Advisers (who are most likely to find automation cost effective) and
assume that information would need to be gathered from many sources,
both internal and external. See supra note 435 and accompanying
text.
---------------------------------------------------------------------------

    After filing their initial reports, we anticipate that advisers
will incur significantly lower costs because much of the work involved
in the initial report is non-recurring and because of efficiencies
realized from system configuration and reporting automation efforts
accounted for in the initial reporting period. In addition, we estimate
that senior personnel will bear less of the reporting burden in
subsequent reporting periods, reducing costs though not necessarily
reducing the burden hours.
    One commenter agreed that efficiencies will be realized over
time,\506\ but another stated that, at least for private real estate
funds, they would not.\507\ Having considered these comments, we
continue to believe that, for the average adviser (and particularly for
those with more liquid portfolios and greater systems capabilities),
efficiencies will be realized over time.

We have, however, also increased the cost estimates for subsequent
filings in recognition of concerns regarding the overall burden of the
reporting and the possibility that efficiencies are not the same for
all types of private fund adviser.
---------------------------------------------------------------------------

    \506\ See MFA Letter.
    \507\ See comment letter of The National Association of Real
Estate Investment Managers (Mar. 24, 2011).
---------------------------------------------------------------------------

    Based on the foregoing, we estimate \508\ that the periodic filing
requirements under Form PF (including configuring systems and
compiling, automating, reviewing and electronically filing the report)
will impose:
---------------------------------------------------------------------------

    \508\ We understand that some advisers may outsource all or a
portion of their Form PF reporting responsibilities to software
consultants, vendors, filing agents or other third-party service
providers. We have based our estimates on the use of internal
resources, for which some cost data is available, because we believe
that an adviser would engage third-party service providers only if
the external costs were comparable, or less than, the estimated
internal costs of compiling, reviewing and filing the Form PF. The
hourly wage data used in this Economic Analysis section of the
Release is based on the Securities Industry and Financial Markets
Association's Report on Management & Professional Earnings in the
Securities Industry 2010 and Office Salaries in the Securities
Industry 2010 (``SIFMA Earnings Reports''). This data has been
modified to account for an 1,800-hour work-year and multiplied by
5.35 for management and professional employees and by 2.93 for
general and compliance clerks to account for bonuses, firm size,
employee benefits and overhead.
---------------------------------------------------------------------------

    (1) 40 burden hours at a cost of $13,600 \509\ per smaller private
fund adviser for the initial annual report;
---------------------------------------------------------------------------

    \509\ We expect that for the initial report these activities
will most likely be performed equally by a compliance manager at a
cost of $273 per hour and a senior risk management specialist at a
cost of $409 per hour and that, because of the limited scope of
information required from smaller private fund advisers, these
advisers generally would not realize significant benefits from or
incur significant costs for system configuration or automation.
($273/hour x 0.5 + $409/hour x 0.5) x 40 hours = approximately
$13,600.
---------------------------------------------------------------------------

    (2) 15 burden hours at a cost of $4,200 \510\ per smaller private
fund adviser for each subsequent annual report;
---------------------------------------------------------------------------

    \510\ We expect that for subsequent reports senior personnel
will bear less of the reporting burden. As a result, we estimate
that these activities will most likely be performed equally by a
compliance manager at a cost of $273 per hour, a senior compliance
examiner at a cost of $235 per hour, a senior risk management
specialist at a cost of $409 per hour and a risk management
specialist at a cost of $192 per hour. ($273/hour x 0.25 + $235/hour
x 0.25 + $409/hour x 0.25 + $192/hour x 0.25) x 15 hours =
approximately $4,200.
---------------------------------------------------------------------------

    (3) 100 burden hours at a cost of $31,000 \511\ per large private
equity fund adviser for the initial annual report;
---------------------------------------------------------------------------

    \511\ The SEC expects that for the initial report, of a total
estimated burden of 100 hours, approximately 60 hours will most
likely be performed by compliance professionals and 40 hours will
most likely be performed by programmers working on system
configuration and reporting automation. Of the work performed by
compliance professionals, the SEC anticipates that it will be
performed equally by a compliance manager at a cost of $273 per hour
and a senior risk management specialist at a cost of $409 per hour.
Of the work performed by programmers, the SEC anticipates that it
will be performed equally by a senior programmer at a cost of $304
per hour and a programmer analyst at a cost of $224 per hour. ($273/
hour x 0.5 + $409/hour x 0.5) x 60 hours + ($304/hour x 0.5 + $224/
hour x 0.5) x 40 hours = approximately $31,000.
---------------------------------------------------------------------------

    (4) 50 burden hours at a cost of $13,900 \512\ per large private
equity fund adviser for each subsequent annual report;
---------------------------------------------------------------------------

    \512\ The SEC expects that for subsequent reports senior
personnel will bear less of the reporting burden and that
significant system configuration and reporting automation costs will
not be incurred. As a result, the SEC estimates that these
activities will most likely be performed equally by a compliance
manager at a cost of $273 per hour, a senior compliance examiner at
a cost of $235 per hour, a senior risk management specialist at a
cost of $409 per hour and a risk management specialist at a cost of
$192 per hour. ($273/hour x 0.25 + $235/hour x 0.25 + $409/hour x
0.25 + $192/hour x 0.25) x 50 hours = approximately $13,900.
---------------------------------------------------------------------------

    (5) 300 burden hours at a cost of $93,100 \513\ per large hedge
fund adviser for the initial quarterly report;
---------------------------------------------------------------------------

    \513\ We expect that for the initial report, of a total
estimated burden of 300 hours, approximately 180 hours will most
likely be performed by compliance professionals and 120 hours will
most likely be performed by programmers working on system
configuration and reporting automation. Of the work performed by
compliance professionals, we anticipate that it will be performed
equally by a compliance manager at a cost of $273 per hour and a
senior risk management specialist at a cost of $409 per hour. Of the
work performed by programmers, we anticipate that it will be
performed equally by a senior programmer at a cost of $304 per hour
and a programmer analyst at a cost of $224 per hour. ($273/hour x
0.5 + $409/hour x 0.5) x 180 hours + ($304/hour x 0.5 + $224/hour x
0.5) x 120 hours = approximately $93,100.
---------------------------------------------------------------------------

    (6) 140 burden hours at a cost of $38,800 \514\ per large hedge
fund adviser for each subsequent quarterly report;
---------------------------------------------------------------------------

    \514\ We expect that for subsequent reports senior personnel
will bear less of the reporting burden and that significant system
configuration and reporting automation costs will not be incurred.
As a result, we estimate that these activities will most likely be
performed equally by a compliance manager at a cost of $273 per
hour, a senior compliance examiner at a cost of $235 per hour, a
senior risk management specialist at a cost of $409 per hour and a
risk management specialist at a cost of $192 per hour. ($273/hour x
0.25 + $235/hour x 0.25 + $409/hour x 0.25 + $192/hour x 0.25) x 140
hours = approximately $38,800.
---------------------------------------------------------------------------

    (7) 140 burden hours at a cost of $43,500 \515\ per large liquidity
fund adviser for the initial quarterly report; and
---------------------------------------------------------------------------

    \515\ The SEC expects that for the initial report, of a total
estimated burden of 140 hours, approximately 85 hours will most
likely be performed by compliance professionals and 55 hours will
most likely be performed by programmers working on system
configuration and reporting automation. Of the work performed by
compliance professionals, the SEC anticipates that it will be
performed equally by a compliance manager at a cost of $273 per hour
and a senior risk management specialist at a cost of $409 per hour.
Of the work performed by programmers, the SEC anticipates that it
will be performed equally by a senior programmer at a cost of $304
per hour and a programmer analyst at a cost of $224 per hour. ($273/
hour x 0.5 + $409/hour x 0.5) x 85 hours + ($304/hour x 0.5 + $224/
hour x 0.5) x 55 hours = approximately $43,500.
---------------------------------------------------------------------------

    (8) 65 burden hours at a cost of $18,000 \516\ per large liquidity
fund adviser for each subsequent quarterly report.
---------------------------------------------------------------------------

    \516\ The SEC expects that for subsequent reports senior
personnel will bear less of the reporting burden and that
significant system configuration and reporting automation costs will
not be incurred. As a result, the SEC estimates that these
activities will most likely be performed equally by a compliance
manager at a cost of $273 per hour, a senior compliance examiner at
a cost of $235 per hour, a senior risk management specialist at a
cost of $409 per hour and a risk management specialist at a cost of
$192 per hour. ($273/hour x 0.25 + $235/hour x 0.25 + $409/hour x
0.25 + $192/hour x 0.25) x 65 hours = approximately $18,000.
---------------------------------------------------------------------------

    Assuming that there are 3,070 smaller private fund advisers, 250
large hedge fund advisers, 80 large liquidity fund advisers, and 170
large private equity fund advisers, the foregoing estimates suggest an
annual cost of $107,000,000 \517\ for all private fund advisers in the
first year of reporting and an annual cost of $59,800,000 in subsequent
years.\518\
---------------------------------------------------------------------------

    \517\ (3,070 smaller private fund advisers x $13,600 per initial
annual report) + (170 large private equity fund advisers x $31,000
per initial annual report) + (250 large hedge fund advisers x
$93,100 per initial quarterly report) + (250 large hedge fund
advisers x 3 quarterly reports x $38,800 per subsequent quarterly
report) + (80 large liquidity fund advisers x $43,500 per initial
quarterly report) + (80 large liquidity fund advisers x 3 quarterly
reports x $18,000 per subsequent quarterly report) = approximately
$107,000,000.
    \518\ (3,070 smaller private fund advisers x $4,200 per
subsequent annual report) + (170 large private equity fund advisers
x $13,900 per subsequent annual report) + (250 large hedge fund
advisers x 4 quarterly reports x $38,800 per subsequent quarterly
report) + (80 large liquidity fund advisers x 4 quarterly reports x
$18,000 per subsequent quarterly report) = approximately
$59,800,000.
---------------------------------------------------------------------------

    The cost estimates above assume that risk and compliance personnel
(and, in the case of Large Private Fund Advisers filing an initial
report, programmers) will carry out the work of reporting on Form PF.
Some commenters suggested that employees in portfolio management as
well as legal, controller and other back office functions may also be
involved in compiling, reviewing and filing Form PF.\519\ These
commenters did not provide estimates for how the reporting burdens
would be allocated among these groups of employees, and we believe the
allocation is likely to vary significantly among advisers depending on
the size and complexity of their operations. Based on available wage
data, we do not believe that variations in the allocation of these
responsibilities among the functions that we and commenters identified

would result in significantly different aggregate cost estimates.\520\
---------------------------------------------------------------------------

    \519\ See, e.g., Kleinberg General Letter; MFA Letter.
    \520\ For example, our estimates assume that the work is
performed by compliance managers at $273 per hour, senior compliance
examiners at $235 per hour, senior risk management specialists at
$409 per hour, risk management specialists at $192 per hour and, in
the case of Large Private Fund Advisers filing an initial report,
programmers ranging from $304 to $224 per hour. Based on the SIFMA
Earnings Reports, indicative costs in the other functions that
commenters identified are: $287 per hour for a senior portfolio
manager; $211 per hour for an intermediate portfolio manager; $430
per hour for an assistant general counsel; $165 per hour for a fund
senior accountant; $194 per hour for an intermediate business
analyst; and $154 per hour for an operations specialist. An
adviser's chief compliance officer (at a cost of $423 per hour) or
controller (at a cost of $433 per hour) may also review the filing,
though we would expect that in most cases their involvement would be
more limited than that of more junior employees.
---------------------------------------------------------------------------

    In addition, as discussed above, a private fund adviser must file
very limited information on Form PF if it needs to transition from
quarterly to annual filing, if it is no longer subject to the reporting
requirements of Form PF or if it requires a temporary hardship
exemption under rule 204(b)-1(f). We estimate that transition and final
filings will, collectively, cost private fund advisers as a whole
approximately $5,200 per year.\521\ We further estimate that hardship
exemption requests will cost private fund advisers as a whole
approximately $760 per year.\522\ No commenters addressed these
estimates. The estimate with respect to hardship exemptions is
unchanged from the proposal. The estimate with respect to transition
and final filings have been reduced because fewer filers will be
required to report on a quarterly basis and the addition of a minimum
reporting threshold means that fewer advisers will report in
total.\523\
---------------------------------------------------------------------------

    \521\ The SEC estimates that, for the purposes of the PRA,
transition filings will impose 7 burden hours per year on private
fund advisers in the aggregate and that final filings will impose 71
burden hours per year on private fund advisers in the aggregate. The
SEC anticipates that this work will most likely be performed by a
compliance clerk at a cost of $67 per hour. (7 burden hours + 71
burden hours) x $67/hour = approximately $5,200.
    \522\ The SEC estimates that, for the purposes of the PRA,
requests for temporary hardship exemptions will impose 4 burden
hours per year on private fund advisers in the aggregate. The SEC
anticipants that five-eighths of this work will most likely be
performed by a compliance manager at a cost of $273 per hour and
that three-eighths of this work will most likely be performed by a
general clerk at a cost of $50 per hour. (($273 per hour x \5/8\ of
an hour) + ($50 per hour x \3/8\ of an hour)) x 4 hours =
approximately $760.
    \523\ See supra note 424.
---------------------------------------------------------------------------

    Advisers may also incur costs related to the modification or
deployment of systems to support their reporting obligations under Form
PF.\524\ As discussed above, certain of the anticipated costs to Large
Private Fund Advisers of automating Form PF reporting are accounted for
in our cost estimates.\525\ In addition, Large Private Fund Advisers
may incur costs associated with the acquisition or use of hardware
needed to perform computations or otherwise process the data required
on Form PF.\526\ Commenters did not provide estimates for these costs.
However, as discussed above, we estimate that these costs, which are
likely to vary significantly among advisers, will range from $0 to
$25,000,000 in the aggregate for the first year of reporting, with the
actual costs likely to fall in between these two end-points.\527\
---------------------------------------------------------------------------

    \524\ See supra section IV.G of this Release.
    \525\ See supra note 438 and accompanying text.
    \526\ See supra notes 434-441 and accompanying text.
    \527\ Id.
---------------------------------------------------------------------------

    Based on the foregoing estimates, we estimate that the aggregate
annual costs of Form PF, other than for hardware costs, are
approximately $108,000,000 in the first year and $60,500,000 in
subsequent years.\528\ In addition, we estimate that hardware costs
will add between $0 and $25,000,000 in the first year.\529\
---------------------------------------------------------------------------

    \528\ $107,000,000 (for periodic reporting in the first year) +
$5,200 (for transition and final filings) + $760 (for hardship
requests) + $684,000 (for filing fees) = approximately $108,000,000.
$59,800,000 (for periodic reporting in subsequent years) + $5,200
(for transition and final filings) + $760 (for hardship requests) +
$684,000 (for filing fees) = approximately $60,500,000.
    \529\ See supra notes 440-441 and accompanying text.
---------------------------------------------------------------------------

    Reporting requirements can also impose costs beyond the direct
costs associated with compiling and submitting data, and advisers
subject to the Form PF reporting requirements may incur costs that are
more difficult to quantify. One commenter, for instance, suggested an
adviser may incur indirect ``costs associated with the risk of
disclosure of highly sensitive proprietary information.'' \530\ As
discussed above, Form PF elicits non-public information about private
funds and their trading strategies, the public disclosure of which
could adversely affect the funds and their investors.\531\ We are,
however, working to establish controls designed to protect this
sensitive information from improper or inadvertent disclosure and
believe that the risk of such disclosure is low.\532\ If an adviser's
Form PF data were disclosed despite the controls intended to maintain
its confidentiality, there is some risk that a competitor may be able
to use an adviser's data to replicate the adviser's trading strategy or
trade against the adviser, thereby potentially harming the
profitability of the strategy to that adviser. However, because data on
Form PF generally could not, on its own, be used to identify individual
investment positions, the ability of a competitor to use Form PF data
in this manner is limited.\533\ In addition, the deadlines for filing
Form PF have, in most cases, been significantly extended from the
proposal, meaning that the filings will generally contain less current,
and therefore less sensitive, data.\534\ In the very unlikely event
that improper or inadvertent disclosures of Form PF data occurred
frequently, the disclosures could discourage advisers from investing
the time and other resources required to develop novel strategies,
potentially reducing the range of options available to investors and
inhibiting financial innovation.
---------------------------------------------------------------------------

    \530\ CCMR Letter.
    \531\ See supra section II.D of this Release.
    \532\ See supra sections II.D and II.E of this Release.
    \533\ See supra note 343.
    \534\ See supra notes 351 and 344 and accompanying text.
---------------------------------------------------------------------------

    We do not expect this rulemaking to have a significant negative
effect on competition because the information generally will be non-
public and similar types of SEC-registered advisers will have
comparable burdens under the Form.\535\ In addition, the SEC does not
expect this rulemaking to have a significant negative effect on capital
formation, again because the information collected generally will be
non-public and, therefore, should not affect private fund advisers'
ability to raise capital.
---------------------------------------------------------------------------

    \535\ See supra section II.D of this Release for a discussion of
confidentiality of Form PF data.
---------------------------------------------------------------------------

    Although Form PF data generally will be non-public, Form PF will
increase transparency to regulators.\536\ As discussed above, this may
result in a positive effect on capital formation because advisers may,
as a result, assess more carefully the risks associated with particular
investments and, in the aggregate, allocate capital to investments with
a higher value to the economy as a whole.\537\ However, this increased
transparency could also have a negative effect on capital formation if
it increases advisers' aversion to risk and, as a result, reduces
investment in projects that may be risky but beneficial to the economy
as a whole. To the extent that changes in investment allocations lead
to reduced economic outcomes in the aggregate, Form PF reporting may
result in a negative effect on capital available for investment.
---------------------------------------------------------------------------

    \536\ See supra section II.D of this Release for a discussion of
confidentiality of Form PF data.
    \537\ See supra note 494 and accompanying text.
---------------------------------------------------------------------------

    The SEC also recognizes that the direct costs of completing and
filing Form PF may reduce the amount of

capital that funds have available for investment or, if the costs are
passed on to fund investors, reduce the amount of capital investors
have available for investment. This could, in turn, affect capital
formation.\538\ However, the direct costs of reporting on Form PF will,
to some extent, only transfer capital from private fund advisers to
other market participants, such as employees or service providers paid
to complete the Form. Because private fund advisers may have different
investment opportunities than these other market participants, this
transfer may negatively affect aggregate economic outcomes. However,
some of this transferred capital will be invested or spent and will not
represent an aggregate loss to the economy. In addition, the direct
costs of Form PF are, on average, small compared to other economic
incentives that motivate private funds and their advisers to invest and
grow.\539\
---------------------------------------------------------------------------

    \538\ One commenter expressed concern regarding the possible
effects of Form PF reporting on economic growth, investors,
investment opportunities, companies, markets, market liquidity and
tax revenue as well as ``the cost in terms of jobs and capital.''
Issa Letter. This commenter suggested that these potential negative
effects could flow from several sources, including: (1) The
possibility that advisers will locate funds outside the United
States as a result of, or to avoid, Form PF compliance costs or that
these costs will be passed on to investors, causing them to seek
investment opportunities outside the United States; and (2) the
possibility that advisers will form fewer funds, slow the growth of
their funds or shut down existing funds as a result of, or to avoid,
Form PF compliance costs. We address these possible sources of
indirect costs below.
    \539\ See infra notes 545 and 548 and accompanying text.
---------------------------------------------------------------------------

    One commenter expressed concern that this rulemaking could cause
advisers, private funds or investors to seek investment opportunities
outside the U.S. as a result of, for instance, increased costs.\540\
This rulemaking could impose costs on U.S. private fund advisers that
non-U.S. private fund advisers would not bear unless they are subject
to the Advisers Act and the Form PF reporting requirements. However,
advisers generally would not be able to avoid these reporting
obligations by simply organizing the fund in a third country because
regulatory jurisdiction for Form PF does not depend solely on where the
fund is formed.\541\ In addition, as noted above, ESMA has proposed a
reporting regime similar to Form PF for alternative investment fund
managers subject to the EU Directive. If that regime is adopted, we
understand most such alternative investment managers would bear
reporting costs similar to those that Form PF imposes. Accordingly, we
believe the competitive impact of this difference in operating costs
will be limited. We also do not expect that private funds will, to any
significant extent, seek to avoid these regulatory burdens by foregoing
participation in the U.S. capital markets because of the depth and
liquidity of these markets and the stability afforded by the legal
structures in the U.S.
---------------------------------------------------------------------------

    \540\ See Issa Letter.
    \541\ See supra note 134 and accompanying text.
---------------------------------------------------------------------------

    This commenter also suggested that some fund advisers may determine
not to form a new private fund if the costs of Form PF outweigh the
marginal benefits the adviser expects to obtain by forming the
fund.\542\ Reduced fund formation could diminish competition and the
number of choices available to investors. The SEC does not, however,
believe the cost of reporting on Form PF will have a substantial
negative effect on fund formation. An adviser with no existing private
funds considering whether to form its first fund is likely to face
little or no costs as a result of Form PF because it is unlikely to
leap past a Large Private Fund Adviser Threshold and may not even
exceed the minimum reporting threshold of $150 million in private fund
assets under management.\543\ For an existing private fund adviser,
forming a new private fund would increase the cost of reporting on Form
PF, but the adviser would be able to leverage its experience and
existing systems, making the incremental reporting more efficient than
for an adviser first becoming subject to Form PF reporting
requirements.\544\ In the case of either an adviser newly managing
private funds or an adviser with existing private funds, the SEC
believes that Form PF reporting costs are unlikely to discourage the
formation of many funds because the costs of either becoming subject to
Form PF as a smaller private fund adviser or reporting incrementally
more information on Form PF are small when compared to possible
management and performance fees. For example, the SEC estimates that
the cost to smaller private fund advisers of completing and filing Form
PF will average less than $14,000 per initial annual filing and $5,000
per subsequent annual filing--or less than 0.01% of assets under
management for the smallest adviser subject to Form PF reporting
requirements--compared to annual management and performance fees that,
at least among hedge fund advisers, average approximately 1.5% of
assets under management and 20% of excess returns, respectively.\545\
---------------------------------------------------------------------------

    \542\ See Issa Letter.
    \543\ According to HFI data, even among the top 25 hedge fund
launches reported in 2010, the average fund size was approximately
$750 million, and existing advisers launched the majority of those
funds in any case. This data also shows that, out of 135 total hedge
fund launches reported in 2010 exceeding $50 million, at least 110
of them raised under $300 million. HFI does not report in their
annual global review hedge fund launches under $50 million. See HFI
2011 Global Review, supra note 493. See also supra sections IV.A and
IV.G of this Release (discussing estimates of Form PF reporting
costs for smaller private fund advisers).
    \544\ In addition, in the case of large hedge fund advisers, the
more detailed information they must file in section 2b of the Form
only applies to qualifying hedge funds that have at least $500
million in net assets.
    \545\ See Ibbotson, et al., supra note 95, at 15 (finding a
management fee of 1.5% of assets under management and a 20%
performance fee to be the median fee structure in the TASS hedge
fund database). $14,000/$150,000,000 = approximately 0.009%.
---------------------------------------------------------------------------

    In addition, this commenter expressed concern that the Large
Private Fund Adviser thresholds may encourage some private fund
advisers with assets under management near but below the thresholds to
attempt to staunch growth in their funds, either by refusing to admit
new investors or by managing the investments of the funds, to remain
below the thresholds.\546\ Similarly, this commenter suggested that
some funds may even shut down to avoid Form PF reporting costs.\547\
The SEC believes, however, that substantial economic incentives will
likely counter such behavior, including private fund performance fees
that incentivize the private fund adviser to continue advising its
funds and maximize fund appreciation and return. For example, a hedge
fund with an initial value of $1.5 billion that experiences a 1% excess
return will net $3 million in performance fees, and a 1% growth in
assets under management will net an additional $225,000 per year in
management fees, compared to an estimated cost of between $210,000 and
$260,000 in the first year of reporting.\548\ In addition, we believe
the cost to an adviser of reporting will decline over time as the
adviser becomes more familiar with the Form and realizes efficiencies
while, at the same time, the adviser will continue to charge management
fee and potentially collect performance fees each year. With

respect to the large adviser threshold specifically, we anticipate that
business relations with investors that may be damaged if the adviser
turns away investor assets may also motivate advisers to continue to
permit the size of their funds to increase as a result of new
investment.
---------------------------------------------------------------------------

    \546\ See Issa Letter.
    \547\ Id.
    \548\ The calculations assume a management fee of 1.5% of assets
under management and a 20% performance fee. See supra note 545.
$93,100 for the initial quarterly report + $38,800 for each
subsequent quarterly reporting x 3 quarterly reports = approximately
$210,000 for the first year of reporting. See supra notes 513-514.
In addition, the SEC has estimated that a Large Private Fund Adviser
may incur between $0 and $50,000 in costs for the acquisition or use
of hardware in the first year of reporting. See supra note 441 and
accompanying text.
---------------------------------------------------------------------------

    As discussed above, we believe that private fund advisers,
investors in private funds and the companies in which private funds may
invest will enjoy certain benefits related to Form PF.\549\ We
recognize, however, that many of Form PF's benefits will be widely
distributed across the financial system while its costs will be
concentrated. Private fund advisers will bear most of these costs,
though they may also pass some of these costs on to fund investors, and
to the extent that capital available for investment is reduced, the
companies in which private funds would otherwise invest may also bear
costs. In addition, the costs of Form PF to an individual adviser will
vary depending on factors such as the state of its existing systems and
the complexity of its business. As a result, the costs and benefits of
Form PF to particular advisers, particular investors, particular
companies and individual American citizens will not be evenly
distributed. For certain individuals and entities, the costs of Form PF
may even exceed the benefits to them. However, we believe that the
aggregate benefits of this rulemaking will be substantial. Moreover,
the uneven distribution of the benefits and costs of Form PF reflects
the potential for an uneven distribution of the costs and benefits of
engaging in risky financial activities that may impose negative
externalities.\550\
---------------------------------------------------------------------------

    \549\ See supra section V.A of this Release.
    \550\ See, e.g., Iman Anabtawi and Steven L. Schwarcz,
Regulating Systemic Risk: Towards an Analytical Framework, 86 Notre
Dame L. Rev. 4, 27 (2011) (arguing that financial market
participants will not expend sufficient effort to identify and avoid
conditions giving rise to systemic risk and explaining that one
factor contributing to this behavior is that ``the benefits of
exploiting finite capital resources accrue to individual market
participants, each of whom is motivated to maximize use of the
resource, whereas the costs of exploitation are distributed more
widely.* * * The root of the commons problem in financial markets is
the asymmetry in the distribution of gains and losses associated
with investment decisions.* * * In the case of a positive outcome,
the firm captures the full benefits of the investment's success. In
the case of a negative outcome, however, the firm may not suffer the
full consequences of the poor investment. Rather, if the firm fails
or merely defaults, those consequences will impact financial market
participants that rely on the soundness of the firm's financial
condition. Furthermore, if the firm is deemed too systemically
significant to fail, its loss may be absorbed by government as a
lender of last resort. In either case, the uninternalized costs
associated with risk-taking by financial firms leads them to
overexploit scarce capital resources in the form of socially
excessive risk-taking.'').
---------------------------------------------------------------------------

C. CFTC Statutory Findings

    Rule 4.27, as finalized, would deem a CPO registered with the CFTC
that is dually registered as a private fund adviser with the SEC to
have satisfied certain reporting requirements that the CFTC may adopt
by filing Form PF with the SEC. The CPOs and CTAs that are dually
registered as private fund advisers would be required to provide
annually a limited amount of basic information on Form PF about the
operations of their private funds. Only large CPOs and CTAs that are
also registered as private fund advisers with the SEC would have to
submit on a quarterly basis the full complement of systemic risk
related information required by Form PF.\551\ As noted above, the Dodd-
Frank Act tasks FSOC with monitoring the financial services marketplace
in order to identify potential threats to the financial stability of
the United States.\552\ The Dodd-Frank Act also requires FSOC to
collect information from member agencies--like the SEC and the CFTC--to
support its functions.\553\ The CFTC and the SEC are jointly adopting
sections 1 and 2 of Form PF as a means to collect the information
necessary to permit FSOC to fulfill its obligation to monitor private
funds, and in order to identify any potential systemic threats arising
from their activities. The CFTC and the SEC do not currently collect
the information that is covered in proposed sections 1 and 2 of Form
PF.
---------------------------------------------------------------------------

    \551\ See 5 U.S.C. 801(a)(1)(B)(i).
    \552\ See section 112(a)(2)(C) of the Dodd-Frank Act.
    \553\ See section 112(d)(1) of the Dodd-Frank Act.
---------------------------------------------------------------------------

    Section 15(a) of the CEA requires that the CFTC, before
promulgating a regulation under the Act or issuing an order, consider
the costs and benefits of its action. By its terms, CEA Section 15(a)
does not require the CFTC to quantify the costs and benefits of a new
regulation or determine whether the benefits of the regulation outweigh
its costs. Rather, CEA section 15(a) simply requires the CFTC to
``consider the costs and benefits'' of its action. CEA section 15(a)(2)
specifies that costs and benefits shall be evaluated in light of the
following considerations: (1) Protection of market participants and the
public; (2) efficiency, competitiveness and financial integrity of
futures markets; (3) price discovery; (4) sound risk management
practices; and (5) other public interest considerations.\554\
Accordingly, the CFTC could, in its discretion, give greater weight to
any of the five considerations and could, in its discretion, determine
that, notwithstanding its costs, a particular regulation was necessary
or appropriate to protect the public interest or to effectuate any of
the provisions or to accomplish any of the purposes of the Act.
---------------------------------------------------------------------------

    \554\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    Before promulgating these final rules, the CFTC sought public
comment on the rules themselves, including the cost-benefit
considerations of section 1 and 2 of Form PF.\555\ The CFTC also
specifically invited commenters to submit ``any data or other
information that they may have quantifying or qualifying the perceived
costs and benefits of this proposed rule with their comment
letters.''\556\ As noted above, the CFTC and the SEC received comments
on the cost and benefits of the proposed regulations and the estimates
of costs included in the Proposing Release, and they have carefully
considered those comments. CEA Rule 4.27 does not impose any additional
burdens or costs upon registered CPOs and CTAs that are dually
registered as investment advisers with the SEC. By filing Form PF with
the SEC, these dual registrants would be deemed to have satisfied
certain reporting obligations with the CFTC, should the CFTC adopt such
requirements.
---------------------------------------------------------------------------

    \555\ See generally, CFTC Proposing Release, supra note 16, at
76 FR 8068, 8087 (for CFTC's request for comment on the cost-benefit
considerations).
    \556\ See generally, CFTC Proposing Release, supra note 16, at
76 FR 8068, 8087.
---------------------------------------------------------------------------

1. General Costs and Benefits
    With respect to costs, the CFTC has determined that: (1) Without
the reporting requirements imposed by this rulemaking, FSOC will not
have sufficient information to identify and address potential threats
to the financial stability of the United States (such as the near
collapse of Long Term Capital Management); (2) the reporting
requirements, once finalized, will provide the CFTC with better
information regarding the business operations, creditworthiness, use of
leverage, and other material information of certain registered CPOs and
CTAs that are also registered as investment advisers with the SEC; and
(3) while they are necessary to U.S. financial stability, the reporting
requirements will create additional compliance costs for these
registrants, as discussed in the foregoing portions of the Economic
Analysis as well as in the PRA section of this Release.
    The CFTC has determined that the proposed reporting requirements
will provide a benefit to all investors and

market participants by providing the CFTC and other policy makers with
more complete information about these registrants and the potential
risk their activities may pose to the U.S. financial system. In turn,
this information will enhance the CFTC's ability to appropriately
tailor its regulatory policies to the commodity pool industry and its
operators and advisors. As mentioned above, the CFTC and the SEC do not
have access to this information today and have instead been made to use
information from other, less reliable sources.
2. Section 15(a) Determination
    As stated above, section 15(a) of the CEA requires the CFTC to
consider the costs and benefits of its actions in light of five broad
areas of market and public concern: (1) Protection of market
participants and the public; (2) efficiency, competitiveness, and
financial integrity of futures markets; (3) price discovery; (4) sound
risk management practices; and (5) other public interest
considerations.
a. Protection of Market Participants and the Public
    Should the CFTC adopt certain of its proposed systemic risk
reporting requirements, the coordination between the CFTC and SEC on
this rulemaking would result in significant efficiencies for any
private fund adviser that is also registered as a CPO or CTA with the
CFTC. This is because, under CEA rule 4.27, filling Form PF would
satisfy both SEC and CFTC reporting obligations with respect to
commodity pools that are ``private funds'' and may satisfy CFTC
reporting obligations with respect to commodity pools that are not
``private funds,'' in each case should the CFTC adopt such reporting
obligations. As noted above, the CFTC has determined that this
coordination will protect such participants from duplicative reporting
while still providing FSOC with needed information to fulfill its
mission to protect the public from potential threats to the financial
stability of the United States.
    Commodity pools that fall within the definition of private funds
and will be filing Form PF represent a sector of collective investment
vehicles that have experienced a substantial growth and have been the
subject of international concern regarding their size in juxtaposition
with the markets as a whole. This concern has led to several countries
instituting similar data collection efforts and it is well recognized
that the U.S. contingent of these funds represents a sizable portion of
all trading by this type of entity. Thus, this combined SEC/CFTC effort
will contribute substantially to a better understanding of the impact
of private investment vehicles on both the U.S. and international
markets and provide the information necessary to intelligently develop
regulatory efforts and oversight programs to provide adequate
protection of market participants and the public at large.
    Finally, the CFTC agrees with the SEC that Form PF, as adopted,
will increase the amount and quality of information available regarding
a previously opaque area of investment activity and, thereby, enhance
the ability of regulators to protect investors and oversee the markets
that they regulate.
b. Efficiency, Competitiveness, and Financial Integrity of Futures
Markets
    Although the CFTC does not believe this rule relates directly to
the efficiency or competitiveness of futures markets, the CFTC does
recognize that the interconnectedness of the United States financial
system is such that the integrity of futures markets depends on the
financial stability of the entire financial system. To the extent that
the information collected by Form PF assists the Commissions and FSOC
to identify threats that may damage the United States financial system,
the regulations herein indirectly protect the integrity of futures
markets.
c. Price Discovery
    The CFTC has not identified a specific effect on price discovery as
a result of Form PF or related regulations.
d. Sound Risk Management
    The Dodd-Frank Act tasks FSOC and its member agencies (including
both the SEC and the CFTC) with mitigating risks to the financial
stability the United States. The CFTC believes these regulations are
necessary to fulfill that obligation. Risk management is provided by
these regulations in two main ways: (1) Assisting FSOC in fulfilling
its mission of protecting the systemic financial stability of the
United States; and (2) improving the ability of regulators to oversee
markets. These benefits are shared by market participants, at least
indirectly, as a part of the United States financial system. In
addition, CPOs and CTAs that are dually registered as investment
advisers will benefit from these regulations to the extent that
reporting on Form PF requires such entities to review their firms'
portfolios, trading practices, and risk profiles; thus, the CFTC
believes that these regulations may improve the sound risk management
practices within their internal risk management systems.
e. Other Public Interest Considerations
    The CFTC has not identified other public interest considerations
related to the costs and benefits of these regulations.

VI. Final Regulatory Flexibility Analysis

    SEC:
    The SEC has prepared the following Final Regulatory Flexibility
Analysis (``FRFA'') regarding Advisers Act rule 204(b)-1 in accordance
with section 4(a) of the Regulatory Flexibility Act (``RFA'').\557\ The
SEC prepared the Initial Regulatory Flexibility Analysis (``IRFA'') in
conjunction with the Proposing Release in January 2011.\558\
---------------------------------------------------------------------------

    \557\ 5 U.S.C. 603(a).
    \558\ See Proposing Release, supra note 12, at section VI.
---------------------------------------------------------------------------

A. Need for and Objectives of the New Rule

    New Advisers Act rule 204(b)-1 and Form PF implement provisions of
the Dodd-Frank Act by specifying information that private fund advisers
must disclose confidentially to the SEC, which information the SEC will
provide to FSOC for systemic risk assessment purposes. Under the new
rule, private fund advisers must file information responsive to all or
portions of Form PF on a periodic basis. The scope of the required
information and the frequency of the reporting is related to the amount
of private fund assets that each private fund adviser manages and the
type of private fund to which those assets relate. Specifically,
smaller private fund advisers and large private equity advisers must
report annually, while large hedge fund and liquidity fund advisers
must report quarterly and provide additional information regarding the
hedge funds and liquidity funds, respectively, that they manage.\559\
---------------------------------------------------------------------------

    \559\ See section II.A of this Release (describing who must file
Form PF), section II.B of this Release (discussing the frequency
with which private fund advisers must file Form PF), and section
II.C of this Release (describing the information that private fund
advisers must report on Form PF). See also proposed Instruction 9 to
Form PF for information regarding the frequency with which private
fund advisers must file Form PF.
---------------------------------------------------------------------------

B. Significant Issues Raised by Public Comment

    In the Proposing Release, we requested comment on the IRFA. In
particular, we sought comment on the number of small entities,
particularly small advisers, to which the new Advisers Act rule and
reporting requirements would apply and the effect

on those entities, including whether the effects would be economically
significant. None of the comment letters we received addressed the IRFA
or the effect of the proposal on small entities, as that term was used
in the IRFA.

C. Small Entities Subject to the Rule

    Under SEC rules, for the purposes of the Advisers Act and the
Regulatory Flexibility Act, an investment adviser generally is a small
entity if it: (i) Has assets under management having a total value of
less than $25 million; (ii) did not have total assets of $5 million or
more on the last day of its most recent fiscal year; and (iii) does not
control, is not controlled by, and is not under common control with
another investment adviser that has assets under management of $25
million or more, or any person (other than a natural person) that had
total assets of $5 million or more on the last day of its most recent
fiscal year.\560\
---------------------------------------------------------------------------

    \560\ See Advisers Act rule 0-7(a).
---------------------------------------------------------------------------

    Advisers Act rule 204(b)-1 requires an investment adviser
registered with the SEC to file certain information on Form PF if it
manages one or more private funds and had at least $150 million in
regulatory assets under management attributable to private funds as of
the end of its most recently completed fiscal year. Under section 203A
of the Advisers Act, most advisers qualifying as small entities are
prohibited from registering with the SEC and are instead registered
with state regulators. Therefore, few small advisers will meet the
registration criterion. Fewer still are likely to meet the minimum
reporting threshold of $150 million in regulatory assets under
management attributable to private funds. By definition, no small
entities will, on their own, meet this threshold, which the SEC did not
include in the proposal but has added in response to commenter
concerns.\561\ Advisers are, however, required to determine whether
they exceed this threshold by aggregating their private fund assets
under management with those of their related persons (other than
separately operated related persons), with the result that some small
entities may be subject to Form PF reporting requirements.\562\ The SEC
does not have a precise count of the number of advisers that may
satisfy the minimum reporting threshold based on the aggregate private
fund assets that it and its related persons manage because such
advisers file separate reports on Form ADV. However, because of the new
minimum reporting threshold, the group of small entities subject to the
rule as adopted will be a subset of the group that would have been
subject to the proposed rule. In the Proposing Release, the SEC
estimated that approximately 50 small entities were registered with the
SEC and advised one or more private funds.\563\ Accordingly, the SEC
estimates that no more than 50 small entities are likely to become
subject to Form PF reporting obligations under the final rule.
---------------------------------------------------------------------------

    \561\ See supra note 56-59 and accompanying text.
    \562\ See supra section II.A.5 of this Release. The SEC notes
that related persons are permitted to file on a single Form PF. As a
result, even in the case that a larger related person causes a small
entity to exceed the minimum reporting threshold, the small entity
may not ultimately bear the reporting burden. See supra section
II.A.6 of this Release. In addition, under Advisers Act rule 0-
7(a)(3), an adviser with affiliates exceeding the other small entity
thresholds under that rule would not be regarded as a small entity,
suggesting that it may not be possible both to qualify as a small
entity under that rule and to satisfy the criteria that would
subject an adviser to Form PF reporting obligations.
    \563\ See Proposing Release, supra note 12, at n.212 and
accompanying text.
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

    Advisers Act rule 204(b)-1 and Form PF impose certain reporting and
compliance requirements on advisers, including small advisers. A small
adviser that is subject to the rule must complete all or part of
section 1 of the Form. As discussed above, the SEC estimates that
completing, reviewing and filing Form PF will cost approximately
$13,600 for each small adviser in its first year of reporting and
$4,200 per year for each subsequent year.\564\ In addition, small
entities must pay a filing fee of $150 per annual filing.\565\
---------------------------------------------------------------------------

    \564\ See supra notes 509-510 and accompanying text.
    \565\ See supra note 432 and accompanying text.
---------------------------------------------------------------------------

E. Agency Action To Minimize Effect on Small Entities

    The Regulatory Flexibility Act directs the SEC to consider
significant alternatives that would accomplish the stated objective,
while minimizing any significant impact on small entities. In
connection with the proposed rules and amendments, the SEC considered
the following alternatives: (1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for small entities; (3) the use
of performance rather than design standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.
    Regarding the first and fourth alternatives, the SEC is adopting a
minimum reporting threshold of $150 million as well as reporting
requirements and timetables that differ for entities of smaller sizes.
A small entity adviser that is subject to the rule only needs to file
Form PF annually and complete applicable portions of section 1 of the
form.\566\ Large Private Fund Advisers must file additional
information, and large hedge fund or large liquidity fund advisers must
file more frequently. In addition, the filing fees that a smaller
adviser must pay in a given year are lower than those that a large
hedge fund or large liquidity fund advisers must pay over the same
period. Regarding the second alternative, the information that a small
entity subject to the rule must provide under section 1 of Form PF is
much simpler than the information required of large hedge fund or large
liquidity fund advisers and is consolidated in one section of the form.
Regarding the third alternative, the SEC has, in a number of cases,
permitted advisers to rely on their own methodologies in providing the
information that the Form requires, though the use of performance
standards is limited by the need to obtain comparable information from
all filers.
---------------------------------------------------------------------------

    \566\ If the adviser has no hedge fund assets under management,
it need not complete section 1.C of the Form. Advisers that manage a
significant amount of both registered money market fund and
liquidity fund assets must complete section 3 of Form PF, but there
are no small entities that manage a registered money market fund.
---------------------------------------------------------------------------

    CFTC:
    Under CEA rule 4.27, the CFTC would not impose any additional
burden upon registered CPOs and CTAs that are dually registered as
investment advisers with the SEC because such entities are only
required to file Form PF with the SEC. Further, certain CPOs registered
with the CFTC that are also registered with the SEC would be deemed to
have satisfied certain CFTC-related filing requirements, should the
CFTC adopt such requirements, by completing and filing the applicable
sections of Form PF with the SEC. Therefore, any burden imposed by Form
PF through rule 4.27 on small entities registered with both the CFTC
and the SEC has been accounted for within the SEC's calculations
regarding the impact of this collection of information under the RFA
or, to the extent the reporting may relate to commodity pools that are
not private funds, the CFTC anticipates that it would account for this
burden should it adopt a future rulemaking establishing

reporting requirements with respect to those commodity pools.
Accordingly, the Chairman, on behalf of the CFTC, hereby certifies
pursuant to 5 U.S.C. 605(b) that the rules as adopted will not have a
significant impact on a substantial number of small entities.

VII. Statutory Authority

    CFTC:
    The CFTC is adopting rule 4.27 [17 CFR 4.27] pursuant to its
authority set forth in section 4n of the Commodity Exchange Act [7
U.S.C. 6n].
    SEC:
    The SEC is adopting rule 204(b)-1 [17 CFR 275.204(b)-1] pursuant to
its authority set forth in sections 204(b) and 211(e) of the Advisers
Act [15 U.S.C. 80b-4 and 15 U.S.C. 80b-11], respectively.
    The SEC is adopting rule 279.9 pursuant to its authority set forth
in sections 204(b) and 211(e) of the Advisers Act [15 U.S.C. 80b-4 and
15 U.S.C. 80b-11], respectively.

List of Subjects

17 CFR Part 4

    Advertising, Brokers, Commodity futures, Commodity pool operators,
Commodity trading advisors, Consumer protection, Reporting and
recordkeeping requirements.

17 CFR Parts 275 and 279

    Reporting and recordkeeping requirements, Securities.

Text of Final Rules

Commodity Futures Trading Commission

    For the reasons set out in the preamble, the CFTC is amending Title
17, Chapter I of the Code of Federal Regulations as follows:

PART 4--COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS

0
1. The authority citation for part 4 is revised to read as follows:

    Authority: 7 U.S.C. 1a, 2, 4, 6(c), 6b, 6c, 6l, 6m, 6n, 6o, 12a,
and 23.

0
2. Add Sec.  4.27 to subpart B to read as follows:

Sec.  4.27  Additional reporting by advisors of commodity pools.

    Except as otherwise expressly provided in this section, CPOs and
CTAs that are dually registered with the Securities and Exchange
Commission and are required to file Form PF pursuant to the rules
promulgated under the Investment Advisers Act of 1940, shall file Form
PF with the Securities and Exchange Commission in lieu of filing such
other reports with respect to private funds as may be required under
this section. In addition, except as otherwise expressly provided in
this section, CPOs and CTAs that are dually registered with the
Securities and Exchange Commission and are required to file Form PF
pursuant to the rules promulgated under the Investment Advisers Act of
1940, may file Form PF with the Securities and Exchange Commission in
lieu of filing such other reports with respect to commodity pools that
are not private funds as may be required under this section. Dually
registered CPOs and CTAs that file Form PF with the Securities and
Exchange Commission will be deemed to have filed Form PF with the
Commission for purposes of any enforcement action regarding any false
or misleading statement of a material fact in Form PF.

Securities and Exchange Commission

    For the reasons set out in the preamble, the SEC is amending Title
17, Chapter II of the Code of Federal Regulations as follows:

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

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

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

0
4. Section 275.204(b)-1 is added to read as follows:

Sec.  275.204(b)-1  Reporting by investment advisers to private funds.

    (a) Reporting by investment advisers to private funds on Form PF.
If you are an investment adviser registered or required to be
registered under section 203 of the Act (15 U.S.C. 80b-3), you act as
an investment adviser to one or more private funds and, as of the end
of your most recently completed fiscal year, you managed private fund
assets of at least $150 million, you must complete and file a report on
Form PF (17 CFR 279.9) by following the instructions in the Form, which
specify the information that an investment adviser must provide. Your
initial report on Form PF is due no later than the last day on which
your next update would be timely in accordance with paragraph (e) if
you had previously filed the Form; provided that you are not required
to file Form PF with respect to any fiscal quarter or fiscal year
ending prior to the date on which your registration becomes effective.
    (b) Electronic filing. You must file Form PF electronically with
the Form PF filing system on the Investment Adviser Registration
Depository (IARD).

    Note to paragraph (b): Information on how to file Form PF is
available on the Commission's Web site at http://www.sec.gov/iard.

    (c) When filed. Each Form PF is considered filed with the
Commission upon acceptance by the Form PF filing system.
    (d) Filing fees. You must pay the operator of the Form PF filing
system a filing fee as required by the instructions to Form PF. The
Commission has approved the amount of the filing fee. No portion of the
filing fee is refundable. Your completed Form PF will not be accepted
by the operator of the Form PF filing system, and thus will not be
considered filed with the Commission, until you have paid the filing
fee.
    (e) Updates to Form PF. You must file an updated Form PF:
    (1) At least annually, no later than the date specified in the
instructions to Form PF; and
    (2) More frequently, if required by the instructions to Form PF.
You must file all updated reports electronically with the Form PF
filing system.
    (f) Temporary hardship exemption.
    (1) If you have unanticipated technical difficulties that prevent
you from submitting Form PF on a timely basis through the Form PF
filing system, you may request a temporary hardship exemption from the
requirements of this section to file electronically.
    (2) To request a temporary hardship exemption, you must:
    (i) Complete and file in paper format, in accordance with the
instructions to Form PF, Item A of Section 1a and Section 5 of Form PF,
checking the box in Section 1a indicating that you are requesting a
temporary hardship exemption, no later than one business day after the
electronic Form PF filing was due; and
    (ii) Submit the filing that is the subject of the Form PF paper
filing in electronic format with the Form PF filing system no later
than seven business days after the filing was due.
    (3) The temporary hardship exemption will be granted when you file
Item A of Section 1a and Section 5 of Form PF, checking the box in
Section 1a indicating that you are requesting a temporary hardship
exemption.
    (4) The hardship exemptions available under Sec.  275.203-3 do not
apply to Form PF.
    (g) Definitions. For purposes of this section:

    (1) Assets under management means the regulatory assets under
management as determined under Item 5.F of Form ADV (Sec.  279.1 of
this chapter).
    (2) Private fund assets means the investment adviser's assets under
management attributable to private funds.

PART 279--FORMS PRESCRIBED UNDER THE INVESTMENT ADVISERS ACT OF
1940

0
5. The authority citation for Part 279 continues to read as follows:

    Authority: 15 U.S.C. 80b-1, et seq.

0
6. Section 279.9 is added to read as follows:

Sec.  279.9  Form PF, reporting by investment advisers to private
funds.

    This form shall be filed pursuant to Rule 204(b)-1 (Sec.
275.204(b)-1 of this chapter) by certain investment advisers registered
or required to register under section 203 of the Act (15 U.S.C. 80b-3)
that act as an investment adviser to one or more private funds.

    Note: The text of the following Form PF will not appear in the
Code of Federal Regulations.

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    By the Commodity Futures Trading Commission.
    Dated: October 31, 2011.
David A. Stawick,
Secretary.
    By the Securities and Exchange Commission.
    Dated: October 31, 2011.
Elizabeth M. Murphy,
Secretary .
[FR Doc. 2011-28549 Filed 11-15-11; 8:45 am]
BILLING CODE 6351-01-P; 8011-01-P


[Federal Register Volume 81, Number 130 (Thursday, July 7, 2016)]
[Notices]
[Pages 44404-44406]
[FR Doc No: 2016-16030]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78203; File No. SR-ISE-2016-15]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Extend the Penny Pilot Program

June 30, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 29, 2016, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission the proposed rule change as described in Items I and II
below, which items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The ISE proposes to amend its rules to extend a pilot program to
quote and to trade certain options classes in penny increments (``Penny
Pilot Program''). The text of the proposed rule change is available on
the Exchange's Web site www.ise.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    Under the Penny Pilot Program, the minimum price variation for all
participating options classes, except for the Nasdaq-100 Index Tracking
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all
quotations in options series that are quoted at less than $3 per
contract and $0.05 for all quotations in options series that are quoted
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01
increments for all options series. The Penny Pilot Program is currently
scheduled to expire on June 30, 2016.\3\ The Exchange proposes to
extend the Penny Pilot Program through December 31, 2016, and to
provide a revised date for adding replacement issues to the Penny Pilot
Program. The Exchange proposes that any Penny Pilot Program issues that
have been delisted may be replaced on the second trading day following
July 1, 2016. The replacement issues will be selected based on trading
activity for the most recent six month period excluding the month
immediately preceding the replacement (i.e., beginning December 1,
2015, and ending May 31, 2016). This filing does not propose any
substantive changes to the Penny Pilot Program: All classes currently
participating will remain the same and all minimum increments will
remain unchanged. The Exchange believes the benefits to public
customers and other market participants who will be able to express
their true prices to buy and sell options have been

demonstrated to outweigh any increase in quote traffic.
---------------------------------------------------------------------------

    \3\ See Exchange Act Release No. 75312 (June 26, 2015), 80 FR
38251 (July 2, 2015) (SR-ISE-2015-21).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6(b) of the Act.\4\
Specifically, the proposed rule change is consistent with Section
6(b)(5) of the Act,\5\ because it is designed to promote just and
equitable principles of trade, remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, to protect investors and the public interest. In
particular, the proposed rule change, which extends the Penny Pilot
Program for an additional six months, will enable public customers and
other market participants to express their true prices to buy and sell
options to the benefit of all market participants.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does
not believe that the proposed rule change will impose any burden on
intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Specifically,
the Exchange believes that, by extending the expiration of the Penny
Pilot Program, the proposed rule change will allow for further analysis
of the Penny Pilot Program and a determination of how the Penny Pilot
Program should be structured in the future. In doing so, the proposed
rule change will also serve to promote regulatory clarity and
consistency, thereby reducing burdens on the marketplace and
facilitating investor protection.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of the
filing.\10\ However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because doing so will allow the Pilot Program to continue without
interruption in a manner that is consistent with the Commission's prior
approval of the extension and expansion of the Pilot Program and will
allow the Exchange and the Commission additional time to analyze the
impact of the Pilot Program. Accordingly, the Commission designates the
proposed rule change as operative upon filing with the Commission.\12\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this pre-filing requirement.
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form http://www.sec.gov/rules/sro.shtml); or
     Send an Email to<EMAIL_ADDRESS>Please include
File No. SR-ISE-2016-15 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2016-15. 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 Web site (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 inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the ISE. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All

submissions should refer to File Number SR-ISE-2016-15 and should be
submitted by July 28, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-16030 Filed 7-6-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 149 (Friday, August 2, 2019)]
[Notices]
[Pages 37905-37906]
[FR Doc No: 2019-16475]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Docket ID FEMA-2008-0010]

Board of Visitors for the National Fire Academy

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Committee management; notice of open Federal Advisory Committee
meeting.

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

SUMMARY: The Board of Visitors for the National Fire Academy (Board)
will meet on September 9-10, 2019, in Emmitsburg, Maryland. The meeting
will be open to the public.

DATES: The meeting will take place on Monday, September 9, 8 a.m. to 5
p.m. Eastern Daylight Time and on Tuesday, September 10, 8 a.m. to 5
p.m. Eastern Daylight Time. Please note that the meeting may close
early if the Board has completed its business.

ADDRESSES: The meeting will be held at the National Emergency Training
Center, 16825 South Seton Avenue, Building H, Room 300, Emmitsburg,
Maryland. Members of the public who wish to obtain details on how to
gain access to the facility and directions may contact Deborah
Gartrell-Kemp as listed in the FOR FURTHER INFORMATION CONTACT section
by close of business September 2, 2019. Photo identification that meets
REAL ID ACT standards (https://www.usfa.fema.gov/training/nfa/admissions/campus_access.html) is required for access. Members of the
public may also participate by teleconference and may contact Deborah
Gartrell-Kemp to obtain the call-in number and access code. For
information on services for individuals with disabilities or to request
special assistance, contact Deborah Gartrell-Kemp as soon as possible.
    To facilitate public participation, we are inviting public comment
on the issues to be considered by the Board as listed in the
SUPPLEMENTARY INFORMATION section. Comments must be submitted in
writing no later than September 2, 2019, must be identified by Docket
ID FEMA-2008-0010 and may be submitted by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
     Mail/Hand Delivery: Deborah Gartrell-Kemp, 16825 South
Seton Avenue, Emmitsburg, Maryland 21727, post-marked no later than
September 2, 2019.
    Instructions: All submissions received must include the words
``Federal Emergency Management Agency'' and the Docket ID for this
action. Comments received will be posted without alteration at http://www.regulations.gov, including any personal information provided.
    Docket: For access to the docket to read background documents or
comments received by the National Fire Academy Board of Visitors, go to
http://www.regulations.gov, click on ``Advanced Search,'' then enter
``FEMA-2008-0010'' in the ``By Docket ID'' box, then select ``FEMA''
under ``By Agency,'' and then click ``Search.''

FOR FURTHER INFORMATION CONTACT:
    Alternate Designated Federal Officer: Kirby E. Kiefer, telephone
(301) 447-1117, email<EMAIL_ADDRESS>    Logistical Information: Deborah Gartrell-Kemp, telephone (301) 447-
7230 and email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The Board will meet on Monday, September 9,
and Tuesday, September 10, 2019. The meeting will be open to the
public. Notice of this meeting is given under the Federal Advisory
Committee Act, 5 U.S.C. App.

Purpose of the Board

    The purpose of the Board is to review annually the programs of the
National Fire Academy (Academy) and advise the Administrator of the
Federal Emergency Management Agency (FEMA), through the United States
Fire Administrator, on the operation of the Academy and any
improvements therein that the Board deems appropriate. In carrying out
its responsibilities, the Board examines Academy programs to determine
whether these programs further the basic missions that are approved by
the Administrator of FEMA, examines the

physical plant of the Academy to determine the adequacy of the
Academy's facilities, and examines the funding levels for Academy
programs. The Board submits a written annual report through the United
States Fire Administrator to the Administrator of FEMA. The report
provides detailed comments and recommendations regarding the operation
of the Academy.

Agenda

    On Monday, September 9, there will be five sessions, with
deliberations and voting at the end of each session as necessary:
    1. The Board will conduct a swearing in of new Board members and
will then select a Chairperson and Vice Chairperson for Fiscal Year
2020.
    2. The Board will discuss the USFA Strategic Plan.
    3. The Board will discuss deferred maintenance and capital
improvements on the National Emergency Training Center campus and
Fiscal Year 2019 Budget Request/Budget Planning.
    4. The Board will deliberate and vote on recommendations on Academy
program activities.
    5. The Board will receive activity reports on the National Fire
Incident Reporting System Subcommittee, and the Professional
Development Initiative Subcommittee. The board will also visit
classrooms and tour the campus.
    On Tuesday, September 10, 2019, the Board will receive updates on
U.S. Fire Administration data, research, and response support
initiatives, and will receive ethics and FACA training. The Board will
also engage in an annual report writing session. Deliberations or
voting may occur as needed during the report writing session.
    There will be a 10-minute comment period after each agenda item and
each speaker will be given no more than 2 minutes to speak. Please note
that the public comment period may end before the time indicated,
following the last call for comments. Contact Deborah Gartrell-Kemp to
register as a speaker. Meeting materials will be posted at https://www.usfa.fema.gov/training/nfa/about/bov.html by September 6, 2019.

Tonya L. Hoover,
Superintendent, National Fire Academy, United States Fire
Administration, Federal Emergency Management Agency.
[FR Doc. 2019-16475 Filed 8-1-19; 8:45 am]
 BILLING CODE 9111-45-P


[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Rules and Regulations]
[Pages 42254-42256]
[FR Doc No: 2016-15415]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2016-0347]
RIN 1625- AA00

Safety Zone; Fourth of July Fireworks Murrells Inlet, SC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a temporary safety zone on the
navigable waters of Murrells Inlet, SC. This safety zone is necessary
to protect the public from hazards associated with launching fireworks
over navigable waters of the United States. This rule will prohibit
persons and vessels from being in the safety zone unless authorized by
the Captain of the Port Charleston or a designated representative.

DATES: This rule is effective on July 4, 2016.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2016-0347 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions about this rule,
call or email Lieutenant John Downing, Sector Charleston Office of
Waterways Management, Coast Guard; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
NPRM Notice of Proposed Rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    On April 22, 2016, The Marsh Walk Group notified the Coast Guard
that it will be conducting a fireworks display from 9:30 p.m. to 9:50
p.m. on July 4, 2016. In response, on June 7, 2016, the

Coast Guard published a notice of proposed rulemaking titled Fourth of
July Fireworks Murrells Inlet, SC. There we stated why we issued the
NPRM, and invited comments on our proposed regulatory action related to
this rule. During the comment period that ended June 22, 2016, we
received no comments.
    Under good cause provisions in 5 U.S.C. 553(d)(3), we are making
this rule effective less than 30 days after its publication in the
Federal Register. The Coast Guard finds that good cause exists for
making this rule effective starting July 4, 2016 because it was
impracticable to publish a NPRM and a final rule 30 days or more before
this event due to the limited time available between when the Coast
Guard was notified of this event and the date of the event. This safety
zone is necessary to ensure the safety of life and property during the
Fireworks display and it would be contrary to public interest not to
make this rule effective by July 4, 2016.

III. Legal Authority and Need for Rule

    The legal basis for the rule is the Coast Guard's authority to
establish a safety zone: 33 U.S.C. 1231. The purpose of this rulemaking
is to ensure the safety of vessels and the navigable waters within a
500-yard radius of the fireworks barge before, during, and after the
scheduled event.

IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received no comments on our NPRM published June
7, 2016. There are no changes in the regulatory text of this rule from
the proposed rule in the NPRM.
    On July 4, 2016 The Marsh Walk Group will host a fireworks display
from 9:30 p.m. to 9:50 p.m. The safety zone will cover all navigable
waters within 500 yards of the Veterans pier located on the Atlantic
Ocean. The duration of the zone is intended to ensure the safety of
vessels and these navigable waters before, during, and after the
scheduled 9:30 p.m. to 9:50 p.m. fireworks display. No vessel or person
is permitted to enter the safety zone without obtaining permission from
the COTP or a designated representative. The Coast Guard will provide
notice of the regulated areas by Local Notice to Mariners, Broadcast
Notice to Mariners, and on-scene designated representatives.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive Orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive Orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This rule has not been designated
a ``significant regulatory action,'' under Executive Order 12866.
Accordingly, it has not been reviewed by the Office of Management and
Budget.
    This regulatory action determination is based on the size,
location, duration, and time-of-day of the safety zone. Vessel traffic
will be able to safely transit around this safety zone which will
impact a small designated area of the Atlantic Ocean for less than 1
hour during the evening when vessel traffic is normally low. Moreover,
the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM
marine channel 16 about the zone, and the rule will allow vessels to
seek permission to enter the zone.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rulemaking. The Coast Guard certifies under 5
U.S.C. 605(b) that this rule will not have a significant economic
impact on a substantial number of small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this rule has implications for federalism or Indian tribes,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a

State, local, or tribal government, in the aggregate, or by the private
sector of $100,000,000 (adjusted for inflation) or more in any one
year. Though this rule will not result in such an expenditure, we do
discuss the effects of this rule elsewhere in this preamble.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that
this action is one of a category of actions that do not individually or
cumulatively have a significant effect on the human environment. This
rule involves a safety zone lasting less than 1 hour that will prohibit
entry within 500 yards of the Veterans Pier. Normally such actions are
categorically excluded from further review under paragraph 34(g) of
Figure 2-1 of Commandant Instruction M16475.lD. A preliminary
environmental analysis checklist and Categorical Exclusion
Determination are available in the docket where indicated under
ADDRESSES. We seek any comments or information that may lead to the
discovery of a significant environmental impact from this rule.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-
1, 6.04-6, and Department of Homeland Security Delegation No.
0170.1.

0
2. Add a temporary Sec.  165.T07-0347 to read as follows:

Sec.  165.T07-0347  Safety Zone; Fourth of July Fireworks Murrells
Inlet, SC.

    (a) This rule establishes a safety zone on all Atlantic Ocean
waters within a 500 yard radius of Veterans Pier, from which fireworks
will be launched.
    (b) Definition. As used in this section, ``designated
representative'' means Coast Guard Patrol Commanders, including Coast
Guard coxswains, petty officers, and other officers operating Coast
Guard vessels, and Federal, state, and local officers designated by or
assisting the Captain of the Port Charleston in the enforcement of the
regulated areas.
    (c) Regulations. (1) All persons and vessels are prohibited from
entering, transiting through, anchoring in, or remaining within the
regulated area unless authorized by the Captain of the Port Charleston
or a designated representative.
    (2) Persons and vessels desiring to enter, transit through, or
remain within the regulated area may contact the Captain of the Port
Charleston by telephone at<PHONE_NUMBER>, or a designated representative
via VHF radio on channel 16, to request authorization. If authorization
to enter, transit through, or remain within the regulated area is
granted by the Captain of the Port Charleston or a designated
representative, all persons and vessels receiving such authorization
must comply with the instructions of the Captain of the Port Charleston
or a designated representative.
    (3) The Coast Guard will provide notice of the regulated area by
Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene
designated representatives.
    (d) Enforcement period. This rule will be enforced on July 4, 2016
from 9:15 p.m. until 10 p.m.

    Dated: June 24, 2016.
B.D. Falk,
Commander, U.S. Coast Guard, Acting Captain of the Port Charleston.
[FR Doc. 2016-15415 Filed 6-28-16; 8:45 am]
 BILLING CODE 9110-04-P