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Federal Register / Vol. 86, No. 145 / Monday, August 2, 2021 / Notices except for Exchange Act rules 18a 6b1iv and b2ii.475
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 requirement from the Orders list of EU
and French law requirements comparable to the Commissions recordkeeping, reporting, notification, and securities count requirements.476

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b. Exchange Act Rules 18a5 and 18a 6
The commenter recommended deleting references to 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 not correspond to, and goes beyond, the requirements of Exchange Act rules 18a5 and 18a6. With respect to Exchange Act rule 18a6, the five year record retention period is directly relevant to the record preservation requirement in Exchange Act rule 18a 6. With respect to Exchange Act rule 18a5, while this requirement contains a record retention element, it also contains a record creation requirement that is relevant to Exchange Act rule 18a5. Accordingly, the Commission is not removing references to this requirement from the Orders list of EU
and French law requirements comparable to Exchange Act rules 18a 5 and 18a6.
The commenter recommended deleting references to CRD article 73
and its French implementing provisions, reasoning that it relates to substantive capital requirements. CRD
article 73 requires firms to have in place sound, effective and comprehensive strategies and processes to assess and maintain . . . internal capital which the French Authorities Application states in practice will require the maintenance of full records of the Investment Firms assets, liabilities, income and expense and capital accounts to be maintained on an on-going basis. 477 Accordingly, the Commission is not removing references to this requirement from the Orders list of EU and French law requirements 475 See paras. f1iA1, f1iD1, f1iF1, f1iG1, f1iI1, f1iM, f2iA, f2iB, and f2iO1 of the Order.
476 See para. f2iR of the Order.
477 See French Authorities Application Annex I
category 2 at 14.

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comparable to Exchange Act rules 18a 5 and 18a6.
The commenter recommended deleting references to MiFID Delegated Directive article 2 and its French implementing provisions, reasoning that they do not relate to recordkeeping. The Commission disagrees because MiFID
Delegated Directive article 2 requires, among other things, that firms keep records and accounts enabling them . . . to distinguish assets held for one client from assets held for any other client and from its other own assets which directly implicates record creation and preservation. Accordingly, the Commission is not removing references to these requirements from the Orders list of EU and French law requirements comparable to Exchange Act rules 18a5 and 18a6.
The commenter recommended deleting references to EMIR article 11, which relates to timely confirmation of transactions, and EMIR article 39, which relates to a firms requirement to segregate the positions they clear for a client with a central counterparty from their own positions, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6. While these requirements contain segregation and confirmation requirements, they also contain record creation requirements that are relevant to Exchange Act rule 18a5. Accordingly, the Commission is not removing references to these requirements from the Orders list of EU
and French law requirements comparable to Exchange Act rule 18a 5, except with respect to Exchange Act rule 18a5a12 for which the Commission agrees with the commenters reasoning.478 However, the Commission agrees these provisions do not relate to record preservation is removing references to these requirements from the Orders list of EU
and French law requirements comparable to Exchange Act rule 18a 6.479
The commenter recommended deleting references to MiFID articles 255 and 256 and their French implementing provisions, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6. Both provisions contain record creation elements, because MiFID article 255
requires firms to establish a record setting out the rights and obligations of the firm and the client, and MiFID

article 256 requires firms to prepare client reports in a durable medium.
Accordingly, the Commission is not removing references to these requirement from the Orders list of EU
and French law requirements comparable to Exchange Act rule 18a 5. However, the Commission agrees that these provisions do not relate to record preservation and is removing references to these requirements from the Orders list of EU and French law requirements comparable to Exchange Act rule 18a 6,480 except with respect to Exchange Act rule 18a6d4 and d5 which implicates record creation in addition to record preservation.481
The commenter recommended deleting references to CRR articles 103, 1053, and 10510, which relate to the firms management of trading book exposures, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6. However, the French Authorities Application states that these requirements in practice require firms to have a record of their long and short positions to enable these to be monitored which is relevant to Exchange Act rules 18a5 and 18a6.482
Accordingly, the Commission is not removing references to these requirements from the Orders list of EU
and French law requirements comparable to Exchange Act rules 18a 5 and 18a6.
The commenter recommended deleting references to MiFID article 166 and its French implementing provisions, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6. MiFID article 166
requires firms to arrange for records to be kept of all services, activities and transactions undertaken by it which is relevant to record creation and preservation. Accordingly, the Commission is not removing references to these requirements from the Orders list of EU and French law requirements comparable to Exchange Act rules 18a 5 and 18a6.
The commenter recommended deleting references to CRR article 1041j from the Order, reasoning that the provision does not exist. The Commission confirmed with the French Authorities that references to CRR
article 1041j were intended to reference CRD article 1041j.
However, CRD article 1041j relates to 480 See
para. f2iP1 of the Order.
paras. f2iA, f2iB, f2iC1, f2iD, f2iG1, f2iI1, and f2iO1 of the Order.
482 See French Authorities Application Annex 1
category 2 at 16.
481 See
para. f1iL1 of the Order.
paras. f2iA, f2iB, f2iD, f2iF1, f2iG1, and f2iQ of the Order.

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