Exemptive Relief for Individuals and Entities Affected by Hurricanes Harvey, Irma or Maria, 46335-46338 [2017-21284]
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Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices
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ensure that the Clearing Agencies’
systems have a high degree of security,
resiliency, and operational reliability.
Furthermore, as the Framework
indicates TRM’s early and continuous
involvement in the Clearing Agencies’
initiatives, the Framework reveals how
TRM would enable the Clearing
Agencies to grow and evolve while
accounting for technology and cyber
security concerns, thereby ensuring the
Clearing Agencies’ adequate and
scalable capacity.
Therefore, by describing TRM’s role
and responsibilities in helping the
Clearing Agencies maintain systems
with a high degree of security,
resiliency, operational reliability, and
adequate, scalable capacity, the
Commission believes the Framework is
consistent with the requirements of Rule
17Ad–22(e)(17)(ii).50
rule changes are consistent with the
requirements of the Act and in
particular with the requirements of
Section 17A of the Act 53 and the rules
and regulations thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that
proposed rule changes SR–DTC–2017–
014, SR–NSCC–2017–013, and SR–
FICC–2017–017 be, and hereby are,
approved.54
D. Consistency With Rule 17Ad–
22(e)(17)(iii)
Rule 17Ad–22(e)(17)(iii) under the
Act requires, in part, that each covered
clearing agency establish, implement,
maintain and enforce written policies
and procedures reasonably designed to
manage the covered clearing agency’s
operational risks by establishing and
maintaining a business continuity plan
that addresses events posing a
significant risk of disrupting
operations.51
As described above, the Framework
would describe how the Clearing
Agencies establish and maintain
business continuity plans. Specifically,
the Framework would describe the
critical features of the Clearing
Agencies’ business continuity plans to
demonstrate how they are designed to
address events posing a significant risk
of disrupting the Clearing Agencies’
operations. The Framework would also
indicate how each Clearing Agency
Business and Clearing Agency Support
Area reviews and ratifies its respective
plan and its business impact analysis,
relative to its assigned Tier. Therefore,
as the Framework describes how the
Clearing Agencies establish and
maintain their business continuity
plans, which are designed to address
events posing a significant risk of
disrupting operations, the Commission
believes that the Framework is
consistent with the requirements of Rule
17Ad–22(e)(17)(iii).52
[SECURITIES EXCHANGE ACT OF 1934
Release No. 81760/September 28, 2017:
INVESTMENT COMPANY ACT OF 1940
Release No. 32842/September 28, 2017]
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
50 Id.
51 17
CFR 240.17Ad–22(e)(17)(iii).
52 Id.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.55
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–21273 Filed 10–3–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Exemptive Relief for Individuals and
Entities Affected by Hurricanes
Harvey, Irma or Maria
Order Under Section 15b, Section 17a And
Section 36 Of The Securities Exchange Act
Of 1934 Granting Exemptions From Specified
Provisions Of The Exchange Act And Certain
Rules Thereunder
Order Under Section 6(C) And Section
38(A) Of The Investment Company Act Of
1940 Granting Exemptions From Specified
Provisions Of The Investment Company Act
And Certain Rules Thereunder
In late August 2017, Hurricane Harvey
caused catastrophic damage along the
Texas and Louisiana coast, in early
September 2017, Hurricane Irma caused
catastrophic damage to the U.S. Virgin
Islands, Puerto Rico and the Florida
coast, and, in mid-September 2017,
Hurricane Maria caused additional
catastrophic damage to the U.S. Virgin
Islands and Puerto Rico. The storms and
subsequent flooding have displaced
individuals and businesses and
disrupted communications and
transportation across the affected
regions. We are issuing this Order to
address the needs of companies and
individuals with obligations under the
federal securities laws who have been
directly or indirectly affected by
Hurricane Harvey, Hurricane Irma or
Hurricane Maria and their respective
aftermaths.
53 15
U.S.C. 78q–1.
approving the Proposed Rule Changes, the
Commission considered the proposals’ impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
55 17 CFR 200.30–3(a)(12).
54 In
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Section 15B(a)(4) of the Securities
Exchange Act of 1934 (the ‘‘Exchange
Act’’) provides that the Securities and
Exchange Commission (the
‘‘Commission’’), by rule or order, upon
its own motion or upon application,
may conditionally or unconditionally
exempt any broker, dealer, municipal
securities dealer or municipal advisor,
or class of brokers, dealers, municipal
securities dealers, or municipal advisors
from any provision of Section 15B or the
rules or regulations thereunder, if the
Commission finds that such exemption
is consistent with the public interest,
the protection of investors and the
purposes of Section 15B.
Section 36 of the Exchange Act
authorizes the Commission, by rule,
regulation or order, to exempt, either
conditionally or unconditionally, any
person, security or transaction, or any
class or classes of persons, securities or
transactions, from any provision or
provisions of the Exchange Act or any
rule or regulation thereunder, to the
extent that such exemption is necessary
or appropriate in the public interest,
and is consistent with the protection of
investors.
Section 17A(c)(1) of the Exchange Act
provides that the appropriate regulatory
agency, by rule or by order, upon its
own motion or upon application, may
conditionally or unconditionally
exempt any person or security or class
of persons or securities from any
provision of Section 17A or any rule or
regulation prescribed under Section
17A, if the appropriate regulatory
agency 1 finds that such exemption is in
the public interest and consistent with
the protection of investors and the
purposes of Section 17A, including the
prompt and accurate clearance and
settlement of securities transactions and
the safeguarding of securities and funds.
Section 17A(c)(1) also requires that the
Commission not object to the use of
exemptive authority in instances where
an appropriate regulatory authority
other than the Commission is providing
exemptive relief.
Section 6(c) of the Investment
Company Act of 1940 (the ‘‘Company
Act’’) provides that the Commission
may conditionally or unconditionally
exempt any person, security or
transaction, or any class or classes of
persons, securities or transactions, from
any provision or provisions of the
Company Act, or any rule or regulation
thereunder, if and to the extent that
such exemption is necessary or
appropriate in the public interest and
consistent with the protection of
1 Section 3(a)(34)(B) of the Exchange Act defines
‘‘appropriate regulatory authority.’’
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Rule 12b–2) subject to the reporting
requirements of Exchange Act Section
13(a) or 15(d), and any person required
to make any filings with respect to such
a registrant, is exempt from any
requirement to file or furnish materials
with the Commission under Exchange
Act Sections 13(a), 13(d), 13(f), 13(g),
14(a), 14(c), 14(f), 15(d) and 16(a),
Regulations 13A, 13D–G, 14A, 14C and
15D, and Exchange Act Rules 13f–1,
14f–1 and 16a–3, as applicable, where
the conditions below are satisfied.
I. Time Period for the Relief
The time period for the relief
specified in Sections II and VI of this
Order is as follows:
(1) With respect to those persons or
entities affected by Hurricane Harvey,
for the period from and including
August 25, 2017 to October 6, 2017, all
reports, schedules or forms must be
filed on or before October 10, 2017;
(2) With respect to those persons or
entities affected by Hurricane Irma, for
the period from and including
September 6, 2017 to October 18, 2017,
all reports, schedules or forms must be
filed on or before October 19, 2017; and
(3) With respect to those persons or
entities affected by Hurricane Maria, for
the period from and including
September 20, 2017 to November 1,
2017, all reports, schedules or forms
must be filed on or before November 2,
2017.
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investors and the purposes fairly
intended by the policy and provisions of
the Company Act. Section 38(a) of the
Company Act provides that the
Commission may make, issue, amend
and rescind such rules and regulations
and such orders as are necessary or
appropriate to the exercise of the
powers conferred upon the Commission
under the Company Act.
The necessity for prompt action of the
Commission does not permit prior
notice of the Commission’s action.
Conditions
II. Filing Requirements for Registrants
and Other Persons
The lack of communications,
transportation, electricity, facilities and
available staff and professional advisors
as a result of Hurricane Harvey,
Hurricane Irma and Hurricane Maria
could hamper the efforts of public
companies and other persons with filing
obligations to meet their filing
deadlines. At the same time, investors
have an interest in the timely
availability of required information
about these companies and the activities
of persons required to file schedules and
reports with respect to these companies.
While the Commission believes that the
relief from filing requirements provided
by the exemption below is necessary
and appropriate in the public interest
and consistent with the protection of
investors, we remind public companies
and other persons who are the subjects
of this Order to continue to evaluate
their obligations to make materially
accurate and complete disclosures in
accordance with the anti-fraud
provisions of the federal securities laws.
Accordingly, it is ordered, pursuant to
Section 36 of the Exchange Act, that a
registrant (as defined in Exchange Act
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(a) The registrant or person other than
a registrant is not able to meet a filing
deadline due to Hurricane Harvey,
Hurricane Irma or Hurricane Maria and
their respective aftermaths;
(b) The registrant or person other than
a registrant files with the Commission
any report, schedule or form required to
be filed during the applicable period of
relief on or before the applicable
deadline set forth in Section I; and
(c) In any such report, schedule or
form filed pursuant to this Order, the
registrant or person other than a
registrant must disclose that it is relying
on this Order and state the reasons why,
in good faith, it could not file such
report, schedule or form on a timely
basis.
III. Furnishing of Proxy and
Information Statements
The conditions in the areas affected
by Hurricane Harvey, Hurricane Irma
and Hurricane Maria, including
displacement of thousands of
individuals and the destruction of
property, have prevented and will
continue to prevent the delivery of mail
to the affected areas. In light of these
conditions, we believe that relief is
warranted for those seeking to comply
with our rules imposing requirements to
furnish materials to security holders
when mail delivery is not possible and
that the following exemption is
necessary and appropriate in the public
interest and consistent with the
protection of investors.
Accordingly, it is ordered, pursuant to
Section 36 of the Exchange Act, that a
registrant or any other person is exempt
from the requirements to furnish proxy
statements, annual reports and other
soliciting materials, as applicable (the
‘‘Soliciting Materials’’), and the
requirements of the Exchange Act and
the rules thereunder to furnish
information statements and annual
reports, as applicable (the ‘‘Information
Materials’’), where the conditions below
are satisfied.
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Conditions
(a) The registrant’s security holder has
a mailing address located within a zip
code where, as a result of Hurricane
Harvey, Hurricane Irma or Hurricane
Maria, the registrant’s common carrier
has suspended delivery service of the
type or class customarily used by the
registrant;
(b) The registrant or other person
making a solicitation has followed
normal procedure when furnishing the
Soliciting Materials to the security
holder in order to ensure that the
Soliciting Materials preceded or
accompanied the proxy, as required by
the rules applicable to the particular
form of Soliciting Materials, or, in the
case of Information Materials, the
registrant has followed normal
procedure when furnishing the
Information Materials to the security
holder in accordance with the rules
applicable to Information Materials; and
(c) If requested by the security holder,
the registrant or other person provides
the Soliciting Materials or Information
Materials by a means reasonably
designed to furnish the Soliciting
Materials or Information Materials to the
security holder.
Any registrant or other person in need
of additional assistance related to
deadlines, delivery obligations or their
public filings, should contact the
Division of Corporation Finance at (202)
551–3500 or at https://tts.sec.gov/cgibin/corp_fin_interpretive.
IV. Transmittal of Annual and SemiAnnual Reports to Investors Required
by the Company Act and the Rules
Thereunder
For reasons similar to those cited in
Section III, we believe that relief is
warranted for the transmittal by
registered management investment
companies and registered unit
investment trusts (collectively,
‘‘registered investment companies’’) of
annual and semi-annual reports to
investors and that the following
exemption is necessary and appropriate
in the public interest and consistent
with the protection of investors.
Accordingly, it is ordered, pursuant to
Sections 6(c) and 38(a) of the Company
Act that for the period from and
including August 25, 2017 to November
1, 2017, a registered investment
company is exempt from the
requirements of Section 30(e) of the
Company Act and Rule 30e–1
thereunder to transmit annual and semiannual reports to investors affected by
Hurricane Harvey, Hurricane Irma or
Hurricane Maria; and
For the period from and including
August 25, 2017 to November 1, 2017,
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a registered unit investment trust is
exempt from the requirements of
Section 30(e) of the Company Act and
Rule 30e–2 thereunder to transmit
annual and semi-annual reports to
unitholders affected by Hurricane
Harvey, Hurricane Irma or Hurricane
Maria,
Provided that:
(a) The affected investor’s mailing
address for transmittal as listed in the
records of the registered investment
company has a zip code for which the
registered investment company’s
common carrier has suspended mail
service, as a result of Hurricane Harvey,
Hurricane Irma or Hurricane Maria, of
the type or class customarily used by
the registered investment company for
transmittal of reports; and
(b) The registered investment
company or other person promptly
transmits the reports to affected
investors: Either (a) if requested by the
investor; or (b) at the earlier of (i)
November 2, 2017 or (ii) the resumption
of the applicable mail service.
Registered investment companies who
are unable to meet a deadline as
extended by this relief, or in need of
additional assistance regarding issues
under the Company Act, should contact
the Division of Investment Management,
Office of Chief Counsel, at (202) 551–
6825 or IMOCC@sec.gov.
Registered investment advisers in
need of additional assistance regarding
issues under the Investment Advisers
Act of 1940 should contact the Division
of Investment Management, Investment
Adviser Regulation Office, at (202) 551–
6999 or IARDLive@sec.gov.
V. Transfer Agent Compliance With
Sections 17A and 17(f) of the Exchange
Act
Exchange Act Section 17A and
Section 17(f), as well as the rules
promulgated under Sections 17A and
17(f), contain requirements for
registered transfer agents relating to,
among other things, processing
securities transfers, safekeeping of
investor and issuer funds and securities
and maintaining records of investor
ownership. Following the events of
Hurricane Harvey, Hurricane Irma and
Hurricane Maria, registered transfer
agents located in the affected regions
may have difficulty complying with
some or all of their obligations as
registered transfer agents. In addition,
registered transfer agents located
outside the affected regions may be
unable to conduct business with entities
or security holders inside the regions,
thereby making it difficult to process
securities transactions and corporate
actions in conformance with Section
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17A, Section 17(f) and the rules
thereunder.
While the national clearance and
settlement system continues to operate
well in light of these emergencies, the
Commission recognizes that the need to
effect securities transfers and payments
to and from security holders in the
affected regions may present
compliance issues for affected transfer
agents. Therefore, the Commission is
using its authority under Section 17A
and Section 36 of the Exchange Act to
provide temporary relief from certain
regulatory provisions. This Order
temporarily exempts transfer agents
from the requirements of: (1) Section
17A of the Exchange Act and Rules
17Ad–1 through 17Ad–20 thereunder;
and (2) Section 17(f) of the Exchange
Act and Rules 17f–1 and 17f–2
thereunder. The Commission finds the
following exemption to be in the public
interest and consistent with the
protection of investors and the purpose
of Section 17A of the Exchange Act,
including the prompt and accurate
clearance and settlement of securities
transactions and the safeguarding of
securities and funds.
Accordingly, it is ordered, pursuant to
Sections 17A and 36 of the Exchange
Act, that any registered transfer agent
that is unable to comply with Section
17A and Section 17(f) of the Exchange
Act and the rules promulgated
thereunder, as applicable, due to
Hurricane Harvey, Hurricane Irma or
Hurricane Maria and their respective
aftermaths is hereby temporarily
exempted from complying with such
provisions for the period from and
including August 25, 2017 to November
2, 2017 where the conditions below are
satisfied.
Conditions
(a) A registered transfer agent relying
on this Order must notify the
Commission in writing by November 2,
2017 of the following:
(1) The transfer agent is relying on
this Order;
(2) A statement of the reasons why, in
good faith, the transfer agent is unable
to comply with Section 17A and Section
17(f) of the Exchange Act and the rules
promulgated thereunder, as applicable;
(3) If the transfer agent knows or
believes that the books and records it is
required to maintain pursuant to
Section 17A and the rules thereunder
were lost, destroyed or materially
damaged, information, to the extent
reasonably available, as to the type of
books and records that were maintained,
the names of the issuers for whom such
books and records were maintained, the
extent of the loss of, or damage to, such
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books and records and the steps taken
to ameliorate any such loss or damage;
and
(4) If the transfer agent knows or
believes that funds or securities
belonging to either issuers or security
holders and within its possession were,
for any reason, lost, destroyed, stolen or
unaccounted for, information, to the
extent reasonably available, regarding
the dollar amount of any such funds and
the number of such securities and the
steps taken to ameliorate any such loss;
and
(b) Transfer agents that have custody
or possession of any security holder or
issuer funds or securities shall use all
reasonable means available to ensure
that all such securities are held in
safekeeping and are handled, in light of
all facts and circumstances, in a manner
reasonably free from risk of theft, loss or
destruction and that all funds are
protected against misuse. To the extent
possible, all security holder or issuer
funds that remain in the custody of the
transfer agent shall be maintained in a
separate bank account held for the
exclusive benefit of security holders
until such funds are properly remitted.
The notification required under (a)
above shall be sent to: U.S. Securities
and Exchange Commission, Division of
Trading and Markets, Office of
Clearance and Settlement, 100 F Street
NE., Washington, DC 20549–7010.
The Commission encourages
registered transfer agents and the issuers
for whom they act to inform affected
security holders whom they should
contact concerning their accounts, their
access to funds or securities and other
shareholder concerns. If feasible, issuers
and their transfer agents should place a
notice on their websites or providing
toll free numbers to respond to
inquiries.
Transfer agents who are unable to
meet a deadline as extended by this
relief, or in need of additional
assistance, should contact the Division
of Trading and Markets at (202) 551–
5777 or tradingandmarkets@sec.gov.
VI. Filing of Annual Update to Form
MA as Required by the Exchange Act
and the Rules Thereunder
Section 15B of the Exchange Act and
Rule 15Ba1–5(a)(1) thereunder requires
each registered municipal advisor to file
with the Commission an annual update
to its Form MA. For reasons similar to
those cited in Section II, the
Commission believes that relief is
warranted for the filing with the
Commission of annual updates to Form
MA by registered municipal advisors
and that such relief is consistent with
the public interest, the protection of
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investors and the purposes of Section
15B of the Exchange Act.
Accordingly, it is so ordered,
pursuant to Section 15B(a)(4) of the
Exchange Act, that any registered
municipal advisor is exempt from the
requirement to file an annual update to
Form MA with the Commission, as
required by Section 15B of the Exchange
Act and Rule 15Ba1–5(a)(1) thereunder,
where the conditions below are
satisfied.
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Conditions
(a) The registered municipal advisor
is not able to fulfill its obligation to file
an annual update to the registered
municipal advisor’s Form MA within 90
days of the end of the registered
municipal advisor’s fiscal year due to
Hurricane Harvey, Hurricane Irma or
Hurricane Maria;
(b) The registered municipal advisor
files with the Commission its annual
update to Form MA required to be filed
during the applicable period of relief on
or before the applicable deadline set
forth in Section I; and
(c) In any such annual update to its
Form MA filing, the registered
municipal advisor must disclose that it
is relying on this Order and state the
reasons why, in good faith, it could not
file such annual update to Form MA on
a timely basis.
Registered municipal advisors who
are unable to meet a deadline as
extended by this relief or in need of
additional assistance, should contact the
Office of Municipal Securities at (202)
551–5680 or munis@sec.gov.
VII. Independence—Bookkeeping or
Other Services Related to the
Accounting Records or Financial
Statements of the Audit Client
The conditions in the areas affected
by Hurricane Harvey, Hurricane Irma
and Hurricane Maria, including
displacement of individuals, the
destruction of property and loss or
destruction of corporate records, may
require extraordinary efforts to
reconstruct lost or destroyed accounting
records. The Commission understands
that in these particularly challenging
situations an audit client may look to its
auditor for assistance in reconstruction
of its accounting records because of the
auditor’s knowledge of the client’s
financial systems and records. Under
Section 10A(g)(1) of the Exchange Act
and Rule 2–01(c)(4)(i) of Regulation S–
X, auditors are prohibited from
providing bookkeeping or other services
relating to the accounting records of the
audit client, and in Rule 2–01(c)(4)(i) of
Regulation S–X, these prohibited
services are described as including
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‘‘maintaining or preparing the audit
client’s accounting records’’ or
‘‘preparing or originating source data
underlying the audit client’s financial
statements.’’ In light of the conditions in
areas affected by Hurricane Harvey,
Hurricane Irma and Hurricane Maria,
however, we believe that limited relief
from these prohibitions is warranted for
those registrants and other persons that
are required to comply with the
independence requirements of the
federal securities laws and the
Commission’s rules and regulations
thereunder and that are affected by
those conditions. The Commission finds
the following exemption to be necessary
and appropriate in the public interest
and consistent with the protection of
investors.
Accordingly, it is ordered, pursuant to
Section 36 of the Exchange Act, that
independent certified public
accountants engaged to provide audit
services to registrants and other persons
required to comply with the
independence requirements of the
federal securities laws and the
Commission’s rules and regulations
thereunder are exempt from the
requirements of Section 10A(g)(1) of the
Exchange Act and Rule 2–01(c)(4)(i) of
Regulation S–X, where the conditions
below are satisfied.
Conditions
(a) Services provided by the auditor
are limited to reconstruction of
previously existing accounting records
that were lost or destroyed as a result of
Hurricane Harvey, Hurricane Irma or
Hurricane Maria and such services cease
as soon as the audit client’s lost or
destroyed records are reconstructed, its
financial systems are fully operational
and the client can effect an orderly and
efficient transition to management or
other service provider; and
(b) Services provided by the auditor to
its audit client pursuant to this Order
are subject to pre-approval by the audit
client’s audit committee as required by
Rule 2–01(c)(7) of Regulation S–X.
Auditors or audit clients who are in
need of additional assistance or have
other questions relating to auditor
independence, should contact the Office
of the Chief Accountant at (202) 551–
5300 or OCARequest@sec.gov.
By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017–21284 Filed 10–3–17; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81747; File No. SR–
NYSEArca–2017–06]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Withdrawal of a
Proposed Rule Change, as Modified by
Amendment No. 2, Relating to the
Listing and Trading of Shares of the
Bitcoin Investment Trust Under NYSE
Arca Equities Rule 8.201
September 28, 2017.
On January 25, 2017, NYSE Arca, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
list and trade shares of the Bitcoin
Investment Trust under NYSE Arca
Equities Rule 8.201. The proposed rule
change was published for comment in
the Federal Register on February 9,
2017.3
On March 22, 2017, pursuant to
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change.5
On April 6, 2017, the Exchange filed
Amendment No. 1 to the proposed rule
change. On April 27, 2017, the
Commission published notice of
Amendment No. 1 and instituted
proceedings to determine whether to
approve or disapprove the proposed
rule change, as modified by Amendment
No. 1.6 On May 11, 2017, the Exchange
filed Amendment No. 2 to the proposed
rule change, and on May 25, 2017, the
Commission published notice of
Amendment No. 2.7 On July 25, 2017,
the Commission designated a longer
period for Commission action on the
proposed rule change.8 The Commission
has received eighteen comment letters
on the proposed rule change.9
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 79955
(Feb. 3, 2017), 82 FR 10086 (Feb. 9, 2017).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 80297
(Mar. 22, 2017), 82 FR 15408 (Mar. 28, 2017).
6 See Securities Exchange Act Release No. 80502
(Apr. 21, 2017), 82 FR 19398 (Apr. 27, 2017).
7 See Securities Exchange Act Release No. 80729
(May 19, 2017), 82 FR 24185 (May 25, 2017).
8 See Securities Exchange Act Release No. 81201
(July 25, 2017), 82 FR 33938 (July 31, 2017). The
Commission designated October 7, 2017, as the date
by which the Commission shall either approve or
disapprove the proposed rule change.
9 See Letters from Joseph Stephen White (Feb. 5,
2017); Anonymous (Feb. 8, 2017) (purportedly from
2 17
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[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Notices]
[Pages 46335-46338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21284]
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SECURITIES AND EXCHANGE COMMISSION
[SECURITIES EXCHANGE ACT OF 1934 Release No. 81760/September 28, 2017:
INVESTMENT COMPANY ACT OF 1940 Release No. 32842/September 28, 2017]
Exemptive Relief for Individuals and Entities Affected by
Hurricanes Harvey, Irma or Maria
Order Under Section 15b, Section 17a And Section 36 Of The
Securities Exchange Act Of 1934 Granting Exemptions From Specified
Provisions Of The Exchange Act And Certain Rules Thereunder
Order Under Section 6(C) And Section 38(A) Of The Investment
Company Act Of 1940 Granting Exemptions From Specified Provisions Of
The Investment Company Act And Certain Rules Thereunder
In late August 2017, Hurricane Harvey caused catastrophic damage
along the Texas and Louisiana coast, in early September 2017, Hurricane
Irma caused catastrophic damage to the U.S. Virgin Islands, Puerto Rico
and the Florida coast, and, in mid-September 2017, Hurricane Maria
caused additional catastrophic damage to the U.S. Virgin Islands and
Puerto Rico. The storms and subsequent flooding have displaced
individuals and businesses and disrupted communications and
transportation across the affected regions. We are issuing this Order
to address the needs of companies and individuals with obligations
under the federal securities laws who have been directly or indirectly
affected by Hurricane Harvey, Hurricane Irma or Hurricane Maria and
their respective aftermaths.
Section 15B(a)(4) of the Securities Exchange Act of 1934 (the
``Exchange Act'') provides that the Securities and Exchange Commission
(the ``Commission''), by rule or order, upon its own motion or upon
application, may conditionally or unconditionally exempt any broker,
dealer, municipal securities dealer or municipal advisor, or class of
brokers, dealers, municipal securities dealers, or municipal advisors
from any provision of Section 15B or the rules or regulations
thereunder, if the Commission finds that such exemption is consistent
with the public interest, the protection of investors and the purposes
of Section 15B.
Section 36 of the Exchange Act authorizes the Commission, by rule,
regulation or order, to exempt, either conditionally or
unconditionally, any person, security or transaction, or any class or
classes of persons, securities or transactions, from any provision or
provisions of the Exchange Act or any rule or regulation thereunder, to
the extent that such exemption is necessary or appropriate in the
public interest, and is consistent with the protection of investors.
Section 17A(c)(1) of the Exchange Act provides that the appropriate
regulatory agency, by rule or by order, upon its own motion or upon
application, may conditionally or unconditionally exempt any person or
security or class of persons or securities from any provision of
Section 17A or any rule or regulation prescribed under Section 17A, if
the appropriate regulatory agency \1\ finds that such exemption is in
the public interest and consistent with the protection of investors and
the purposes of Section 17A, including the prompt and accurate
clearance and settlement of securities transactions and the
safeguarding of securities and funds. Section 17A(c)(1) also requires
that the Commission not object to the use of exemptive authority in
instances where an appropriate regulatory authority other than the
Commission is providing exemptive relief.
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\1\ Section 3(a)(34)(B) of the Exchange Act defines
``appropriate regulatory authority.''
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Section 6(c) of the Investment Company Act of 1940 (the ``Company
Act'') provides that the Commission may conditionally or
unconditionally exempt any person, security or transaction, or any
class or classes of persons, securities or transactions, from any
provision or provisions of the Company Act, or any rule or regulation
thereunder, if and to the extent that such exemption is necessary or
appropriate in the public interest and consistent with the protection
of
[[Page 46336]]
investors and the purposes fairly intended by the policy and provisions
of the Company Act. Section 38(a) of the Company Act provides that the
Commission may make, issue, amend and rescind such rules and
regulations and such orders as are necessary or appropriate to the
exercise of the powers conferred upon the Commission under the Company
Act.
The necessity for prompt action of the Commission does not permit
prior notice of the Commission's action.
I. Time Period for the Relief
The time period for the relief specified in Sections II and VI of
this Order is as follows:
(1) With respect to those persons or entities affected by Hurricane
Harvey, for the period from and including August 25, 2017 to October 6,
2017, all reports, schedules or forms must be filed on or before
October 10, 2017;
(2) With respect to those persons or entities affected by Hurricane
Irma, for the period from and including September 6, 2017 to October
18, 2017, all reports, schedules or forms must be filed on or before
October 19, 2017; and
(3) With respect to those persons or entities affected by Hurricane
Maria, for the period from and including September 20, 2017 to November
1, 2017, all reports, schedules or forms must be filed on or before
November 2, 2017.
II. Filing Requirements for Registrants and Other Persons
The lack of communications, transportation, electricity, facilities
and available staff and professional advisors as a result of Hurricane
Harvey, Hurricane Irma and Hurricane Maria could hamper the efforts of
public companies and other persons with filing obligations to meet
their filing deadlines. At the same time, investors have an interest in
the timely availability of required information about these companies
and the activities of persons required to file schedules and reports
with respect to these companies. While the Commission believes that the
relief from filing requirements provided by the exemption below is
necessary and appropriate in the public interest and consistent with
the protection of investors, we remind public companies and other
persons who are the subjects of this Order to continue to evaluate
their obligations to make materially accurate and complete disclosures
in accordance with the anti-fraud provisions of the federal securities
laws.
Accordingly, it is ordered, pursuant to Section 36 of the Exchange
Act, that a registrant (as defined in Exchange Act Rule 12b-2) subject
to the reporting requirements of Exchange Act Section 13(a) or 15(d),
and any person required to make any filings with respect to such a
registrant, is exempt from any requirement to file or furnish materials
with the Commission under Exchange Act Sections 13(a), 13(d), 13(f),
13(g), 14(a), 14(c), 14(f), 15(d) and 16(a), Regulations 13A, 13D-G,
14A, 14C and 15D, and Exchange Act Rules 13f-1, 14f-1 and 16a-3, as
applicable, where the conditions below are satisfied.
Conditions
(a) The registrant or person other than a registrant is not able to
meet a filing deadline due to Hurricane Harvey, Hurricane Irma or
Hurricane Maria and their respective aftermaths;
(b) The registrant or person other than a registrant files with the
Commission any report, schedule or form required to be filed during the
applicable period of relief on or before the applicable deadline set
forth in Section I; and
(c) In any such report, schedule or form filed pursuant to this
Order, the registrant or person other than a registrant must disclose
that it is relying on this Order and state the reasons why, in good
faith, it could not file such report, schedule or form on a timely
basis.
III. Furnishing of Proxy and Information Statements
The conditions in the areas affected by Hurricane Harvey, Hurricane
Irma and Hurricane Maria, including displacement of thousands of
individuals and the destruction of property, have prevented and will
continue to prevent the delivery of mail to the affected areas. In
light of these conditions, we believe that relief is warranted for
those seeking to comply with our rules imposing requirements to furnish
materials to security holders when mail delivery is not possible and
that the following exemption is necessary and appropriate in the public
interest and consistent with the protection of investors.
Accordingly, it is ordered, pursuant to Section 36 of the Exchange
Act, that a registrant or any other person is exempt from the
requirements to furnish proxy statements, annual reports and other
soliciting materials, as applicable (the ``Soliciting Materials''), and
the requirements of the Exchange Act and the rules thereunder to
furnish information statements and annual reports, as applicable (the
``Information Materials''), where the conditions below are satisfied.
Conditions
(a) The registrant's security holder has a mailing address located
within a zip code where, as a result of Hurricane Harvey, Hurricane
Irma or Hurricane Maria, the registrant's common carrier has suspended
delivery service of the type or class customarily used by the
registrant;
(b) The registrant or other person making a solicitation has
followed normal procedure when furnishing the Soliciting Materials to
the security holder in order to ensure that the Soliciting Materials
preceded or accompanied the proxy, as required by the rules applicable
to the particular form of Soliciting Materials, or, in the case of
Information Materials, the registrant has followed normal procedure
when furnishing the Information Materials to the security holder in
accordance with the rules applicable to Information Materials; and
(c) If requested by the security holder, the registrant or other
person provides the Soliciting Materials or Information Materials by a
means reasonably designed to furnish the Soliciting Materials or
Information Materials to the security holder.
Any registrant or other person in need of additional assistance
related to deadlines, delivery obligations or their public filings,
should contact the Division of Corporation Finance at (202) 551-3500 or
at https://tts.sec.gov/cgi-bin/corp_fin_interpretive.
IV. Transmittal of Annual and Semi-Annual Reports to Investors Required
by the Company Act and the Rules Thereunder
For reasons similar to those cited in Section III, we believe that
relief is warranted for the transmittal by registered management
investment companies and registered unit investment trusts
(collectively, ``registered investment companies'') of annual and semi-
annual reports to investors and that the following exemption is
necessary and appropriate in the public interest and consistent with
the protection of investors.
Accordingly, it is ordered, pursuant to Sections 6(c) and 38(a) of
the Company Act that for the period from and including August 25, 2017
to November 1, 2017, a registered investment company is exempt from the
requirements of Section 30(e) of the Company Act and Rule 30e-1
thereunder to transmit annual and semi-annual reports to investors
affected by Hurricane Harvey, Hurricane Irma or Hurricane Maria; and
For the period from and including August 25, 2017 to November 1,
2017,
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a registered unit investment trust is exempt from the requirements of
Section 30(e) of the Company Act and Rule 30e-2 thereunder to transmit
annual and semi-annual reports to unitholders affected by Hurricane
Harvey, Hurricane Irma or Hurricane Maria,
Provided that:
(a) The affected investor's mailing address for transmittal as
listed in the records of the registered investment company has a zip
code for which the registered investment company's common carrier has
suspended mail service, as a result of Hurricane Harvey, Hurricane Irma
or Hurricane Maria, of the type or class customarily used by the
registered investment company for transmittal of reports; and
(b) The registered investment company or other person promptly
transmits the reports to affected investors: Either (a) if requested by
the investor; or (b) at the earlier of (i) November 2, 2017 or (ii) the
resumption of the applicable mail service.
Registered investment companies who are unable to meet a deadline
as extended by this relief, or in need of additional assistance
regarding issues under the Company Act, should contact the Division of
Investment Management, Office of Chief Counsel, at (202) 551-6825 or
IMOCC@sec.gov.
Registered investment advisers in need of additional assistance
regarding issues under the Investment Advisers Act of 1940 should
contact the Division of Investment Management, Investment Adviser
Regulation Office, at (202) 551-6999 or IARDLive@sec.gov.
V. Transfer Agent Compliance With Sections 17A and 17(f) of the
Exchange Act
Exchange Act Section 17A and Section 17(f), as well as the rules
promulgated under Sections 17A and 17(f), contain requirements for
registered transfer agents relating to, among other things, processing
securities transfers, safekeeping of investor and issuer funds and
securities and maintaining records of investor ownership. Following the
events of Hurricane Harvey, Hurricane Irma and Hurricane Maria,
registered transfer agents located in the affected regions may have
difficulty complying with some or all of their obligations as
registered transfer agents. In addition, registered transfer agents
located outside the affected regions may be unable to conduct business
with entities or security holders inside the regions, thereby making it
difficult to process securities transactions and corporate actions in
conformance with Section 17A, Section 17(f) and the rules thereunder.
While the national clearance and settlement system continues to
operate well in light of these emergencies, the Commission recognizes
that the need to effect securities transfers and payments to and from
security holders in the affected regions may present compliance issues
for affected transfer agents. Therefore, the Commission is using its
authority under Section 17A and Section 36 of the Exchange Act to
provide temporary relief from certain regulatory provisions. This Order
temporarily exempts transfer agents from the requirements of: (1)
Section 17A of the Exchange Act and Rules 17Ad-1 through 17Ad-20
thereunder; and (2) Section 17(f) of the Exchange Act and Rules 17f-1
and 17f-2 thereunder. The Commission finds the following exemption to
be in the public interest and consistent with the protection of
investors and the purpose of Section 17A of the Exchange Act, including
the prompt and accurate clearance and settlement of securities
transactions and the safeguarding of securities and funds.
Accordingly, it is ordered, pursuant to Sections 17A and 36 of the
Exchange Act, that any registered transfer agent that is unable to
comply with Section 17A and Section 17(f) of the Exchange Act and the
rules promulgated thereunder, as applicable, due to Hurricane Harvey,
Hurricane Irma or Hurricane Maria and their respective aftermaths is
hereby temporarily exempted from complying with such provisions for the
period from and including August 25, 2017 to November 2, 2017 where the
conditions below are satisfied.
Conditions
(a) A registered transfer agent relying on this Order must notify
the Commission in writing by November 2, 2017 of the following:
(1) The transfer agent is relying on this Order;
(2) A statement of the reasons why, in good faith, the transfer
agent is unable to comply with Section 17A and Section 17(f) of the
Exchange Act and the rules promulgated thereunder, as applicable;
(3) If the transfer agent knows or believes that the books and
records it is required to maintain pursuant to Section 17A and the
rules thereunder were lost, destroyed or materially damaged,
information, to the extent reasonably available, as to the type of
books and records that were maintained, the names of the issuers for
whom such books and records were maintained, the extent of the loss of,
or damage to, such books and records and the steps taken to ameliorate
any such loss or damage; and
(4) If the transfer agent knows or believes that funds or
securities belonging to either issuers or security holders and within
its possession were, for any reason, lost, destroyed, stolen or
unaccounted for, information, to the extent reasonably available,
regarding the dollar amount of any such funds and the number of such
securities and the steps taken to ameliorate any such loss; and
(b) Transfer agents that have custody or possession of any security
holder or issuer funds or securities shall use all reasonable means
available to ensure that all such securities are held in safekeeping
and are handled, in light of all facts and circumstances, in a manner
reasonably free from risk of theft, loss or destruction and that all
funds are protected against misuse. To the extent possible, all
security holder or issuer funds that remain in the custody of the
transfer agent shall be maintained in a separate bank account held for
the exclusive benefit of security holders until such funds are properly
remitted.
The notification required under (a) above shall be sent to: U.S.
Securities and Exchange Commission, Division of Trading and Markets,
Office of Clearance and Settlement, 100 F Street NE., Washington, DC
20549-7010.
The Commission encourages registered transfer agents and the
issuers for whom they act to inform affected security holders whom they
should contact concerning their accounts, their access to funds or
securities and other shareholder concerns. If feasible, issuers and
their transfer agents should place a notice on their websites or
providing toll free numbers to respond to inquiries.
Transfer agents who are unable to meet a deadline as extended by
this relief, or in need of additional assistance, should contact the
Division of Trading and Markets at (202) 551-5777 or
tradingandmarkets@sec.gov.
VI. Filing of Annual Update to Form MA as Required by the Exchange Act
and the Rules Thereunder
Section 15B of the Exchange Act and Rule 15Ba1-5(a)(1) thereunder
requires each registered municipal advisor to file with the Commission
an annual update to its Form MA. For reasons similar to those cited in
Section II, the Commission believes that relief is warranted for the
filing with the Commission of annual updates to Form MA by registered
municipal advisors and that such relief is consistent with the public
interest, the protection of
[[Page 46338]]
investors and the purposes of Section 15B of the Exchange Act.
Accordingly, it is so ordered, pursuant to Section 15B(a)(4) of the
Exchange Act, that any registered municipal advisor is exempt from the
requirement to file an annual update to Form MA with the Commission, as
required by Section 15B of the Exchange Act and Rule 15Ba1-5(a)(1)
thereunder, where the conditions below are satisfied.
Conditions
(a) The registered municipal advisor is not able to fulfill its
obligation to file an annual update to the registered municipal
advisor's Form MA within 90 days of the end of the registered municipal
advisor's fiscal year due to Hurricane Harvey, Hurricane Irma or
Hurricane Maria;
(b) The registered municipal advisor files with the Commission its
annual update to Form MA required to be filed during the applicable
period of relief on or before the applicable deadline set forth in
Section I; and
(c) In any such annual update to its Form MA filing, the registered
municipal advisor must disclose that it is relying on this Order and
state the reasons why, in good faith, it could not file such annual
update to Form MA on a timely basis.
Registered municipal advisors who are unable to meet a deadline as
extended by this relief or in need of additional assistance, should
contact the Office of Municipal Securities at (202) 551-5680 or
munis@sec.gov.
VII. Independence--Bookkeeping or Other Services Related to the
Accounting Records or Financial Statements of the Audit Client
The conditions in the areas affected by Hurricane Harvey, Hurricane
Irma and Hurricane Maria, including displacement of individuals, the
destruction of property and loss or destruction of corporate records,
may require extraordinary efforts to reconstruct lost or destroyed
accounting records. The Commission understands that in these
particularly challenging situations an audit client may look to its
auditor for assistance in reconstruction of its accounting records
because of the auditor's knowledge of the client's financial systems
and records. Under Section 10A(g)(1) of the Exchange Act and Rule 2-
01(c)(4)(i) of Regulation S-X, auditors are prohibited from providing
bookkeeping or other services relating to the accounting records of the
audit client, and in Rule 2-01(c)(4)(i) of Regulation S-X, these
prohibited services are described as including ``maintaining or
preparing the audit client's accounting records'' or ``preparing or
originating source data underlying the audit client's financial
statements.'' In light of the conditions in areas affected by Hurricane
Harvey, Hurricane Irma and Hurricane Maria, however, we believe that
limited relief from these prohibitions is warranted for those
registrants and other persons that are required to comply with the
independence requirements of the federal securities laws and the
Commission's rules and regulations thereunder and that are affected by
those conditions. The Commission finds the following exemption to be
necessary and appropriate in the public interest and consistent with
the protection of investors.
Accordingly, it is ordered, pursuant to Section 36 of the Exchange
Act, that independent certified public accountants engaged to provide
audit services to registrants and other persons required to comply with
the independence requirements of the federal securities laws and the
Commission's rules and regulations thereunder are exempt from the
requirements of Section 10A(g)(1) of the Exchange Act and Rule 2-
01(c)(4)(i) of Regulation S-X, where the conditions below are
satisfied.
Conditions
(a) Services provided by the auditor are limited to reconstruction
of previously existing accounting records that were lost or destroyed
as a result of Hurricane Harvey, Hurricane Irma or Hurricane Maria and
such services cease as soon as the audit client's lost or destroyed
records are reconstructed, its financial systems are fully operational
and the client can effect an orderly and efficient transition to
management or other service provider; and
(b) Services provided by the auditor to its audit client pursuant
to this Order are subject to pre-approval by the audit client's audit
committee as required by Rule 2-01(c)(7) of Regulation S-X.
Auditors or audit clients who are in need of additional assistance
or have other questions relating to auditor independence, should
contact the Office of the Chief Accountant at (202) 551-5300 or
OCARequest@sec.gov.
By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017-21284 Filed 10-3-17; 8:45 am]
BILLING CODE 8011-01-P
