83 FR 4523 - BNP Paribas USA, Inc., et al.; Notice of Application and Temporary Order

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 21 (January 31, 2018)

Page Range		4523-4526
FR Document		2018-01905

Federal Register, Volume 83 Issue 21 (Wednesday, January 31, 2018)

[Federal Register Volume 83, Number 21 (Wednesday, January 31, 2018)]
[Notices]
[Pages 4523-4526]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-01905]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-32995; File No. 812-14874]

BNP Paribas USA, Inc., et al.; Notice of Application and
Temporary Order

January 26, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Temporary order and notice of application for a permanent
order under section 9(c) of the Investment Company Act of 1940
(``Act'').

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Summary of Application: Applicants have received a temporary order
(``Temporary Order'') exempting them from section 9(a) of the Act, with
respect to a guilty plea entered on January 25, 2018 (``Guilty Plea''),
by BNP Paribas USA, Inc. (the ``Pleading Entity'') in the United States
District Court for the Southern District of New York (the ``District
Court'') in connection with a plea agreement (``Plea Agreement'')
between the Pleading Entity and the United States Department of Justice
(``DOJ''), until the Commission takes final action on an application
for a permanent order (the ``Permanent

[[Page 4524]]

Order,'' and with the Temporary Order, the ``Orders''). Applicants also
have applied for a Permanent Order.

Applicants: BNP Paribas USA, Inc., BNP Paribas Asset Management USA,
Inc. (``BNPP AM USA''), Bishop Street Capital Management Corp.
(``BSCM''), and BNP Paribas Asset Management UK Limited (``BNPP AM
UK'') (each, an ``Applicant'' and collectively, ``Applicants'').

Filing Date: The application was filed on January 25, 2018.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving Applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on February 20, 2018 and should be accompanied by proof of service
on Applicants, in the form of an affidavit, or for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE, Washington, DC 20549-1090; Applicants: BNP Paribas USA,
Inc., 787 Seventh Avenue, New York, NY 10019; BNPP AM USA: 200 Park
Avenue, 11th Floor, New York, NY 10166; BSCM: First Hawaiian Center,
999 Bishop Street, Suite 2806, Honolulu, HI 96813; BNPP AM UK: 5
Aldermanbury Square, London EC2V 7BP, United Kingdom.

FOR FURTHER INFORMATION CONTACT: Jessica Shin, Attorney-Adviser, or
Robert H. Shapiro, Branch Chief, at (202) 551-6821 (Division of
Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a temporary order and a
summary of the application. The complete application may be obtained
via the Commission's website by searching for the file number, or an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicants' Representations

1. The Pleading Entity is a corporation organized under the laws of
Delaware and wholly owned subsidiary of BNP Paribas S.A. (``BNPP'').\1\
The Pleading Entity serves as BNPP's U.S. intermediate holding company.
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\1\ BNPP, the parent of the Pleading Entity, does not and will
not serve as an investment adviser, depositor or principal
underwriter to any registered investment company as it is not a
Covered Person (as defined below).
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2. BNPP AM USA, a corporation formed under the laws of New York, is
registered as an investment adviser under the Investment Advisers Act
of 1940 (the ``Advisers Act'') and is an indirect wholly owned
subsidiary of BNPP and of the Pleading Entity. BNPP AM USA serves as
sub-adviser to the investment companies registered under the Act or
series of such companies listed in Part 1 of Appendix A to the
application (each a ``Fund'' and, collectively, ``Funds''). Until late
April 2017, BNPP AM USA was named ``Fischer Francis Trees & Watts,
Inc.''
3. BSCM, a corporation formed under the laws of Hawaii in 1999, is
registered as an investment adviser under the Advisers Act. BSCM is an
indirect wholly owned subsidiary of First Hawaiian, Inc., which is an
approximately 62% owned indirect subsidiary of BNPP. BSCM serves as
investment adviser to each Fund listed in Part 2 of Appendix A to the
application.
4. BNPP AM UK, a corporation formed under the laws of the United
Kingdom, is registered as an investment adviser under the Advisers Act.
BNPP AM UK is an indirect wholly owned subsidiary of BNPP. BNPP AM UK
does not currently advise any Fund, but expects to be sub-adviser to
the newly-organized Fund listed in Part 1B of Appendix A to the
application.
5. While no existing company of which the Pleading Entity is an
``affiliated person'' within the meaning of section 2(a)(3) of the Act
(``Affiliated Person''), other than BNPP AM USA, BSCM and BNPP AM UK
(together, the ``Fund Servicing Applicants''), currently serves as an
investment adviser or depositor of any Fund, employees' securities
company (``ESC'') or investment company that has elected to be treated
as a business development company under the Act (``BDC''), or principal
underwriter (as defined in section 2(a)(29) of the Act) for any open-
end management investment company registered under the Act (``Open-End
Fund''), unit investment trust registered under the Act (``UIT''), or
face-amount certificate company registered under the Act (``FACC''),
Applicants request that any relief granted by the Commission pursuant
to the application also apply to any current or future Affiliated
person of the Pleading Entity other than BNPP (together with the Fund
Servicing Applicants, the ``Covered Persons'') with respect to any
activity contemplated by section 9(a) of the Act.\2\
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\2\ Covered Persons may, if the Order is granted, in the future
act in any of the capacities contemplated by Section 9(a) of the Act
subject to the applicable terms and conditions of the Orders.
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6. On January 25, 2018, the United States Department of Justice
(the ``Department of Justice'') filed a one-count criminal information
(the ``Information'') in the District Court. The Information charges
that from as early as September 2011 until at least July 2013, the
Pleading Entity, through a single Central and Eastern European, Middle
Eastern and African Emerging Markets currencies (``CEEMEA'' currencies)
trader employed by BNP Paribas Securities Corp. (``Sec Corp''),
participated in a conspiracy to suppress and eliminate competition in
CEEMEA currencies by various methods (the ``Conduct''), as further
described in the application, in violation of the Sherman Antitrust Act
(Title 15, United States Code, section 1).
7. Pursuant to the Plea Agreement, the Pleading Entity entered the
Guilty Plea on January 25, 2018 in the District Court to the charge set
out in the Information. According to the Plea Agreement, the Pleading
Entity, among other things, agreed to a fine of $90 million. The
Applicants expect that the District Court will enter a judgment against
the Pleading Entity (the ``Judgment'') that will require remedies that
are materially the same as set forth in the Plea Agreement. The
individual referenced in the Information as responsible for the Conduct
is no longer employed by BNPP or any of its affiliates.
8. BNPP and its affiliates have entered into settlement agreements
with other U.S. regulatory or enforcement agencies related to the
Conduct. The Board of Governors of the Federal Reserve System (``FRB'')
entered a cease and desist order (the ``FRB Order'') on July 17, 2017
against BNPP, the Pleading Entity and Sec Corp concerning unsafe and
unsound banking practices relating to BNPP's foreign exchange (``FX'')
business. The New York State Department of Financial Services (``DFS'')
entered into a consent order (the ``DFS Order'') on May 24, 2017 with
BNPP and its New York branch (the ``DFS Order Parties'') to settle DFS'
investigations into alleged violations of the New York laws and
regulations arising out of conduct in the DFS Order Parties' FX
business during the period between 2007 and 2013.

[[Page 4525]]

Applicants' Legal Analysis

1. Section 9(a)(1) of the Act provides, in pertinent part, that a
person may not serve or act as an investment adviser or depositor of
any registered investment company or as principal underwriter for any
registered open-end investment company, UIT, or FACC, if such person
within ten years has been convicted of any felony or misdemeanor,
including those arising out of such person's conduct as a bank. Section
2(a)(10) of the Act defines the term ``convicted'' to include a plea of
guilty. Section 9(a)(3) of the Act extends the prohibitions of section
9(a)(1) to a company, any affiliated person of which has been
disqualified under the provisions of section 9(a)(1). Section 2(a)(3)
of the Act defines ``affiliated person'' to include, among others, any
person directly or indirectly controlling, controlled by, or under
common control with, the other person. The Pleading Entity is an
Affiliated Person of each of the other Applicants within the meaning of
section 2(a)(3) of the Act. Therefore, the Applicants state that the
Plea Agreement would result in a disqualification of the Applicants for
ten years under section 9(a)(3) were they to act in any of the
capacities listed in section 9(a), by effect of a conviction described
in section 9(a)(1).
2. Section 9(c) of the Act provides that, upon application, the
Commission shall by order grant an exemption from the disqualification
provisions of section 9(a) of the Act, either unconditionally or on an
appropriate temporary or other conditional basis, to any person if that
person establishes that: (a) The prohibitions of section 9(a), as
applied to the person, are unduly or disproportionately severe or (b)
the conduct of the person has been such as not to make it against the
public interest or the protection of investors to grant the exemption.
Applicants have filed an application pursuant to section 9(c) seeking a
Temporary Order and a Permanent Order exempting the Fund Servicing
Applicants and other Covered Persons from the disqualification
provisions of section 9(a) of the Act. The Covered Persons may, if the
Orders are granted, in the future act in any of the capacities
contemplated by section 9(a) of the Act subject to the applicable terms
and conditions of the Orders.
3. Applicants believe they meet the standards for exemption
specified in section 9(c). Applicants assert that (i) the scope of the
misconduct was limited and did not involve any of the Fund Servicing
Applicants acting as an ``investment adviser'' (as defined in section
2(a)(20) of the Act) to Funds (such activities, ``Fund Service
Activities''), or any Fund with respect to which the Applicants engage
in Fund Service Activities, (ii) application of the statutory bar would
impose significant hardships on the Funds and their shareholders, (iii)
the prohibitions of section 9(a), if applied to the BNPP and other
Covered Persons, would be unduly or disproportionately severe and (iv)
the Conduct did not constitute conduct that would make it against the
public interest or protection of investors to grant the exemption from
section 9(a).
4. Applicants represent that the Conduct did not involve any of
Applicants acting in the capacity as an investment adviser or depositor
of any Fund, ESC or BDC or as principal underwriter for any Open-End
Fund, UIT or FACC. Applicants represent that the Conduct similarly did
not involve any Fund with respect to which the Applicants engage in
Fund Service Activities.\3\ Instead, the Applicants state that the
Conduct occurred as a result of the actions of a single employee. The
employee is no longer employed and will not be employed in the future,
by BNPP, the Applicants or any of the other Covered Persons. Applicants
assert that, in light of the limited scope of the Conduct, it would be
unduly and disproportionately severe to impose a section 9(a)
disqualification on the Applicants. Applicants assert that the conduct
of the Applicants has not been such to make it against the public
interest or the protection of investors to grant the exemption from
section 9(a).
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\3\ The Pleading Entity does not engage, has not engaged, and
will not engage in in any of the capacities contemplated by Section
9(a) of the Act.
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5. Applicants assert that neither the protection of investors nor
the public interest would be served by permitting the section 9(a)
disqualifications to apply to the Fund Servicing Applicants because
those disqualifications would deprive the Fund of the advisory or sub-
advisory services that shareholders expected the Funds would receive
when they decided to invest in the Funds. Applicants also assert that
the prohibitions of section 9(a) could operate to the financial
detriment of the Funds and their shareholders, which would be an unduly
and disproportionately severe consequence given that the Conduct did
not involve any of the Fund Service Activities.
6. Applicants further represent that the inability of the Fund
Servicing Applicants to continue providing investment advisory services
to Funds would result in the Funds and their shareholders facing
potential hardship, as described in the application. Applicants assert
that if the Fund Servicing Applicants were barred under section 9(a)
from providing investment advisory services to the Funds and were
unable to obtain the requested exemption, the effect on their
businesses and employees would be severe. Applicants state that the
Fund Servicing Applicants have committed substantial capital and other
resources to establishing expertise in advising and sub-advising Funds
with a view to continuing and expanding this business, which Applicants
consider strategically important. Applicants further state that
prohibiting the Fund Servicing Applicants from engaging in Fund Service
Activities would not only adversely affect their business, but would
also adversely affect their employees who are involved in these
activities. In addition, Applicants assert that if the Fund Servicing
Applicants or Covered Persons are unable to expand their businesses in
the future because of the imposition of the section 9(a)
disqualification, it could also have an adverse impact on their
businesses.
7. Applicants represent that: (1) None of the current or former
directors, officers or employees of Applicants had any involvement in
the Conduct; (2) no current or former employee of the Pleading Entity
or of any other Covered Person who previously has been or who
subsequently may be identified by the Pleading Entity or any U.S. or
non-U.S. regulatory or enforcement agencies as having been responsible
for the Conduct will be an officer, director, or employee of any
Covered Person; (3) the identified employee has had no, and will not
have any future, involvement in the Covered Persons' activities in any
capacity described in section 9(a) of the Act; and (4) because the
personnel of Applicants did not have any involvement in the Conduct,
shareholders of the Fund were not affected any differently than if the
Fund had received services from any other non-affiliated investment
adviser.
8. Applicants have agreed that none of BNPP, the Applicants or any
of the other Covered Persons will employ the former employee of an
affiliate of the Pleading Entity or any other person who subsequently
may be identified by the Pleading Entity or any U.S. or non-U.S.
regulatory or enforcement agencies as having been responsible for the
Conduct in any capacity without first making a further application to
the Commission pursuant to section 9(c).
9. Applicants have also agreed that BNPP and each Applicant and
Covered Person will adopt and implement policies and procedures
reasonably designed to ensure compliance with the

[[Page 4526]]

terms and conditions of the Orders granted under section 9(c).
10. In addition, BNPP and each Applicant and Covered Person will
comply in all material respects with the material terms and conditions
of the Plea Agreement and with the materials terms of the FRB Order,
the DFS Order any other orders issued by regulatory or enforcement
agencies addressing the Conduct. Applicants further state that BNPP and
its affiliates have undertaken certain remedial measures, as described
in greater detail in the application. These include certain remedial
measures as required by the Plea Agreement, the FRB Order, and the DFS
Order, including improvements to the oversight, internal controls and
compliance program, compliance risk management program, and internal
audit program for FX trading. Applicants state that BNPP and its
affiliates have taken a number of steps to enhance its internal
controls, policies and procedures relating to its FX activities.
Specifically, Applicants represent BNPP has devised and implemented new
global detailed FX-specific policies and procedures and a comprehensive
program to change the culture of the business with the aim that each
individual within the business understands their responsibility for
proper conduct and compliance. Applicants also represent that BNPP has
globally rolled out culture and conduct workshops and training on
BNPP's Foreign Exchange Local Markets remediation program.
Additionally, Applicants represent that supervisors have been given
increased tools to directly oversee their staff and identify conduct
issues more effectively, permanent cross-bank chat rooms have been
prohibited, and reverse trades are monitored through software designed
to detect transactions (proprietary and customer) that were not exposed
to the risk of the market and did not result in a change of beneficial
ownership.
11. As a result of the foregoing, the Applicants submit that
granting the exemption as requested in the application is consistent
with the public interest and the protection of investors.
12. To provide further assurance that the exemptive relief being
requested herein would be consistent with the public interest and the
protection of the investors, the Applicants agree that they will, as
soon as reasonably practical, distribute to the boards of directors or
trustees of the Funds (``Board'') written materials describing the
circumstances that led to the Plea Agreement, as well as any effects on
the Funds and the application. The written materials will include an
offer to discuss the materials at an in-person meeting with the Board,
including the directors who are not ``interested persons'' of the Funds
as defined in section 2(a)(19) of the Act and their ``independent legal
counsel'' as defined in rule 0-1(a)(6) under the Act, if any. The
Applicants undertake to provide the Boards with all information
concerning the Plea Agreement and the application as necessary for
those Funds to fulfill their disclosure and other obligations under the
U.S. federal securities laws and will provide them a copy of the
Judgment as entered by the District Court.
13. Applicants state that certain of the Applicants and their
affiliates have previously received an order under section 9(c) of the
Act, as the result of conduct that triggered section 9(a), as described
in greater detail in the application.

Applicants' Conditions

Applicants agree that any order granted by the Commission pursuant
to the application will be subject to the following conditions:
1. Any temporary exemption granted pursuant to the application will
be without prejudice to, and will not limit the Commission's rights in
any manner with respect to, any Commission investigation of, or
administrative proceedings involving or against, Covered Persons,
including, without limitation, the consideration by the Commission of a
permanent exemption from section 9(a) of the Act requested pursuant to
the application or the revocation or removal of any temporary
exemptions granted under the Act in connection with the application.
2. None of BNPP, the Applicants or any of the other Covered Persons
will employ the former employee of an affiliate of the Pleading Entity
or any other person who subsequently may be identified by the Pleading
Entity or any U.S. or non-U.S. regulatory or enforcement agencies as
having been responsible for the Conduct in any capacity without first
making a further application to the Commission pursuant to section
9(c).
3. BNPP and each Applicant and Covered Person will adopt and
implement policies and procedures reasonably designed to ensure that it
will comply with the terms and conditions of the Orders within 60 days
of the date of the Permanent Order or, with respect to condition four,
such later date or dates as may be contemplated by the FRB Order, the
DFS Order or any other orders issued by regulatory or enforcement
agencies addressing the Conduct.
4. BNPP and each Applicant and Covered Person will comply in all
material respects with the material terms and conditions of the Plea
Agreement and with the material terms of the FRB Order, the DFS Order
and any other orders issued by regulatory or enforcement agencies
addressing the Conduct.
5. Applicants will provide written notification to the Chief
Counsel of the Commission's Division of Investment Management with a
copy to the Chief Counsel of the Commission's Division of Enforcement
of a material violation of the terms and conditions of any of the
Orders within 30 days of discovery of the material violation.

Temporary Order

The Commission has considered the matter and finds that Applicants
have made the necessary showing to justify granting a temporary
exemption.
Accordingly,
It is hereby ordered, pursuant to section 9(c) of the Act, that the
Applicants and any other Covered Persons are granted a temporary
exemption from the provisions of section 9(a), effective as the date of
the Guilty Plea, solely with respect to the Guilty Plea entered into
pursuant to the Plea Agreement, subject to the representations and
conditions in the application, until the Commission takes final action
on their application for a permanent order.

By the Commission.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-01905 Filed 1-30-18; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Notices 4523

OMB for review entitled, 10 CFR part Dated at Rockville, Maryland, this 25th day published in the Federal Register on
50, ‘‘Domestic Licensing of Production of January 2017. October 4, 2017 (82 FR 46312).
and Utilization Facilities.’’ The NRC For the Nuclear Regulatory Commission. Detailed meeting agendas and meeting
hereby informs potential respondents David Cullison, transcripts are available on the NRC
that an agency may not conduct or NRC Clearance Officer, Office of the Chief website at http://www.nrc.gov/reading-
sponsor, and that a person is not Information Officer. rm/doc-collections/acrs. Information
required to respond to, a collection of [FR Doc. 2018–01875 Filed 1–30–18; 8:45 am] regarding topics to be discussed,
information unless it displays a BILLING CODE 7590–01–P changes to the agenda, whether the
currently valid OMB control number. meeting has been canceled or
The NRC published a Federal rescheduled, and the time allotted to
Register notice with a 60-day comment NUCLEAR REGULATORY present oral statements can be obtained
period on this information collection on COMMISSION from the website cited above or by
October 18, 2017, (82 FR 48539). contacting the identified DFO.
1. The title of the information Advisory Committee on Reactor Moreover, in view of the possibility that
collection: 10 CFR part 50, ‘‘Domestic Safeguards (ACRS); Meeting of the the schedule for ACRS meetings may be
Licensing of Production and Utilization ACRS Subcommittee on Future Plant adjusted by the Chairman as necessary
Facilities.’’ Designs; Notice of Meeting to facilitate the conduct of the meeting,
2. OMB approval number: 3150–0011. persons planning to attend should check
3. Type of submission: Extension. The ACRS Subcommittee on Future with these references if such
4. The form number if applicable: Not Plant Designs will hold a meeting on rescheduling would result in a major
applicable. February 7, 2018 at 11545 Rockville inconvenience.
5. How often the collection is required Pike, Room T–2B1, Rockville, Maryland If attending this meeting, please enter
or requested: As necessary in order for 20852. through the One White Flint North
the NRC to meet its responsibilities to The entire meeting will be open to building, 11555 Rockville Pike,
conduct a detailed review of public attendance. Rockville, Maryland 20852. After
applications for licenses and The agenda for the subject meeting registering with Security, please contact
amendments thereto to construct and shall be as follows: Mr. Theron Brown (Telephone 301–
operate nuclear power plants, 415–6702) to be escorted to the meeting
preliminary or final design approvals, Wednesday, February 7, 2018—8:30 room.
design certifications, research and test a.m. Until 12:00 p.m.
Dated: January 25, 2018.
facilities, reprocessing plants and other
The Subcommittee will review Final Mark L. Banks,
utilization and production facilities,
Regulatory Guide 1.232, ‘‘Guidance for Chief, Technical Support Branch, Advisory
licensed pursuant to the Atomic Energy
Developing Principal Design Criteria for Committee on Reactor Safeguards.
Act of 1954, as amended (the Act) and
Non-Light-Water Reactors.’’ The [FR Doc. 2018–01839 Filed 1–30–18; 8:45 am]
to monitor their activities. Reports are
Subcommittee will hear presentations
submitted daily, monthly, quarterly, BILLING CODE 7590–01–P
by and hold discussions with NRC staff
annually, semi-annually, and on
and other interested persons regarding
occasion.
6. Who will be required or asked to this matter. The Subcommittee will SECURITIES AND EXCHANGE
respond: Licensees and applicants for gather information, analyze relevant COMMISSION
nuclear power plants and research and issues and facts, and formulate
proposed positions and actions, as [Release No. IC–32995; File No. 812–14874]
test facilities.
7. The estimated number of annual appropriate, for deliberation by the Full
Committee. BNP Paribas USA, Inc., et al.; Notice of
responses: 43,623 (43,473 reporting Application and Temporary Order
responses + 149 recordkeepers + 1 third- Members of the public desiring to
party disclosure response). provide oral statements and/or written January 26, 2018.
8. The estimated number of annual comments should notify the Designated AGENCY: Securities and Exchange
respondents: 149. Federal Official (DFO), Derek Widmayer Commission (‘‘Commission’’).
9. An estimate of the total number of (Telephone 391–221–1448 or Email ACTION: Temporary order and notice of
hours needed annually to comply with Derek.Widmayer@nrc.gov) five days application for a permanent order under
the information collection requirement prior to the meeting, if possible, so that section 9(c) of the Investment Company
or request: 3.7M hours (1.1M hours appropriate arrangements can be made. Act of 1940 (‘‘Act’’).
reporting + 2.6M hours recordkeeping + Thirty-five hard copies of each
100 hours third-party disclosure). presentation or handout should be SUMMARY OF APPLICATION: Applicants
10. Abstract: Part 50 of title 10 of the provided to the DFO thirty minutes have received a temporary order
Code of Federal Regulations (10 CFR), before the meeting. In addition, one (‘‘Temporary Order’’) exempting them
‘‘Domestic Licensing of Production and electronic copy of each presentation from section 9(a) of the Act, with
Utilization Facilities,’’ specifies should be emailed to the DFO one day respect to a guilty plea entered on
technical information and data to be before the meeting. If an electronic copy January 25, 2018 (‘‘Guilty Plea’’), by
provided to the NRC or maintained by cannot be provided within this BNP Paribas USA, Inc. (the ‘‘Pleading
applicants and licensees so that the NRC timeframe, presenters should provide Entity’’) in the United States District
may take determinations necessary to the DFO with a CD containing each Court for the Southern District of New
sradovich on DSK3GMQ082PROD with NOTICES

protect the health and safety of the presentation at least thirty minutes York (the ‘‘District Court’’) in
public, in accordance with the Atomic before the meeting. Electronic connection with a plea agreement (‘‘Plea
Energy Act of 1954, as amended. The recordings will be permitted only Agreement’’) between the Pleading
reporting and recordkeeping during those portions of the meeting Entity and the United States Department
requirements contained in 10 CFR part that are open to the public. Detailed of Justice (‘‘DOJ’’), until the Commission
50 are mandatory for the affected procedures for the conduct of and takes final action on an application for
licensees and applicants. participation in ACRS meetings were a permanent order (the ‘‘Permanent

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4526 Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Notices

terms and conditions of the Orders at an in-person meeting with the Board, 4. BNPP and each Applicant and
granted under section 9(c). including the directors who are not Covered Person will comply in all
10. In addition, BNPP and each ‘‘interested persons’’ of the Funds as material respects with the material
Applicant and Covered Person will defined in section 2(a)(19) of the Act terms and conditions of the Plea
comply in all material respects with the and their ‘‘independent legal counsel’’ Agreement and with the material terms
material terms and conditions of the as defined in rule 0–1(a)(6) under the of the FRB Order, the DFS Order and
Plea Agreement and with the materials Act, if any. The Applicants undertake to any other orders issued by regulatory or
terms of the FRB Order, the DFS Order provide the Boards with all information enforcement agencies addressing the
any other orders issued by regulatory or concerning the Plea Agreement and the Conduct.
enforcement agencies addressing the application as necessary for those Funds 5. Applicants will provide written
Conduct. Applicants further state that to fulfill their disclosure and other notification to the Chief Counsel of the
BNPP and its affiliates have undertaken obligations under the U.S. federal Commission’s Division of Investment
certain remedial measures, as described securities laws and will provide them a Management with a copy to the Chief
in greater detail in the application. copy of the Judgment as entered by the Counsel of the Commission’s Division of
These include certain remedial District Court. Enforcement of a material violation of
measures as required by the Plea 13. Applicants state that certain of the the terms and conditions of any of the
Agreement, the FRB Order, and the DFS Applicants and their affiliates have Orders within 30 days of discovery of
Order, including improvements to the previously received an order under the material violation.
oversight, internal controls and section 9(c) of the Act, as the result of
compliance program, compliance risk Temporary Order
conduct that triggered section 9(a), as
management program, and internal described in greater detail in the The Commission has considered the
audit program for FX trading. application. matter and finds that Applicants have
Applicants state that BNPP and its made the necessary showing to justify
affiliates have taken a number of steps Applicants’ Conditions granting a temporary exemption.
to enhance its internal controls, policies Applicants agree that any order Accordingly,
and procedures relating to its FX granted by the Commission pursuant to It is hereby ordered, pursuant to
activities. Specifically, Applicants the application will be subject to the section 9(c) of the Act, that the
represent BNPP has devised and following conditions: Applicants and any other Covered
implemented new global detailed FX- 1. Any temporary exemption granted Persons are granted a temporary
specific policies and procedures and a pursuant to the application will be exemption from the provisions of
comprehensive program to change the without prejudice to, and will not limit section 9(a), effective as the date of the
culture of the business with the aim that Guilty Plea, solely with respect to the
the Commission’s rights in any manner
each individual within the business Guilty Plea entered into pursuant to the
with respect to, any Commission
understands their responsibility for Plea Agreement, subject to the
investigation of, or administrative
proper conduct and compliance. representations and conditions in the
proceedings involving or against,
Applicants also represent that BNPP has application, until the Commission takes
Covered Persons, including, without
globally rolled out culture and conduct final action on their application for a
limitation, the consideration by the
workshops and training on BNPP’s permanent order.
Commission of a permanent exemption
Foreign Exchange Local Markets
from section 9(a) of the Act requested By the Commission.
remediation program. Additionally,
pursuant to the application or the Robert W. Errett,
Applicants represent that supervisors
have been given increased tools to revocation or removal of any temporary Deputy Secretary.
directly oversee their staff and identify exemptions granted under the Act in [FR Doc. 2018–01905 Filed 1–30–18; 8:45 am]
conduct issues more effectively, connection with the application.
BILLING CODE 8011–01–P
permanent cross-bank chat rooms have 2. None of BNPP, the Applicants or
been prohibited, and reverse trades are any of the other Covered Persons will
monitored through software designed to employ the former employee of an SECURITIES AND EXCHANGE
detect transactions (proprietary and affiliate of the Pleading Entity or any COMMISSION
customer) that were not exposed to the other person who subsequently may be
identified by the Pleading Entity or any [Release No. 34–82585; File No. SR–OCC–
risk of the market and did not result in 2017–020]
a change of beneficial ownership. U.S. or non-U.S. regulatory or
11. As a result of the foregoing, the enforcement agencies as having been Self-Regulatory Organizations; The
Applicants submit that granting the responsible for the Conduct in any Options Clearing Corporation; Notice
exemption as requested in the capacity without first making a further of Designation of Longer Period for
application is consistent with the public application to the Commission pursuant Commission Action on Proposed Rule
interest and the protection of investors. to section 9(c). Change Concerning Enhanced and
12. To provide further assurance that 3. BNPP and each Applicant and New Tools for Recovery Scenarios
the exemptive relief being requested Covered Person will adopt and
herein would be consistent with the implement policies and procedures January 25, 2018.
public interest and the protection of the reasonably designed to ensure that it On December 18, 2017, The Options
investors, the Applicants agree that they will comply with the terms and Clearing Corporation (‘‘OCC’’) filed with
will, as soon as reasonably practical, conditions of the Orders within 60 days
sradovich on DSK3GMQ082PROD with NOTICES

the Securities and Exchange
distribute to the boards of directors or of the date of the Permanent Order or, Commission (‘‘Commission’’) proposed
trustees of the Funds (‘‘Board’’) written with respect to condition four, such rule change SR–OCC–2017–020
materials describing the circumstances later date or dates as may be (‘‘Proposed Rule Change’’) pursuant to
that led to the Plea Agreement, as well contemplated by the FRB Order, the Section 19(b)(1) of the Securities
as any effects on the Funds and the DFS Order or any other orders issued by Exchange Act of 1934 (‘‘Act’’),1 and
application. The written materials will regulatory or enforcement agencies
include an offer to discuss the materials addressing the Conduct. 1 15 U.S.C. 78s(b)(1).

VerDate Sep<11>2014 17:36 Jan 30, 2018 Jkt 244001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\31JAN1.SGM 31JAN1

Document Created: 2018-01-31 00:57:52
Document Modified: 2018-01-31 00:57:52

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		Notices
Action		Temporary order and notice of application for a permanent order under section 9(c) of the Investment Company Act of 1940 (``Act'').
Dates		The application was filed on January 25, 2018.
Contact		Jessica Shin, Attorney-Adviser, or Robert H. Shapiro, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		83 FR 4523