81 FR 66526 - Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Order With Respect to FINRA Rule 2030

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 188 (September 28, 2016)

Page Range		66526-66526
FR Document		2016-23225

The Securities and Exchange Commission (``Commission'' or ``SEC'') is issuing an order finding that Financial Industry Regulatory Authority (``FINRA'') rule 2030 (the ``FINRA Pay to Play Rule'') imposes substantially equivalent or more stringent restrictions on broker-dealers than rule 206(4)-5 (the ``SEC Pay to Play Rule) under the Investment Advisers Act of 1940 (the ``Advisers Act'') imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule.

Federal Register, Volume 81 Issue 188 (Wednesday, September 28, 2016)

[Federal Register Volume 81, Number 188 (Wednesday, September 28, 2016)]
[Rules and Regulations]
[Page 66526]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-23225]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 275

[Release No. IA-4532; File No. S7-16-16]


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

AGENCY: Securities and Exchange Commission.

ACTION: Order.

-----------------------------------------------------------------------

SUMMARY: The Securities and Exchange Commission (``Commission'' or 
``SEC'') is issuing an order finding that Financial Industry Regulatory 
Authority (``FINRA'') rule 2030 (the ``FINRA Pay to Play Rule'') 
imposes substantially equivalent or more stringent restrictions on 
broker-dealers than rule 206(4)-5 (the ``SEC Pay to Play Rule) under 
the Investment Advisers Act of 1940 (the ``Advisers Act'') imposes on 
investment advisers and is consistent with the objectives of the SEC 
Pay to Play Rule.

DATES: This Order was issued by the Commission on September 20, 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: The SEC Pay to Play Rule [17 CFR 275.206(4)-
5] under the Advisers Act [15 U.S.C. 80b] prohibits 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. 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''). Rule 206(4)-5 defines a ``regulated 
person'' as an SEC-registered investment adviser, 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, or a registered municipal advisor subject 
to pay to play restrictions adopted by the Municipal Securities 
Rulemaking Board that prohibit members from engaging in distribution or 
solicitation activities if certain political contributions have been 
made. 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 impose substantially equivalent or 
more stringent restrictions on broker-dealers or municipal advisors 
than the SEC Pay to Play Rule imposes on investment advisers and are 
consistent with the objectives of the SEC Pay to Play Rule.
    On December 16, 2015, the Financial Industry Regulatory Authority 
(``FINRA'') proposed a rule change (Exchange Act Rel. No. 76767 (Dec. 
24, 2015) [80 FR 81650 (Dec. 30, 2015)]) to adopt the FINRA Pay to Play 
Rule, which would establish pay to play rules for its member firms. On 
August 25, 2016, the Commission approved the FINRA Pay to Play Rule 
(Exchange Act Rel. No. 78683 (Aug. 25, 2016) [81 FR 60051 (Aug. 31, 
2016)]).
    On August 25, 2016, the Commission also issued a notice of intent 
to issue an order (Investment Advisers Act Rel. No. 4511 (Aug. 25, 
2016) [81 FR 60653 (Sept. 2, 2016)]) finding that the FINRA Pay to Play 
Rule 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. The notice gave interested persons an opportunity to request a 
hearing and stated that an order would be issued unless a hearing was 
ordered. The Commission has not received a request for a hearing.
    Accordingly, the Commission hereby finds that the FINRA Pay to Play 
Rule imposes substantially equivalent or more stringent restrictions on 
broker-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.

    By the Commission.

    Dated: September 20, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-23225 Filed 9-27-16; 8:45 am]
 BILLING CODE 8011-01-P

66526 Federal Register / Vol. 81, No. 188 / Wednesday, September 28, 2016 / Rules and Regulations

ASI Service Kit SK406–137, dated December Financial Industry Regulatory Authority advisers and are consistent with the
3, 2015 (which superseded ASI Aviation (‘‘FINRA’’) rule 2030 (the ‘‘FINRA Pay objectives of the SEC Pay to Play Rule.
Service Kit SKRA406–12–Rev. 2, dated to Play Rule’’) imposes substantially On December 16, 2015, the Financial
December 3, 2015), and ASI Aviation Service equivalent or more stringent restrictions Industry Regulatory Authority
Kit SKRA406–13–Rev. 2, dated December 3,
2015, for related information. You may
on broker-dealers than rule 206(4)–5 (‘‘FINRA’’) proposed a rule change
examine the MCAI in the AD docket on the (the ‘‘SEC Pay to Play Rule) under the (Exchange Act Rel. No. 76767 (Dec. 24,
Internet at https://www.regulations.gov/ Investment Advisers Act of 1940 (the 2015) [80 FR 81650 (Dec. 30, 2015)]) to
document?D=FAA-2016-8161-0002. ‘‘Advisers Act’’) imposes on investment adopt the FINRA Pay to Play Rule,
advisers and is consistent with the which would establish pay to play rules
(i) Material Incorporated by Reference
objectives of the SEC Pay to Play Rule. for its member firms. On August 25,
(1) The Director of the Federal Register DATES: This Order was issued by the 2016, the Commission approved the
approved the incorporation by reference
Commission on September 20, 2016. FINRA Pay to Play Rule (Exchange Act
(IBR) of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR ADDRESSES: Secretary, Securities and Rel. No. 78683 (Aug. 25, 2016) [81 FR
part 51. Exchange Commission, 100 F Street NE., 60051 (Aug. 31, 2016)]).
(2) You must use this service information Washington, DC 20549–1090. On August 25, 2016, the Commission
as applicable to do the actions required by FOR FURTHER INFORMATION CONTACT: also issued a notice of intent to issue an
this AD, unless this AD specifies otherwise. Sirimal R. Mukerjee, Senior Counsel, order (Investment Advisers Act Rel. No.
(i) ASI Aviation Service Bulletin CAB01– Melissa Roverts Harke, Senior Special 4511 (Aug. 25, 2016) [81 FR 60653
5 Rev 2, dated December 3, 2015. (Sept. 2, 2016)]) finding that the FINRA
Counsel, or Sara Cortes, Assistant
(ii) Reserved. Pay to Play Rule imposes substantially
(3) For ASI Aviation service information Director, at (202) 551–6787 or IArules@
sec.gov, Investment Adviser Regulation equivalent or more stringent restrictions
identified in this AD, contact ASI Aviation,
Aérodrome de Reims Prunay, 51360 Prunay, Office, Division of Investment on brokers-dealers than the SEC Pay to
France; telephone: +33 3 26 48 46 84; fax: Management, Securities and Exchange Play Rule imposes on investment
+33 3 26 49 18 57; email: contact@asi- Commission, 100 F Street NE., advisers and is consistent with the
aviation.fr; Internet: http://asi-aviation.fr/ Washington, DC 20549–8549. objectives of the SEC Pay to Play Rule.
page-Accueil.html. SUPPLEMENTARY INFORMATION: The SEC The notice gave interested persons an
(4) You may view this service information Pay to Play Rule [17 CFR 275.206(4)–5] opportunity to request a hearing and
at the FAA, Small Airplane Directorate, 901 stated that an order would be issued
Locust, Kansas City, Missouri 64106. For
under the Advisers Act [15 U.S.C. 80b]
prohibits an investment adviser from unless a hearing was ordered. The
information on the availability of this
providing advisory services for Commission has not received a request
material at the FAA, call (816) 329–4148. In
addition, you can access this service compensation to a government client for for a hearing.
information on the Internet at http:// two years after the adviser or certain of Accordingly, the Commission hereby
www.regulations.gov by searching for and its executives or employees (‘‘covered finds that the FINRA Pay to Play Rule
locating Docket No. FAA–2016–8161. associates’’) make a contribution to imposes substantially equivalent or
(5) You may view this service information certain elected officials or candidates. more stringent restrictions on broker-
that is incorporated by reference at the Rule 206(4)–5 also prohibits an adviser dealers than the SEC Pay to Play Rule
National Archives and Records imposes on investment advisers and is
and its covered associates from
Administration (NARA). For information on consistent with the objectives of the SEC
the availability of this material at NARA, call providing or agreeing to provide,
directly or indirectly, payment to any Pay to Play Rule.
202–741–6030, or go to: http://
www.archives.gov/federal-register/cfr/ibr- third-party for a solicitation of advisory By the Commission.
locations.html. business from any government entity on Dated: September 20, 2016.
Issued in Kansas City, Missouri, on behalf of such adviser, unless such Brent J. Fields,
September 16, 2016. third-party is a ‘‘regulated person’’ Secretary.
Pat Mullen, (‘‘third-party solicitor ban’’). Rule
[FR Doc. 2016–23225 Filed 9–27–16; 8:45 am]
206(4)–5 defines a ‘‘regulated person’’ as
Acting Manager, Small Airplane Directorate, BILLING CODE 8011–01–P
Aircraft Certification Service. an SEC-registered investment adviser, a
registered broker or dealer subject to pay
[FR Doc. 2016–22830 Filed 9–27–16; 8:45 am]
to play restrictions adopted by a SECURITIES AND EXCHANGE
BILLING CODE 4910–13–P
registered national securities association COMMISSION
that prohibit members from engaging in
distribution or solicitation activities if 17 CFR Part 275
SECURITIES AND EXCHANGE certain political contributions have been
COMMISSION made, or a registered municipal advisor [Release No. IA–4531; File No. S7–17–16]
subject to pay to play restrictions
17 CFR Part 275 Political Contributions by Certain
adopted by the Municipal Securities
Investment Advisers: Ban on Third-
[Release No. IA–4532; File No. S7–16–16] Rulemaking Board that prohibit
Party Solicitation; Order With Respect
members from engaging in distribution
Political Contributions by Certain to MSRB Rule G–37
or solicitation activities if certain
Investment Advisers: Ban on Third- political contributions have been made. AGENCY: Securities and Exchange
Party Solicitation; Order With Respect In addition, in order for a broker-dealer Commission.
to FINRA Rule 2030 or municipal advisor to be a regulated ACTION: Order.
sradovich on DSK3GMQ082PROD with RULES

AGENCY: Securities and Exchange person under rule 206(4)–5, the
Commission. Commission must find, by order, that SUMMARY: The Securities and Exchange
ACTION: Order. these pay to play rules impose Commission (‘‘Commission’’ or ‘‘SEC’’)
substantially equivalent or more is issuing an order finding that
SUMMARY: The Securities and Exchange stringent restrictions on broker-dealers Municipal Securities Rulemaking Board
Commission (‘‘Commission’’ or ‘‘SEC’’) or municipal advisors than the SEC Pay (‘‘MSRB’’) rule G–37 (the ‘‘MSRB Pay to
is issuing an order finding that to Play Rule imposes on investment Play Rule’’) imposes substantially

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Document Created: 2016-09-28 01:07:36
Document Modified: 2016-09-28 01:07:36

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Order.
Dates		This Order was issued by the Commission on September 20, 2016.
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.
FR Citation		81 FR 66526