[Federal Register Volume 79, Number 27 (Monday, February 10, 2014)]
[Notices]
[Pages 7719-7722]
[FR Doc No: 2014-02766]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30905; File No. 812-14124]

KKR Series Trust and Prisma Capital Partners LP; Notice of
Application

AGENCY: Securities and Exchange Commission.

ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from section 15(a) of
the Act and rule 18f-2 under the Act, as well as from certain
disclosure requirements.

-----------------------------------------------------------------------

 Summary of Application: Applicants request an order that would permit
them to enter into and materially amend sub-advisory agreements with
Wholly-Owned Sub-Advisers (as defined below) and non-affiliated sub-
advisers without shareholder approval and would grant relief from
certain disclosure requirements.

 Applicants: KKR Series Trust (the ``Trust''), and Prisma Capital
Partners LP (``Prisma'').

 Filing Dates: The application was filed on February 15, 2013, and
amended on June 25, 2013, and November 6, 2013.

 Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on March 3, 2014, and should be accompanied by proof of service on
applicants, in the form of an affidavit or, for lawyers, a certificate
of service. Hearing requests should state the nature of the writer's
interest, the reason for the request, and the issues contested. Persons
who wish to be notified of a hearing may request notification by
writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549-1090. The Trust, c/
o Nicole J. Macarchuk, Esq., KKR Asset Management LLC, 555 California
Street, 50th Floor, San Francisco, California 94104; and Prisma, c/o
Francis J. Conroy and Vince Cuticello, Esq., Prisma Capital Partners
LP, One Penn Plaza, Suite 3515, New York, New York 10119.

FOR FURTHER INFORMATION CONTACT: Steven I. Amchan, Senior Counsel, at
(202) 551-6826, or David P. Bartels, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Trust is organized as a Delaware statutory trust and is
registered with the Commission as an open-end management investment
company under the Act. The Trust may offer one or more series of shares
(each a ``Series'' and collectively, ``Series'') with its own distinct
investment objectives, policies and restrictions. Prisma is the
investment adviser to KKR Alternative Strategies Fund, a series of the
Trust (the ``Multi-Manager Fund''). Prisma is a Delaware limited
partnership and is a subsidiary of KKR & Co. L.P.\1\
---------------------------------------------------------------------------

    \1\ The Trust and Prisma, together, the ``Applicants.'' Prisma
or another investment adviser controlling, controlled by or under
common control with Prisma or its successors, each, an ``Adviser.''
For purposes of the requested order, ``successor'' is limited to an
entity that results from reorganization into another jurisdiction or
a change in the type of business organization. Prisma is, and any
other Adviser will be, registered with the Commission as an
investment adviser under the Investment Advisers Act of 1940, as
amended (``Advisers Act'').
---------------------------------------------------------------------------

    2. Applicants request an order to permit the Adviser, subject to
the approval of the board of trustees of the Trust (the ``Board''),
including a majority of the trustees who are not ``interested
persons,'' as defined in section 2(a)(19) of the Act, of the Series or
the Adviser (``Independent Trustees''), to, without obtaining
shareholder approval: (i) Select Sub-Advisers to manage all or a
portion of the assets of a Sub-Advised Series and enter into Sub-
Advisory Agreements (as defined below) with the Sub-Advisers, and (ii)
materially amend Sub-Advisory Agreements with the Sub-Advisers.\2\
Applicants request that the relief apply to the Applicants, as well as
to any future Series and any other existing or future registered open-
end management investment company or series thereof that is advised by
an Adviser, uses the multi-manager structure described in the
application (``Multi-Manager Structure''), and complies with the terms
and conditions of the application (``Sub-Advised Series'').\3\
---------------------------------------------------------------------------

    \2\ Shareholder approval will continue to be required for any
other sub-adviser change (not otherwise permitted by rule and
material amendments to an existing sub-advisory agreement with any
sub-adviser other than a Non-Affiliated Sub-Adviser or a Wholly-
Owned Sub-Adviser (all such changes referred to as ``Ineligible
Affiliated Sub-Adviser Changes'').
    \3\ The Trust is the only registered open-end investment company
that currently intend to rely on the requested order. The Multi-
Manager Fund is the only Series that currently intends to be a Sub-
Advised Series. Any entity that relies on the requested order will
do so only in accordance with the terms and conditions contained in
the application. The requested relief will not extend to any sub-
adviser, other than a Wholly-Owned Sub-Adviser, who is an affiliated
person, as defined in Section 2(a)(3) of the Act, of the Trust, a
Sub-Advised Series, or an Adviser, other than by reason of serving
as a sub-adviser to one or more of the Sub-Advised Series
(``Affiliated Sub-Adviser'').
---------------------------------------------------------------------------

    3. Prisma will serve as the investment adviser to the Multi-Manager
Fund pursuant to an investment advisory agreement with the Trust (the
``Investment Management Agreement''). The Investment Management
Agreement was approved by the Board, including a majority of the
Independent Trustees, and prior to the commencement date, will be
approved by the initial shareholder of the Multi-Manager Fund as
required by sections 15(a) and 15(c) of the Act and rule 18f-2
thereunder. The terms of the Investment

Management Agreements comply with section 15(a) of the Act. Each other
Investment Management Agreement will comply with section 15(a) of the
Act and will be similarly approved.
    4. Under the terms of the Investment Management Agreement, Prisma,
subject to the supervision of the Board, will provide continuous
oversight of the investment management of the assets of the Multi-
Manager Fund. For its services to the Multi-Manager Fund under the
Investment Management Agreement, Prisma will receive an investment
management fee from the Multi-Manager Fund based on the average daily
net assets of the Multi-Manager Fund. Consistent with the contemplated
Multi-Manager Structure, Prisma may, subject to the approval of the
Board, including a majority of the Independent Trustees, delegate
portfolio management responsibilities of all or a portion of the assets
of the Multi-Manager Fund to one or more Sub-Advisers.\4\
---------------------------------------------------------------------------

    \4\ As used herein, a ``Sub-Adviser'' for a Series may be: (1)
An indirect or direct ``wholly-owned subsidiary'' (as such term is
defined in the Act) of the Adviser for that Series, or (2) a sister
company of the Adviser for that Series that is an indirect or direct
``wholly-owned subsidiary'' (as such term is defined in the Act) of
the same company that, indirectly or directly, wholly owns the
Adviser (each of (1) and (2) a ``Wholly-Owned Sub-Adviser'' and
collectively, the ``Wholly-Owned Sub-Advisers''), or (3) not an
``affiliated person'' (as such term is defined in section 2(a)(3) of
the Act) of the Series, the Trust, or an Adviser, except to the
extent that an affiliation arises solely because the sub-adviser
serves as a Sub-Adviser to a Series (each a ``Non-Affiliated Sub-
Adviser'').
---------------------------------------------------------------------------

    5. Pursuant to the Investment Management Agreement, Prisma has
overall responsibility for the management of the Multi-Manager Fund;
these responsibilities include recommending the removal or replacement
of Sub-Advisers, determining the portion of the Multi-Manager Fund's
assets to be managed by any given Sub-Adviser and reallocating those
assets as necessary from time to time.
    6. Pursuant to the authority under the Investment Management
Agreement, Prisma will be permitted to enter into investment sub-
advisory agreements with Sub-Advisers (``Sub-Advisory Agreements'') on
behalf of the Multi-Manager Fund.\5\ The terms of each Sub-Advisory
Agreement will comply fully with the requirements of section 15(a) of
the Act. The Sub-Advisory Agreements will be approved by the Board,
including a majority of the Independent Trustees, in accordance with
sections 15(a) and 15(c) of the Act. The Sub-Advisers, subject to the
supervision of Prisma and oversight of the Board, will determine the
securities and other instruments to be purchased, sold or entered into
by the Multi-Manager Fund's portfolio or a portion thereof, and will
place orders with brokers or dealers that they select. Prisma will
compensate each Sub-Adviser out of the fee paid to Prisma under the
Investment Management Agreement.
---------------------------------------------------------------------------

    \5\ If the name of any Series contains the name of a Sub-
Adviser, that name will be preceded by the name of the Adviser.
---------------------------------------------------------------------------

    7. Sub-Advised Series will inform shareholders of the hiring of a
new Sub-Adviser pursuant to the following procedures (``Modified Notice
and Access Procedures''): (a) within 90 days after a new Sub-Adviser is
hired for any Sub-Advised Series, that Sub-Advised Series will send its
shareholders either a Multi-Manager Notice or a Multi-Manager Notice
and Multi-Manager Information Statement; \6\ and (b) the Sub-Advised
Series will make the Multi-Manager Information Statement available on
the Web site identified in the Multi-Manager Notice no later than when
the Multi-Manager Notice (or Multi-Manager Notice and Multi-Manager
Information Statement) is first sent to shareholders, and will maintain
it on that Web site for at least 90 days. Applicants state that, in the
circumstances described in the application, a proxy solicitation to
approve the appointment of new Sub-Advisers provides no more meaningful
information to shareholders than the proposed Multi-Manager Information
Statement. Applicants state that the Board would comply with the
requirements of sections 15(a) and 15(c) of the Act before entering
into or amending Sub-Advisory Agreements.
---------------------------------------------------------------------------

    \6\ A ``Multi-Manager Notice'' will be modeled on a Notice of
Internet Availability as defined in rule 14a-16 under the Securities
Exchange Act of 1934 (``Exchange Act''), and specifically will,
among other things: (a) summarize the relevant information regarding
the new Sub-Adviser; (b) inform shareholders that the Multi-Manager
Information Statement is available on a Web site; (c) provide the
Web site address; (d) state the time period during which the Multi-
Manager Information Statement will remain available on that Web
site; (e) provide instructions for accessing and printing the Multi-
Manager Information Statement; and (f) instruct the shareholder that
a paper or email copy of the Multi-Manager Information Statement may
be obtained, without charge, by contacting the Sub-Advised Series. A
``Multi-Manager Information Statement'' will meet the requirements
of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under
the Exchange Act for an information statement, except as modified by
the order to permit Aggregate Fee Disclosure, as defined below.
Multi-Manager Information Statements will be filed with the
Commission via the EDGAR system.
---------------------------------------------------------------------------

    8. Applicants also request an order exempting the Sub-Advised
Series from certain disclosure obligations that may require the
Applicants to disclose fees paid by the Adviser to each Sub-Adviser.
Applicants seek relief to permit each Sub-Advised Series to disclose
(as a dollar amount and a percentage of the Sub-Advised Series' net
assets): (a) the aggregate fees paid to the Adviser and any Wholly-
Owned Sub-Advisers; and (b) the aggregate fees paid to Non-Affiliated
Sub-Advisers (the ``Aggregate Fee Disclosure''). If a sub-adviser,
other than a Non-Affiliated Sub-Adviser or a Wholly-Owned Sub-Adviser,
is employed to provide management services to a Sub-Advised Series,
that Sub-Advised Series will provide separate disclosure of any fees
paid to such sub-adviser.

Applicants' Legal Analysis

    1. Section 15(a) of the Act states, in part, that it is unlawful
for any person to act as an investment adviser to a registered
investment company ``except pursuant to a written contract, which
contract, whether with such registered company or with an investment
adviser of such registered company, has been approved by the vote of a
majority of the outstanding voting securities of such registered
company.'' Rule 18f-2 under the Act states that any ``matter required
to be submitted . . . to the holders of the outstanding voting
securities of a series company shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of
the outstanding voting securities of each class or series of stock
affected by such matter.'' Further, rule 18(f)-2(c)(1) under the Act
provides that a vote to approve an investment advisory contract
required by section 15(a) of the Act ``shall be deemed to be
effectively acted upon with respect to any class or series of
securities of such registered investment company if a majority of the
outstanding voting securities of such class or series vote for the
approval of such matter.''
    2. Form N-1A is the registration statement used by open-end
investment companies. Item 19(a)(3) of Form N-1A requires a registered
investment company to disclose in its statement of additional
information the method of computing the ``advisory fee payable'' by the
investment company, including the total dollar amounts that the
investment company ``paid to the adviser (aggregated with amounts paid
to affiliated advisers, if any), and any advisers who are not
affiliated persons of the adviser, under the investment advisory
contract for the last three fiscal years.''
    3. Rule 20a-1 under the Act requires proxies solicited with respect
to a registered investment company to comply with Schedule 14A under
the Exchange Act. Items 22(c)(1)(ii),

22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together,
require a proxy statement for a shareholder meeting at which the
advisory contract will be voted upon to include the ``rate of
compensation of the investment adviser,'' the ``aggregate amount of the
investment adviser's fee,'' a description of the ``terms of the
contract to be acted upon,'' and, if a change in the advisory fee is
proposed, the existing and proposed fees and the difference between the
two fees.
    4. Regulation S-X sets forth the requirements for financial
statements required to be included as part of a registered investment
company's registration statement and shareholder reports filed with the
Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require
a registered investment company to include in its financial statement
information about the investment advisory fees.
    5. Section 6(c) of the Act provides that the Commission by order
upon application may conditionally or unconditionally exempt any
person, security, or transaction or any class or classes of persons,
securities, or transactions from any provisions of the Act, or from any
rule thereunder, if such exemption is necessary or appropriate in the
public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Applicants state that their requested relief meets this standard for
the reasons discussed below.
    6. Applicants assert that the shareholders expect the Adviser,
subject to review and approval of the Board, to select Sub-Advisers who
the Adviser believes can achieve the Sub-Advised Series' investment
objectives. Applicants assert that, from the perspective of the
shareholder, the role of the Sub-Advisers is substantially equivalent
to the role of the individual portfolio managers employed by an
investment adviser to a traditional investment company. Applicants
believe that permitting the Adviser to perform the duties for which the
shareholders of the Sub-Advised Series are paying the Adviser--the
selection, supervision and evaluation of the Sub-Advisers, including
Wholly-Owned Sub-Advisers--without incurring unnecessary delays or
expenses is appropriate in the interest of the Sub-Advised Series'
shareholders and will allow such Sub-Advised Series to operate more
efficiently. Applicants state that each Investment Management Agreement
will continue to be fully subject to section 15(a) of the Act and rule
18f-2 under the Act, and was approved by the Board, including a
majority of the Independent Trustees, in the manner required by
sections 15(a) and 15(c) of the Act. Applicants are not seeking an
exemption with respect to the Investment Management Agreements.
    7. Applicants assert that disclosure of the individual fees that
the Adviser would pay to the Sub-Advisers would not serve any
meaningful purpose. Applicants contend that the primary reasons for
requiring disclosure of individual fees paid to Sub-Advisers are to
inform shareholders of expenses to be charged by a particular Sub-
Advised Series and to enable shareholders to compare the fees to those
of other comparable investment companies. Applicants believe that the
requested relief satisfies these objectives because the advisory fee
paid to the Adviser will be fully disclosed and, therefore,
shareholders will know what the Sub-Advised Series' fees and expenses
are and will be able to compare the advisory fees a Sub-Advised Series
is charged to those of other investment companies. Applicants assert
that the requested relief would benefit shareholders of the Sub-Advised
Series because it would improve the Adviser's ability to negotiate the
fees paid to Sub-Advisers. Applicants assert that the Adviser's ability
to negotiate with the various Sub-Advisers would be adversely affected
by public disclosure of fees paid to each Sub-Adviser. Applicants state
that if the Adviser is not required to disclose the Sub-Advisers' fees
to the public, the Adviser may be able to negotiate rates that are
below a Sub-Adviser's ``posted'' amounts. Applicants submit that the
relief will also encourage Sub-Advisers to negotiate lower sub-advisory
fees with the Adviser if the lower fees are not required to be made
public.
    8. For the reasons discussed above, Applicants submit that the
requested relief meets the standards for relief under section 6(c) of
the Act. Applicants state that the operation of the Sub-Advised Series
in the manner described in the application must be approved by
shareholders of a Sub-Advised Series before that Sub-Advised Series may
rely on the requested relief. In addition, Applicants state that the
proposed conditions to the requested relief are designed to ensure that
shareholder interests are adequately protected through Board oversight.
Applicants assert that conditions 6, 7, 10 and 11 are designed to
provide the Board with sufficient independence and the resources and
information it needs to monitor and address any conflicts of interest.
Applicants state that, accordingly, they believe the requested relief
is necessary or appropriate in the public interest and consistent with
the protection of investors and the purposes fairly intended by the
policy and provisions of the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:\7\
---------------------------------------------------------------------------

    \7\ Applicants will only comply with conditions 8 and 12 if they
rely on the relief that would allow them to provide Aggregate Fee
Disclosure.
---------------------------------------------------------------------------

    1. Before a Sub-Advised Series may rely on the order requested in
the application, the operation of the Sub-Advised Series pursuant to
the Multi-Manager Structure, including the hiring of Wholly-Owned Sub-
Advisers, will be approved by a majority of the Sub-Advised Series'
outstanding voting securities, as defined in the Act, which in the case
of a Sub-Advised Series whose public shareholders purchase shares on
the basis of a prospectus containing the disclosure contemplated by
condition 2 below, will be by the sole initial shareholder before
offering the Sub-Advised Series' shares to the public.
    2. The prospectus for each Sub-Advised Series will disclose the
existence, substance, and effect of any order granted pursuant to the
application. Each Sub-Advised Series will hold itself out to the public
as employing the Multi-Manager Structure described in the application.
A Sub-Advised Series' prospectus will prominently disclose that the
Adviser has the ultimate responsibility, subject to oversight by the
Board, to oversee the Sub-Advisers and recommend their hiring,
termination and replacement.
    3. The Adviser will provide general management services to a Sub-
Advised Series, including overall supervisory responsibility for the
general management and investment of the Sub-Advised Series' assets.
Subject to review and approval of the Board, the Adviser will (a) set a
Sub-Advised Series' overall investment strategies, (b) evaluate,
select, and recommend Sub-Advisers to manage all or a portion of a Sub-
Advised Series' assets, and (c) implement procedures reasonably
designed to ensure that Sub-Advisers comply with a Sub-Advised Series'
investment objective, policies and restrictions. Subject to review by
the Board, the Adviser will (a) when appropriate, allocate and
reallocate a Sub-Advised Series' assets among multiple Sub-Advisers;
and (b) monitor and evaluate the performance of Sub-Advisers.

    4. A Sub-Advised Series will not make any Ineligible Affiliated
Sub-Adviser Changes without the approval of the shareholders of the
applicable Sub-Advised Series.
    5. A Sub-Advised Series will inform shareholders of the hiring of a
new Sub-Adviser within 90 days after the hiring of the new Sub-Adviser
pursuant to the Modified Notice and Access Procedures.
    6. At all times, at least a majority of the Board will be
Independent Trustees, and the selection and nomination of new or
additional Independent Trustees will be placed within the discretion of
the then-existing Independent Trustees.
    7. Independent Legal Counsel, as defined in rule 0-1(a)(6) under
the Act, will be engaged to represent the Independent Trustees. The
selection of such counsel will be within the discretion of the then-
existing Independent Trustees.
    8. The Adviser will provide the Board, no less frequently than
quarterly, with information about the profitability of the Adviser on a
per Sub-Advised Series basis. The information will reflect the impact
on profitability of the hiring or termination of any sub-adviser during
the applicable quarter.
    9. Whenever a sub-adviser is hired or terminated, the Adviser will
provide the Board with information showing the expected impact on the
profitability of the Adviser.
    10. Whenever a sub-adviser change is proposed for a Sub-Advised
Series with an Affiliated Sub-Adviser or Wholly-Owned Sub-Adviser, the
Board, including a majority of the Independent Trustees, will make a
separate finding, reflected in the Board minutes, that such change is
in the best interests of the Sub-Advised Series and its shareholders,
and does not involve a conflict of interest from which the Adviser or
the Affiliated Sub-Adviser or Wholly-Owned Sub-Adviser derives an
inappropriate advantage.
    11. No Board member or officer of a Sub-Advised Series or any
partner, director, manager, or officer of the Adviser, will own
directly or indirectly (other than through a pooled investment vehicle
that is not controlled by such person), any interest in a Sub-Adviser,
except for (i) ownership of interests in the Adviser or any entity,
other than a Wholly-Owned Sub-Adviser, that controls, is controlled by,
or is under common control with the Adviser; or (ii) ownership of less
than 1% of the outstanding securities of any class of equity or debt of
a publicly traded company that is either a Sub-Adviser or an entity
that controls, is controlled by, or is under common control with a Sub-
Adviser.
    12. Each Sub-Advised Series will disclose the Aggregate Fee
Disclosure in its registration statement.
    13. In the event the Commission adopts a rule under the Act
providing substantially similar relief to that requested in the
application, the requested order will expire on the effective date of
that rule.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02766 Filed 2-7-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 17 (Wednesday, January 26, 2022)]
[Notices]
[Pages 4072-4075]
[FR Doc No: 2022-01467]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94018; File No. SR-FINRA-2022-001]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Extend the Effectiveness of Temporary
Supplementary Material .17 (Temporary Relief To Allow Remote
Inspections for Calendar Years 2020 and 2021, and Through June 30 of
Calendar Year 2022) Under FINRA Rule 3110 (Supervision)

January 20, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 10, 2022, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. FINRA has
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under
the Act,\3\ which renders the proposal effective upon receipt of this
filing by the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to extend temporary Supplementary Material .17
(Temporary Relief to Allow Remote Inspections for Calendar Years 2020
and 2021, and Through June 30 of Calendar Year 2022) under FINRA Rule
3110 (Supervision) to include calendar year 2022 inspection obligations
through December 31, 2022 within the scope of the supplementary
material.\4\ The proposed additional six-month extension of Rule
3110.17 is necessary to address the operational challenges resulting
from the COVID-19 pandemic that many member firms continue to face in
planning for and timely conducting, during the second half of calendar
year 2022, the on-site

inspection component of Rule 3110(c) (Internal Inspections) at
locations requiring inspection in calendar year 2022.\5\
---------------------------------------------------------------------------

    \4\ The proposed rule text changes to Rule 3110.17 are applied
to the version that becomes operative on January 1, 2022 and
automatically sunsets on June 30, 2022.
    \5\ The proposed rule change will automatically sunset on
December 31, 2022. FINRA will submit a separate rule filing if it
seeks to extend the duration of the temporary proposed rule beyond
December 31, 2022.
---------------------------------------------------------------------------

    Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in brackets.
* * * * *

3100. SUPERVISORY RESPONSIBILITIES

3110. Supervision

    (a) through (f) No Change.
    * * *
Supplementary Material: ----------
.01 through .16 No Change.
.17 Temporary Relief to Allow Remote Inspections for Calendar Years
2020 and 2021, and Through [June 30]December 31 of Calendar Year
2022.
    (a) Use of Remote Inspections. Each member obligated to conduct
an inspection of an office of supervisory jurisdiction, branch
office or non-branch location in calendar years 2020, 2021 and 2022
pursuant to, as applicable, paragraphs (c)(1)(A), (B) and (C) under
Rule 3110 may, subject to the requirements of this Rule 3110.17,
satisfy such obligation by conducting the applicable inspection
remotely, without an on-site visit to the office or location. In
accordance with Rule 3110.16, inspections for calendar year 2020
must be completed on or before March 31, 2021 and inspections for
calendar year 2021 must be completed on or before December 31, 2021.
With respect to a member's obligation to conduct an inspection of an
office or location in calendar year 2022, a member has the option to
conduct those inspections remotely [only] through [June 30]December
31, 2022. Notwithstanding Rule 3110.17, a member shall remain
subject to the other requirements of Rule 3110(c).
    (b) Written Supervisory Procedures for Remote Inspections.
Consistent with a member's obligation under Rule 3110(b)(1), a
member that elects to conduct its inspections remotely for any of
the calendar years specified in this supplementary material must
amend or supplement its written supervisory procedures to provide
for remote inspections that are reasonably designed to assist in
detecting and preventing violations of and achieving compliance with
applicable securities laws and regulations, and with applicable
FINRA rules. Reasonably designed procedures for conducting remote
inspections of offices or locations should include, among other
things: (1) A description of the methodology, including technologies
permitted by the member, that may be used to conduct remote
inspections; and (2) the use of other risk-based systems employed
generally by the member firm to identify and prioritize for review
those areas that pose the greatest risk of potential violations of
applicable securities laws and regulations, and of applicable FINRA
rules.
    (c) Effective Supervisory System. The requirement to conduct
inspections of offices and locations is one part of the member's
overall obligation to have an effective supervisory system and
therefore, the member must continue with its ongoing review of the
activities and functions occurring at all offices and locations,
whether or not the member conducts inspections remotely. A member's
use of a remote inspection of an office or location will be held to
the same standards for review as set forth under Rule 3110.12. Where
a member's remote inspection of an office or location identifies any
indicators of irregularities or misconduct (i.e., ``red flags''),
the member may need to impose additional supervisory procedures for
that office or location or may need to provide for more frequent
monitoring of that office or location, including potentially a
subsequent physical, on-site visit on an announced or unannounced
basis when the member's operational difficulties associated with
COVID-19 abate, nationally or locally as relevant, and the
challenges a member is facing in light of the public health and
safety concerns make such on-site visits feasible using reasonable
best efforts. The temporary relief provided by this Rule 3110.17
does not extend to a member's inspection requirements beyond [June
30]December 31, 2022 and such inspections must be conducted in
compliance with Rule 3110(c).
    (d) Documentation Requirement. A member must maintain and
preserve a centralized record for each of calendar years 2020 and
2021, and for calendar year 2022 through [June 30]December 31, 2022
[only] that separately identifies: (1) all offices or locations that
had inspections that were conducted remotely; and (2) any offices or
locations for which the member determined to impose additional
supervisory procedures or more frequent monitoring, as provided in
Rule 3110.17(c). A member's documentation of the results of a remote
inspection for an office or location must identify any additional
supervisory procedures or more frequent monitoring for that office
or location that were imposed as a result of the remote inspection.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In the midst of the global COVID-19 pandemic where the United
States recorded its first case of COVID-19 in early 2020,\6\ and the
attendant logistical challenges member firms were encountering to
satisfy the on-site inspection component of their Rule 3110(c)
requirements, FINRA adopted Rule 3110.17 to provide a tailored
regulatory alternative for member firms to have the option, subject to
specified conditions, to complete their inspection obligations
remotely.\7\ While there were some signs that the pandemic was receding
for a subsequent period of time, much uncertainty still remained. The
emergence of the Delta variant, dissimilar vaccination rates throughout
the U.S., and the significant uptick in transmissions in many locations
during the summer of 2021 indicated that COVID-19 remained an active
and real public health concern.\8\ Against this setting, FINRA
understood the complexity firms were facing in assessing when and how
to effectively and safely recall their employees back into offices
alongside fashioning permanent telework arrangements or a hybrid
workforce model in which some employees may work on-site in a
commercial office space and other employees may work off-site in an
alternative location (e.g., personal residence).\9\ Accordingly, in
September

2021, FINRA extended Rule 3110.17 through June 30, 2022 to give firms
clarity on their inspection requirements at least for the first half of
2022 and to account for the time needed for many firms to carefully
assess when and how to have their employees safely return to their
offices in light of vaccination coverage in the U.S. and transmission
levels of the virus, including any emergent variants throughout the
country.\10\
---------------------------------------------------------------------------

    \6\ See generally Centers for Disease Control and Prevention
(``CDC''), CDC Museum COVID-19 Timeline, https://www.cdc.gov/museum/timeline/covid19.html (last visited January 10, 2022).
    \7\ See Securities Exchange Act Release No. 90454 (November 18,
2020), 85 FR 75097 (November 24, 2020) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2020-040) (citing SEC
National Examination Risk Alert, Volume I, Issue 2 (November 30,
2011) and Regulatory Notice 11-54 (November 2011) for the
expectation that firms must conduct their inspections on-site).
    \8\ See Securities Exchange Act Release No. 93002 (September 15,
2021), 86 FR 52508, 52509 nn.7 & 8 (September 21, 2021) (Notice of
Filing and Immediate Effectiveness of File No. SR-FINRA-2021-023)
(``Extension No. 1'') (becoming operative on January 1, 2022).
    \9\ Since March 2020, FINRA staff, with limited exceptions, have
continued to work remotely to protect their health and safety. As
indicated in its previous filings concerning other pandemic-related
temporary relief from specified FINRA rules and requirements, FINRA
has established a COVID-19 task force to develop a data-driven,
staged plan for FINRA staff to safely return to working in FINRA
office locations and resume other in-person activities. See
Securities Exchange Act Release No. 93758 (December 13, 2021), 86 FR
71695, 71696 (December 17, 2021) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2021-031). Similarly, the SEC has
remained in a telework posture since March 2020 and has recently
indicated that in 2022, it ``will continue to monitor the scientific
data about COVID-19 and national, state, and local guidance to
determine the appropriate operating posture for the agency's
workforce.'' See the SEC's Fiscal Year 2021 Agency Financial Report,
https://www.sec.gov/files/sec-2021-agency-financial-report.pdf.
    \10\ See Extension No. 1, supra note 8.
---------------------------------------------------------------------------

    The emergence of the new Omicron variant in November 2021 and its
rapid spread in the U.S. since December 1, 2021, the date on which the
first confirmed case of Omicron in the U.S. was identified,\11\
indicate that the active and real public health concerns about COVID-19
are unabated.\12\
---------------------------------------------------------------------------

    \11\ See CDC, Omicron Variant: What You Need to Know, https://www.cdc.gov/coronavirus/2019-ncov/variants/omicron-variant.html
(updated December 20, 2021).
    \12\ In November 2021, the U.S. Office of Personnel Management
(``OPM''), which serves as the chief human resources agency and
personnel policy manager for the Federal Government, released an
updated guide to telework and remote work, noting, among other
things, that ``[t]he COVID-19 pandemic forced even more adoption of
telework and sparked a nationwide focus on telework as an important
tool for safely and efficiently delivering mission-critical services
in the public and private sectors during both short- and long-term
emergencies . . . . As we look to the future, OPM is encouraging
agencies to strategically leverage workplace flexibilities such as
telework, remote work, and alternative/flexible work schedules as
tools to help attract, recruit, and retain the best possible
workforce.'' See OPM, 2021 Guide to Telework and Remote Work in the
Federal Government: Leveraging Telework and Remote Work in the
Federal Government to Better Meet Our Human Capital Needs and
Improve Mission Delivery (November 2021), https://www.telework.gov/guidance-legislation/telework-guidance/telework-guide/guide-to-telework-in-the-federal-government.pdf. Further, on December 2,
2021, President Biden announced new actions to protect Americans
against the Delta and Omicron variants. See https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/02/fact-sheet-president-biden-announces-new-actions-to-protect-americans-against-the-delta-and-omicron-variants-as-we-battle-covid-19-this-winter/. See also Lena H. Sun, Joel Achenbach, Laurie
McGinley & Tyler Pager, Omicron spreading rapidly in U.S. and could
bring punishing wave as soon as January, CDC warns, Washington Post
(December 14, 2021), https://www.washingtonpost.com/health/2021/12/14/omicron-us-spread/.
---------------------------------------------------------------------------

    Due to the continued logistical challenges of going on-site to
branch offices or locations while these public health and safety
concerns related to COVID-19 persist, and the continued risk from the
Delta and new Omicron variants, the need for firms to establish
inspection schedules for the second half of 2022 and ensure there is
adequate, experienced staff available to travel and conduct on-site
inspections within the context of fluid work locations continues to
present a unique complexity for many firms in terms of planning and
deploying resources. Even with increased availability of vaccines,
FINRA understands that many firm personnel are still working from
alternative work locations, and have not resumed traveling or are
reluctant to do so at pre-pandemic levels amid persistent significant
health and safety concerns. As a result of the new Omicron variant,
many employers have further delayed or modified their return to office
plans.\13\ For unvaccinated persons in particular, health and safety
risks in connection with returning to the office with other personnel
still remain worrisome and travel still poses a risk of contracting and
spreading COVID-19.\14\ FINRA believes extending Rule 3110.17 through
December 31, 2022 represents a prudent accommodation.\15\ The proposed
additional six-month extension would provide further clarity to firms
on regulatory requirements and account for the time needed for many
firms to carefully assess when and how to have their employees safely
return to their offices in light of vaccination coverage in the U.S.
and transmission levels of the virus, including any emergent variants
throughout the country.
---------------------------------------------------------------------------

    \13\ See Jennifer Surane & Angelica Peebles, `I Was Wrong':
Omicron Wrecks CEOs' Plans for Office Return (describing how the
``new wave of Covid uncertainty is upending business plans from Wall
Street to Silicon Valley.''), Bloomberg (December 16, 2021), https://www.bloomberg.com/news/articles/2021-12-16/-i-was-wrong-omicron-wrecks-ceos-plans-for-u-s-office-return; see also Nne D'Innocenzio,
Omicron Cases Have Companies Rethinking Return to Work Plans
(noting, in part, ``how difficult it is for companies to set firm
plans for their employees' mandatory return as worries about a spike
in new cases or new variants keep shifting deadlines. This fall, the
delta variant spurred many big companies to postpone a mandatory
return to early next year.''), Time (December 10, 2021), https://time.com/6127429/omicron-companies-rethinking-return-to-work/.
    \14\ See generally CDC, Workplaces and Businesses, https://www.cdc.gov/coronavirus/2019-ncov/community/workplaces-businesses/index.html (updated October 18, 2021); CDC, Domestic Travel During
COVID-19 (stating, among other things, ``You might have been exposed
to COVID-19 on your travels. You might feel well and not have any
symptoms, but you can still be infected and spread the virus to
others. People who are not fully vaccinated are more likely to get
COVID-19 and spread it to others.''), https://www.cdc.gov/coronavirus/2019-ncov/travelers/travel-during-covid19.html (updated
January 4, 2022).
    \15\ See supra note 5.
---------------------------------------------------------------------------

    By further extending Rule 3110.17 to cover the second half of
calendar year 2022 inspection obligations through December 31, 2022,
FINRA is not proposing to amend the other conditions of the temporary
rule. The proposed amendments to Rule 3110.17 would provide that for
calendar year 2022, a member has the option to conduct those
inspections remotely through December 31, 2022. The current conditions
of the supplementary material for firms that elect to conduct remote
inspections would remain unchanged: Such firms must amend or supplement
their written supervisory procedures for remote inspections, use remote
inspections as part of an effective supervisory system, and maintain
the required documentation. The additional period of time would also
enable FINRA to further monitor the effectiveness of remote inspections
and their impacts--positive or negative--on firms' overall supervisory
systems in the evolving workplace.
    FINRA continues to believe this temporary remote inspection option
is a reasonable alternative to provide to firms to fulfill their Rule
3110(c) obligations during the ongoing pandemic, and is designed to
achieve the investor protection objectives of the inspection
requirements under these unique circumstances. Firms should consider
whether, under their particular operating conditions, reliance on
remote inspections would be reasonable under the circumstances. For
example, firms with offices that are open to the public or that are
otherwise doing business as usual should consider whether some form of
in-person inspections would be feasible and appropriately contribute to
a supervisory system that is reasonably designed to achieve compliance
with applicable securities laws and regulations, and with applicable
FINRA rules.
    FINRA has filed the proposed rule change for immediate
effectiveness. FINRA is proposing to make the proposed rule change
operative on July 1, 2022.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\16\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. In recognition of the ongoing impact of COVID-19, and
the emergence of the Delta variant and, more recently, the new Omicron
variant, on performing the on-site inspection

component of Rule 3110(c), the proposed rule change is intended to
provide firms a temporary regulatory option to conduct inspections of
offices and locations remotely during the second half of calendar year
2022. This temporary proposed supplementary material does not relieve
firms from meeting the core regulatory obligation to establish and
maintain a system to supervise the activities of each associated person
that is reasonably designed to achieve compliance with applicable
securities laws and regulations, and with applicable FINRA rules that
directly serve investor protection. In a time when faced with ongoing
challenges resulting from the COVID-19 pandemic and the emergence of
new variants, FINRA believes that the proposed rule change provides
sensibly tailored relief that will afford firms the ability to assess
when and how to implement their work re-entry plans as measured against
the health and safety of their personnel, while continuing to serve and
promote the protection of investors and the public interest.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The potential economic impacts
of Rule 3110.17 as described in File No. SR-FINRA-2020-040 continue to
have applicability to the proposed rule change herein. The proposed
rule change would extend the temporary relief to include calendar year
2022 inspection obligations through December 31, 2022 within the scope
of the supplementary material without making substantive changes to the
other aspects of the provision. FINRA believes that the proposed
temporary extension would afford firms the time needed to determine
when and how to effectively and safely implement their work re-entry
plans, which must take into account multiple factors, including local
health and safety conditions, without diminishing investor protection.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-FINRA-2022-001 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2022-001. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of FINRA. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-FINRA-2022-001 and should be submitted
on or before February 16, 2022.
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01467 Filed 1-25-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 123 (Wednesday, June 28, 2023)]
[Notices]
[Pages 41999-42000]
[FR Doc No: 2023-13732]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2018-0136; FMCSA-2021-0013]

Qualification of Drivers; Exemption Applications; Hearing

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT).

ACTION: Notice of final disposition.

-----------------------------------------------------------------------

SUMMARY: FMCSA announces its decision to renew exemptions for eight
individuals from the hearing requirement in the Federal Motor Carrier
Safety Regulations (FMCSRs) for interstate commercial motor vehicle
(CMV) drivers. The exemptions enable these hard of hearing and deaf
individuals to continue to operate CMVs in interstate commerce.

DATES: The exemptions were applicable on May 14, 2023. The exemptions
expire on May 14, 2025.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room
W64-224, Washington, DC 20590-0001,<PHONE_NUMBER>,
[email protected]. Office hours are 8:30 a.m. to 5 p.m. ET Monday
through Friday, except Federal holidays. If you have questions
regarding viewing or submitting material to the docket, contact Dockets
Operations,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Public Participation

A. Viewing Comments

    To view comments go to www.regulations.gov. Insert the docket
number (FMCSA-2018-0136 or FMCSA-2021-0013) in the keyword box and
click ``Search.'' Next, sort the results by ``Posted (Newer-Older),''
choose the first notice listed, and click ``Browse Comments.'' If you
do not have access to the internet, you may view the docket online by
visiting Dockets Operations on the ground floor of the DOT West
Building, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, between
9 a.m. and 5 p.m. ET Monday through Friday, except Federal holidays. To
be sure someone is there to help you, please call<PHONE_NUMBER> or
(202) 366-9826 before visiting Dockets Operations.

B. Privacy Act

    In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments
from the public on the exemption requests. DOT posts these comments,
without edit, including any personal information the commenter
provides, to www.regulations.gov. As described in the system of records
notice DOT/ALL 14 (Federal Docket Management System), which can be
reviewed at https://www.transportation.gov/individuals/privacy/privacy-act-system-records-notices, the comments are searchable by the name of
the submitter.

II. Background

    On May 15, 2023, FMCSA published a notice announcing its decision
to renew exemptions for 8 individuals from the hearing standard in 49
CFR 391.41(b)(11) to operate a CMV in interstate commerce and requested
comments from the public (88 FR 31096). The public comment period ended
on June 14, 2023, and no comments were received.
    FMCSA has evaluated the eligibility of these applicants and
determined that renewing these exemptions would likely achieve a level
of safety that is equivalent to, or greater than, the level that would
be achieved by complying with Sec.  391.41(b)(11).
    The physical qualification standard for drivers regarding hearing
found in Sec.  391.41(b)(11) states that a person is physically
qualified to drive a CMV if that person first perceives a forced
whispered voice in the better ear at not less than 5 feet with or
without the use of a hearing aid or, if tested by use of an audiometric
device, does not have an average hearing loss in the better ear greater
than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a
hearing aid when the audiometric device is calibrated to American
National Standard (formerly ASA Standard) Z24.5-1951.
    This standard was adopted in 1970 and was revised in 1971 to allow
drivers to be qualified under this standard while wearing a hearing aid
(35 FR 6458, 6463 (Apr. 22, 1970) and 36 FR 12857 (July 8, 1971),
respectively).

III. Discussion of Comments

    FMCSA received no comments in this proceeding.

IV. Conclusion

    Based upon its evaluation of the eight renewal exemption
applications, FMCSA announces its decision to exempt the following
drivers from the hearing requirement in section 391.41(b)(11).
    As of May 14, 2023, and in accordance with 49 U.S.C. 31136(e) and
31315(b), the following eight individuals have satisfied the renewal
conditions for obtaining an exemption

from the hearing requirement in the FMCSRs for interstate CMV drivers
(88 FR 31097):

Timothy Allen (LA)
Frederick Fleetwood (NC)
Christopher Gilmore (TX)
Jeffrey Haley (MN)
Kelvin Jarman (IL)
Elizabeth Keyes (MN)
Raymond Levine (CA)
Ted McCracken (OR)

    The drivers were included in docket number numbers FMCSA-2018-0136
or FMCSA-2021-0013. Their exemptions were applicable as of May 14, 2023
and will expire on May 14, 2025.
    In accordance with 49 U.S.C. 31315(b), each exemption will be valid
for 2 years from the effective date unless revoked earlier by FMCSA.
The exemption will be revoked if the following occurs: (1) the person
fails to comply with the terms and conditions of the exemption; (2) the
exemption has resulted in a lower level of safety than was maintained
prior to being granted; or (3) continuation of the exemption would not
be consistent with the goals and objectives of 49 U.S.C. 31136, 49
U.S.C. chapter 313, or the FMCSRs.

Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2023-13732 Filed 6-27-23; 8:45 am]
BILLING CODE 4910-EX-P


Comment Info: =================

General Comment:VAPOR BOSS INC
9272 KINGSTON PIKE
KNOXVILLE, TN 37922

12 MAY 2014

Dockets Management Branch (HFA-305)
Food and Drug Administration
5630 Fishers Lane
Room 1061
Rockville, MD 20852

Re: Request for Extension of Comment Period: Docket No. FDA-2014-N-0189

We, Vapor Boss Inc, have conducted preliminary review of your lengthy proposed regulations and respectfully request that the Food and Drug Administration (FDA) extend the comment period for the proposed rule entitled “Deeming Tobacco Products to be Subject to the Federal Food, Drug, and Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Regulations on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products.”

We, Vapor Boss Inc, are small electronic cigarette retailer, family run business. We offers custom e-liquid and a wide variety of Personal Vaporizers (PV), Electronic Cigarettes and Accessories for a smoke-free lifestyle.  As explained further below, the initial 75-day comment period does not provide enough time for companies like Vapor Boss Inc to adequately analyze the entire proposal and provide substantive comments on the many questions posed by the agency. We need more time to address this 240-page document whose contents will deal a devastating economic blow to our business.

The preamble to the proposed rule identifies approximately 70 topics and issues the agency has requested comments on. Many of these issues are complex and difficult and relate to an extremely diverse array of products. Clearly, the lengthy time period that the Agency required to propose these regulations is evidence that the issues addressed in the proposal are multi-faceted and challenging. FDA cannot expect any interested party, and in particular, any manufacturer, to conduct a meaningful review and analysis of these issues and provide detailed and thoughtful comment in a 75-day period.

Therefore, Vapor Boss Inc again respectfully requests that FDA extend the comment period by 105 days and agree to accept comments filed to the docket on or before October 22, 2014. This will help ensure that the final rule is based on an adequate and meaningful administrative record. Thank you in advance for your consideration of this request.

Sincerely,
Destiny Hatton
Vapor Boss Inc Owner