\422\ See para. (f)(2)(i)(L) of the Order.
---------------------------------------------------------------------------

    Aside from these modifications, the Order does not extend
substituted compliance to discrete Exchange Act Recordkeeping and
Reporting Requirements that are linked to substantive Exchange Act
requirements for which there is no substituted compliance, as proposed.
In particular, a positive substituted compliance determination is not
being made, in full or in part, for recordkeeping, reporting, or
notification requirements linked to

the following Exchange Act rules for which substituted compliance is
not available or a positive substituted compliance determination is not
being made: (1) Exchange Act rule 15Fh-4; \423\ (2) Exchange Act rule
15Fh-5; \424\ (3) Exchange Act rule 15Fh-6; \425\ (4) Exchange Act rule
18a-2; \426\ (5) Exchange Act rule 18a-4; and (6) Regulation SBSR.\427\
---------------------------------------------------------------------------

    \423\ 17 CFR 240.15Fh-4.
    \424\ 17 CFR 240.15Fh-5.
    \425\ 17 CFR 240.15Fh-6.
    \426\ 17 CFR 240.18a-2.
    \427\ 17 CFR 242.900 et seq.
---------------------------------------------------------------------------

    Second, the Commission did not make a positive substituted
compliance determination with respect to the inspection requirement of
Exchange Act section 15F(f) and the records production requirement of
Exchange Act rule 18a-6(g).\428\ The Commission did not receive comment
on this approach and the Order does not extend substituted compliance
to these requirements.
---------------------------------------------------------------------------

    \428\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18403-404 (discussing this condition).
---------------------------------------------------------------------------

    Third, the Commission conditioned substituted compliance with
discrete provisions of the Exchange Act Recordkeeping and Reporting
Requirements that were fully or partially linked to a substantive
Exchange Act requirement for which substituted compliance was available
on the Covered Entity applying substituted compliance with respect to
the linked Exchange Act requirement.\429\ In particular, substituted
compliance for a provision of the Exchange Act Recordkeeping and
Reporting Requirements that is linked to the following Exchange Act
rules was conditioned on the SBS Entity applying substituted compliance
to the linked substantive Exchange Act rule: (1) Exchange Act rule
15Fh-3, except paragraphs (a) and (d) of the rule for which substituted
compliance is not available; (2) Exchange Act rule 15Fi-2; (3) Exchange
Act rule 15Fi-3; (4) Exchange Act rule 15Fi-4; (5) Exchange Act rule
15Fi-5; (6) Exchange Act rule 15Fk-1; (7) Exchange Act rule 18a-1
(``Rule 18a-1 Condition''); (8) Exchange Act rule 18a-3; (8) Exchange
Act rule 18a-5; and (9) Exchange Act rule 18a-7. The Commission did not
receive comment on this approach and is adopting it as proposed.
---------------------------------------------------------------------------

    \429\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18395 (discussing this condition).
---------------------------------------------------------------------------

    The only difference is that the positive substituted compliance
determination for Exchange Act rule 18a-6(b)(1)(viii) is now
conditioned on the Covered Entity applying substituted compliance for
the requirements of Exchange Act rule 18a-7(a)(1), (b), and (c) through
(h), and Exchange Act rule 18a-7(j) as applied to these requirements,
rather than on the entirety of Exchange Act rule 18a-7, to reflect that
substituted compliance with respect to Exchange Act rule 18a-7 is
granted on a paragraph-by-paragraph basis and not all paragraphs of
Exchange Act rule 18a-7 are pertinent to Exchange Act rule 18a-
6(b)(1)(viii).
    Moreover, for the reasons discussed above in part III.B.2.k. of
this release, substituted compliance with respect to paragraphs (a)(1),
(b), and (c) through (h) of Exchange Act rule 18a-7 is subject to the
additional condition that the Covered Entity applies substituted
compliance with respect to Exchange Act rule 18a-6(b)(1)(viii) (a
record preservation requirement).\430\ This record preservation
requirement is directly linked to the financial and operational
reporting requirements of paragraphs (a)(1), (b), and (c) through (h)
of Exchange Act rule 18a-7. The proposed Order conditioned substituted
compliance with respect to this record preservation requirement on the
Covered Entity applying substituted compliance with respect to Exchange
Act rule 18a-7(a)(1).\431\ This additional condition is designed to
provide clarity as to the Covered Entity's obligations under this
record preservation requirement when applying substituted compliance
with respect to paragraphs (a)(1), (b), and (c) through (h) of Exchange
Act rule 18a-7 pursuant this Order.
---------------------------------------------------------------------------

    \430\ See para. (f)(3)(i)(D) of the Order.
    \431\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18399, 18417.
---------------------------------------------------------------------------

    Fourth, the Commission conditioned substituted compliance with
discrete provisions of the Exchange Act Recordkeeping and Reporting
Requirements that would be important for monitoring or examining
compliance with the capital rule for nonbank security-based swap
dealers on the Covered Entity applying substituted compliance with
respect to the capital rule (i.e., the Rule 18a-1 Condition).\432\ The
Commission included the Rule 18a-1 Condition as part of the substituted
compliance determination for the daily trading records requirement of
Exchange Act section 15F(g). A commenter asked that the condition be
modified so that it applies only if the Covered Entity is not
prudentially regulated (and therefore subject to rule 18a-1).\433\
Instead, the Commission is deleting this condition from the substituted
compliance determination because these requirements are not important
to monitoring or examining for compliance with Exchange Act rule 18a-1.
Therefore, all Covered Entities--whether or not subject to rule 18a-1--
can apply substituted compliance with respect to Exchange Act section
15F(g). The Order otherwise includes the Rule 18a-1 Condition for
discrete provisions of the Exchange Act Recordkeeping and Reporting
Requirements that would be important for monitoring or examining
compliance with the capital rule for nonbank security-based swap
dealers, as proposed.
---------------------------------------------------------------------------

    \432\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18395 (discussing this condition).
    \433\ See SIFMA 5/3/2021 Letter at 23.
---------------------------------------------------------------------------

    Fifth, the proposed Order included a condition that Covered
Entities must promptly furnish to a representative of the Commission
upon request an English translation of any record, report, or
notification of the Covered Entity that is required to be made,
preserved, filed, or subject to examination pursuant to Exchange Act
section 15F of this Order.\434\ The Commission did not receive a
comment on this approach and the Order includes this condition.
---------------------------------------------------------------------------

    \434\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18395 (discussing this condition).
---------------------------------------------------------------------------

    Sixth, the Commission conditioned substituted compliance with
Exchange Act rule 18a-7 on Covered Entities filing periodic unaudited
financial and operational information with the Commission or its
designee in the manner and format required by Commission rule or order.
Commenters made new suggestions about the scope and requirements of
such a Commission order or rule in addition to reiterating comments
previously made in response to the same condition in the German
Substituted Compliance Order.\435\ First, if SBS Entities are required
to prepare FOCUS Report Part II, and a positive substituted compliance
determination is made with respect to the Commission's capital
requirements, a commenter proposed that the Commission permit a Covered
Entity to submit capital computations in a manner consistent with its
home country capital standards and related reporting rules.\436\
Second, some commenters asked that Covered Entities be permitted to
file their unaudited financial information less frequently (e.g.,
quarterly) and provide a later submission deadline to match the
frequency of reporting and reporting deadlines required by the Covered

Entity's home country regulator,\437\ while other commenters urged that
Covered Entities be subject to monthly instead of quarterly reporting
of their financial condition.\438\ Third, commenters supported a
potential approach identified by the Commission under which Covered
Entities would be permitted to satisfy their Exchange Act rule 18a-7
obligations for a two-year period by filing the FOCUS Report Part IIC
with only a limited number of the required line items completed.\439\
Fourth, the Commission received comment recommending that the FOCUS
Report be modified to omit certain line items either permanently or
during a two-year transition.\440\ The Commission will consider these
comments as it works towards completing a Commission order or rule
pursuant to the provision in this Order that substituted compliance
with respect to Exchange Act rule 18a-7's FOCUS Report filing
requirements is conditioned on Covered Entities filing unaudited
financial and operational information in the manner and format
specified by Commission order or rule.
---------------------------------------------------------------------------

    \435\ See SIFMA 5/3/2021 Letter Appendix B.
    \436\ See SIFMA 5/3/2021 Letter Appendix B.
    \437\ See SIFMA 5/3/2021 Letter Appendix B.
    \438\ See Americans for Financial Reform Education Fund Letter
at 1.
    \439\ See SIFMA 5/3/2021 Letter Appendix B.
    \440\ See SIFMA 5/3/2021 Letter Appendix B.
---------------------------------------------------------------------------

    Seventh, the Commission proposed to make a positive substituted
compliance determination with respect to Exchange Act rule 18a-
6(b)(2)(v) but not with respect to Exchange Act rule 18a-
6(b)(1)(viii)(L), even though both provisions require firms to preserve
detail relating to information for possession or control requirements
under Exchange Act rule 18a-4 and reported on Part II of Form X-17A-5.
These provisions are fully linked with Exchange Act rule 18a-4 for
which a positive substituted compliance is not available, so a positive
substituted compliance determination should not be made for these
linked record retention requirements. Accordingly, the Order does not
make a positive substituted compliance determination with respect to
Exchange Act rule 18a-6(b)(2)(v).
    The Commission also received comment suggesting certain
modifications to the ordering language. Specifically, a commenter
suggested revising paragraph (f)(4)(ii)(A)(1) of the proposed Order,
which requires a Covered Entity to send a copy of any notice required
to be sent by UK laws cited in paragraph (f)(4) simultaneously to the
Commission. The commenter recommended revising this provision to
require the notices that a Covered Entity would be required to send to
the Commission be limited to those notices required by UK law cited in
paragraph (f)(4)(i)(C) only instead of paragraph (f)(4). Furthermore,
the commenter recommended conditioning the requirement to provide these
notices to the Commission to be limited to those notifications that are
related to: (1) A breach of the UK laws cited in the relevant portions
of paragraphs (f)(1) or (2) of the Order, which, in the case of a
Covered Entity that is prudentially regulated, also relates to the
Covered Entity's business as a security-based swap dealer or major
security-based swap participant; or (2) a deficiency relating to
capital requirements.\441\ The commenter reasoned that the provisions
of UK law requiring notification referenced in paragraph (f)(4) require
notification of a far wider array of matters than those described in
Exchange Act rule 18a-8.
---------------------------------------------------------------------------

    \441\ See SIFMA 5/3/2021 Letter Appendix A.
---------------------------------------------------------------------------

    The Commission disagrees. Exchange Act rule 18a-8 requires
security-based swap dealers and major security-based swap participants
for which there is no prudential regulator to notify the Commission of
a failure to meet minimum net capital. Exchange Act rule 18a-8 also
specifies several events that trigger a requirement that a security-
based swap dealer or major security-based swap participant for which
there is no prudential regulator must send notice within twenty-four
hours to the Commission. These notices are designed to provide the
Commission with ``early warning'' that the SBS entity may experience
financial difficulty. Furthermore, Exchange Act rule 18a-8 requires
bank security-based swap dealers to give notice to the Commission when
it files an adjustment of its reported capital category with its
prudential regulator. Additional notification requirements arise with
respect to the failure to maintain and keep current required books and
records, the discovery of material weaknesses, and failure to make a
required deposit into the special reserve account for the exclusive
benefit of security-bases swap customers.\442\ While the specific UK
requirements cited with respect to Exchange Act rule 18a-8 are
different from the specific requirements set forth in Exchange Act rule
18a-8, the Commission believes the UK notice requirements cited in
paragraph (f)(4) of the Order provide for comparable regulatory
outcomes by requiring notification of events or conditions which may
impact an SBS Entity's capital or signal the potential for financial
difficulty, indicate the failure to maintain and keep current books and
records, or the potential for the failure to comply with other
requirements related to the protection of customer assets. The
recommended revisions would reduce the scope of notifications the
Commission would receive. Consequently, the Commission is not making
the recommended revisions with respect to paragraph (f)(4)(ii)(A)(1).
---------------------------------------------------------------------------

    \442\ See 17 CFR 240.18a-8.
---------------------------------------------------------------------------

    The commenter also recommended revising paragraphs (f)(2)(i)(H)(1),
(f)(3)(i)(A), and (f)(3)(ii)(A) to include the qualifier ``as
applicable'' with respect to citations to UK CRR Reporting ITS annexes.
The commenter stated that not all firms submit all of the UK CRR
Reporting ITS annexes.\443\ Accordingly, the Commission is modifying
these paragraphs to include the qualifier ``as applicable.'' \444\
---------------------------------------------------------------------------

    \443\ See SIFMA 5/3/2021 Letter Appendix A.
    \444\ Compare paras. (f)(2)(i)(H)(1), (f)(3)(i)(A), and
(f)(3)(ii)(A) of the UK Substituted Compliance Notice and Proposed
Order, with paras. (f)(2)(i)(H)(1), (f)(3)(i)(A), and (f)(3)(ii)(A)
of the Order.
---------------------------------------------------------------------------

    Finally, with respect to recordkeeping rules that are linked with
Exchange Act rule 15Fh-3, references to Exchange Act rule 15Fh-3 are
revised to clarify that substituted compliance is available with
respect to Exchange Act rule 15Fh-3 except paragraphs (a) and (d) of
the rule, instead of the entirety of Exchange Act rule 15Fh-3.
Accordingly, the Commission is revising the conditions in paragraphs
(f)(1)(i)(M)(2) and (f)(2)(i)(K)(2) of the Order to state that the
Covered Entity must apply substituted compliance with respect to the
portion of the recordkeeping rule that relates to ``one or more
provisions of Exchange Act rule 15Fh-3 for which substituted compliance
is available under this Order'' (instead of just ``Exchange Act rule
15Fh-3'').
2. Citations to UK Law
    The Commission also received comment recommending changes to the
proposed Order to refine the scope of UK law provisions that would
operate as conditions to substituted compliance.\445\ The Commission
reviewed each of the UK law citations that the commenter recommended
adding or removing from the Order for relevance to the comparable
Exchange Act requirement while also keeping in mind that each UK law
citation was included in the FCA Application intentionally. The
Commission's conclusion and reasoning with respect to the commenter's
recommendations is discussed in further detail below. In addition to
refining the scope of UK law citations in response to comment, the

Order reflects changes to the UK law citations after refining the UK
law provisions in the proposed Order to better reflect the UK law
provisions cited in the FCA Application, as well as the EU law
provisions cited in the French Substituted Compliance Order.\446\
---------------------------------------------------------------------------

    \445\ See SIFMA 5/3/2021 Letter Appendix A.
    \446\ There are a number of subparagraphs of the recordkeeping,
reporting, notification, and securities count paragraph of the Order
that reflect changes for consistency with the FCA Application and
French Substituted Compliance Order. Compare paras. (f)(1)(i)(B)(1),
(f)(1)(i)(C)(1), (f)(1)(i)(D)(1), (f)(1)(i)(F)(1), (f)(1)(i)(G)(1),
(f)(1)(i)(H)(1), (f)(1)(i)(I)(1), (f)(1)(i)(J)(1), (f)(1)(i)(K),
(f)(1)(i)(L)(1), (f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(C)(1),
(f)(2)(i)(D), (f)(2)(i)(E)(1), (f)(2)(i)(F)(1), (f)(2)(i)(G)(1),
(f)(2)(i)(H)(1), (f)(2)(i)(I)(1), (f)(2)(i)(J)(1), (f)(2)(i)(K)(1),
(f)(2)(i)(L), (f)(2)(i)(M), (f)(2)(i)(N)(1), (f)(2)(i)(O)(1),
(f)(2)(i)(P)(1), (f)(2)(i)(Q), (f)(2)(i)(R), (f)(3)(ii)(A),
(f)(3)(iii), (f)(3)(iv)(A), (f)(4)(i)(A)(1), (f)(4)(i)(B),
(f)(4)(i)(C)(1), and (f)(4)(i)(D)(1) of the UK Substituted
Compliance Notice and Proposed Order, with paras. (f)(1)(i)(B)(1),
(f)(1)(i)(C)(1), (f)(1)(i)(D)(1), (f)(1)(i)(F)(1), (f)(1)(i)(G)(1),
(f)(1)(i)(H)(1), (f)(1)(i)(I)(1), (f)(1)(i)(J)(1), (f)(1)(i)(K),
(f)(1)(i)(L)(1), (f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(C)(1),
(f)(2)(i)(D), (f)(2)(i)(E)(1), (f)(2)(i)(F)(1), (f)(2)(i)(G)(1),
(f)(2)(i)(H)(1), (f)(2)(i)(I)(1), (f)(2)(i)(J)(1), (f)(2)(i)(K)(1),
(f)(2)(i)(L)(1), (f)(2)(i)(M), (f)(2)(i)(N)(1), (f)(2)(i)(O)(1),
(f)(2)(i)(P)(1), (f)(2)(i)(Q), (f)(2)(i)(R), (f)(3)(ii)(A),
(f)(3)(iii), (f)(3)(iv)(A), (f)(4)(i)(A)(1), (f)(4)(i)(B),
(f)(4)(i)(C)(1), (f)(4)(i)(D)(1), and (f)(6) of the Order.
---------------------------------------------------------------------------

a. Global
    The commenter recommended deleting references to UK MiFID Org Reg,
COBS 8A, and UK MiFIR article 25(1), reasoning that these provisions
could raise issues due to the discrepancy between Exchange Act
requirements, which apply on an entity-level basis, and these UK
requirements, which are territorially limited. As explained in part
III.B.2. above, conducting business outside the UK does not preclude a
firm from relying on substituted compliance for the business it
conducts within the UK. Accordingly, other than the specific articles
of UK MiFID Org Reg, FCA COBS, and UK MiFIR discussed below, the
Commission is not removing references to these UK requirements from the
Order's list of UK requirements comparable to the Commission's
recordkeeping, reporting, notification, and securities count
requirements.
    The commenter recommended deleting references to FCA IFPRU,
reasoning that FCA IFPRU does not apply to banks and PRA-designated
investment firms, and all Covered Entities are expected to be banks or
PRA-designated investment firms. On further examination, the Commission
believes that the IFPRU provisions are not necessary to find
comparability with respect to the Commission's recordkeeping,
reporting, notification, and securities count requirements and is
therefore removing references to this UK requirement.\447\
---------------------------------------------------------------------------

    \447\ Compare paras. (f)(1)(i)(B)(1), (f)(1)(i)(J)(1),
(f)(1)(i)(L)(1), (f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(C)(1),
(f)(2)(i)(D), (f)(2)(i)(I)(1), (f)(2)(i)(J)(1), (f)(4)(i)(A)(1),
(f)(4)(i)(B), (f)(4)(i)(C)(1), and (f)(4)(i)(D)(1) of the UK
Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(B)(1), (f)(1)(i)(J)(1), (f)(1)(i)(L)(1), (f)(2)(i)(A),
(f)(2)(i)(B), (f)(2)(i)(C)(1), (f)(2)(i)(D), (f)(2)(i)(I)(1),
(f)(2)(i)(J)(1), (f)(4)(i)(A)(1), (f)(4)(i)(B), and (f)(4)(i)(C)(1)
of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to FCA COBS 9A.2.1R,
which relates to suitability requirements, reasoning that the provision
does not correspond to, and goes beyond, the Commission's
recordkeeping, reporting, notification, and securities count
requirements. The Commission agrees with the commenter's reasoning,
except with respect to Exchange Act rules 18a-5(a)(17) and (b)(13),
which relate to suitability records, and is therefore removing
references to this UK requirement from the Order's list of UK
requirements comparable to the Commission's recordkeeping, reporting,
notification, and securities count requirements, except for Exchange
Act rules 18a-5(a)(17) and (b)(13).\448\
---------------------------------------------------------------------------

    \448\ Compare paras. (f)(1)(i)(D)(1), (f)(1)(i)(G)(1),
(f)(1)(i)(I)(1), (f)(2)(i)(A), (f)(2)(i)(B), and (f)(2)(i)(D) of the
UK Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(D)(1), (f)(1)(i)(G)(1), (f)(1)(i)(I)(1), (f)(2)(i)(A),
(f)(2)(i)(B), and (f)(2)(i)(D) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to UK MiFID Org Reg
article 76 and FCA SYSC 10A.1.6R and 10A.1.8R, which relate to the
recording of telephone and electronic communications, reasoning that
they do not correspond to, and go beyond, the requirements of the
Commission's recordkeeping, reporting, notification, and securities
count rules. The Commission agrees with the commenter's reasoning,
except with respect to Exchange Act rules 18a-6(b)(1)(iv) and
(b)(2)(ii), which relate to communications including telephonic
communications. Therefore, the Commission is removing references to
these UK requirements from the Order's list of UK requirements
comparable to the Commission's recordkeeping, reporting, notification,
and securities count requirements, except for Exchange Act rules 18a-
6(b)(1)(iv) and (b)(2)(ii).\449\
---------------------------------------------------------------------------

    \449\ Compare paras. (f)(1)(i)(A)(1), (f)(1)(i)(D)(1),
(f)(1)(i)(F)(1), (f)(1)(i)(G)(1), (f)(1)(i)(I)(1), (f)(1)(i)(M),
(f)(2)(i)(A), (f)(2)(i)(B), and (f)(2)(i)(O)(i) of the UK
Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(A)(1), (f)(1)(i)(D)(1), (f)(1)(i)(F)(1), (f)(1)(i)(G)(1),
(f)(1)(i)(I)(1), (f)(1)(i)(M), (f)(2)(i)(A), (f)(2)(i)(B), and
(f)(2)(i)(O)(i) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to FCA FCG, reasoning
that this sourcebook only contains nonbinding guidance. The Commission
agrees with the commenter's reasoning and is therefore removing
references to this UK requirement from the Order's list of UK
requirements comparable to the Commission's recordkeeping, reporting,
notification, and securities count requirements.\450\
---------------------------------------------------------------------------

    \450\ Compare paras. (f)(1)(i)(B)(1), (f)(1)(i)(J)(1),
(f)(1)(i)(L)(1), (f)(2)(i)(A), (f)(2)(i)(B), and (f)(2)(i)(D) of the
UK Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(B)(1), (f)(1)(i)(J)(1), (f)(1)(i)(L)(1), (f)(2)(i)(A),
(f)(2)(i)(B), and (f)(2)(i)(D) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to FCA FIT, reasoning
that FCA FIT only contains nonbinding guidance. The Commission agrees
with the commenter's reasoning and is therefore removing references to
this UK requirement from the Order's list of UK requirements comparable
to the Commission's recordkeeping, reporting, notification, and
securities count requirements.\451\
---------------------------------------------------------------------------

    \451\ Compare paras. (f)(1)(i)(K) and (f)(2)(i)(M) of the UK
Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(K) and (f)(2)(i)(M) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to the EBA Guidelines
on Outsourcing, reasoning that they only contain nonbinding guidance.
The Commission agrees with the commenter's reasoning and is therefore
removing references to this UK requirement from the Order's list of UK
requirements comparable to the Commission's recordkeeping, reporting,
notification, and securities count requirements.\452\
---------------------------------------------------------------------------

    \452\ Compare para. (f)(2)(i)(R) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(2)(i)(R) of the
Order.
---------------------------------------------------------------------------

    In addition, the Commission is deleting references to FCA
provisions ending in ``G'', because they only contain nonbinding
guidance.\453\ Therefore, these UK requirements are removed from the
Order's list of UK requirements comparable to the Commission's
recordkeeping, reporting, notification, and securities count
requirements.\454\
---------------------------------------------------------------------------

    \453\ See FCA Reader's Guide: An Introduction to the Handbook
(Jan. 2019), available at: https://www.fca.org.uk/publication/handbook/readers-guide_0.pdf.
    \454\ Compare para. (f)(2)(i)(R) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(2)(i)(R) of the
Order.
---------------------------------------------------------------------------

b. Exchange Act Rules 18a-5 and 18a-6
    The commenter recommended deleting references to UK MiFIR article
25(1), which sets a duration of five years for firms to keep relevant
data relating to orders and transactions in financial instruments,
reasoning that this does

not correspond to, and goes beyond, the requirements of Exchange Act
rules 18a-5 and 18a-6. With respect to Exchange Act rule 18a-6, the
five year record retention period is directly relevant to the record
preservation requirement in Exchange Act rule 18a-6. With respect to
Exchange Act rule 18a-5, while this UK requirement contains a record
retention element, it also contains a record creation requirement that
is relevant to Exchange Act rule 18a-5. Accordingly, the Commission is
not removing references to this UK requirement from the Order's list of
UK requirements comparable to Exchange Act rules 18a-5 and 18a-6.
    The commenter recommended deleting references to PRA Internal
Capital Adequacy Assessment Rules, which relate to a firm's
distribution of financial resources, own funds and internal capital,
and related risk management processes, reasoning that they do not
correspond to, and go beyond, the requirements of Exchange Act rules
18a-5 and 18a-6. While the rules require firms to implement
``strategies, processes and systems'', the FCA Application states that
in practice, one or more of these provisions ``will require the
maintenance of full records of the Investment Firm's assets,
liabilities, income and expense and capital accounts to be maintained''
which is relevant to Exchange Act rules 18a-5 and 18a-6.\455\
Accordingly, the Commission is not removing references to these UK
requirements from the Order's list of UK requirements comparable to
Exchange Act rules 18a-5 and 18a-6, except with respect to Exchange Act
rules 18a-6(b)(1)(iv) and (b)(2)(ii) for which the Commission agrees
with the commenter's reasoning.\456\
---------------------------------------------------------------------------

    \455\ See FCA Application at 109.
    \456\ Compare para. (f)(2)(i)(D) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(2)(i)(D) of the
Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to certain parts of
FCA CASS, which relate to a firm's holding of safe custody assets and
client money, reasoning that this does not correspond to, and goes
beyond, the requirements of Exchange Act rules 18a-5 and 18a-6.
However, the FCA Application states that, among other things, these
provisions require firms to ``maintain detailed, up-to-date and
accurate accounts and records distinguishing client money and assets
from those of the Investment Firm,'' which is relevant to Exchange Act
rules 18a-5 and 18a-6.\457\ Accordingly, the Commission is not removing
references to these UK requirements from the Order's list of UK
requirements comparable to Exchange Act rules 18a-5 and 18a-6, except
with respect to Exchange Act rule 18a-5(a)(12) and Exchange Act rules
18a-6(b)(1)(iv) and (b)(2)(ii) for which the Commission agrees with the
commenter's reasoning.\458\
---------------------------------------------------------------------------

    \457\ See FCA Application at 110.
    \458\ Compare paras. (f)(1)(i)(L)(1) and (f)(2)(i)(D) of the UK
Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(L)(1) and (f)(2)(i)(D) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to UK EMIR article
11, which relates to the timely confirmation of transactions, and UK
EMIR article 39, which relates to a firm's requirement to segregate the
positions they clear for a client with a UK central counterparty from
their own positions, reasoning that they do not correspond to, and go
beyond, the requirements of Exchange Act rules 18a-5 and 18a-6. While
these UK requirements contain segregation and confirmation
requirements, they also contain record creation requirements that are
relevant to Exchange Act rule 18a-5. Accordingly, the Commission is not
removing references to these UK requirements from the Order's list of
UK requirements comparable to Exchange Act rule 18a-5, except with
respect to Exchange Act rule 18a-5(a)(12) for which the Commission
agrees with the commenter's reasoning.\459\ However, the Commission
agrees with the commenter's reasoning with respect to Exchange Act rule
18a-6 and is removing references to these UK requirements from the
Order's list of UK requirements comparable to Exchange Act rule 18a-
6.\460\
---------------------------------------------------------------------------

    \459\ Compare para. (f)(1)(i)(L)(1) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(1)(i)(L)(1) of
the Order.
    \460\ Compare paras. (f)(2)(i)(A), (f)(2)(i)(B),
(f)(2)(i)(C)(1), (f)(2)(i)(D), (f)(2)(i)(G)(1), (f)(2)(i)(I)(1), and
(f)(2)(i)(O)(1) of the UK Substituted Compliance Notice and Proposed
Order, with paras. (f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(C)(1),
(f)(2)(i)(D), (f)(2)(i)(G)(1), (f)(2)(i)(I)(1), and (f)(2)(i)(O)(1)
of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to UK CRR articles
103, 105(3), and 105(10), which relate to the firm's management of
trading book exposures, reasoning that they do not correspond to, and
go beyond, the requirements of Exchange Act rules 18a-5 and 18a-6.
However, the FCA Application states that these requirements in practice
require firms to have ``a record of their long and short positions to
enable these to be monitored'' which is relevant to Exchange Act rules
18a-5 and 18a-6.\461\ Accordingly, the Commission is not removing
references to these UK requirements from the Order's list of UK
requirements comparable to Exchange Act rules 18a-5 and 18a-6.
---------------------------------------------------------------------------

    \461\ See FCA Application at 111.
---------------------------------------------------------------------------

    The commenter recommended deleting references to UK CRR article
104(1)(j) from the Order, reasoning that the provision does not exist.
The Commission agrees with the commenter's reasoning, and is therefore
removing references to this citation from the Order's list of UK
requirements comparable to Exchange Act rules 18a-5 and 18a-6.\462\
---------------------------------------------------------------------------

    \462\ Compare paras. (f)(2)(i)(E)(1) and (f)(2)(i)(H)(1) of the
UK Substituted Compliance Notice and Proposed Order, with paras.
(f)(2)(i)(E)(1) and (f)(2)(i)(H)(i) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting certain references to FCA COBS,
which relate to client agreements for services and client reporting,
reasoning that they do not correspond to, and go beyond, the
requirements of Exchange Act rules 18a-5 and 18a-6. With respect to
Exchange Act rule 18a-5, these provisions (other than FCA COBS 9A.2.1R
which is discussed above) generally also contains record creation
requirements that are relevant to Exchange Act rule 18a-5 and Exchange
Act rules 18a-6(b)(1)(ix) and (d)(4) and (d)(5) (which implicate record
creation). Accordingly, the Commission is not removing references to
most of these UK requirements from the Order's list of UK requirements
comparable to Exchange Act rule 18a-5 and Exchange Act rule 18a-
6(b)(1)(ix), except for FCA COBS 8A.1.9R and 16A.2.1R with respect to
Exchange Act rule 18a-5(a)(4), (a)(8), and (b)(3) for which the
Commission agrees with the commenter's reasoning.\463\ With respect to
the remainder of Exchange Act rule 18a-6, the Commission is removing
references to these UK requirements because FCA COBS is relevant to
record creation but not record preservation.\464\
---------------------------------------------------------------------------

    \463\ Compare paras. (f)(1)(i)(D)(1) and (f)(1)(i)(I)(1) of the
UK Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(D)(1) and (f)(1)(i)(I)(1) of the Order.
    \464\ Compare paras. (f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(D),
(f)(2)(i)(F)(1), (f)(2)(i)(G)(1), and (f)(2)(i)(Q) of the UK
Substituted Compliance Notice and Proposed Order, with paras.
(f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(D), (f)(2)(i)(F)(1),
(f)(2)(i)(G)(1), and (f)(2)(i)(Q) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to MLR 2017
Regulations 28 through 30, which relate to anti-money laundering
customer due diligence measures, reasoning that they do not correspond
to, and go beyond, the requirements of Exchange Act rules 18a-5 and
18a-6. These UK provisions contain record creation requirements
regarding customers, but not record preservation requirements.
Accordingly, the Commission is not removing

references to these UK requirements from the Order's list of UK
requirements comparable to Exchange Act rule 18a-5 and Exchange Act
rules 18a-6(b)(1)(xii) and (b)(2)(vii) (which implicate record
creation), except with respect to Exchange Act rule 18a-5(a)(4),
(a)(6), (a)(15), (b)(3), (b)(6), and (b)(11) for which the Commission
agrees with the commenter's reasoning.\465\ However, the Commission is
removing references to these UK requirements from the Order's list of
UK requirements comparable to the remainder of Exchange Act rule 18a-
6.\466\
---------------------------------------------------------------------------

    \465\ Compare paras. (f)(1)(i)(D)(1) and (f)(1)(i)(G)(1) of the
UK Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(D)(1) and (f)(1)(i)(G)(1) of the Order.
    \466\ Compare paras. (f)(2)(i)(A), (f)(2)(i)(B), and
(f)(2)(i)(D) of the UK Substituted Compliance Notice and Proposed
Order, with paras. (f)(2)(i)(A), (f)(2)(i)(B), and (f)(2)(i)(D) of
the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to FCA COND at
paragraphs 2C, 2D, 3B, 3C, 5D, and 5F, which set out certain minimum
requirements for obtaining and maintaining PRA authorization, reasoning
that they do not correspond to, and go beyond, the requirements of
Exchange Act rules 18a-5 and 18a-6. However, the FCA Application states
that these requirements effectively require firms to have ``systems and
controls for maintaining records'' which is relevant to Exchange Act
rules 18a-5 and 18a-6.\467\ Accordingly, the Commission is not removing
references to this UK requirement from the Order's list of UK
requirements comparable to Exchange Act rules 18a-5 and 18a-6, except
with respect to Exchange Act rule 18a-5(a)(6), (a)(8), (a)(15), (b)(6),
and (b)(11) and Exchange Act rules 18a-6(b)(1)(iv) and (b)(2)(ii) for
which the Commission agrees with the commenter's reasoning.\468\
---------------------------------------------------------------------------

    \467\ See FCA Application at 126-27.
    \468\ Compare paras. (f)(1)(i)(G)(1), (f)(1)(i)(I)(1), and
(f)(2)(i)(D) of the UK Substituted Compliance Notice and Proposed
Order, with paras. (f)(1)(i)(G)(1), (f)(1)(i)(I)(1), and
(f)(2)(i)(D) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to PRA Fundamental
Rules 2 and 6 and FCA PRIN 2.1.1R(2) and (3), which set out certain
high-level principles for businesses, reasoning that they do not
correspond to, and go beyond, the requirements of Exchange Act rules
18a-5 and 18a-6. However, the FCA Application states that, ``In
practice, this will require UK firms to maintain adequate records and
record-keeping systems.'' \469\ Accordingly, the Commission is not
removing references to these UK requirements from the Order's list of
UK requirements comparable to Exchange Act rules 18a-5 and 18a-6,
except with respect to Exchange Act rule 18a-5(a)(6), (a)(8), (a)(15),
(b)(6), and (b)(11) and Exchange Act rules 18a-6(b)(1)(iv) and
(b)(2)(ii) for which the Commission agrees with the commenter's
reasoning.\470\
---------------------------------------------------------------------------

    \469\ See FCA Application at 127.
    \470\ Compare paras. (f)(1)(i)(G)(1), (f)(1)(i)(I)(1), and
(f)(2)(i)(D) of the UK Substituted Compliance Notice and Proposed
Order, with paras. (f)(1)(i)(G)(1), (f)(1)(i)(I)(1), and
(f)(2)(i)(D) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to FSMA section
63(2A), which relates to the annual fit and proper reassessment
requirement, and FSMA section 63F(5), which relates to the validity of
a certificate issued to a firm's ``certification staff,'' and FSMA
section 63(2A), which relates to the annual fit and proper reassessment
requirement, reasoning that they do not correspond to, and go beyond,
the requirements of Exchange Act rules 18a-5 and 18a-6. However, the
FCA Application cites these provisions to support the statement that
these certifications must be conducted annually,\471\ and frequency of
these certifications is relevant to Exchange Act rules 18a-5 and 18a-6.
Accordingly, the Commission is not removing references to this UK
requirement from the Order's list of UK requirements comparable to
Exchange Act rules 18a-5 and 18a-6.
---------------------------------------------------------------------------

    \471\ See FCA Application at 203.
---------------------------------------------------------------------------

    The commenter recommended deleting references to the PRA
Certification Rules, the general PRA regime for certified employees,
reasoning that they do not correspond to, and go beyond, the
requirements of Exchange Act rules 18a-5 and 18a-6. The Commission
agrees with the commenter's reasoning with respect to most of the PRA
Certification Rules, but PRA Certification Rule 2.1 requires employees
performing certification functions to have a valid certificate issued
by the firm, which is relevant to Exchange Act rule 18a-5. Accordingly,
the Commission is replacing references to the PRA Certification Rules
with PRA Certification Rule 2.1 in the Order's list of UK requirements
comparable to Exchange Act rules 18a-5 and 18a-6.\472\
---------------------------------------------------------------------------

    \472\ Compare paras. (f)(1)(i)(K) and (f)(2)(i)(M) of the UK
Substituted Compliance Notice and Proposed Order, with paras.
(f)(1)(i)(K) and (f)(2)(i)(M) of the Order.
---------------------------------------------------------------------------

    The commenter recommended adding to paragraph (f)(1) of the Order
regarding Exchange Act rule 18a-5 references to PRA Recordkeeping Rule
2.1 and FCA SYSC 9.1.1AR, which require firms to ``arrange for orderly
records to be kept of its business and internal organization'', and to
``arrange for records to be kept of all services, activities, and
transactions undertaken by it,'' respectively. The Commission agrees
these UK requirements are relevant and is therefore adding them to the
Order's list of UK requirements comparable to Exchange Act rule 18a-
5.\473\
---------------------------------------------------------------------------

    \473\ Compare paras. (f)(1)(i)(A)(1), (f)(1)(i)(B)(1),
(f)(1)(i)(C)(1), and (f)(1)(i)(F)(1) of the UK Substituted
Compliance Notice and Proposed Order, with paras. (f)(1)(i)(A)(1),
(f)(1)(i)(B)(1), (f)(1)(i)(C)(1), and (f)(1)(i)(F)(1) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraphs (f)(1) and
(f)(2) of the Order references to UK MiFID Org Reg article 59, which
set out the requirement to confirm execution of an order to the client,
reasoning that it does not correspond to, and goes beyond, the
requirements of Exchange Act rules 18a-5 and 18a-6. UK MiFID Org Reg
article 59 identifies specific data elements that are relevant to the
records required to be created under Exchange Act rule 18a-5, so the
Commission is not removing references to this requirement from the
Order's list of UK requirements comparable to Exchange Act rule 18a-5.
However, the Commission agrees with the commenter's reasoning with
respect to Exchange Act rule 18a-6 because UK MiFID Org Reg article 59
relates to record creation but not record preservation and is therefore
removing references to this requirement from the Order's list of UK
requirements comparable to Exchange Act rule 18a-6.\474\
---------------------------------------------------------------------------

    \474\ Compare paras. (f)(2)(i)(A), (f)(2)(i)(B), (f)(2)(i)(D),
and (f)(2)(i)(G)(1) of the UK Substituted Compliance Notice and
Proposed Order, with paras. (f)(2)(i)(A), (f)(2)(i)(B),
(f)(2)(i)(D), and (f)(2)(i)(G)(1) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraphs (f)(1)(i)(K) and
(f)(2)(i)(M) of the Order references to PRA General Organisational
Requirements Rules 5.1 and 5.2, regarding management body requirements,
reasoning that they do not correspond to, and go beyond, the
requirements of Exchange Act rules 18a-5(a)(10) and (b)(8) (employment
application record creation) and 18a-6(d)(1) (employment application
record preservation). However, the FCA Application states that a ``CRR
Firm's management body must define, oversee and be accountable for the
implementation of the governance arrangements including, among other
matters, ensuring the prevention of conflicts of interest'' (with
respect to PRA General Organisational Requirement 5.1) and ``[e]ach
member of the management body of a CRR Firm must be of sufficiently
good repute and possess sufficient knowledge, skills and experience to
perform their duties''

(with respect to PRA General Organisational Requirement 5.2),\475\ both
of which are relevant to employment application record creation but not
employment application record preservation. Accordingly, the Commission
is not removing references to these UK requirements from the Order's
list of UK requirements comparable to Exchange Act rules 18a-5(a)(10)
and (b)(8), but is removing references to these requirements from the
Order's list of UK requirements comparable to Exchange Act rule 18a-
6(d)(1).
---------------------------------------------------------------------------

    \475\ See FCA Application at 127.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraphs (f)(1)(i)(K) and
(f)(2)(i)(M) of the Order references to FCA SYSC 4.3A.1R and 4.3A.3R
(management body), FCA SYSC 10.1.7R (managing conflicts), and FCA SYSC
27 (certification regime), reasoning that they do not correspond to,
and go beyond, the requirements of Exchange Act rules 18a-5(a)(10) and
(b)(8) (employment application record creation) and 18a-6(d)(1)
(employment application record preservation). These provisions identify
characteristics and standards applicable to a firm's employees, or
require a conflicts of interest record to be maintained, which are
relevant to employment application record creation but not employment
application record preservation. Accordingly, the Commission is not
removing references to these UK requirements from the Order's list of
UK requirements comparable to Exchange Act rules 18a-5(a)(10) and
(b)(8), but is removing references to these requirements from the
Order's list of UK requirements comparable to Exchange Act rule 18a-
6(d)(1).
    The commenter recommended replacing in paragraph (f)(1)(i)(K) of
the Order references to UK MiFID Org Reg article 21(1)(a) with
references to UK MiFID Org Reg article 21(1)(d) due to an incorrect
reference in the FCA Application with respect to Exchange Act rules
18a-5(a)(10) and (b)(8). The Commission agrees with the commenter's
reasoning and is therefore replacing references to UK MiFID Org Reg
article 21(1)(a) with references to UK MiFID Org Reg article 21(1)(d)
in the Order's list of UK requirements comparable to Exchange Act rules
18a-5(a)(10) and (b)(8).\476\
---------------------------------------------------------------------------

    \476\ Compare para. (f)(1)(i)(K) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(1)(i)(K) of the
Order.
---------------------------------------------------------------------------

    The commenter recommended replacing in paragraphs (f)(1)(i)(N)(1)
and (f)(1)(i)(O)(1) of the Order references to UK EMIR RTS article
15(1) with UK EMIR RTS article 15(1)(a) with respect to Exchange Act
rules 18a-5(a)(18) and (b)(14) because the remainder of article 15(1)
does not include a record creation requirement. The Commission agrees
with the commenter's reasoning and is therefore replacing references to
UK EMIR RTS article 15(1) with UK EMIR RTS article 15(1)(a) in the
Order's list of UK requirements comparable to Exchange Act rules 18a-
5(a)(18) and (b)(14).
    The commenter recommended deleting from paragraph (f)(2)(E)(1) of
the Order references to UK CRR and UK CRR Reporting ITS, which relate
to supervisory reports to be made, reasoning that they do not
correspond to, and go beyond, the requirements of Exchange Act rule
18a-6(b)(1)(v). Although these UK laws relate to reporting
requirements, the information contained in these reports is relevant to
the records required by Exchange Act rule 18a-6(b)(1)(v). In addition,
the FCA Application specifically cites these requirements as comparable
to Exchange Act rule 18a-6(b)(1)(v).\477\ Accordingly, the Commission
is not removing references to this UK requirement from the Order's list
of UK requirements comparable to Exchange Act rule 18a-6(b)(1)(v).
---------------------------------------------------------------------------

    \477\ See FCA Application at 146-47.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraph (f)(2)(i)(I)(1)
of the Order references to UK CRR articles 286 and 293(1)(d), which
relate to the use of internal models for credit risk, reasoning that
they do not correspond to, and go beyond, the requirements of Exchange
Act rule 18a-6(b)(1)(ix). The ``policies, processes and systems'' (with
respect to UK CRR article 286) and ``adequate resources [ ] devoted to
credit and counterparty risk control'' (with respect to UK CRR article
293(1)(d)) in practice require firms to maintain records relevant to
Exchange Act rule 18a-6(b)(1)(ix). Accordingly, the Commission is not
removing references to these UK requirements from the Order's list of
UK requirements comparable to Exchange Act rule 18a-6(b)(1)(ix).
    The commenter recommended deleting from paragraph (f)(2)(i)(I)(1)
of the Order references to PRA Risk Control Rule 2.3, which sets a
requirement that the management body approves and periodically reviews
the strategies and policies for taking up, managing, monitoring, and
mitigating risks, reasoning that it does not correspond to, and goes
beyond, the requirements of Exchange Act rule 18a-6(b)(1)(ix). The
Commission disagrees because in practice, this UK rule requires records
to manage the firm's risks. Accordingly, the Commission is not removing
references to this UK requirement from the Order's list of UK
requirements comparable to Exchange Act rule 18a-6(b)(1)(ix).
    The commenter recommended deleting from paragraph (f)(2)(i)(I)(1)
of the Order references to UK EMIR RTS, reasoning that referencing an
entire UK law without referencing a specific provision is does not
correspond to, and goes beyond, the requirements of Exchange Act rule
18a-6(b)(1)(ix). This provision is cited by the FCA Application as
directly relevant because it requires firms to ``implement formalised
processes'' for ``identifying and resolving disputes,'' \478\ which is
relevant to Exchange Act rule 18a-6(b)(1)(ix). Accordingly, the
Commission is not removing references to this UK requirement from the
Order's list of UK requirements comparable to Exchange Act rule 18a-
6(b)(1)(ix).
---------------------------------------------------------------------------

    \478\ See FCA Application at 153-54.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraph (f)(2)(i)(M) of
the Order references to FSMA sections 60A(2) and 63F(2), SMR
Applications and Notifications Rules, PRA Certification Rules, PRA
General Organisational Requirements Rules, and FCA SUP, reasoning that
they do not correspond to, and go beyond, the requirements of Exchange
Act rule 18a-6(d)(1). The Commission agrees with the commenter's
reasoning because these provisions relate to record creation rather
than record preservation, and is removing references to these UK
requirements from the Order's list of UK requirements comparable to
Exchange Act rule 18a-6(d)(1).
    The commenter recommended deleting from paragraph (f)(2)(i)(O) of
the Order references to FCA SYSC 6.1.1R and 10.1.6R, which relate to
risk management control systems and risk control records, reasoning
that they do not correspond to, and go beyond, the requirements of
Exchange Act rule 18a-6(d)(3). However, the FCA Application cites these
provisions as requiring ``the maintenance of a range of compliance
policies and procedures'',\479\ which is relevant to Exchange Act rule
18a-6(d)(3). Accordingly, the Commission is not removing references to
these UK requirements from the Order's list of UK requirements
comparable to Exchange Act rule 18a-6(d)(3).
---------------------------------------------------------------------------

    \479\ See FCA Application at 159-60.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraph (f)(2)(i)(P)(1)
of the Order references to FCA SYSC 4.1.1R(1), which is a general
requirement concerning a firm's

governance, reasoning that it does not correspond to, and goes beyond,
the requirements of Exchange Act rules 18a-6(d)(4) and (d)(5). However,
the FCA Application cites this provision as requiring ``the maintenance
of a range of risk management records'',\480\ which is relevant to
Exchange Act rules 18a-6(d)(4) and (d)(5). Accordingly, the Commission
is not removing references to these UK requirements from the Order's
list of UK requirements comparable to Exchange Act rules 18a-6(d)(4)
and (d)(5).
---------------------------------------------------------------------------

    \480\ See FCA Application at 160-61.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraph (f)(2)(i)(Q) of
the Order references to FCA SYSC 4.1.1R(1), which is a general
requirement concerning a firm's governance, reasoning that it does not
correspond to, and goes beyond, the requirements of Exchange Act rule
18a-6(e). However, the FCA Application cites this provision as
requiring ``sound security mechanisms in place to guarantee the
security and authentication of the means of transfer of information,
minimize the risk of data corruption and unauthorized access and to
prevent information leakage maintaining the confidentiality of the data
at all times'',\481\ which is relevant to Exchange Act rule 18a-6(e).
Accordingly, the Commission is not removing references to these UK
requirements from the Order's list of UK requirements comparable to
Exchange Act rule 18a-6(e).
---------------------------------------------------------------------------

    \481\ See FCA Application at 165.
---------------------------------------------------------------------------

c. Exchange Act Rule 18a-7
    The commenter recommended deleting references to FSMA sections
137A, 137G, and 137T from paragraph (f)(3)(i)(A) reasoning that these
provisions relate to the FCA's and PRA's powers to make rules and do
not impose requirements on firms. Additionally, the commenter
recommended deleting reference to CRD article 104(1)(j) reasoning that
this provision does not form part of UK law. The Commission agrees with
the commenter's reasoning and is removing references to these UK
requirements from the list of UK requirements comparable to Exchange
Act rules 18a-7(a)(1) and (a)(2).\482\
---------------------------------------------------------------------------

    \482\ Compare para. (f)(3)(i)(A) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(3)(i)(A) of the
Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to UK CRR rules that
are set out in Part 8 of UK CRR relating to public disclosure in
paragraph (f)(3)(ii)(A), reasoning that they do not correspond to, and
go beyond, the requirements of Exchange Act rule 18a-7(a)(3) and
Exchange Act rule 18a-7(j). However, the FCA application cites CRR
articles 431, 433, 452, 454, and 455 as requiring, among other things,
firms to make ``Pillar III' disclosures which include information on
the use of capital models and matters such as credit risk, the exposure
values by class of exposures subject to evaluation using models, and
internal controls on the development and use of models.\483\ This
information is relevant to rule 18a-7(a)(3) and 18a-7(j). Accordingly,
the Commission is removing references to UK CRR rules that are set out
in Part 8 of UK CRR except for UK CRR articles 431, 433, 452, 454, and
455 in the Order's list of UK requirements comparable to Exchange Act
rule 18a-7(a)(3) and 18a-7(j).\484\
---------------------------------------------------------------------------

    \483\ See FCA Application at 178-79.
    \484\ Compare para. (f)(3)(ii)(A) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(3)(ii)(A) of
the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting references to FSMA sections
137A, 137G, and 137T in paragraph (f)(3)(ii)(A). As discussed above,
the commenter has stated that these sections relate to the FCA's and
the PRA's powers to make rules, and do not impose requirements on
firms. The Commission agrees with this reasoning and is therefore
removing references to these to these UK requirements from the Order's
list of requirements comparable to Exchange Act rules 18a-7(a)(3) and
18a-7(j).\485\
---------------------------------------------------------------------------

    \485\ Compare para. (f)(3)(ii)(A) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(3)(ii)(A) of
the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraph (f)(3)(iv)(A)
references to the following FCA CASS sections: 6.2.2R, 6.6.2R, 6.6.3.R,
6.6.33G, 6.6.34R, 7.12.2R, 7.15.2R, 7.15.3R, 7.15.20R, and 7.15.21R.
Additionally, the commenter recommended deleting references to FCA SUP
sections 3.10.4R through 3.10.7R and the following UK CRR articles:
26(2), 132(5), 154, 191, 321, 325bi, 350, 353, 368, and 418. The
commenter reasoned that these provisions do not correspond to, and go
beyond, the requirements of Exchange Act rules 18a-7(c), (d), (e), (f),
(g), and (h), and Exchange Act rule 18a-7(j). However, the FCA
Application states that, pursuant to FCA CASS 6.2.2R, 6.62R, 6.63R,
6.6.33G, 6.6.34R 7.12.2R, 7.15.2R, 7.15.3R, 7.15.20R, and 7.15.21R,
investment firms must ensure the segregation of client money and assets
from those of the firm, maintain detailed records distinguishing client
money and assets from those of the firm, and must conduct regular
reconciliations between their accounts and records and those accounts
and records of any third-parties with whom client money or assets may
be held. Additionally, the FCA Application states that the that
information about client money required under FCA CASS 7.12.2R,
7.15.2R, 7.15.3R, 7.15.20R, and 7.15.21R is comparable to the
information required under Exchange Act rules 18a-7(c)(1)(i)(B) and
17a-7(c)(3) and (4).\486\ Moreover, the FCA Application states that
certain firms must have their financial statements audited pursuant to
Companies Act section 475, and that under FCA SUP 3.8.5R and 3.10.4R
through 3.10.7R an independent auditor must submit a client money and
assets report to the FCA, within the prescribed time period and format,
providing reasonable assurance that, among other things, the investment
firm has maintained adequate systems to enable it to comply with the
FCA CASS Rules. The FCA Application goes on to state that CRR article
26(2) relates to the inclusion of a firm's interim or year-end profits
in Common Equity Tier 1 capital and the associated requirement that
such profits be verified by persons independent of the firm, and that
CRR articles 132(5) and 154 set forth requirements for a firm to engage
an external auditor to confirm the accuracy of information regarding
the firm's calculations with respect to average risk weights for
certain exposures which is comparable to the requirements under
Exchange Act rules 18a-7(c)(1)(i)(C) and 18a-7(d) through (g).
Furthermore the FCA Application states that, for firms using internal
models to calculate credit risk, operational risk, market risk
exposures, or market risk capital requirement, CRR articles 191, 321,
325bi, and 368 require various levels of internal or external audit
and/or review of the models, systems, and/or operations. The FCA
application states where investment firms rely on a depository or
management company of a collective investment undertaking, CRR articles
418, 350, and 353 require the investment firm to calculate and report
own funds requirements for the market value of haircuts, and position
risk with respect to positions in specified instruments.\487\ As a
result, the FCA Application states that the UK report review
requirements provide for comparable regulatory outcomes to the SEC
report review requirements, as both regulatory regimes require firms to
submit reports by independent auditors on the firm's financial and
operational information in order to ensure the accuracy of information
and protect

market participants. The Commission believes these provisions are
relevant to Exchange Act rules 18a-7(c), (d), (e), (f), (g), and (h).
Accordingly, the Commission is not deleting references to these UK
requirements from the Order's list of UK requirements comparable to
Exchange Act rules 18a-7(c), (d), (e), (f), (g), and (h) and Exchange
Act rule 18a-7(j).
---------------------------------------------------------------------------

    \486\ See FCA Application at 175-76.
    \487\ See FCA Application at 177 and 186-89.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraph (f)(3)(iv)(A)
reference to Capital Requirements 2013 Regulation 2(4), reasoning that
this provision does not impose requirements directly on firms. The
Commission agrees with the commenter's reasoning and, accordingly, is
removing reference to this requirement from the Order's list of UK
requirements comparable to Exchange Act rules 18a-7(c), (d), (e), (f),
(g), and (h) and Exchange Act rule 18a-7(j). However, the FCA
Application cites regulation 2(4) of the Capital Requirements (Country-
by-Country Reporting) Regulations 2013 as relevant and which the
Commission understands imposes reporting obligations directly on firms.
As a result, the Commission is including reference to this requirement
in the Order's list of UK requirements comparable to Exchange Act rule
18a-7(c), (d), (e), (f), (g), and (h) and Exchange Act rule 18a-
7(j).\488\
---------------------------------------------------------------------------

    \488\ Compare para. (f)(3)(iv)(A) of the UK Substituted
Compliance Notice and Proposed Order, with para. (f)(3)(iv)(A) of
the Order.
---------------------------------------------------------------------------

d. Exchange Act Rule 18a-8
    The commenter recommended deleting from paragraphs (f)(4)(i)(A)(1),
(f)(4)(i)(B), (f)(4)(i)(C)(1), and (f)(4)(i)(D)(1) references to FCA
SUP 15.3.12G and 15.3.14G, reasoning that these provisions are
guidance. The Commission agrees. Accordingly, the removing reference to
these requirements from the Order's list of UK requirements comparable
to Exchange Act rule 18a-8(a)(1)((i), (a)(1)(ii), (b)(1), (b)(2),
(b)(4), (c), (d), (e), and (h).\489\
---------------------------------------------------------------------------

    \489\ Compare paras. (f)(4)(i)(A)(1), (f)(4)(i)(B),
(f)(4)(i)(C)(1), and (f)(4)(i)(D)(1) of the UK Substituted
Compliance Notice and Proposed Order, with paras. (f)(4)(i)(A)(1),
(f)(4)(i)(B), (f)(4)(i)(C)(1), and (f)(4)(i)(D)(1) of the Order.
---------------------------------------------------------------------------

    The commenter recommended deleting from paragraphs (f)(4)(i)(A)(1),
(f)(4)(i)(B), (f)(4)(i)(C)(1), and (f)(4)(i)(D)(1) references to: FCA
SUP 15.3.15R, 15.3.17R, 15.3.21R; PRA Notifications Rules 2.6, 2.8, and
2.9; FCA CASS 6.657R, 7.15.33R, and Schedule 2; FCA SYSC 18.6.1R and
18.6.4G; and PRA General Organisational Requirements 2A.2, 2A.1(2), and
2A.3 to 2A.6. The commenter reasoned that these provisions do not
correspond to, and go beyond, the requirements of Exchange Act rule
18a-8(a)(1)((i), (a)(1)(ii), (b)(1), (b)(2), (b)(4), (c), (d), (e), and
(h). However, the FCA Application states that these provisions provide
for a comparable regulatory outcome to the SEC notice requirements as
these provisions require a CRR firm to notify the FCA immediately if
the firm becomes aware of, or has information that reasonably suggests,
that specified matters have occurred, may have occurred, or may occur
in the foreseeable future. Additionally, specific notification
obligations apply for breaches of requirements related to client money
and assets, and with respect to civil, criminal, or disciplinary
proceedings, fraud, errors, or other regularities, and insolvency,
bankruptcy, and winding up. Furthermore, CRR firms must have procedures
in place for employees to report a breach of, among other things, any
rule, as well as appropriate arrangements for individuals, including
employees, to disclose reportable concerns internally.\490\ In
practice, these provisions establish reporting mechanisms that will
result in regulators being notified of events relevant to the
disclosures required under rule 18a-8. Accordingly, the Commission is
not deleting references to this UK requirement from the Order's list of
UK requirements comparable to Exchange Act rule 18a-8(a)(1)((i),
(a)(1)(ii), (b)(1), (b)(2), (b)(4), (c), (d), (e), and (h).
---------------------------------------------------------------------------

    \490\ See FCA Application at 181-85.
---------------------------------------------------------------------------

e. Exchange Act Rule 18a-9
    The commenter recommends deleting from paragraph (f)(5)(1)
references to FCA CASS 6.2.1R, 6.2.2R, 6.3.4A-1R, 6.3.6AR, 6.6.2R,
6.6.3R, 6.6.33G, 6.6.34R, 6.6.47G, 6.6.5G, 6.6.8R, 7.12.1R, 7.12.2R,
7.13.12R, 7.13.32R(3), 7.13.33R(3), 7.15.2R, 7.15.5R, 7.15.9R, 7.15.3R,
7.15.8R, 7.15.20R, 7.15.21G, 10.1.2G, 10.1.3R, 10.1.7, and 10.1.9E. The
commenter also recommended deleting references to UK MiFID Org Reg
articles 74 and 75, and to UK EMIR RTS article 12. The commenter
reasoned that these provisions do not correspond to, and go beyond, the
requirements of Exchange act rule 18a-9. With respect to FCA CASS
7.12R, 7.12.2R, 7.13.12R, 7.13.32R(3), 7.13.33R(3), 7.15.2R, 7.15.5R,
7.15.9R, 7.15.3R, 7.15.8R, 7.15.20R, and 7.15.21G the Commission
agrees. These provisions relate to treatment of client money, and not
the holding of client financial instruments. Accordingly, the
Commission is removing references to these requirements from the
Order's list of UK requirements comparable to Exchange Act rule 18a-9.
Additionally, the Commission is removing references to FCA CASS
6.6.33G, 6.6.47G, and 6.6.5G as these provisions are non-binding
guidance.\491\
---------------------------------------------------------------------------

    \491\ Compare para. (f)(5)(1) of the UK Substituted Compliance
Notice and Proposed Order, with para. (f)(5)(1) of the Order.
---------------------------------------------------------------------------

    With respect to the remaining provisions, the Commission disagrees.
The FCA Applications states that, pursuant to FCA CASS 6.2.1R, firms
holding financial instruments belonging to clients must make adequate
arrangements to safeguard the ownership rights of clients and to
prevent the use of a client's financial instruments on own account
except with express consent of the client. To that end, the FCA
Application states that the remaining provisions require investment
firms to, among other things, maintain records enabling the firm to
distinguish client assets from the firm's assets, including maintaining
a client-specific safe custody asset record, and conduct on a regular
basis reconciliations between internal accounts and records and those
of any third-parties by whom client assets are held. Additionally,
firms must ensure that client financial instruments deposited with
third-party are identifiable separately from those of the firm and the
third-party, and must minimize risk of loss of client assets. Moreover,
the remaining provisions also require that checks and reconciliations
must be carried out by a person who is independent of the production or
maintenance of the records to be checked and/or reconciled, and must
record any liens or rights of set-off against so that ownership is
clear. Firms are also required, pursuant to the remaining provisions,
to keep any internal records and accounts of client assets separate
from any records the firm obtains from any third parties, and must also
create specified records regarding each record check and
reconciliation. Firms are required under the cited provision to keep
detailed records in relation to every client order and decision to
deal, and must also, with respect to verifying open transactions,
comply with certain confirmation and portfolio reconciliation
requirements for uncleared OTC derivatives contracts. Finally, firms
must maintain a client asset resolution pack that can be used to
achieve a timely return of client assets in a resolution scenario, as
well as internal and external client asset reconciliations that must be
available or retrievable within prescribed time

periods.\492\ Based on these provisions, the FCA Application states
that the UK periodic securities count requirements provide for a
comparable regulatory outcome to the Commission's periodic securities
count requirements.\493\ The Commission believes these provisions are
relevant to the requirements of rule 18a-9. Accordingly, the Commission
is not removing references to these UK requirements from the Order's
list of UK requirements comparable to Exchange Act rule 18a-9.
---------------------------------------------------------------------------

    \492\ See FCA Application at 129-36.
    \493\ See FCA Application at 129.
---------------------------------------------------------------------------

f. Exchange Act Section 15F(g)
    The commenter recommended deleting from paragraph (f)(6) references
to FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D, and 5F, stating that
these provisions set our certain minimum requirements for obtaining and
maintaining PRA authorization. The commenter also recommended removing
references in paragraph (f)(6) to PRA Fundamental Rules 2 and 6, and
FCA PRIN 2.1.1R(2) and (3), stating that these provisions set out
certain high-level principals for business. The commenter reasoned that
these provisions do not correspond to, and go beyond, the requirements
of Exchange Act section 15F(g). The Commission agrees with respect to
references to FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D, and 5F.
Accordingly, the Commission is removing references to FCA COND at
paragraphs 2C, 2D, 3B, 3C, 5D, and 5F from the Order's list of
requirements comparable to Exchange Act section 15F(g).\494\ However,
the FCA Application states that pursuant to PRA Fundamental Rules 2 and
6, and FCA PRIN 2.1.1R(2) and (3) a UK firm must conduct its business
with due skill, care, and diligence, and take reasonable care to
organize and control its affairs responsibly and effectively. In
practice, the FCA Application states that this will require UK firms to
maintain adequate records and recordkeeping systems.\495\ The
Commission believes that these provisions are relevant to the
requirements of Exchange Act section 15F(g). Accordingly, the
Commission is not removing reference to these UK requirements from the
Order's list of requirements comparable to Exchange Act section 15F(g).
---------------------------------------------------------------------------

    \494\ Compare para. (f)(6) of the UK Substituted Compliance
Notice and Proposed Order, with para. (f)(6) of the Order.
    \495\ See FCA Application at 102.
---------------------------------------------------------------------------

IX. Supervisory and Enforcement Considerations

A. Preliminary Analysis

    Exchange Act rule 3a71-6(a)(2)(i) provides that the Commission's
assessments regarding the comparability of foreign requirements in part
should take into account ``the effectiveness of the supervisory program
administered, and the enforcement authority exercised'' by the foreign
financial regulatory authority. This provision is intended to help
ensure that substituted compliance is not predicated on rules that
appear high-quality on paper if market participants in practice are
allowed to fall short of their obligations, while also recognizing that
differences among supervisory and enforcement regimes should not be
assumed to reflect flaws in one regime or another.\496\ The FCA
Application accordingly included information regarding the supervisory
and enforcement framework applicable to derivatives markets and market
participants in the UK.
---------------------------------------------------------------------------

    \496\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18404.
---------------------------------------------------------------------------

    In proposing to grant substituted compliance in connection with the
UK, the Commission preliminarily concluded that the relevant
supervisory and enforcement considerations were consistent with
substituted compliance. That preliminary conclusion took into account
information regarding the FCA's and the PRA's roles and practices in
supervising banks and investment firms located in the UK, as well as
their enforcement-related authority and practices.\497\
---------------------------------------------------------------------------

    \497\ See UK Substituted Compliance Notice and Proposed Order,
86 FR at 18404-06.
---------------------------------------------------------------------------

B. Conclusions

    Commenters did not address the Commission's preliminary conclusions
regarding supervisory and enforcement considerations, and the
Commission continues to conclude that the relevant supervisory and
enforcement considerations in the UK are consistent with substituted
compliance. In particular, based on the available information regarding
the FCA's and the PRA's authority and practices to oversee market
participants' compliance with applicable requirements and to take
action in the event of violations, the Commission remains of the view
that, consistent with rule 3a71-6, comparability determinations reflect
UK requirements as they apply in practice.
    To be clear, the supervisory and enforcement considerations
addressed by rule 3a71-6 do not mandate that the Commission make
judgments regarding the comparative merits of U.S. and foreign
supervisory and enforcement frameworks, or to require specific findings
regarding the supervisory and enforcement effectiveness of a foreign
regime. The rule 3a71-6 considerations regarding supervisory and
enforcement effectiveness instead address whether comparability
analyses related to substituted compliance reflect requirements that
market participants must follow, and for which market participants are
subject to enforcement consequences in the event of violations. Those
considerations are satisfied here.

X. Conclusion

    It is hereby determined and ordered, pursuant to rule 3a71-6 under
the Exchange Act, that a Covered Entity (as defined in paragraph (g)(1)
of this Order) may satisfy the requirements under the Exchange Act that
are addressed in paragraphs (b) through (f) of this Order so long as
the Covered Entity is subject to and complies with relevant
requirements of the United Kingdom and with the conditions of this
Order, as amended or superseded from time to time.

(a) General Conditions.

    This Order is subject to the following general conditions, in
addition to the conditions specified in paragraphs (b) through (f):
    (1) Activities as UK ``regulated activities.'' For each condition
in paragraphs (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
FCA SYSC 4, 5, 6, 7, 9, and/or 10, PRA General Organisational
Requirements, PRA Recordkeeping Rules, PRA Remuneration Rules, PRA Risk
Control Rules, and/or MLR 2017, the Covered Entity's relevant security-
based swap activities constitute ``regulated activities'' as defined
for purposes of the relevant UK provisions, are carried on by the
Covered Entity from an establishment in the United Kingdom, and fall
within the scope of the Covered Entity's authorization from the FCA
and/or the PRA to conduct regulated activities in the United Kingdom.
    (2) Activities as UK MiFID ``investment services or activities.''
For each condition in paragraphs (b) through (f) of this Order that
requires the application of, and the Covered Entity's compliance with,
provisions of FCA PROD 3 and/or UK MiFID Org Reg, the Covered Entity's
relevant security-based swap activities (a) constitute ``investment
services or activities,'' as defined in the FCA Handbook Glossary;

(b) are carried on by the Covered Entity from an establishment in the
United Kingdom or from any other place that would cause FCA PROD 3 and/
or UK MiFID Org Reg, as applicable, to apply to those activities, and
(c) fall within the scope of the Covered Entity's authorization from
the FCA and/or PRA to conduct regulated activities in the United
Kingdom.
    (3) Activities as UK ``MiFID or equivalent third country
business.'' For each condition in paragraphs (b) through (f) of this
Order that requires the application of, and the Covered Entity's
compliance with, provisions of FCA COBS 2, 4, 6, 8A, 9A, 14, and/or
16A, the Covered Entity's relevant security-based swap activities (a)
constitute ``MiFID or equivalent third country business,'' as defined
in the FCA Handbook Glossary; (b) are carried on by the Covered Entity
from an establishment in the United Kingdom or from any other place
that would cause FCA COBS 2, 4, 6, 8A, 9A, 14, and/or 16A, as
applicable, to apply to those activities; and (c) fall within the scope
of the Covered Entity's authorization from the FCA and/or PRA to
conduct regulated activities in the United Kingdom.
    (4) Activities as UK ``designated investment business.'' For each
condition in paragraphs (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
FCA COBS 11, the Covered Entity's relevant security-based swap
activities (a) constitute ``MiFID business'' that is also ``designated
investment business,'' each as defined in the FCA Handbook Glossary;
(b) are carried on by the Covered Entity from an establishment in the
United Kingdom or from any other place that would cause FCA COBS 11, as
applicable, to apply to those activities; and (c) fall within the scope
of the Covered Entity's authorization from the FCA and/or PRA to
conduct regulated activities in the United Kingdom.
    (5) Activities as UK ``MiFID business.'' For each condition in
paragraphs (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, provisions of FCA CASS 6
and/or 7, the Covered Entity is not an ICVC as defined in the FCA
Handbook Glossary and the Covered Entity's relevant security-based swap
activities constitute ``regulated activities'' as defined for purposes
of the relevant UK provisions and ``MiFID business'' as defined in the
FCA Handbook Glossary; are carried on by the Covered Entity from an
establishment in the United Kingdom; and fall within the scope of the
Covered Entity's authorization from the FCA and/or the PRA to conduct
regulated activities in the United Kingdom.
    (6) Activities covered by FCA SYSC 10A. For each condition in
paragraphs (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, provisions of FCA SYSC
10A, the Covered Entity's relevant security-based swap activities
constitute activities described in FCA SYSC 10A.1.1(2)(a), (b), and/or
(c); are carried on by the Covered Entity from an establishment in the
United Kingdom and fall within the scope of the Covered Entity's
authorization from the FCA and/or the PRA to conduct regulated
activities in the United Kingdom.
    (7) Counterparties as UK MiFID ``clients.'' For each condition in
paragraphs (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, provisions of FCA CASS 6
and/or 7, FCA COBS 2, 4, 6, 8A, 9A, 11, 14, and/or 16A, FCA PROD 3, FCA
SYSC 10.1.8, FCA SYSC 10A, and/or UK MiFID Org Reg, the relevant
counterparty (or potential counterparty) to the Covered Entity is a
``client'' (or potential ``client''), as defined in COBS 3.2.1R.
    (8) Security-based swaps as UK MiFID ``financial instruments.'' For
each condition in paragraphs (b) through (f) of this Order that
requires the application of, and the Covered Entity's compliance with,
provisions of FCA CASS 6 and/or 7, FCA COBS 2, 4, 6, 8A, 9A, 11, 14,
and/or 16A, FCA PROD 3, FCA SYSC 10A, UK MAR, UK MAR Investment
Recommendations Regulation, and/or UK MiFID Org Reg, the relevant
security-based swap is a ``financial instrument,'' as defined in Part 1
of Schedule 2 of the UK Regulated Activities Order.
    (9) Covered Entity as UK CRD/CRR ``institution.'' For each
condition in paragraph (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
UK CRR, the Covered Entity is an ``institution,'' as defined in UK CRR
article 4(1)(3).
    (10) Covered Entity as UK ``common platform firm'' or ``third
country firm.'' For each condition in paragraph (b) through (f) of this
Order that requires the application of, and the Covered Entity's
compliance with, provisions of FCA SYSC 4, 5, 6, 7, 9, and/or 10, the
Covered Entity is either a ``common platform firm'' (other than a
``UCITS investment firm'') or a ``third country firm,'' each as defined
in the FCA Handbook Glossary.
    (11) Covered Entity as UK ``IFPRU investment firm.'' For each
condition in paragraph (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
FCA SYSC 19A, FCA IFPRU, and/or FCA BIPRU, the Covered Entity is an
``IFPRU investment firm,'' as defined in the FCA Handbook Glossary.
    (12) Covered Entity as ``UK bank'' or ``UK designated investment
firm.'' For each condition in paragraph (b) through (f) of this Order
that requires the application of, and the Covered Entity's compliance
with, provisions of FCA SYSC 19D, PRA Internal Capital Adequacy
Assessment Rules, PRA Internal Liquidity Adequacy Assessment Rules, PRA
General Organisational Requirements, PRA Remuneration Rules, and/or PRA
Risk Control Rules, the Covered Entity is a ``UK bank'' or ``UK
designated investment firm,'' each as defined in the FCA Handbook
Glossary (in the case of a provision of FCA SYSC 19D) or as defined in
the PRA Rulebook Glossary (in the case of a provision of a PRA rule).
    (13) Covered Entity's counterparties as UK EMIR ``counterparties.''
For each condition in paragraphs (b) through (f) of this Order that
requires the application of, and the Covered Entity's compliance with,
provisions of UK EMIR, UK EMIR RTS, UK EMIR Margin RTS, and/or other UK
requirements adopted pursuant to those provisions, if the relevant
provision applies only to the Covered Entity's activities with
specified types of counterparties, and if the counterparty to the
Covered Entity is not any of the specified types of counterparty, the
Covered Entity complies with the applicable condition of this Order:
    (i) As if the counterparty were the specified type of counterparty;
in this regard, if the Covered Entity reasonably determines that the
counterparty would be a financial counterparty if it were established
in the UK and authorized by an appropriate UK authority, it must treat
the counterparty as if the counterparty were a financial counterparty;
and
    (ii) Without regard to the application of UK EMIR article 13.
    (14) Security-based swap status under UK EMIR. For each condition
in paragraphs (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
UK EMIR, UK EMIR RTS, UK EMIR Margin RTS, and/or other UK requirements
adopted pursuant to those provisions, if the relevant provision applies
to the Covered Entity's OTC derivatives or OTC derivative contracts

that have not been cleared by a central counterparty, then either:
    (i) The relevant security-based swap is an ``OTC derivative'' or
``OTC derivative contract,'' as defined in UK EMIR article 2(7), that
has not been cleared by a central counterparty and otherwise is subject
to the provisions of UK EMIR article 11, UK EMIR RTS articles 11
through 15, and UK EMIR Margin RTS article 2; or
    (ii) The relevant security-based swap has been cleared by a central
counterparty that is authorized, recognized, or taken to be recognized
by a relevant UK authority to provide clearing services to clearing
members or trading venues established in the UK.
    (15) Memorandum of Understanding with the FCA and the Bank of
England (including in its capacity as the PRA). The Commission has a
supervisory and enforcement memorandum of understanding and/or other
arrangement with the FCA and the Bank of England (including in its
capacity as the PRA) addressing cooperation with respect to this Order
at the time the Covered Entity complies with the relevant requirements
under the Exchange Act via compliance with one or more provisions of
this Order.
    (16) Notice to Commission. A Covered Entity relying on this Order
must provide notice of its intent to rely on this Order by notifying
the Commission in writing. Such notice must be sent to the Commission
in the manner specified on the Commission's website. The notice must
include the contact information of an individual who can provide
further information about the matter that is the subject of the notice.
The notice must also identify each specific substituted compliance
determination within paragraphs (b) through (f) of the Order for which
the Covered Entity intends to apply substituted compliance. A Covered
Entity must promptly provide an amended notice if it modifies its
reliance on the substituted compliance determinations in this Order.
    (17) Notification Requirements Related to Changes in Capital. A
Covered Entity that is prudentially regulated relying on this Order
must apply substituted compliance with respect to the requirements of
Exchange Act rule 18a-8(c) and the requirements of Exchange Act rule
18a-8(h) as applied to Exchange Act rule 18a-8(c).

(b) Substituted Compliance in Connection With Risk Control Requirements

    This Order extends to the following provisions related to risk
control:
    (1) Internal risk management. The requirements of Exchange Act
section 15F(j)(2) and related aspects of Exchange Act rule 15Fh-
3(h)(2)(iii)(I), provided that the Covered Entity is subject to and
complies with the requirements of:
    (i) FCA CASS 6.2.1R, 7.11.1R, and 7.12.1R;
    (ii) FCA COBS 11.7A.3R;
    (iii) Either {FCA IFPRU 2.2.7R(2), 2.2.17R through 2.2.28R,
2.2.30R, and 2.2.32R through 2.2.35R and FCA BIPRU 12.3.4R, 12.3.5R,
12.3.7R, 12.3.8R, 12.3.22AR, 12.3.22BR, 12.3.27R, 12.4.-2R, 12.4.-1R,
12.4.5AR, 12.4.10R, and 12.4.11R{time}  or {PRA Internal Capital
Adequacy Assessment Rules 4.1 through 4.4, 5.1, 6.1, 7.1, 7.2, 8.1
through 8.5, 9.1, 10.1, 10.2, and 11.1 through 11.3 and PRA Internal
Liquidity Adequacy Assessment Rules 3.1, 3.2, 3.3, 4.1, 7.2, 8.1, 9.2,
11.1, 11.2, 11.4, 12.1, 12.3, and 12.4{time} ;
    (iv) FCA PRIN 2.1.1R(3);
    (v) FCA SYSC 4.1.1R(1), 4.1.2R, 4.3A.1R, 4.3A.2R, 4.3A.3R, 4.3A.4R,
7.1.4R, 7.1.17R, 7.1.18R, 7.1.18BR, 7.1.19R, 7.1.20R, 7.1.21R, 7.1.22R,
9.1.1AR, 10.1.3R, 10.1.7R, 10.1.8R, 10A.1.6R, 10A.1.8R, and 10A.1.11R
and, if the Covered Entity is a UK bank or UK designated investment
firm, also PRA General Organisational Requirements Rules 2.1, 2.2, and
5.1 through 5.3; PRA Record Keeping Rule 2.1; PRA Risk Control Rules
2.3, 2.7, and 3.1 through 3.5, and PRA Senior Management Functions Rule
8.2;
    (vi) Either {FCA SYSC 19A.2.1R, 19A.3.1R(1), 19A.3.3R, 19A.3.7R
through 19A.3.11R, 19A.3.13R, 19A.3.14R, 19A.3.16R, 19A.3.18R,
19A.3.22R, 19A.3.25R, 19A.3.27R, 19A.3.29R, 19A.3.30R, 19A.3.32R,
19A.3.35R, 19A.3.35AR, 19A.3.36R, 19A.3.38R, 19A.3.40R, 19A.3.40AR,
19A.3.44R through 19A.3.44DR, 19A.3.45R, 19A.3.47R, 19A.3.49R,
19A.3.51R, 19A.3.51AR, and 19A.3.52E{time}  or {FCA SYSC 19D.2.1R,
19D.3.1R, 19D.3.3R, 19D.3.7R through 19D.3.12R, 19D.3.15R, 19D.3.17R,
19D.3.19R, 19D.3.23R, 19D.3.25R, 19D.3.27R, 19D.3.29R, 19D.3.31R,
19D.3.32R, 19D.3.34R, 19D.3.35R through 19D.3.39R, 19D.3.42R through
19D.3.45R, 19D.3.48R through 19D.3.52R, 19D.3.54R, 19D.3.56R,
19D.3.59R, 19D.3.61R, 19D.3.62R, 19D.3.63E, and 19D.3.64R and PRA
Remuneration Rules 3.1, 4.2, 5.1, 5.3, 6.2, 6.3, 6.4, 7.2 through 7.4,
8.1, 8.2, 9.1, 11.1, 11.6, 12.1, 13.1, 14.1, and 15.2 through
15.23{time} ;
    (vii) Either {FSMA schedule 6 part 2D and FCA COND 2.4.1A{time}  or
{FSMA schedule 6 parts 3C and 5D, FCA COND 2.4.1C, and PRA Fundamental
Rules 3 through 6{time} ;
    (viii) UK CRR articles 286 through 288 and 293;
    (ix) UK EMIR Margin RTS article 2; and
    (x) UK MiFID Org Reg articles 21 through 37 and 72 through 76 and
Annex IV.
    (2) Trade acknowledgement and verification. The requirements of
Exchange Act rule 15Fi-2, provided that the Covered Entity is subject
to and complies with the requirements of UK EMIR article 11(1)(a) and
UK EMIR RTS article 12.
    (3) Portfolio reconciliation and dispute reporting. The
requirements of Exchange Act rule 15Fi-3, provided that:
    (i) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11(1)(b) and UK EMIR RTS articles 13
and 15; and
    (ii) The Covered Entity provides the Commission with reports
regarding disputes between counterparties on the same basis as it
provides those reports to the FCA pursuant to UK EMIR RTS article
15(2).
    (4) Portfolio compression. The requirements of Exchange Act rule
15Fi-4, provided that the Covered Entity is subject to and complies
with the requirements of UK EMIR RTS article 14.
    (5) Trading relationship documentation. The requirements of
Exchange Act rule 15Fi-5, other than paragraph (b)(5) to that rule when
the counterparty is a U.S. person, provided that the Covered Entity is
subject to and complies with the requirements of UK EMIR article
11(1)(a), UK EMIR RTS article 12 and UK EMIR Margin RTS article 2.

(c) Substituted Compliance in Connection With Capital and Margin

    (1) Capital. The requirements of Exchange Act section 15F(e) and
Exchange Act rules 18a-1, and 18a-1a through d, provided that:
    (i) The Covered Entity is subject to and complies with: UK CRR,
Part One (General Provisions) Article 6(1), Part Two (Own Funds), Part
Three (Capital Requirements), Part Four (Large Exposures), Part Five
(Exposures to Transferred Credit Risk), Part Six (Liquidity), and Part
Seven (Leverage); UK MiFID Org Reg article 23; UK EMIR Margin RTS,
articles 2, 3(b), 7, and 19(1)(d) and (e), (3), and (8); PRA General
Organisational Requirements Rule 2.1; PRA Fundamental Rules 2.4 and
2.5; PRA Risk Control Rules 2.3 and 3.1(1); PRA Capital Buffers Rules;
PRA Internal Capital Adequacy Assessment

Rules; PRA Internal Liquidity Adequacy Assessment Rules; PRA Liquidity
Coverage Requirement--UK Designated Investment Firms Rules; PRA
Notifications Rules 2.1, 2.4 through 2.6, 2.8, 2.9; and Part 9 of the
Bank Recovery and Resolution (No 2) Order 2014;
    (ii) The Covered Entity applies substituted compliance for the
requirements of Exchange Act rules 18a-5(a)(9), 18a-6(b)(1)(x), and
18a-8(a)(1)(i), (a)(1)(ii), (b)(1), (b)(2), and (b)(4) pursuant to this
Order; and
    (iii)(A) The Covered Entity:
    (1) Maintains liquid assets as defined in paragraph (c)(1)(iii)(B)
that have an aggregate market value that exceeds the amount of the
Covered Entity's total liabilities by at least $100 million before
applying the deduction specified in paragraph (c)(1)(iii)(C) and by at
least $20 million after applying the deduction specified in paragraph
(c)(1)(iii)(C);
    (2) Makes and preserves for three years a quarterly record that:
    (a) Identifies and values the liquid assets maintained pursuant to
paragraph (c)(1)(iii)(A)(1);
    (b) Compares the amount of the aggregate value the liquid assets
maintained pursuant to paragraph (c)(1)(iii)(A)(1) to the amount of the
Covered Entity's total liabilities and shows the amount of the
difference between the two amounts (``the excess liquid assets
amount''); and
    (c) Shows the amount of the deduction specified in paragraph
(c)(1)(iii)(C) and the amount that deduction reduces the excess liquid
assets amount;
    (3) The Covered Entity notifies the Commission in writing within 24
hours in the manner specified on the Commission's website if the
Covered Entity fails to meet the requirements of paragraph
(c)(iii)(A)(1) and includes in the notice the contact information of an
individual who can provide further information about the failure to
meet the requirements; and
    (4) Includes its most recent statement of financial condition filed
with its local supervisor (whether audited or unaudited) with its
initial written notice to the Commission of its intent to rely on
substituted compliance under condition (a)(16) above.
    (B) For the purposes of paragraph (c)(1)(iii)(A)(1), liquid assets
are:
    (1) Cash and cash equivalents;
    (2) Collateralized agreements;
    (3) Customer and other trading related receivables;
    (4) Trading and financial assets; and
    (5) Initial margin posted by the Covered Entity to a counterparty
or a third-party custodian, provided:
    (a) The initial margin requirement is funded by a fully executed
written loan agreement with an affiliate of the Covered Entity;
    (b) The loan agreement provides that the lender waives re-payment
of the loan until the initial margin is returned to the Covered Entity;
and
    (c) The liability of the Covered Entity to the lender can be fully
satisfied by delivering the collateral serving as initial margin to the
lender.
    (C) The deduction required by paragraph (c)(1)(iii)(A) is the
amount of the Covered Entity's risk-weighted assets calculated for the
purposes of the capital requirements identified in paragraph (c)(1)(i)
divided by 12.5.
    (2) Margin. The requirements of Exchange Act section 15F(e) and
Exchange Act rule 18a-3, provided that:
    (i) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11; UK EMIR Margin RTS; UK CRR articles
103, 105(3); 105(10); 111(2), 224, 285, 286, 286(7), 290, 295,
296(2)(b), 297(1), 297(3), and 298(1); UK MiFID Org Reg article 23(1);
PRA General Organisational Requirements Rule 2.1; and PRA Internal
Capital Adequacy Assessment Rule 4.2;
    (ii) The Covered Entity collects variation margin, as defined in
the UK EMIR Margin RTS, from a counterparty with respect to
transactions in non-cleared security-based swaps, unless the
counterparty would qualify for an exception from the collateral
collection requirements under paragraph (c)(1)(iii) or (c)(2)(iii) of
Exchange Act 18a-3;
    (iii) The Covered Entity collects initial margin, as defined in the
UK EMIR Margin RTS, from a counterparty with respect to transactions in
non-cleared security-based swaps, unless the counterparty would qualify
for an exception from the collateral collection requirements under
paragraph (c)(1)(iii) of Exchange Act rule 18a-3; and
    (iv) The Covered Entity applies substituted compliance for the
requirements of Exchange Act rule 18a-5(a)(12) pursuant to this Order.

(d) Substituted Compliance in Connection With Internal Supervision and
Compliance Requirements and Certain Exchange Act Section 15F(J)
Requirements

    This Order extends to the following provisions related to internal
supervision and compliance and Exchange Act section 15F(j)
requirements:
    (1) Internal supervision. The requirements of Exchange Act rule
15Fh-3(h) and Exchange Act sections 15F(j)(4)(A) and (j)(5), provided
that:
    (i) The Covered Entity is subject to and complies with the
requirements identified in paragraph (d)(3) of this Order;
    (ii) The Covered Entity complies with paragraph (d)(4) of this
Order; and
    (iii) This paragraph (d) does not extend to the requirements of
paragraph (h)(2)(iii)(I) to rule 15Fh-3 to the extent those
requirements pertain to compliance with Exchange Act sections
15F(j)(2), (j)(3), (j)(4)(B), and (j)(6), or to the general and
supporting provisions of paragraph (h) to rule 15Fh-3 in connection
with those Exchange Act sections.
    (2) Chief compliance officers. The requirements of Exchange Act
section 15F(k) and Exchange Act rule 15Fk-1, provided that:
    (i) The Covered Entity is subject to and complies with the
requirements identified in paragraph (d)(3) of this Order;
    (ii) All reports required pursuant to UK MiFID Org Reg article
22(2)(c) must also:
    (A) Be provided to the Commission at least annually and in the
English language;
    (B) Include a certification signed by the chief compliance officer
or senior officer (as defined in Exchange Act rule 15Fk-1(e)(2)) of the
Covered Entity that, to the best of the certifier's knowledge and
reasonable belief and under penalty of law, the report is accurate and
complete in all material respects;
    (C) Address the Covered Entity's compliance with:
    (1) Applicable requirements under the Exchange Act; and
    (2) The other applicable conditions of this Order in connection
with requirements for which the Covered Entity is relying on this
Order;
    (D) Be provided to the Commission no later than 15 days following
the earlier of:
    (1) The submission of the report to the Covered Entity's management
body; or
    (2) The time the report is required to be submitted to the
management body; and
    (E) Together cover the entire period that the Covered Entity's
annual compliance report referenced in Exchange Act section 15F(k)(3)
and Exchange Act rule 15Fk-1(c) would be required to cover.
    (3) Applicable supervisory and compliance requirements. Paragraphs
(d)(1) and (d)(2) are conditioned on the Covered Entity being subject
to and complying with the following requirements:
    (i) FCA CASS 6.2.1R, 7.11.1R, and 7.12.1R;
    (ii) FCA COBS 11.7A.3R;
    (iii) Either {FCA IFPRU 2.2.7R(2), 2.2.17R through 2.2.28R,
2.2.30R, and

2.2.32R through 2.2.35R and FCA BIPRU 12.3.4R, 12.3.5R, 12.3.7R,
12.3.8R, 12.3.22AR, 12.3.22BR, 12.3.27R, 12.4.-2R, 12.4.-1R, 12.4.5AR,
12.4.10R, and 12.4.11R{time}  or {PRA Internal Capital Adequacy
Assessment Rules 4.1 through 4.4, 5.1, 6.1, 7.1, 7.2, 8.1 through 8.5,
9.1, 10.1, 10.2 and 11.1 through 11.3 and PRA Internal Liquidity
Adequacy Assessment Rules 3.1, 3.2, 3.3, 4.1, 7.2, 8.1, 9.2, 11.1,
11.2, 11.4, 12.1, 12.3, and 12.4{time} ;
    (iv) FCA PRIN 2.1.1R(3);
    (v) FCA SYSC 4.1.1R(1), 4.1.2R, 4.3A.1R, 4.3A.2R, 4.3A.3R, 4.3A.4R,
7.1.4R, 7.1.17R, 7.1.18R, 7.1.18BR, 7.1.19R, 7.1.20R, 7.1.21R, 7.1.22R,
9.1.1AR, 10.1.3R, 10.1.7R, 10.1.8R, 10A.1.6R, 10A.1.8R, 10A.1.11R, and
24.2.6R(8) and, if the Covered Entity is a UK bank or UK designated
investment firm, also PRA Allocation of Responsibilities Rule 4.1(16);
PRA General Organisational Requirements Rules 2.1, 2.2, and 5.1 through
5.3; PRA Record Keeping Rule 2.1; PRA Risk Control Rules 2.3, 2.7, and
3.1 through 3.5; and PRA Senior Management Functions Rule 8.2;
    (vi) Either {FCA SYSC 19A.2.1R, 19A.3.1R(1), 19A.3.3R, 19A.3.7R
through 19A.3.11R, 19A.3.13R, 19A.3.14R, 19A.3.16R, 19A.3.18R,
19A.3.22R, 19A.3.25R, 19A.3.27R, 19A.3.29R, 19A.3.30R, 19A.3.32R,
19A.3.35R, 19A.3.35AR, 19A.3.36R, 19A.3.38R, 19A.3.40R, 19A.3.40AR,
19A.3.44R through 19A.3.44DR, 19A.3.45R, 19A.3.47R, 19A.3.49R,
19A.3.51R, 19A.3.51AR, and 19A.3.52E{time}  or {FCA SYSC 19D.2.1R,
19D.3.1R, 19D.3.3R, 19D.3.7R through 19D.3.12R, 19D.3.15R, 19D.3.17R,
19D.3.19R, 19D.3.23R, 19D.3.25R, 19D.3.27R, 19D.3.29R, 19D.3.31R,
19D.3.32R, 19D.3.34R, 19D.3.35R through 19D.3.39R, 19D.3.42R through
19D.3.45R, 19D.3.48R through 19D.3.52R, 19D.3.54R, 19D.3.56R,
19D.3.59R, 19D.3.61R, 19D.3.62R, 19D.3.63E, and 19D.3.64R and PRA
Remuneration Rules 3.1, 4.2, 5.1, 5.3, 6.2, 6.3, 6.4, 7.2, through 7.4,
8.1, 8.2, 9.1, 11.1, 11.6, 12.1, 13.1, 14.1, and 15.2 through
15.23{time} ;
    (vii) Either {FSMA schedule 6 part 2D and FCA COND 2.4.1A{time}  or
{FSMA schedule 6 parts 3C and 5D, FCA COND 2.4.1C, and PRA Fundamental
Rules 3 through 6{time} ;
    (viii) UK CRR articles 286 through 288 and 293;
    (ix) UK EMIR Margin RTS article 2; and
    (x) UK MiFID Org Reg articles 21 through 37 and 72 through 76 and
Annex IV.
    (4) Additional condition to paragraph (d)(1). Paragraph (d)(1)
further is conditioned on the requirement that the Covered Entity
complies with the provisions specified in paragraph (d)(3) as if those
provisions also require compliance with:
    (i) Applicable requirements under the Exchange Act; and
    (ii) The other applicable conditions of this Order in connection
with requirements for which the Covered Entity is relying on this
Order.
(e) Substituted Compliance in Connection With Counterparty Protection
Requirements.
    This Order extends to the following provisions related to
counterparty protection:
    (1) Disclosure of information regarding material risks and
characteristics. The requirements of Exchange Act rule 15Fh-3(b)
relating to disclosure of material risks and characteristics of one or
more security-based swaps subject thereto, provided that the Covered
Entity, in relation to that security-based swap, is subject to and
complies with the requirements of:
    (i) FCA COBS 2.2A.2R (excluding paragraph (1)(c) thereof),
6.1ZA.11R, 6.1ZA.12R, 6.2B.33R, 9A.3.6R, and 14.3A.3R; and
    (ii) Either {UK MiFID Org Reg articles 48 through 50{time}  or {FCA
COBS 6.1ZA.9UK, 6.1ZA.14UK, and 14.3A.5UK{time} .
    (2) Disclosure of information regarding material incentives or
conflicts of interest. The requirements of Exchange Act rule 15Fh-3(b)
relating to disclosure of material incentives or conflicts of interest
that a Covered Entity may have in connection with one or more security-
based swaps subject thereto, provided that the Covered Entity, in
relation to that security-based swap, is subject to and complies with
the requirements of either:
    (i) FCA SYSC 10.1.8R and UK MiFID Org Reg articles 33 to 35;
    (ii) FCA COBS 2.3A.5R, 2.3A.6R, 2.3A.7E, and 2.3A.10R through
2.3A.14R; or
    (iii) UK MAR article 20(1) and UK MAR Investment Recommendations
Regulation articles 5 and 6.
    (3) ``Know your counterparty.'' The requirements of Exchange Act
rule 15Fh-3(e), as applied to one or more security-based swap
counterparties subject thereto, provided that the Covered Entity, in
relation to the relevant security-based swap counterparty, is subject
to and complies with the requirements of:
    (i) FCA SYSC 6.1.1R;
    (ii) UK MiFID Org Reg articles 21, 22, 25, and 26 and applicable
parts of Annex I;
    (iii) FCA SYSC 4.1.1R(1);
    (iv) Either {FCA IFPRU 2.2.7R(2) and 2.2.32R{time}  or {PRA General
Organisational Requirement 2.1 and PRA Internal Capital Adequacy
Assessment Rule 10.1{time} ;
    (v) MLR 2017 Regulations 27 and 28; and
    (vi) MLR 2017 Regulations 19(1) through (3), as applied to
policies, controls, and procedures regarding customer due diligence.
    (4) Suitability. The requirements of Exchange Act rule 15Fh-3(f),
as applied to one or more recommendations of a security-based swap or
trading strategy involving a security-based swap subject thereto,
provided that:
    (i) The Covered Entity, in relation to the relevant recommendation,
is subject to and complies with the requirements of:
    (A) FCA COBS 4.2.1R, 9A.2.1R, and 9A.2.16R;
    (B) FCA PROD 3.2.1R and 3.3.1R;
    (C) FCA SYSC 5.1.5AAR and 5.1.5ABR; and
    (D) UK MiFID Org Reg articles 21(1)(b) and (d), 54, and 55; and
    (ii) The counterparty to which the Covered Entity makes the
recommendation is a ``professional client'' mentioned in FCA COBS
3.5.2R and is not a ``special entity'' as defined in Exchange Act
section 15F(h)(2)(C) and Exchange Act rule 15Fh-2(d).
    (5) Fair and balanced communications. The requirements of Exchange
Act rule 15Fh-3(g), as applied to one or more communications subject
thereto, provided that the Covered Entity, in relation to the relevant
communication, is subject to and complies with the requirements of:
    (i) Either {FCA COBS 2.1.1R and FCA COBS 4.2.1R{time}  or {FCA COBS
2.1.1AR and FCA COBS 4.2.1R{time} ;
    (ii) FCA COBS 2.2A.2R (excluding paragraph (1)(c) thereof),
2.2A.3R, 6.1ZA.11R, 6.1ZA.12R, 6.1ZA.13R, 6.2B.33R, 6.2B.34R, 9A.3.6R,
and 14.3A.3R;
    (iii) Either {UK MiFID Org Reg articles 46 through 48{time}  or
{FCA COBS 4.5A.9UK, 4.7.-1AUK, 6.1ZA.5UK, 6.1ZA.8UK, 6.1ZA.17UK,
6.1ZA.19UK, 6.1ZA.20UK, 8A.1.5UK to 8A.1.7UK, 14.3A.5UK, 14.3A.7UK, and
14.3A.9UK{time} ;
    (iv) UK MAR Investment Recommendations Regulation articles 3 and 4;
and
    (v) UK MAR articles 12(1)(c), 15, and 20(1).
    (6) Daily mark disclosure. The requirements of Exchange Act rule
15Fh-3(c), as applied to one or more security-based swaps subject
thereto, provided that the Covered Entity is

required to reconcile, and does reconcile, the portfolio containing the
relevant security-based swap on each business day pursuant to UK EMIR
articles 11(1)(b) and 11(2) and UK EMIR RTS article 13.

(f) Substituted Compliance in Connection With Recordkeeping, Reporting,
Notification, and Securities Count Requirements.

    This Order extends to the following provisions that apply to a
Covered Entity related to recordkeeping, reporting, notification, and
securities counts:
    (1)(i) Make and keep current certain records. The requirements of
the following provisions of Exchange Act rule 18a-5, provided that the
Covered Entity complies with the relevant conditions in this paragraph
(f)(1)(i) and with the applicable conditions in paragraph (f)(1)(ii):
    (A) The requirements of Exchange Act rule 18a-5(a)(1) or (b)(1), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rule 2.1; UK MiFID Org Reg articles
74, 75, and Annex IV; UK MiFIR article 25(1); and FCA SYSC 9.1.1AR; and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(1), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order.
    (B) The requirements of Exchange Act rule 18a-5(a)(2), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rule 2.1; FCA SYSC 9.1.1AR; PRA
Internal Capital Adequacy Assessment Rule 3.1; FCA CASS 6, 7, 10.1.3R,
10.1.7, and 10.1.9E; UK MiFID Org Reg articles 72, 74, and 75; and UK
EMIR article 39(4); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (C) The requirements of Exchange Act rule 18a-5(a)(3) or (b)(2), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rule 2.1; FCA SYSC 9.1.1AR; FCA CASS
6, 7, 10.1.3R, 10.1.7, and 10.1.9E; UK MiFID Org Reg articles 72, 74,
and 75; and UK EMIR article 39(4); and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(3), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (D) The requirements of Exchange Act rule 18a-5(a)(4) or (b)(3), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR article 103; FCA COND at paragraphs 2C, 2D, 3B,
3C, 5D, and 5F; PRA Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and
(3); PRA Recordkeeping Rule 2.1; UK MiFID Org Reg articles 59, 74, 75
and Annex IV; UK MiFIR article 25(1); FCA SYSC 9.1.1AR; FCA COBS
16A.3.1UK; UK EMIR articles 9(2) and 11(1)(a); and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(4), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (E) The requirements of Exchange Act rule 18a-5(b)(4) provided that
the Covered Entity is subject to and complies with the requirements of
FCA COBS 8A.1.9R, 16A.2.1R, 16A.3.1UK; UK MiFID Org Reg article 59; FCA
SYSC 9.1.1AR; and UK EMIR articles 9(2) and 11(1)(a);
    (F) The requirements of Exchange Act rule 18a-5(a)(5) or (b)(5), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rule 2.1; UK MiFID Org Reg articles
74, 75, and Annex IV; UK MiFIR article 25(1); and FCA SYSC 9.1.1AR; and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(5), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (G) The requirements of Exchange Act rules 18a-5(a)(6) and (a)(15)
or (b)(6) and (b)(11), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Fundamental Rules 2 and 6; PRA Recordkeeping Rule
2.1; CRR articles 103, 105(3), and 105(10); UK MiFID Org Reg articles
59, 74, 75, and Annex IV; UK MiFIR article 25(1); FCA SYSC 9.1.1AR; FCA
COBS 8A.1.9R, 16A.2.1R, and 16A.3.1UK; UK EMIR articles 9(2), 11(1)(a),
and 39(4); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act rule 15Fi-2 pursuant to this Order;
    (H) The requirements of Exchange Act rule 18a-5(a)(7) or (b)(7), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK MiFIR article 25(1); MLR 2017 Regulations 28 through
30; FCA SYSC 9.1.1AR; and PRA Recordkeeping Rule 2.1; and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(7), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (I) The requirements of Exchange Act rule 18a-5(a)(8), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of CRR articles 103, 105(3), and 105(10); PRA Fundamental
Rules 2 and 6; PRA Recordkeeping Rule 2.1; UK MiFID Org Reg articles
59, 74, 75, and Annex IV; UK MiFIR article 25(1); FCA SYSC 9.1.1AR; UK
EMIR articles 9(2), 11(1)(a), and 39(4); MLR 2017 Regulations 28
through 30; and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order.;
    (J) The requirements of Exchange Act rule 18a-5(a)(9), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Internal Capital Adequacy Assessment Rule 3.1; FCA
CASS 6, 7, 10.1.3R, 10.1.7, and 10.1.9E; UK EMIR article 39(4); and UK
MiFID Org Reg articles 72, 74, and 75;
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order; and
    (3) This Order does not extend to the requirements of Exchange Act
rule 18a-5(a)(9) relating to Exchange Act rule 18a-2;
    (K) The requirements of Exchange Act rules 18a-5(a)(10) and (b)(8),
provided that the Covered Entity is subject to and complies with the
requirements of FSMA sections 63F(2), 63F(5), 63(2A), 60A(2); PRA
Fitness and Propriety Rules 2.6 and 2.9; SMR Applications and
Notifications Rules 2.1, 2.2, and 2.6; PRA Certification Rule 2.1; PRA
General Organisational Requirements Rules 5.1 and 5.2; FCA SUP
10C.10.8D, 10C.10.8AD, 10C.15, 10C.10.16R, and 10C Annex 3D; FCA SYSC
4.3A.1R., 4.3A.3R, 10.1.7R, and 27; and UK MiFID Org Reg articles
21(1)(d) and 35;
    (L) The requirements of Exchange Act rule 18a-5(a)(12), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 103, 105(3), and

105(10); PRA Internal Capital Adequacy Assessment Rule 3.1; and MiFID
Org Reg. articles 72, 74, and 75;
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rule 18a-3
pursuant to this Order;
    (M) The requirements of Exchange Act rules 18a-5(a)(17) and
(b)(13), as applicable, regarding one or more provisions of Exchange
Act rules 15Fh-3 or 15Fk-1 for which substituted compliance is
available under this Order, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D, and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); PRA
Recordkeeping Rule 2.1; FCA SYSC 9.1.1AR; FCA COBS 9A.2.1R, UK MiFID
Org Reg articles 72, 73, and Annex I; and UK EMIR article 39(5), in
each case with respect to the relevant security-based swap or activity;
    (2) With respect to the portion of Exchange Act rules 18a-5(a)(17)
and (b)(13) that relates to one or more provisions of Exchange Act rule
15Fh-3 for which substituted compliance is available under this Order,
the Covered Entity applies substituted compliance for such business
conduct standard(s) of Exchange Act rule 15Fh-3 pursuant to this Order,
as applicable, with respect to the relevant security-based swap or
activity; and
    (3) With respect to the portion of Exchange Act rules 18a-5(a)(17)
and (b)(13) that relates to Exchange Act rule 15Fk-1, the Covered
Entity applies substituted compliance for Exchange Act section 15F(k)
and Exchange Act rule 15Fk-1 pursuant to this Order;
    (N) The requirements of Exchange Act rules 18a-5(a)(18)(i) and (ii)
or (b)(14)(i) and (ii), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11(1)(b) and UK EMIR RTS article
15(1)(a); and
    (2) The Covered Entity applies substituted compliance for Exchange
Act rule 15Fi-3 pursuant to this Order; and
    (O) The requirements of Exchange Act rule 18a-5(a)(18)(iii) or
(b)(14)(iii), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11(1)(b) and UK EMIR RTS article
15(1)(a), in each case with respect to such security-based swap
portfolio(s); and
    (2) The Covered Entity applies substituted compliance for Exchange
Act rule 15Fi-4 pursuant to this Order.
    (ii) Paragraph (f)(1)(i) is subject to the following further
conditions:
    (A) Paragraphs (f)(1)(i)(A) through (D) and (H) are subject to the
condition that the Covered Entity preserves all of the data elements
necessary to create the records required by the applicable Exchange Act
rules cited in such paragraphs and upon request furnishes promptly to
representatives of the Commission the records required by those rules;
    (B) A Covered Entity may apply the substituted compliance
determination in paragraph (f)(1)(i)(M) to records of compliance with
Exchange Act rule 15Fh-3(b), (c), (e), (f), and (g) in respect of one
or more security-based swaps or activities related to security-based
swaps; and
    (C) This Order does not extend to the requirements of Exchange Act
rule 18a-5(a)(13), (a)(14), (a)(16), (b)(9), (b)(10), or (b)(12).
    (2)(i) Preserve certain records. The requirements of the following
provisions of Exchange Act rule 18a-6, provided that the Covered Entity
complies with the relevant conditions in this paragraph (f)(2)(i) and
with the applicable conditions in paragraph (f)(2)(ii):
    (A) The requirements of Exchange Act rule 18a-6(a)(1) or (a)(2), as
applicable, provided that the Covered Entity is subject to and complies
with the requirements of UK MiFID Org Reg articles 72, 74, 75, and
Annex IV; FCA SYSC 9.1.1AR and 9.1.2R; FSMA section 165; PRA Internal
Capital Adequacy Assessment Rule 3.1; PRA Fundamental Rules 2 and 6;
PRA Recordkeeping Rules 2.1 and 2.2; FCA PRIN 2.1.1.R(2) and (3); FCA
CASS 6, 7, 10.1.3R, 10.1.7, and 10.1.9E; UK CRR article 103; FCA COND
at paragraphs 2C, 2D, 3B, 3C, 5D, and 5F; UK MiFIR article 25(1); and
UK EMIR article 9(2);
    (B) The requirements of Exchange Act rule 18a-6(b)(1)(i) or
(b)(2)(i), as applicable, provided that the Covered Entity is subject
to and complies with the requirements of UK MiFID Org Reg articles 72,
74, 75, and Annex IV; FCA SYSC 9.1.1AR and 9.1.2R; FSMA section 165;
PRA Internal Capital Adequacy Assessment Rule 3.1; PRA Fundamental
Rules 2 and 6; PRA Recordkeeping Rules 2.1 and 2.2; FCA PRIN 2.1.1.R(2)
and (3); FCA CASS 6, 7, 10.1.3R, 10.1.7, and 10.1.9E; UK CRR article
103; FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D, and 5F; UK MiFIR
article 25(1); and UK EMIR article 9(2);
    (C) The requirements of Exchange Act rules 18a-6(b)(1)(ii) and
(iii), provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Internal Capital Adequacy Assessment Rule 3.1; FCA
CASS 6, 7, 10.1.3R, 10.1.7, and 10.1.9E; UK MiFID Org Reg articles 72,
74, and 75; PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR and
9.1.2R; and UK EMIR article 9(2); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (D) The requirements of Exchange Act rule 18a-6(b)(1)(iv) or
(b)(2)(ii), as applicable, provided that the Covered Entity is subject
to and complies with the requirements of PRA Fundamental Rules 2 and 6;
PRA Recordkeeping Rules 2.1 and 2.2; UK CRR article 103; FCA SYSC
9.1.1AR, 9.1.2R, 10A.1.6R, and 10A.1.8R; UK MiFID Org Reg articles 72,
73, 74, 75, 76, Annex I, and Annex IV; UK MiFIR article 25(1); and UK
EMIR article 9(2);
    (E) The requirements of Exchange Act rule 18a-6(b)(1)(v), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 9(2); UK CRR articles 99, 294, 394,
415, 430, and Part Six: Title II and Title III; UK CRR Reporting ITS
article 14 and annexes I-V and VIII-XIII; PRA Recordkeeping Rules 2.1
and 2.2; FCA SYSC 9.1.1AR and 9.1.2R; and UK MiFID Org Reg article
72(1);
    (2) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(v), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant this Order; and
    (3) This Order does not extend to the requirements of Exchange Act
rule 18a-6(b)(1)(v) relating to Exchange Act rule 18a-2;
    (F) The requirements of Exchange Act rule 18a-6(b)(1)(vi) or
(b)(2)(iii), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR
and 9.1.2R; UK MiFID Org Reg articles 72(1) and 73; and UK EMIR article
9(2); and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(vi), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (G) The requirements of Exchange Act rule 18a-6(b)(1)(vii) or
(b)(2)(iv), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR
and 9.1.2R; UK

MiFID Org Reg articles 72(1) and 73; UK MiFIR article 25(1); and UK
EMIR article 9(2); and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(vii), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (H) The requirements of Exchange Act rule 18a-6(b)(1)(viii),
provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 99, 294, 394, 415, 430, and Part Six:
Title II and Title III; UK CRR Reporting ITS article 14 and annexes I-V
and VIII-XIII, as applicable; PRA Recordkeeping Rules 2.1 and 2.2; FCA
SYSC 9.1.1AR and 9.1.2R; and UK MiFID Org Reg article 72(1);
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act rule 18a-7(a)(1), (b), (c) through (h),
and Exchange Act rule 18a-7(j) as applied to these requirements
pursuant to this Order;
    (3) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(viii), the Covered Entity applies substituted compliance for
the requirements of Exchange Act section 15F(e) and Exchange Act rules
18a-1 through 18a-1d pursuant to this Order;
    (4) This Order does not extend to the requirements of Exchange Act
rule 18a-6(b)(1)(viii)(L); and
    (5) This Order does not extend to the requirements of Exchange Act
rule 18a-6(b)(1)(viii)(M) relating to Exchange Act rule 18a-2.
    (I) The requirements of Exchange Act rule 18a-6(b)(1)(ix), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA SYSC 4.1.1R(1), 6.1.1R, 7.1.4R, 9.1.1AR, 9.1.2R,
and 10.1.7R; FCA COBS 2.3A.32R; UK MiFID Org Reg articles 22(3)(c), 23,
24, 25(2), 26, 29(2)(c), 35, and 72(1); PRA Risk Control Rule 2.3; PRA
Internal Capital Adequacy Assessment Rules 3 through 11; UK CRR
articles 176, 286, and 293(1)(d); UK EMIR RTS; PRA Recordkeeping Rule
2.1 and 2.2; and UK EMIR article 9(2); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (J) The requirements of Exchange Act rule 18a-6(b)(1)(x), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Internal Capital Adequacy Assessment Rules 3.1 and
13.2; PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR and 9.1.2R;
UK MiFID Org Reg article 72(1); and UK EMIR article 9(2); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (K) The requirements of Exchange Act rule 18a-6(b)(1)(xii) or
(b)(2)(vii), as applicable, regarding one or more provisions of
Exchange Act rules 15Fh-3 or 15Fk-1 for which substituted compliance is
available under this Order, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of MLR 2017 Regulations 27 through 30; PRA Recordkeeping
Rule 2.1 and 2.2; FCA SYSC 9.1.1AR and 9.1.2R; UK MiFID Org Reg article
72(1); and UK EMIR article 9(2), in each case with respect to the
relevant security-based swap or activity;
    (2) With respect to the portion of Exchange Act rule 18a-
6(b)(1)(xii) or (b)(2)(vii) that relates to one or more provisions of
Exchange Act rule 15Fh-3 for which substituted compliance is available
under this Order, the Covered Entity applies substituted compliance for
such business conduct standard(s) of Exchange Act rule 15Fh-3 pursuant
to this Order, as applicable, with respect to the relevant security-
based swap or activity; and
    (3) With respect to the portion of Exchange Act rule 18a-
6(b)(1)(xii) or (b)(2)(vii), as applicable, that relates to Exchange
Act rule 15Fk-1, the Covered Entity applies substituted compliance for
Exchange Act section 15F(k) and Exchange Act rule 15Fk-1 pursuant to
this Order;
    (L) The requirements of Exchange Act rule 18a-6(c), provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR
and 9.1.2R; and UK MiFID Org Reg articles 21(1)(f) and 72(1); and
    (2) This Order does not extend to the requirements of Exchange act
rule 18a-6(c) relating to Forms SBSE, SBSE-A, SBSE-C, SBSE-W, all
amendments to these forms, and all other licenses or other
documentation showing the registration of the Covered Entity with any
securities regulatory authority or the U.S. Commodity Futures Trading
Commission;
    (M) The requirements of Exchange Act rule 18a-6(d)(1), provided
that the Covered Entity is subject to and complies with the
requirements of FSMA sections 63(2A) and 63F(5); FCA SYSC 9.1.1AR and
9.1.2R; UK MiFID Org Reg articles 35 and 72(1); and PRA Recordkeeping
Rules 2.1 and 2.2;
    (N) The requirements of Exchange Act rule 18a-6(d)(2), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR
and 9.1.2R; UK MiFID Org Reg articles 72(1) and 72(3); and UK EMIR
article 9(2); and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(d)(2)(i), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (O) The requirements of Exchange Act rule 18a-6(d)(3), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D, and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); FCA SYSC
6.1.1R, 9.1.1AR, 9.1.2R, 10A.1.6R; PRA Recordkeeping Rules 2.1 and 2.2;
UK MiFID Org Reg articles 21(1)(f), 72, and Annex I; and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(d)(3)(i), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (P) The requirements of Exchange Act rules 18a-6(d)(4) and (d)(5),
provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COBS 8A.1.9R; PRA Recordkeeping Rules 2.1 and 2.2;
FCA SYSC 4.1.1R(1), 6.1.1, 9.1.1AR, and 9.1.2R; UK MiFID Org Reg
articles 24, 25(2), 72(1), and 73; and UK EMIR article 9(2); and