Technical Amendments to Form ADV and Form ADV-W, 21472-21475 [2017-09331]
Download as PDF
21472
Federal Register / Vol. 82, No. 88 / Tuesday, May 9, 2017 / Rules and Regulations
current FAA training philosophy and
added new FAA procedures not
previously part of the MU–2B training
under SFAR No. 108. The final rule
required all MU–2B training programs
to meet the requirements of subpart N
of part 91 and to be approved by the
FAA to ensure safety is maintained.
After the final rule was published, the
FAA discovered an error in the
regulatory text of the rule. The FAA was
also notified that the publisher of the
MHI MU–2B Checklists, which were
incorporated by reference in the final
rule, changed on March 31, 2017.
Because the publisher’s contact
information is codified in § 91.1721(b),
the regulatory text of paragraph (b) was
incorrect as of March 31, 2017. These
errors, and the corresponding
corrections, are as follows:
Corrections
Section 91.1715(a) currently reads, in
part, ‘‘takeoff landing currency
requirements.’’ The FAA is adding the
word ‘‘and’’ to correct an inadvertent
omission in the regulation.
nlaroche on DSK30NT082PROD with RULES
2. Publisher’s Contact Information in
§ 91.1721(b)
The MHI MU–2B Cockpit Checklists
are incorporated by reference in
§ 91.1721. Section 91.1721(b) contains
the contact information of the company
who publishes these checklists. When
the final rule was published, Turbine
Aircraft Services, Inc. (TAS) was
contracted by Mitsubishi Heavy
Industries America, Inc. (MHIA) to print
and distribute the MU–2B Cockpit
Checklists. Therefore, § 91.1721(b)
currently contains TAS’s contact
information. The FAA was notified,
however, that beginning on March 31,
2017, MHIA will be responsible for
printing and distributing the MU–2B
Cockpit Checklists. This correction
document updates the contact
information in § 91.1721(b) to reflect the
new publisher.
Because these amendments are
technical in nature and result in no
substantive changes, the FAA finds that
the notice and public procedures under
5 U.S.C. 553(b) are unnecessary. For the
same reason, the FAA finds good cause
exists under 5 U.S.C. 553(d)(3) to make
the amendments effective in less than
30 days.
List of Subjects in 14 CFR Part 91
Aircraft, Airmen, Airports, Aviation
safety, Freight, Incorporation by
reference, Reporting and recordkeeping
requirements.
14:51 May 08, 2017
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In consideration of the foregoing, the
Federal Aviation Administration
corrects chapter I of title 14, Code of
Federal Regulations as follows:
PART 91—GENERAL OPERATING AND
FLIGHT RULES
1. The authority citation for part 91
continues to read as follows:
■
Authority: 49 U.S.C. 106(f), 106(g), 1155,
40101, 40103, 40105, 40113, 40120, 44101,
44111, 44701, 44704, 44709, 44711, 44712,
44715, 44716, 44717, 44722, 46306, 46315,
46316, 46504, 46506–46507, 47122, 47508,
47528–47531, 47534, articles 12 and 29 of the
Convention on International Civil Aviation
(61 Stat. 1180), (126 Stat. 11).
2. Revise paragraph (a) of § 91.1715 to
read as follows:
■
(a) The takeoff and landing currency
requirements of § 61.57 of this chapter
must be maintained in the Mitsubishi
MU–2B series airplane. Takeoff and
landings in other multiengine airplanes
do not meet the takeoff and landing
currency requirements for the
Mitsubishi MU–2B series plane. Takeoff
and landings in either the short-body or
long-body Mitsubishi MU–2B model
airplane may be credited toward takeoff
and landing currency for both
Mitsubishi MU–2B model groups.
*
*
*
*
*
3. In § 91.1721, revise the introductory
text of paragraph (b) to read as follows:
■
§ 91.1721
Incorporation by reference.
*
*
*
*
*
(b) Mitsubishi Heavy Industries
America, Inc., 4951 Airport Parkway,
Suite 530, Addison, TX 75001.
*
*
*
*
*
Issued under authority provided by
(consult AGC) 49 U.S.C. 106(f), 44701(a), and
44703 in Washington, DC, on May 2, 2017.
Lirio Liu,
Director, Office of Rulemaking.
[FR Doc. 2017–09316 Filed 5–8–17; 8:45 am]
BILLING CODE 4910–13–P
SECURITIES AND EXCHANGE
COMMISSION
17 CFR Part 279
[Release No. IA–4698]
Technical Amendments to Form ADV
and Form ADV–W
Securities and Exchange
Commission.
AGENCY:
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Final rule; technical
amendments.
ACTION:
§ 91.1715 Currency requirements and
flight review.
1. Takeoff and Landing Currency
Requirements in § 91.1715(a)
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The Amendment
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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 IArules@
sec.gov, 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
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
SUMMARY:
1 Wyoming Uniform Securities Act, Wyo. Stat.
Ann. §§ 17–4–101, 17–4–403 through 17–4–412
(effective July 1, 2017) (‘‘Wyoming Securities Act’’).
2 15 U.S.C. 80b–3a; 15 U.S.C. 80b–3.
3 15 U.S.C. 80b–3a(a)(1).
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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
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
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
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 midsized 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)].
7 Wyoming Securities Act §§ 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.
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14:51 May 08, 2017
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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
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
We do not believe that these
ministerial amendments to Forms ADV
and ADV–W, to reflect the addition of
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.
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).
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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
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 Commissionregistered 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
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.
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.
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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.
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
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),
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14:51 May 08, 2017
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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.
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 Commissionregistered 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
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.
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.
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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.
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 DoddFrank 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.
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)
19 See
supra note 5.
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.
20 ‘‘The
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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.
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
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.
[Amended]
2. Form ADV (referenced in § 279.1) is
amended by:
■ 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’’;
■ b. Adding ‘‘b WY’’ after ‘‘b WI’’ in
the table of Part 1A, Item 2.C.; and
■ 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.
§ 279.2
[Amended]
3. Form ADV–W (referenced in
§ 279.2) is amended by adding ‘‘b WY’’
after ‘‘b WI’’ in the table in paragraph
(b) of the Status section.
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■
Note: The text of Form ADV–W does not
and the amendments will not appear in the
Code of Federal Regulations.
By the Commission.
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14:51 May 08, 2017
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List of Subjects in 34 CFR Part 612
[FR Doc. 2017–09331 Filed 5–8–17; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF EDUCATION
34 CFR Parts 612 and 686
Administrative practice and
procedure, Aliens, Colleges and
universities, Consumer protection,
Grant programs—education, Loan
programs—education, Reporting and
recordkeeping requirements, Selective
Service System, Student aid, Vocational
education.
RIN 1840–AD07
Dated: May 4, 2017.
Betsy DeVos,
Secretary of Education.
Teacher Preparation Issues
Revocation of Amendatory Instructions
[Docket ID ED–2014–OPE–0057]
Office of Postsecondary
Education, Department of Education.
ACTION: Final rule; CRA Revocation.
AGENCY:
Under the Congressional
Review Act, Congress has passed, and
the President has signed, a resolution of
disapproval of the Teacher Preparation
Issues final regulations that were
published on October 31, 2016.
Pursuant to the resolution, the
Department of Education (Department)
is removing applicable regulations from
the Code of Federal Regulations.
DATES: This action is effective May 9,
2017.
FOR FURTHER INFORMATION CONTACT:
Sophia McArdle, Ph.D., U.S.
Department of Education, 400 Maryland
Avenue SW., Room 6W256,
Washington, DC 20202. Telephone:
(202) 453–6318 or by email:
sophia.mcardle@ed.gov.
If you use a telecommunications
device for the deaf or a text telephone,
call the Federal Relay Service, toll free,
at 1–800–877–8339.
SUPPLEMENTARY INFORMATION: On
October 31, 2016, the Department
published the teacher preparation issues
notice of final regulations (81 FR
75494). The regulations in 34 CFR part
612 were effective November 30, 2016.
The amendments to part 686 were to be
effective on July 1, 2017, except for
amendatory instructions 4.A., 4.B.,
4.C.iv., 4.C.x., and 4.C.xi., amending 34
CFR 686.2(d) and (e), which were to be
effective July 1, 2021. Congress
subsequently passed a resolution of
disapproval of the rule, and President
Trump signed the resolution into law as
Public Law 115–14 on March 27, 2017.
Accordingly, the Department is hereby
removing part 612 of the teacher
preparation issues final regulations from
the Code of Federal Regulations. The
amendments to part 686 were not
effective, and therefore, were never part
of the Code of Federal Regulations. The
Department is removing the instructions
amending part 686 from the rule that
published October 31, 2016.
SUMMARY:
Text of Rule and Form Amendments
§ 279.1
Dated: May 4, 2017.
Brent J. Fields,
Secretary.
21475
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
For the reasons discussed in the
preamble, and under the authority of the
Congressional Review Act (5 U.S.C. 801
et seq.) and Public Law 115–14 (March
27, 2017), the Secretary revokes the
following amendatory instructions from
FR Doc. 2016–24856, published in the
issue of Monday, October 31, 2016 (81
FR 75494):
§§ 686.1, 686.2, 686.3, 686.11, 686.12, 686.32,
686.37, 686.40, 686.42, and 686.43
[Revocation of instructions]
1. On pages 75619 through 75622,
remove amendatory instructions 2
through 12.
■
Amendment to 34 CFR Chapter VI
For the reasons discussed in the
preamble, and under the authority of the
Congressional Review Act (5 U.S.C. 801
et seq.) and Public Law 115–14 (March
27, 2017), the Secretary also amends
chapter VI of title 34 of the Code of
Federal Regulations as follows:
PART 612—[Removed]
■
1. Remove part 612.
[FR Doc. 2017–09351 Filed 5–8–17; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 622
[Docket No. 160810719–7353–02]
RIN 0648–BG29
Amendments to the Reef Fish, Spiny
Lobster, and Corals and Reef
Associated Plants and Invertebrates
Fishery Management Plans of Puerto
Rico and the U.S. Virgin Islands
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Final rule.
AGENCY:
E:\FR\FM\09MYR1.SGM
09MYR1
Agencies
[Federal Register Volume 82, Number 88 (Tuesday, May 9, 2017)]
[Rules and Regulations]
[Pages 21472-21475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09331]
=======================================================================
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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.
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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
IArules@sec.gov, 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\
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\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'').
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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\
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\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)].
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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\
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\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.
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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\
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\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.
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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\
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\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\
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\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.
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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.
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\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.
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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.
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\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.
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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.
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\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.
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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.
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\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.
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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