82 FR 16867 - Order Extending a Temporary Exemption From Compliance With Rules 13n-1 to 13n-12 Under the Securities Exchange Act of 1934
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 65 (April 6, 2017)
Federal Register Volume 82, Issue 65 (April 6, 2017)
| Page Range | 16867-16868 | |
| FR Document | 2017-06793 |
[Federal Register Volume 82, Number 65 (Thursday, April 6, 2017)] [Notices] [Pages 16867-16868] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-06793] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80359] Order Extending a Temporary Exemption From Compliance With Rules 13n-1 to 13n-12 Under the Securities Exchange Act of 1934 March 31, 2017. I. Introduction The Securities and Exchange Commission (``Commission'') is extending certain exemptions previously granted in connection with requirements applicable to security-based swap data repositories (``SDR''). The Commission adopted Rules 13n-1 to 13n-12 (the ``SDR Rules'') under the Securities Exchange Act of 1934 (``Exchange Act'') on February 15, 2015, with a compliance date of March 18, 2016.\1\ Following the adoption of the SDR Rules, the Commission, pursuant to its authority in Section 36 of the Exchange Act, granted several temporary exemptions \2\ from compliance with the SDR Rules and also extended exemptions from the provisions of the Dodd-Frank Act set forth in a Commission order providing temporary exemptions and other temporary relief from compliance with certain provisions of the Exchange Act concerning security-based swaps \3\ [[Page 16868]] (``SDR Relief''). The most current temporary extension expires on April 1, 2017.\4\ These actions have provided the Commission with additional time to review and consider the applications for registration as an SDR (the ``Pending SDR Applications'') submitted by DTCC Data Repository (U.S.) LLC (``DDR'') and ICE Trade Vault, LLC (``ICE Trade Vault'') \5\ Commission staff understands that DDR and ICE Trade Vault (collectively the ``SDR Applicants'') intend to file amendments to their respective applications for registration as SDRs. --------------------------------------------------------------------------- \1\ See Exchange Act Release No. 74246 (Feb. 11, 2015), 80 FR 14438 (Mar. 19, 2015). \2\ See infra note 4. \3\ See Temporary Exemptions and Other Temporary Relief, Together with Information on Compliance Dates for New Provisions of the Exchange Act Applicable to Security-Based Swaps, Exchange Act Release No. 64678 (June 15, 2011), 76 FR 36287 (June 22, 2011) (the ``DFA Effective Date Order''). With respect to Commission regulation of SDRs, the DFA Effective Date Order provided exemptions from Exchange Act Sections 13(n)(5)(D)(i), 13(n)(5)(F), 13(n)(5)(G), 13(n)(5)(H), 13(n)(7)(A), 13(n)(7)(B), and 13(n)(7)(C). Each exemption provided by the DFA Effective Date Order will expire on the earlier of (1) the date the Commission grants registration to an SDR and (2) the earliest compliance date set forth in any of the final rules regarding the registration of SDRs. In addition, the Commission granted temporary exemptions from Exchange Act Section 29(b) in connection with the above listed provisions of the Exchange Act until such date as the Commission specifies. \4\ On March 18, 2016, the Commission granted a temporary exemption from the SDR Rules until June 30, 2016. See Exchange Act Release No. 34-77400 (Mar. 18, 2016), 81 FR 15599 (Mar. 23, 2016). On June 30, 2016, the Commission extended the temporary exemption until October 5, 2016. See Exchange Act Release No. 34-78215 (June 30, 2016), 81 FR 44337 (July 7, 2016), corrected at Exchange Act Release No. 34-78215A (June 30, 2016), 81 FR 45336 (July 13, 2016). On September 29, 2016, the Commission again extended the temporary exemption until April 1, 2017. See Exchange Act Release No. 34-78975 (Sept. 29, 2016), 81 FR 69122 (Oct. 5, 2016). \5\ See Exchange Act Release No. 77699 (Apr. 22, 2016), 81 FR 25475 (Apr. 28, 2016) (``ICE Trade Vault Notice'') and Exchange Act Release No. 78216 (June 30, 2016), 81 FR 44379 (July 7, 2016) (``DDR Notice''). During the same period, the Commission amended the SDR Rules on August 29, 2016 to require SDRs to make data available to regulators and other authorities to enable them to share information and more effectively oversee the security-based swap market. See Exchange Act Release No. 78716 (Aug. 29, 2016), 81 FR 60585 (Sep. 2, 2016) (``Data Access Rule''). --------------------------------------------------------------------------- To provide the SDR Applicants additional time to file their amended applications, and for the Commission to review and consider any such amended applications, the Commission is extending the temporary exemption from compliance with the SDR Rules \6\ and the SDR Relief until the later of (i) May 1, 2017 or (ii) for any SDR Applicant \7\ that files with the Commission prior to May 1, 2017 amendments to its Pending SDR Application, September 29, 2017. Given the amount of time that has elapsed since the adoption of the SDR Rules, the Commission currently does not intend to provide any further extensions to the exemption and SDR Relief. --------------------------------------------------------------------------- \6\ This relief applies to the SDR Rules as amended to include the Data Access Rule. \7\ Any extension of the exemption and SDR Relief provided to an SDR Applicant pursuant to this order shall be applicable to any affiliate of the SDR Applicant in the event that any affiliate engages in activity related to SDR functions prior to the applicant's registration. See, e.g., Exhibit F to DDR's Form SDR application and non-confidential exhibits thereto are available at https://www.sec.gov/rules/other/2016/dtcc-data-repository-form-sdr.htm. --------------------------------------------------------------------------- II. Discussion The SDR Rules Release states that SDRs were required to be in compliance with the SDR Rules by March 18, 2016.\8\ The SDR Rules Release also notes that, absent an exemption, any SDR must be registered with the Commission and in compliance with the federal securities laws and the rules and regulations thereunder (including the applicable Dodd-Frank Act provisions and all of the SDR Rules) by that date. --------------------------------------------------------------------------- \8\ See Exchange Act Release No. 74246 (Feb. 11, 2015), 80 FR 14438 (Mar. 19, 2015) (``SDR Rules Release''). --------------------------------------------------------------------------- ICE Trade Vault filed with the Commission a Form SDR seeking registration as an SDR on March 29, 2016, and amended that form on April 18, 2016. The Commission's notice of ICE Trade Vault's application for registration as an SDR was published in the Federal Register on April 28, 2016.\9\ The comment period closed on May 31, 2016. The Commission received six comment letters on the ICE Trade Vault application. --------------------------------------------------------------------------- \9\ See ICE Trade Vault Notice. --------------------------------------------------------------------------- DDR filed with the Commission a Form SDR seeking registration as an SDR on April 6, 2016 and amended that form on April 25, 2016. The Commission's notice of DDR's application for registration as an SDR was published in the Federal Register on July 7, 2016.\10\ The comment period closed on August 8, 2016. The Commission received four comment letters on the DDR application. --------------------------------------------------------------------------- \10\ See DDR Notice. --------------------------------------------------------------------------- The SDR Applicants each have indicated to Commission staff that they intend to file amendments to the Pending SDR Applications. These amendments would provide revised information about the manner in which DDR and ICE Trade Vault propose to operate as SDRs. The Commission urges the SDR Applicants to finalize and file expeditiously any amendments to the Pending SDR Applications by May 1, 2017, in which case the exemption and the SDR Relief will extend to September 29, 2017.\11\ --------------------------------------------------------------------------- \11\ As the Commission explained in the SDR Rules Release, an SDR application ``must include information sufficient to allow the Commission to assess the applicant's ability to comply with the federal securities laws and the rules and regulations thereunder.'' See SDR Rules Release, 80 FR at 14465 n.313 (also noting that ``General Instruction 7 to Form SDR, as adopted, provides that `[a] form that is not prepared and executed in compliance with applicable requirements may be deemed as not acceptable for filing.' . . . If the application is not complete, then the application will not be deemed to have been filed for the Commission's review''). --------------------------------------------------------------------------- Subject to certain exceptions, Section 36 of the Exchange Act authorizes the Commission, by rule, regulation, or order, to exempt, either conditionally or unconditionally, any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of the Exchange Act or any rule or regulation thereunder, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.\12\ The Commission finds that it is necessary and appropriate in the public interest, and consistent with the protection of investors, to grant a temporary exemption from compliance with the SDR Rules and extend the SDR Relief. The comment letters raise important matters for the Commission's consideration. In addition, this is the first opportunity for the Commission to evaluate the policies and procedures of an SDR, which will have significant consequences for the Commission's regulatory regime for security-based swaps and the robustness of transaction reporting. In this regard, these SDR applications raise important issues of first impression for the Commission's consideration. The Commission therefore believes that it is necessary and appropriate in the public interest, and is consistent with the protection of investors, to provide additional time for the Commission to consider the Pending SDR Applications, including comments received and any possible amendments to the Pending SDR Applications. --------------------------------------------------------------------------- \12\ See 15 U.S.C. 78mm. --------------------------------------------------------------------------- III. Conclusion Accordingly, the Commission hereby grants, pursuant to Section 36 of the Exchange Act, a temporary exemption from compliance with the SDR Rules and an extension of the SDR Relief until the later of (i) May 1, 2017 or (ii) for any SDR Applicant that files with the Commission prior to May 1, 2017 amendments to its Pending SDR Application, September 29, 2017. By the Commission. Brent J. Fields, Secretary. [FR Doc. 2017-06793 Filed 4-5-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 65 / Thursday, April 6, 2017 / Notices 16867
is a reduced reliance on distribution III. Date of Effectiveness of the inspection and copying at the principal
requirements to assure appropriate price Proposed Rule Change and Timing for office of the Exchange. All comments
discovery. In addition, a number of ACs Commission Action received will be posted without change;
have listed on Nasdaq Capital Market Within 45 days of the date of the Commission does not edit personal
subject to identical distribution publication of this notice in the Federal identifying information from
requirements to those proposed by the Register or up to 90 days (i) as the submissions. You should submit only
Exchange and there is no evidence that Commission may designate if it finds information that you wish to make
they have proven unfit for exchange available publicly. All submissions
such longer period to be appropriate
trading. It is also important to note that should refer to File Number SR–NYSE–
and publishes its reasons for so finding
any AC that remains listed after 2017–11 and should be submitted on or
or (ii) as to which the self-regulatory
before April 27, 2017.
completing a business combination will organization consents, the Commission
be required to meet the NYSE’s initial will: For the Commission, by the Division of
(A) By order approve or disapprove Trading and Markets, pursuant to delegated
listing requirement of 400 round lot
authority.12
holders at the time of consummation of the proposed rule change, or
(B) institute proceedings to determine Eduardo A. Aleman,
the transaction.11
whether the proposed rule change Assistant Secretary.
While the proposed amended [FR Doc. 2017–06787 Filed 4–5–17; 8:45 am]
should be disapproved.
distribution requirements for the listing BILLING CODE 8011–01–P
of ACs would be lower than those for IV. Solicitation of Comments
other listing applicants, the Exchange Interested persons are invited to
does not believe that this difference is submit written data, views, and SECURITIES AND EXCHANGE
unfairly discriminatory. The Exchange arguments concerning the foregoing, COMMISSION
believes this to be the case because including whether the proposed rule [Release No. 34–80359]
market value-based listing standards are change is consistent with the Act.
largely adopted to ensure adequate Comments may be submitted by any of Order Extending a Temporary
trading liquidity and, consequently, the following methods: Exemption From Compliance With
efficient market pricing of a company’s Rules 13n–1 to 13n–12 Under the
Electronic Comments
securities. As an investment in an AC Securities Exchange Act of 1934
prior to its business combination • Use the Commission’s Internet
comment form (http://www.sec.gov/ March 31, 2017.
represents a right to a pro rata share of
the AC’s assets held in trust, AC shares rules/sro.shtml); or I. Introduction
typically have a trading price very close • Send an email to rule-comments@
The Securities and Exchange
to their liquidation value and the sec.gov. Please include File Number SR–
Commission (‘‘Commission’’) is
liquidity and market efficiency concerns NYSE–2017–11 on the subject line.
extending certain exemptions
relevant to listed operating companies Paper Comments previously granted in connection with
do not arise to the same degree. As such, • Send paper comments in triplicate requirements applicable to security-
the Exchange does not believe it is to Brent J. Fields, Secretary, Securities based swap data repositories (‘‘SDR’’).
unfairly discriminatory to apply and Exchange Commission, 100 F Street The Commission adopted Rules 13n–
different distribution requirements to NE., Washington, DC 20549–1090. 1 to 13n–12 (the ‘‘SDR Rules’’) under
ACs than to other listing applicants. the Securities Exchange Act of 1934
All submissions should refer to File (‘‘Exchange Act’’) on February 15, 2015,
B. Self-Regulatory Organization’s Number SR–NYSE–2017–11. This file with a compliance date of March 18,
Statement on Burden on Competition number should be included on the 2016.1 Following the adoption of the
subject line if email is used. To help the SDR Rules, the Commission, pursuant to
The Exchange does not believe that Commission process and review your its authority in Section 36 of the
the proposed rule change will impose comments more efficiently, please use Exchange Act, granted several
any burden on competition that is not only one method. The Commission will temporary exemptions 2 from
necessary or appropriate in furtherance post all comments on the Commission’s compliance with the SDR Rules and also
of the purposes of the Act. The Internet Web site (http://www.sec.gov/ extended exemptions from the
proposed rule change is designed to rules/sro.shtml). Copies of the provisions of the Dodd-Frank Act set
enable the Exchange to better compete submission, all subsequent forth in a Commission order providing
with Nasdaq Capital Market by adopting amendments, all written statements temporary exemptions and other
distribution requirements that a greater with respect to the proposed rule temporary relief from compliance with
number of ACs will be able to meet at change that are filed with the certain provisions of the Exchange Act
the time of their IPOs. As such, it is Commission, and all written concerning security-based swaps 3
intended to promote competition for the communications relating to the
listing of ACs. proposed rule change between the 12 17 CFR 200.30–3(a)(12).
Commission and any person, other than 1 See Exchange Act Release No. 74246 (Feb. 11,
C. Self-Regulatory Organization’s those that may be withheld from the 2015), 80 FR 14438 (Mar. 19, 2015).
Statement on Comments on the public in accordance with the 2 See infra note 4.
3 See Temporary Exemptions and Other
provisions of 5 U.S.C. 552, will be
mstockstill on DSK3G9T082PROD with NOTICES
Proposed Rule Change Received From
Temporary Relief, Together with Information on
Members, Participants, or Others available for Web site viewing and Compliance Dates for New Provisions of the
printing in the Commission’s Public Exchange Act Applicable to Security-Based Swaps,
No written comments were solicited Reference Room, 100 F Street NE., Exchange Act Release No. 64678 (June 15, 2011), 76
or received with respect to the proposed Washington, DC 20549 on official FR 36287 (June 22, 2011) (the ‘‘DFA Effective Date
rule change. Order’’). With respect to Commission regulation of
business days between the hours of SDRs, the DFA Effective Date Order provided
10:00 a.m. and 3:00 p.m. Copies of the exemptions from Exchange Act Sections
11 See Section 802.01B of the Manual. filing also will be available for Continued
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![16868 Federal Register / Vol. 82, No. 65 / Thursday, April 6, 2017 / Notices
(‘‘SDR Relief’’). The most current Application, September 29, 2017. Given Subject to certain exceptions, Section
temporary extension expires on April 1, the amount of time that has elapsed 36 of the Exchange Act authorizes the
2017.4 These actions have provided the since the adoption of the SDR Rules, the Commission, by rule, regulation, or
Commission with additional time to Commission currently does not intend order, to exempt, either conditionally or
review and consider the applications for to provide any further extensions to the unconditionally, any person, security,
registration as an SDR (the ‘‘Pending exemption and SDR Relief. or transaction, or any class or classes of
SDR Applications’’) submitted by DTCC persons, securities, or transactions, from
II. Discussion
Data Repository (U.S.) LLC (‘‘DDR’’) and any provision or provisions of the
ICE Trade Vault, LLC (‘‘ICE Trade The SDR Rules Release states that
SDRs were required to be in compliance Exchange Act or any rule or regulation
Vault’’) 5 Commission staff understands
with the SDR Rules by March 18, 2016.8 thereunder, to the extent that such
that DDR and ICE Trade Vault
The SDR Rules Release also notes that, exemption is necessary or appropriate
(collectively the ‘‘SDR Applicants’’)
intend to file amendments to their absent an exemption, any SDR must be in the public interest, and is consistent
respective applications for registration registered with the Commission and in with the protection of investors.12 The
as SDRs. compliance with the federal securities Commission finds that it is necessary
To provide the SDR Applicants laws and the rules and regulations and appropriate in the public interest,
additional time to file their amended thereunder (including the applicable and consistent with the protection of
applications, and for the Commission to Dodd-Frank Act provisions and all of investors, to grant a temporary
review and consider any such amended the SDR Rules) by that date. exemption from compliance with the
applications, the Commission is ICE Trade Vault filed with the SDR Rules and extend the SDR Relief.
extending the temporary exemption Commission a Form SDR seeking The comment letters raise important
from compliance with the SDR Rules 6 registration as an SDR on March 29, matters for the Commission’s
and the SDR Relief until the later of (i) 2016, and amended that form on April consideration. In addition, this is the
May 1, 2017 or (ii) for any SDR 18, 2016. The Commission’s notice of first opportunity for the Commission to
Applicant 7 that files with the ICE Trade Vault’s application for evaluate the policies and procedures of
Commission prior to May 1, 2017 registration as an SDR was published in an SDR, which will have significant
amendments to its Pending SDR the Federal Register on April 28, 2016.9 consequences for the Commission’s
The comment period closed on May 31, regulatory regime for security-based
13(n)(5)(D)(i), 13(n)(5)(F), 13(n)(5)(G), 13(n)(5)(H), 2016. The Commission received six swaps and the robustness of transaction
13(n)(7)(A), 13(n)(7)(B), and 13(n)(7)(C). Each comment letters on the ICE Trade Vault
exemption provided by the DFA Effective Date reporting. In this regard, these SDR
Order will expire on the earlier of (1) the date the
application.
DDR filed with the Commission a applications raise important issues of
Commission grants registration to an SDR and (2)
the earliest compliance date set forth in any of the Form SDR seeking registration as an first impression for the Commission’s
final rules regarding the registration of SDRs. In SDR on April 6, 2016 and amended that consideration. The Commission
addition, the Commission granted temporary
form on April 25, 2016. The therefore believes that it is necessary
exemptions from Exchange Act Section 29(b) in and appropriate in the public interest,
connection with the above listed provisions of the Commission’s notice of DDR’s
Exchange Act until such date as the Commission application for registration as an SDR and is consistent with the protection of
specifies. was published in the Federal Register investors, to provide additional time for
4 On March 18, 2016, the Commission granted a
on July 7, 2016.10 The comment period the Commission to consider the Pending
temporary exemption from the SDR Rules until June
30, 2016. See Exchange Act Release No. 34–77400 closed on August 8, 2016. The SDR Applications, including comments
(Mar. 18, 2016), 81 FR 15599 (Mar. 23, 2016). On Commission received four comment received and any possible amendments
June 30, 2016, the Commission extended the letters on the DDR application. to the Pending SDR Applications.
temporary exemption until October 5, 2016. See The SDR Applicants each have
Exchange Act Release No. 34–78215 (June 30,
indicated to Commission staff that they III. Conclusion
2016), 81 FR 44337 (July 7, 2016), corrected at
Exchange Act Release No. 34–78215A (June 30, intend to file amendments to the Accordingly, the Commission hereby
2016), 81 FR 45336 (July 13, 2016). On September Pending SDR Applications. These grants, pursuant to Section 36 of the
29, 2016, the Commission again extended the amendments would provide revised
temporary exemption until April 1, 2017. See Exchange Act, a temporary exemption
information about the manner in which
Exchange Act Release No. 34–78975 (Sept. 29, from compliance with the SDR Rules
2016), 81 FR 69122 (Oct. 5, 2016). DDR and ICE Trade Vault propose to
5 See Exchange Act Release No. 77699 (Apr. 22, operate as SDRs. and an extension of the SDR Relief until
2016), 81 FR 25475 (Apr. 28, 2016) (‘‘ICE Trade The Commission urges the SDR the later of (i) May 1, 2017 or (ii) for any
Vault Notice’’) and Exchange Act Release No. 78216 Applicants to finalize and file SDR Applicant that files with the
(June 30, 2016), 81 FR 44379 (July 7, 2016) (‘‘DDR Commission prior to May 1, 2017
Notice’’). During the same period, the Commission
expeditiously any amendments to the
amended the SDR Rules on August 29, 2016 to Pending SDR Applications by May 1, amendments to its Pending SDR
require SDRs to make data available to regulators 2017, in which case the exemption and Application, September 29, 2017.
and other authorities to enable them to share the SDR Relief will extend to September
information and more effectively oversee the
By the Commission.
security-based swap market. See Exchange Act
29, 2017.11 Brent J. Fields,
Release No. 78716 (Aug. 29, 2016), 81 FR 60585
8 See Exchange Act Release No. 74246 (Feb. 11, Secretary.
(Sep. 2, 2016) (‘‘Data Access Rule’’).
6 This relief applies to the SDR Rules as amended 2015), 80 FR 14438 (Mar. 19, 2015) (‘‘SDR Rules [FR Doc. 2017–06793 Filed 4–5–17; 8:45 am]
to include the Data Access Rule. Release’’). BILLING CODE 8011–01–P
7 Any extension of the exemption and SDR Relief 9 See ICE Trade Vault Notice.
mstockstill on DSK3G9T082PROD with NOTICES
10 See DDR Notice.
provided to an SDR Applicant pursuant to this
order shall be applicable to any affiliate of the SDR 11 As the Commission explained in the SDR Rules
Applicant in the event that any affiliate engages in Release, an SDR application ‘‘must include is not prepared and executed in compliance with
activity related to SDR functions prior to the information sufficient to allow the Commission to
applicable requirements may be deemed as not
applicant’s registration. See, e.g., Exhibit F to DDR’s assess the applicant’s ability to comply with the
Form SDR application and non-confidential federal securities laws and the rules and regulations acceptable for filing.’ . . . If the application is not
exhibits thereto are available at https:// thereunder.’’ See SDR Rules Release, 80 FR at 14465 complete, then the application will not be deemed
www.sec.gov/rules/other/2016/dtcc-data-repository- n.313 (also noting that ‘‘General Instruction 7 to to have been filed for the Commission’s review’’).
form-sdr.htm. Form SDR, as adopted, provides that ‘[a] form that 12 See 15 U.S.C. 78mm.
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Document Created: 2017-04-06 01:46:32
Document Modified: 2017-04-06 01:46:32
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 82 FR 16867 |
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