Je veux savoir à propos de…

Federal Register / Vol. 86, No. 145 / Monday, August 2, 2021 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES3

Fifth, the proposed Order included a condition that Covered Entities must promptly furnish to a representative of the Commission upon request an English translation of any record, report, or notification of the Covered Entity that is required to be made, preserved, filed, or subject to examination pursuant to Exchange Act section 15F of this Order.460 In response, commenters requested that the Commission provide a time period for furnishing such translations that is commensurate with the scope of the Commissions request.461 Records requested by the Commission staff must be provided promptly. Requests for translations of those records may require additional time. The facts and circumstances of a particular requests i.e., the volume of records requested and the extent to which they contain narrative text as opposed to figures will implicate the timing of production. Therefore, the Commission does not believe it would be appropriate to prescribe a timeframe for production. The Commission is adopting the English translation requirement in paragraph f7 of the final Order as proposed.
Sixth, the Commission conditioned substituted compliance with Exchange Act rule 18a7 on Covered Entities filing periodic unaudited financial and operational information with the Commission or its designee in the manner and format required by Commission rule or order. Commenters made suggestions about the scope and requirements of such a Commission order or rule in addition to reiterating comments previously made in response to the same condition in the German order.462 First, if SBS Entities are required to prepare FOCUS Report Part II, and a positive substituted compliance determination is made with respect to the Commissions capital requirements, a commenter proposed that the Commission permit an SBS Entity to submit capital computations in a manner consistent with its home country capital standards and related reporting rules.463 Second, some compliance with Exchange Act rule 18a1.
Therefore, all Covered Entitieswhether or not subject to Exchange Act rule 18a1can apply substituted compliance with respect to Exchange Act section 15Fg.
460 See French Substituted Compliance Notice and Proposed Order, 85 FR at 85734 discussing this condition.
461 See FBF Letter at 2; SIFMA Letter I at 14.
462 See SIFMA Letter I at 15; SIFMA Letter II at Appendix B.
463 See SIFMA Letter I at 15.; SIFMA Letter II at Appendix B. See also FBF Letter at 3 supporting the SIFMA Letter Is observations and recommendations that would provide additional flexibility for SBS Entities with respect to their financial reporting obligations.

VerDate Sep<11>2014

18:23 Jul 30, 2021

Jkt 253001

commenters asked that Covered Entities be permitted to file their unaudited financial information less frequently e.g., quarterly and provide a later submission deadline to match the frequency of reporting and reporting deadline required by the Covered Entitys home country regulator,464
while other comment urged that Covered Entities be subject to monthly instead of quarterly reporting of their financial condition.465 Third, commenters supported a potential approach identified by the Commission under which Covered Entities would be permitted to satisfy their Exchange Act rule 18a7 obligations for a two-year period by filing the FOCUS Report Part IIC with only a limited number of the required line items completed.466
Fourth, the Commission received comment recommending that the FOCUS Report be modified to omit certain line items either permanently or during a two-year transition.467 The Commission will consider these comments as it works towards completing a Commission order or rule pursuant to the provision in this Order that substituted compliance with respect to Exchange Act rule 18a7s FOCUS Report filing requirement is conditioned on Covered Entities filing unaudited financial and operational information in the manner and format specified by Commission order or rule.
The Commission will consider these comments as it works towards completing a Commission order or rule pursuant to the provision in this Order that substituted compliance with respect to Exchange Act rule 18a7s FOCUS Report filing requirement is conditioned on Covered Entities filing unaudited financial and operational information in the manner and format specified by Commission order or rule.
Seventh, the Commissions positive substituted compliance determination for Exchange Act rule 18a7 identifies a number of conditions regarding the requirement to file annual audited reports pursuant to Exchange Act rule 18a7. The third condition states SBS
Entities that are not required under French or EU laws to file a report of an independent public accountant covering their financial statements must file such an accountants report. In its proposal, 464 See SIFMA Letter I at 1516; SIFMA Letter II
at Appendix B. See also FBF Letter at 3 supporting the SIFMA Letter Is observations and recommendations that would provide additional flexibility for SBS Entities with respect to their financial reporting obligations.
465 See AFR Letter at 1.
466 See SIFMA Letter I at 16; SIFMA Letter II at Appendix B; FBF Letter at 3.
467 See SIMA Letter II at Appendix B.

PO 00000

Frm 00041

Fmt 4701

Sfmt 4703

41651

the Commission requested comment on whether the independent public accountant must meet the Commissions independence standards for public accountants. The Commission did not receive comment on this point, but to ensure that the SBS Entitys accountant is subject to independence standards, the Commission is adding to the third condition the requirement that the SBS
Entitys accountant complies with French independence requirements.468
Eighth, in its proposal, the Commission requested comment on whether there are any French SBS
Entities that are not expected to be exempt from Exchange Act rule 18a4, and therefore should be required to file certain supporting schedules under Exchange Act rule 18a7 that relate to Exchange Act rule 18a4. The Commission did not receive comment on this point, but in case such entities exist, paragraph f3E of the Order now includes a condition requiring SBS
Entities to file with the Commission the supporting schedules required by Exchange Act rule 18a7c2ii and iii that relate to Exchange Act rule 18a4 i.e., Computation for Determination of Security-Based Swap Customer Reserve Requirements and Information Relating to the Possession or Control Requirements for SecurityBased Swap Customers if the SBS
Entity is not exempt from Exchange Act rule 18a4. Substituted compliance is not available for Exchange Act rule 18a 4 and, therefore, this condition is designed to provide the Commission with similar compliance information.
The Commission also received comment suggesting certain modifications to the ordering language.
Specifically, a commenter suggested revising paragraph f4 of the French Substituted Compliance Notice and Proposed Order, which requires a Covered Entity to send a copy of any notice required to be sent by EU and French laws cited in paragraph f4
simultaneously to the Commission. The commenter recommended revising this provision to require the notices that a Covered Entity would be required to send to the Commission be limited to those notices required by EU and French law that are comparable to Exchange Act rule 18a8d instead of the entirety of Exchange Act rule 18a 8. Furthermore, the commenter recommended conditioning the requirement to provide these notices to the Commission to be limited to those notifications that are related to 1 a breach of the EU and French laws cited in the relevant portions of paragraphs 468 See
E:FRFM02AUN3.SGM

para. f3iiiC of the Order.

02AUN3