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Federal Register / Vol. 86, No. 145 / Monday, August 2, 2021 / Notices comparable to Exchange Act rule 18a 9.508
f. Exchange Act Section 15Fg The commenter recommended including references to MiFID Org Reg articles 211f, 214, and 721 in paragraph f6. The Commission agrees. These provisions require investment firms to maintain adequate and orderly business and internal organization records, have policies and procedures in place enabling them to deliver to a competent authority in a timely manner financial reports reflecting a true and fair view of the investment firms financial position, and retain specified records. The Commission believes that these provisions are relevant to the requirements of Exchange Act section 15Fg. Accordingly, the Commission is adding citations to these provisions in the Orders list of requirements comparable to Exchange Act section 15Fg.

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IX. Supervisory and Enforcement Considerations A. Proposed Approach Exchange Act rule 3a716a2i provides that the Commissions assessments regarding the comparability of foreign requirements in part should take into account the effectiveness of the supervisory program administered, and the enforcement authority exercised by the foreign financial regulatory authority. This provision is intended to help ensure that substituted compliance is not predicated on rules that appear high-quality on paper if market participants in practice are allowed to fall short of their obligations, while also recognizing that differences among supervisory and enforcement regimes should not be assumed to reflect flaws in one regime or another.509 The French Authorities Application accordingly included information regarding the supervisory and enforcement framework applicable to derivatives markets and market participants in France.
In proposing to grant substituted compliance in connection with the French Authorities Application, the Commission preliminarily concluded that the relevant supervisory and enforcement considerations were consistent with substituted compliance.
That preliminary conclusion took into account information regarding the French Authorities and the ECBs roles and practices in supervising investment 508 See
para. f51 of the Order.
French Substituted Compliance Notice and Proposed Order, 85 FR at 85734.

firms and credit institutions located in France, as well as their enforcementrelated authority and practices.510
B. Commenter Views and Final Provisions Commenters did not address the Commissions preliminary conclusions regarding supervisory and enforcement considerations, and the Commission continues to conclude that the relevant supervisory and enforcement considerations in France are consistent with substituted compliance. In particular, based on the available information regarding the French Authorities and the ECBs authority and practices to oversee market participants compliance with applicable requirements and to take action in the event of violations, the Commission remains of the view that, consistent with rule 3a716, comparability determinations reflect French and EU
requirements as they apply in practice.
To be clear, the supervisory and enforcement considerations addressed by rule 3a716 do not mandate that the Commission make judgments regarding the comparative merits of U.S. and foreign supervisory and enforcement frameworks, or to require specific findings regarding the supervisory and enforcement effectiveness of a foreign regime. The rule 3a716 considerations regarding supervisory and enforcement effectiveness instead address whether comparability analyses related to substituted compliance reflect requirements that market participants must follow, and for which market participants are subject to enforcement consequences in the event of violations.
Those considerations are satisfied here.
X. Conclusion It is hereby determined and ordered, pursuant to rule 3a716 under the Exchange Act, that a Covered Entity as defined in paragraph g1 of this Order may satisfy the requirements under the Exchange Act that are addressed in paragraphs b through f of this Order so long as the Covered Entity is subject to and complies with relevant requirements of the French Republic and the European Union and with the conditions of this Order, as amended or superseded from time to time.
a General Conditions This Order is subject to the following general conditions, in addition to the conditions specified in paragraphs b through f:

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1 Activities as MiFID investment services or activities. For each condition in paragraphs b through f of this Order that requires the application of, and the Covered Entitys compliance with, provisions of MiFID, provisions of MFC that implement MiFID and/or other EU and French requirements adopted pursuant to those provisions, the Covered Entitys relevant security-based swap activities constitute investment services or investment activities, as defined in MiFID article 412 and in MFC L. 3211, and fall within the scope of the Covered Entitys authorization from the AMF or from the ACPR after approval by the AMF of the Covered Firms program of operations to provide investment services and/or perform investment activities in the French Republic.
2 Counterparties as MiFID clients.
For each condition in paragraphs b through f of this Order that requires the application of, and the Covered Entitys compliance with, provisions of MiFID, provisions of MFC that implement MiFID and/or other EU and French requirements adopted pursuant to those provisions, the relevant counterparty or potential counterparty to the Covered Entity is a client or potential client, as defined in MiFID
article 419 and as used in the relevant provision of MFC.
3 Security-based swaps as MiFID
financial instruments. For each condition in paragraphs b through f of this Order that requires the application of, and the Covered Entitys compliance with, provisions of MiFID, provisions of MFC that implement MiFID and/or other EU and French requirements adopted pursuant to those provisions, the relevant security-based swap is a financial instrument, as defined in MiFID article 4115 and in MFC L. 2111 and D. 2111A.
4 Covered Entity as CRD/CRR
institution. For each condition in paragraph b through f of this Order that requires the application of, and the Covered Entitys compliance with, the provisions of CRD, provisions of MFC
that implement CRD, CRR and/or other EU and French requirements adopted pursuant to those provisions, the Covered Entity is an institution, as defined in CRD article 313 and CRR
article 413, and is either a credit institution or finance company, each as defined in MFC L. 5111.
5 Counterparties as EMIR
counterparties. For each condition in paragraphs b through f of this Order that requires the application of, and the Covered Entitys compliance with, provisions of EMIR, EMIR RTS, EMIR
Margin RTS, and/or other EU

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