[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)]
[Rules and Regulations]
[Pages 1296-1302]
[FR Doc No: 2018-00299]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 275

[Release No. IA-4839; File No. S7-05-17]
RIN 3235-AM02

Exemptions From Investment Adviser Registration for Advisers to
Small Business Investment Companies

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: We are adopting amendments to the rule that defines a venture
capital fund (rule 203(l)-1) and the rule that implements the private
fund adviser exemption (rule 203(m)-1) under the Investment Advisers
Act of 1940 (the ``Advisers Act'') in order to reflect changes made by
title LXXIV, sections 74001 and 74002 of the Fixing America's Surface
Transportation Act of 2015 (the ``FAST Act''), which amended sections
203(l) and 203(m) of the Advisers Act. Title LXXIV, section 74001 of
the FAST Act amended the exemption from investment adviser registration
for any adviser solely to one or more ``venture capital funds'' in
Advisers Act section 203(l) by deeming ``small business investment
companies'' to be ``venture capital funds'' for purposes of the
exemption. Accordingly, we are amending the definition of a venture
capital fund to include ``small business investment companies.'' Title
LXXIV, section 74002 of the FAST Act amended the exemption from
investment adviser registration for any adviser solely to ``private
funds'' with less than $150 million in assets under management in
Advisers Act section 203(m) by excluding the assets of ``small business
investment companies'' when calculating ``private fund assets'' towards
the registration threshold of $150 million. Accordingly, we are
amending the definition of ``assets under management'' in the rule that
implements the private fund adviser exemption to exclude the assets of
``small business investment companies.''

DATES: Effective March 12, 2018.

FOR FURTHER INFORMATION CONTACT: Jennifer Songer, Senior Counsel, or
Sara Cortes, Assistant Director, at<PHONE_NUMBER> or [email protected],
Investment Adviser Regulation Office, Division of Investment
Management, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-8549.

SUPPLEMENTARY INFORMATION: The Commission is adopting amendments to
rules 203(l)-1 [17 CFR 275.203(l)\1] and 203(m)-1 [17 CFR 275.203(m)-1]
under the Investment Advisers Act of 1940 [15 U.S.C. 80b].\1\
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    \1\ Unless otherwise noted, when we refer to the Advisers Act,
or any paragraph of the Advisers Act, we are referring to 15 U.S.C.
80b of the United States Code [15 U.S.C. 80b], at which the Advisers
Act is codified, and when we refer to Advisers Act rules, or any
paragraph of these rules, we are referring to title 17, part 275 of
the Code of Federal Regulations [17 CFR part 275], in which these
rules are published.
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Table of Contents

I. Background
II. Discussion
    A. Amendment to Rule 203(l)-1
    B. Amendment to Rule 203(m)-1
III. Effective Date
IV. Economic Analysis
    A. Introduction and Economic Justification
    B. Costs and Benefits
    C. Efficiency, Competition, and Capital Formation
V. Paperwork Reduction Act Analysis
VI. Regulatory Flexibility Act Certification
VII. Statutory Authority

I. Background

    Prior to the enactment of the Fixing America's Surface
Transportation Act of 2015 (the ``FAST Act''),\2\ we believe that
investment advisers to small business investment companies (``SBICs'')
\3\ primarily relied upon an exemption

from investment adviser registration under the Investment Advisers Act
of 1940 (the ``Advisers Act'') \4\ for advisers solely to SBICs (the
``SBIC adviser exemption'').\5\ The FAST Act expanded the applicability
of two additional exemptions from investment adviser registration for
investment advisers to SBICs: (1) The exemption for any adviser solely
to one or more ``venture capital funds'' in Advisers Act section 203(l)
(the ``venture capital fund adviser exemption''), and (2) the exemption
for any adviser solely to ``private funds'' with less than $150 million
in assets under management in Advisers Act section 203(m) (the
``private fund adviser exemption''). This had the effect of permitting
investment advisers to SBICs to advise both SBICs and other types of
private funds without being required to register as investment advisers
with the Commission.
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    \2\ Public Law 114-94, 129 Stat. 1312 (Dec. 4, 2015).
    \3\ An SBIC is (other than an entity that has elected to be
regulated or is regulated as a business development company pursuant
to section 54 of the Investment Company Act of 1940): (A) A small
business investment company that is licensed under the Small
Business Investment Act of 1958 (``SBIA''), (B) an entity that has
received from the Small Business Administration notice to proceed to
qualify for a license as a small business investment company under
the SBIA, which notice or license has not been revoked, or (C) an
applicant that is affiliated with 1 or more licensed small business
investment companies described in subparagraph (A) and that has
applied for another license under the SBIA, which application
remains pending. Advisers Act section 203(b)(7).
    \4\ 15 U.S.C. 80b.
    \5\ Advisers Act section 203(b)(7). Although we believe that
most, if not all, SBICs are private funds, we believe that very few
advisers to SBICs have private fund assets under management in the
United States of less than $150 million. Therefore, very few
advisers to SBICs are likely to qualify for the private fund adviser
exemption. See SBIC Program Overview, Small Business Administration,
Office of Investment and Innovation, Data Management Branch,
September 30, 2016, available at: https://www.sba.gov/sbic/general-information/program-overview (``SBIC Program Overview'').
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    The FAST Act amended sections 203(l) and 203(m) of the Advisers Act
regarding the registration of investment advisers to SBICs. Title
LXXIV, section 74001 of the FAST Act amended the venture capital fund
adviser exemption by deeming SBICs to be ``venture capital funds'' for
purposes of the exemption. Title LXXIV, section 74002 of the FAST Act
amended the private fund adviser exemption by excluding the assets of
SBICs for purposes of calculating private fund assets towards the
registration threshold of $150 million.\6\ Accordingly, on May 3,
2017,\7\ we proposed to amend (1) the definition of ``venture capital
funds'' in Advisers Act rule 203(l)-1 to include SBICs and (2) the
definition of ``assets under management'' in Advisers Act rule 203(m)-1
to exclude the assets of SBICs.
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    \6\ The term ``private fund'' means an issuer that would be an
investment company, as defined in section 3 of the Investment
Company Act of 1940, but for section 3(c)(1) or 3(c)(7) of that Act.
Advisers Act section 202(a)(29). While we believe that most SBICs
are private funds, it is possible for an SBIC to be an investment
company registered with the Commission. See 13 CFR 107.115 (stating
that a registered investment company is eligible to apply for an
SBIC license).
    \7\ See Amendments to Investment Advisers Act Rules to Reflect
Changes Made by the FAST Act, Investment Advisers Act Release No.
4697 (May 3, 2017) [82 FR 21487 (May 9, 2017)] (``Proposing
Release'').
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    Advisers who rely on the SBIC adviser exemption are not subject to
reporting or recordkeeping provisions under the Advisers Act or
examination by our staff.\8\ Advisers who rely on the venture capital
fund adviser exemption and the private fund adviser exemption are
exempt from registration under the Advisers Act; however, they are
considered ``exempt reporting advisers'' and must maintain such records
and submit such reports as the Commission determines necessary or
appropriate in the public interest or for the protection of
investors.\9\ Exempt reporting advisers are required to file a subset
of the information requested by Form ADV with the Commission but are
not subject to many of the other substantive requirements to which
registered investment advisers are subject.\10\
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    \8\ Under section 204(a) of the Advisers Act, the Commission has
the authority to require an investment adviser to maintain records
and provide reports, as well as the authority to examine such
adviser's records, unless the adviser is specifically exempted from
the requirement to register pursuant to Advisers Act section 203(b).
Advisers Act section 203(b)(7) provides an exemption from
registration for advisers solely to SBICs. Advisers Act sections
204(a) and 203(b)(7); Exemptions for Advisers to Venture Capital
Funds, Private Fund Advisers With Less Than $150 Million in Assets
Under Management, and Foreign Private Advisers, Investment Advisers
Act Release No. 3222 (June 22, 2011) [76 FR 39646 (July 6, 2011)]
(``Exemptions Release'') at footnote 5 and accompanying text.
    \9\ Under Advisers Act section 204(a), the Commission has the
authority to require an investment adviser to maintain records and
provide reports, as well as the authority to examine such adviser's
records, unless the adviser is specifically exempted from the
requirement to register pursuant to Advisers Act section 203(b).
Investment advisers that are exempt from registration in reliance on
other sections of the Advisers Act, such as sections 203(l) or
203(m), are not specifically exempted from the requirement to
register pursuant to section 203(b), and thus the Commission has
authority under Advisers Act section 204(a) to require those
advisers to maintain records and provide reports and has authority
to examine such advisers' records. Advisers Act sections 203(l)(1)
and 203(m)(2). See also Exemptions Release supra footnote 8 at
footnote 5 and accompanying text. Advisers Act rule 204-4 requires
an exempt reporting adviser to complete and file reports on Form ADV
by following the instructions in the Form, which specify the
information that an exempt reporting adviser must provide. See
``Frequently Asked Questions on Form ADV and IARD'' available at:
https://www.sec.gov/divisions/investment/iard/iardfaq.shtml (``Form
ADV FAQs'') at section entitled: Reporting to the SEC as an Exempt
Reporting Adviser; Form ADV: General Instructions available at:
https://www.sec.gov/about/forms/formadv-instructions.pdf (``General
Instructions to Form ADV'') at Instruction 3. Further, an adviser
electing to be an exempt reporting adviser with the Commission must
separately evaluate the need to register in any state in which it
operates. General Instructions to Form ADV at Instruction 14.
    \10\ In addition to reporting requirements, registered
investment advisers are required to comply with Advisers Act rules
204-2, 204-3, 204(b)-1, 204A-1, 206(4)-1, 206(4)-2, 206(4)-3,
206(4)-6 and 206(4)-7.
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    Since the enactment of the FAST Act, advisers to SBICs have been
able to rely on the following exemptions from investment adviser
registration with the Commission: (1) The SBIC adviser exemption by
advising only SBICs; (2) the venture capital fund adviser exemption by
advising both SBICs and venture capital funds (as defined in rule
203(l)-1); or (3) the private fund adviser exemption by advising both
SBICs and non-SBIC private funds, provided those non-SBIC private funds
account for less than $150 million in assets under management in the
United States.\11\
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    \11\ See FAST Act supra footnote 2. See generally, FAST Act
Changes Affecting Investment Advisers to Small Business Investment
Companies (March 2016), available at: https://www.sec.gov/investment/im-guidance-2016-03.pdf (``Staff Guidance'').
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    As discussed above, we proposed to amend the definition of a
``venture capital fund'' in Advisers Act rule 203(l)-1 to include SBICs
and to amend the definition of ``assets under management'' in Advisers
Act rule 203(m)-1 to exclude the assets of SBICs.\12\ We received three
comment letters,\13\ none of which specifically addressed the proposed
amendments.\14\ We are adopting the amendments as proposed.
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    \12\ Proposing Release supra footnote 7.
    \13\ Comment letters submitted in File No. S7-05-17 are
available on the Commission's website at: https://www.sec.gov/comments/s7-05-17/s70517.htm.
    \14\ See Comment Letter of Daphne K. Ross (June 7, 2017)
(generally addressing the need for consumer protections), Comment
Letter of Donald H. Homan (June 5, 2017) (commenting on the impact
of regulations on the investment advisory industry) and Comment
Letter of Thomas Garrett (June 3, 2017) (making a request that did
not address the rule proposal).
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II. Discussion

A. Amendment to Rule 203(l)-1

    The venture capital fund adviser exemption in section 203(l) of the
Advisers Act provides an exemption from registration under the Advisers
Act for investment advisers that solely advise venture capital
funds.\15\ Advisers

who rely on the venture capital fund adviser exemption are exempt from
registration under the Advisers Act; however, they are considered
``exempt reporting advisers'' and must maintain such records and submit
such reports as the Commission determines necessary or appropriate in
the public interest or for the protection of investors.\16\ The FAST
Act amended the venture capital fund adviser exemption by deeming SBICs
to be venture capital funds for purposes of the exemption.\17\
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    \15\ We note, however, that depending on the facts and
circumstances, we may view two or more separately formed advisory
entities, each of which purports to rely on a separate exemption
from registration, as a single adviser for purposes of assessing the
availability of exemptions from registration. For example, an
adviser may not advise venture capital funds with more than $150
million in assets under management in reliance on the venture
capital fund adviser exemption and also advise other types of
private funds with less than $150 million in assets under management
in reliance on the private fund adviser exemption. See Exemptions
Release supra footnote 8 at footnote 314, footnote 506 and
accompanying text. See also In the Matter of TL Ventures Inc.,
Investment Advisers Act Release No. 3859 (June 20, 2014) (settled
action); Advisers Act section 208(d) (prohibiting a person from
doing indirectly or through or by another person, any act or thing
which it would be unlawful for such person to do directly).
    \16\ Advisers Act section 203(l)(1). See Rules Implementing
Amendments to the Investment Advisers Act of 1940, Investment
Advisers Act Release No. 3221 (June 22, 2011) [76 FR 42950 (July 11,
2011)] (``Implementing Release'') at section II.B. Advisers Act rule
204-4 requires an exempt reporting adviser to complete and file
reports on Form ADV by following the instructions in the Form, which
specify the information that an exempt reporting adviser must
provide. See Form ADV FAQs supra footnote 9 at section entitled:
Reporting to the SEC as an Exempt Reporting Adviser; General
Instructions to Form ADV supra footnote 9 at Instruction 4.
    \17\ Advisers Act section 203(l)(2).
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    Advisers Act rule 203(l)-1 defines a ``venture capital fund'' for
purposes of the venture capital fund adviser exemption.\18\ While most,
if not all, SBICs meet the definition of a ``private fund'' under the
Advisers Act,\19\ they may not meet the rule 203(l)-1 definition of a
``venture capital fund.'' We proposed to amend Advisers Act rule
203(l)-1 to include SBICs in the definition of venture capital funds
for purposes of the venture capital fund adviser exemption.\20\ We did
not receive any comments on the proposed amendment, and we are adopting
the amendment as proposed.\21\ Amending the definition of venture
capital fund in Advisers Act rule 203(l)-1 makes it consistent with
Advisers Act section 203(l)(2), thereby reflecting in the rule the
application of the venture capital fund adviser exemption to advisers
to SBICs. An adviser to SBICs who relies on the venture capital fund
adviser exemption will be required to submit Form ADV reports to the
Commission as an exempt reporting adviser, consistent with the current
requirement for advisers relying on the venture capital fund adviser
exemption.\22\
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    \18\ Advisers Act rule 203(l)-1(a) generally defines a ``venture
capital fund'' as a private fund that: (i) Represents to investors
and potential investors that it pursues a venture capital strategy;
(ii) holds no more than 20 percent of the fund's capital commitments
in assets that are not qualifying investments (other than short-term
holdings); (iii) does not borrow or otherwise incur leverage in
excess of 15 percent of the fund's capital commitments, and such
borrowing is for a non-renewable term of no longer than 120 days
(excluding certain guarantees of qualifying portfolio company
obligations by the fund from the 120 day limit); (iv) does not offer
its investors redemption or certain other liquidity rights except in
extraordinary circumstances; and (v) is not registered under the
Investment Company Act and has not elected to be treated as a
business development company. See also Advisers Act rule 203(l)-1(b)
and (c).
    \19\ Advisers Act section 202(a)(29).
    \20\ Proposed amended Advisers Act rule 203(l)-1(a).
    \21\ Amended Advisers Act rule 203(l)-1(a).
    \22\ Advisers Act section 203(l)(1). See Implementing Release
supra footnote 16 at section II.B.
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B. Amendment to Rule 203(m)-1

    The private fund adviser exemption in Advisers Act section 203(m)
directs the Commission to provide an exemption from registration to any
investment adviser that solely advises private funds if the adviser has
assets under management in the United States of less than $150
million.\23\ Advisers Act rule 203(m)-1 implements the private fund
adviser exemption. Advisers who rely on the private fund adviser
exemption are exempt from registration under the Advisers Act; however,
they are considered ``exempt reporting advisers'' and must maintain
such records and submit such reports as the Commission determines
necessary or appropriate in the public interest or for the protection
of investors.\24\ The FAST Act amended the private fund adviser
exemption to require that private fund advisers exclude the assets of
their SBICs for purposes of calculating private fund assets towards the
registration threshold of $150 million.\25\
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    \23\ Supra footnote 15.
    \24\ Advisers Act section 203(m)(2). See Implementing Release
supra footnote 16 at section II.B. Advisers Act rule 204-4 requires
an exempt reporting adviser to complete and file reports on Form ADV
by following the instructions in the Form, which specify the
information that an exempt reporting adviser must provide. See Form
ADV FAQs supra footnote 9 at section entitled: Reporting to the SEC
as an Exempt Reporting Adviser; General Instructions to Form ADV
supra footnote 9 at Instruction 3.
    \25\ Advisers Act section 203(m)(3).
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    Advisers Act rule 203(m)-1(d)(1) defines ``assets under
management'' for purposes of the private fund adviser exemption.\26\
The rule 203(m)-1(d)(1) definition of assets under management includes
an adviser's regulatory assets under management attributable to SBICs.
We proposed to amend Advisers Act rule 203(m)-1(d)(1) to exclude an
adviser's regulatory assets under management attributable to SBICs from
the definition of assets under management for purposes of the private
fund adviser exemption.\27\ We did not receive any comments on our
proposed amendment, and we are adopting the amendment as proposed.\28\
Amending the definition of assets under management in Advisers Act rule
203(m)-1 to make it consistent with Advisers Act section 203(m)(3) will
reflect that advisers to both private funds and SBICs can rely on the
private fund adviser exemption without regard to the SBIC assets that
they advise. An adviser to SBICs who relies on the private fund adviser
exemption will be required to submit reports to the Commission as an
exempt reporting adviser and to include the SBICs that it advises on
its Form ADV, consistent with the current requirement for advisers
relying on the private fund adviser exemption.\29\
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    \26\ For purpose of Advisers Act section 203(m), assets under
management means the regulatory assets under management as
determined under Item 5.F of Form ADV. Advisers Act rule 203(m)-
1(d)(1). Instruction 5.b. to Part 1A of Form ADV explains how to
calculate regulatory assets under management for purposes of Item
5.F of Part 1A of Form ADV. In general, it states that an adviser
should include the securities portfolios for which it provides
continuous and regular supervisory or management services. In the
case of a private fund, advisers are instructed to determine the
current market value (or fair value) of the private fund's assets
and the contractual amount of any uncalled commitment pursuant to
which a person is obligated to acquire an interest in, or make a
capital contribution to, the private fund. See Form ADV:
Instructions for Part 1A available at: https://www.sec.gov/about/forms/formadv-instructions.pdf at Instruction 5.b.4.
    \27\ Proposed amended Advisers Act rule 203(m)-1(d)(1).
    \28\ Amended Advisers Act rule 203(m)-1(d)(1).
    \29\ Advisers Act section 203(m)(2). See Implementing Release
supra footnote 16 at section II.B.
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III. Effective Date

    The effective date of the amendments to rules 203(l)-1 and 203(m)-1
is March 12, 2018.

IV. Economic Analysis

A. Introduction and Economic Justification

    The Commission is sensitive to the potential economic effects of
the amendments to Advisers Act rules 203(l)-1 and 203(m)-1 we are
adopting today. These effects include the benefits and costs to
investment advisers, their funds, and the investors in their funds as
well as the amendments' implications for efficiency, competition, and
capital formation. We discussed these effects in our economic analysis
of the proposed amendments to Advisers Act rules 203(l)-1 and 203(m)-1
and we did not receive any comments on this analysis.\30\ The economic
baseline estimates have been revised to reflect updates to industry
figures that were utilized in the Proposing Release.

However, these changes are only marginally different from the proposal
and, accordingly, the analysis of the amendments' economic effects
remains unchanged.
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    \30\ See supra footnotes 13 and 14.
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    The amendments to Advisers Act rules 203(l)-1 and 203(m)-1 reflect
changes made by title LXXIV, sections 74001 and 74002 of the FAST Act
to the Advisers Act. While the FAST Act does not expressly require the
Commission to amend the Advisers Act rules, the amendments eliminate
any confusion that might otherwise exist if Advisers Act rules 203(l)-1
and 203(m)-1 were not amended. As adopted, Advisers Act rule 203(l)-1
reflects that advisers to venture capital funds and SBICs qualify for
the venture capital fund adviser exemption from registration. As
adopted, Advisers Act rule 203(m)-1 reflects that advisers to SBIC and
non-SBIC private funds with less than $150 million in non-SBIC private
fund assets under management in the United States qualify for the
private fund adviser exemption from registration.
Economic Baseline
    To establish a baseline useful for evaluating the economic effects
of the amendments, we briefly describe the nature of SBICs and then
define the different classes of advisers that could be affected by the
amendments.
    According to the Small Business Administration (the ``SBA''), SBICs
are investment funds that make equity and debt investments in
qualifying small businesses and are licensed and regulated by the
SBA.\31\ SBICs have access to low-cost capital because of a guarantee
by the SBA. According to the SBA, this funding subsidy is intended to
promote the SBIC program's purpose of bridging the gap between the
small business community's need for capital and traditional sources of
financing that might otherwise be more expensive.\32\
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    \31\ SBIC Program Overview supra footnote 5.
    \32\ Id.
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    Advisers to SBICs may also advise non-SBIC private funds, including
venture capital funds. Depending on the amount and type of assets they
advise, SBIC advisers belong to one of three categories: (1) Registered
investment advisers; (2) exempt reporting advisers; or (3) advisers
exempt from registration and reporting requirements. Registered
investment advisers are required to file Form ADV and are also subject
to other substantive requirements including the establishment of a
compliance program and a Code of Ethics.\33\ Exempt reporting advisers
are required to file a subset of the information requested by Form ADV
with the Commission but are not subject to many of the other
substantive requirements to which registered investment advisers are
subject. Finally, any adviser that solely advises SBICs is exempt from
registering with the Commission under section 203(b)(7) of the Advisers
Act and does not have an obligation to report information to the
Commission.\34\
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    \33\ Supra footnote 10.
    \34\ See supra footnote 8.
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    Prior to the enactment of the FAST Act, an adviser to both SBICs
and other non-SBIC private funds qualified for the private fund adviser
exemption under Advisers Act rule 203(m)-1 if the adviser had assets
under management in the United States, including assets of the SBICs it
advised, of less than $150 million. Advisers to SBICs and other non-
SBIC private funds that did not qualify for the private fund adviser
exemption were required to register with the Commission. In addition,
advisers to both venture capital funds and SBICs were required to
register with the Commission unless they qualified for the private fund
adviser exemption.
    In establishing a baseline for the amendments, two additional
classes of investment advisers that did not advise SBICs prior to the
FAST Act are relevant: (1) Advisers solely to venture capital funds
that rely on the venture capital fund adviser exemption from
registration and are considered exempt reporting advisers; and (2)
advisers solely to private funds with less than $150 million in assets
under management in the United States that rely on the private fund
adviser exemption from registration and are considered exempt reporting
advisers. Prior to the FAST Act, advisers relying on the venture
capital fund adviser exemption were required to register with the
Commission if they added SBIC clients unless their total assets under
management remained under $150 million, in which case they could
instead rely on the private fund adviser exemption. In addition, prior
to the FAST Act, advisers relying on the private fund adviser exemption
were required to register with the Commission if they added SBIC
clients that caused their total assets under management in the United
States to equal or exceed $150 million.
    The FAST Act provided the classes of advisers discussed above with
several options. First, registered investment advisers to SBICs and
non-SBIC private funds can withdraw from registration and report to the
Commission as exempt reporting advisers if their non-SBIC private fund
assets under management in the United States are less than $150
million. Second, registered investment advisers to SBICs and venture
capital funds can withdraw from registration and report to the
Commission as exempt reporting advisers. Finally, advisers that relied
on either the venture capital fund adviser or private fund adviser
exemption prior to the FAST Act can begin advising SBICs without
changing their registration status independent of the amount of assets
attributable to SBICs.
    For those advisers that benefit from any of the above options, it
would have been in their best economic interest to exercise such
options following the passage of the FAST Act, particularly after the
Commission's Division of Investment Management issued a guidance update
regarding the application of the FAST Act.\35\ That guidance update
indicated that the Commission's Division of Investment Management would
not object to advisers who exclude the assets of the SBICs they advise
when determining whether they qualify for the private fund adviser
exemption or advisers who consider SBICs to be venture capital funds
for the purposes of the venture capital fund adviser exemption.\36\ We
believe, therefore, that it is likely that advisers have already
exercised these options if doing so was in their economic interest.
However, inconsistencies in the definitions of venture capital funds
and assets under management that exist between the Advisers Act rules
and the FAST Act may be discouraging some advisers from exercising
these options. Similarly, these inconsistencies may result in assets
under management being calculated differently by advisers for purposes
of the private fund adviser exemption, which could lead to similarly-
situated advisers reaching different conclusions as to their reporting
status.
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    \35\ See Staff Guidance supra footnote 11.
    \36\ Id.
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    As of June 30, 2017, there were approximately 12,474 registered
investment advisers reporting a total of approximately $70.1 trillion
in regulatory assets under management.\37\ In addition, there were
3,332 exempt reporting advisers, of whom 623 relied on the venture
capital fund adviser

exemption,\38\ 2,401 relied on the private fund adviser exemption,\39\
and 308 qualified for both exemptions. For exempt reporting advisers
that relied on the private fund adviser exemption, total private fund
assets under management were approximately $235 billion.\40\ Registered
investment advisers advise approximately 34,343 private funds, while
exempt reporting advisers advise approximately 12,562 private funds. As
of June 30, 2017, there were 315 SBICs licensed by the SBA managing
approximately $30 billion in assets.\41\ We are unable to identify
which of those 315 SBICs are managed by advisers solely to SBICs
compared to advisers that also advise other funds because section
203(b)(7) of the Advisers Act exempts advisers solely to SBICs from
registration and reporting, and filers of Form ADV are not required to
explicitly indicate whether they advise SBICs. Because filers of Form
ADV are not required to explicitly indicate whether they advise SBICs,
we are not able to estimate the number of advisers that have already
taken advantage of the exemptions afforded to them by the FAST Act
compared to the number of advisers who have not done so due to any
inconsistencies between the Advisers Act rules and the FAST Act.
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    \37\ We calculate these estimates using the last Form ADV filing
for each adviser in the 15 months prior to July 1, 2017. This allows
us to exclude advisers that are technically still registered with
the Commission but have not filed a Form ADV for their most recent
fiscal year. We use the same approach in calculating statistics for
exempt reporting advisers. Our estimate of assets under management
excludes filings that did not report this value so it should be
considered a lower bound.
    \38\ Form ADV, Part 1A, Item 2.B.(1).
    \39\ Form ADV, Part 1A, Item 2.B.(2).
    \40\ Form ADV, Schedule D, Section 2.B. We exclude filings that
did not report this value from our calculation so it should be
considered a lower bound. Advisers relying on the venture capital
fund adviser exemption are not required to answer this question.
    \41\ See the SBIC Quarterly Report as of March, 31 2017,
available at: https://www.sba.gov/sites/default/files/articles/Quarterly_Data_as_of_June_30_2017.pdf.
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    The amendments may affect the classes of investment advisers
mentioned above, the funds they advise, and the investors in those
funds. We discuss the potential economic effects of the amendments on
these parties in the next two sections.

B. Costs and Benefits

    In this section, we discuss the costs and benefits that may result
from the amendments for each affected party. The economic effects
discussed in this section only apply to the extent that advisers have
not already exercised the exemption options provided to them under the
baseline due to any inconsistencies between the FAST Act and the
Advisers Act rules. As discussed above, we believe that it is likely
that advisers have already exercised any exemption options provided to
them by the FAST Act under the baseline if it were in their interest to
do so; thus, we do not expect the magnitude of these effects to be
significant. We discuss the amendments' likely impact on efficiency,
competition, and capital formation in the next section.
    As discussed in the Economic Baseline Section, advisers solely to
SBICs are exempt from registering as investment advisers with the
Commission. To the extent that any inconsistencies between the FAST Act
and Advisers Act rules 203(l)-1 and 203(m)-1 have discouraged advisers
solely to SBICs from taking advantage of the venture capital fund
adviser or private fund adviser exemptions, the amendments could lead
these advisers to take on additional venture capital or private fund
clients. Such advisers can weigh the additional fee revenue associated
with advising non-SBIC private funds against the costs of reporting to
the Commission as exempt reporting advisers when determining whether to
rely on either of the exemptions. We estimate that the annual cost of
filing Form ADV for an exempt reporting adviser is $916.\42\ In
addition, advisers that switch from exempt to exempt reporting status
may incur indirect costs if the information they disclose on Form ADV,
such as any disciplinary history, reduces investor demand for their
advisory services. We are unable to estimate how many advisers solely
to SBICs would choose to take on non-SBIC private funds as a result of
the amendments because we do not have information on the demand for
their advisory services from non-SBIC private funds or whether any
additional business generated would offset these reporting costs.
Furthermore, we cannot estimate the extent to which advisers solely to
SBICs have been deterred from exercising their option to rely on the
venture capital fund adviser and private fund adviser exemptions due to
any inconsistencies between the FAST Act and the Advisers Act rules
under the baseline.
---------------------------------------------------------------------------

    \42\ Form ADV under the Investment Advisers Act of 1940 (Office
of Management and Budget ``OMB'' Control No. 3235-0049) Supporting
Statement at footnotes 37-42 and accompanying text. The total
aggregate annual monetized burden for exempt reporting advisers is
estimated to be $2,976,632 assuming there are 3,248 such advisers,
resulting in an estimated cost of approximately $916 per exempt
reporting adviser. Similarly, the total aggregate annual monetized
burden for registered investment advisers is estimated to be
$89,427,727 assuming there are 12,024 such advisers, resulting in an
estimated cost of approximately $7,437 per registered investment
adviser.
---------------------------------------------------------------------------

    The amendments provide registered advisers to SBICs and non-SBIC
private funds that have not taken advantage of the venture capital fund
adviser and private fund adviser exemptions due to inconsistencies
between the FAST Act and the Advisers Act rules with clarification on
the option to switch from registered investment adviser to exempt
reporting adviser status. This option is difficult to value, but its
value is broadly determined by the cost reductions associated with the
change in registration status compared to the explicit and implicit
costs of withdrawing from registration. Advisers that elect to change
from registered to exempt reporting adviser status should expect to
face reduced ongoing costs associated with filing Form ADV because, as
exempt reporting advisers, they would only be required to complete
certain portions of Form ADV.\43\ We estimate the annual cost savings
associated with filing Form ADV as an exempt reporting adviser instead
of as a registered investment adviser to be $6,521.\44\ Furthermore,
such advisers would no longer bear the costs associated with the
substantive requirements of being an adviser registered with the
Commission.\45\ Such advisers would incur the one-time cost of filing a
Form ADV-W withdrawal, which we estimate to be $119 per full withdrawal
and $13 per partial withdrawal.\46\ They may also incur one-time
operational costs associated with switching from registered to exempt
reporting status, such as those associated with adapting information
technology systems to a new reporting regime. Finally, to the extent
that advisers benefit from marketing themselves as registered
investment advisers to client funds and investors, they will forgo this
benefit by withdrawing from registration. Because advisers are not
required to rely on either of the exemptions in Advisers Act

rules 203(l)-1 or 203(m)-1 even though they may qualify for them, we
expect only those registered investment advisers that would experience
a net benefit by relying on these exemptions and have not already done
so following the FAST Act and subsequent Staff Guidance to withdraw
from registration.\47\
---------------------------------------------------------------------------

    \43\ Exempt reporting advisers that are not also registering
with any state securities authority must complete only the following
Items of Form ADV, Part 1A: 1, 2, 3, 6, 7, 10, and 11, as well as
corresponding schedules. Exempt reporting advisers that are
registering with any state securities authority must complete all of
Form ADV. See Form ADV FAQs supra footnote 9 at section entitled:
Reporting to the SEC as an Exempt Reporting Adviser; General
Instructions to Form ADV supra footnote 9 at Instruction 3.
    \44\ See supra footnote 42. The estimated annual cost of filing
Form ADV as a registered investment adviser is approximately $7,437
and the estimated cost for an exempt reporting adviser is
approximately $916.
    \45\ See supra footnote 10 for a more detailed list of these
requirements.
    \46\ Rule 203-2 and Form ADV-W under the Investment Advisers Act
of 1940 (OMB Control No. 3235-0313) Supporting Statement at
footnotes 7 and 9 and accompanying text. An adviser would file full
withdrawal if it was only registered with the Commission. An adviser
would file a partial withdrawal if it was required to remain
registered with one or more States. See Form ADV FAQs supra footnote
9 at section entitled: Form ADV-W.
    \47\ An adviser that qualifies for one of these exemptions can
still choose to register with the Commission if it has sufficient
assets under management. See Exemptions Release supra footnote 8 at
footnote 24 and accompanying text.
---------------------------------------------------------------------------

    Investors in private funds, including venture capital funds and
SBICs, may experience costs and benefits as a result of the amendments.
If investors face fixed costs in transacting with a given adviser, for
example in performing any necessary due diligence, they may benefit if
the amendments encourage more advisers to advise both SBIC and non-SBIC
private funds, allowing investors to consolidate different types of
investments with a single adviser. We cannot quantify the extent to
which investors prefer to use a single adviser or the number of
advisers who will expand into either SBICs or non-SBIC private funds
because we do not have the information needed to assess investors'
latent demand for consolidated advice services or the number of
advisers that have been deterred from expanding their client bases
under the baseline. We therefore cannot estimate the magnitude of this
potential cost reduction for investors.
    In addition, to the extent that the amendments result in advisers
changing their status from registered to exempt reporting, it may
impose costs on investors. If investors value the transparency provided
by complete Form ADV reporting and the safeguards associated with the
other substantive requirements of being a registered investment
adviser, then the amendments could impose costs on investors if they
result in advisers changing their status from registered to exempt
reporting. However, such investors have the option of moving their
investments to advisers that are registered and, as noted above, we
expect that advisers will weigh the benefits and costs associated with
remaining registered in connection with any change in reporting status.
The amendments could also impose costs on investors if any reduction in
transparency or the other substantive requirements associated with
registration reduce the ability of the Commission to protect investors
from potentially fraudulent investment advisory schemes.

C. Efficiency, Competition, and Capital Formation

    As discussed above, because the amendments potentially reduce the
reporting requirements for advisers to both SBICs and non-SBIC private
funds, they could result in an increased number of advisers in both
markets. Advisers solely to SBICs may enter the market for venture
capital or other private fund advisory services, and current advisers
to non-SBIC private funds may enter the market for SBIC advisory
services. In this section, we discuss the potential effects of these
changes on efficiency, competition, and capital formation. As was the
case above, the economic effects discussed in this section only apply
to the extent that advisers have not already exercised the exemption
options provided to them under the baseline due to any inconsistencies
between the FAST Act and the Advisers Act rules, and we do not expect
the magnitude of these effects to be significant.
    Changes in the costs of advising both SBIC and non-SBIC private
funds, as described above, could have several competitive effects.
First, to the extent that non-SBIC private fund advisers find it
profitable to enter the market for SBICs under the amendments, the
amendments might increase competition in that market, resulting in
reduced profits for SBIC advisers and lower advisory fees for their
SBICs and their investors. Similarly, to the extent that SBIC advisers
find it profitable to enter the non-SBIC private fund advisory market,
the amendments might increase competition in that market, resulting in
reduced profits for non-SBIC private fund advisers and lower advisory
fees for their non-SBIC private funds and their investors. Whether the
amendments result in such a reallocation of advisory services depends
on whether advisers find it profitable to expand operations into new
markets and whether they can do so without changing the quality or
quantity of services in current markets. While we cannot precisely
estimate the relative likelihood of the above competitive effects, the
fact that the market for SBIC advisers is an order of magnitude smaller
than the market for non-SBIC private fund advisers suggests that non-
SBIC private fund advisers are more likely to have benefitted from
expanding into the SBIC market following the FAST Act's enactment,
thereby increasing the amount of competition in that market. As
discussed above, it is likely that most advisers would have already
exercised this option under the baseline if it was in their economic
interest to do so. Therefore, the competitive effects of the amendments
are not likely to be significant.
    Any relative shift of advisory talent from one segment of the
market to another could also have effects on efficiency and capital
formation. To the extent that advisers who expand into new markets as a
result of the amendments possess skill in identifying investment
opportunities, an increase in the supply of advisers in the SBIC or
non-SBIC private fund markets, or both, could result in more efficient
investment decisions and market prices that more accurately reflect the
fundamental value of assets where applicable. Also, any increase in the
number of advisers in the SBIC market could make more capital available
to small businesses if the increased supply of SBIC advisers attracts
more capital to that market. In addition, to the extent that there are
economies of scale in the provision of advisory services, advisory
services may be provided at lower aggregate cost if the amendments
result in an expansion of advisers in either the SBIC or non-SBIC
private fund market. To the extent that the amendments result in
reduced transparency into advisers because they opt to switch from
registered to exempt reporting status, and to the extent that investors
rely on that transparency when making investment decisions, the
amendments might cause a reduction in the efficiency of investor
allocations to these advisers. Any reduction in transparency could also
reduce the aggregate amount of capital managed by investment advisers
if investors cannot find suitable registered investment advisers as
replacements and these investors value transparency more than any
benefits, such as potentially lower advisory fees, of the amendments.
Finally, if the amendments increase the supply of investment advisers
to SBICs and non-SBIC private funds, and these advisers attract assets
that were not already invested in other markets, they may increase the
aggregate amount of capital investment.

V. Paperwork Reduction Act Analysis

    As discussed in the Proposing Release, we do not believe that the
amendments to reflect changes made by the FAST Act make any substantive
modifications to any existing collection of information requirements or
impose any new substantive recordkeeping or information collection
requirements

within the meaning of the Paperwork Reduction Act of 1995.\48\
---------------------------------------------------------------------------

    \48\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    The amendments to reflect the changes made by the FAST Act as
described in Section II above may shift the number of advisers between
each class of advisers as well as include advisers solely to SBICs that
take on additional non-SBIC venture capital fund or private fund
clients and therefore would become exempt reporting advisers.
    We believe that the current burden and cost estimates for the
existing collection of information requirements remain appropriate.\49\
Thus, we believe that the amendments should not impose substantive new
burdens on the overall population of respondents or affect the current
overall burden estimates for the affected forms.\50\ Accordingly, we
are not revising any burden and cost estimates in connection with these
amendments.
---------------------------------------------------------------------------

    \49\ The most recent Paperwork Reduction Act analysis for Form
ADV is based upon the number of registered advisers and exempt
reporting advisers as of May 1, 2016. Because approximately five
months had passed between the signing of the FAST Act and May 1,
2016, we believe that most of the advisers who wanted to change
their registration status as a result of the FAST Act, did so in
that five month period and are therefore included in the most recent
Paperwork Reduction Act analysis for Form ADV. Form ADV under the
Investment Advisers Act of 1940 (OMB Control No. 3235-0049).
    \50\ See Section IV above. In the Proposing Release, we
requested comment on whether our belief that the amendments would
not impose substantive new burdens on the overall population of
respondents or affect the current over all burden estimates for the
affected forms was correct. We did not receive any responses to our
request for comment.
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act Certification

    The Commission certified, pursuant to section 605(b) of the
Regulatory Flexibility Act of 1980 \51\ that the proposed amendments to
Advisers Act rules 203(l)-1 and 203(m)-1, if adopted, would not have a
significant economic impact on a substantial number of small
entities.\52\ We included this certification in Section V of the
Proposing Release. Although we encouraged written comments regarding
this certification, no commenters responded to this request.
---------------------------------------------------------------------------

    \51\ 5 U.S.C. 603(b).
    \52\ Under Commission rules, for the purposes of the Advisers
Act and the Regulatory Flexibility Act, an investment adviser
generally is a small entity if it: (i) Has assets under management
having a total value of less than $25 million; (ii) did not have
total assets of $5 million or more on the last day of its most
recent fiscal year; and (iii) does not control, is not controlled
by, and is not under common control with another investment adviser
that has assets under management of $25 million or more, or any
person (other than a natural person) that had total assets of $5
million or more on the last day of its most recent fiscal year. Rule
0-7(a) (17 CFR 275.0-7(a)).
---------------------------------------------------------------------------

VII. Statutory Authority

    The Commission is amending rule 203(l)-1 under the authority set
forth in sections 211(a) and 203(l) of the Advisers Act, (15 U.S.C.
80b-11(a) and 80b-3(l), respectively). The Commission is amending rule
203(m)-1 under the authority set forth in sections 211(a) and 203(m) of
the Advisers Act (15 U.S.C. 80b-11(a) and 80b-3(m), respectively).

List of Subjects in 17 CFR Part 275

    Reporting and recordkeeping requirements, Securities.

Text of Rule Amendments

    For the reasons set forth in the preamble, the Commission amends
title 17, chapter II of the Code of Federal Regulations as follows.

PART 275--RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940

0
1. The authority citation for part 275 continues to read, in part, as
follows:

    Authority:  15 U.S.C. 80b-2(a)(11)(G), 80b-2(a)(11)(H), 80b-
2(a)(17), 80b-3, 80b-4, 80b-4a, 80b-6(4), 80b-6a, and 80b-11, unless
otherwise noted.
* * * * *

0
2. Amend Sec.  275.203(l)-1 by revising the introductory text to
paragraph (a) to read as follows:

Sec.  275.203(l)-1   Venture capital fund defined.

    (a) Venture capital fund defined. For purposes of section 203(l) of
the Act (15. U.S.C. 80b-3(l)), a venture capital fund is any entity
described in subparagraph (A), (B), or (C) of section 203(b)(7) of the
Act (15 U.S.C. 80b-3(b)(7)) (other than an entity that has elected to
be regulated or is regulated as a business development company pursuant
to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53))
or any private fund that:
* * * * *

0
3. Amend Sec.  275.203(m)-1 by revising paragraph (d)(1) to read as
follows:

Sec.  275.203(m)-1   Private fund adviser exemption.

* * * * *
    (d) * * *
    (1) Assets under management means the regulatory assets under
management as determined under Item 5.F of Form ADV (Sec.  279.1 of
this chapter) except that the regulatory assets under management
attributable to a private fund that is an entity described in
subparagraph (A), (B), or (C) of section 203(b)(7) of the Act (15
U.S.C. 80b-3(b)(7)) (other than an entity that has elected to be
regulated or is regulated as a business development company pursuant to
section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53))
shall be excluded from the definition of assets under management for
purposes of this section.
* * * * *

    By the Commission.

    Dated: January 5, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018-00299 Filed 1-10-18; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 91 (Friday, May 12, 2017)]
[Notices]
[Page 22151]
[FR Doc No: 2017-09608]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4307-DR; Docket ID FEMA-2017-0001]

Nevada; Amendment No. 1 to Notice of a Major Disaster Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the State of Nevada (FEMA-4307-DR), dated March 27, 2017, and
related determinations.

DATES: Effective April 5, 2017.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA) hereby gives notice that pursuant to the authority vested in the
Administrator, under Executive Order 12148, as amended, David Haas, of
FEMA is appointed to act as the Federal Coordinating Officer for this
disaster.
    This action terminates the appointment of Rosalyn L. Cole as
Federal Coordinating Officer for this disaster.

The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households In
Presidentially Declared Disaster Areas; 97.049, Presidentially
Declared Disaster Assistance--Disaster Housing Operations for
Individuals and Households; 97.050, Presidentially Declared Disaster
Assistance to Individuals and Households--Other Needs; 97.036,
Disaster Grants--Public Assistance (Presidentially Declared
Disasters); 97.039, Hazard Mitigation Grant.

Robert J. Fenton,
Acting Administrator, Federal Emergency Management Agency.
[FR Doc. 2017-09608 Filed 5-11-17; 8:45 am]
 BILLING CODE 9110-12-P


[Federal Register Volume 76, Number 131 (Friday, July 8, 2011)]
[Notices]
[Pages 40375-40376]
[FR Doc No: 2011-17142]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-D-0108]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Revised Draft
Guidance for Industry on User Fee Waivers, Reductions, and Refunds for
Drug and Biological Products; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995 (the PRA).

DATES: Fax written comments on the collection of information by August
8, 2011.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
Fax:<PHONE_NUMBER>, or e-mailed to<EMAIL_ADDRESS>All
comments should be identified with the OMB control number 0910-New and
title ``Revised Draft Guidance for Industry on User Fee Waivers,
Reductions, and Refunds for Drug and Biological Products;
Availability.'' Also include the FDA docket number found in brackets in
the heading of this document.

FOR FURTHER INFORMATION CONTACT: Elizabeth Berbakos, Office of
Information Management, Food and Drug Administration, 1350 Piccard Dr.,
PI50-400B, Rockville, MD 20850,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Revised Draft Guidance for Industry on User Fee Waivers, Reductions,
and Refunds for Drug and Biological Products; Availability--(OMB
Control Number 0910--New)

I. Background

    FDA is announcing the availability of a revised draft guidance for
industry entitled ``User Fee Waivers, Reductions, and Refunds for Drug
and Biological Products.'' This revised draft guidance provides
recommendations for applicants planning to request waivers or
reductions in user fees assessed under sections 735 and 736 of the
Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 379g and
379h). This revised draft guidance describes the types of waivers and
reductions permitted under the user fee provisions of the FD&C Act, and
the procedures for submitting requests for waivers or reductions and
requests for reconsideration and appeal. The revised draft guidance
also provides clarification on related issues such as user fee
exemptions for orphan drugs. After comments are received and
considered, FDA intends to promptly issue a final guidance.
    This revised draft guidance is being issued consistent with FDA's
good guidance practices regulation (21 CFR 10.115). The draft guidance,
when finalized, will represent the Agency's current thinking on user
fee waivers and reductions for drug products. It does not create or
confer any rights for or on any person and does not operate to bind FDA
or the public. An alternative approach may be used if such approach
satisfies the requirements of the applicable statutes and regulations.

II. Paperwork Reduction Act of 1995

    Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain
approval from OMB for each collection of information that they conduct
or sponsor. ``Collection of information'' is defined in 44 U.S.C.
3502(3) and 5 CFR 1320.3(c) and includes Agency requests or
requirements that members of the public submit reports, keep records,
or provide information to a third party. Section 3506(c)(2)(A) of the
PRA, 44 U.S.C. 3506(c)(2)(A), requires Federal Agencies to provide a
60-day notice in the Federal Register for each proposed collection of
information before submitting the collection to OMB for approval. To
comply with this requirement, FDA is publishing this notice of the
proposed collection of information set forth in this document.
    With respect to the collection of information associated with this
draft guidance, FDA invites comments on the following topics: (1)
Whether the proposed information collected is necessary for the proper
performance of FDA's functions, including whether the information will
have practical utility; (2) the accuracy of FDA's estimated burden of
the proposed information collected, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information collected; and (4) ways to
minimize the burden of information collected on the respondents,
including through the use of automated collection techniques, when
appropriate, and other forms of information technology.
    The draft guidance describes how to submit requests for waivers,
reductions, and refunds of certain user fees. It also includes
recommendations for submitting information for requests for
reconsideration of denials of waiver or reduction requests, and for
requests for appeals. We estimate that the total annual number of
waiver requests submitted for all of these categories will be 90,
submitted by 75 different sponsors. We estimate that the average burden
hours for preparation of a submission will total 16 hours. Because FDA
may request additional information from the applicant during the review
period, we have also included in this estimate time to prepare any
additional information.

    The reconsideration and appeal requests are not addressed in the
FD&C Act but are discussed in the draft guidance. We estimate that we
will receive three requests for reconsideration annually, and that the
total average burden hours for a reconsideration request will be 24
hours. We estimate that we will receive one request annually for an
appeal of a user fee waiver determination, and that the time needed to
prepare an appeal would be approximately 12 hours. Reconsideration
requests are sent to the Associate Director for Policy at the Center
for Drug Evaluation and Research (CDER), and requests for appeals are
sent to the User Fee Appeals Officer at FDA, with a copy to the
Associate Director for Policy at CDER. We have also included in this
estimate both the time needed to prepare the request for appeal and the
time needed to create and send a copy of the request for an appeal to
the Associate Director for Policy at CDER.
    The burden for filling out and submitting Form FDA 3397
(Prescription Drug User Fee Coversheet) has not been included in the
burden analysis because that information collection is already approved
by OMB under OMB control number 0910-0297. The collections of
information associated with a new drug application or biologics license
application have been approved under OMB control numbers 0910-0001 and
0910-0338, respectively.
    We have included in the burden estimate the preparation and
submission of application fee waivers for small businesses because
small businesses requesting a waiver must submit documentation to FDA
on the number of their employees and must include the information that
the application is the first human drug application, within the meaning
of the FD&C Act, to be submitted to the Agency for approval. Because
the Small Business Administration (SBA) makes the size determinations
for FDA, small businesses must also submit information to the SBA. The
submission of information to SBA is already approved by OMB under OMB
control number 3245-0101.
    In the Federal Register of March 14, 2011 (76 FR 13629), FDA
published a 60-day notice requesting public comment on the proposed
collection of information. No comments were received.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                                                Average
                                    Number of       Number of      Total annual     burden per
                                   respondents    responses per      responses     response  (in    Total hours
                                                    respondent                        hours)
----------------------------------------------------------------------------------------------------------------
Section 736 of the FD&C Act....              75              1.2              90              16           1,440
Reconsideration Requests.......               3              1                 3              24              72
Appeal Requests................               1              1                 1              12              12
                                --------------------------------------------------------------------------------
    Total......................  ..............  ...............  ..............  ..............           1,524
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Dated: July 1, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-17142 Filed 7-7-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 88, Number 53 (Monday, March 20, 2023)]
[Notices]
[Pages 16724-16726]
[FR Doc No: 2023-05569]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2022-0018]

Agency Information Collection Activities; Submission to the
Office of Management and Budget for Review and Approval; Request for
Comment; Title: FMVSS Considerations for Vehicles With Automated
Driving Systems: Seating Preference Study

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Notice and request for comments on a request for approval of a
new information collection.

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SUMMARY: In compliance with the Paperwork Reduction Act of 1995 (PRA),
this notice announces that the Information Collection Request (ICR)
summarized below will be submitted to the Office of Management and
Budget (OMB) for review and approval. The ICR describes the nature of
the information collection and its expected burden. This is a new
collection of information to conduct an experiment to gather both
objective and subjective data regarding occupant/passenger seat
preference in Automated Driving System-Dedicated Vehicles (ADS-DVs). A
Federal Register Notice with a 60-day comment period soliciting
comments on the following information collection was published on March
7, 2022. No relevant comments were received.

DATES: Comments must be submitted on or before April 19, 2023.

ADDRESSES: Written comments and recommendations for the proposed
information collection, including suggestions for reducing burden,
should be submitted to the Office of Management and Budget at
www.reginfo.gov/public/do/PRAMain. To find this particular information
collection, select ``Currently under Review--Open for Public Comment''
or use the search function.

FOR FURTHER INFORMATION CONTACT: For additional information or access
to background documents, contact Debbie Sweet, Office of Vehicle Safety
Research (NVS-010),<PHONE_NUMBER>, National Highway Traffic Safety
Administration, W46-413, U.S. Department of Transportation, 1200 New
Jersey Avenue SE, Washington, DC 20590.

SUPPLEMENTARY INFORMATION:
    Under the PRA (44 U.S.C. 3501 et seq.), a Federal agency must
receive approval from the Office of Management and Budget (OMB) before
it collects certain information from the public and a person is not
required to respond to a collection of information by a Federal agency
unless the collection displays a valid OMB control number. In
compliance with these requirements, this notice announces that the
following information collection request will be submitted OMB.
    Title: FMVSS Considerations for Vehicles with Automated Driving
Systems: Seating Preference Study.
    OMB Control Number: New.
    Form Number(s): NHTSA Forms 1624, 1625, and 1626.

                 Table 1--Forms To Be Used in the Study
------------------------------------------------------------------------

------------------------------------------------------------------------
NHTSA Form 1624...................  Eligibility Questionnaire--FMVSS
                                     Considerations for Vehicles with
                                     Automated Driving Systems: Seating
                                     Preference Study.
NHTSA Form 1625...................  Demographic Questionnaire--FMVSS
                                     Considerations for Vehicles with
                                     Automated Driving Systems: Seating
                                     Preference Study.
NHTSA Form 1626...................  Post Experiment Questionnaire--FMVSS
                                     Considerations for Vehicles with
                                     Automated Driving Systems: Seating
                                     Preference Study.
------------------------------------------------------------------------

    Type of Request: New collection.
    Type of Review Requested: Regular.
    Requested Expiration Date of Approval: 3 years from date of
approval.
    Summary of the Collection of Information:
    49 U.S.C. 30181, 30182, and 30183 authorize the Secretary of
Transportation (NHTSA by delegation) to conduct research, development,
and testing programs, including activities related to new and emerging
technologies that impact, or that may impact, motor vehicle safety.
NHTSA proposes to collect information from the public regarding
occupant/passenger seat preference in Automated Driving System-
Dedicated Vehicles (ADS-DVs). Adults aged 18 and older will participate
in an on-road study after giving informed consent. Participants will
ride in one passenger vehicle and two ADS-DVs on a closed test track.
Questionnaire data will be collected at the beginning and end of
participation for each participant. Objective data will be collected
via the data acquisition systems installed in each study vehicle. The
data from each participant will be

combined, stratified by demographic information and analyzed.
    There are four information collections for the study. The (1)
Eligibility Questionnaire will be used to identify eligible
participants for this study; results from this questionnaire will not
be kept or analyzed. Candidates who are selected for the study will
participate in a single test-track experiment and will complete two
additional questionnaires while participating in the experiment. The
(2) Demographic Questionnaire will be used for description of the
participant sample (e.g., number of males and females in the dataset,
final age range for all participants, and driving experience range for
all participants). This is necessary to compare the sample collected to
the general driving population. The (3) objective data collected via
data acquisition systems installed in each study vehicle during the
test-track experiment is necessary for collecting information about
participants' seat selection, any seat changes during the ride, seat
belt use, and how participants interact with the HMI. The (4) Post
Experiment Questionnaire will be used to analyze the perceptions and
opinions of ADS-DV technology within the participant sample, as well as
to gather any comments regarding their seat preference and seat belt
use. This data will be used to determine how and why participants
choose seating preferences in ADS-DVs.

Description of the Need for the Information and Proposed Use of the
Information

    The National Highway Traffic Safety Administration's (NHTSA's)
mission is to save lives, prevent injuries, and reduce economic losses
resulting from motor vehicle crashes. ADS technology is rapidly
developing, and current Federal motor vehicle safety standards (FMVSS)
and/or NHTSA guidance may need to be adapted to ensure this technology
is deployed safely. Many of NHTSA's FMVSS focus on particular seating
positions and thus, changes in seating preferences could impact those
FMVSS. This study will provide NHTSA information about the seating
preferences of occupants in vehicles that do not require a human driver
in the left front seat. Several safety outcomes stem from occupant
seating preference, which may change in the future as Automated Driving
Systems (ADS) change seating configurations and the way people use
vehicles. ADS-Dedicated Vehicles (ADS-DVs) are vehicles that lack
manually operated driving controls, and therefore do not require a
human driver or occupant to drive the vehicle or sit in the left front
seat (the ``driver's seat'' in conventional vehicles). In conventional
vehicles, there is the basic assumption that a human will always be in
the left front seat while the vehicle is operating because a human
driver would be necessary to operate those vehicles. ADS-DVs provide
the opportunity for occupants to sit in any seat they choose in the
vehicle. It is currently unknown where occupants may choose to sit when
riding in an ADS-DV. Moreover, new seating configurations for occupants
of ADS-DVs may necessitate changes to how and where information is
presented to occupants about their responsibilities as occupants (e.g.,
closing doors, fastening seatbelts). Furthermore, occupants will need a
human-machine interface (HMI) to provide input that they are ready for
the ride to begin, or to request that the ride stop. At present, no
standardized or otherwise commercially produced HMIs exist for this
purpose. Therefore, in order to conduct the research, a prototype HMI
will be developed. The two main goals for this study are to:
    1. Describe the occupant distribution for ADS-DVs (i.e., seating
distribution).
    2. Use the prototype HMI to evaluate whether occupants would choose
to initiate a ride in an ADS-DV without a seatbelt.

60-Day Notice

    A Federal Register notice with a 60-day comment period soliciting
public comments on the information collection was published on March 7,
2022 (87 FR 12772). NHTSA received one comment on the notice that did
not address the information collection request or the seating
preference study but instead addressed vehicle and road user safety in
general. In addition to seeking public comment, NHTSA and the research
team have publicized this study for a number of years across industry
and consumer events. NHTSA has socialized this study through various
means including discussion in the public-facing Annual Modal Research
Plan FY2022-2023, discussion during the NHTSA Research Portfolio Fall
2022 public meeting, inclusion in a presentation at the 2021 SAE
Government Industry Meeting, and discussion with industry stakeholders
through individual meetings and association groups. Feedback regarding
the study was positive and supportive and assistive in refinement of
the study including the human machine interaction design and
presentation.
    Affected Public: Adults ages 18 and older who meet eligibility
criteria such as holding a valid driver's license and having used a
ride- sharing application at least once in the past year.
    Estimated Number of Respondents: An expected total of up to 100
participants will be recruited to participate in the study. It is
estimated that 200 respondents will be needed to identify 100 eligible
participants.
    Frequency: One-time collection.
    Estimated Total Annual Burden Hours: 268.
    The eligibility questionnaire will have a maximum of 28 questions
and NHTSA estimates it will take approximately 20 minutes to complete.
Therefore, NHTSA estimates the total time associated with completing
eligibility questionnaires to be 67 hours (200 responses x 20 minutes =
66.7 hours). Study Intake (reading study information sheet and
obtaining participant consent, general study instruction) is expected
to take 10 minutes to complete. Both the demographic and post-
experiment questionnaires will have a maximum of 20 questions and NHTSA
estimates that it will take each eligible participant 10 minutes to
complete the demographic questionnaire and 10 minutes to complete the
post-experiment questionnaire. Therefore, NHTSA estimates the total
burden for Study Intake to be 17 hours (100 responses x 10 minutes =
16.67 hours), Demographic Questionnaire to be 17 hours (100 responses x
10 minutes = 16.67 hours), and the Post Experiment questionnaire to be
17 hours (100 responses x 10 minutes = 16.67 hours). Study
participation (e.g., riding in study vehicles on the test track) is
expected to take 90 minutes. The total burden hours for study
participation are calculated to be 150 hours (100 responses x 90
minutes = 9,000 minutes = 150 hours). Accordingly, NHTSA estimates the
total burden hours for this information collection to be 268 hours.
Data collection will take less than one year.
    The table below shows the estimated burden hours for this
information collection, which accounts for the maximum number of
expected responses and drop-outs.

                                             Estimated Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                Estimated
                                                                  Maximum number    individual         Total
                           Instrument                             of respondents      burden         estimated
                                                                                (minutes)     burden hours
----------------------------------------------------------------------------------------------------------------
Eligibility Questionnaire.......................................             200              20              67
Study Intake....................................................             100              10              17
Demographic questionnaire.......................................             100              10              17
Study Participation.............................................             100              90             150
Post Experiment Questionnaire...................................             100              10              17
                                                                 -----------------------------------------------
    Total.......................................................  ..............  ..............             268
----------------------------------------------------------------------------------------------------------------

    Estimated Total Annual Burden Cost: The only cost burdens
respondents will incur are costs related to travel to and from the
study location. The costs are minimal and are expected to be offset by
the honorarium that will be provided to all research participants.
    Public Comments Invited: You are asked to comment on any aspects of
this information collection, including (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the Department, including whether the information will
have practical utility; (b) the accuracy of the Department's estimate
of the burden of the proposed information collection; (c) ways to
enhance the quality, utility and clarity of the information to be
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including the use of automated collection
techniques or other forms of information technology.
    Authority: The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter
35, as amended; 49 CFR 1.49; and DOT Order 1351.29.

Cem Hatipoglu,
Associate Administrator, Vehicle Safety Research, NHTSA.
[FR Doc. 2023-05569 Filed 3-17-23; 8:45 am]
BILLING CODE 4910-59-P


[Federal Register: February 28, 2008 (Volume 73, Number 40)]
[Notices]
[Page 10753-10754]
[DOCID:fr28fe08-53]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP08-76-000]

Northern Natural Gas Company; Prior Notice of Activity Under
Blanket Certificate

February 22, 2008.
    Take notice that on February 20, 2008 Northern Natural Gas Company
(NNG) filed a prior notice request pursuant to Sections 157.205,
157.208 and 157.210 of the Federal Energy Regulatory Commission's
(Commission) regulations under the Natural Gas Act, and NNG's blanket
certificate issued in Docket No. CP82-401-000 on September 1, 1982, for
authorization to: Install approximately one mile of 36-inch mainline
and approximately 3.67 miles of 6-inch branch line, including
appurtenant facilities; and, uprate the maximum allowable operating
pressures (MAOP) on three system branch lines, including appurtenant
facilities on certain of the branch lines in conjunction with the MAOP
uprate, all as more fully described in the application.
    Any questions regarding the application should be directed to
Michael T. Loeffler, Senior Director, Certificates and External Affairs
for NNG, 1111 South 103rd Street, Omaha, Nebraska 68124, at (402) 398-
7103 or Donna Martens, Senior Regulatory Analyst, at<PHONE_NUMBER>.
    Any person or the Commission's staff may, within 60 days after
issuance of the instant notice by the Commission, file pursuant to Rule
214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to
intervene or notice of intervention and pursuant to Section 157.205 of
the regulations under the NGA (18 CFR 157.205), a protest to the
request. If no protest is filed within the time allowed therefore, the
proposed activity shall be deemed to be authorized effective the day
after the

time allowed for filing a protest. If a protest is filed and not
withdrawn within 30 days after the allowed time for filing a protest,
the instant request shall be treated as an application for
authorization pursuant to Section 7 of the NGA.
    Protests will be considered by the Commission in determining the
appropriate action to be taken, but will not serve to make protestants
parties to the proceeding. Any person wishing to become a party must
file a notice of intervention or motion to intervene, as appropriate.
Such motions or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant, on or before the comment date. It is
not necessary to serve motions to intervene or protests on persons
other than the Applicant.
    The Commission encourages electronic submission of comments,
protests and interventions in lieu of paper using the ``eFiling'' link
at http://www.ferc.gov. Persons unable to file electronically should
submit an original and 14 copies of the protest or intervention to the
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

Kimberly D. Bose,
Secretary.
 [FR Doc. E8-3757 Filed 2-27-08; 8:45 am]

BILLING CODE 6717-01-P


			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on November 1, 2004

NOTICE OF ACTION TAKEN -- DOCKETS OST-2004-18920 & 2004-18919

________________________________________________________________________
__________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  SriLankan Airlines Ltd. & Emirates				Date Filed:  August
17, 2004

Relief requested:

SriLankan Airlines Ltd. (Docket OST-2004-18920)--Exemption from 49
U.S.C. § 41301 to engage in scheduled foreign air transportation of
persons, property and mail from points behind Sri Lanka via Sri Lanka
and intermediate points to a point or points in the United States and
beyond, pursuant to a code-share arrangement with Emirates, a foreign
air carrier of the United Arab Emirates (U.A.E.).

Emirates (Docket OST-2004-18919)--Statement of authorization under 14
CFR Part 212 to the extent necessary to permit Emirates to display the
designator code of SriLankan Airlines Ltd.(“UL”) on flights operated
by Emirates between the U.A.E. and the United States.

If renewal, date and citation of last action:  New authority

Applicant(s) representative:  Jeffrey A. Manley<PHONE_NUMBER> (for both
carriers)

DOT Analyst:  Gordon H. Bingham<PHONE_NUMBER>

Responsive pleadings:  None filed

DISPOSITION

Action:  Approved							Action date:  November 1, 2004

Effective dates of exemption authority granted SriLankan Airlines:
November 1, 2004-November 1, 2006

Effective dates of the statement of authorization granted Emirates:
November 1, 2004-November 1, 2006

Basis for approval (bilateral agreement/reciprocity):  Air Services
Agreements between the United States and Sri Lanka (for SriLankan
Airlines) and between the United States and the U.A.E. (for Emirates)

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated:  X  Standard exemption
conditions attached for both SriLankan Airlines & Emirates.

Special conditions/Partial grant/Denial basis/Remarks:  Based on the
record in this case, we found that SriLankan Airlines is financially and
operationally qualified to perform the services authorized above.

However, we are unable to find that SriLankan Airlines is substantially
owned and effectively controlled by Sri Lankan nationals.  Specifically,
the applicant states that it is owned by the Government of Sri Lanka
(51%) and its codeshare partner, Emirates (44%).  In addition, SriLankan
Airlines’ chairman and four of its six directors are citizens of Sri
Lanka.  In spite of the fact that we are unable to find that SriLankan
Airlines is substantially owned and effectively controlled by homeland
nationals, we find it appropriate to waive our ownership and

2

control requirements.  The carrier is properly licensed and designated
by the Government of Sri Lanka to perform the proposed services, and
there is no evidence on the record which would suggest that the
ownership of the carrier would be inimical to U.S. aviation policy or
interests.

By memorandum dated October 21, 2004, the FAA noted that it has not
conducted an assessment of Sri Lanka’s civil aviation authority under
the FAA’s International Aviation Safety Assessment program, and stated
that it has no safety information on SriLankan Airlines.  Based on the
advice of the FAA and the evidence in the docket, we found that there
was no basis to find that SriLankan Airlines was unqualified to conduct
the proposed code-share operations with Emirates.

The statement of authorization granted to Emirates is subject to the
following conditions:

(a)  The statement of authorization will remain in effect only as long
as (i) Emirates and SriLankan Airlines continue to hold the necessary
underlying authority to operate the code-share services at issue, and
(ii) the code-share agreement providing for the code-share operations
remains in effect.

(b)  Emirates and/or SriLankan Airlines must promptly notify the
Department (Office of International Aviation) if the code-share
agreement providing for the code-share operations is no longer effective
or the carriers decide to cease operating any or all of the approved
code-share services.  Such notices should be filed in Docket
OST-2004-18919.

(c)  Emirates and/or SriLankan Airlines must notify the Department no
later than 30 days before they begin any new code-share service under
the code-share services authorized here.  Such notice shall identify the
market(s) to be served and the date on which the service will begin.
Such notices should be filed in Docket OST-2004-18919.

(d)  The code-sharing operations conducted under this authority must
comply with 14 CFR 257 and with any amendments to the Department’s
regulations concerning code-share arrangements that may be adopted.
Notwithstanding any provisions in the contract between the carriers, our
approval here is expressly conditioned upon the requirements that the
subject foreign air transportation be sold in the name of the carrier
holding out such service in computer reservation systems and elsewhere;
that the carrier selling such transportation (i.e., the carrier shown on
the ticket) accept responsibility for the entirety of the code-share
journey for all obligations established in its contract of carriage with
the passenger; and that the passenger liability of the operating carrier
be unaffected.

(e)  The authority granted here is specifically conditioned so that
neither Emirates nor SriLankan Airlines shall give any force or effect
to any contractual provisions between themselves that are contrary to
these conditions.

Action taken by:   Paul L. Gretch, Director

		      Office of International Aviation

________________________________________________________________________
_________

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) the applicant was qualified to perform the
proposed operations; (2) our action was consistent with Department
policy; (3) grant of the authority was consistent with the public
interest; and (4) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR §
385.30, may file their petitions within seven (7) days after the date of
issuance of this Notice.  This action was effective when taken, and the
filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp

Foreign Carrier Exemption Conditions

In the conduct of the operations authorized, the foreign carrier
applicant(s) shall:

(1)  Not conduct any operations unless it holds a currently effective
authorization from its homeland for such operations, and it has filed a
copy of such authorization with the Department;

(2)  Comply with all applicable requirements of the Federal Aviation
Administration, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security, including, but not limited to, 49 CFR Part 1546 or 1550, as
applicable.  To assure compliance with all applicable U.S. Government
requirements concerning security, the holder shall, before commencing
any new service (including charter flights) from a foreign airport that
would be the holder’s last point of departure for the United States,
contact its International Principal Security Inspector (IPSI) to advise
the IPSI of its plans and to find out whether the Transportation
Security Administration has determined that security is adequate to
allow such airport(s) to be served;

(3)  Comply with the requirements for minimum insurance coverage
contained in 14 CFR Part 205, and, prior to the commencement of any
operations under this authority, file evidence of such coverage, in the
form of a completed OST Form 6411, with the Federal Aviation
Administration’s Program Management Branch (AFS-260), Flight Standards
Service (any changes to, or termination of, insurance also shall be
filed with that office);

(4)  Not operate aircraft under this authority unless it complies with
operational safety requirements at least equivalent to Annex 6 of the
Chicago Convention;

(5)  Conform to the airworthiness and airman competency requirements of
its Government for international air services;

(6)  Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR Part 203,
concerning waiver of Warsaw Convention liability limits and defenses;

(7)  Agree that operations under this authority constitute a waiver of
sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with
respect to those actions or proceedings instituted against it in any
court or other tribunal in the United States that are: (a)  based on its
operations in international air transportation that, according to the
contract of carriage, include a point in the United States as a point of
origin, point of destination, or agreed stopping place, or for which the
contract of carriage was purchased in the United States; or (b)  based
on a claim under any international agreement or treaty cognizable in any
court or other tribunal of the United States.  In this condition, the
term "international air transportation" means "international
transportation" as defined by the Warsaw Convention, except that all
States shall be considered to be High Contracting Parties for the
purpose of this definition;

(8)  Except as specifically authorized by the Department, originate or
terminate all flights to/from the United States in its homeland;

(9)  Comply with the requirements of 14 CFR Part 217, concerning the
reporting of scheduled, nonscheduled, and charter data;

(10) If charter operations are authorized, except as otherwise provided
in the applicable aviation agreement, comply with the Department's rules
governing charters (including 14 CFR Parts 212 and 380); and

(11) Comply with such other reasonable terms, conditions, and
limitations required by the public interest as may be prescribed by the
Department, with all applicable orders or regulations of other U.S.
agencies and courts, and with all applicable laws of the United States.

This authority shall not be effective during any period when the holder
is not in compliance with the conditions imposed above.  Moreover, this
authority cannot be sold or otherwise transferred without explicit
Department approval under Title 49 of the U.S. Code.

  Emirates states that, at present, New York is the only U.S. city at
which it operates services using its own aircraft.

  Emirates is wholly owned by the Government of Dubai.  In 1998,
Emirates, the government of Sri Lanka and SriLankan Airlines entered
into a shareholders agreement in which Emirates was granted management
rights over SriLankan Airlines for a period of ten years.  Under the
agreement, the government of Sri Lanka retains majority (51%) share
ownership and control of the applicant and majority representation on
the board of directors, including the sole right to select the chairman
of the board.

  The two remaining positions are held by citizens of the United
Kingdom.  All but two of SriLankan Airlines’ key management positions
are held by citizens of Sri Lanka.

  SriLankan Airlines may not itself operate flights to or from the
United States without further order of the Department.

  We expect this notification to be received within 10 days of such
noneffectiveness or of such decision.

05/2004