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Federal Register / Vol. 86, No. 149 / Friday, August 6, 2021 / Notices
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 UK 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 UK requirement from the Orders list of UK requirements comparable to Exchange Act rules 18a5 and 18a6.
The commenter recommended deleting references to PRA Internal Capital Adequacy Assessment Rules, which relate to a firms distribution of financial resources, own funds and internal capital, and related risk management processes, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6. While the rules require firms to implement strategies, processes and systems, the FCA Application states that in practice, one or more of these provisions will require the maintenance of full records of the Investment Firms assets, liabilities, income and expense and capital accounts to be maintained which is relevant to Exchange Act rules 18a5 and 18a6.455 Accordingly, the Commission is not removing references to these UK requirements from the Orders list of UK requirements comparable to Exchange Act rules 18a 5 and 18a6, except with respect to Exchange Act rules 18a6b1iv and b2ii for which the Commission agrees with the commenters reasoning.456
The commenter recommended deleting references to certain parts of FCA CASS, which relate to a firms holding of safe custody assets and client money, reasoning that this does not correspond to, and goes beyond, the requirements of Exchange Act rules 18a5 and 18a6. However, the FCA
Application states that, among other things, these provisions require firms to maintain detailed, up-to-date and accurate accounts and records distinguishing client money and assets from those of the Investment Firm, which is relevant to Exchange Act rules 18a5 and 18a6.457 Accordingly, the Commission is not removing references 455 See
FCA Application at 109.
para. f2iD of the UK
Substituted Compliance Notice and Proposed Order, with para. f2iD of the Order.
457 See FCA Application at 110.
456 Compare
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to these UK requirements from the Orders list of UK requirements comparable to Exchange Act rules 18a 5 and 18a6, except with respect to Exchange Act rule 18a5a12 and Exchange Act rules 18a6b1iv and b2ii for which the Commission agrees with the commenters reasoning.458
The commenter recommended deleting references to UK EMIR article 11, which relates to the timely confirmation of transactions, and UK
EMIR article 39, which relates to a firms requirement to segregate the positions they clear for a client with a UK 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 UK
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 UK
requirements from the Orders list of UK
requirements comparable to Exchange Act rule 18a5, except with respect to Exchange Act rule 18a5a12 for which the Commission agrees with the commenters reasoning.459 However, the Commission agrees with the commenters reasoning with respect to Exchange Act rule 18a6 and is removing references to these UK
requirements from the Orders list of UK
requirements comparable to Exchange Act rule 18a6.460
The commenter recommended deleting references to UK 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 FCA
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 18a6.461
Accordingly, the Commission is not removing references to these UK

requirements from the Orders list of UK
requirements comparable to Exchange Act rules 18a5 and 18a6.
The commenter recommended deleting references to UK CRR article 1041j from the Order, reasoning that the provision does not exist. The Commission agrees with the commenters reasoning, and is therefore removing references to this citation from the Orders list of UK requirements comparable to Exchange Act rules 18a 5 and 18a6.462
The commenter recommended deleting certain references to FCA
COBS, which relate to client agreements for services and client reporting, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6.
With respect to Exchange Act rule 18a 5, these provisions other than FCA
COBS 9A.2.1R which is discussed above generally also contains record creation requirements that are relevant to Exchange Act rule 18a5 and Exchange Act rules 18a6b1ix and d4 and d5 which implicate record creation. Accordingly, the Commission is not removing references to most of these UK requirements from the Orders list of UK requirements comparable to Exchange Act rule 18a5 and Exchange Act rule 18a6b1ix, except for FCA
COBS 8A.1.9R and 16A.2.1R with respect to Exchange Act rule 18a 5a4, a8, and b3 for which the Commission agrees with the commenters reasoning.463 With respect to the remainder of Exchange Act rule 18a6, the Commission is removing references to these UK requirements because FCA COBS is relevant to record creation but not record preservation.464
The commenter recommended deleting references to MLR 2017
Regulations 28 through 30, which relate to anti-money laundering customer due diligence measures, reasoning that they do not correspond to, and go beyond, the requirements of Exchange Act rules 18a5 and 18a6. These UK provisions contain record creation requirements regarding customers, but not record preservation requirements. Accordingly, the Commission is not removing
458 Compare paras. f1iL1 and f2iD of the UK Substituted Compliance Notice and Proposed Order, with paras. f1iL1 and f2iD of the Order.
459 Compare para. f1iL1 of the UK
Substituted Compliance Notice and Proposed Order, with para. f1iL1 of the Order.
460 Compare paras. f2iA, f2iB, f2iC1, f2iD, f2iG1, f2iI1, and f2iO1 of the UK Substituted Compliance Notice and Proposed Order, with paras. f2iA, f2iB, f2iC1, f2iD, f2iG1, f2iI1, and f2iO1 of the Order.
461 See FCA Application at 111.

462 Compare paras. f2iE1 and f2iH1
of the UK Substituted Compliance Notice and Proposed Order, with paras. f2iE1 and f2iHi of the Order.
463 Compare paras. f1iD1 and f1iI1
of the UK Substituted Compliance Notice and Proposed Order, with paras. f1iD1 and f1iI1 of the Order.
464 Compare paras. f2iA, f2iB, f2iD, f2iF1, f2iG1, and f2iQ of the UK Substituted Compliance Notice and Proposed Order, with paras. f2iA, f2iB, f2iD, f2iF1, f2iG1, and f2iQ of the Order.

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