On July 26, 2022, the U.S. Department of Labor (DOL) released a proposal (Proposal) to amend the Prohibited Transaction Class Exemption 84-14, known as the qualified professional asset manager (QPAM) exemption. Managers of pension and welfare funds - including managers of PE funds and hedge funds that are or may be deemed to have "plan assets" under the DOL's plan asset regulations (collectively, Investment Managers) - should begin evaluating the possible impact of those revisions and assess what changes to processes and procedures will be required for continued reliance on the QPAM exemption if the Proposal becomes final.

This article lays out significant changes contemplated by the Proposal, including an increase in min­ imum capitalization and asset under management (AUM) requirements to qualify as a QPAM; new rules regarding notification, registration and recordkeeping; and additional terms for management agreements. In addition, the article offers an overview of the QPAM exemption, its significance to the private funds industry and suggestions for how fund managers can prepare for potential adop­ tion of the changes in the Proposal.

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