Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Extension of Compliance Date, 35263-35264 [2012-14440]

Download as PDF Federal Register / Vol. 77, No. 114 / Wednesday, June 13, 2012 / Rules and Regulations and prompts action when needed. National banks and Federal savings associations should have investment portfolio review processes that effectively assess and manage the risks in the portfolio and ensure compliance with policies and risk limits. Institutions should reference existing regulatory guidance for additional supervisory expectations for investment portfolio risk management practices. Dated: June 4, 2012. Thomas J. Curry, Comptroller of the Currency. [FR Doc. 2012–14168 Filed 6–12–12; 8:45 am] BILLING CODE 4810–33–P SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 275 [Release No. IA–3418; File No. S7–18–09] RIN 3235–AK39 Political Contributions by Certain Investment Advisers: Ban on ThirdParty Solicitation; Extension of Compliance Date Securities and Exchange Commission. ACTION: Final rule; extension of compliance date. AGENCY: The Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’) is extending the date by which advisers must comply with the ban on thirdparty solicitation in rule 206(4)–5 under the Investment Advisers Act of 1940, the ‘‘pay to play’’ rule. The Commission is extending the compliance date in order to ensure an orderly transition for advisers and third-party solicitors as well as to provide additional time for them to adjust compliance policies and procedures after the transition. DATES: Effective date: The effective date for this release is June 11, 2012. The effective date for the ban on third-party solicitation under rule 206(4)–5 of the Investment Advisers Act of 1940 remains September 13, 2010. COMPLIANCE DATE: The compliance date for the ban on third-party solicitation is extended until nine months after the compliance date of a final rule adopted by the Commission by which municipal advisor firms must register under the Securities Exchange Act of 1934. Once such final rule is adopted, we will issue the new compliance date for the ban on third-party solicitation in a notice in the Federal Register. FOR FURTHER INFORMATION CONTACT: Vanessa M. Meeks, Attorney-Adviser, or erowe on DSK2VPTVN1PROD with RULES SUMMARY: VerDate Mar<15>2010 12:20 Jun 12, 2012 Jkt 226001 Melissa A. Roverts, Branch Chief, at (202) 551–6787 or IArules@sec.gov, Office of Investment Adviser Regulation, Division of Investment Management, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–8549. SUPPLEMENTARY INFORMATION: On July 1, 2010, the Commission adopted rule 206(4)–5 [17 CFR 275.206(4)–5] (the ‘‘Pay to Play Rule’’) under the Investment Advisers Act of 1940 [15 USC 80b] (‘‘Advisers Act’’) to prohibit an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees (‘‘covered associates’’) make a contribution to certain elected officials or candidates.1 As adopted, rule 206(4)– 5 also prohibited an adviser and its covered associates from providing or agreeing to provide, directly or indirectly, payment to any third-party for a solicitation of advisory business from any government entity on behalf of such adviser, unless such third-party was an SEC-registered investment adviser or a registered broker or dealer subject to pay to play restrictions adopted by a registered national securities association (the ‘‘third-party solicitor ban’’).2 Rule 206(4)–5 became effective on September 13, 2010, and, as adopted, the third-party solicitor ban’s compliance date was September 13, 2011. This compliance date was intended to provide advisers and thirdparty solicitors with sufficient time to conform their business practices to the rule, and to revise their compliance policies and procedures to prevent a violation. In addition, the transition period was intended to provide an opportunity for a registered national securities association to adopt a pay to play rule and for the Commission to assess whether that rule met the requirements of rule 206(4)– 5(f)(9)(ii)(B).3 It was our understanding at the time, and it still is, that FINRA is planning to propose a rule that would meet those requirements, but we also suggested that we may need to take further action to ensure an orderly transition.4 Not long after the Pay to Play Rule was adopted, Congress created a new category of Commission registrants called ‘‘municipal advisors’’ in the Dodd-Frank Act. The statutory definition of municipal advisor includes persons that undertake ‘‘a solicitation of a municipal entity.’’ 5 These solicitors would be registered with us and also subject to regulation by the Municipal Securities Rulemaking Board (‘‘MSRB’’). In September 2010, we adopted an interim final rule establishing a temporary means for municipal advisors to satisfy the registration requirement.6 In December 2010, we proposed permanent rules and forms that would interpret the term ‘‘municipal advisor’’ and create a new process by which municipal advisors must register with the SEC.7 On January 14, 2011, the MSRB requested comment on a draft proposal to establish a number of rules applicable to municipal advisors, including a pay to play rule.8 In December 2011, we extended the expiration date of the interim final rule to September 30, 2012.9 With the understanding that municipal advisors would be subject to permanent registration requirements with the Commission and could be subject to an MSRB pay to play rule, on June 22, 2011, we amended the Pay to Play Rule to add municipal advisors to the categories of registered entities— referred to as ‘‘regulated persons’’— excepted from the rule’s third-party solicitor ban.10 For a municipal advisor to qualify as a ‘‘regulated person,’’ it must be registered with us as such and subject to a pay to play rule adopted by the MSRB. In addition, the Commission 4 See id. at Section III.B. Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376 (2010) at section 975. 6 The Dodd-Frank Act required municipal advisors to be registered with the Commission by October 2010. See section 975 of the Dodd-Frank Act. 7 See Registration of Municipal Advisors, Exchange Act Release No. 63576 (Dec. 20, 2010) [76 FR 824, (Jan. 6, 2011)]. 8 See MSRB, Request for Comment on Pay to Play Rule for Municipal Advisors, MSRB Notice 2011– 04 (Jan. 14, 2011) available at https://www.msrb.org/ Rules-and-Interpretations/Regulatory-Notices/2011/ 2011-04.aspx?n=1. 9 Extension of Temporary Registration of Municipal Advisors, Exchange Act Release No. 66020 (Dec. 21, 2011) [76 FR 80733 (Dec. 27, 2011)]. 10 Rules Implementing Amendments to the Investment Advisers Act of 1940, Investment Advisers Act Rel. No. 3221 (June 22, 2011) [76 FR 42950 (July 19, 2011)] (‘‘Implementing Release’’). 5 See 1 Political Contributions by Certain Investment Advisers, Investment Advisers Act Rel. No. 3043 (July 1, 2010) [75 FR 41018 (July 14, 2010)] (‘‘Pay to Play Release’’). 2 See id. at Section II.B.2.(b). The Commission must find, by order, that those restrictions: (i) Impose substantially equivalent or more stringent restrictions on broker-dealers than the Pay to Play Rule imposes on investment advisers; and (ii) are consistent with the objectives of the Pay to Play Rule. 3 See note 2. While rule 206(4)–5 applies to any registered national securities association, the Financial Industry Regulatory Authority, or FINRA, is currently the only registered national securities association under section 19(a) of the Securities Exchange Act of 1934 [15 U.S.C. 78s(b)]. As such, for convenience, we will refer directly to FINRA in this Release when describing the exception for certain broker-dealers from the third-party solicitor ban. PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 35263 E:\FR\FM\13JNR1.SGM 13JNR1 35264 Federal Register / Vol. 77, No. 114 / Wednesday, June 13, 2012 / Rules and Regulations must find, by order, that the MSRB rule: (i) Imposes substantially equivalent or more stringent restrictions on municipal advisors than the Pay to Play Rule imposes on investment advisers; and (ii) is consistent with the objectives of the Advisers Act Pay to Play Rule. The Commission also extended the date by which advisers must comply with the ban on third-party solicitation from September 13, 2011 to June 13, 2012 due to the expansion of the definition of ‘‘regulated persons.’’ The extension was intended, again, to provide sufficient time for an orderly transition.11 Soon thereafter, on August 19, 2011, the MSRB filed a proposal with the Commission that included a new pay to play rule regarding the solicitation activities of municipal advisors and amendments to several existing MSRB rules related to pay to play practices.12 On September 9, 2011, the MSRB withdrew the proposals, stating that it intends to resubmit them upon our adoption of a permanent definition of the term ‘‘municipal advisor.’’ 13 In order to ensure an orderly transition for advisers and third-party solicitors as well as to provide additional time for them to adjust compliance policies and procedures after the transition, we believe that an extension of the compliance date for the Pay to Play Rule’s third-party solicitor ban is appropriate until nine months after the compliance date of a final rule adopted by the Commission by which municipal advisor firms must register under the Securities Exchange Act of 1934. Final rules as to who must register as a municipal advisor, and the process for doing so, will provide clarity to persons who may qualify as municipal advisors, and the investment advisers who may hire them, as to status and registration obligations under these future Commission rules. The new compliance date will also allow all solicitors to assess compliance 11 See id. at section II.D.1. Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Proposed New Rule G–42, on Political Contributions and Prohibitions on Municipal Advisory Activities; Proposed Amendments to Rules G–8, on Books and Records, G–9, on Preservation of Records, and G– 37, on Political Contributions and Prohibitions on Municipal Securities Business; Proposed Form G– 37/G–42 and Form G–37x/G–42x; and a Proposed Restatement of a Rule G–37 Interpretive Notice, Exchange Act Release No. 65255 (Sept. 2, 2011) [76 FR 55976 (Sept. 9, 2011)]; MSRB, MSRB Files Pay to Play Rule for Municipal Advisors and Changes to Dealer Pay to Play Rule, MSRB Notice 2011–46 (Aug. 19, 2011) available at https://www.msrb.org/ Rules-and-Interpretations/Regulatory-Notices/2011/ 2011-46.aspx. The proposal consisted of (i) proposed MSRB Rule G–42 (on political contributions and prohibitions on municipal advisory activities); (ii) proposed amendments that erowe on DSK2VPTVN1PROD with RULES 12 See VerDate Mar<15>2010 12:20 Jun 12, 2012 Jkt 226001 obligations with pay to play rules that may be adopted by FINRA or the MSRB. The Commission finds that, for good cause and the reasons cited above, notice and solicitation of comment regarding the extension of the compliance date for the ban on thirdparty solicitation under rule 206(4)–5 are impracticable, unnecessary, or contrary to the public interest.14 In this regard, the Commission also notes that investment advisers need to be informed as soon as possible of the extension in order to plan and adjust their implementation process accordingly. By the Commission. Dated: June 8, 2012. Kevin M. O’Neill, Deputy Secretary. impairments in the affected body systems at step three of the sequential evaluation processes for initial claims and continuing disability reviews. This final rule is effective on June 13, 2012. DATES: FOR FURTHER INFORMATION CONTACT: Cheryl Williams, Director, Office of Medical Listings Improvement, 6401 Security Boulevard, Baltimore, MD 21235–6401, (410) 965–1020. For information on eligibility or filing for benefits, call our national toll-free number, 1–800–772–1213, or TTY 1– 800–325–0778, or visit our Internet site, Social Security Online, at https:// www.socialsecurity.gov. SUPPLEMENTARY INFORMATION: [FR Doc. 2012–14440 Filed 6–11–12; 8:45 am] Background BILLING CODE 8011–01–P SOCIAL SECURITY ADMINISTRATION 20 CFR Part 404 [Docket No. SSA–2012–0024] RIN 0960–AH49 Extension of Expiration Dates for Several Body System Listings Social Security Administration. Final rule. AGENCY: ACTION: We are extending the expiration dates of the following body systems in the Listing of Impairments (listings) in our regulations: Growth Impairment, Musculoskeletal System, Respiratory System, Cardiovascular System, Digestive System, Hematological Disorders, Skin Disorders, Neurological, and Mental Disorders. We are making no other revisions to these body system listings in this final rule. This extension will ensure that we continue to have the criteria we need to evaluate SUMMARY: would make conforming changes to MSRB Rules G– 8 (on books and records), G–9 (on preservation of records), and G–37 (on political contributions and prohibitions on municipal securities business); (iii) proposed Form G–37/G–42 and Form G–37x/G–42x; and (iv) a proposed restatement of a Rule G–37 interpretive notice issued by the MSRB in 1997. 13 See MSRB, MSRB Withdraws Pending Municipal Advisor Rule Proposals, MSRB Notice 2011–51 (Sept. 12, 2011) available at https://www. msrb.org/Rules-and-Interpretations/RegulatoryNotices/2011/2011-51.aspx. 14 See Section 553(b)(3)(B) of the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)) (‘‘APA’’) (an agency may dispense with prior notice and comment when it finds, for good cause, that notice and comment are ‘‘impracticable, unnecessary, or contrary to the public interest’’). This finding also satisfies the requirements of 5 U.S.C. 808(2), allowing the rules to become effective notwithstanding the requirement of 5 U.S.C. 801 (if PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 We use the listings in appendix 1 to subpart P of part 404 of 20 CFR at the third step of the sequential evaluation process to evaluate claims filed by adults and children for benefits based on disability under the title II and title XVI programs.1 20 CFR 404.1520(d), 416.920(d). The listings are in two parts: Part A (adults) and Part B (children). If you are age 18 or over, we apply the listings in part A when we assess your claim. If you are under age 18, we first use the criteria in part B of the listings. If the criteria in part B do not apply, we may use the criteria in part A when those criteria give appropriate consideration to the effects of the impairment(s) in children. 20 CFR 404.1525(b), 416.925(b). Explanation of Changes In this final rule, we are extending the dates on which the listings for nine body systems will no longer be effective. The current expiration dates for these listing are provided in the following chart: a federal agency finds that notice and public comment are ‘‘impractical, unnecessary or contrary to the public interest,’’ a rule ‘‘shall take effect at such time as the federal agency promulgating the rule determines’’). Also, because the Regulatory Flexibility Act (5 U.S.C. 601—612) only requires agencies to prepare analyses when the APA requires general notice of rulemaking, that Act does not apply to the actions that we are taking in this release. The change to the compliance date is effective upon publication in the Federal Register. This date is less than 30 days after publication in the Federal Register, in accordance with the APA, which allows effectiveness in less than 30 days after publication for ‘‘a substantive rule which grants or recognizes an exemption or relieves a restriction.’’ See 5 U.S.C. 553(d)(1). 1 We also use the listings in the sequential evaluation processes we use to determine whether a beneficiary’s disability continues. See 20 CFR 404.1594, 416.994, and 416.994a . E:\FR\FM\13JNR1.SGM 13JNR1

Agencies

[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Rules and Regulations]
[Pages 35263-35264]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14440]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 275

[Release No. IA-3418; File No. S7-18-09]
RIN 3235-AK39


Political Contributions by Certain Investment Advisers: Ban on 
Third-Party Solicitation; Extension of Compliance Date

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; extension of compliance date.

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

SUMMARY: The Securities and Exchange Commission (``Commission'' or 
``SEC'') is extending the date by which advisers must comply with the 
ban on third-party solicitation in rule 206(4)-5 under the Investment 
Advisers Act of 1940, the ``pay to play'' rule. The Commission is 
extending the compliance date in order to ensure an orderly transition 
for advisers and third-party solicitors as well as to provide 
additional time for them to adjust compliance policies and procedures 
after the transition.

DATES: Effective date: The effective date for this release is June 11, 
2012. The effective date for the ban on third-party solicitation under 
rule 206(4)-5 of the Investment Advisers Act of 1940 remains September 
13, 2010.

Compliance date: The compliance date for the ban on third-party 
solicitation is extended until nine months after the compliance date of 
a final rule adopted by the Commission by which municipal advisor firms 
must register under the Securities Exchange Act of 1934. Once such 
final rule is adopted, we will issue the new compliance date for the 
ban on third-party solicitation in a notice in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Vanessa M. Meeks, Attorney-Adviser, or 
Melissa A. Roverts, Branch Chief, at (202) 551-6787 or IArules@sec.gov, 
Office of Investment Adviser Regulation, Division of Investment 
Management, U.S. Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-8549.

SUPPLEMENTARY INFORMATION: On July 1, 2010, the Commission adopted rule 
206(4)-5 [17 CFR 275.206(4)-5] (the ``Pay to Play Rule'') under the 
Investment Advisers Act of 1940 [15 USC 80b] (``Advisers Act'') to 
prohibit an investment adviser from providing advisory services for 
compensation to a government client for two years after the adviser or 
certain of its executives or employees (``covered associates'') make a 
contribution to certain elected officials or candidates.\1\ As adopted, 
rule 206(4)-5 also prohibited an adviser and its covered associates 
from providing or agreeing to provide, directly or indirectly, payment 
to any third-party for a solicitation of advisory business from any 
government entity on behalf of such adviser, unless such third-party 
was an SEC-registered investment adviser or a registered broker or 
dealer subject to pay to play restrictions adopted by a registered 
national securities association (the ``third-party solicitor ban'').\2\ 
Rule 206(4)-5 became effective on September 13, 2010, and, as adopted, 
the third-party solicitor ban's compliance date was September 13, 2011. 
This compliance date was intended to provide advisers and third-party 
solicitors with sufficient time to conform their business practices to 
the rule, and to revise their compliance policies and procedures to 
prevent a violation. In addition, the transition period was intended to 
provide an opportunity for a registered national securities association 
to adopt a pay to play rule and for the Commission to assess whether 
that rule met the requirements of rule 206(4)-5(f)(9)(ii)(B).\3\ It was 
our understanding at the time, and it still is, that FINRA is planning 
to propose a rule that would meet those requirements, but we also 
suggested that we may need to take further action to ensure an orderly 
transition.\4\
---------------------------------------------------------------------------

    \1\ Political Contributions by Certain Investment Advisers, 
Investment Advisers Act Rel. No. 3043 (July 1, 2010) [75 FR 41018 
(July 14, 2010)] (``Pay to Play Release'').
    \2\ See id. at Section II.B.2.(b). The Commission must find, by 
order, that those restrictions: (i) Impose substantially equivalent 
or more stringent restrictions on broker-dealers than the Pay to 
Play Rule imposes on investment advisers; and (ii) are consistent 
with the objectives of the Pay to Play Rule.
    \3\ See note 2. While rule 206(4)-5 applies to any registered 
national securities association, the Financial Industry Regulatory 
Authority, or FINRA, is currently the only registered national 
securities association under section 19(a) of the Securities 
Exchange Act of 1934 [15 U.S.C. 78s(b)]. As such, for convenience, 
we will refer directly to FINRA in this Release when describing the 
exception for certain broker-dealers from the third-party solicitor 
ban.
    \4\ See id. at Section III.B.
---------------------------------------------------------------------------

    Not long after the Pay to Play Rule was adopted, Congress created a 
new category of Commission registrants called ``municipal advisors'' in 
the Dodd-Frank Act. The statutory definition of municipal advisor 
includes persons that undertake ``a solicitation of a municipal 
entity.'' \5\ These solicitors would be registered with us and also 
subject to regulation by the Municipal Securities Rulemaking Board 
(``MSRB''). In September 2010, we adopted an interim final rule 
establishing a temporary means for municipal advisors to satisfy the 
registration requirement.\6\ In December 2010, we proposed permanent 
rules and forms that would interpret the term ``municipal advisor'' and 
create a new process by which municipal advisors must register with the 
SEC.\7\ On January 14, 2011, the MSRB requested comment on a draft 
proposal to establish a number of rules applicable to municipal 
advisors, including a pay to play rule.\8\ In December 2011, we 
extended the expiration date of the interim final rule to September 30, 
2012.\9\
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    \5\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010) at section 975.
    \6\ The Dodd-Frank Act required municipal advisors to be 
registered with the Commission by October 2010. See section 975 of 
the Dodd-Frank Act.
    \7\ See Registration of Municipal Advisors, Exchange Act Release 
No. 63576 (Dec. 20, 2010) [76 FR 824, (Jan. 6, 2011)].
    \8\ See MSRB, Request for Comment on Pay to Play Rule for 
Municipal Advisors, MSRB Notice 2011-04 (Jan. 14, 2011) available at 
https://www.msrb.org/Rules-and-Interpretations/Regulatory-Notices/2011/2011-04.aspx?n=1.
    \9\ Extension of Temporary Registration of Municipal Advisors, 
Exchange Act Release No. 66020 (Dec. 21, 2011) [76 FR 80733 (Dec. 
27, 2011)].
---------------------------------------------------------------------------

    With the understanding that municipal advisors would be subject to 
permanent registration requirements with the Commission and could be 
subject to an MSRB pay to play rule, on June 22, 2011, we amended the 
Pay to Play Rule to add municipal advisors to the categories of 
registered entities--referred to as ``regulated persons''--excepted 
from the rule's third-party solicitor ban.\10\ For a municipal advisor 
to qualify as a ``regulated person,'' it must be registered with us as 
such and subject to a pay to play rule adopted by the MSRB. In 
addition, the Commission

[[Page 35264]]

must find, by order, that the MSRB rule: (i) Imposes substantially 
equivalent or more stringent restrictions on municipal advisors than 
the Pay to Play Rule imposes on investment advisers; and (ii) is 
consistent with the objectives of the Advisers Act Pay to Play Rule. 
The Commission also extended the date by which advisers must comply 
with the ban on third-party solicitation from September 13, 2011 to 
June 13, 2012 due to the expansion of the definition of ``regulated 
persons.'' The extension was intended, again, to provide sufficient 
time for an orderly transition.\11\
---------------------------------------------------------------------------

    \10\ Rules Implementing Amendments to the Investment Advisers 
Act of 1940, Investment Advisers Act Rel. No. 3221 (June 22, 2011) 
[76 FR 42950 (July 19, 2011)] (``Implementing Release'').
    \11\ See id. at section II.D.1.
---------------------------------------------------------------------------

    Soon thereafter, on August 19, 2011, the MSRB filed a proposal with 
the Commission that included a new pay to play rule regarding the 
solicitation activities of municipal advisors and amendments to several 
existing MSRB rules related to pay to play practices.\12\ On September 
9, 2011, the MSRB withdrew the proposals, stating that it intends to 
resubmit them upon our adoption of a permanent definition of the term 
``municipal advisor.'' \13\
---------------------------------------------------------------------------

    \12\ See Self-Regulatory Organizations; Municipal Securities 
Rulemaking Board; Notice of Filing of Proposed New Rule G-42, on 
Political Contributions and Prohibitions on Municipal Advisory 
Activities; Proposed Amendments to Rules G-8, on Books and Records, 
G-9, on Preservation of Records, and G-37, on Political 
Contributions and Prohibitions on Municipal Securities Business; 
Proposed Form G-37/G-42 and Form G-37x/G-42x; and a Proposed 
Restatement of a Rule G-37 Interpretive Notice, Exchange Act Release 
No. 65255 (Sept. 2, 2011) [76 FR 55976 (Sept. 9, 2011)]; MSRB, MSRB 
Files Pay to Play Rule for Municipal Advisors and Changes to Dealer 
Pay to Play Rule, MSRB Notice 2011-46 (Aug. 19, 2011) available at 
https://www.msrb.org/Rules-and-Interpretations/Regulatory-Notices/2011/2011-46.aspx. The proposal consisted of (i) proposed MSRB Rule 
G-42 (on political contributions and prohibitions on municipal 
advisory activities); (ii) proposed amendments that would make 
conforming changes to MSRB Rules G-8 (on books and records), G-9 (on 
preservation of records), and G-37 (on political contributions and 
prohibitions on municipal securities business); (iii) proposed Form 
G-37/G-42 and Form G-37x/G-42x; and (iv) a proposed restatement of a 
Rule G-37 interpretive notice issued by the MSRB in 1997.
    \13\ See MSRB, MSRB Withdraws Pending Municipal Advisor Rule 
Proposals, MSRB Notice 2011-51 (Sept. 12, 2011) available at https://www.msrb.org/Rules-and-Interpretations/Regulatory-Notices/2011/2011-51.aspx.
---------------------------------------------------------------------------

    In order to ensure an orderly transition for advisers and third-
party solicitors as well as to provide additional time for them to 
adjust compliance policies and procedures after the transition, we 
believe that an extension of the compliance date for the Pay to Play 
Rule's third-party solicitor ban is appropriate until nine months after 
the compliance date of a final rule adopted by the Commission by which 
municipal advisor firms must register under the Securities Exchange Act 
of 1934. Final rules as to who must register as a municipal advisor, 
and the process for doing so, will provide clarity to persons who may 
qualify as municipal advisors, and the investment advisers who may hire 
them, as to status and registration obligations under these future 
Commission rules. The new compliance date will also allow all 
solicitors to assess compliance obligations with pay to play rules that 
may be adopted by FINRA or the MSRB.
    The Commission finds that, for good cause and the reasons cited 
above, notice and solicitation of comment regarding the extension of 
the compliance date for the ban on third-party solicitation under rule 
206(4)-5 are impracticable, unnecessary, or contrary to the public 
interest.\14\ In this regard, the Commission also notes that investment 
advisers need to be informed as soon as possible of the extension in 
order to plan and adjust their implementation process accordingly.
---------------------------------------------------------------------------

    \14\ See Section 553(b)(3)(B) of the Administrative Procedure 
Act (5 U.S.C. 553(b)(3)(B)) (``APA'') (an agency may dispense with 
prior notice and comment when it finds, for good cause, that notice 
and comment are ``impracticable, unnecessary, or contrary to the 
public interest''). This finding also satisfies the requirements of 
5 U.S.C. 808(2), allowing the rules to become effective 
notwithstanding the requirement of 5 U.S.C. 801 (if a federal agency 
finds that notice and public comment are ``impractical, unnecessary 
or contrary to the public interest,'' a rule ``shall take effect at 
such time as the federal agency promulgating the rule determines''). 
Also, because the Regulatory Flexibility Act (5 U.S.C. 601--612) 
only requires agencies to prepare analyses when the APA requires 
general notice of rulemaking, that Act does not apply to the actions 
that we are taking in this release. The change to the compliance 
date is effective upon publication in the Federal Register. This 
date is less than 30 days after publication in the Federal Register, 
in accordance with the APA, which allows effectiveness in less than 
30 days after publication for ``a substantive rule which grants or 
recognizes an exemption or relieves a restriction.'' See 5 U.S.C. 
553(d)(1).

---------------------------------------------------------------------------
    By the Commission.

    Dated: June 8, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14440 Filed 6-11-12; 8:45 am]
BILLING CODE 8011-01-P
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