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lotter on DSK11XQN23PROD with NOTICES1

Federal Register / Vol. 86, No. 155 / Monday, August 16, 2021 / Notices elements into the records required by these rules e.g., a blotter, ledger, or securities record, as applicable if the firm was requested to do so? In what formats do Covered Entities in Switzerland produce this information to FINMA or other Swiss authorities? How do those formats differ from the formats required by Exchange Act rules 18a 5b1, 2, 3, and 7?
Is it appropriate to structure the Commissions substituted compliance determinations in the proposed Order to provide Covered Entities with greater flexibility to select which distinct requirements within the broader recordkeeping, reporting, and notification rules for which they want to apply substituted compliance? Explain why or why not. For example, would it be more efficient for a Covered Entity to comply with certain Exchange Act requirements within a given rule rather than apply substituted compliance because it can utilize systems that its affiliated broker-dealer has implemented to comply with them? If so, explain why. If not, explain why not.
Is it appropriate to permit Covered Entities to take a more granular approach to the requirements within the recordkeeping rules? For example, would this approach make it more difficult for the Commission to get a comprehensive understanding of the Covered Entitys security-based swap activities and financial condition?
Explain why or why not. Would it be overly complex for the Covered Entity to administer a firm-wide recordkeeping system under this approach? Explain why or why not.
Certain of the Commissions recordkeeping and notification requirements are fully or partially linked to substantive Exchange Act requirements for which a positive substituted compliance determination preliminarily would not be made under the proposed Order. In these cases, should the Commission not make a positive substituted compliance determination for the fully linked requirement in the recordkeeping or notification rules or to the portion of the requirement that is linked to a substantive Exchange Act requirement?
In particular, should the Commission not make a positive substituted compliance determination for recordkeeping or notification requirements linked to the following Exchange Act rules for which a positive substituted compliance determination is preliminarily not being made: 1
Exchange Act rule 15Fh4; 2 Exchange Act rule 15Fh5; 3 Exchange Act rule 15Fh6; 4 Exchange Act rule 18a4; 5
Regulation SBSR; 6 Form SBSE and its
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variations; 7 Exchange Act rule 15Fh 1; 8 Exchange Act rule 15Fh2; and 9
Exchange Act rule 15Fi5? If not, explain why.
Certain of the requirements in the Commissions recordkeeping rules are linked to substantive Exchange Act requirements where a positive substituted compliance determination is being made under the proposed Order.
In these cases, should a positive substituted compliance determination for the linked requirement in the recordkeeping rule be conditioned on the Covered Entity applying substituted compliance to the linked substantive Exchange Act requirement? If not, explain why. Should this be the case regardless of whether the requirement is fully or partially linked to the substantive Exchange Act requirement?
If not, explain why. In particular, should substituted compliance for recordkeeping, reporting, and notification requirements linked to the following Exchange Act rules be conditioned on the Covered Entity applying substituted compliance to the linked substantive Exchange Act rule:
1 Exchange Act rule 15Fh3h; 2
Exchange Act rule 15Fi2; 3 Exchange Act rule 15Fi3; 4 Exchange Act rule 15Fi4; and 5 Exchange Act rule 15Fk1? If not, explain why.
Commenters also are invited to address the preliminary positive substituted compliance determination with respect to Exchange Act rule 18a 7, which would be conditioned on the Covered Entity filing financial and operational information with the Commission in the manner and format specified by the Commission by order or rule. Should the Commission require Covered Entities with a prudential regulator to file the financial and operational information using the FOCUS Report Part IIC? Are there line items on the FOCUS Report Part IIC that elicit information that is not included in the reports Covered Entities with a prudential regulator file with FINMA or other Swiss authorities? If so, do Covered Entities with a prudential regulator record that information in their required books and records? Please identify any information that is elicited in the FOCUS Report Part IIC that is not:
1 Included in the financial reports filed by Covered Entities with a prudential regulator with FINMA or other Swiss authorities; or 2 recorded in the books and records required of Covered Entities with a prudential regulator. Would the answer to these questions change if references to FFIEC
Form 031 were not included in the FOCUS Report Part IIC? If so, how? As a preliminary matter, as a condition of
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substituted compliance should Covered Entities with a prudential regulator file a limited amount of financial and operational information on the FOCUS
Report Part IIC for a period of two years to further evaluate the burden of requiring all applicable line items to be filled out? If so, which line items should be required? To the extent that Covered Entities with a prudential regulator otherwise report or record information that is responsive to the FOCUS Report Part IIC, how could the information on this report be integrated into a database of filings the Commission or its designee will maintain for filers of the FOCUS
Report Parts IIC e.g., the eFOCUS
system to achieve the objective of being able to perform cross-form analysis of information entered into the uniquely numbered line items on the forms?
Commenters further are invited to address any differences between Swiss regulatory requirements and frameworks and the German, French, and/or UK
requirements and frameworks that formed the basis for the Commissions conditional grants of substituted compliance for recordkeeping, reporting, and notification requirements in those countries.127 Would the responses to any of the questions about those requirements that the Commission asked in connection with the German, French, and/or UK notices and proposed orders differ if those questions applied to Swiss regulatory requirements and frameworks?
E. Supervisory and Enforcement Issues The Commission further requests comment regarding how to weigh considerations regarding supervisory and enforcement effectiveness in Switzerland as part of the comparability assessments. Commenters particularly are invited to address relevant issues regarding the effectiveness of Swiss supervision and enforcement over firms that may register with the Commission as SBSDs, including but not limited to issues regarding:
Swiss supervisory and enforcement authority, supervisory inspection practices and the use of alternative supervisory tools, and enforcement tools and practices;
Swiss supervisory and enforcement effectiveness with respect to derivatives such as security-based swaps; and Swiss supervision and enforcement in the cross-border context e.g., any differences between the oversight of firms businesses within Switzerland 127 See German Substituted Compliance Order, 85 FR at 8569597; French Substituted Compliance Order, 86 FR at 4164857; UK Substituted Compliance Order, 86 FR at 4335969.

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