Compliance February 22, 2010

EBSA Offers Form 5500 Guidance for 403(b) Plans

The U. S. Department of Labor’s Employee Benefits Security Administration (EBSA) has issued guidance for 403(b) plans subject to new Form 5500 reporting requirements.
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Field Assistance Bulletin (FAB) 2010-01 answers many frequently asked questions from the 403(b) community about the new reporting requirements, mainly concerning clarification on the ability to exclude certain custodial accounts and annuity contracts from the reporting (see “DoL Provides Form 5500 Reporting Relief for 403(b) Plans“). The FAB also answers many questions on maintaining a “safe harbor arrangement” that is not subject to the Employee Retirement Income Security Act (ERISA).

The agency announced it is sending a letter to administrators of the approximately 16,000 403(b) plans subject to ERISA to remind them that their 2009 Form 5500 annual reporting requirements have changed and to direct them to various EBSA resources for help in understanding and complying with the new requirements. The letter also directs administrators to a toll-free Form 5500 help desk that is available from 8:00 a.m. to 8:00 p.m. (ET) at 866-463-3278.

EBSA has also published a brochure entitled “Getting Ready for Changes in Filing Your Plan’s Annual Return/Report Form 5500.”
Products February 22, 2010

Credit Suisse Introduces ETN

Credit Suisse announced today that for the first time, U.S. investors will be able to access the Credit Suisse/Tremont Long/Short Equity Hedge Fund Index strategy through an exchange-traded product.
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The Credit Suisse Long/Short Liquid Index (Net) ETN (ticker: CSLS) is designed to correlate to the historical performance of the Credit Suisse Tremont Long/Short Equity Hedge Fund Index by tracking the performance of non-hedge fund, transparent market measures.  The firm says that the exchange-traded approach offers a variety of advantages to investors, including real-time pricing, intraday liquidity and portfolio transparency–advantages that, according to a press release, were previously not associated with alternative investments.    

However, the firm notes that the Credit Suisse Long/Short Liquid Index (Net) ETN does not invest directly in hedge funds and therefore does not have the risks usually associated with hedge funds such as illiquidity, fraud risk, or individual manager risk.

This ETN seeks to replicate the performance of the Long/Short Equity hedge fund sector as represented by the Credit Suisse Long/Short Liquid Index (Net), an index which is calculated intraday and “reflects the return of a dynamic basket of 18 liquid, investable market factors.”  Those factors are selected and weighted monthly in accordance with an algorithm that aims to track the performance of the Credit Suisse/Tremont Long/Short Equity Hedge Fund Index.

More information about the Credit Suisse Long/Short Liquid Index (Net) ETN can be found at www.credit-suisse.com/notes.

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