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Federal Register / Vol. 86, No. 149 / Friday, August 6, 2021 / Notices Order reflects changes to the UK law citations after refining the UK law provisions in the proposed Order to better reflect the UK law provisions cited in the FCA Application, as well as the EU law provisions cited in the French Substituted Compliance Order.446

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a. Global The commenter recommended deleting references to UK MiFID Org Reg, COBS 8A, and UK MiFIR article 251, reasoning that these provisions could raise issues due to the discrepancy between Exchange Act requirements, which apply on an entitylevel basis, and these UK requirements, which are territorially limited. As explained in part III.B.2. above, conducting business outside the UK
does not preclude a firm from relying on substituted compliance for the business it conducts within the UK. Accordingly, other than the specific articles of UK
MiFID Org Reg, FCA COBS, and UK
MiFIR discussed below, the Commission is not removing references to these UK requirements from the Orders list of UK requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements.
The commenter recommended deleting references to FCA IFPRU, reasoning that FCA IFPRU does not apply to banks and PRA-designated investment firms, and all Covered Entities are expected to be banks or PRA-designated investment firms. On further examination, the Commission believes that the IFPRU provisions are not necessary to find comparability with respect to the Commissions recordkeeping, reporting, notification, and securities count requirements and is 446 There are a number of subparagraphs of the recordkeeping, reporting, notification, and securities count paragraph of the Order that reflect changes for consistency with the FCA Application and French Substituted Compliance Order.
Compare paras. f1iB1, f1iC1, f1iD1, f1iF1, f1iG1, f1iH1, f1iI1, f1iJ1, f1iK, f1iL1, f2iA, f2iB, f2iC1, f2iD, f2iE1, f2iF1, f2iG1, f2iH1, f2iI1, f2iJ1, f2iK1, f2iL, f2iM, f2iN1, f2iO1, f2iP1, f2iQ, f2iR, f3iiA, f3iii, f3ivA, f4iA1, f4iB, f4iC1, and f4iD1 of the UK
Substituted Compliance Notice and Proposed Order, with paras. f1iB1, f1iC1, f1iD1, f1iF1, f1iG1, f1iH1, f1iI1, f1iJ1, f1iK, f1iL1, f2iA, f2iB, f2iC1, f2iD, f2iE1, f2iF1, f2iG1, f2iH1, f2iI1, f2iJ1, f2iK1, f2iL1, f2iM, f2iN1, f2iO1, f2iP1, f2iQ, f2iR, f3iiA, f3iii, f3ivA, f4iA1, f4iB, f4iC1, f4iD1, and f6 of the Order.

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therefore removing references to this UK
requirement.447
The commenter recommended deleting references to FCA COBS
9A.2.1R, which relates to suitability requirements, reasoning that the provision does not correspond to, and goes beyond, the Commissions recordkeeping, reporting, notification, and securities count requirements. The Commission agrees with the commenters reasoning, except with respect to Exchange Act rules 18a 5a17 and b13, which relate to suitability records, and is therefore removing references to this UK
requirement from the Orders list of UK
requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements, except for Exchange Act rules 18a5a17 and b13.448
The commenter recommended deleting references to UK MiFID Org Reg article 76 and FCA SYSC 10A.1.6R
and 10A.1.8R, which relate to the recording of telephone and electronic communications, reasoning that they do not correspond to, and go beyond, the requirements of the Commissions recordkeeping, reporting, notification, and securities count rules. The Commission agrees with the commenters reasoning, except with respect to Exchange Act rules 18a 6b1iv and b2ii, which relate to communications including telephonic communications. Therefore, the Commission is removing references to these UK requirements from the Orders list of UK requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements, except for Exchange Act rules 18a6b1iv and b2ii.449
The commenter recommended deleting references to FCA FCG, reasoning that this sourcebook only 447 Compare paras. f1iB1, f1iJ1, f1iL1, f2iA, f2iB, f2iC1, f2iD, f2iI1, f2iJ1, f4iA1, f4iB, f4iC1, and f4iD1 of the UK
Substituted Compliance Notice and Proposed Order, with paras. f1iB1, f1iJ1, f1iL1, f2iA, f2iB, f2iC1, f2iD, f2iI1, f2iJ1, f4iA1, f4iB, and f4iC1 of the Order.
448 Compare paras. f1iD1, f1iG1, f1iI1, f2iA, f2iB, and f2iD
of the UK Substituted Compliance Notice and Proposed Order, with paras. f1iD1, f1iG1, f1iI1, f2iA, f2iB, and f2iD of the Order.
449 Compare paras. f1iA1, f1iD1, f1iF1, f1iG1, f1iI1, f1iM, f2iA, f2iB, and f2iOi of the UK
Substituted Compliance Notice and Proposed Order, with paras. f1iA1, f1iD1, f1iF1, f1iG1, f1iI1, f1iM, f2iA, f2iB, and f2iOi of the Order.

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contains nonbinding guidance. The Commission agrees with the commenters reasoning and is therefore removing references to this UK
requirement from the Orders list of UK
requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements.450
The commenter recommended deleting references to FCA FIT, reasoning that FCA FIT only contains nonbinding guidance. The Commission agrees with the commenters reasoning and is therefore removing references to this UK requirement from the Orders list of UK requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements.451
The commenter recommended deleting references to the EBA
Guidelines on Outsourcing, reasoning that they only contain nonbinding guidance. The Commission agrees with the commenters reasoning and is therefore removing references to this UK
requirement from the Orders list of UK
requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements.452
In addition, the Commission is deleting references to FCA provisions ending in G, because they only contain nonbinding guidance.453
Therefore, these UK requirements are removed from the Orders list of UK
requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements.454
b. Exchange Act Rules 18a5 and 18a 6
The commenter recommended deleting references to UK MiFIR article 251, which sets a duration of five years for firms to keep relevant data relating to orders and transactions in financial instruments, reasoning that this does 450 Compare paras. f1iB1, f1iJ1, f1iL1, f2iA, f2iB, and f2iD
of the UK Substituted Compliance Notice and Proposed Order, with paras. f1iB1, f1iJ1, f1iL1, f2iA, f2iB, and f2iD of the Order.
451 Compare paras. f1iK and f2iM of the UK Substituted Compliance Notice and Proposed Order, with paras. f1iK and f2iM of the Order.
452 Compare para. f2iR of the UK
Substituted Compliance Notice and Proposed Order, with para. f2iR of the Order.
453 See FCA Readers Guide: An Introduction to the Handbook Jan. 2019, available at: https
www.fca.org.uk/publication/handbook/readersguide_0.pdf.
454 Compare para. f2iR of the UK
Substituted Compliance Notice and Proposed Order, with para. f2iR of the Order.

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