                   UNITED STATES OF AMERICA

            DEPARTMENT OF TRANSPORTATION

                    OFFICE OF THE SECRETARY

                             WASHINGTON, DC

Docket: OST-2002-12683					Served:  August 7, 2002

NOTICE

In the Matter of the 2002 U.S.-Brazil All-Cargo Service Proceeding

SUMMARY

By this Notice, we have decided to decline to require that incumbent
U.S.-Brazil all-cargo carriers report on their U.S.-Brazil frequency
utilization in the 2002 U.S.-Brazil All-Cargo Service Proceeding, Docket
OST-2002-12683.

DISCUSSION AND SUMMARY OF PLEADINGS

By Order 2002-6-20, the Department instituted the 2002 U.S.-Brazil
All-Cargo Service Proceeding to select a carrier for an authorization to
be designated to serve the U.S.-Brazil all-cargo market and for
allocation of four U.S.-Brazil all-cargo frequencies under the
U.S.-Brazil aviation agreement.  The instituting order established a
procedural schedule for the submission of evidentiary material needed by
the Department to make its selection(s), as follows: Applications by
July 19, 2002; Direct Exhibits by August 2; Rebuttal Exhibits by August
16; and Briefs by August 30.  Gemini Air Cargo, Evergreen International
Airlines, and Amerijet International filed applications for the
available authorization and an allocation of frequencies.

On July 31, 2002, Amerijet filed a letter in the above-captioned docket
requesting that the Department require each all-cargo carrier currently
designated to provide service in the U.S.-Brazil market (Federal
Express, UPS, and Atlas/Polar) to submit, by no later than August 9, a
complete description of their services in the U.S.-Brazil market for the
period June 1, 2001 through May 31, 2002.  In the alternative, Amerijet
states that the incumbent carriers may agree to voluntarily submit the
requested information for the record of the case.

By Notice dated August 1, 2002, in this Docket, we stated that we would
treat Amerijet’s letter as a motion, and we required that answers to
Amerijet’s letter be filed by August 5, 2002 and replies by

August 6, 2002.  Atlas/Polar and Evergreen filed answers.  UPS,
Amerijet, and Atlas/Polar filed replies.

In general, Atlas/Polar and UPS are opposed to Amerijet’s request
whereas Evergreen supports the request.

In its letter, Amerijet states that a relevant consideration in this or
any other route proceeding is the degree to which incumbent carriers are
and have been using frequencies allocated to them.  Amerijet maintains
that neither the Department nor the applicants in this case currently
have access to that information, and that the T-100 reports do not allow
the parties to determine completely and accurately the extent to which
the incumbent carriers are and have been using their frequencies.
Amerijet further indicates that dormancy information with respect to
frequency utilization is unreliable.

Amerijet states that the Department’s instituting order appears to
have recognized this issue when it required that any incumbent carrier
applicant include a complete description of its services in the market.
In this regard, Amerijet notes that this information was not submitted
since none of the incumbent carriers applied for additional frequencies.
 To help minimize any burden on the incumbent carriers, Amerijet
requests that the incumbents submit the requested information by August
9, one week after directs and one week before rebuttals are due in this
proceeding.

Atlas/Polar state that Amerijet’s own letter indicates that the T-100
reports for the U.S.-Brazil market are available to all applicants in
the proceeding, and that Amerijet has failed to specify the manner in
which these T-100 reports are inadequate or how the information that
Amerijet seeks would enhance the record of the proceeding.  Moreover,
Atlas/Polar contend that Amerijet’s request expresses only a vague,
general interest in determining U.S.-Brazil frequency usage, which does
not validate the request for new information requirements.

Atlas/Polar further argue that incumbent carrier frequencies are beyond
the scope of the proceeding.  In this connection, Atlas/Polar state that
this case arose because the Department decided to replace Polar’s
Brazil designation and reallocate its four frequencies.  Atlas/Polar
also note that the instituting order allowed for petitions for
reconsideration, and none were filed.

UPS argues that Amerijet’s request harkens back to the time of strict
regulation when incumbents were required to provide extensive
information about their existing services.  UPS states that the burden
of producing the data, when viewed in relation to its complete lack of
relevance to the proceeding, warrants a denial of the request.  UPS
maintains that any information regarding frequency usage, aircraft
routings, schedules, etc. has no bearing whatsoever on this proceeding
since none of the applicants has requested any frequencies now held by
incumbents.  UPS also notes that it is too late in this proceeding for
the requested information to be of use to the applicants, and that
questions concerning confidentiality and business sensitive information
need to be considered.

Evergreen states that it supports Amerijet’s request, and that
information concerning existing services could prove useful to the
Department and the parties in this proceeding.  Evergreen maintains that
specific issues such as the need for service to intermediate points and
interior U.S. points justify the filing of the requested information
even though incumbents do not seek to increase Brazil service.
Evergreen urges the Department to require incumbents to provide
operational information by month and by direction and to identify all
Brazilian, U.S., and third-country points in their single-plane,
U.S.-Brazil scheduled services for the period June 1, 2001 to May 31,
2002.  Evergreen indicates that the Department required similar
information by its June 21, 2000 Notice in the last U.S.-Brazil
all-cargo proceeding.

In its reply, Atlas/Polar state that Evergreen’s support of
Amerijet’s request similarly makes no claim that incumbent operational
data would affect the applicants’ service proposals or the
Department’s decision in any way.  While the Department required the
submission of U.S.-Brazil all-cargo frequency utilization data two years
ago, Atlas/Polar maintain that that precedent is not relevant here
because there has been no suggestion (let alone proof) that the
incumbents have not been using their frequencies, as was the case two
years ago.  Atlas/Polar note that the Department has already determined
that Polar’s designation and four frequencies will be the issue of the
current Brazil proceeding.

In its reply, Amerijet states that historical precedent shows that in
virtually every proceeding where the issuance of additional certificates
is at issue, the incumbent carrier(s) are called upon to provide data
with respect to the market(s) at issue.  Amerijet maintains that if, as
Atlas/Polar suggest, the T-100 reports are sufficient, then incumbent
carriers would never be called upon to submit market information in
route proceedings.  According to Amerijet, it and the other applicants
in this case must be able to examine market information in the
possession of Atlas/Polar, FedEx, and UPS in order to best determine the
nature of the need for additional service in the relevant market and
sub-markets.  Amerijet states that if, for example, the wide-body
operators in the market are not and have not been fully utilizing
frequencies, it is far more likely that the Department would support the
selection of a carrier such as Amerijet, which would not simply add new
additional capacity between major terminals, but would expand its base
scheduled system in the region into Brazil.

DECISION

This proceeding began shortly after the Department approved a de facto
route transfer between Atlas and Polar, but did not approve the transfer
of Polar’s Brazil designation and four frequencies.  The Department
found that the transaction with respect to Polar’s Brazil authority
would not be consistent with the public interest, as it would have
resulted in half of the four available designations for all-cargo
service and over half of the 24 available frequencies in the U.S.-Brazil
market being under single corporate control.  Against this background,
the Department subsequently instituted the 2002 U.S.-Brazil All-Cargo
Service Proceeding in this docket to select a carrier for an
authorization to be designated to serve the U.S.-Brazil all-cargo market
and for allocation of four U.S.-Brazil all-cargo frequencies under the
U.S.-Brazil aviation agreement.

The scope of the authority at issue was already well known at the time
we instituted this case.  In the circumstances presented, the
instituting order did not include a general requirement that incumbent
U.S.-Brazil all-cargo carriers report a complete description of their
services in the market.  Such a requirement would apply only to
incumbents choosing to apply for an allocation of additional
frequencies.  Clearly, the Department would want to know how such an
applicant had been using its own allocation before deciding on whether
to award that applicant additional frequencies.  However, each applicant
in this case (Gemini, Evergreen, and Amerijet) is a non-incumbent
carrier applying for the available designation and an allocation of
frequencies.  Neither Amerijet nor Evergreen has presented any
persuasive reason why it needs incumbent carrier data in order to make
its affirmative case in this proceeding.  Indeed, Amerijet’s own
request only contemplated that the incumbent carrier data be submitted
one week after the direct exhibits in this case were due.

In these circumstances, we are not persuaded that the Department should
require incumbent U.S.-Brazil all-cargo carriers to report on their
current services in the market.  We believe that such a requirement is
unnecessary in this case, and we continue to believe that the applicants
and the Department have access to the relevant information needed for,
respectively, prosecuting and deciding this proceeding.  For these
reasons, we have decided that the public interest would be best served
here by declining to require that incumbent carriers report on their
U.S.-Brazil frequency utilization in this docket.

We will serve this notice on Gemini Air Cargo, Inc.; Evergreen
International Airlines, Inc.; Amerijet International, Inc.; Federal
Express Corporation; United Parcel Service Co.; and Atlas Air,
Inc./Polar Air Cargo, Inc.

By:

						Paul L. Gretch

						Director, Office of International Aviation

(Seal)

Dated:  August 7, 2002

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

http://dms.dot.gov//reports/reports_ aviation.asp

On August 6, 2002, Amerijet filed a separate motion requesting that the
Department issue an order directing Gemini and Evergreen to produce
copies of their respective applications reportedly filed with the Air
Transportation Stabilization Board seeking Federal loan guarantees
pursuant to the Air Transportation Safety and System Stabilization Act,
together with copies of all other related or supportive documents.
Amerijet’s motion requests that the Department shorten the answer
period to its motion.  Our regulations (14 CFR Part 302.11) would
normally allow seven days for answers (i.e., Thursday, August 15).
However, to ensure that the issues raised by Amerijet’s letter are
addressed in an expedited manner, we will require that answers to
Amerijet’s motion be filed in the above-referenced docket by Friday,
August 9, 2002.  Any replies shall be filed by Monday, August 12, 2002.

See Order 2002-5-24.  Atlas and Polar had reached an agreement under
which the two carriers would be owned by the same company but continue
to operate as separate airlines.

 PAGE

 PAGE   4


[Federal Register Volume 85, Number 87 (Tuesday, May 5, 2020)]
[Notices]
[Pages 26774-26775]
[FR Doc No: 2020-09527]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88775; File No. SR-ICC-2020-002]

Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove
Proposed Rule Change Relating to the ICC Risk Management Model
Description, ICC Stress Testing Framework, ICC Liquidity Risk
Management Framework, ICC Back-Testing Framework, and ICC Risk
Parameter Setting and Review Policy

April 29, 2020.

I. Introduction

    On January 14, 2020, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (the
``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
amend ICC's Risk Management Model Description, Stress Testing
Framework, Liquidity Risk Management Framework, Back-Testing Framework,
and Risk Parameter Setting and Review Policy in connection with the
clearing of credit default index swaptions. The proposed rule change
was published for comment in the Federal Register on January 31,
2020.\3\ On March 13, 2020, the Commission designated a longer period
of time for Commission action on the proposed rule change until April
30, 2020.\4\ The Commission has not received comments regarding the
proposed rule change. The Commission is publishing this order to
solicit comments from interested persons and to institute proceedings
pursuant to Section 19(b)(2)(B) of the Act \5\ to determine whether to
approve or disapprove the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change, Security-Based Swap Submission,
or Advance Notice Relating to the ICC Risk Management Model
Description, ICC Stress Testing Framework, ICC Liquidity Risk
Management Framework, ICC Back-Testing Framework, and ICC Risk
Parameter Setting and Review Policy; Exchange Act Release No. 88047
(Jan. 27, 2020); 85 FR 5756 (Jan. 31, 2020) (SR-ICC-2020-002)
(``Notice'').
    \4\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Designation of Longer Period for Commission Action on Proposed
Rule Change Relating to the ICC Risk Management Model Description,
ICC Stress Testing Framework, ICC Liquidity Risk Management
Framework, ICC Back-Testing Framework, and ICC Risk Parameter
Setting and Review Policy; Exchange Act Release No. 88379 (Mar. 13,
2020); 85 FR 15829 (Mar. 19, 2020).
    \5\ 15 U.S.C. 78s(b)(2)(B).

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II. Description of the Proposed Rule Change

    As described more fully in the Notice, the proposed rule change
would amend ICC's Risk Management Model Description, Stress Testing
Framework, Liquidity Risk Management Framework, Back-Testing Framework,
and Risk Parameter Setting and Review Policy in connection with the
clearing of credit default index swaptions.

III. Proceedings To Determine Whether To Approve or Disapprove the
Proposed Rule Change and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act to determine whether the proposed rule change
should be approved or disapproved.\6\ Institution of proceedings is
appropriate at this time in view of the legal and policy issues raised
by the proposed rule change. Institution of proceedings does not
indicate that the Commission has reached any conclusions with respect
to any of the issues involved.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\7\ the Commission is
providing notice of the potential grounds for approval or disapproval
under consideration. The Commission is instituting proceedings to allow
for additional analysis and input concerning the proposed rule change's
consistency with the Act and the rules thereunder, including the
following:
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

     Section 17A(b)(3)(F) of the Act, which requires, among
other things, that the rules of ICC be designed to promote the prompt
and accurate clearance and settlement of securities transactions and,
to the extent applicable, derivative agreements, contracts, and
transactions, to assure the safeguarding of securities and funds which
are in the custody or control of ICC or for which it is responsible,
and, in general, to protect investors and the public interest; \8\
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

     Rule 17Ad-22(b)(2), which requires that ICC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to use margin requirements to limit its credit
exposures to participants under normal market conditions and use risk-
based models and parameters to set margin requirements and review such
margin requirements and the related risk-based models and parameters at
least monthly; \9\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 17Ad-22(b)(2).
---------------------------------------------------------------------------

     Rule 17Ad-22(b)(3), which requires that ICC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to maintain sufficient financial resources to
withstand, at a minimum, a default by the two participant families to
which it has the largest exposures in extreme but plausible market
conditions; \10\ and
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    \10\ 15 U.S.C. 17Ad-22(b)(3).
---------------------------------------------------------------------------

     Rule 17Ad-22(d)(8), which requires that ICC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to have governance arrangements that are clear and
transparent to fulfill the public interest requirements in Section 17A
of the Act applicable to clearing agencies, to support the objectives
of owners and participants, and to promote the effectiveness of ICC's
risk management procedures.\11\
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    \11\ 15 U.S.C. 17Ad-22(d)(8).
---------------------------------------------------------------------------

IV. Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments regarding the proposed
rule change with respect to the issues identified above, as well as any
other concerns they may have with the proposed rule change. In
particular, the Commission invites the written views of interested
persons concerning whether the proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act \12\ and Rules 17Ad-22(b)(2), 17Ad-
22(b)(3), and 17Ad-22(d)(8) under the Act,\13\ or any other provision
of the Act or rules and regulations thereunder.
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    \12\ 15 U.S.C. 78q-1(b)(3)(F).
    \13\ 17 CFR 240.17Ad-22(b)(2), (b)(3), and (d)(8).
---------------------------------------------------------------------------

    Although there do not appear to be any issues relevant to approval
or disapproval that would be facilitated by an oral presentation of
views, data, and arguments, the Commission will consider, pursuant to
Rule 19b-4, any request for an opportunity to make an oral
presentation.\14\
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    \14\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29, 89 Stat. 97 (1975),
grants the Commission flexibility to determine what type of
proceeding--either oral or notice and opportunity for written
comments--is appropriate for consideration of a particular proposal
by a self-regulatory organization. See Securities Acts Amendments of
1975, Report of the Senate Committee on Banking, Housing and Urban
Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess.
30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved on or before May 20, 2020. Any person who wishes to file
a rebuttal to any other person's submission must file that rebuttal on
or before May 26, 2020.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number ICC-2020-002 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ICC-2020-002. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filings will also be available for inspection
and copying at the principal office of ICE Clear Credit and on ICE
Clear Credit's website at https://www.theice.com/clear-credit/regulation. All comments received will be posted without change.
Persons submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ICC-2020-002 and should be
submitted on or before May 20, 2020. If comments are received, any
rebuttal comments should be submitted on or before May 26, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09527 Filed 5-4-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 136 (Friday, July 15, 2011)]
[Notices]
[Pages 41829-41831]
[FR Doc No: 2011-17816]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-29719; 812-13919]

J.P. Morgan Securities LLC, et al.; Notice of Application and
Temporary Order

July 11, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Temporary order and notice of application for a permanent order
under section 9(c) of the Investment Company Act of 1940 (``Act'').

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Summary of Application: Applicants have received a temporary order
exempting them from section 9(a) of the Act, with respect to an
injunction entered against J.P. Morgan Securities LLC (``JPMS'') on
July 8, 2011 by the United States District Court for the District of
New Jersey (``Injunction'') until the Commission takes final action on
an application for a permanent order. Applicants also have applied for
a permanent order.

Applicants: JPMS; Bear Stearns Asset Management Inc. (``BSAM''), Bear
Stearns Health Innoventures Management, L.L.C. (``BSHIM''), BSCGP Inc.
(``BSGCP''), Constellation Growth Capital LLC (``Constellation''),
Constellation Ventures Management II, LLC (``Constellation II''),
Highbridge Capital Management, LLC (``Highbridge''), JF International
Management Inc. (``JFIMI''), JPMorgan Asset Management (UK) Limited
(``JPMAMUK''), JPMorgan Distribution Services, Inc. (``JPMDS''), J.P.
Morgan Institutional Investments, Inc. (``JPMII''), J.P. Morgan
Investment Management Inc. (``JPMIM''), J.P. Morgan Latin America
Management Company, LLC (``JPMLAM''), J.P. Morgan Partners, LLC
(``JPMP''), J.P. Morgan Private Investments Inc. (``JPMPI''), OEP Co-
Investors Management II, Ltd. (``OEP II''), OEP Co-Investors Management
III, Ltd. (``OEP III,'' and together with OEP II, the ``OEP
Entities''), Security Capital Research & Management Incorporated
(``Security Capital''), Sixty Wall Street GP Corporation (``Sixty Wall
GP''), Sixty Wall Street Management Company, LLC (``Sixty Wall
Management'') and Technology Coinvestors Management, LLC (``TCM'')
(each an ``Applicant'' and collectively, the ``Applicants'').\1\
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    \1\ Applicants request that any relief granted pursuant to the
application also apply to any other company of which JPMS is or may
become an affiliated person within the meaning of section 2(a)(3) of
the Act (together with the Applicants, the ``Covered Persons'').

Filing Date: The application was filed on July 7, 2011 and amended on
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July 11, 2011.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on August 5, 2011, and should be accompanied by proof of service
on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicants: JPMS, 338 Madison
Avenue, New York, NY 10179; BSAM, BSHIM, BSCGP, Constellation II,
JPMII, JPMIM, JPMLAM, JPMP, JPMPI, Sixty Wall GP, Sixty Wall Management
and TCM, 270 Park Avenue, New York, NY 10017; Constellation and
Highbridge, 49 West 57th Street, 32nd Floor, New York, NY 10019; JFIMI,
21st Floor, Chater House, 8 Connaught Road Central, Hong Kong; JPMAMUK,
125 London Wall, London, UK, EC2Y5AJ; JPMDS, 1111 Polaris Parkway,
Columbus, OH 43240; OEP Entities, 320 Park Avenue, 18th Floor, New
York, NY 10022; and Security Capital, 10 South Dearborn Street, Suite
1400, Chicago, IL 60603.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at
202-551-6811 or Daniele Marchesani, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a temporary order and
summary of the application. The complete application may be obtained
via the Commission's website by

searching for the file number, or an applicant using the Company name
box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-
8090.

Applicants' Representations

    1. JPMS, a limited liability company organized under the laws of
Delaware, is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the ``Exchange Act'') and is
registered as an investment adviser under the Investment Advisers Act
of 1940, as amended (the ``Advisers Act''). JPMS does not currently
serve as investment adviser, sub-adviser, or depositor of any
registered investment company, or principal underwriter for any
registered open-end investment company, registered unit investment
trust (``UIT'') or registered face amount certificate company, or
investment adviser of any employees' securities company, as defined in
section 2(a)(13) of the Act (``ESC'') (``Fund Service Activities'').
``Funds'' refers to the registered investment companies or ESCs for
which a Covered Person provides Fund Service Activities. The ultimate
parent of JPMS is J.P. Morgan Chase & Co. (``JPMC''). JPMC is a
financial services holding company whose businesses provide a broad
range of financial services to consumer and corporate customers. JPMC
is also the ultimate parent of the other Applicants, who, as
subsidiaries of the same ultimate parent, are under common control with
JPMS.
    2. BSAM is registered as an investment adviser under the Advisers
Act and serves as investment adviser or sub-adviser to various Funds,
including as a general partner that provides investment advisory
services to various ESCs, which provide investment opportunities for
highly compensated key employees, officer, directors and current
consultants of JPMC and its affiliates.\2\ BSHIM, BSCGP, Constellation
II, the OEP Entities and TCM serve as general partners that provide
investment advisory services to various ESCs. Constellation serves as a
sub-adviser to various ESCs. Highbridge, JFIMI, JPMAMUK, JPMIM, JPMPI,
and Security Capital are registered as investment advisers under the
Advisers Act and serve as investment advisers or sub-advisers to
various Funds. JPMLAM, JPMP, Sixty Wall GP, Sixty Wall Management are
registered as investment advisers under the Advisers Act and serve as
investment advisers or sub-advisers to ESCs. JPMDS is registered as a
broker-dealer under the Exchange Act and serves as principal
underwriter to various Funds. JPMII is registered as a broker-dealer
under the Exchange Act and serves as placement agent to various
Funds.\3\
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    \2\ Every Applicant that is a general partner that provides
investment advisory services to one or more ESCs believes, for
purposes of the application, that it is performing a function that
falls within the definition of ``investment adviser'' in section
2(a)(20) of the Act.
    \3\ JPMII serves as placement agent to JPMorgan Institutional
Trust (``Trust'') with respect to three of its series. The Trust is
an open-end investment company registered under the Act, but its
shares are not registered under the Securities Act of 1933, as
amended. JPMII believes, for purposes of the application, that it is
performing a function that falls within the definition of principal
underwriter in section 2(a)(29) of the Act.
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    3. On July 8, 2011, the United States District Court for the
District of New Jersey entered a judgment, which included the
Injunction, against JPMS (``Judgment'') in a matter brought by the
Commission.\4\ The Commission alleged in the complaint (``Complaint'')
that prior to at least 2005, JPMS engaged in fraudulent practices and
made misrepresentations and omissions in connection with bidding on
municipal reinvestment instruments. The Complaint alleged that JPMS
engaged in fraudulent practices, misrepresentations, and omissions that
affected the prices of certain reinvestment instruments, deprived
certain municipalities of a presumption that their reinvestment
instruments were purchased at fair market value, and/or jeopardized the
tax-exempt status of certain securities. Based on the alleged
misconduct described above, the Complaint alleged that JPMS violated
section 15(c)(1)(A) of the Exchange Act. Without admitting or denying
any of the allegations in the Complaint (other than those relating to
the jurisdiction of the District Court over it and the subject matter,
solely for purposes of this action), JPMS consented to the entry of the
Injunction and other relief, including disgorgement, prejudgment
interest, and civil monetary penalties.
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    \4\ U.S. Securities and Exchange Commission v. J.P. Morgan
Securities LLC, Case No. 2:11-cv-03877-WJM (D.N.J. July 8, 2011).
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Applicants' Legal Analysis

    1. Section 9(a)(2) of the Act, in relevant part, prohibits a person
who has been enjoined from engaging in or continuing any conduct or
practice in connection with the purchase or sale of a security, or in
connection with activities as an underwriter, broker or dealer, from
acting, among other things, as an investment adviser or depositor of
any registered investment company or a principal underwriter for any
registered open-end investment company, registered UIT, or registered
face-amount certificate company or as investment adviser of an ESC.
Section 9(a)(3) of the Act makes the prohibition in section 9(a)(2)
applicable to a company, any affiliated person of which has been
disqualified under the provisions of section 9(a)(2). Section 2(a)(3)
of the Act defines ``affiliated person'' to include, among others, any
person directly or indirectly controlling, controlled by, or under
common control, with the other person. Applicants state that JPMS is an
affiliated person of each of the other Applicants within the meaning of
section 2(a)(3) of the Act. Applicants state that, as a result of the
Injunction, they would be subject to the prohibitions of section 9(a)
of the Act.
    2. Section 9(c) of the Act provides that the Commission shall grant
an application for exemption from the disqualification provisions of
section 9(a) of the Act if it is established that these provisions, as
applied to the Applicants, are unduly or disproportionately severe or
that the conduct of the Applicants has been such as not to make it
against the public interest or the protection of investors to grant the
exemption. Applicants have filed an application pursuant to section
9(c) seeking a temporary and permanent order exempting them and other
Covered Persons from the disqualification provisions of section 9(a).
    3. Applicants believe they meet the standard for exemption
specified in section 9(c). Applicants state that the prohibitions of
section 9(a) as applied to them would be unduly and disproportionately
severe and that the conduct of the Applicants has been such as not to
make it against the public interest or the protection of investors to
grant the exemption from section 9(a).
    4. Applicants state that the alleged conduct giving rise to the
Injunction did not involve any of the Applicants engaging in Fund
Service Activities. Applicants also state to the best of their
knowledge (i) none of the current directors, officers, or employees of
the Applicants (other than JPMS) that are involved in providing Fund
Service Activities (or any other persons in such roles during the time
period covered by the Complaint) participated in the conduct alleged in
the Complaint to have constituted the violations that provided a basis
for the Injunction; and (ii) the personnel at JPMS who participated in
the conduct alleged in the Complaint to have constituted the violations
that provided a basis for the Injunction have had no, and will not have
any, involvement in providing Fund Service Activities to the Funds on

behalf of the Applicants or other Covered Persons.
    5. Applicants state that the inability of the Applicants to engage
in Fund Service Activities would result in potentially severe financial
hardships for the Funds they serve and the Funds' shareholders or
unitholders. Applicants state that they will distribute written
materials, including an offer to meet in person to discuss the
materials, to the boards of directors of the Funds (excluding for this
purpose the ESCs) (the ``Boards''), including the directors who are not
``interested persons,'' as defined in section 2(a)(19) of the Act, of
such Funds, and their independent legal counsel as defined in rule 0-
1(a)(6) under the Act, if any, describing the circumstances that led to
the Injunction, any impact on the Funds, and the application.
Applicants state that they will provide the Boards with the information
concerning the Injunction and the application that is necessary for the
Funds to fulfill their disclosure and other obligations under the
federal securities laws.
    6. Applicants also state that, if they were barred from providing
Fund Service Activities to registered investment companies and ESCs,
the effect on their businesses and employees would be severe.
Applicants state that they have committed substantial resources to
establish an expertise in providing Fund Service Activities. Applicants
further state that prohibiting them from providing Fund Service
Activities would not only adversely affect their businesses, but would
also adversely affect approximately 940 employees that are involved in
those activities. Applicants also state that disqualifying certain
Applicants from continuing to provide investment advisory services to
ESCs is not in the public interest or in furtherance of the protection
of investors. Because the ESCs have been formed for the benefit of key
employees, officers, directors and current consultants of JPMC and its
affiliates, it would not be consistent with the purposes of the ESC
provisions of the Act to require another entity not affiliated with
JPMC to manage the ESCs. In addition, participating employees of JPMC
and its affiliates likely subscribed for interests in the ESCs with the
expectation that the ESCs would be managed by an affiliate of JPMC.
    7. Applicants state that Applicants and certain other affiliated
persons of the Applicants have previously received orders under section
9(c) of the Act, as the result of conduct that triggered section 9(a),
as described in greater detail in the application.

Applicants' Condition

    Applicants agree that any order granting the requested relief will
be subject to the following condition:
    Any temporary exemption granted pursuant to the application shall
be without prejudice to, and shall not limit the Commission's rights in
any manner with respect to, any Commission investigation of, or
administrative proceedings involving or against, Covered Persons,
including without limitation, the consideration by the Commission of a
permanent exemption from section 9(a) of the Act requested pursuant to
the application or the revocation or removal of any temporary
exemptions granted under the Act in connection with the application.

Temporary Order

    The Commission has considered the matter and finds that the
Applicants have made the necessary showing to justify granting a
temporary exemption.

Accordingly,
    It is hereby ordered, pursuant to section 9(c) of the Act, that
Applicants and any other Covered Persons are granted a temporary
exemption from the provisions of section 9(a), solely with respect to
the Injunction, subject to the condition in the application, from July
8, 2011, until the Commission takes final action on their application
for a permanent order.

    By the Commission.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17816 Filed 7-14-11; 8:45 am]
BILLING CODE 8011-01-P