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Federal Register / Vol. 86, No. 145 / Monday, August 2, 2021 / Notices
requirements comparable to Exchange Act rule 18a7b.499
The commenter recommended deleting references in paragraph f3ivA references to MiFID Org Reg article 722 and Annex I, which relate to recordkeeping requirements. The Commission notes that MiFID Org Reg article 722 and Annex I are not cited in connection with the EU and French law requirements in the Orders list of requirements comparable to Exchange Act rule 18a7b. The commenter also recommended deleting reference to CRR
and CRD articles which set out specific capital requirements. With respect to CRD article 89, the Commission agrees as this provision requires member states to impose specified disclosure requirements on institutions.
Accordingly, the Commission is deleting reference to this requirement in the Orders list of requirements comparable to Exchange Act rule 18a 7c through h.500 With respect to the cited CRR provisions, the Commission disagrees. The French Authorities Application states that CRR article 262
relates to the inclusion of a firms interim or year-end profits in Common Equity Tier 1 capital and the associated requirement that such profits be verified by persons independent of the firm, and that CRR articles 1325 and 154 set forth requirements for a firm to engage an external auditor to confirm the accuracy of information regarding the firms calculations with respect to average risk weights for certain exposures which is comparable to the requirements under Exchange Act rules 18a7c1iC and 18a7d through g. Furthermore the French Authorities Application states that, for firms using internal models to calculate credit risk, operational risk, market risk exposures, or market risk capital requirement, CRR
articles 191, 321, 325bi, and 368 require various levels of internal or external audit and/or review of the models, systems, and/or operations. The French Authorities application notes where investment firms rely on a depository or management company of a collective investment undertaking, CRR articles 418, 350 and 353 require the investment firm to calculate and report own funds requirements for the market value of haircuts, and position risk with respect to positions in specified instruments.501
As a result, the French Authorities Application states that the EU report review requirements provide for comparable regulatory outcomes to the
SEC report review requirements, as both regulatory regimes require firms to submit reports by independent auditors on the firms financial and operational information in order to ensure the accuracy of information and protect market participants. The Commission believes these provisions are relevant to Rule 18a7c, d, e, f, g, and h.
Accordingly, the Commission is not deleting references to these EU and French law in the Orders list of requirements comparable to Exchange Act rule 18a7c through h.502
The commenter recommended deleting references to Accounting Directive article 34 from paragraph f3ivA, stating that this provision sets out accounting and publication requirements applicable to corporations generally, and is not enforced by the ACPR or the AMF, and reasons that the provision does not correspond to, and goes beyond, the requirements of Exchange Act rule 18a7 c through h.
The commenter suggests replacing this provision instead with MFC articles L.
51135 to L. 51138, setting forth accounting and publication obligations for credit institutions, and article L.
5335 which sets forth accounting and publication obligations for investment firms. With respect to Accounting Directive article 34, the Commission agrees. As a result, the Commission is deleting reference to Accounting Directive article 34 from the Orders list of requirements comparable to Exchange Act rule 18a7c through h.503 With respect to the commenters recommendation regarding MFC articles L. 51135 to L. 51138, and article L.
5335, the Commission agrees and, accordingly, is including references to these provisions in the Orders list of requirements comparable to Exchange Act rule 18a7c through h.504
The commenter recommended deleting references in paragraph f3ivA to MiFID articles 168
through 10. The commenter reasoned that these provisions contain substantive, not reporting requirements, and do not correspond to, and go beyond, the requirements of Exchange Act rules 18a7c through h. The Commission agrees and is not including references to these provisions in the Orders list of requirements comparable to Exchange Act rules 18a7c through h.505

499 See
502 See
500 See
503 See
para. f3iii of the Order.
para. f3ivA of the Order.
501 See French Authorities Application Annex I
categories 2 and 4 at 99102.

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para. f3ivA.
para. f3ivA of the Order.
504 See para. f3ivA of the Order.
505 See para. f3ivA of the Order.

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d. Exchange Act Rule 18a8
The commenter recommended deleting references MiFID article 73, and CRD article 71 as well as the implementing provisions from paragraphs f4iA1, f4iB, f4iC1, and f4iD1, reasoning that these provisions do not correspond to, and go beyond, the requirements of Exchange Act Rule 18a 8a1i, a1ii, b1, b2, b4, c, d, e, and h. The Commission agrees with respect to references to MiFID article 73 and CRD article 71, but disagrees with respect to the implementing provisions. The French Authorities Application cite the implementing provisions as providing for comparable regulation outcomes to the Commissions notice requirements as both regimes aim to establish reporting mechanisms so that regulators will be promptly notified of relevant events. The Commission believes the implementing provisions, MFC articles L. 51133II, L. 6341, and L. 6342, are relevant to the requirements of Exchange Act Rule 18a8a1i, a1ii, b1, b2, b4, c, d, e, and h. Accordingly, the Commission is deleting references to MiFID article 73
and CRD article 71, but is not deleting references to the implementing regulations MFC articles L. 51133II, L.
6341, and L. 6342, from the Orders list of requirements comparable to Exchange Act rule 18a8a1i, a1ii, b1, b2, b4, c, d, e, and h.506
The commenter recommended including references to Internal Control Order 249 and 2491 in paragraphs f4iA1, f4iB, f4iC1, and f4iD1. The Commission agrees. Accordingly, the Commission is adding references to Internal Control Order 249 and 2491 to the Orders list of requirements comparable to Exchange Act rule 18a8a1i, a1ii, b1, b2, b4, c, d, e, and h.507
e. Exchange Act Rule 18a9
The commenter recommended deleting references to MiFID Org Reg articles 74 and 75, from paragraph f51, reasoning that these provisions relate to recordkeeping requirements and therefore go beyond the requirements of Exchange Act rule 18a 9. The Commission agrees. Accordingly, the Commission is removing references to these requirements from the Orders list of EU and French law requirements 506 See paras. f4iA1, f4iB, f4iC1, and f4iD1 of the Order.
507 See paras. f4iA1, f4iB, f4iC1, and f4iD1 of the Order.

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