Order Granting a Conditional Exemption From Exchange Act Section 11(d)(1) for Certain Asset Backed Securities and Other Collateral, 31019-31020 [2020-10929]
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Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Notices
Commission, 100 F Street NE,
Washington, DC 20549–1090.
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should be submitted on or before June
11, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–10935 Filed 5–20–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88884/May 15, 2020]
Order Granting a Conditional
Exemption From Exchange Act Section
11(d)(1) for Certain Asset Backed
Securities and Other Collateral
The Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
is issuing an order granting an
exemption from compliance with
Section 11(d)(1) of the Securities
22 17
CFR 200.30–3(a)(12), (59).
VerDate Sep<11>2014
17:18 May 20, 2020
Jkt 250001
Exchange Act of 1934 (‘‘Exchange Act’’)
pertaining to certain lending
transactions in asset backed securities.
I. Introduction
By letter dated May 12, 2020 (the
‘‘Letter’’),1 the Federal Reserve Bank of
New York (‘‘New York Fed’’), has
requested that the Commission grant
exemptive relief from Section 11(d)(1) of
the Securities Exchange Act of 1934
(‘‘Exchange Act’’) to permit all brokers
and dealers registered with the
Commission and designated by the New
York Fed as ‘‘TALF Agents’’ (‘‘TALF
Agents’’) to participate in the Federal
Reserve’s 2020 Term Asset-Backed
Securities Loan Facility (‘‘TALF 2020’’)
by facilitating extensions of nonrecourse credit, on behalf of a special
purpose vehicle (the ‘‘TALF SPV’’)
established by the New York Fed, to
purchasers of new issues of asset-backed
securities (‘‘ABS’’) that are or that may
be designated as ‘‘eligible collateral’’ in
the distribution of which such TALF
Agents may have participated as
member of a selling syndicate or group
within the meaning of Section 11(d)(l).
II. Discussion
Section 11(d)(1) of the Exchange Act
generally prohibits a person that is both
a broker and a dealer from extending or
maintaining credit, or arranging for the
extension or maintenance of credit, to or
for a customer on any security (other
than an exempted security) that was
part of a distribution of a new issue of
securities in which the broker-dealer
participated as a member of a selling
syndicate or group within thirty days
prior to such transaction.
The TALF 2020 is intended to support
the provision of credit to consumers and
businesses by enabling the issuance of
ABS backed by private student loans,
auto loans and leases, consumer and
corporate credit card receivables,
equipment loans and leases, floorplan
loans, insurance premium finance loans,
certain small business loans guaranteed
by the Small Business Administration,
and leveraged loans.2 TALF Agents will
act as agents of borrowers in, among
other things, making applications for
TALF loans. TALF Agents will also (i)
assess the eligibility of prospective
borrowers and collateral, (ii) receive that
1 Letter from Michael Held, General Counsel and
Executive Vice President, Federal Reserve Bank of
New York to Vanessa Countryman, Secretary,
Securities and Exchange Commission, dated May
12, 2020. Each defined term in this order has the
same meaning as defined in the Letter, unless
otherwise noted.
2 Certain legacy commercial mortgage-backed
securities are also eligible ABS. The set of
permissible underlying assets of eligible ABS may
be expanded later to other asset classes.
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
31019
portion of the interest and principal
distributions on the collateral that is for
the account of the borrowers, and (iii)
disburse such interest and principal to
the borrowers. TALF Agents will also
perform certain recordkeeping
functions. In addition, all payments in
respect of interest and principal on the
underlying collateral that are to be paid
to a borrower shall be paid by the
custodian to such borrower’s TALF
Agent, for further distribution to that
borrower. The function of the TALF
Agents is necessary to the success of the
TALF 2020 because the New York Fed
and the TALF SPV lack the resources to
perform these functions themselves.
The Commission understands, based
on the New York Fed statements, that
the success of the TALF 2020 program
depends on the effective participation of
TALF Agents in facilitating the
availability of the program to potential
participants, and furthermore that the
success of the TALF 2020 program is
important to the United States
Government’s efforts to restore the
availability of credit in the national
economy. The relief is consistent with
investor protection because the TALF
2020 loans are non-recourse to the
borrower, absent a breach of
representation or other enforcement
event under the facility documentation,
and therefore neither the TALF SPV nor
the New York Fed may proceed against
the borrower for collection of the loan
balance, irrespective of the market value
or performance of the underlying
collateral. Furthermore, natural persons
do not qualify as participants under the
TALF 2020 program. The Commission
agrees that granting the requested relief
is consistent with its tripartite mission.
III. Conclusion
In light of the above, and in
accordance with Section 36 of the
Exchange Act, the Commission finds
that exempting brokers and dealers that
are designated by the New York Fed as
TALF Agents and that participate in
TALF 2020 from the requirements of
Section 11(d)(1) of the Exchange Act
with respect to ABS that are or that may
be designated as ‘‘eligible collateral’’ is
necessary and appropriate in the public
interest, and consistent with the mission
of the Commission, including the
protection of investors.3
3 Exchange Act Section 36 [15 U.S.C. 78mm].
Section 36 of the Exchange Act authorizes the
Commission to conditionally or unconditionally
exempt, by rule, regulation, or order any person,
security, or transaction (or any class or classes of
persons, securities, or transactions) from any
provision of the Exchange Act or any rule or
regulation thereunder, to the extent such exemption
E:\FR\FM\21MYN1.SGM
Continued
21MYN1
31020
Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Notices
It is hereby ordered, pursuant to its
authority under Section 36 of the
Exchange Act, based on the
representations and facts presented in
the Letter, that any broker-dealer that is
designated as a TALF Agent and that
participates in TALF 2020 by facilitating
extensions of non-recourse credit, on
behalf of the TALF SPV, to a purchaser
of new issues of securities is exempt
from the prohibition on arranging
certain credit contained in Section
11(d)(1) with respect to ABS securities
that are or that may be designated as
designated as ‘‘eligible collateral.’’
This exemption from Section 11(d)(1)
of the Exchange Act applies solely to
such TALF Agent’s facilitation of
extensions and maintenance of credit by
the New York Fed pursuant to the TALF
2020 with respect to ABS that are or that
may be designated as ‘‘eligible
collateral,’’ and not to any other
extension or maintenance of credit, or
any other arranging for the extension or
maintenance of credit, on new issues of
securities in the distribution of which
such TALF Agent participated as a
member of a selling syndicate or group
within the meaning of Section 11(d)(1)
of the Exchange Act.
This order should not be considered
a view with respect to any other
question that participation in TALF
2020 program may raise, including, but
not limited to the applicability of other
federal or state laws to such
participation.
For the Commission, by the Division of
Trading and Markets pursuant to delegated
authority.4
J. Matthew DeLesDernier,
Assistant Secretary.
Description of Collection
[FR Doc. 2020–10929 Filed 5–20–20; 8:45 am]
BILLING CODE 8011–01–P
SURFACE TRANSPORTATION BOARD
60-Day Notice of Intent To Seek
Extension of Approval: Complaints
Surface Transportation Board.
Notice and request for
comments.
AGENCY:
ACTION:
As required by the Paperwork
Reduction Act of 1995 (PRA), the
Surface Transportation Board (STB or
Board) gives notice of its intent to seek
approval from the Office of Management
and Budget (OMB) for an extension of
the collection of Complaints, as
described below.
SUMMARY:
is necessary or appropriate in the public interest,
and is consistent with the protection of investors.
4 17 CFR 200.30–3(a)(62).
VerDate Sep<11>2014
17:18 May 20, 2020
Jkt 250001
Comments on this information
collection should be submitted by July
20, 2020.
ADDRESSES: Direct all comments to
Chris Oehrle, Surface Transportation
Board, 395 E Street SW, Washington, DC
20423–0001, or to PRA@stb.gov. When
submitting comments, please refer to
‘‘Paperwork Reduction Act Comments,
Complaints.’’ For further information
regarding this collection, contact
Michael Higgins, Deputy Director,
Office of Public Assistance,
Governmental Affairs, and Compliance,
at (202) 245–0284 or at
Michael.Higgins@stb.gov. Assistance for
the hearing impaired is available
through the Federal Relay Service at
(800) 877–8339.
SUPPLEMENTARY INFORMATION: Comments
are requested concerning: (1) The
accuracy of the Board’s burden
estimates; (2) ways to enhance the
quality, utility, and clarity of the
information collected; (3) ways to
minimize the burden of the collection of
information on the respondents,
including the use of automated
collection techniques or other forms of
information technology, when
appropriate; and (4) whether the
collection of information is necessary
for the proper performance of the
functions of the Board, including
whether the collection has practical
utility. Submitted comments will be
summarized and included in the
Board’s request for OMB approval.
DATES:
Title: Complaints under 49 CFR 1111.
OMB Control Number: 2140–0029.
STB Form Number: None.
Type of Review: Extension without
change.
Respondents: Affected shippers,
railroads and communities that seek
redress for alleged violations related to
unreasonable rates, unreasonable
practices, service issues, and other
statutory claims.
Number of Respondents: Four.
Estimated Time per Response: 467
hours.
Frequency: On occasion. For years
2017–2019, respondents filed an average
of four complaints of this type with the
Board.
Total Burden Hours (annually
including all respondents): 1,876
(estimated hours per complaint (467) ×
average number of complaints (4)).
Total ‘‘Non-hour Burden’’ Cost:
$5,848 (estimated non-hour burden cost
per complaint ($1,462) × average
number of complaints (4)).
Needs and Uses: Under the Board’s
regulations, persons may file complaints
PO 00000
Frm 00096
Fmt 4703
Sfmt 9990
before the Board pursuant to 49 CFR
part 1111 seeking redress for alleged
violations of provisions of the Interstate
Commerce Act, 49 U.S.C. 10101 et seq.
The required content of a complaint is
outlined at 49 CFR 1111.1(a). Generally,
the most significant complaints filed at
the Board allege that railroads are
charging unreasonable rates or that they
are engaging in unreasonable practices.
The collection by the Board of these
complaints, and the agency’s action in
conducting proceedings and ruling on
the complaints, enables the Board to
meet its statutory duty to regulate the
rail industry.
In two notices of proposed
rulemakings, Final Offer Rate Review,
EP 755 et al. (84 FR 48872 (Sept. 17,
2019)); and Market Dominance
Streamlined Approach, EP 756 (84 FR
48882 (Sept. 17, 2019)), the Board is
proposing new rules that are intended to
simplify and streamline certain
complaint proceedings. The Board has
submitted to OMB an interim request for
modification and extension of the
existing collection and has received
comments, which it is reviewing. The
Board will submit its requests for
modification of this collection once the
final rules are decided.
Under the PRA, a federal agency that
conducts or sponsors a collection of
information must display a currently
valid OMB control number. A collection
of information, which is defined in 44
U.S.C. 3502(3) and 5 CFR 1320.3(c),
includes agency requirements that
persons submit reports, keep records, or
provide information to the agency, third
parties, or the public. Under 44 U.S.C.
3506(c)(2)(A), federal agencies are
required to provide, prior to an agency’s
submitting a collection to OMB for
approval, a 60-day notice and comment
period through publication in the
Federal Register concerning each
proposed collection of information,
including each proposed extension of an
existing collection of information.
Dated: May 18, 2020.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2020–11002 Filed 5–20–20; 8:45 am]
BILLING CODE 4915–01–P
E:\FR\FM\21MYN1.SGM
21MYN1
Agencies
[Federal Register Volume 85, Number 99 (Thursday, May 21, 2020)]
[Notices]
[Pages 31019-31020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10929]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88884/May 15, 2020]
Order Granting a Conditional Exemption From Exchange Act Section
11(d)(1) for Certain Asset Backed Securities and Other Collateral
The Securities and Exchange Commission (``Commission'' or ``SEC'')
is issuing an order granting an exemption from compliance with Section
11(d)(1) of the Securities Exchange Act of 1934 (``Exchange Act'')
pertaining to certain lending transactions in asset backed securities.
I. Introduction
By letter dated May 12, 2020 (the ``Letter''),\1\ the Federal
Reserve Bank of New York (``New York Fed''), has requested that the
Commission grant exemptive relief from Section 11(d)(1) of the
Securities Exchange Act of 1934 (``Exchange Act'') to permit all
brokers and dealers registered with the Commission and designated by
the New York Fed as ``TALF Agents'' (``TALF Agents'') to participate in
the Federal Reserve's 2020 Term Asset-Backed Securities Loan Facility
(``TALF 2020'') by facilitating extensions of non-recourse credit, on
behalf of a special purpose vehicle (the ``TALF SPV'') established by
the New York Fed, to purchasers of new issues of asset-backed
securities (``ABS'') that are or that may be designated as ``eligible
collateral'' in the distribution of which such TALF Agents may have
participated as member of a selling syndicate or group within the
meaning of Section 11(d)(l).
---------------------------------------------------------------------------
\1\ Letter from Michael Held, General Counsel and Executive Vice
President, Federal Reserve Bank of New York to Vanessa Countryman,
Secretary, Securities and Exchange Commission, dated May 12, 2020.
Each defined term in this order has the same meaning as defined in
the Letter, unless otherwise noted.
---------------------------------------------------------------------------
II. Discussion
Section 11(d)(1) of the Exchange Act generally prohibits a person
that is both a broker and a dealer from extending or maintaining
credit, or arranging for the extension or maintenance of credit, to or
for a customer on any security (other than an exempted security) that
was part of a distribution of a new issue of securities in which the
broker-dealer participated as a member of a selling syndicate or group
within thirty days prior to such transaction.
The TALF 2020 is intended to support the provision of credit to
consumers and businesses by enabling the issuance of ABS backed by
private student loans, auto loans and leases, consumer and corporate
credit card receivables, equipment loans and leases, floorplan loans,
insurance premium finance loans, certain small business loans
guaranteed by the Small Business Administration, and leveraged
loans.\2\ TALF Agents will act as agents of borrowers in, among other
things, making applications for TALF loans. TALF Agents will also (i)
assess the eligibility of prospective borrowers and collateral, (ii)
receive that portion of the interest and principal distributions on the
collateral that is for the account of the borrowers, and (iii) disburse
such interest and principal to the borrowers. TALF Agents will also
perform certain recordkeeping functions. In addition, all payments in
respect of interest and principal on the underlying collateral that are
to be paid to a borrower shall be paid by the custodian to such
borrower's TALF Agent, for further distribution to that borrower. The
function of the TALF Agents is necessary to the success of the TALF
2020 because the New York Fed and the TALF SPV lack the resources to
perform these functions themselves.
---------------------------------------------------------------------------
\2\ Certain legacy commercial mortgage-backed securities are
also eligible ABS. The set of permissible underlying assets of
eligible ABS may be expanded later to other asset classes.
---------------------------------------------------------------------------
The Commission understands, based on the New York Fed statements,
that the success of the TALF 2020 program depends on the effective
participation of TALF Agents in facilitating the availability of the
program to potential participants, and furthermore that the success of
the TALF 2020 program is important to the United States Government's
efforts to restore the availability of credit in the national economy.
The relief is consistent with investor protection because the TALF 2020
loans are non-recourse to the borrower, absent a breach of
representation or other enforcement event under the facility
documentation, and therefore neither the TALF SPV nor the New York Fed
may proceed against the borrower for collection of the loan balance,
irrespective of the market value or performance of the underlying
collateral. Furthermore, natural persons do not qualify as participants
under the TALF 2020 program. The Commission agrees that granting the
requested relief is consistent with its tripartite mission.
III. Conclusion
In light of the above, and in accordance with Section 36 of the
Exchange Act, the Commission finds that exempting brokers and dealers
that are designated by the New York Fed as TALF Agents and that
participate in TALF 2020 from the requirements of Section 11(d)(1) of
the Exchange Act with respect to ABS that are or that may be designated
as ``eligible collateral'' is necessary and appropriate in the public
interest, and consistent with the mission of the Commission, including
the protection of investors.\3\
---------------------------------------------------------------------------
\3\ Exchange Act Section 36 [15 U.S.C. 78mm]. Section 36 of the
Exchange Act authorizes the Commission to conditionally or
unconditionally exempt, by rule, regulation, or order any person,
security, or transaction (or any class or classes of persons,
securities, or transactions) from any provision of the Exchange Act
or any rule or regulation thereunder, to the extent such exemption
is necessary or appropriate in the public interest, and is
consistent with the protection of investors.
---------------------------------------------------------------------------
[[Page 31020]]
It is hereby ordered, pursuant to its authority under Section 36 of
the Exchange Act, based on the representations and facts presented in
the Letter, that any broker-dealer that is designated as a TALF Agent
and that participates in TALF 2020 by facilitating extensions of non-
recourse credit, on behalf of the TALF SPV, to a purchaser of new
issues of securities is exempt from the prohibition on arranging
certain credit contained in Section 11(d)(1) with respect to ABS
securities that are or that may be designated as designated as
``eligible collateral.''
This exemption from Section 11(d)(1) of the Exchange Act applies
solely to such TALF Agent's facilitation of extensions and maintenance
of credit by the New York Fed pursuant to the TALF 2020 with respect to
ABS that are or that may be designated as ``eligible collateral,'' and
not to any other extension or maintenance of credit, or any other
arranging for the extension or maintenance of credit, on new issues of
securities in the distribution of which such TALF Agent participated as
a member of a selling syndicate or group within the meaning of Section
11(d)(1) of the Exchange Act.
This order should not be considered a view with respect to any
other question that participation in TALF 2020 program may raise,
including, but not limited to the applicability of other federal or
state laws to such participation.
---------------------------------------------------------------------------
\4\ 17 CFR 200.30-3(a)(62).
For the Commission, by the Division of Trading and Markets
pursuant to delegated authority.\4\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-10929 Filed 5-20-20; 8:45 am]
BILLING CODE 8011-01-P