

(h) A qualified appraisal report is any appraisal report that:

(1) Is prepared by a qualified independent appraiser; and

(2) Satisfies all the requirements set forth in § 2570.34(c)(5).

(i) A qualified independent appraiser is any individual or entity with appropriate training, experience, and facilities to provide a qualified appraisal report regarding the particular asset or property appraised in the report, that is independent of and unrelated to any party in interest engaging in the exemption transaction (and their affiliates). In general, the Department determines an appraiser's independence based on all relevant facts and circumstances, such as the extent to which the plan's counterparty in the transaction participated in or influenced the selection of the appraiser. In making the independence determination, the Department will consider the amount of the appraiser's revenues and projected revenues for the current Federal income tax year (including amounts received for preparing the appraisal report) that will be derived from parties in interest (and their affiliates) relative to the appraiser's revenues from all sources for the appraiser's prior Federal income tax year. The Department generally will not conclude that an appraiser's independence is compromised solely based on the revenues it receives from the parties in interest (and their affiliates) that engaged in the exemption transaction, to the extent that the appraiser neither receives nor is projected to receive more than two (2) percent of its revenues within the current Federal income tax year from the parties in interest (and their affiliates). Although larger percentages merit more stringent scrutiny, an appraiser may be considered independent based upon other facts and circumstances provided that the appraiser neither receives nor is projected to receive more than five (5) percent of its revenues within the current Federal income tax year from parties in interest (and their affiliates) participating in the exemption transaction.

(j) A qualified independent fiduciary is any individual or entity with appropriate training, experience, and facilities to act on behalf of the plan regarding the exemption transaction in accordance with the fiduciary duties and responsibilities prescribed by ERISA, that is independent of and unrelated to any party in interest engaging in the exemption transaction (and its affiliates). In general, the Department will make the determination of whether a fiduciary is independent based on all relevant facts and circumstances, such as the extent to which the plan's counterparty in the transaction participated in or influenced the selection of the fiduciary. In making this determination, the Department will also take into account, among other things, the amount of both the fiduciary's revenues and projected revenues for the current Federal income tax year (including amounts received for preparing fiduciary reports) that will be derived from parties in interest engaging in the exemption transaction (and their affiliates) relative to the fiduciary's revenues from all sources for the prior Federal income tax year. The Department generally will not conclude that a fiduciary's independence is compromised solely based on the revenues it receives from parties in interest (and their affiliates) that engaged in the exemption transaction, to the extent that the fiduciary neither receives nor is projected to receive more than two (2) percent of its revenues within the current Federal income tax year from the parties in interest (and their affiliates). Although larger percentages merit more stringent scrutiny, a fiduciary may be considered independent based upon other facts and circumstances provided that the fiduciary neither receives nor is projected to receive more than five (5) percent of its revenues within the current Federal income tax year from the parties in interest (and their affiliates) that engaged in the exemption transaction.

(k) A pre-submission applicant is a party that contacts the Department, either orally or in writing, to inquire whether a party with a particular fact pattern would need to submit an exemption application and, if so, what conditions and relief would be applicable. A party that contacts the Department to inquire broadly, without reference to a specific fact pattern, about prohibited transaction exemptions is not a pre-submission applicant.