82 FR 21472 - Technical Amendments to Form ADV and Form ADV-W
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 88 (May 9, 2017)
Federal Register Volume 82, Issue 88 (May 9, 2017)
| Page Range | 21472-21475 | |
| FR Document | 2017-09331 |
[Federal Register Volume 82, Number 88 (Tuesday, May 9, 2017)] [Rules and Regulations] [Pages 21472-21475] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09331] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 279 [Release No. IA-4698] Technical Amendments to Form ADV and Form ADV-W AGENCY: Securities and Exchange Commission. ACTION: Final rule; technical amendments. ----------------------------------------------------------------------- SUMMARY: The Securities and Exchange Commission (the ``Commission'' or ``SEC'') is making technical amendments to Form ADV under the Investment Advisers Act of 1940 (``Advisers Act'') to reflect the enactment of a Wyoming state law regulating investment advisers. Form ADV is the form advisers use to register with the Commission and the state securities regulatory authorities. The Commission is also making similar amendments to Form ADV-W, the form advisers use to withdraw from registration with the Commission or the states. DATES: Effective July 1, 2017. FOR FURTHER INFORMATION CONTACT: Bridget D. Farrell, Senior Counsel or Melissa Roverts Harke, Senior Special Counsel 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 Commission is adopting technical amendments to Form ADV [17 CFR 279.1] and Form ADV-W [17 CFR 279.2] under the Advisers Act to correct and update what will be outdated references in those forms to the state of Wyoming due to the enactment by Wyoming of legislation regulating investment advisers, which will be effective as of July 1, 2017.\1\ --------------------------------------------------------------------------- \1\ Wyoming Uniform Securities Act, Wyo. Stat. Ann. Sec. Sec. 17-4-101, 17-4-403 through 17-4-412 (effective July 1, 2017) (``Wyoming Securities Act''). --------------------------------------------------------------------------- An investment adviser must register with the Commission unless it is prohibited from registering under section 203A of the Advisers Act or relies on an exemption from registration under section 203.\2\ Under section 203A(a)(1) of the Advisers Act, an adviser that is regulated or required to be regulated as an investment adviser in the state in which it maintains its principal office and place of business is prohibited from registering with the Commission unless the adviser has assets under management of not less than $25 million, or advises an investment company registered under the Investment Company Act of 1940.\3\ Under section 203A(a)(2) of the Advisers Act, an investment adviser with between $25 million and $100 million of assets under management (``mid- sized adviser'') is also prohibited from registering with the Commission if [[Page 21473]] that adviser is required to be registered as an investment adviser in the state in which it maintains its principal office and place of business and, if registered, would be subject to examination as an investment adviser.\4\ These provisions make the states the primary regulators of smaller advisers and the Commission the primary regulator of larger advisers.\5\ However, all investment advisers--regardless of the amount of assets they manage--must register with the Commission if their principal office and place of business is located in a state that has not enacted a statute regulating advisers.\6\ --------------------------------------------------------------------------- \2\ 15 U.S.C. 80b-3a; 15 U.S.C. 80b-3. \3\ 15 U.S.C. 80b-3a(a)(1). \4\ 15 U.S.C. 80b-3a(a)(2). Section 203A(a)(2) also provides exceptions to the prohibition on Commission registration of state- registered mid-sized advisers for advisers to registered investment companies or business development companies under the Investment Company Act of 1940 and advisers that would otherwise be required to register with 15 or more states. \5\ See Rules Implementing Amendments to the Investment Advisers Act of 1940, Investment Advisers Act Release No. 3221 (June 22, 2011) [76 FR 42950 (July 19, 2011)]. \6\ See Rules Implementing Amendments to the Investment Advisers Act of 1940, Investment Advisers Act Release No. 1633, section I (May 15, 1997) [62 FR 28112 (May 22, 1997)]. --------------------------------------------------------------------------- Recently, the state of Wyoming enacted a statute regulating investment advisers that will become effective July 1, 2017.\7\ Further, our staff has contacted the state securities authority for the state of Wyoming, the Wyoming Secretary of State Compliance Division, which has advised our staff that mid-sized advisers with a principal office and place of business in Wyoming will be required to be registered with the state and will be subject to examination. As a consequence, by operation of the Wyoming statute, as of July 1, 2017, an investment adviser with a principal office and place of business in Wyoming may not register with the Commission unless it has greater than $100 million in assets under management, advises a registered investment company, or is eligible to rely on one of the exemptions from the prohibition on registration contained in rule 203A-2.\8\ --------------------------------------------------------------------------- \7\ Wyoming Securities Act Sec. Sec. 17-4-403-412. \8\ Absent eligibility for Commission registration, these advisers are subject to the registration provisions of Wyoming law. In addition, advisers ineligible for Commission registration that have their principal office and place of business in Wyoming may be required to register in one or more other states, subject to the laws of those states. --------------------------------------------------------------------------- As a result of this Wyoming statute, the Commission is making technical amendments to Form ADV as well as to Form ADV-W to reflect the addition of the state of Wyoming to the group of states with investment adviser regulation. Specifically, any adviser filing an initial Form ADV or an amendment to an existing Form ADV on or after July 1, 2017 will not be able to select Item 2.A.(3) of Form ADV, which currently indicates having a principal office and place of business in Wyoming (which does not regulate advisers) as a basis for Commission registration. Further, a checkbox for ``WY'' will be added to Item 2.C. of Form ADV to enable state notice filings for Commission-registered advisers. Finally, a checkbox for ``WY'' will also be added to section (b) of Form ADV-W, concerning withdrawals from state investment adviser registration.\9\ On October 1, 2017, Item 2.A.(3) will be redesignated as ``Reserved.'' The same change will be made to Schedule R, Section 2.A.(3) for relying advisers.\10\ --------------------------------------------------------------------------- \9\ Item 2.A.(3) on Form ADV will be disabled as a basis for registration in the Investment Adviser Registration Depository (``IARD'') on July 1, 2017, when the Wyoming statute becomes effective. Additionally, on that date, IARD will be programmed to accept Wyoming notice filings, and to enable withdrawal from Wyoming registration. However, IARD will not be programmed to replace the text in Item 2.A.(3) with ``Reserved'' or to make the amendments to Schedule R discussed in this paragraph until October 1, 2017, in order to implement those amendments concurrently with the unrelated amendments to the form adopted recently. See Form ADV and Investment Advisers Act Rules, Investment Advisers Act Release No. 4509 (Aug. 25, 2016) (``Release 4509'') [81 FR 60418 (Sept. 1, 2016)] (compliance date October 1, 2017). \10\ Schedule R is a schedule to Form ADV that may be used by private fund advisers that are registered with the Commission and operate a single advisory business through multiple legal entities to file a single registration form, subject to conditions. See Release 4509. --------------------------------------------------------------------------- Procedural and Other Matters Under the Administrative Procedure Act (``APA''), notice of proposed rulemaking is not required when the agency, for good cause, finds ``that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.'' \11\ The Commission is adopting technical amendments to correct and eliminate what will automatically become outdated provisions in Part 1A of Form ADV and Form ADV-W as a result of legislation enacted by the state of Wyoming, which will be effective July 1, 2017. These amendments are therefore ministerial in nature. Accordingly, the Commission finds good cause that publishing the amendments for comment is unnecessary.\12\ --------------------------------------------------------------------------- \11\ 5 U.S.C. 553(b). \12\ The amendments also do not require analysis under the Regulatory Flexibility Act (``RFA''). See 5 U.S.C. 601(2) (for purposes of RFA analysis, the term ``rule'' generally means any rule for which the agency publishes a general notice of proposed rulemaking). --------------------------------------------------------------------------- We do not believe that these ministerial amendments to Forms ADV and ADV-W, to reflect the addition of Wyoming to the group of states with investment adviser regulation, make any substantive modifications to any existing collection of information requirements or impose any new substantive recordkeeping or information collection requirements within the meaning of the Paperwork Reduction Act of 1995 (``PRA'').\13\ Accordingly, we are not revising any burden and cost estimates in connection with these amendments.\14\ --------------------------------------------------------------------------- \13\ 44 U.S.C. 3501 et seq. As noted in the Economic Analysis below, we recognize that approximately 35 investment advisers would likely be affected by the new Wyoming state law. Thus, while the enactment of the Wyoming state law may impact a small number of Commission-registered small and mid-sized investment advisers that have a principal office and place of business in Wyoming, we believe that the amendments adopted today do not impose substantive new burdens as they may marginally reduce the overall population of respondents and therefore will not affect the current overall burden estimates for affected forms. \14\ The most recent Paperwork Reduction Act analysis for Form ADV, which is pending approval by the Office of Management and Budget (OMB Control No. 3235-0049), is based upon the number of registered advisers and exempt reporting advisers as of May 1, 2016. --------------------------------------------------------------------------- Economic Analysis As a result of the Wyoming statute, and its interaction with the Advisers Act and rules thereunder, small and mid-sized investment advisers who have a principal office and place of business in Wyoming, and cannot assert another basis for continuing to remain registered with the Commission, will be required to register with the Wyoming Secretary of State, deregister with the Commission, and be subject to Wyoming oversight as of July 1, 2017.\15\ This transition of these Commission-registered investment advisers to Wyoming oversight is a result of a Wyoming statute and therefore does not necessitate additional rule changes by the Commission, but will cause Forms ADV and ADV-W to contain outdated provisions that reflect the prior status of Wyoming investment advisers who had been able to register with the Commission before July 1, 2017. This rulemaking updates those forms accordingly. In considering the economic effects of this rulemaking, we primarily focus on any effects that changes to the forms might have on Commission-registered advisers filing Form ADV and ADV-W. However, we recognize that we are making these changes to the forms in light of the [[Page 21474]] broader transition of certain Wyoming investment advisers to Wyoming oversight--a transition that will entail a set of economic effects separate from the changes to the forms--and we briefly discuss the effects of this broader transition. --------------------------------------------------------------------------- \15\ Specifically, for small investment advisers, the impact of the transition to state oversight is the result of the interaction of the Wyoming statute with section 203A(a) and our 1997 rule, see supra note 6; for mid-sized investment advisers, it is the result of section 203A(a) as amended by Section 410 of the Dodd-Frank Act, and our 2011 rule, see supra note 5. --------------------------------------------------------------------------- As of February 1, 2017, there are 40 investment advisers that selected Item 2.A.(3) of Form ADV, indicating that the adviser has a principal office and place of business in the state of Wyoming. Of these 40 investment advisers, four advisers have identified themselves as those with regulatory assets under management of $100 million or more by checking Item 2.A.(1) on Form ADV and will continue to be required to register with the Commission, regardless of the change in the statute enacted by the state of Wyoming. However, based on regulatory assets under management (Item 5.F.(2)(c) on Form ADV), there is one additional adviser with regulatory assets under management of $100 million or more that did not identify itself by Item 2.A.(1) that we therefore anticipate would remain registered with the Commission. Only one adviser currently selecting Item 2.A.(3) also selected Item 2.A.(2) on Form ADV as of February 1, 2017, indicating that it is a ``mid-sized adviser'' with regulatory assets under management of more than $25 million but less than $100 million; however, based on regulatory assets under management, we identified seven additional mid- sized advisers that did not select Item 2.A.(2). We anticipate these eight advisers would need to change their registrations to state registration, absent an alternative basis for remaining registered with the Commission. The remaining 27 advisers report regulatory assets under management of less than $25 million and checked only Item 2.A.(3) as a basis for registration with the Commission and would need to change their registrations to state registration absent an alternative basis for remaining registered with the Commission. Thus, there are approximately 35 advisers that have not indicated an alternative basis for remaining registered with the Commission after the Wyoming statute becomes effective on July 1, 2017,\16\ and that we therefore assume will be required to register with the state of Wyoming and withdraw from registration with the Commission.\17\ These 35 investment advisers collectively reported $530 million in regulatory assets under management as of February 1, 2017. --------------------------------------------------------------------------- \16\ We arrive at 35 mid-sized and small advisers by two means. First, we take the 40 Wyoming advisers and subtract the five advisers who either have checked the large-size box (Item 2.A.(1)) or who have assets under management that would seem to permit them to check Item 2.A.(1). Alternatively, we sum together the adviser who checked the mid-sized box (Item 2.A.(2)) together with firms that have assets under management that would appear to make them mid-sized (seven), as well as those that have assets under management that would seem to make them small advisers (27), none of which have checked any additional box that would constitute an alternative basis for remaining registered. \17\ As these 35 small and mid-sized advisers may have an alternative basis for remaining registered with the Commission (e.g., they serve as an adviser to a registered investment company or business development company, or are a pension consultant), 35 is likely to be an upper bound; however, we assume that all 35 advisers will be required to shift for purposes of understanding the possible magnitude of the change. --------------------------------------------------------------------------- The Commission has analyzed the effects of the changes to the forms as a result of the Wyoming legislation and anticipates only nominal benefits or costs, if any, to arise from the technical amendments to Form ADV and Form ADV-W to reflect the change in Wyoming law. The removal of Item 2.A.(3) from Form ADV will prevent investment advisers from improperly checking the box previously used to identify investment advisers from the state of Wyoming, making clear to such advisers that they are no longer eligible to register with the Commission on the basis of having a principal office and place of business in Wyoming. Correspondingly, amendments to Schedule R of Form ADV to remove Item 2.A.(3) from the Schedule will have effects for relying advisers subject to umbrella registration similar to the effects for advisers that do not use Schedule R but respond to Item 2.A.(3) of Form ADV. Further, Item 2.C of Form ADV will now be amended to include Wyoming check boxes for Commission-registered advisers to send notice filings to Wyoming. Finally, Form ADV-W will be revised to allow Wyoming registrants to withdraw their registration with Wyoming as necessary. As Item 2.A.(3) would not be relevant to investment advisers without a principal office and place of business in the state of Wyoming, we do not believe that changes to the forms will impose any costs on these investment advisers to update their systems or otherwise review or understand the impact of the changes.\18\ While some advisers that remain registered with the Commission may need to check the notice filing box to send notice filings to Wyoming, we anticipate that the burden to check the box will be nominal, if any. The changes to the forms also do not directly impose any costs on the advisers who must change their registration as a result of the Wyoming statute. The Commission further anticipates that these technical amendments to Form ADV and Form ADV-W will have minimal, if any, effects on efficiency, competition, or capital formation because the amendments reflect only ministerial changes to Forms ADV and ADV-W. --------------------------------------------------------------------------- \18\ To the extent that filers have fewer questions to research when completing the form, this removal of Item 2.A.(3) may reduce the costs associated with filing activities for investment advisers with a principal office and place of business in the state of Wyoming. --------------------------------------------------------------------------- Separately, we recognize that approximately 35 investment advisers will be required to transition to Wyoming oversight as a self-executing result of the Wyoming statute's interaction with our existing statutes and rules. We acknowledge that this transition resulting from the Wyoming statute will have economic effects on these entities. In our 2011 rule implementing Section 410 of the Dodd-Frank Act, which transitioned mid-sized investment advisers to state oversight, we discussed certain economic effects that result from transitioning a class of advisers from federal to state oversight.\19\ These economic effects include costs incurred by transitioning advisers to make the necessary filings to register with the state and to withdraw from Commission registration,\20\ and to comply with the state's ongoing reporting and inspections regime. Similarly, Wyoming advisers will be required to calculate and monitor assets under management going forward to determine if Commission registration (or deregistration, for those currently exceeding the threshold) would be required. At the same time, these advisers transitioning as a result of the Wyoming statute may experience cost savings associated with no longer being subject to the Commission's regulatory regime for registered investment advisers. Because the amendments affect only 35 small to mid-sized advisers that have principal offices and a place of business in the state of Wyoming out of a total 12,176 investment advisers currently filing Form ADV, the Commission does not anticipate that, taken together, these changes would have a significant effect on efficiency, competition, or capital formation. --------------------------------------------------------------------------- \19\ See supra note 5. \20\ ``The state'' here principally refers to Wyoming. We recognize that advisers transitioning to Wyoming registration may be required to register with additional states as well, which may impose additional costs on such advisers. --------------------------------------------------------------------------- Statutory Authority The Commission is adopting technical amendments to Form ADV under section 19(a) of the Securities Act of 1933 [15 U.S.C. 77s(a)], sections 23(a) [[Page 21475]] and 28(e)(2) of the Securities Exchange Act of 1934 [15 U.S.C. 78w(a) and 78bb(e)(2)], section 319(a) of the Trust Indenture Act of 1939 [15 U.S.C. 7sss(a)], section 38(a) of the Investment Company Act of 1940 [15 U.S.C. 80a-37(a)], and sections 203(c)(1), 204 and 211(a) of the Investment Advisers Act of 1940 [15 U.S.C. 80b-3(c)(1), 80b-4, and 80b- 11(a)]. The Commission is adopting technical amendments to Form ADV-W (17 CFR 279.2) under the authority set forth in sections 203(h), 204 and 211(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(h), 80b- 4, and 80b-11)). List of Subjects in 17 CFR Part 279 Reporting and recordkeeping requirements; Securities. Text of Rule and Form Amendments For the reasons set forth in the preamble, title 17, chapter II of the Code of Federal Regulations is amended as follows: PART 279--FORMS PRESCRIBED UNDER THE INVESTMENT ADVISERS ACT OF 1940 0 1. The authority citation for part 279 continues to read as follows: Authority: The Investment Advisers Act of 1940, 15 U.S.C. 80b-1, et seq. Sec. 279.1 [Amended] 0 2. Form ADV (referenced in Sec. 279.1) is amended by: 0 a. Removing the phrase ``have your principal office and place of business in Wyoming (which does not regulate advisers);'' from Part 1A, Item 2.A.(3) and adding in its place ``Reserved''; 0 b. Adding ``[ballot] WY'' after ``[ballot] WI'' in the table of Part 1A, Item 2.C.; and 0 c. Removing the phrase ``have your principal office and place of business in Wyoming (which does not regulate advisers);'' from Part 1A, Schedule R, Section 2.A.(3) and adding in its place ``Reserved''. Note: The text of Form ADV does not and the amendments will not appear in the Code of Federal Regulations. Sec. 279.2 [Amended] 0 3. Form ADV-W (referenced in Sec. 279.2) is amended by adding ``[ballot] WY'' after ``[ballot] WI'' in the table in paragraph (b) of the Status section. Note: The text of Form ADV-W does not and the amendments will not appear in the Code of Federal Regulations. By the Commission. Dated: May 4, 2017. Brent J. Fields, Secretary. [FR Doc. 2017-09331 Filed 5-8-17; 8:45 am] BILLING CODE 8011-01-P
![21472 Federal Register / Vol. 82, No. 88 / Tuesday, May 9, 2017 / Rules and Regulations
current FAA training philosophy and The Amendment Final rule; technical
ACTION:
added new FAA procedures not In consideration of the foregoing, the amendments.
previously part of the MU–2B training Federal Aviation Administration
under SFAR No. 108. The final rule SUMMARY: The Securities and Exchange
corrects chapter I of title 14, Code of Commission (the ‘‘Commission’’ or
required all MU–2B training programs Federal Regulations as follows:
to meet the requirements of subpart N ‘‘SEC’’) is making technical
of part 91 and to be approved by the amendments to Form ADV under the
PART 91—GENERAL OPERATING AND Investment Advisers Act of 1940
FAA to ensure safety is maintained. FLIGHT RULES
After the final rule was published, the (‘‘Advisers Act’’) to reflect the
FAA discovered an error in the ■ 1. The authority citation for part 91 enactment of a Wyoming state law
regulatory text of the rule. The FAA was continues to read as follows: regulating investment advisers. Form
also notified that the publisher of the ADV is the form advisers use to register
Authority: 49 U.S.C. 106(f), 106(g), 1155, with the Commission and the state
MHI MU–2B Checklists, which were 40101, 40103, 40105, 40113, 40120, 44101,
incorporated by reference in the final securities regulatory authorities. The
44111, 44701, 44704, 44709, 44711, 44712,
rule, changed on March 31, 2017. 44715, 44716, 44717, 44722, 46306, 46315,
Commission is also making similar
Because the publisher’s contact 46316, 46504, 46506–46507, 47122, 47508, amendments to Form ADV–W, the form
information is codified in § 91.1721(b), 47528–47531, 47534, articles 12 and 29 of the advisers use to withdraw from
the regulatory text of paragraph (b) was Convention on International Civil Aviation registration with the Commission or the
incorrect as of March 31, 2017. These (61 Stat. 1180), (126 Stat. 11). states.
errors, and the corresponding ■ 2. Revise paragraph (a) of § 91.1715 to DATES: Effective July 1, 2017.
corrections, are as follows: read as follows: FOR FURTHER INFORMATION CONTACT:
Bridget D. Farrell, Senior Counsel or
Corrections § 91.1715 Currency requirements and Melissa Roverts Harke, Senior Special
flight review. Counsel at (202) 551–6787 or IArules@
1. Takeoff and Landing Currency
Requirements in § 91.1715(a) (a) The takeoff and landing currency sec.gov, Investment Adviser Regulation
requirements of § 61.57 of this chapter Office, Division of Investment
Section 91.1715(a) currently reads, in must be maintained in the Mitsubishi Management, Securities and Exchange
part, ‘‘takeoff landing currency MU–2B series airplane. Takeoff and Commission, 100 F Street NE.,
requirements.’’ The FAA is adding the landings in other multiengine airplanes Washington, DC 20549–8549.
word ‘‘and’’ to correct an inadvertent do not meet the takeoff and landing SUPPLEMENTARY INFORMATION: The
omission in the regulation. currency requirements for the Commission is adopting technical
2. Publisher’s Contact Information in Mitsubishi MU–2B series plane. Takeoff amendments to Form ADV [17 CFR
§ 91.1721(b) and landings in either the short-body or 279.1] and Form ADV–W [17 CFR 279.2]
long-body Mitsubishi MU–2B model under the Advisers Act to correct and
The MHI MU–2B Cockpit Checklists airplane may be credited toward takeoff
are incorporated by reference in update what will be outdated references
and landing currency for both in those forms to the state of Wyoming
§ 91.1721. Section 91.1721(b) contains Mitsubishi MU–2B model groups.
the contact information of the company due to the enactment by Wyoming of
who publishes these checklists. When * * * * * legislation regulating investment
the final rule was published, Turbine ■ 3. In § 91.1721, revise the introductory advisers, which will be effective as of
Aircraft Services, Inc. (TAS) was text of paragraph (b) to read as follows: July 1, 2017.1
contracted by Mitsubishi Heavy An investment adviser must register
Industries America, Inc. (MHIA) to print § 91.1721 Incorporation by reference. with the Commission unless it is
and distribute the MU–2B Cockpit * * * * * prohibited from registering under
Checklists. Therefore, § 91.1721(b) (b) Mitsubishi Heavy Industries section 203A of the Advisers Act or
currently contains TAS’s contact America, Inc., 4951 Airport Parkway, relies on an exemption from registration
information. The FAA was notified, Suite 530, Addison, TX 75001. under section 203.2 Under section
however, that beginning on March 31, * * * * * 203A(a)(1) of the Advisers Act, an
2017, MHIA will be responsible for adviser that is regulated or required to
Issued under authority provided by be regulated as an investment adviser in
printing and distributing the MU–2B (consult AGC) 49 U.S.C. 106(f), 44701(a), and
Cockpit Checklists. This correction the state in which it maintains its
44703 in Washington, DC, on May 2, 2017.
document updates the contact principal office and place of business is
Lirio Liu, prohibited from registering with the
information in § 91.1721(b) to reflect the Director, Office of Rulemaking.
new publisher. Commission unless the adviser has
[FR Doc. 2017–09316 Filed 5–8–17; 8:45 am] assets under management of not less
Because these amendments are
technical in nature and result in no
BILLING CODE 4910–13–P than $25 million, or advises an
substantive changes, the FAA finds that investment company registered under
the notice and public procedures under the Investment Company Act of 1940.3
5 U.S.C. 553(b) are unnecessary. For the SECURITIES AND EXCHANGE Under section 203A(a)(2) of the
same reason, the FAA finds good cause COMMISSION Advisers Act, an investment adviser
exists under 5 U.S.C. 553(d)(3) to make with between $25 million and $100
the amendments effective in less than 17 CFR Part 279 million of assets under management
(‘‘mid-sized adviser’’) is also prohibited
nlaroche on DSK30NT082PROD with RULES
30 days.
[Release No. IA–4698] from registering with the Commission if
List of Subjects in 14 CFR Part 91
Technical Amendments to Form ADV 1 Wyoming Uniform Securities Act, Wyo. Stat.
Aircraft, Airmen, Airports, Aviation and Form ADV–W Ann. §§ 17–4–101, 17–4–403 through 17–4–412
safety, Freight, Incorporation by (effective July 1, 2017) (‘‘Wyoming Securities Act’’).
reference, Reporting and recordkeeping AGENCY:Securities and Exchange 2 15 U.S.C. 80b–3a; 15 U.S.C. 80b–3.
requirements. Commission. 3 15 U.S.C. 80b–3a(a)(1).
VerDate Sep<11>2014 14:51 May 08, 2017 Jkt 241001 PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1](https://thefederalregister.org/doc/82_FR_21560/page/1.svg)
![Federal Register / Vol. 82, No. 88 / Tuesday, May 9, 2017 / Rules and Regulations 21473
that adviser is required to be registered or after July 1, 2017 will not be able to Wyoming to the group of states with
as an investment adviser in the state in select Item 2.A.(3) of Form ADV, which investment adviser regulation, make any
which it maintains its principal office currently indicates having a principal substantive modifications to any
and place of business and, if registered, office and place of business in Wyoming existing collection of information
would be subject to examination as an (which does not regulate advisers) as a requirements or impose any new
investment adviser.4 These provisions basis for Commission registration. substantive recordkeeping or
make the states the primary regulators of Further, a checkbox for ‘‘WY’’ will be information collection requirements
smaller advisers and the Commission added to Item 2.C. of Form ADV to within the meaning of the Paperwork
the primary regulator of larger advisers.5 enable state notice filings for Reduction Act of 1995 (‘‘PRA’’).13
However, all investment advisers— Commission-registered advisers. Accordingly, we are not revising any
regardless of the amount of assets they Finally, a checkbox for ‘‘WY’’ will also burden and cost estimates in connection
manage—must register with the be added to section (b) of Form ADV– with these amendments.14
Commission if their principal office and W, concerning withdrawals from state Economic Analysis
place of business is located in a state investment adviser registration.9 On
that has not enacted a statute regulating October 1, 2017, Item 2.A.(3) will be As a result of the Wyoming statute,
advisers.6 redesignated as ‘‘Reserved.’’ The same and its interaction with the Advisers
Recently, the state of Wyoming change will be made to Schedule R, Act and rules thereunder, small and
enacted a statute regulating investment Section 2.A.(3) for relying advisers.10 mid-sized investment advisers who
advisers that will become effective July have a principal office and place of
1, 2017.7 Further, our staff has contacted Procedural and Other Matters business in Wyoming, and cannot assert
the state securities authority for the state Under the Administrative Procedure another basis for continuing to remain
of Wyoming, the Wyoming Secretary of Act (‘‘APA’’), notice of proposed registered with the Commission, will be
State Compliance Division, which has rulemaking is not required when the required to register with the Wyoming
advised our staff that mid-sized advisers agency, for good cause, finds ‘‘that Secretary of State, deregister with the
with a principal office and place of notice and public procedure thereon are Commission, and be subject to
business in Wyoming will be required to impracticable, unnecessary, or contrary Wyoming oversight as of July 1, 2017.15
be registered with the state and will be to the public interest.’’ 11 The This transition of these Commission-
subject to examination. As a Commission is adopting technical registered investment advisers to
consequence, by operation of the amendments to correct and eliminate Wyoming oversight is a result of a
Wyoming statute, as of July 1, 2017, an what will automatically become Wyoming statute and therefore does not
investment adviser with a principal outdated provisions in Part 1A of Form necessitate additional rule changes by
office and place of business in Wyoming ADV and Form ADV–W as a result of the Commission, but will cause Forms
may not register with the Commission legislation enacted by the state of ADV and ADV–W to contain outdated
unless it has greater than $100 million Wyoming, which will be effective July provisions that reflect the prior status of
in assets under management, advises a 1, 2017. These amendments are Wyoming investment advisers who had
registered investment company, or is therefore ministerial in nature. been able to register with the
eligible to rely on one of the exemptions Accordingly, the Commission finds Commission before July 1, 2017. This
from the prohibition on registration good cause that publishing the rulemaking updates those forms
contained in rule 203A–2.8 amendments for comment is accordingly. In considering the
As a result of this Wyoming statute, unnecessary.12 economic effects of this rulemaking, we
the Commission is making technical We do not believe that these primarily focus on any effects that
amendments to Form ADV as well as to ministerial amendments to Forms ADV changes to the forms might have on
Form ADV–W to reflect the addition of and ADV–W, to reflect the addition of Commission-registered advisers filing
the state of Wyoming to the group of Form ADV and ADV–W. However, we
states with investment adviser 9 Item 2.A.(3) on Form ADV will be disabled as recognize that we are making these
regulation. Specifically, any adviser a basis for registration in the Investment Adviser changes to the forms in light of the
filing an initial Form ADV or an Registration Depository (‘‘IARD’’) on July 1, 2017,
when the Wyoming statute becomes effective.
amendment to an existing Form ADV on Additionally, on that date, IARD will be
13 44 U.S.C. 3501 et seq. As noted in the
Economic Analysis below, we recognize that
programmed to accept Wyoming notice filings, and approximately 35 investment advisers would likely
4 15 U.S.C. 80b–3a(a)(2). Section 203A(a)(2) also
to enable withdrawal from Wyoming registration. be affected by the new Wyoming state law. Thus,
provides exceptions to the prohibition on However, IARD will not be programmed to replace while the enactment of the Wyoming state law may
Commission registration of state-registered mid- the text in Item 2.A.(3) with ‘‘Reserved’’ or to make impact a small number of Commission-registered
sized advisers for advisers to registered investment the amendments to Schedule R discussed in this small and mid-sized investment advisers that have
companies or business development companies paragraph until October 1, 2017, in order to a principal office and place of business in
under the Investment Company Act of 1940 and implement those amendments concurrently with Wyoming, we believe that the amendments adopted
advisers that would otherwise be required to the unrelated amendments to the form adopted today do not impose substantive new burdens as
register with 15 or more states. recently. See Form ADV and Investment Advisers they may marginally reduce the overall population
5 See Rules Implementing Amendments to the Act Rules, Investment Advisers Act Release No. of respondents and therefore will not affect the
Investment Advisers Act of 1940, Investment 4509 (Aug. 25, 2016) (‘‘Release 4509’’) [81 FR 60418 current overall burden estimates for affected forms.
Advisers Act Release No. 3221 (June 22, 2011) [76 (Sept. 1, 2016)] (compliance date October 1, 2017). 14 The most recent Paperwork Reduction Act
FR 42950 (July 19, 2011)]. 10 Schedule R is a schedule to Form ADV that
analysis for Form ADV, which is pending approval
6 See Rules Implementing Amendments to the may be used by private fund advisers that are by the Office of Management and Budget (OMB
Investment Advisers Act of 1940, Investment registered with the Commission and operate a Control No. 3235–0049), is based upon the number
Advisers Act Release No. 1633, section I (May 15, single advisory business through multiple legal of registered advisers and exempt reporting advisers
1997) [62 FR 28112 (May 22, 1997)]. entities to file a single registration form, subject to as of May 1, 2016.
nlaroche on DSK30NT082PROD with RULES
7 Wyoming Securities Act §§ 17–4–403–412. conditions. See Release 4509. 15 Specifically, for small investment advisers, the
8 Absent eligibility for Commission registration, 11 5 U.S.C. 553(b).
impact of the transition to state oversight is the
these advisers are subject to the registration 12 The amendments also do not require analysis result of the interaction of the Wyoming statute
provisions of Wyoming law. In addition, advisers under the Regulatory Flexibility Act (‘‘RFA’’). See with section 203A(a) and our 1997 rule, see supra
ineligible for Commission registration that have 5 U.S.C. 601(2) (for purposes of RFA analysis, the note 6; for mid-sized investment advisers, it is the
their principal office and place of business in term ‘‘rule’’ generally means any rule for which the result of section 203A(a) as amended by Section 410
Wyoming may be required to register in one or more agency publishes a general notice of proposed of the Dodd-Frank Act, and our 2011 rule, see supra
other states, subject to the laws of those states. rulemaking). note 5.
VerDate Sep<11>2014 14:51 May 08, 2017 Jkt 241001 PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1](https://thefederalregister.org/doc/82_FR_21560/page/2.svg)
![21474 Federal Register / Vol. 82, No. 88 / Tuesday, May 9, 2017 / Rules and Regulations
broader transition of certain Wyoming assume will be required to register with to the forms also do not directly impose
investment advisers to Wyoming the state of Wyoming and withdraw any costs on the advisers who must
oversight—a transition that will entail a from registration with the change their registration as a result of
set of economic effects separate from the Commission.17 These 35 investment the Wyoming statute. The Commission
changes to the forms—and we briefly advisers collectively reported $530 further anticipates that these technical
discuss the effects of this broader million in regulatory assets under amendments to Form ADV and Form
transition. management as of February 1, 2017. ADV–W will have minimal, if any,
As of February 1, 2017, there are 40 The Commission has analyzed the effects on efficiency, competition, or
investment advisers that selected Item effects of the changes to the forms as a capital formation because the
2.A.(3) of Form ADV, indicating that the result of the Wyoming legislation and amendments reflect only ministerial
adviser has a principal office and place anticipates only nominal benefits or changes to Forms ADV and ADV–W.
of business in the state of Wyoming. Of costs, if any, to arise from the technical Separately, we recognize that
these 40 investment advisers, four amendments to Form ADV and Form approximately 35 investment advisers
advisers have identified themselves as ADV–W to reflect the change in will be required to transition to
those with regulatory assets under Wyoming law. The removal of Item Wyoming oversight as a self-executing
management of $100 million or more by 2.A.(3) from Form ADV will prevent result of the Wyoming statute’s
checking Item 2.A.(1) on Form ADV and investment advisers from improperly interaction with our existing statutes
will continue to be required to register checking the box previously used to and rules. We acknowledge that this
with the Commission, regardless of the identify investment advisers from the transition resulting from the Wyoming
change in the statute enacted by the state of Wyoming, making clear to such statute will have economic effects on
state of Wyoming. However, based on advisers that they are no longer eligible these entities. In our 2011 rule
regulatory assets under management to register with the Commission on the implementing Section 410 of the Dodd-
(Item 5.F.(2)(c) on Form ADV), there is basis of having a principal office and Frank Act, which transitioned mid-sized
one additional adviser with regulatory place of business in Wyoming. investment advisers to state oversight,
assets under management of $100 Correspondingly, amendments to we discussed certain economic effects
million or more that did not identify Schedule R of Form ADV to remove that result from transitioning a class of
itself by Item 2.A.(1) that we therefore Item 2.A.(3) from the Schedule will advisers from federal to state
anticipate would remain registered with have effects for relying advisers subject oversight.19 These economic effects
the Commission. Only one adviser to umbrella registration similar to the include costs incurred by transitioning
currently selecting Item 2.A.(3) also effects for advisers that do not use advisers to make the necessary filings to
selected Item 2.A.(2) on Form ADV as of Schedule R but respond to Item 2.A.(3) register with the state and to withdraw
February 1, 2017, indicating that it is a of Form ADV. Further, Item 2.C of Form from Commission registration,20 and to
‘‘mid-sized adviser’’ with regulatory ADV will now be amended to include comply with the state’s ongoing
assets under management of more than Wyoming check boxes for Commission- reporting and inspections regime.
$25 million but less than $100 million; registered advisers to send notice filings Similarly, Wyoming advisers will be
however, based on regulatory assets to Wyoming. Finally, Form ADV–W will required to calculate and monitor assets
under management, we identified seven be revised to allow Wyoming registrants under management going forward to
additional mid-sized advisers that did to withdraw their registration with determine if Commission registration (or
not select Item 2.A.(2). We anticipate Wyoming as necessary. deregistration, for those currently
these eight advisers would need to As Item 2.A.(3) would not be relevant exceeding the threshold) would be
change their registrations to state to investment advisers without a required. At the same time, these
registration, absent an alternative basis principal office and place of business in advisers transitioning as a result of the
for remaining registered with the the state of Wyoming, we do not believe Wyoming statute may experience cost
Commission. The remaining 27 advisers that changes to the forms will impose savings associated with no longer being
report regulatory assets under any costs on these investment advisers subject to the Commission’s regulatory
management of less than $25 million to update their systems or otherwise regime for registered investment
and checked only Item 2.A.(3) as a basis review or understand the impact of the advisers. Because the amendments
for registration with the Commission changes.18 While some advisers that affect only 35 small to mid-sized
and would need to change their remain registered with the Commission advisers that have principal offices and
registrations to state registration absent may need to check the notice filing box a place of business in the state of
an alternative basis for remaining to send notice filings to Wyoming, we Wyoming out of a total 12,176
registered with the Commission. anticipate that the burden to check the investment advisers currently filing
Thus, there are approximately 35 box will be nominal, if any. The changes Form ADV, the Commission does not
advisers that have not indicated an anticipate that, taken together, these
alternative basis for remaining none of which have checked any additional box changes would have a significant effect
registered with the Commission after the that would constitute an alternative basis for on efficiency, competition, or capital
remaining registered.
Wyoming statute becomes effective on 17 As these 35 small and mid-sized advisers may
formation.
July 1, 2017,16 and that we therefore have an alternative basis for remaining registered Statutory Authority
with the Commission (e.g., they serve as an adviser
16 We arrive at 35 mid-sized and small advisers to a registered investment company or business The Commission is adopting technical
by two means. First, we take the 40 Wyoming development company, or are a pension amendments to Form ADV under
advisers and subtract the five advisers who either consultant), 35 is likely to be an upper bound; section 19(a) of the Securities Act of
have checked the large-size box (Item 2.A.(1)) or however, we assume that all 35 advisers will be
1933 [15 U.S.C. 77s(a)], sections 23(a)
nlaroche on DSK30NT082PROD with RULES
who have assets under management that would required to shift for purposes of understanding the
seem to permit them to check Item 2.A.(1). possible magnitude of the change.
19 Seesupra note 5.
Alternatively, we sum together the adviser who 18 To the extent that filers have fewer questions
checked the mid-sized box (Item 2.A.(2)) together to research when completing the form, this removal 20 ‘‘Thestate’’ here principally refers to Wyoming.
with firms that have assets under management that of Item 2.A.(3) may reduce the costs associated with We recognize that advisers transitioning to
would appear to make them mid-sized (seven), as filing activities for investment advisers with a Wyoming registration may be required to register
well as those that have assets under management principal office and place of business in the state with additional states as well, which may impose
that would seem to make them small advisers (27), of Wyoming. additional costs on such advisers.
VerDate Sep<11>2014 14:51 May 08, 2017 Jkt 241001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1](https://thefederalregister.org/doc/82_FR_21560/page/3.svg)
![Federal Register / Vol. 82, No. 88 / Tuesday, May 9, 2017 / Rules and Regulations 21475
and 28(e)(2) of the Securities Exchange Dated: May 4, 2017. List of Subjects in 34 CFR Part 612
Act of 1934 [15 U.S.C. 78w(a) and Brent J. Fields, Administrative practice and
78bb(e)(2)], section 319(a) of the Trust Secretary. procedure, Aliens, Colleges and
Indenture Act of 1939 [15 U.S.C. [FR Doc. 2017–09331 Filed 5–8–17; 8:45 am] universities, Consumer protection,
7sss(a)], section 38(a) of the Investment BILLING CODE 8011–01–P Grant programs—education, Loan
Company Act of 1940 [15 U.S.C. 80a– programs—education, Reporting and
37(a)], and sections 203(c)(1), 204 and recordkeeping requirements, Selective
211(a) of the Investment Advisers Act of DEPARTMENT OF EDUCATION Service System, Student aid, Vocational
1940 [15 U.S.C. 80b–3(c)(1), 80b–4, and education.
80b–11(a)]. 34 CFR Parts 612 and 686
Dated: May 4, 2017.
The Commission is adopting technical [Docket ID ED–2014–OPE–0057] Betsy DeVos,
amendments to Form ADV–W (17 CFR
279.2) under the authority set forth in RIN 1840–AD07 Secretary of Education.
sections 203(h), 204 and 211(a) of the Revocation of Amendatory Instructions
Teacher Preparation Issues
Investment Advisers Act of 1940 (15
For the reasons discussed in the
U.S.C. 80b–3(h), 80b–4, and 80b–11)). AGENCY: Office of Postsecondary
preamble, and under the authority of the
Education, Department of Education.
List of Subjects in 17 CFR Part 279 Congressional Review Act (5 U.S.C. 801
ACTION: Final rule; CRA Revocation.
et seq.) and Public Law 115–14 (March
Reporting and recordkeeping 27, 2017), the Secretary revokes the
requirements; Securities. SUMMARY: Under the Congressional
Review Act, Congress has passed, and following amendatory instructions from
Text of Rule and Form Amendments the President has signed, a resolution of FR Doc. 2016–24856, published in the
disapproval of the Teacher Preparation issue of Monday, October 31, 2016 (81
For the reasons set forth in the Issues final regulations that were FR 75494):
preamble, title 17, chapter II of the Code published on October 31, 2016.
of Federal Regulations is amended as §§ 686.1, 686.2, 686.3, 686.11, 686.12, 686.32,
Pursuant to the resolution, the 686.37, 686.40, 686.42, and 686.43
follows: Department of Education (Department) [Revocation of instructions]
PART 279—FORMS PRESCRIBED is removing applicable regulations from
the Code of Federal Regulations. ■ 1. On pages 75619 through 75622,
UNDER THE INVESTMENT ADVISERS remove amendatory instructions 2
ACT OF 1940 DATES: This action is effective May 9,
through 12.
2017.
■ 1. The authority citation for part 279 FOR FURTHER INFORMATION CONTACT: Amendment to 34 CFR Chapter VI
continues to read as follows: Sophia McArdle, Ph.D., U.S. For the reasons discussed in the
Authority: The Investment Advisers Act of
Department of Education, 400 Maryland preamble, and under the authority of the
1940, 15 U.S.C. 80b–1, et seq. Avenue SW., Room 6W256, Congressional Review Act (5 U.S.C. 801
Washington, DC 20202. Telephone: et seq.) and Public Law 115–14 (March
§ 279.1 [Amended] (202) 453–6318 or by email: 27, 2017), the Secretary also amends
sophia.mcardle@ed.gov. chapter VI of title 34 of the Code of
■ 2. Form ADV (referenced in § 279.1) is If you use a telecommunications Federal Regulations as follows:
amended by: device for the deaf or a text telephone,
■ a. Removing the phrase ‘‘have your call the Federal Relay Service, toll free, PART 612—[Removed]
principal office and place of business in at 1–800–877–8339.
Wyoming (which does not regulate SUPPLEMENTARY INFORMATION: On ■ 1. Remove part 612.
advisers);’’ from Part 1A, Item 2.A.(3) October 31, 2016, the Department [FR Doc. 2017–09351 Filed 5–8–17; 8:45 am]
and adding in its place ‘‘Reserved’’; published the teacher preparation issues BILLING CODE 4000–01–P
■ b. Adding ‘‘b WY’’ after ‘‘b WI’’ in notice of final regulations (81 FR
the table of Part 1A, Item 2.C.; and 75494). The regulations in 34 CFR part
■ c. Removing the phrase ‘‘have your
612 were effective November 30, 2016. DEPARTMENT OF COMMERCE
principal office and place of business in The amendments to part 686 were to be
Wyoming (which does not regulate effective on July 1, 2017, except for National Oceanic and Atmospheric
advisers);’’ from Part 1A, Schedule R, amendatory instructions 4.A., 4.B., Administration
Section 2.A.(3) and adding in its place 4.C.iv., 4.C.x., and 4.C.xi., amending 34
‘‘Reserved’’. CFR 686.2(d) and (e), which were to be 50 CFR Part 622
effective July 1, 2021. Congress
Note: The text of Form ADV does not and [Docket No. 160810719–7353–02]
subsequently passed a resolution of
the amendments will not appear in the Code disapproval of the rule, and President RIN 0648–BG29
of Federal Regulations.
Trump signed the resolution into law as
Public Law 115–14 on March 27, 2017. Amendments to the Reef Fish, Spiny
§ 279.2 [Amended] Lobster, and Corals and Reef
Accordingly, the Department is hereby
removing part 612 of the teacher Associated Plants and Invertebrates
■ 3. Form ADV–W (referenced in
preparation issues final regulations from Fishery Management Plans of Puerto
§ 279.2) is amended by adding ‘‘b WY’’
the Code of Federal Regulations. The Rico and the U.S. Virgin Islands
nlaroche on DSK30NT082PROD with RULES
after ‘‘b WI’’ in the table in paragraph
(b) of the Status section. amendments to part 686 were not AGENCY: National Marine Fisheries
effective, and therefore, were never part Service (NMFS), National Oceanic and
Note: The text of Form ADV–W does not
and the amendments will not appear in the
of the Code of Federal Regulations. The Atmospheric Administration (NOAA),
Code of Federal Regulations. Department is removing the instructions Commerce.
amending part 686 from the rule that
ACTION: Final rule.
By the Commission. published October 31, 2016.
VerDate Sep<11>2014 14:51 May 08, 2017 Jkt 241001 PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1](https://thefederalregister.org/doc/82_FR_21560/page/4.svg)
Document Created: 2018-11-08 08:41:10
Document Modified: 2018-11-08 08:41:10
| 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 | Final rule; technical amendments. | |
| Dates | Effective July 1, 2017. | |
| Contact | Bridget D. Farrell, Senior Counsel or Melissa Roverts Harke, Senior Special Counsel 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 | 82 FR 21472 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR