Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 215 / Wednesday, November 10, 2021 / Rules and Regulations List of Subjects in 14 CFR Part 107
Aircraft, airmen, Aviation safety, Reporting and recordkeeping requirements.
Accordingly, the FAA corrects 14 CFR
part 107 by making the following technical amendments:
PART 107SMALL UNMANNED
AIRCRAFT SYSTEMS
1. The authority citation for part 107
continues to read as follows:

Authority: 49 U.S.C. 106f, 40101 note, 40103b, 44701a5, 46105c, 46110, 44807.
107.110

Amended
2. Amend 107.110 by redesignating paragraphs b and c and paragraphs a2 and b, respectively.
3. Amend 107.125 by revising paragraph a2 to read as follows:

107.125 Category 3 operations:
Operating requirements.

a
2 Is listed on an FAA-accepted declaration of compliance as eligible for Category 3 operations in accordance with 107.160; and

Issued in Washington, DC, under the authority provided by 49 U.S.C. 106f, 40101
note and 44807.
Caitlin Locke, Acting Deputy Executive Director, Office of Rulemaking, Federal Aviation Administration.
FR Doc. 202124550 Filed 11921; 8:45 am BILLING CODE 491013P

SECURITIES AND EXCHANGE
COMMISSION
17 CFR Part 275
Release No. IA5904

Performance-Based Investment Advisory Fees Securities and Exchange Commission.
ACTION: Final rule.
AGENCY:

The Securities and Exchange Commission Commission or SEC
is adopting amendments to the rule under the Investment Advisers Act of 1940 Advisers Act that permits investment advisers to charge performance-based compensation to qualified clients. The rule defines qualified client with reference to specific dollar amount thresholds, which are required to be adjusted every
khammond on DSKJM1Z7X2PROD with RULES

SUMMARY:

VerDate Sep<11>2014

15:55 Nov 09, 2021

Jkt 256001

five years to account for the effects of inflation. These amendments replace specific dollar amount thresholds in the rules qualified client definition with references to the Commissions most recent order, as defined by the amended rule, containing the specific dollar amount thresholds adjusted for inflation.
DATES: The amendments are effective on November 10, 2021.
FOR FURTHER INFORMATION CONTACT:
Matthew Cook, Senior Counsel, at 202
5516787 or IArules@sec.gov, Investment Adviser Regulation Office, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC
205498549.
SUPPLEMENTARY INFORMATION: The Commission is adopting amendments to 17 CFR 275.2053 rule 2053 under the Advisers Act.1
I. Background Section 205a1 of the Advisers Act generally prohibits an investment adviser registered or required to be registered with the Commission from entering into, extending, renewing, or performing any investment advisory contract that provides for compensation to the adviser based on a share of capital gains on, or capital appreciation of, the funds of a client.2 Congress restricted these compensation arrangements also known as performance compensation or performance fees in 1940 to protect advisory clients from fee arrangements it believed could encourage advisers to engage in speculative trading practices while managing client funds in order to realize or increase advisory fees.3
Congress subsequently authorized the Commission to exempt any advisory contract from the performance fee prohibition if the contract is with any person that the Commission determines does not need the protections of this restriction.4 Rule 2053 under the 1 15 U.S.C. 80b. Unless otherwise noted, all references to statutory sections are to 15 U.S.C. 80b of the United States Code, at which the Advisers Act is codified, and all references to rules under the Advisers Act, including rule 2053, are to title 17, part 275 of the Code of Federal Regulations 17 CFR
part 275.
2 15 U.S.C. 80b5a1.
3 See Exemption to Allow Registered Investment Advisers to Charge Fees Based Upon a Share of Capital Gains Upon or Capital Appreciation of a Clients Account, Investment Advisers Act Release No. 996 Nov. 14, 1985 50 FR 48556 Nov. 26, 1985 1985 Adopting Release, at Section I.A
and footnote 3.
4 Section 205e of the Advisers Act. Section 205e provides that the Commission may determine that persons do not need the protections of section 205a1 on the basis of such factors as financial sophistication, net worth, knowledge of and experience in financial matters, amount of
PO 00000

Frm 00009

Fmt 4700

Sfmt 4700

62473

Advisers Act exempts an investment adviser from the prohibition against charging a client performance fees when the client is a qualified client. 5 A
qualified client includes a client that has at least a certain dollar amount in assets under management with the adviser immediately after entering into the advisory contract assets-undermanagement test, and a client that the adviser reasonably believes, immediately prior to entering into the contract, had a net worth of more than a certain dollar amount net worth test.6
The Dodd-Frank Wall Street Reform and Consumer Protection Act DoddFrank Act 7 amended section 205e of the Advisers Act to provide that, by July 21, 2011, and every five years thereafter, the Commission shall, by order, adjust for the effects of inflation the dollar amount thresholds included in rules issued under section 205e, rounded to the nearest multiple of $100,000.8 In 2011, the Commission issued an order to revise the dollar amount thresholds of the assets-under-management and net worth tests to $1,000,000 and $2,000,000, respectively.9 In 2012, the Commission amended rule 2053 to codify the dollar amount thresholds in the 2011 Order and, among other assets under management, relationship with a registered investment adviser, and such other factors as the Commission determines are consistent with section 205.
5 1985 Adopting Release, supra footnote 3. The exemption applies to the entrance into, performance, renewal, and extension of advisory contracts. See rule 2053a.
6 Rule 2053d1i through ii. The dollar amount thresholds of the assets-under-management and net worth tests were $500,000 and $1 million, respectively, when the Commission adopted rule 2053 in 1985. See 1985 Adopting Release, supra footnote 3. In 1998, the Commission amended rule 2053 to, among other things, revise the dollar amounts of the assets-under-management test and net worth test to adjust for the effects of inflation since 1985 the amounts were adjusted to $750,000
and $1.5 million, respectively. See Exemption To Allow Investment Advisers To Charge Fees Based Upon a Share of Capital Gains Upon or Capital Appreciation of a Clients Account, Investment Advisers Act Release No. 1731 July 15, 1998 63
FR 39022 July 21, 1998. These dollar amount thresholds were subsequently adjusted to account for the effects of inflation by Commission orders in 2011, 2016 and 2021, as discussed infra footnotes 9, 11, and 12 and accompanying text.
7 Public Law 111203, 124 Stat. 1376 2010.
8 See section 418 of the Dodd-Frank Act requiring the Commission to issue an order every five years revising dollar amount thresholds in a rule that exempts a person or transaction from section 205a1 of the Advisers Act if the dollar amount threshold was a factor in the Commissions determination that the person does not need the protections of that section.
9 Order Approving Adjustment for Inflation of the Dollar Amount Tests in Rule 2053 under the Investment Advisers Act of 1940, Investment Advisers Act Release No. 3236 July 12, 2011 76
FR 41838 July 15, 2011 2011 Order.

E:FRFM10NOR1.SGM

10NOR1