81_FR_60824 81 FR 60653 - Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Notice of Order With Respect to FINRA Rule 2030

81 FR 60653 - Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Notice of Order With Respect to FINRA Rule 2030

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 171 (September 2, 2016)

Page Range60653-60654
FR Document2016-20889

The Securities and Exchange Commission (``Commission'' or ``SEC'') intends to issue an order pursuant to section 206 of the Investment Advisers Act of 1940 (the ``Advisers Act'') and rule 206(4)- 5 thereunder (the ``SEC Pay to Play Rule'') finding that Financial Industry Regulatory Authority (``FINRA'') rule 2030 (the ``FINRA Pay to Play Rule''), which was approved by the Commission on August 25, 2016, imposes substantially equivalent or more stringent restrictions on brokers-dealers than the SEC Pay to Play Rule imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule.

Federal Register, Volume 81 Issue 171 (Friday, September 2, 2016) 
[Federal Register Volume 81, Number 171 (Friday, September 2, 2016)]
[Proposed Rules]
[Pages 60653-60654]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20889]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 275

[Release No. IA-4511; File No. S7-16-16]


Political Contributions by Certain Investment Advisers: Ban on 
Third-Party Solicitation; Notice of Order With Respect to FINRA Rule 
2030

AGENCY: Securities and Exchange Commission.

ACTION: Notice of intent to issue order.

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SUMMARY: The Securities and Exchange Commission (``Commission'' or 
``SEC'') intends to issue an order pursuant to section 206 of the 
Investment Advisers Act of 1940 (the ``Advisers Act'') and rule 206(4)-
5 thereunder (the ``SEC Pay to Play Rule'') finding that Financial 
Industry Regulatory Authority (``FINRA'') rule 2030 (the ``FINRA Pay to 
Play Rule''), which was approved by the Commission on August 25, 2016, 
imposes substantially equivalent or more stringent restrictions on 
brokers-dealers than the SEC Pay to Play Rule imposes on investment 
advisers and is consistent with the objectives of the SEC Pay to Play 
Rule.

DATES: Hearing requests should be received by the Commission by 5:30 
p.m. on September 19, 2016.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street 
NE., Washington, DC 20549-1090.

FOR FURTHER INFORMATION CONTACT: Sirimal R. Mukerjee, Senior Counsel, 
Melissa Roverts Harke, Senior Special Counsel, or Sara Cortes, 
Assistant Director, at (202) 551-6787 or [email protected], Investment 
Adviser Regulation Office, Division of Investment Management, 
Securities and Exchange Commission, 100 F Street NE., Washington, DC 
20549-8549.

SUPPLEMENTARY INFORMATION:

Hearing or Notification of Hearing

    An order will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary. Hearing requests should be received by the Commission by 
5:30 p.m. on September 19, 2016. Pursuant to rule 0-5 under the 
Advisers Act, hearing requests should state the nature of the writer's 
interest, any facts bearing upon the desirability of a hearing on the 
matter, the reason for the request, and the issues contested. Persons 
who wish to be notified of a hearing may request notification by 
writing to the Commission's Secretary.
    The Commission intends to issue an order under the Advisers Act.\1\
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    \1\ 15 U.S.C. 80b. Unless otherwise noted, all references to 
statutory sections are to the Advisers Act, and all references to 
rules under the Advisers Act, including rule 206(4)-5, are to Title 
17, Part 275 of the Code of Federal Regulations [17 CFR part 275].
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I. Background

    The Commission adopted the SEC Pay to Play Rule [17 CFR 275.206(4)-
5] under the Advisers Act [15 U.S.C. 80b] to prohibit an investment 
adviser from providing advisory services for compensation to a 
government client for two years after the adviser or certain of its 
executives or employees (``covered associates'') make a contribution to 
certain elected officials or candidates.\2\ Rule 206(4)-5 also 
prohibits an adviser and its covered associates from providing or 
agreeing to provide, directly or indirectly, payment to any third-party 
for a solicitation of advisory business from any government entity on 
behalf of such adviser, unless such third-party is a ``regulated 
person'' (``third-party solicitor ban'').\3\ Rule 206(4)-5 defines a 
``regulated person'' as an SEC-registered investment adviser,\4\ a 
registered broker or dealer subject to pay to play restrictions adopted 
by a registered national securities association that prohibit members 
from engaging in distribution or solicitation activities if certain 
political contributions have been made,\5\ or a registered municipal 
advisor subject to pay to play restrictions adopted by the Municipal 
Securities Rulemaking Board (the ``MSRB'') that prohibit members from 
engaging in distribution or solicitation activities if certain 
political contributions have been made.\6\ In addition, in order for a 
broker-dealer or municipal advisor to be a regulated person under rule 
206(4)-5, the Commission must find, by order, that these pay to play 
rules: (i) Impose substantially equivalent or more stringent 
restrictions on broker-dealers or municipal advisors than the SEC Pay 
to Play Rule imposes on investment

[[Page 60654]]

advisers; and (ii) are consistent with the objectives of the SEC Pay to 
Play Rule.\7\
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    \2\ Political Contributions by Certain Investment Advisers, 
Investment Advisers Act Rel. No. 3043 (July 1, 2010) [75 FR 41018 
(July 14, 2010)] (``SEC Pay to Play Rule Release'').
    \3\ See id. at section II.B.2.(b). See also 17 CFR 275.206(4)-
5(a)(2)(i)(A).
    \4\ See 17 CFR 275.206(4)-5(f)(9)(i).
    \5\ See 17 CFR 275.206(4)-5(f)(9)(ii). While rule 206(4)-5 
applies to any registered national securities association, FINRA is 
currently the only registered national securities association under 
section 19(a) of the Securities Exchange Act of 1934 [15 U.S.C. 
78s(b)] (the ``Exchange Act''). As such, for convenience, we will 
refer directly to FINRA in this Notice when describing the exception 
for certain broker-dealers from the third-party solicitor ban.
    \6\ See 17 CFR 275.206(4)-5(f)(9)(iii).
    \7\ See 17 CFR 275.206(4)-5(f)(9).
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    Rule 206(4)-5 became effective on September 13, 2010 and the 
compliance date for the third-party solicitor ban was set to September 
13, 2011.\8\ When the Commission added municipal advisors to the 
definition of regulated person, the Commission also extended the third-
party solicitor ban's compliance date to June 13, 2012.\9\ In the 
absence of a final municipal advisor registration rule, the Commission 
extended the third-party solicitor ban's compliance date from June 13, 
2012 to nine months after the compliance date of the final rule,\10\ 
which was July 31, 2015.\11\ On June 25, 2015, the Commission issued 
notice of the July 31, 2015 compliance date.\12\
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    \8\ See SEC Pay to Play Rule Release, supra footnote 2, at 
section III.
    \9\ See Rules Implementing Amendments to the Investment Advisers 
Act of 1940, Investment Advisers Act Rel. No. 3221 (June 22, 2011) 
[76 FR 42950 (July 19, 2011)], at section II.D.1.
    \10\ See Political Contributions by Certain Investment Advisers: 
Ban on Third-Party Solicitation; Extension of Compliance Date, 
Investment Advisers Act Rel. No. 3418 (June 8, 2012) [77 FR 35263 
(June 13, 2012)].
    \11\ The final date on which a municipal advisor must file a 
complete application for registration was October 31, 2014. See 
Registration of Municipal Advisors, Exchange Act Rel. No. 70462 
(Sept. 20, 2013) [78 FR 67468 (Nov. 12, 2013)], at section V.
    \12\ See Political Contributions by Certain Investment Advisers: 
Ban on Third-Party Solicitation; Notice of Compliance Date, 
Investment Advisers Act Rel. No. 4129 (June 25, 2015) [80 FR 37538 
(July 2, 2015)]. On June 25, 2015, the Division of Investment 
Management published an FAQ that provides that the Division would 
not recommend enforcement action to the Commission against any 
investment adviser or its covered associates for the payment to any 
third person to solicit a government entity for investment advisory 
services until the later of (i) the effective date of the FINRA Pay 
to Play Rule or (ii) the effective date of a pay to play rule 
adopted by the MSRB. See http://www.sec.gov/divisions/investment/pay-to-play-faq.htm#1.4.
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    On December 16, 2015, FINRA filed with the Commission the proposed 
rule change relating to the FINRA Pay to Play Rule, which the 
Commission published for notice and comment in the Federal Register on 
December 30, 2015 pursuant to section 19(b)(1) of the Exchange Act and 
rule 19b-4 thereunder.\13\ The Commission received ten comment letters, 
from nine different commenters, in response to the FINRA Pay to Play 
Rule Notice. On February 8, 2016, FINRA extended the time period by 
which the Commission must approve or disapprove the FINRA Pay to Play 
Rule or institute proceedings to determine whether to approve or 
disapprove the rule change to March 29, 2016. On March 28, 2016, FINRA 
filed a letter with the Commission stating that it had considered the 
comments received by the Commission in response to the FINRA Pay to 
Play Rule Notice and that FINRA is not intending to make changes to the 
proposed rule text in response to comments received. On March 29, 2016, 
pursuant to delegated authority, the Commission published an order 
instituting proceedings under section 19(b)(2)(B) of the Exchange Act 
to determine whether to approve or disapprove the FINRA Pay to Play 
Rule, and solicited additional comment. The Commission received an 
additional four comments in response to the order instituting 
proceedings. On July 6, 2016, FINRA submitted a letter responding to 
all comments and to the order instituting proceedings. After 
considering the proposed rule change, the comments received and FINRA's 
responses to the comments, the Commission issued an order on August 25, 
2016, approving the proposed rule change pursuant to section 19(b)(2) 
of the Exchange Act.\14\
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    \13\ See Self-Regulatory Organizations; Financial Industry 
Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule 
Change To Adopt FINRA Rule 2030 and FINRA Rule 4580 To Establish 
``Pay-To-Play'' and Related Rules, Exchange Act Rel. No. 76767 (Dec. 
24, 2015) [80 FR 81650 (Dec. 30, 2015)] (the ``FINRA Pay to Play 
Rule Notice'').
    \14\ See Self-Regulatory Organizations; Financial Industry 
Regulatory Authority, Inc.; Order Approving a Proposed Rule Change 
to Adopt FINRA Rule 2030 and FINRA Rule 4580 to Establish ``Pay-To-
Play'' and Related Rules, Exchange Act Rel. No. 78683 (Aug. 25, 
2016).
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II. Discussion of Order

    Pursuant to section 206 of the Advisers Act and rule 206(4)-
5(f)(9)(ii)(B) thereunder, the Commission is providing notice \15\ that 
the Commission intends to issue an order finding that the FINRA Pay to 
Play Rule (i) imposes substantially equivalent or more stringent 
restrictions on brokers-dealers than the SEC Pay to Play Rule imposes 
on investment advisers and (ii) is consistent with the objectives of 
the SEC Pay to Play Rule. The FINRA Pay to Play Rule imposes 
substantially similar requirements for its member firms as the SEC Pay 
to Play Rule imposes on investment advisers. For example, the FINRA Pay 
to Play Rule:
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    \15\ See section 211(c) of the Advisers Act (requiring the 
Commission to provide appropriate notice and opportunity for hearing 
for orders issued under the Advisers Act).
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     Prohibits a covered member from engaging in distribution 
or solicitation activities for compensation with a government entity on 
behalf of an investment adviser that provides or is seeking to provide 
investment advisory services to such government entity within two years 
after a contribution to an official of the government entity is made by 
the covered member or a covered associate (including a person who 
becomes a covered associate within two years or, under certain 
circumstances, six months after the contribution is made); \16\
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    \16\ See FINRA Pay to Play Rule Notice, supra footnote 13, at 
81651.
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     Prohibits a covered member or covered associate from 
coordinating or soliciting any person or political action committee to 
make any (i) contribution to an official of a government entity in 
respect of which the covered member is engaging in, or seeking to 
engage in, distribution or solicitation activities on behalf of an 
investment adviser or (ii) payment to a political party of a state or 
locality of a government entity with which the covered member is 
engaging in, or seeking to engage in, distribution or solicitation 
activities on behalf of an investment adviser; \17\
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    \17\ See id. at 81653.
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     Provides that it shall be a violation of the rules for any 
covered member or any of its covered associates to do anything 
indirectly that, if done directly, would result in a violation of the 
rule; \18\
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    \18\ See id. at 81654.
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     Provides that a covered member that engages in 
distribution or solicitation activities with a government entity on 
behalf of a covered investment pool in which a government entity 
invests or is solicited to invest shall be treated as though the 
covered member was engaging in or seeking to engage in distribution or 
solicitation activities with the government entity on behalf of the 
investment adviser to the covered investment pool directly; and \19\
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    \19\ See id.
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     Provides exceptions under, and an exemption provision in 
respect of, the rule similar to those in rule 206(4)-5.\20\
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    \20\ See id. In addition, FINRA adopted rule 4580 that requires 
covered members to maintain books and records related to the FINRA 
Pay to Play Rule.
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    The Commission believes that the rule imposes substantially 
equivalent or more stringent restrictions on broker-dealers than rule 
206(4)-5 imposes on investment advisers and would be consistent with 
the objectives of rule 206(4)-5.

    By the Commission.

    Dated: August 25, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-20889 Filed 9-1-16; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Proposed Rules 60653 by the municipal advisor or a municipal SECURITIES AND EXCHANGE The Commission intends to issue an advisor professional of the municipal COMMISSION order under the Advisers Act.1 advisor; 16 I. Background 17 CFR Part 275 • Prohibit municipal advisors and municipal advisor professionals from The Commission adopted the SEC Pay [Release No. IA–4511; File No. S7–16–16] to Play Rule [17 CFR 275.206(4)–5] soliciting contributions, or coordinating contributions, to certain officials of a under the Advisers Act [15 U.S.C. 80b] Political Contributions by Certain to prohibit an investment adviser from municipal entity with which the Investment Advisers: Ban on Third- municipal advisor is engaging, or providing advisory services for Party Solicitation; Notice of Order With compensation to a government client for seeking to engage, in municipal Respect to FINRA Rule 2030 two years after the adviser or certain of advisory business; 17 AGENCY: Securities and Exchange its executives or employees (‘‘covered • Prohibit municipal advisors and Commission. associates’’) make a contribution to certain municipal advisor professionals certain elected officials or candidates.2 ACTION: Notice of intent to issue order. from soliciting payments, or Rule 206(4)–5 also prohibits an adviser coordinating payments, to political SUMMARY: The Securities and Exchange and its covered associates from parties of states and localities with Commission (‘‘Commission’’ or ‘‘SEC’’) providing or agreeing to provide, which the municipal advisor is engaging intends to issue an order pursuant to directly or indirectly, payment to any in, or seeking to engage in, municipal section 206 of the Investment Advisers third-party for a solicitation of advisory advisory business; 18 Act of 1940 (the ‘‘Advisers Act’’) and business from any government entity on • Prohibit municipal advisors and rule 206(4)–5 thereunder (the ‘‘SEC Pay behalf of such adviser, unless such municipal advisor professionals from to Play Rule’’) finding that Financial third-party is a ‘‘regulated person’’ Industry Regulatory Authority (‘‘third-party solicitor ban’’).3 Rule committing indirect violations of the (‘‘FINRA’’) rule 2030 (the ‘‘FINRA Pay 206(4)–5 defines a ‘‘regulated person’’ as MSRB Pay to Play Rule; 19 to Play Rule’’), which was approved by an SEC-registered investment adviser,4 a • Extend applicable interpretive the Commission on August 25, 2016, registered broker or dealer subject to pay guidance under the existing MSRB pay imposes substantially equivalent or to play restrictions adopted by a to play rule to municipal advisors; 20 more stringent restrictions on brokers- registered national securities association and dealers than the SEC Pay to Play Rule that prohibit members from engaging in • Include a new defined term imposes on investment advisers and is distribution or solicitation activities if (‘‘municipal advisor third-party consistent with the objectives of the SEC certain political contributions have been solicitor’’) for municipal advisors that Pay to Play Rule. made,5 or a registered municipal advisor undertake a solicitation of a municipal DATES: Hearing requests should be subject to pay to play restrictions entity on behalf of a third-party dealer, received by the Commission by 5:30 adopted by the Municipal Securities p.m. on September 19, 2016. Rulemaking Board (the ‘‘MSRB’’) that municipal advisor or investment prohibit members from engaging in adviser. Certain aspects of the rule will ADDRESSES: Secretary, Securities and distribution or solicitation activities if apply to this distinct type of municipal Exchange Commission, 100 F Street NE., certain political contributions have been advisor. Washington, DC 20549–1090. made.6 In addition, in order for a The Commission believes that the rule FOR FURTHER INFORMATION CONTACT: broker-dealer or municipal advisor to be imposes substantially equivalent or Sirimal R. Mukerjee, Senior Counsel, a regulated person under rule 206(4)–5, more stringent restrictions on municipal Melissa Roverts Harke, Senior Special the Commission must find, by order, advisors than rule 206(4)–5 imposes on Counsel, or Sara Cortes, Assistant that these pay to play rules: (i) Impose investment advisers and would be Director, at (202) 551–6787 or IArules@ substantially equivalent or more consistent with the objectives of rule sec.gov, Investment Adviser Regulation stringent restrictions on broker-dealers Office, Division of Investment or municipal advisors than the SEC Pay 206(4)–5. Management, Securities and Exchange to Play Rule imposes on investment By the Commission. Commission, 100 F Street NE., Dated: August 25, 2016. Washington, DC 20549–8549. 1 15 U.S.C. 80b. Unless otherwise noted, all Brent J. Fields, SUPPLEMENTARY INFORMATION: references to statutory sections are to the Advisers Act, and all references to rules under the Advisers Secretary. Hearing or Notification of Hearing Act, including rule 206(4)–5, are to Title 17, Part [FR Doc. 2016–20890 Filed 9–1–16; 8:45 am] 275 of the Code of Federal Regulations [17 CFR part An order will be issued unless the 275]. BILLING CODE 8011–01–P Commission orders a hearing. Interested 2 Political Contributions by Certain Investment persons may request a hearing by Advisers, Investment Advisers Act Rel. No. 3043 writing to the Commission’s Secretary. (July 1, 2010) [75 FR 41018 (July 14, 2010)] (‘‘SEC Pay to Play Rule Release’’). Hearing requests should be received by 3 See id. at section II.B.2.(b). See also 17 CFR the Commission by 5:30 p.m. on 275.206(4)–5(a)(2)(i)(A). September 19, 2016. Pursuant to rule 0– 4 See 17 CFR 275.206(4)–5(f)(9)(i). 5 under the Advisers Act, hearing 5 See 17 CFR 275.206(4)–5(f)(9)(ii). While rule requests should state the nature of the 206(4)–5 applies to any registered national Lhorne on DSK30JT082PROD with PROPOSALS writer’s interest, any facts bearing upon securities association, FINRA is currently the only registered national securities association under 16 MSRB Pay to Play Release, supra footnote 13, the desirability of a hearing on the section 19(a) of the Securities Exchange Act of 1934 at 81712. matter, the reason for the request, and [15 U.S.C. 78s(b)] (the ‘‘Exchange Act’’). As such, 17 Id. the issues contested. Persons who wish for convenience, we will refer directly to FINRA in to be notified of a hearing may request this Notice when describing the exception for 18 Id. certain broker-dealers from the third-party solicitor 19 Id. notification by writing to the ban. 20 Id. Commission’s Secretary. 6 See 17 CFR 275.206(4)–5(f)(9)(iii). VerDate Sep<11>2014 15:10 Sep 01, 2016 Jkt 238001 PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 E:\FR\FM\02SEP1.SGM 02SEP1

60654 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Proposed Rules advisers; and (ii) are consistent with the determine whether to approve or covered associate (including a person objectives of the SEC Pay to Play Rule.7 disapprove the rule change to March 29, who becomes a covered associate within Rule 206(4)–5 became effective on 2016. On March 28, 2016, FINRA filed two years or, under certain September 13, 2010 and the compliance a letter with the Commission stating that circumstances, six months after the date for the third-party solicitor ban was it had considered the comments contribution is made); 16 set to September 13, 2011.8 When the received by the Commission in response Commission added municipal advisors • Prohibits a covered member or to the FINRA Pay to Play Rule Notice to the definition of regulated person, the and that FINRA is not intending to make covered associate from coordinating or Commission also extended the third- changes to the proposed rule text in soliciting any person or political action party solicitor ban’s compliance date to response to comments received. On committee to make any (i) contribution June 13, 2012.9 In the absence of a final March 29, 2016, pursuant to delegated to an official of a government entity in municipal advisor registration rule, the authority, the Commission published an respect of which the covered member is Commission extended the third-party order instituting proceedings under engaging in, or seeking to engage in, solicitor ban’s compliance date from section 19(b)(2)(B) of the Exchange Act distribution or solicitation activities on June 13, 2012 to nine months after the to determine whether to approve or behalf of an investment adviser or (ii) compliance date of the final rule,10 disapprove the FINRA Pay to Play Rule, payment to a political party of a state or which was July 31, 2015.11 On June 25, and solicited additional comment. The locality of a government entity with 2015, the Commission issued notice of Commission received an additional four which the covered member is engaging the July 31, 2015 compliance date.12 comments in response to the order in, or seeking to engage in, distribution On December 16, 2015, FINRA filed instituting proceedings. On July 6, 2016, or solicitation activities on behalf of an with the Commission the proposed rule FINRA submitted a letter responding to investment adviser; 17 change relating to the FINRA Pay to all comments and to the order Play Rule, which the Commission instituting proceedings. After • Provides that it shall be a violation published for notice and comment in considering the proposed rule change, of the rules for any covered member or the Federal Register on December 30, the comments received and FINRA’s any of its covered associates to do 2015 pursuant to section 19(b)(1) of the responses to the comments, the anything indirectly that, if done Exchange Act and rule 19b–4 Commission issued an order on August directly, would result in a violation of thereunder.13 The Commission received 25, 2016, approving the proposed rule the rule; 18 ten comment letters, from nine different change pursuant to section 19(b)(2) of • Provides that a covered member commenters, in response to the FINRA the Exchange Act.14 that engages in distribution or Pay to Play Rule Notice. On February 8, solicitation activities with a government 2016, FINRA extended the time period II. Discussion of Order entity on behalf of a covered investment by which the Commission must approve Pursuant to section 206 of the pool in which a government entity or disapprove the FINRA Pay to Play Advisers Act and rule 206(4)– Rule or institute proceedings to 5(f)(9)(ii)(B) thereunder, the invests or is solicited to invest shall be Commission is providing notice 15 that treated as though the covered member 7 See 17 CFR 275.206(4)–5(f)(9). the Commission intends to issue an was engaging in or seeking to engage in 8 See SEC Pay to Play Rule Release, supra order finding that the FINRA Pay to Play distribution or solicitation activities footnote 2, at section III. Rule (i) imposes substantially with the government entity on behalf of 9 See Rules Implementing Amendments to the equivalent or more stringent restrictions the investment adviser to the covered Investment Advisers Act of 1940, Investment Advisers Act Rel. No. 3221 (June 22, 2011) [76 FR on brokers-dealers than the SEC Pay to investment pool directly; and 19 42950 (July 19, 2011)], at section II.D.1. Play Rule imposes on investment • Provides exceptions under, and an 10 See Political Contributions by Certain advisers and (ii) is consistent with the exemption provision in respect of, the Investment Advisers: Ban on Third-Party objectives of the SEC Pay to Play Rule. Solicitation; Extension of Compliance Date, rule similar to those in rule 206(4)–5.20 Investment Advisers Act Rel. No. 3418 (June 8, The FINRA Pay to Play Rule imposes substantially similar requirements for its The Commission believes that the rule 2012) [77 FR 35263 (June 13, 2012)]. 11 The final date on which a municipal advisor member firms as the SEC Pay to Play imposes substantially equivalent or must file a complete application for registration was Rule imposes on investment advisers. more stringent restrictions on broker- October 31, 2014. See Registration of Municipal dealers than rule 206(4)–5 imposes on Advisors, Exchange Act Rel. No. 70462 (Sept. 20, For example, the FINRA Pay to Play 2013) [78 FR 67468 (Nov. 12, 2013)], at section V. Rule: investment advisers and would be 12 See Political Contributions by Certain • Prohibits a covered member from consistent with the objectives of rule Investment Advisers: Ban on Third-Party engaging in distribution or solicitation 206(4)–5. Solicitation; Notice of Compliance Date, Investment activities for compensation with a Advisers Act Rel. No. 4129 (June 25, 2015) [80 FR By the Commission. government entity on behalf of an 37538 (July 2, 2015)]. On June 25, 2015, the Dated: August 25, 2016. Division of Investment Management published an investment adviser that provides or is FAQ that provides that the Division would not seeking to provide investment advisory Brent J. Fields, recommend enforcement action to the Commission services to such government entity Secretary. against any investment adviser or its covered within two years after a contribution to [FR Doc. 2016–20889 Filed 9–1–16; 8:45 am] associates for the payment to any third person to solicit a government entity for investment advisory an official of the government entity is BILLING CODE 8011–01–P services until the later of (i) the effective date of the made by the covered member or a FINRA Pay to Play Rule or (ii) the effective date of a pay to play rule adopted by the MSRB. See http:// 14 See Self-Regulatory Organizations; Financial Lhorne on DSK30JT082PROD with PROPOSALS 16 See FINRA Pay to Play Rule Notice, supra www.sec.gov/divisions/investment/pay-to-play- Industry Regulatory Authority, Inc.; Order faq.htm#1.4. Approving a Proposed Rule Change to Adopt footnote 13, at 81651. 13 See Self-Regulatory Organizations; Financial FINRA Rule 2030 and FINRA Rule 4580 to Establish 17 See id. at 81653. Industry Regulatory Authority, Inc.; Notice of Filing ‘‘Pay-To-Play’’ and Related Rules, Exchange Act 18 See id. at 81654. of a Proposed Rule Change To Adopt FINRA Rule Rel. No. 78683 (Aug. 25, 2016). 19 See id. 2030 and FINRA Rule 4580 To Establish ‘‘Pay-To- 15 See section 211(c) of the Advisers Act 20 See id. In addition, FINRA adopted rule 4580 Play’’ and Related Rules, Exchange Act Rel. No. (requiring the Commission to provide appropriate 76767 (Dec. 24, 2015) [80 FR 81650 (Dec. 30, 2015)] notice and opportunity for hearing for orders issued that requires covered members to maintain books (the ‘‘FINRA Pay to Play Rule Notice’’). under the Advisers Act). and records related to the FINRA Pay to Play Rule. VerDate Sep<11>2014 15:10 Sep 01, 2016 Jkt 238001 PO 00000 Frm 00006 Fmt 4702 Sfmt 9990 E:\FR\FM\02SEP1.SGM 02SEP1


Document Created: 2018-02-09 11:55:52
Document Modified: 2018-02-09 11:55:52
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionNotice of intent to issue order.
DatesHearing requests should be received by the Commission by 5:30 p.m. on September 19, 2016.
ContactSirimal R. Mukerjee, Senior Counsel, Melissa Roverts Harke, Senior Special Counsel, or Sara Cortes, Assistant Director, at (202) 551-6787 or [email protected], Investment Adviser Regulation Office, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-8549.
FR Citation81 FR 60653 
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