technical staff, when it wants to review a certain area, such as a
particular business line or a model review. The inspections are in-
depth, focused reviews that involve discussions with staff, reviews of
internal documents at the firm, and testing to ensure the information
provided by the firm to the PRA is accurate. If a firm does not take
appropriate corrective action as required, the PRA may open an
enforcement proceeding.

C. Enforcement Authority in the UK

    Similar to the supervision regime, enforcement of banks and
investment firms located in the UK is conducted by the FCA and the PRA.
As with supervisory powers, the FCA is primarily responsible for
conduct, anti-money laundering, trade acknowledgment and verification,
portfolio reconciliation and dispute reporting, portfolio compression,
trading relationship documentation and securities count requirements,
while the PRA is primarily responsible for capital, margin, internal
supervision, chief compliance officer and risk management requirements.
Both the FCA and PRA are responsible for recordkeeping, reporting and
notification requirements.
1. FCA
    Within the FCA, enforcement investigations are carried out by the
relevant department of the organization's Enforcement and Market
Oversight Division (``EMO''). EMO has three investigation departments:
(1) Unauthorized business; (2) retail; and (3) wholesale. Most
investigations into firms subject to substituted compliance would fall
into the wholesale category. The FCA gathers information through
voluntary submissions and interviews, and may compel information,
documents or testimony as necessary, and subject to limitations on use.
In addition to the authority to investigate and impose sanctions for
regulatory misconduct, the FCA can simultaneously prosecute criminal
offenses such as insider trading and unauthorized business and
promotion activities. The FCA has many sanctions and remedies for
wrongdoing available for use. Among its sanctioning powers are: Public
censure, financial penalties, disciplinary prohibitions, and suspension
or restriction orders. In deciding which sanction to apply, the FCA
considers relevant circumstances including steps taken to mitigate or
remedy the harm and the level of cooperation. The FCA resolves many
matters by settlement. Additionally, as required by law, it publishes
Final Notices regarding enforcement, subject to certain public interest
limitations on publication.
2. PRA
    The decision to open an investigation at the PRA is typically made
jointly by a senior supervisor and a senior representative of the PRA's
enforcement team. Once these individuals decide to investigate,
investigators are appointed and the PRA sends a notice to the subject.
Like the FCA, the PRA is empowered to require certain information or
documents from authorized firms. Under certain circumstances,
investigators also can require a person that is neither the subject of
the investigation nor connected with the subject to attend an interview
and answer questions and/or

provide information necessary to the investigation. At the end of an
investigation, the investigators will report to the PRA and make a
recommendation. The possible recommendations include, among others, (1)
taking no further action; (2) imposing an enforcement sanction against
the subject, which may start settlement discussions or steps towards a
contested process; (3) imposing requirements or other supervisory
measures against a firm; or (4) opening additional investigations.\201\
The PRA is empowered to impose sanctions such as publishing a public
statement regarding misconduct, called ``public censure,'' directing
persons to refrain from conduct, prohibiting a person from holding an
office or position, or imposing a financial penalty.\202\ In
determining the appropriate amount of penalty, the PRA considers: (1)
Any disgorgement to be ordered; (2) the seriousness of the misconduct;
(3) any adjustment for aggravating or mitigating factors; (4) any
adjustment for deterrence; and (5) reductions for settlement discount
and/or serious financial hardship. In resolving actions, the PRA seeks
first to determine whether an appropriate settlement can be reached. If
one cannot be reached, the investigation team recommends action to the
Enforcement Decision Making Committee, which is the PRA's decision-
making body for contested enforcement cases.\203\ As with the FCA, the
PRA is required by law to publish Final Notices regarding enforcement,
subject to certain public interest limitations on publication.
---------------------------------------------------------------------------

    \201\ See PRA Regulatory Investigations Guide, available at:
https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/pra-statutory-powers/regulatory-investigations-guide.pdf?la=en&hash=7170036F5249F21F15236504A8CC94E6F65D5EE2, April
2019 at 8.
    \202\ See Enforcement Decision Making Committee Policy Statement
PS/EDMC2018, available at: https://www.bankofengland.co.uk/-/media/boe/files/paper/2018/enforcement-decision-making-committee-policy-statement.pdf?la=en&hash=2F1E211F8BDB9B23A054DD770CBE342EB381020E
(``Enforcement Decision Making Committee Policy Statement PS/
EDMC2018''), at 1 (citing Section 832ZR of the Banking Act of 2009).
    \203\ Enforcement Decision Making Committee Policy Statement PS/
EDMC2018.
---------------------------------------------------------------------------

X. Request for Comment

    Commenters are invited to address all aspects of the application,
the Commission's preliminary views and the proposed Order.

A. General Aspects of the Comparability Assessments and Proposed Order

    The Commission requests comment regarding the preliminary views and
proposed Order in connection with each of the general ``regulatory
outcome'' categories addressed above. Commenters particularly are
invited to address, among other issues, whether the relevant UK
provisions generally are sufficient to produce regulatory outcomes that
are comparable to the outcomes associated with requirements under the
Exchange Act, and whether the conditions and limitations of the
proposed Order would adequately address potential gaps in the relevant
regulatory outcomes or would otherwise result in any implementation or
other practical issues.
    Further, the Commission requests comment regarding whether the
proposed conditions and limitations guard against comparability gaps
arising from the cross-border application of UK requirements (including
when SBS Entities conduct security-based swap business through branches
located in the United States or in third countries).
    With respect to the proposed conditions and limitations, commenters
also are invited to address any differences between UK regulatory
requirements and frameworks and either the German requirements and
frameworks that formed the basis for the Commission's conditional grant
of substituted compliance for Germany or the French requirements and
frameworks that formed the basis for the Commission's proposed
conditional grant of substituted compliance for France.\204\ Would the
responses to any of the questions that the Commission asked in
connection with the German Notice and Proposed Order and/or the French
Notice and Proposed Order differ if those questions applied to UK
regulatory requirements and frameworks?
---------------------------------------------------------------------------

    \204\ See German Substituted Compliance Order, 85 FR at 85868;
French Notice and Proposed Order, 85 FR at 85720; see also German
Notice and Proposed Order, 85 FR at 72729-30.
---------------------------------------------------------------------------

B. Risk Control Requirements

    The Commission further requests comment regarding the proposed
grant of substituted compliance in connection with requirements under
the Exchange Act related to internal risk management systems, trade
acknowledgement and verification, portfolio reconciliation and dispute
reporting, and trading relationship documentation. Commenters
particularly are invited to address the basis for substituted
compliance in connection with those risk control requirements, and the
proposed conditions and limitations connected to substituted compliance
for those requirements.
    In addition to these general matters, the Commission invites
commenters to address the Commission's preliminary analysis that UK
EMIR trade acknowledgment and verification and trading relationship
documentation requirements are comparable to Exchange Act requirements
when viewed in light of the ESMA EMIR Q&A and the addition of the new
general condition concerning a Covered Entity's application of UK EMIR
requirements, and without the need to rely on UK requirements that
implement MiFID documentation requirements. Should the Commission
instead require Covered Entities to comply both with UK EMIR
requirements related to trade acknowledgment and verification and
trading relationship documentation and with UK requirements that
implement MiFID documentation requirements?
    With respect to portfolio reconciliation and dispute reporting
requirements, the Commission also invites commenters to address the
condition requiring a Covered Entity to provide the Commission with
reports regarding disputes between counterparties on the same basis as
the Covered Entity provides those reports to the FCA pursuant to UK
law. Would differences in the timing of dispute reports made pursuant
to Exchange Act requirements as compared to reports made pursuant to UK
law make UK portfolio reconciliation and dispute reporting requirements
not comparable to Exchange Act requirements?
    With respect to all risk control requirements, commenters also are
invited to address any differences between UK regulatory requirements
and frameworks and either the German requirements and frameworks that
formed the basis for the Commission's conditional grant of substituted
compliance for Germany or the French requirements and frameworks that
formed the basis for the Commission's proposed conditional grant of
substituted compliance for France.\205\ Would the responses to any of
the questions about risk control requirements that the Commission asked
in connection with the German Notice and Proposed Order and/or the
French Notice and Proposed Order differ if those questions applied to
UK regulatory requirements and frameworks?
---------------------------------------------------------------------------

    \205\ See German Substituted Compliance Order, 85 FR at 85689-
91; French Notice and Proposed Order, 85 FR 85724-25; see also
German Notice and Proposed Order, 85 FR at 72730-32.

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

C. Capital and Margin Requirements

1. Capital
    The Commission further requests comment regarding the comparability
analysis of UK capital requirements with Exchange Act capital
requirements for non-prudentially regulated security-based swap
dealers. Commenters particularly are invited to address the basis for
substituted compliance in connection with those requirements, and the
proposed conditions and limitations connected to substituted compliance
for those requirements. Does UK law taken as a whole produce regulatory
outcomes that are comparable to those of Exchange Act rule 18a-1? Are
there any additional conditions that should be applied to substituted
compliance for these capital requirements to promote comparable
regulatory outcomes?
    The Commission also requests comment and supporting data on the
proposed capital conditions. The purpose of the potential conditions
would be to address the concern that, while the Basel capital standard
contains requirements designed to address liquidity such as the LCR,
net stable funding ratio (``NSFR''), and an internal liquidity adequacy
assessment process (``liquidity assessment process''), the Basel
capital standard does not impose a net liquid assets test that requires
a Covered Entity to maintain more than one dollar of highly liquid
assets for each dollar of unsubordinated liabilities. The Commission
requests comment on how the liquidity provisions in the Basel capital
standard (the LCR, NSFR, and liquidity assessment process) impact the
liquidity of Covered Entities that would apply substituted compliance
with respect to Exchange Act rule 18a-1 (i.e., nonbanks). Do these
requirements in practice result in Covered Entities maintaining more
than one dollar of highly liquid assets for each dollar of
unsubordinated liabilities? If so, explain why. If not, explain why
not.
    The Commission also requests comment on whether Covered Entities
that are not banks have access to short-term liquidity through Central
Bank facilities in the UK that are available to banks (e.g., Sterling
Monetary Framework through the Bank of England). Please identify and
describe each facility that is available to nonbank Covered Entities,
including any limitations on their ability to access the facility.
    The Commission also requests comment on how the proposed capital
conditions compare to any existing capital requirements under the Basel
capital standards. For example, are there differences in the frequency
or nature of calculations under the Basel capital standards?
    The Commission also requests comment on and seeks information about
the assets, liabilities, and capital of the Covered Entities that would
apply substituted compliance with respect to Exchange Act rule 18a-1.
The Commission further requests comment on what specific types of non-
prudentially regulated security-based swap dealers in the UK would be
relying on a substituted compliance determination with respect to
capital requirements under Exchange Act rule 18a-1. What are the
primary business lines engaged in by these entities and what types of
assets and liabilities do they typically carry on their balance sheets?
Are the balance sheets of these entities primarily composed of liquid
or illiquid assets? The Commission would use this information to
analyze the liquidity of these entities in the context of considering
the proposed capital conditions. For example, do the Covered Entities
that would apply substituted compliance with respect to Exchange Act
rule 18a-1 engage primarily in a securities business? If so, are their
balance sheets similar to those of U.S. broker-dealers that deal in
securities in terms of holding highly liquid assets? If their balance
sheets are similar to U.S. broker-dealers, are the additional capital
conditions discussed above necessary? Alternatively, would the
additional capital conditions serve to ensure that these firms do not
engage in non-securities business activities that could impair their
liquidity? Should the Commission consider the relevance of a Covered
Entity's business model in determining whether to impose any potential
capital conditions? For example, should the Commission take into
account the fact that a Covered Entity does not engage in unsecured
lending and other activities more typical of banks?
    The Commission requests comment on the capital conditions that
would require a Covered Entity to: (1) Maintain an amount of assets
that are allowable under Exchange Act rule 18a-1, after applying
applicable haircuts under the Basel capital standard, that equals or
exceeds the Covered Entity's current liabilities coming due in the next
365 days; and (2) makes a quarterly record listing: (a) The assets
maintained pursuant to the first proposed condition, their value, and
the amount of their applicable haircuts; and (b) the aggregate amount
of the liabilities coming due in the next 365 days. Is the term
``current liabilities'' understood by market participants? If not,
please explain why and suggest alternative language. Is 365 days an
appropriate number of days to use in connection with covering ``current
liabilities''? If not, please explain why and suggest an alternative
number of days. For example, would a period of 60, 90, 120, 150, 180,
210, 240, 270, 300, 330, 420, 510 days or some other period of days be
more appropriate in terms of enhancing the liquidity of Covered
Entities applying substituted compliance to Exchange Act rule 18a-1? If
so, explain why. If the Commission determines to use a number of days
that is less than 365, should the Commission use a term other than
``current liabilities'' such as ``short-term liabilities''? If so,
explain why. The Commission requests comment on whether the haircuts
under the Basel capital standard are the appropriate haircuts to apply
under the proposed capital condition. If so, please explain why. Are
they comparable to the haircuts under Exchange Act rule 18a-1? Would it
impose a significant burden on Covered Entities to apply the haircuts
under Exchange Act rule 18a-1 rather than under the Basel capital
standard? If so, please explain why. Please identify any regulatory or
operational issues in connection with these proposed capital
conditions, including with maintaining a quarterly record. The
Commission requests comment on how these conditions would compare to
the LCR.
    The Commission also requests comment and supporting data on the
proposed condition that a Covered Entity maintain at least $100 million
of equity capital composed of ``highly liquid assets'' as defined in
the Basel capital standard. How would this potential minimum capital
amount compare with the amounts of equity capital currently maintained
by Covered Entities that would apply substituted compliance to Exchange
Act rule 18a-1? Should the condition require a different amount of
equity capital? For example, should the amount be $50, $75, $125, or
$150 million or some other amount? If so, explain why. Are the terms
``highly liquid assets'' and ``equity capital'' understood by market
participants? If not, please explain why and suggest alternative terms.
    The Commission also requests comment and supporting data on the
proposed condition that a Covered Entity includes its most recent
audited or unaudited statement of financial condition filed with its
local supervisor with its initial written notice to the Commission of
its intent to rely on substituted compliance. Are there other

means for the Commission to efficiently obtain this information? If so,
explain how. Is the information presented in these reports prepared in
accordance with the GAAP that the firm uses to prepare publicly
available or available to be issued general purpose financial
statements in its home jurisdiction?
    The Commission requests comment on the potential benefits and costs
of the potential capital conditions? Would the conditions promote
comparable regulatory outcomes between the capital requirements applied
to Covered Entities in the UK and capital requirements under Exchange
Act rule 18a-1? If so, explain why. If not, explain why not. The
Commission is mindful that compliance with these capital conditions
would require Covered Entities applying substituted compliance to
Exchange Act rule 18a-1 to supplement their existing capital
calculations and practices, as well as to incur additional time and
cost burdens to implement the potential conditions and integrate them
into existing business operations. The Commission requests comment and
supporting data on these potential time and cost burdens, including
quantitative information about the amount of the burdens. The
Commission also requests comment on any potential operational or
regulatory issues or burdens associated with adhering to the proposed
capital conditions.
    The Commission requests comment on the potential impacts the
capital conditions would have on competition. For example, how would
they impact competition between Covered Entities applying substituted
compliance with respect to Exchange Act rule 18a-1 and SBS Entities
that will comply with Exchange Act rule 18a-1? Would the conditions
eliminate or mitigate potential competitive advantages that Covered
Entities adhering to the Basel capital standard might have over SBS
Entities adhering to the more stringent net liquid assets test standard
of Exchange Act rule 18a-1? Alternatively, would the conditions create
competitive disadvantages for Covered Entities applying substituted
compliance with respect to Exchange Act rule 18a-1 as compared to SBS
Entities complying with Exchange Act rule 18a-1? Please describe and
explain.
    Please identify and describe any potential impacts on the way
Covered Entities currently conduct their business with respect to
implementing the proposed capital conditions.
    The Commission further requests comment on whether the Commission
should consider other potential conditions with respect to applying
substituted compliance to Exchange Act rule 18a-1. Should the
Commission consider imposing a potential capital condition that is more
consistent with Exchange Act rule 18a-1? Please explain why or why not.
Should the capital condition include higher requirements for a Covered
Entity that holds a significant amount of illiquid assets? For example,
if 20%, 30%, 40%, 50%, or some other percent of the Covered Entity's
assets would not be allowable under Exchange Act rule 18a-1, should the
firm be required to hold an amount of allowable assets to cover
liabilities coming due over a longer period of time than a firm that
does not exceed the percent threshold? If so, explain why and identify
the appropriate percent threshold. Should there be a percent threshold
of non-allowable assets under Exchange Act rule 18a-1 held by the
Covered Entity over which substituted compliance with respect to
capital would not be permitted? If so, explain why and identify the
appropriate percent threshold.
    The Commission also requests comment on whether the Commission
should consider imposing other capital conditions (or no conditions) if
a Covered Entity's business with U.S. persons falls below a certain
notional threshold, such as $8 billion, $20 billion, $50 billion, or
some other threshold. If so, explain why? Please explain which
threshold may be appropriate or suggest an alternative.
    The Commission further requests comment on whether there will be
any non-prudentially regulated security-based swap dealers in the UK
other than PRA-designated investment firms that would be seeking
substituted compliance. In addition, HM Treasury, the PRA and the FCA
published a joint statement announcing that they had decided to target
an implementation date of January 1, 2022 for the new prudential rules
for investment firms. The Commission further requests comment on
whether any investment firms that may be relying on the Commission's
proposed substituted compliance determination with respect to Exchange
Act rule 18a-1 would potentially be covered under this new capital
regime for investment firms in the UK. If so, should these capital
requirements be included in any Commission final order regarding the
determination of substituted compliance with respect to the capital
requirements of the Commission and the UK? If so, explain how they are
comparable to the capital requirements for non-prudentially regulated
security-based swap dealers under the Exchange Act.
    With respect to capital requirements, commenters also are invited
to address any differences between UK regulatory requirements and
frameworks and the French requirements and frameworks that formed the
basis for the Commission's proposed conditional grant of substituted
compliance for France.\206\ Would the responses to any of the questions
about capital requirements that the Commission asked in connection with
the French Notice and Proposed Order differ if those questions applied
to UK regulatory requirements and frameworks? \207\
---------------------------------------------------------------------------

    \206\ See French Notice and Proposed Order, 85 FR 85726.
    \207\ See French Notice and Proposed Order, 85 FR 85736-37.
---------------------------------------------------------------------------

    The Commission further requests comment on whether there would be
any non-prudentially regulated major security-based swap participants
in the UK that would be seeking substituted compliance with respect to
Exchange Act rule 18a-2.
2. Margin
    The Commission further requests comment regarding the Commission's
preliminary view that the UK margin requirements are comparable to the
Exchange Act margin requirements for non-prudentially regulated
security-based swap dealers and major security-based swap participants.
Commenters particularly are invited to address the basis for
substituted compliance in connection with those requirements. Does UK
law taken as a whole produce regulatory outcomes that are comparable to
those of Exchange Act rule 18a-3? Are there any additional conditions
that should be applied to substituted compliance for these margin
requirements to promote comparable regulatory outcomes?
    The Commission further requests comment on whether the haircuts
required under the UK EMIR Margin RTS are comparable to the collateral
haircuts required under paragraph (c)(3) of Exchange Act rule 18a-3.
The Commission also requests comment whether the standardized grid for
computing initial margin under the UK EMIR Margin RTS is comparable to
the standardized approach for computing initial margin under paragraph
(d)(1) of Exchange Act rule 18a-3.
    With respect to margin requirements, commenters also are invited to
address any differences between UK regulatory requirements and
frameworks and the French requirements and frameworks that formed the
basis for the Commission's proposed conditional

grant of substituted compliance for France.\208\ Would the responses to
any of the questions about margin requirements that the Commission
asked in connection with the French Notice and Proposed Order differ if
those questions applied to UK regulatory requirements and frameworks?
\209\
---------------------------------------------------------------------------

    \208\ See French Notice and Proposed Order, 85 FR 85726.
    \209\ See French Notice and Proposed Order, 85 FR 85736.
---------------------------------------------------------------------------

D. Internal Supervision, Chief Compliance Officer and Additional
Exchange Act Section 15F(j) Requirements

    The Commission requests comment regarding the proposed grant of
substituted compliance in connection with requirements under the
Exchange Act related to internal supervision and chief compliance
officers, as well as additional Exchange Act section 15F(j)
requirements. Commenters particularly are invited to address the basis
for substituted compliance in connection with those risk control
requirements, and the proposed conditions and limitations connected to
substituted compliance for those requirements.
    With respect to internal supervision and chief compliance officers
requirements, as well as additional Exchange Act section 15F(j)
requirements, commenters also are invited to address any differences
between UK regulatory requirements and frameworks and either the German
requirements and frameworks that formed the basis for the Commission's
conditional grant of substituted compliance for Germany or the French
requirements and frameworks that formed the basis for the Commission's
proposed conditional grant of substituted compliance for France.\210\
In particular, the proposed Order would require a Covered Entity to be
subject to, and comply with, in part provisions of UK law that
implement CRD article 92, whereas the German Substituted Compliance
Order requires, and the French Notice and Proposed Order would require,
compliance with provisions that implement CRD articles 92 through 95.
Should the Commission apply to these three orders (and to any other
substituted compliance orders in jurisdictions with requirements based
on CRD) the approach to these provisions in the proposed Order or the
approach in the German Substituted Compliance Order and French Notice
and Proposed Order? Similarly, the proposed Order would require a
Covered Entity to be subject to, and comply with, in part UK CRR
articles 286 through 288 and 293, whereas the German Substituted
Compliance Order does not require, and the French Notice and Proposed
Order would not require, compliance with comparable provisions of EU
law. Should the Commission apply to these three order (and to any other
substituted compliance orders in jurisdictions with requirements based
on CRR) the approach to these provisions in the proposed Order or the
approach in the German Substituted Compliance Order and French Notice
and Proposed Order? In addition, would the responses to any of the
questions about internal supervision or chief compliance officer
requirements, or the additional Exchange Act section 15F(j)
requirements, that the Commission asked in connection with the German
Notice and Proposed Order and/or the French Notice and Proposed Order
differ if those questions applied to UK regulatory requirements and
frameworks?
---------------------------------------------------------------------------

    \210\ See generally German Substituted Compliance Order, 85 FR
at 85691-92; French Notice and Proposed Order, 85 FR 85726-28; see
also German Notice and Proposed Order, 85 FR at 72732-34.
---------------------------------------------------------------------------

E. Counterparty Protection Requirements

    The Commission requests comment regarding the proposed grant of
substituted compliance in connection with counterparty protection
requirements under the Exchange Act. Commenters particularly are
invited to address the basis for substituted compliance in connection
with the counterparty protection requirements, and the proposed
conditions and limitations connected to substituted compliance for
those requirements.
    The Commission also requests comment on the scope of UK ``know your
counterparty'' and daily mark requirements to which a Covered Entity
must be subject if it relies on substituted compliance. Third country
investment firms (a term that includes third country credit
institutions when providing investment services or performing
investment activities in the UK) are not subject to these UK
requirements and therefore would not be eligible to apply substituted
compliance for Exchange Act ``know your counterparty'' or daily mark
requirements. Do any such third country investment firms currently plan
to apply, or believe they might in the future apply, substituted
compliance for Exchange Act ``know your counterparty'' or daily mark
requirements? Are any other UK requirements applicable to third country
investment firms comparable to Exchange Act ``know your counterparty''
or daily mark requirements?
    With respect to all counterparty protection requirements,
commenters also are invited to address any differences between UK
regulatory requirements and frameworks and either the German
requirements and frameworks that formed the basis for the Commission's
conditional grant of substituted compliance for Germany or the French
requirements and frameworks that formed the basis for the Commission's
proposed conditional grant of substituted compliance for France.\211\
Would the responses to any of the questions about counterparty
protection requirements that the Commission asked in connection with
the German Notice and Proposed Order and/or the French Notice and
Proposed Order differ if those questions applied to UK regulatory
requirements and frameworks?
---------------------------------------------------------------------------

    \211\ See generally German Substituted Compliance Order, 85 FR
at 85692-95; French Notice and Proposed Order, 85 FR 85728-30; see
also German Notice and Proposed Order, 85 FR at 72734-36.
---------------------------------------------------------------------------

F. Recordkeeping, Reporting, Notification, and Securities Count

    The Commission requests comment regarding the proposed grant of
substituted compliance in connection with requirements under the
Exchange Act related to recordkeeping, reporting, notification, and
securities counts, as well as the requirement of Exchange Act section
15F(g). Commenters particularly are invited to address the basis for
substituted compliance in connection with those requirements, and the
proposed conditions and limitations connected to substituted compliance
for those requirements. Does UK law taken as a whole produce regulatory
outcomes that are comparable to those of Exchange Act section 15F(g)
and Exchange Act rules 18a-5, 18a-6, 18a-7, 18a-8, and 18a-9? In this
regard, commenters are invited to address the UK laws cited for each
substituted compliance determination with respect to the distinct
requirements within Exchange Act rules 18a-5, 18a-6, 18a-7, and 18a-8
(i.e., the rules for which a more granular approach to substituted
compliance is being taken). With respect to each substituted compliance
determination, the Commission seeks comment on the following matters:
(1) Will the UK laws cited for the determination result in a comparable
regulatory outcome; (2) are there additional or alternative UK laws
that should be cited to achieve a comparable regulatory outcome; and
(3) are any of the UK laws cited for the determination

unnecessary to achieve a comparable regulatory outcome?
    Commenters particularly are invited to address the proposed
condition with respect to Exchange Act rule 18a-5 that the Covered
Entity: (1) Preserve all of the data elements necessary to create the
records required by Exchange Act rules 18a-5(a)(1), (2), (3), (4), and
(7) (if not prudentially regulated) or Exchange Act rules 18a-5(b)(1),
(2), (3), and (7) (if prudentially regulated); and (2) upon request
furnish promptly to representatives of the Commission the records
required by those rules. Do the relevant UK laws require SBS Entities
to retain the data elements necessary to create the records required by
these rules? If not, please identify which data elements are not
preserved pursuant to the relevant UK laws. Further, how burdensome
would it be for an SBS Entity to format the data elements into the
records required by these rules (e.g., a blotter, ledger, or securities
record, as applicable) if the firm was requested to do so? In what
formats do SBS Entities in the UK produce this information to the PRA,
FCA, or other UK authorities? How do those formats differ from the
formats required by Exchange Act rules 18a-5(a)(1), (2), (3), (4), and
(7) (if not prudentially regulated) or Exchange Act rules 18a-5(b)(1),
(2), (3), and (7) (if prudentially regulated)?
    Is it appropriate to structure the Commission's substituted
compliance determinations in the Order with respect to the
recordkeeping and reporting rules to provide Covered Entities with
greater flexibility to select which distinct requirements within the
broader recordkeeping, reporting, notification, and securities count
rules for which they want to apply substituted compliance? Explain why
or why not. For example, would it be more efficient for a Covered
Entity to comply with certain Exchange Act requirements within a given
recordkeeping or reporting rule (rather than apply substituted
compliance) because it can utilize systems that its affiliated broker-
dealer has implemented to comply with them? If so, explain why. If not,
explain why not. Is it appropriate to permit Covered Entities to take a
more granular approach to the requirements within these recordkeeping
rules? For example, would this approach make it more difficult for the
Commission to get a comprehensive understanding of the Covered Entity's
security-based swap activities and financial condition? Explain why or
why not. Would it be overly complex for the Covered Entity to
administer a firm-wide recordkeeping system under this approach?
Explain why or why not.
    Certain of the Commission's recordkeeping, reporting, and
notification requirements are fully or partially linked to substantive
Exchange Act requirements for which a positive substituted compliance
determination is preliminarily not being made under the proposed Order.
In these cases, should the Commission not make a positive substituted
compliance determination for the fully linked requirement in the
recordkeeping or reporting rules or to the portion of the requirement
that is linked to a substantive Exchange Act requirement? In
particular, should the Commission not make a positive substituted
compliance determination for recordkeeping, reporting, or notification
requirements linked to the following Exchange Act rules for which a
positive substituted compliance determination is preliminarily not
being made: (1) Exchange Act rule 10b-10; (2) Exchange Act rule 15Fh-4;
(3) Exchange Act rule 15Fh-5; (4) Exchange Act rule 15Fh-6; (5)
Exchange Act rule 18a-2; (6) Exchange Act rule 18a-4; and (7)
Regulation SBSR? If not, explain why.
    Certain of the requirements in the Commission's recordkeeping,
reporting, and notification rules are linked to substantive Exchange
Act requirements where a positive substituted compliance determination
is being made under the proposed Order. In these cases, should a
positive substituted compliance determination for the linked
requirement in the recordkeeping, reporting, or notification rule be
conditioned on the Covered Entity applying substituted compliance to
the linked substantive Exchange Act requirement? If not, explain why.
Should this be the case regardless of whether the requirement is fully
or partially linked to the substantive Exchange Act requirement? If
not, explain why. In particular, should substituted compliance for
recordkeeping, reporting, and notification requirements linked to the
following Exchange Act rules be conditioned on the SBS Entity applying
substituted compliance to the linked substantive Exchange Act rule: (1)
Exchange Act rule 15Fh-3; (2) Exchange Act rule 15Fi-2; (3) Exchange
Act rule 15Fi-3; (4) Exchange Act rule 15Fi-4; (5) Exchange Act rule
15Fi-5; (6) Exchange Act rule 15Fk-1; (7) Exchange Act rule 18a-1; (8)
Exchange Act rule 18a-3; (8) Exchange Act rule 18a-5; and (9) Exchange
Act rule 18a-7? If not, explain why.
    While certain recordkeeping and reporting requirements are not
expressly linked to Exchange Act rule 18a-1, they would be important to
the Commission's ability to monitor or examine for compliance with the
capital requirements under this rule. The records also will assist the
firm in monitoring its net capital position and, therefore, in
complying with Exchange rule 18a-1 and its appendices. Should a
positive substituted compliance determination with respect to these
recordkeeping and reporting requirements be subject to the condition
that the Covered Entity applies substituted compliance with respect to
Exchange Act rule 18a-1 and its appendices? If not, explain why.
    Commenters also are invited to address the proposal that a positive
substituted compliance determination with respect to Exchange Act rule
18a-7 would be conditioned on the Covered Entity filing financial and
operational information with the Commission in the manner and format
specified by the Commission by order or rule. With respect to FOCUS
Report Part II, not all of the line items on the report may be as
pertinent to a non-prudentially regulated SBS Entity if a positive
substituted compliance determination is made with respect to capital or
margin. With respect to FOCUS Report Part IIC, because the Commission
does not have responsibility to administer capital and margin
requirements for prudentially regulated SBS Entities, the FOCUS Report
Part IIC elicits much less information than the FOCUS Report Part II or
the financial reports SBS Entities file with UK authorities. Should the
Commission require Covered Entities to file the financial and
operational information using the FOCUS Report Part II (if not
prudentially regulated) or Part IIC (if prudentially regulated)? Are
there line items on the FOCUS Report Part II or Part IIC that elicit
information that is not included in the reports SBS Entities file with
the FCA or PRA? If so, do SBS Entities record that information in their
required books and records? Please identify any information that is
elicited in the FOCUS Report Part II (if not prudentially regulated) or
Part IIC (if prudentially regulated) that is not: (1) Included in the
financial reports filed by SBS Entities with the FCA or PRA; or (2)
recorded in the books and records required of SBS Entities. With
respect to FOCUS Report Part IIC, would the answer to these questions
change if references to FFIEC Form 031 were not included in the FOCUS
Report Part IIC? If so, how? As a preliminary matter, as a condition of
substituted compliance should SBS Entities file a limited amount of
financial and operational information on the FOCUS Report Part II (if
not prudentially regulated) or Part IIC (if prudentially regulated) for
a

period of two years to further evaluate the burden of requiring all
applicable line items to be filled out? If so, which line items should
be required? To the extent that SBS Entities otherwise report or record
information that is responsive to the FOCUS Report Part II or Part IIC,
how could the information on these reports be integrated into a
database of filings the Commission or its designee will maintain for
filers of the FOCUS Report Parts II and IIC (e.g., the eFOCUS system)
to achieve the objective of being able to perform cross-form analysis
of information entered into the uniquely numbered line items on the
forms?
    Commenters also are invited to address the proposal that a positive
substituted compliance determination with respect to the requirement to
file annual audited reports pursuant to Exchange Act rule 18a-7 would
be subject to five conditions. For example, comment is sought on the
first and third conditions that would permit the SBS Entity to
simultaneously transmit to the Commission a copy of the financial
statements the SBS Entity is required to file annually with a UK
regulator, and, if not already required, require the SBS Entity to
engage an independent public accountant to prepare a report covering
the annual financial statements. Are there any concerns with the
Commission accepting financial statements that are prepared in
accordance with UK GAAP and audited by an independent public accountant
in accordance with UK GAAS? In addition, are there any concerns with
the public accountant being independent in accordance with local UK
requirements? Further, the third condition would require SBS Entities
that are not required under UK law to file a report of an independent
public accountant covering their financial statements to file such an
accountant's report. This condition is based on the fact that UK law
only requires certain investment firms (depending on their size) to
have their financial statements audited. Do the firms in the UK that
are not subject to the requirement to file audited financial reports
engage in security-based swap activities? If so, are they likely to
register with the Commission as a non-prudentially regulated security-
based swap dealer or major security-based swap participant?
    With respect to recordkeeping, reporting, notification, and
securities count requirements, commenters also are invited to address
any differences between UK regulatory requirements and frameworks and
either the German requirements and frameworks that formed the basis for
the Commission's conditional grant of substituted compliance for
Germany or the French requirements and frameworks that formed the basis
for the Commission's proposed conditional grant of substituted
compliance for France.\212\ Would the responses to any of the questions
about recordkeeping, reporting, notification, and securities count
requirements that the Commission asked in connection with the German
Notice and Proposed Order and the French Notice and Proposed Order
differ if those questions applied to UK regulatory requirements and
frameworks?
---------------------------------------------------------------------------

    \212\ See generally German Substituted Compliance Order, 85 FR
at 85695-97; French Notice and Proposed Order, 85 FR 85730-34.
---------------------------------------------------------------------------

G. Supervisory and Enforcement Issues

    The Commission further requests comment regarding how to weigh
considerations regarding supervisory and enforcement effectiveness in
the UK as part of the comparability assessments. Commenters
particularly are invited to address relevant issues regarding the
effectiveness of UK supervision and enforcement over firms that may
register with the Commission as SBS Entities, including but not limited
to issues regarding:
     UK supervisory and enforcement authority, supervisory
inspection practices and the use of alternative supervisory tools, and
enforcement tools and practices;
     UK supervisory and enforcement effectiveness with respect
to derivatives such as security-based swaps; and
     UK supervision and enforcement in the cross-border context
(e.g., any differences between the oversight of firms' businesses
within the UK and the oversight of activities and branches outside of
the UK, including within the United States).

    By the Commission.

    Dated: April 5, 2021.
Vanessa A. Countryman,
Secretary.

Attachment A

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

(a) General Conditions

    This Order is subject to the following general conditions, in
addition to the conditions specified in paragraphs (b) through (f):
    (1) Activities as UK ``regulated activities.'' For each condition
in paragraphs (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
FCA SYSC 4, 5, 6, 7, 9 and/or 10, PRA General Organisational
Requirements, PRA Recordkeeping Rules, PRA Remuneration Rules, PRA Risk
Control Rules and/or MLR 2017, the Covered Entity's relevant security-
based swap activities constitute ``regulated activities'' as defined
for purposes of the relevant UK provisions, are carried on by the
Covered Entity from an establishment in the United Kingdom and fall
within the scope of the Covered Entity's authorization from the FCA
and/or the PRA to conduct regulated activities in the United Kingdom.
    (2) Activities as UK MiFID ``investment services or activities.''
For each condition in paragraphs (b) through (f) of this Order that
requires the application of, and the Covered Entity's compliance with,
provisions of FCA PROD 3 and/or UK MiFID Org Reg, the Covered Entity's
relevant security-based swap activities constitute ``investment
services or activities,'' as defined in the FCA Handbook Glossary, are
carried on by the Covered Entity from an establishment in the United
Kingdom and fall within the scope of the Covered Entity's authorization
from the FCA and/or PRA to conduct regulated activities in the United
Kingdom.
    (3) Activities as UK ``MiFID or equivalent third country
business.'' For each condition in paragraphs (b) through (f) of this
Order that requires the application of, and the Covered Entity's
compliance with, provisions of FCA COBS 2, 4, 6, 8A, 9A, 14 and/or 14A,
the Covered Entity's relevant security-based swap activities constitute
``MiFID or equivalent third country business,'' as defined in the FCA
Handbook Glossary, are carried on by the Covered Entity from an
establishment in the United Kingdom and fall within the scope of the
Covered Entity's authorization from the FCA and/or PRA to conduct
regulated activities in the United Kingdom.
    (4) Activities as UK ``designated investment business.'' For each
condition in paragraphs (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
FCA

COBS 11, the Covered Entity's relevant security-based swap activities
constitute ``MiFID business'' that is also ``designated investment
business,'' each as defined in the FCA Handbook Glossary; are carried
on by the Covered Entity from an establishment in the United Kingdom;
and fall within the scope of the Covered Entity's authorization from
the FCA and/or PRA to conduct regulated activities in the United
Kingdom.
    (5) Activities as UK ``MiFID business.'' For each condition in
paragraphs (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, provisions of FCA CASS 6
and/or 7, the Covered Entity is not an ICVC as defined in the FCA
Handbook Glossary and the Covered Entity's relevant security-based swap
activities constitute ``regulated activities'' as defined for purposes
of the relevant UK provisions and ``MiFID business'' as defined in the
FCA Handbook Glossary; are carried on by the Covered Entity from an
establishment in the United Kingdom and fall within the scope of the
Covered Entity's authorization from the FCA and/or the PRA to conduct
regulated activities in the United Kingdom.
    (6) Activities covered by FCA SYSC 10A. For each condition in
paragraphs (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, provisions of FCA SYSC
10A, the Covered Entity's relevant security-based swap activities
constitute activities described in FCA SYSC 10A.1.1(2)(a), (b) and/or
(c); are carried on by the Covered Entity from an establishment in the
United Kingdom and fall within the scope of the Covered Entity's
authorization from the FCA and/or the PRA to conduct regulated
activities in the United Kingdom.
    (7) Counterparties as UK MiFID ``clients.'' For each condition in
paragraphs (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, provisions of FCA CASS 6
and/or 7, FCA COBS 2, 4, 6, 8A, 9A, 11, 14 and/or 14A, FCA PROD 3, FCA
SYSC 10.1.8, FCA SYSC 10A and/or UK MiFID Org Reg, the relevant
counterparty (or potential counterparty) to the Covered Entity is a
``client'' (or potential ``client''), as defined in COBS 3.2.1R.
    (8) Security-based swaps as UK MiFID ``financial instruments.'' For
each condition in paragraphs (b) through (f) of this Order that
requires the application of, and the Covered Entity's compliance with,
provisions of FCA CASS 6 and/or 7, FCA COBS 2, 4, 6, 8A, 9A, 11, 14
and/or 14A, FCA PROD 3, FCA SYSC 10A, UK MAR, UK MAR Investment
Recommendations Regulation and/or UK MiFID Org Reg, the relevant
security-based swap is a ``financial instrument,'' as defined in Part 1
of Schedule 2 of the UK Regulated Activities Order.
    (9) Covered Entity as UK CRD/CRR ``institution.'' For each
condition in paragraph (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
UK CRR, the Covered Entity is an ``institution,'' as defined in UK CRR
article 4(1)(3).
    (10) Covered Entity as UK ``common platform firm'' or ``third
country firm.'' For each condition in paragraph (b) through (f) of this
Order that requires the application of, and the Covered Entity's
compliance with, provisions of FCA SYSC 4, 5, 6, 7, 9 and/or 10, the
Covered Entity is either a ``common platform firm'' (other than a
``UCITS investment firm'') or a ``third country firm,'' each as defined
in the FCA Handbook Glossary.
    (11) Covered Entity as UK ``IFPRU investment firm.'' For each
condition in paragraph (b) through (f) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
FCA SYSC 19A, FCA IFPRU and/or FCA BIPRU, the Covered Entity is an
``IFPRU investment firm,'' as defined in the FCA Handbook Glossary.
    (12) Covered Entity as ``UK bank'' or ``UK designated investment
firm.'' For each condition in paragraph (b) through (f) of this Order
that requires the application of, and the Covered Entity's compliance
with, provisions of FCA SYSC 19D, PRA Internal Capital Adequacy
Assessment Rules, PRA Internal Liquidity Adequacy Assessment Rules, PRA
General Organisational Requirements, PRA Remuneration Rules and/or PRA
Risk Control Rules, the Covered Entity is a ``UK bank'' or ``UK
designated investment firm,'' each as defined in the FCA Handbook
Glossary (in the case of a provision of FCA SYSC 19D) or as defined in
the PRA Rulebook Glossary (in the case of a provision of a PRA rule).
    (13) Covered Entity's counterparties as UK EMIR ``counterparties.''
For each condition in paragraphs (b) through (e) of this Order that
requires the application of, and the Covered Entity's compliance with,
provisions of UK EMIR, UK EMIR RTS and/or UK EMIR Margin RTS, if the
counterparty to the Covered Entity is not a ``financial counterparty''
or ``non-financial counterparty'' as defined in UK EMIR articles 2(8)
or 2(9), respectively, the Covered Entity complies with the applicable
condition of this Order:
    (i) As if the counterparty were a financial counterparty, if the
Covered Entity reasonably determines that the counterparty would be a
financial counterparty if it were established in the UK and authorized
by an appropriate UK authority, or, otherwise, as if the counterparty
were a non-financial counterparty; and
    (ii) Without regard to the application of UK EMIR article 13.
    (14) Security-based swap status under UK EMIR. For each condition
in paragraphs (b) through (e) of this Order that requires the
application of, and the Covered Entity's compliance with, provisions of
UK EMIR and/or other UK requirements adopted pursuant to those
provisions, either:
    (i) The relevant security-based swap is an ``OTC derivative'' or
``OTC derivative contract,'' as defined in UK EMIR article 2(7), that
has not been cleared by a CCP and otherwise is subject to the
provisions of UK EMIR article 11, UK EMIR RTS articles 11 through 15,
and UK EMIR Margin RTS article 2; or
    (ii) The relevant security-based swap has been cleared by a central
counterparty that has been authorized or recognized to clear
derivatives contracts in the UK.
    (15) Memorandum of Understanding with the FCA and the PRA. The
Commission has a supervisory and enforcement memorandum of
understanding and/or other arrangement with the FCA and the PRA
addressing cooperation with respect to this Order at the time the
Covered Entity complies with the relevant requirements under the
Exchange Act via compliance with one or more provisions of this Order.
    (16) Notice to Commission. A Covered Entity relying on this Order
must provide notice of its intent to rely on this Order by notifying
the Commission in writing. Such notice must be sent to the Commission
in the manner specified on the Commission's website. The notice must
include the contact information of an individual who can provide
further information about the matter that is the subject of the notice.
The notice must identify each specific substituted compliance
determination within paragraphs (b) through (f) of the Order for which
the Covered Entity intends to apply substituted compliance. A Covered
Entity must promptly provide an amended notice if it modifies its
reliance on the substituted compliance determinations in this Order.

(b) Substituted Compliance in Connection With Risk Control Requirements

    This Order extends to the following provisions related to risk
control:
    (1) Internal risk management. The requirements of Exchange Act
section 15F(j)(2) and related aspects of Exchange Act rule 15Fh-
3(h)(2)(iii)(I), provided that the Covered Entity is subject to and
complies with the requirements of:
    (i) Either {FCA IFPRU 2.2.7R(2), 2.2.17R through 2.2.28R, 2.2.30R
and 2.2.32R through 2.2.35R; and FCA BIPRU 12.3.4R, 12.3.5R, 12.3.7R,
12.3.8R, 12.3.22AR, 12.3.22BR, 12.3.27R, 12.4.-2R, 12.4.-1R, 12.4.5AR,
12.4.10R and 12.4.11R{time}  or {PRA Internal Capital Adequacy
Assessment Rules 4.1 through 4.4, 5.1, 6.1, 7.1, 7.2, 8.1 through 8.5,
9.1, 10.1, 10.2 and 11.1 through 11.3; and PRA Internal Liquidity
Adequacy Assessment Rules 3.1, 3.2, 3.3, 4.1, 7.2, 8.1, 9.2, 11.1,
11.2, 11.4, 12.1, 12.3, and 12.4{time} ;
    (ii) FCA PRIN 2.1.1R(3);
    (iii) FCA SYSC 4.1.1R(1), 4.1.2R, 7.1.4R, 7.1.17R, 7.1.18R,
7.1.18BR, 7.1.19R, 7.1.20R, 7.1.21R and 7.1.22R and, if the Covered
Entity is a UK bank or UK designated investment firm, also PRA General
Organisational Requirements Rule 2.1 and 2.2 and PRA Risk Control Rules
2.3, 2.7 and 3.1 through 3.5;
    (iv) Either {FCA SYSC 19A.2.1R{time}  or {FCA SYSC 19D.2.1R and PRA
Remuneration Rule 6.2{time} ;
    (v) Either {FSMA schedule 6 part 2D and FCA COND 2.4.1A{time}  or
{FSMA schedule 6 parts 3C and 5D, FCA COND 2.4.1C and PRA Fundamental
Rules 3 through 6{time} ;
    (vi) UK CRR articles 286 through 288 and 293;
    (vii) UK EMIR Margin RTS article 2; and
    (viii) UK MiFID Org Reg articles 21 through 24.
    (2) Trade acknowledgement and verification. The requirements of
Exchange Act rule 15Fi-2, provided that the Covered Entity is subject
to and complies with the requirements of UK EMIR article 11(1)(a) and
UK EMIR RTS article 12.
    (3) Portfolio reconciliation and dispute reporting. The
requirements of Exchange Act rule 15Fi-3, provided that:
    (i) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11(1)(b) and UK EMIR RTS articles 13
and 15;
    (ii) The Covered Entity provides the Commission with reports
regarding disputes between counterparties on the same basis as it
provides those reports to the FCA pursuant to UK EMIR RTS article
15(2).
    (4) Portfolio compression. The requirements of Exchange Act rule
15Fi-4, provided that the Covered Entity is subject to and complies
with the requirements of UK EMIR RTS article 14.
    (5) Trading relationship documentation. The requirements of
Exchange Act rule 15Fi-5, other than paragraph (b)(5) to that rule when
the counterparty is a U.S. person, provided that the Covered Entity is
subject to and complies with the requirements of UK EMIR article
11(1)(a), UK EMIR RTS article 12 and UK EMIR Margin RTS article 2.

(c) Substituted Compliance in Connection With Capital and Margin

    (1) Capital. The requirements of Exchange Act section 15F(e) and
Exchange Act rules 18a-1, and 18a-1a through d, provided that:
    (i) The Covered Entity is subject to and complies with the capital
requirements of: The UK CRR, including recitals 40, 43 and 87, and
articles 26, 28, 50 through 52, 61, 63, 92, 111, 113(1), 114 through
122, 143, 153(8), 177(2), 283, 290, 300 through 311, 312(2), 362
through 377, 382 through 383, 412(1), 413(1), 416(1), 427(1), 413, 429,
430, and 499; UK MiFID Org Reg article 23; UK EMIR Margin RTS, recital
31, articles 2, 3(b), 7, and 19(1)(d) and (e), (3) and (8); FCA SYSC
4.1.1R, 7.1.4R and 7.1.18R; Chapters 2,7, 10, 11 of FCA IFPRU; Chapter
12 of FCA BIPRU; FCA PRIN; Client asset protection requirements under
the FCA CASS; PRA General Organisational Requirements Rule 2.1; PRA
Risk Control Rules 2.3 and 3.1(1); PRA Capital Buffers Rules; PRA
Internal Capital Adequacy Assessment Rules; PRA Internal Liquidity
Adequacy Assessment Rules; PRA Liquidity Coverage Requirement--UK
Designated Investment Firms Rules; PRA Notifications Rules; Banking Act
2009; Capital Requirements Regulations 2013; Capital Requirements
(Capital Buffers and Macro-prudential Measures) Regulations 2014; Part
8 and Part 9 of the Bank Recovery and Resolution (No 2) Order 2014;
Bank of England Act 1998 (Macro-prudential Measures) (No 2) Order 2015;
and Parts 4A and 12A of FSMA; and
    (ii) The Covered Entity:
    (A) Maintains an amount of assets that are allowable under Exchange
Act rule 18a-1, after applying applicable haircuts under the Basel
capital standard, that equals or exceeds the Covered Entity's current
liabilities coming due in the next 365 days;
    (B) Makes a quarterly record listing:
    (1) The assets maintained pursuant to paragraph (c)(1)(ii)(A),
their value, and the amount of their applicable haircuts;
    (2) The aggregate amount of the liabilities coming due in the next
365 days; and
    (C) Maintains at least $100 million of equity capital composed of
``highly liquid assets'' as defined in the Basel capital standard; and
    (D) Includes its most recent statement of financial condition filed
with its local supervisor whether audited or unaudited with its initial
written notice to the Commission of its intent to rely on substituted
compliance under condition (a)(16) above.
    (2) Margin. The requirements of Exchange Act section 15F(e) and
Exchange Act rule 18a-3, provided that the Covered Entity is subject to
and complies with the requirements of: UK EMIR article 11; UK EMIR
Margin RTS; UK CRR articles 103, 105(3); 105(10); 111(2), 224, 285,
286, 286(7), 290, 295, 296(2)(b), 297(1), 297(3), and 298(1); UK MiFID
Org Reg article 23(1); FCA SYSC 4.1.1R; FCA IFPRU 2.2.18R; PRA General
Organisational Requirements Rule 2.1; and PRA Internal Capital Adequacy
Assessment Rule 4.2.

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

    This Order extends to the following provisions related to internal
supervision and compliance and Exchange Act section 15F(j)
requirements:
    (1) Internal supervision. The requirements of Exchange Act rule
15Fh-3(h) and Exchange Act sections 15F(j)(4)(A) and (j)(5), provided
that:
    (i) The Covered Entity is subject to and complies with the
requirements identified in paragraph (d)(3) to this Order;
    (ii) The Covered Entity complies with paragraph (d)(4) to this
Order; and
    (iii) This paragraph (d) does not extend to the requirements of
paragraph (h)(2)(iii)(I) to rule 15Fh-3 to the extent those
requirements pertain to compliance with Exchange Act sections
15F(j)(2), (j)(3), (j)(4)(B) and (j)(6), or to the general and
supporting provisions of paragraph (h) to rule 15Fh-3 in connection
with those Exchange Act sections.
    (2) Chief compliance officers. The requirements of Exchange Act
section 15F(k) and Exchange Act rule 15Fk-1, provided that:
    (i) The Covered Entity is subject to and complies with the
requirements

identified in paragraph (d)(3) to this Order;
    (ii) All reports required pursuant to UK MiFID Org Reg article
22(2)(c) must also:
    (A) Be provided to the Commission at least annually and in the
English language;
    (B) Include a certification that, under penalty of law, the report
is accurate and complete; and
    (C) Address the firm's compliance with other applicable conditions
to this Order in connection with requirements for which the Covered
Entity is relying on this Order.
    (3) Applicable supervisory and compliance requirements. Paragraphs
(d)(1) and (d)(2) are conditioned on the Covered Entity being subject
to and complying with the following requirements:
    (i) FCA CASS 6.2.1R, 7.11.1R and 7.12.1R;
    (ii) FCA COBS 11.7A.3R;
    (iii) Either {FCA IFPRU 2.2.7R(2), 2.2.17R through 2.2.28R, 2.2.30R
and 2.2.32R through 2.2.35R; and FCA BIPRU 12.3.4R, 12.3.5R, 12.3.7R,
12.3.8R, 12.3.22AR, 12.3.22BR, 12.3.27R, 12.4.-2R, 12.4.-1R, 12.4.5AR,
12.4.10R and 12.4.11R{time}  or {PRA Internal Capital Adequacy
Assessment Rules 4.1 through 4.4, 5.1, 6.1, 7.1, 7.2, 8.1 through 8.5,
9.1, 10.1, 10.2 and 11.1 through 11.3; and PRA Internal Liquidity
Adequacy Assessment Rules 3.1, 3.2, 3.3, 4.1, 7.2, 8.1, 9.2, 11.1,
11.2, 11.4, 12.1, 12.3 and 12.4{time} ;
    (iv) FCA PRIN 2.1.1R(3);
    (v) FCA SYSC 4.1.1R(1), 4.1.2R, 4.3A.1R, 4.3A.3R, 4.3A.4R, 7.1.4R,
7.1.17R, 7.1.18R, 7.1.18BR, 7.1.19R, 7.1.20R, 7.1.21R, 7.1.22R,
9.1.1AR, 10.1.3R, 10.1.7R, 10.1.8R, 10A.1.6R, 10A.1.8R, 10A.1.11R and
24.2.6R(8) and, if the Covered Entity is a UK bank or UK designated
investment firm, also PRA Allocation of Responsibilities Rule 4.1(16);
PRA General Organisational Requirements Rules 2.1, 2.2 and 5.1 through
5.3; PRA Record Keeping Rule 2.1; PRA Risk Control Rules 2.3, 2.7 and
3.1 through 3.5; and PRA Senior Management Functions Rule 8.2;
    (vi) Either {FCA SYSC 19A.2.1R, 19A.3.1R(1), 19A.3.3R, 19A.3.7R
through 19A.3.11R, 19A.3.14R, 19A.3.16R and 19A.3.35AR{time}  or {FCA
SYSC 19D.2.1R, 19D.3.1R, 19D.3.3R, 19D.3.7R through 19D.3.11R,
19D.3.15R, 19D.3.17R and 19D.3.37R and PRA Remuneration Rules 3.1, 4.2,
5.1, 6.2, 6.3, 6.4, 7.2, 7.3, 8.1, 8.2 and 15.2{time} ;
    (vii) Either {FSMA schedule 6 part 2D and FCA COND 2.4.1A{time}  or
{FSMA schedule 6 parts 3C and 5D, FCA COND 2.4.1C and PRA Fundamental
Rules 3 through 6{time} ;
    (viii) UK CRR articles 286 through 288 and 293;
    (ix) UK EMIR Margin RTS article 2; and
    (x) UK MiFID Org Reg articles 21 through 37 and 72 through 76 and
Annex IV.
    (4) Additional condition to paragraph (d)(1). Paragraph (d)(1)
further is conditioned on the requirement that the Covered Entity
complies with the provisions specified in paragraph (d)(3) as if those
provisions also require compliance with:
    (i) Applicable requirements under the Exchange Act; and
    (ii) The other applicable conditions to this Order in connection
with requirements for which the Covered Entity is relying on this
Order.

(e) Substituted Compliance in Connection With Counterparty Protection
Requirements

    This Order extends to the following provisions related to
counterparty protection:
    (1) Disclosure of information regarding material risks and
characteristics. The requirements of Exchange Act rule 15Fh-3(b)
relating to disclosure of material risks and characteristics of one or
more security-based swaps subject thereto, provided that the Covered
Entity, in relation to that security-based swap, is subject to and
complies with the requirements of:
    (i) FCA COBS 2.2A.2R, 6.1ZA.11R, 6.1ZA.12R, 6.2B.33R, 9A.3.6R and
14.3A.3R; and
    (ii) Either {UK MiFID Org Reg articles 48 through 50{time}  or {FCA
COBS 6.1ZA.9UK, 6.1ZA.14UK, and 14.3A.5UK{time} .
    (2) Disclosure of information regarding material incentives or
conflicts of interest. The requirements of Exchange Act rule 15Fh-3(b)
relating to disclosure of material incentives or conflicts of interest
that a Covered Entity may have in connection with one or more security-
based swaps subject thereto, provided that the Covered Entity, in
relation to that security-based swap, is subject to and complies with
the requirements of either:
    (i) FCA SYSC 10.1.8R and UK MiFID Org Reg articles 33 to 35;
    (ii) FCA COBS 2.3A.5R, 2.3A.6R, 2.3A.7E and 2.3A.10R through
2.3A.14R; or
    (iii) UK MAR article 20(1) and UK MAR Investment Recommendations
Regulation articles 5 and 6.
    (3) ``Know your counterparty.'' The requirements of Exchange Act
rule 15Fh-3(e), as applied to one or more security-based swap
counterparties subject thereto, provided that the Covered Entity, in
relation to the relevant security-based swap counterparty, is subject
to and complies with the requirements of:
    (i) FCA SYSC 6.1.1R;
    (ii) UK MiFID Org Reg articles 21, 22, 25, 26 and applicable parts
of Annex I;
    (iii) FCA SYSC 4.1.1R(1);
    (iv) Either {FCA IFPRU 2.2.7R(2) and 2.2.32R{time}  or {PRA General
Organisational Requirement 2.1 and PRA Internal Capital Adequacy
Assessment Rule 10.1{time} ;
    (v) MLR 2017 Regulations 27 and 28; and
    (v) MLR 2017 Regulations 19(1) through (3), as applied to policies,
controls and procedures regarding customer due diligence.
    (4) Suitability. The requirements of Exchange Act rule 15Fh-3(f),
as applied to one or more recommendations of a security-based swap or
trading strategy involving a security-based swap subject thereto,
provided that:
    (i) The Covered Entity, in relation to the relevant recommendation,
is subject to and complies with the requirements of:
    (A) FCA COBS 4.2.1R, 9A.2.1R and 9A.1.16R;
    (B) FCA PROD 3.2.1R and 3.3.1R;
    (C) FCA SYSC 5.1.5AAR and 5.1.5ABR; and
    (D) UK MiFID Org Reg articles 21(1)(b) and (d), 54 and 55; and
    (ii) The counterparty to which the Covered Entity makes the
recommendation is a ``professional client'' mentioned in FCA COBS
3.5.2R and is not a ``special entity'' as defined in Exchange Act
section 15F(h)(2)(C) and Exchange Act rule 15Fh-2(d).
    (5) Fair and balanced communications. The requirements of Exchange
Act rule 15Fh-3(g), as applied to one or more communications subject
thereto, provided that the Covered Entity, in relation to the relevant
communication, is subject to and complies with the requirements of:
    (i) Either {FCA COBS 2.1.1R and FCA COBS 4.2.1R{time}  or {FCA COBS
2.1.1AR and FCA COBS 4.2.1R{time} ;
    (ii) FCA COBS 2.2A.2R, 2.2A.3R, 6.1ZA.11R, 6.1ZA.12R, 6.1ZA.13R,
6.2B.33R, 6.2B.34R, 9A.3.6R and 14.3A.3R;
    (iii) Either {UK MiFID Org Reg articles 46 through 48{time}  or
{FCA COBS 4.5A.9UK, 4.7.-1AUK, 6.1ZA.5UK, 6.1ZA.8UK, 6.1ZA.17UK,
6.1ZA.19UK, 6.1ZA.20UK, 8A.1.5UK to 8A.1.7UK, 14.3A.5UK, 14.3A.7UK and
14.3A.9UK{time} ;
    (iv) UK MAR Investment Recommendations Regulation articles 3 and 4;
and
    (v) UK MAR articles 12(1)(c), 15 and 20(1).

    (6) Daily mark disclosure. The requirements of Exchange Act rule
15Fh-3(c), as applied to one or more security-based swaps subject
thereto, provided that the Covered Entity is required to reconcile, and
does reconcile, the portfolio containing the relevant security-based
swap on each business day pursuant to UK EMIR articles 11(1)(b) and
11(2) and UK EMIR RTS article 13.

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

    This Order extends to the following provisions that apply to a
Covered Entity related to recordkeeping, reporting, notification and
securities counts:
    (1)(i) Make and keep current certain records. The requirements of
the following provisions of Exchange Act rule 18a-5, provided that the
Covered Entity complies with the relevant conditions in this paragraph
(f)(1)(i) and with the applicable conditions in paragraph (f)(1)(ii):
    (A) The requirements of Exchange Act rule 18a-5(a)(1) or (b)(1), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK MiFID Org Reg articles 74, 75, 76 and Annex IV; UK
MiFIR article 25(1); and FCA SYSC 10A.1.6R, 10A.1.8R; and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(1), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order.
    (B) The requirements of Exchange Act rule 18a-5(a)(2), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA IFPRU 2.2.7R(1); PRA Internal Capital Adequacy
Assessment Rule 3.1; FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR, 6.3.4A-1R,
6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R, 6.6.5G, 6.6.33G, 6.6.34R, 6.6.8R,
7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3),
7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R,
7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK MiFID Org Reg
articles 72(1), 74 and 75; and UK EMIR article 39(4); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (C) The requirements of Exchange Act rule 18a-5(a)(3) or (b)(2), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR, 6.3.4A-1R, 6.3.6AR,
6.6.4R, 6.6.5G, 6.6.2R, 6.6.3R, 6.6.33G, 6.6.34R, 6.6.8R, 7.12.1R,
7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3), 7.15.2R,
7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R, 7.15.21G,
10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK MiFID Org Reg articles 72(1),
74 and 75; and UK EMIR article 39(4); and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(3), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (D) The requirements of Exchange Act rule 18a-5(a)(4) or (b)(3), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 103 and 103(b)(ii); FCA COND at
paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA Fundamental Rules 2 and 6;
FCA PRIN 2.1.1.R(2) and (3); PRA Recordkeeping Rule 2.1; UK MiFID Org
Reg articles 59, 74, 75 and 76 and Annex IV; UK MiFIR article 25(1);
FCA SYSC 9.1.1AR, 10A.1.6R and 10A.1.8R; FCA COBS 8A.1.9R, 9A.2.1R,
9.1.1AR, 16A.2.1 R and 16A.3.1UK; UK EMIR articles 9(2) and 11(1)(a);
MLR 2017 Regulations 28(10) and (18) and 28 through 30; and FCA FCG
3.1.7; and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(4), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (E) The requirements of Exchange Act rule 18a-5(b)(4) provided that
the Covered Entity is subject to and complies with the requirements of
FCA COBS 8A.1.9R, 16A.2.1 R, 16A.3.1UK; UK MiFID Org Reg article 59;
FCA SYSC 9.1.1AR; and UK EMIR articles 9(2) and 11(1)(a);
    (F) The requirements of Exchange Act rule 18a-5(a)(5) or (b)(5), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK MiFID Org Reg articles 74, 75, 76 and Annex IV; UK
MiFIR article 25(1); FCA SYSC 10A.1.6R, 10A.1.8R; and UK MiFID Org Reg
article 76; and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(5), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (G) The requirements of Exchange Act rules 18a-5(a)(6) and (a)(15)
or (b)(6) and (b)(11), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); PRA
Recordkeeping Rule 2.1; UK MiFID Org Reg articles 59, 74, 75 76 and
Annex IV; UK MiFIR article 25(1); FCA SYSC 9.1.1AR, 10A.1.6R and
10A.1.8R; FCA COBS 8A.1.9R, 9.1.1AR, 9A.2.1R, 16A.2.1R and 16A.3.1UK;
UK EMIR articles 9(2) and 11(1)(a); MLR 2017 Regulations 28(10) and
(18) and 28-30; and FCA FCG 3.1.7;
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act rule 15Fi-2 pursuant to this Order; and
    (3) This Order does not extend to the requirements of Exchange Act
rule 18a-5(a)(6) and (b)(6) to make and keep current books and records
of confirmations of purchases and sales of securities other than
security-based swaps;
    (H) The requirements of Exchange Act rule 18a-5(a)(7) or (b)(7), as
applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK MiFIR article 25(1); MLR 2017 Regulations 28 through
30; FCA FCG 3.1.7; FCA COBS 8A.1.9R, 9.1.1AR, 9A.2.1R, 16A.2.1 R and
16A.3.1UK; FCA SYSC 9.1.1AR, 10A.1.6R and 10A.1.8R; FCA COND at
paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA Fundamental Rules 2 and 6;
FCA PRIN 2.1.1.R(2) and (3); PRA Recordkeeping Rule 2.1; UK MiFID Org
Reg articles 59, 74, 75 and 76 and Annex IV; and UK EMIR articles 9(2)
and 11(1)(a); and
    (2) With respect to the requirements of Exchange Act rule 18a-
5(a)(7), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (I) The requirements of Exchange Act rule 18a-5(a)(8), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); PRA
Recordkeeping Rule 2.1; UK MiFID Org Reg articles 59, 72(1), 74, 75 76
and Annex IV; UK MiFIR article 25(1); FCA SYSC 9.1.1AR, 10A.1.6R and
10A.1.8R; FCA COBS 8A.1.9R, 9.1.1AR, 9A.2.1R, 16A.2.1 R and 16A.3.1UK;
UK EMIR articles 9(2) and 11(1)(a); MLR 2017 Regulations 28(10) and
(18) and 28 through 30; and FCA FCG 3.1.7; and

    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order.;
    (J) The requirements of Exchange Act rule 18a-5(a)(9), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA IFPRU 2.2.7R(1); PRA Internal Capital Adequacy
Assessment Rule 3.1; FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR, 6.3.4A-1R,
6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R, 6.6.5G, 6.6.33G, 6.6.34R, 6.6.8R,
7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3),
7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R,
7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK EMIR article 39(4);
and UK MiFID Org Reg articles 72(1), 74, and 75;
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order; and
    (3) This Order does not extend to the requirements of Exchange Act
rule 18a-5(a)(9) relating to Exchange Act rule 18a-2;
    (K) The requirements of Exchange Act rule 18a-5(a)(10) and (b)(8),
provided that the Covered Entity is subject to and complies with the
requirements of FSMA sections 63F(2), 63F(5), 63(2A), 60A(2) and (5);
PRA Fitness and Propriety Rules 2.6 and 2.9; SMR Applications and
Notifications Rules 2.1, 2.2 and 2.6; PRA Certification Rules; PRA
Fundamental Rules 2 and 6; PRA Recordkeeping Rule 2.1; PRA Internal
Capital Adequacy Assessment Rule 3.1; PRA General Organisational
Requirements Rules 5.1 and 5.2; FCA SUP 3.10.4R through 3.10.7R,
10C.10.8D, 10C.10.8AD, 10C.15, 10C.10.14G, 10C.10.16R, 10C.10.21G and
10C Annex 3D; FCA SYSC 4.3A.1R., 4.3A.3R, 4.3A.3R, 10.1.7R, 27 and
27.2.5G; FCA FIT 2.1, 2.2 and 2.3; UK MiFID Org Reg articles 21(1)(a),
35;
    (L) The requirements of Exchange Act rule 18a-5(a)(12), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 103, 105(3) and 105(10); FCA IFPRU
2.2.7R(1); PRA Internal Capital Adequacy Assessment Rule 3.1; FCA CASS
6.2.1R, 6.2.2R, 6.3.2AR, 6.3.4A-1R, 6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R,
6.6.5G, 6.6.33G, 6.6.34R, 6.6.8R, 7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R,
7.13.32R(3), 7.13.33R(3), 7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R,
7.15.9R, 7.15.20R, 7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK
EMIR article 39(4); and MiFID Org Reg. articles 72(1), 74 and 75;
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rule 18a-3
pursuant to this Order;
    (M) The requirements of Exchange Act rule 18a-5(a)(17) and (b)(13),
as applicable, regarding one or more provisions of Exchange Act rules
15Fh-3 or 15Fk-1 for which substituted compliance is available under
this Order, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); PRA
Recordkeeping Rule 2.1; FCA SYSC 9.1.1AR and 10A.1.6R; UK MiFID Org Reg
articles 72, 73, 76(8)(b) and Annex I; and UK EMIR article 39(5), in
each case with respect to the relevant security-based swap or activity;
    (2) With respect to the portion of Exchange Act rule 18a-5(a)(17)
and (b)(13) that relates to Exchange Act rule 15Fh-3, the Covered
Entity applies substituted compliance for such business conduct
standard(s) of Exchange Act rule 15Fh-3 pursuant to this Order, as
applicable, with respect to the relevant security-based swap or
activity; and
    (3) With respect to the portion of Exchange Act rule 18a-5(a)(17)
and (b)(13) that relates to Exchange Act rule 15Fk-1, the Covered
Entity applies substituted compliance for Exchange Act section 15F(k)
and Exchange Act rule 15Fk-1 pursuant to this Order;
    (N) The requirements of Exchange Act rule 18a-5(a)(18)(i) and (ii)
or (b)(14)(i) and (ii), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11(1)(b); and UK EMIR RTS article
15(1); and
    (2) The Covered Entity applies substituted compliance for Exchange
Act rule 15Fi-3 pursuant to this Order; and
    (O) The requirements of Exchange Act rule 18a-5(a)(18)(iii) or
(b)(14)(iii), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK EMIR article 11(1)(b); and UK EMIR RTS article
15(1), in each case with respect to such security-based swap
portfolio(s); and
    (2) The Covered Entity applies substituted compliance for Exchange
Act rule 15Fi-4 pursuant to this Order.
    (ii) Paragraph (f)(1)(i) is subject to the following further
conditions:
    (A) Paragraphs (f)(1)(i)(A) through (D) and (H) are subject to the
condition that the Covered Entity preserves all of the data elements
necessary to create the records required by the applicable Exchange Act
rules cited in such paragraphs and upon request furnishes promptly to
representatives of the Commission the records required by those rules;
    (B) A Covered Entity may apply the substituted compliance
determination in paragraph (f)(1)(i)(M) to records of compliance with
Exchange Act rule 15Fh-3(b), (c), (e), (f) and (g) in respect of one or
more security-based swaps or activities related to security-based
swaps; and
    (C) This Order does not extend to the requirements of Exchange Act
rule 18a-5(a)(13), (a)(14), (a)(16), (b)(9), (b)(10) or (b)(12).
    (2)(i) Preserve certain records. The requirements of the following
provisions of Exchange Act rule 18a-6, provided that the Covered Entity
complies with the relevant conditions in this paragraph (f)(2)(i) and
with the applicable conditions in paragraph (f)(2)(ii):
    (A) The requirements of Exchange Act rule 18a-6(a)(1) or (a)(2), as
applicable, provided that the Covered Entity is subject to and complies
with the requirements of UK MiFID Org Reg articles 59, 72(1), 74, 75,
76 and Annex IV; FCA SYSC 9.1.1AR, 9.1.2R, 10A.1.6R and 10A.1.8R; FCA
IFPRU 2.2.7R(1); PRA Internal Capital Adequacy Assessment Rule 3.1; PRA
Fundamental Rules 2 and 6; PRA Recordkeeping Rules 2.1 and 2.2; FCA
COBS 8A.1.9R, 9.1.1AR, 9A.2.1R, 16A.2.1 R and 16A.3.1UK; FCA PRIN
2.1.1.R(2) and (3); FCA FCG 3.1.7; FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR,
6.3.4A-1R, 6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R, 6.6.5G, 6.6.33G, 6.6.34R,
6.6.8R, 7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3),
7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R,
7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK CRR articles 103 and
103(b)(ii); FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; MLR 2017
Regulations 28 through 30; UK MiFID Org Reg article 72(1), 74 and 75;
UK MiFIR article 25(1); and UK EMIR article 9(2), 39(4) and 11(1)(a);
    (B) The requirements of Exchange Act rule 18a-6(b)(1)(i) or
(b)(2)(i), as applicable, provided that the Covered Entity is subject
to and complies with the requirements of UK MiFID Org Reg articles 59,
72(1), 74, 75, 76 and Annex IV; FCA SYSC 9.1.1AR, 9.1.2R, 10A.1.6R and
10A.1.8R; FCA IFPRU 2.2.7R(1); PRA Internal Capital Adequacy Assessment
Rule 3.1; PRA Fundamental Rules 2 and 6; PRA Recordkeeping Rules 2.1
and 2.2; FCA COBS 8A.1.9R, 9.1.1AR, 9A.2.1R, 16A.2.1 R and 16A.3.1UK;
FCA PRIN

2.1.1.R(2) and (3); FCA FCG 3.1.7; FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR,
6.3.4A-1R, 6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R, 6.6.5G, 6.6.33G, 6.6.34R,
6.6.8R, 7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3),
7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R,
7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK CRR articles 103 and
103(b)(ii); FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; MLR 2017
Regulations 28(10) and (18) and 28 through 30; UK MiFID Org Reg
articles 72(1), 74 and 75; UK MiFIR article 25(1); and UK EMIR articles
9(2), 39(4) and 11(1)(a);
    (C) The requirements of Exchange Act rule 18a-6(b)(1)(ii) and
(iii), provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA IFPRU 2.2.7R(1); PRA Internal Capital Adequacy
Assessment Rule 3.1; FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR, 6.3.4A-1R,
6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R, 6.6.5G, 6.6.33G, 6.6.34R, 6.6.8R,
7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3),
7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R,
7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK MiFID Org Reg
articles 72(1), 74 and 75; PRA Recordkeeping Rules 2.1 and 2.2; FCA
SYSC 9.1.1AR and 9.1.2R; UK EMIR articles 9(2), 25(1) and 39(4); FCA
COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; and PRA Fundamental Rules
2 and 6; and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (D) The requirements of Exchange Act rule 18a-6(b)(1)(iv) or
(b)(2)(ii), as applicable, provided that the Covered Entity is subject
to and complies with the requirements of FCA SYSC 9.1.1AR, 10A.1.6R and
10A.1.8R; FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; MLR 2017
Regulations 28(18), 28(10) and 28 through 30; PRA Internal Capital
Adequacy Assessment Rule 3.1; PRA Fundamental Rules 2 and 6; PRA
Recordkeeping Rules 2.1 and 2.2; FCA CASS 6.2.1R, 6.2.2R, 6.3.2AR,
6.3.4A-1R, 6.3.6AR, 6.6.2R, 6.6.3R, 6.6.4R, 6.6.5G, 6.6.33G, 6.6.34R,
6.6.8R, 7.12.1R, 7.12.2R, 7.13.12R, 7.13.25R, 7.13.32R(3), 7.13.33R(3),
7.15.2R, 7.15.3R, 7.15.4G, 7.15.5R, 7.15.8R, 7.15.9R, 7.15.20R,
7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and 10.1.9E; UK CRR articles 103 and
103(b)(ii); FCA PRIN 2.1.1.R(2) and (3); FCA FCG 3.1.7; FCA IFPRU
2.2.7R(1); FCA COBS 8A.1.9R, 9.1.1AR, 9A.2.1R, 16A.2.1 R and 16A.3.1UK;
FCA SYSC 9.1.1AR, 9.1.2R, 10A.1.6R and 10A.1.8R; UK MiFID Org Reg
articles 59, 72, 72(1), 73, 74, 75, 76, 76(8)(b), Annex I and Annex IV;
UK MiFIR article 25(1); and UK EMIR articles 9(2), 11(1)(a), 39(4) and
39(5);
    (E) The requirements of Exchange Act rule 18a-6(b)(1)(v), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 99, 104(1)(j), 294, 394, 415, 430 and
Part Six: Title II & Title III; UK CRR Reporting ITS annexes I, II,
III, IV, V, VIII, IX, X, XI, XII, XIII and article 14; PRA
Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR and 9.1.2R; UK MiFID
Org Reg article 72(1); UK MiFIR article 25(1); and UK EMIR article
9(2);
    (2) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(v), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant this Order; and
    (3) This Order does not extend to the requirements of Exchange Act
rule 18a-6(b)(1)(v) relating to Exchange Act rule 18a-2;
    (F) The requirements of Exchange Act rule 18a-6(b)(1)(vi) or
(b)(2)(iii), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COBS 8A.1.9R; PRA Recordkeeping Rules 2.1 and 2.2;
FCA SYSC 9.1.1AR and 9.1.2R; UK MiFID Org Reg articles 72(1) and 73;
FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA Fundamental Rules
2 and 6; and FCA PRIN 2.1.1.R(2) and (3); UK MiFIR article 25(1); and
UK EMIR article 9(2); and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(vi), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (G) The requirements of Exchange Act rule 18a-6(b)(1)(vii) or
(b)(2)(iv), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COBS 8A.1.9R, 16A.2.1 R, and 16A.3.1; PRA
Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR and 9.1.2R; UK MiFID
Org Reg articles 59, 72(1) and 73; UK MiFIR article 25(1); UK EMIR
articles 9(2) and 11(1)(a); FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D
and 5F; PRA Fundamental Rules 2 and 6; and FCA PRIN 2.1.1.R(2) and (3);
and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(vii), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (H) The requirements of Exchange Act rule 18a-6(b)(1)(viii) or
(b)(2)(v), as applicable, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 99, 104(1)(j), 294, 394, 415, 430 and
Part Six: Title II & Title III; UK CRR Reporting ITS article 14 and
annexes I, II, III, IV, V, VIII, IX, X, XI, XII, XIII; PRA
Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR and 9.1.2R; UK MiFID
Org Reg article 72(1); UK MiFIR article 25(1); and UK EMIR article
9(2);
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act rule 18a-7 pursuant to this Order;
    (3) With respect to the requirements of Exchange Act rule 18a-
6(b)(1)(viii), the Covered Entity applies substituted compliance for
the requirements of Exchange Act section 15F(e) and Exchange Act rules
18a-1 through 18a-1d pursuant to this Order;
    (4) This Order does not extend to the requirements of Exchange Act
rule 18a-6(b)(1)(viii)(L); and
    (5) This Order does not extend to the requirements of Exchange Act
rule 18a-6(b)(1)(viii)(M) relating to Exchange Act rule 18a-2.
    (I) The requirements of Exchange Act rule 18a-6(b)(1)(ix), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA SYSC 4.1.1(1)R, 4.1.1R(1), 6.1.1R, 7.1.4R, 9.1.1AR,
9.1.2R and 10.1.7R; FCA COBS 2.3A.32R; UK MiFID Org Reg articles
22(3)(c), 23, 23(1)(b), 24, 25(2), 26, 29(2)(c), 35 and 72(1); PRA Risk
Control Rule 2.3; PRA Internal Capital Adequacy Assessment Rules 3
through 11; FCA IFPRU 2.2.7R, 2.2.17R through 2.2.35R and 2.2.44R; UK
CRR articles 286 and 293(1)(d); UK EMIR RTS; PRA Recordkeeping Rule 2.1
and 2.2; UK MiFIR article 25(1); UK EMIR articles 9(2) and 11; UK EMIR
RTS; FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA Fundamental
Rules 2 and 6; and FCA PRIN 2.1.1.R(2) and (3); and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (J) The requirements of Exchange Act rule 18a-6(b)(1)(x), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA IFPRU 2.2.7R; PRA Internal Capital Adequacy
Assessment Rule 3.1; PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC
9.1.1AR and 9.1.2R; UK MiFID Org Reg article 72(1); UK MiFIR article
25(1); UK EMIR article 9(2); FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D
and 5F; PRA Fundamental Rules 2 and 6; FCA

PRIN 2.1.1.R(2) and (3); PRA Recordkeeping Rule 2.1; and FCA SYSC
9.1.1AR; and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (K) The requirements of Exchange Act rule 18a-6(b)(1)(xii) or
(b)(2)(vii), as applicable, regarding one or more provisions of
Exchange Act rules 15Fh-3 or 15Fk-1 for which substituted compliance is
available under this Order, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of MLD4 articles 11 and 14; MLR 2017 Regulations 27
through 30; PRA Recordkeeping Rule 2.1 and 2.2; FCA SYSC 9.1.1AR and
9.1.2R; UK MiFID Org Reg article 72(1); UK MiFIR article 25(1); and UK
EMIR article 9(2), in each case with respect to the relevant security-
based swap or activity;
    (2) With respect to the portion of Exchange Act rule 18a-
6(b)(1)(xii) or (b)(2)(vii) that relates to Exchange Act rule 15Fh-3,
the Covered Entity applies substituted compliance for such business
conduct standard(s) of Exchange Act rule 15Fh-3 pursuant to this Order,
as applicable, with respect to the relevant security-based swap or
activity; and
    (3) With respect to the portion of Exchange Act rule 18a-
6(b)(1)(xii) or (b)(2)(vii), as applicable, that relates to Exchange
Act rule 15Fk-1, the Covered Entity applies substituted compliance for
Exchange Act section 15F(k) and Exchange Act rule 15Fk-1 pursuant to
this Order;
    (L) The requirements of Exchange Act rule 18a-6(c), provided that
the Covered Entity is subject to and complies with the requirements of
PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR and 9.1.2R; UK
MiFID Org Reg article 72(1); UK MiFIR article 25(1); and UK EMIR
article 9(2);
    (M) The requirements of Exchange Act rule 18a-6(d)(1), provided
that the Covered Entity is subject to and complies with the
requirements of PRA General Organisational Requirements Rule 5.2; FSMA
sections 60A(2), 63(2A), 63F(2) and (5); PRA Fitness and Propriety
Rules 2.6 and 2.9; FCA SUP 10C.10.8D, 10C.10.8AD 10C.15, 10C Annex 3D,
10C.10.14G, 10C.10.16R, and 10C.10.21G; SMR Applications and
Notifications Rules 2.1, 2.2 and 2.6; PRA Certification Rule 2.1; FCA
SYSC 4.3A.1R, 4.3A.3R, 9.1.1AR, 9.1.2R, 10.1.7R, 27 and 27.2.5G; FCA
FIT 2.1, 2.2 and 2.3; PRA General Organisational Requirements Rules 5.1
and 5.2; UK MiFID Org Reg articles 21(1)(a), 35 and 72(1); and PRA
Recordkeeping Rules 2.1 and 2.2;
    (N) The requirements of Exchange Act rule 18a-6(d)(2), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 9.1.1AR
and 9.1.2R; UK MiFID Org Reg articles 72(1) and 72(3); UK MiFIR article
25(1); and UK EMIR article 9(2); and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(d)(2)(i), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (O) The requirements of Exchange Act rule 18a-6(d)(3), provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); FCA SYSC
6.1.1R, 9.1.1AR, 9.1.2R and 10A.1.6R; PRA Recordkeeping Rules 2.1 and
2.2; UK MiFID Org Reg articles 72, 72(1), 73, 76(8)(b) and Annex I; UK
MiFIR article 25(1); and UK EMIR article 9(2) and 39(5); and
    (2) With respect to the requirements of Exchange Act rule 18a-
6(d)(3)(i), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (P) The requirements of Exchange Act rule 18a-6(d)(4) and (d)(5),
provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COBS 8A.1.9R; PRA Recordkeeping Rules 2.1 and 2.2;
FCA SYSC 4.1.1R(1), 9.1.1AR and 9.1.2R; UK MiFID Org Reg articles 24,
25(2), 72(1) and 73; UK MiFIR article 25(1); and UK EMIR article 9(2);
and
    (2) The Covered Entity applies substituted compliance for Exchange
Act rules 15Fi-3, 15Fi-4, and 15Fi-5 pursuant to this Order;
    (Q) The requirements of Exchange Act rule 18a-6(e), provided that
the Covered Entity is subject to and complies with the requirements of
FCA COBS 8A.1.9R; PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 4.1.1R,
9.1.1AR and 9.1.2R; UK MiFID Org Reg articles 21(2), 58, 72(1) and
72(3); UK MiFIR article 25(1); and UK EMIR article 9(2); and
    (R) The requirements of Exchange Act rule 18a-6(f), provided that
the Covered Entity is subject to and complies with the requirements of
PRA Outsourcing Rule 2.1; EBA Guidelines on Outsourcing section 13.3;
PRA Recordkeeping Rules 2.1 and 2.2; FCA SYSC 8.1.1R, 9.1.1AR and
9.1.2R; UK MiFID Org Reg articles 31(1) and 72(1); UK MiFIR article
25(1); and UK EMIR article 9(2).
    (ii) Paragraph (f)(2)(i) is subject to the following further
conditions:
    (A) A Covered Entity may apply the substituted compliance
determination in paragraph (f)(2)(i)(K) to records related to Exchange
Act rule 15Fh-3(b), (c), (e), (f) and (g) in respect of one or more
security-based swaps or activities related to security-based swaps; and
    (B) This Order does not extend to the requirements of Exchange Act
rule (b)(1)(xi), (b)(1)(xiii), (b)(2)(vi), or (b)(2)(viii).
    (3) File Reports. The requirements of the following provisions of
Exchange Act rule 18a-7, provided that the Covered Entity complies with
the relevant conditions in this paragraph (f)(3):
    (i) The requirements of Exchange Act rule 18a-7(a)(1) or (a)(2), as
applicable, and the requirements of Exchange Act rule 18a-7(j) as
applied to such requirements, provided that:
    (A) The Covered Entity is subject to and complies with the
requirements of FSMA sections 137A, 137G and 137T; CRD article
104(1)(j); PRA Definition of Capital Rule 4.5; UK CRR articles 99, 394,
430 and Part Six: Title II & Title III; and UK CRR Reporting ITS
annexes I, II, III, IV, V, VIII, IX, X, XI, XII and XIII;
    (B) The Covered Entity files periodic unaudited financial and
operational information with the Commission or its designee in the
manner and format required by Commission rule or order and presents the
financial information in the filing in accordance with generally
accepted accounting principles that the Covered Entity uses to prepare
general purpose publicly available or available to be issued financial
statements in the UK; and
    (C) With respect to the requirements of Exchange Act rule 18a-
7(a)(1), the Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (ii) The requirements of Exchange Act rule 18a-7(a)(3) and the
requirements of Exchange Act rule 18a-7(j) as applied to such
requirements, provided that:
    (A) The Covered Entity is subject to and complies with the
requirements of UK CRR articles 99, 394, 431 to 455, 432, 433, 434, 437
to 440, 442, 443, 445 to 449, 451 to 455, 452 and 455; UK CRR Reporting
ITS annexes I, II, VIII and IX; FSMA sections 137A, 137G and 137T; PRA
Definition of Capital Rule 4.5; and Companies Act sections 394, 415,
442 and 475; and

    (B) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (iii) The requirements of Exchange Act rule 18a-7(b), provided that
the Covered Entity is subject to and complies with the requirements of
UK CRR articles 434, 437 through 440, 442, 443, 445 through 449, 451
through 455; and Companies Act sections 394, 415, 442 and 475;
    (iv) The requirements of Exchange Act rule 18a-7(c), (d), (e), (f),
(g) and (h) and the requirements of Exchange Act rule 18a-7(j) as
applied to such requirements, provided that:
    (A) The Covered Entity is subject to and complies with the
requirements of FCA CASS 6.2.2R, 6.6.2R, 6.6.3R, 6.6.33G, 6.6.34R,
7.12.2R, 7.15.2R, 7.15.3R, 7.15.20R and 7.15.21R; FCA SUP 3.8.5R,
3.10.4R through 3.10.7R; UK CRR articles 26(2), 132(5), 154, 191, 321,
325bi, 350, 353, 368, 418, 431 to 455, 434, 437 to 440, 442, 443, 445
to 449 and 451 to 455; Companies Act sections 394, 415, 442 and 475;
and Capital Requirements Regulations 2013 Regulation 2(4);
    (B) With respect to financial statements the Covered Entity is
required to file annually with the UK PRA or FCA, including a report of
an independent public accountant covering the financial statements, the
Covered Entity:
    (1) Simultaneously sends a copy of such annual financial statements
and the report of the independent public accountant covering the annual
financial statements to the Commission in the manner specified on the
Commission's website;
    (2) Includes with the transmission the contact information of an
individual who can provide further information about the financial
statements and report;
    (3) Includes with the transmission the report of an independent
public accountant required by Exchange Act rule 18a-7(c)(1)(i)(C)
covering the annual financial statements if UK laws do not require the
Covered Entity to engage an independent public accountant to prepare a
report covering the annual financial statements; provided, however,
that such report of the independent public accountant may be prepared
in accordance with generally accepted auditing standards in UK that the
independent public accountant uses to perform audit and attestation
services and the accountant complies with UK independence requirements;
    (4) Includes with the transmission the reports required by Exchange
Act rule 18a-7(c)(1)(i)(B) and (C) addressing the statements identified
in Exchange Act rule 18a-7(c)(3) or (c)(4), as applicable, that relate
to Exchange Act rule 18a-4; provided, however, that the report of the
independent public accountant required by Exchange Act rule 18a-
7(c)(1)(i)(C) may be prepared in accordance with generally accepted
auditing standards in the UK that the independent public accountant
uses to perform audit and attestation services and the accountant
complies with UK independence requirements; and
    (5) Includes with the transmission the supporting schedules and
reconciliations, as applicable, required by Exchange Act rules 18a-
7(c)(2)(ii) and (iii), respectively, relating to Exchange Act rule 18a-
2; and
    (6) Includes with the transmission the supporting schedules and
reconciliations, as applicable, required by Exchange Act rules 18a-
7(c)(2)(ii) and (iii), respectively, relating to Exchange Act rules
18a-4 and 18a-4a; and
    (C) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (v) The requirements of Exchange Act rule 18a-7(i), provided that:
    (A) The Covered Entity is subject to and complies with the
requirements of FCA SUP 16.3.17R and PRA Regulatory Reporting Rule 18;
and
    (B) The Covered Entity:
    (1) Simultaneously sends a copy of any notice required to be sent
by UK law cited in paragraph (f)(3)(v)(A) of the Order to the
Commission in the manner specified on the Commission's website; and
    (2) Includes with the transmission the contact information of an
individual who can provide further information about the matter that is
the subject of the notice.
    (4)(i) Provide Notification. The requirements of the following
provisions of Exchange Act rule 18a-8, provided that the Covered Entity
complies with the relevant conditions in this paragraph (f)(4)(i) and
with the applicable conditions in paragraph (f)(4)(ii):
    (A) The requirements of paragraphs (a)(1)(i), (a)(1)(ii), (b)(1),
(b)(2), and (b)(4) of Exchange Act rule 18a-8 and the requirements of
Exchange Act rule 18a-8(h) as applied to such requirements, provided
that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA PRIN 2.1.1R and 11; PRA Fundamental Rule 7; FCA SUP
15.3.1R, 15.3.11R, 15.3.12G, 15.3.14G, 15.3.15R, 15.3.17R and 15.3.21R;
FCA CASS 6.6.57R, 7.15.33R and Schedule 2; PRA Notifications Rules 2.1,
2.4, 2.5, 2.6, 2.8 and 2.9; FCA SYSC 18.6.1R and 18.6.4G; FCA IFPRU
2.4.1R; and PRA General Organisational Requirements 2A.2, 2A.1(2) and
2A.3 to 2A.6; and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (B) The requirements of Exchange Act rule 18a-8(c) and the
requirements of Exchange Act rule 18a-8(h) as applied to such
requirements, provided that the Covered Entity is subject to and
complies with the requirements of FCA PRIN 2.1.1R and 11; PRA
Fundamental Rule 7; FCA SUP 15.3.1R, 15.3.11R, 15.3.12G, 15.3.14G,
15.3.15R, 15.3.17R and 15.3.21R; FCA CASS 6.6.57R, 7.15.33R and
Schedule 2; PRA Notifications Rules 2.1, 2.4, 2.5, 2.6, 2.8 and 2.9;
FCA SYSC 18.6.1R and 18.6.4G; FCA IFPRU 2.4.1R; and PRA General
Organisational Requirements 2A.2, 2A.1(2) and 2A.3 to 2A.6;
    (C) The requirements of Exchange Act rule 18a-8(d) and the
requirements of Exchange Act rule 18a-8(h) as applied to such
requirements, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA PRIN 2.1.1R and 11; PRA Fundamental Rule 7; FCA SUP
15.3.1R, 15.3.11R, 15.3.12G, 15.3.14G, 15.3.15R, 15.3.17R and 15.3.21R;
FCA CASS 6.6.57R, 7.15.33R and Schedule 2; PRA Notifications Rules 2.1,
2.4, 2.5, 2.6, 2.8 and 2.9; FCA SYSC 18.6.1R and 18.6.4G; FCA IFPRU
2.4.1R; and PRA General Organisational Requirements 2A.2, 2A.1(2) and
2A.3 through 2A.6; and
    (2) This Order does not extend to the requirements of Exchange Act
rule 18a-8(d) to give notice with respect to books and records required
by Exchange Act rule 18a-5 for which the Covered Entity does not apply
substituted compliance pursuant to this Order;
    (D) The requirements of Exchange Act rule 18a-8(e) and the
requirements of Exchange Act rule 18a-8(h) as applied to such
requirements, provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA PRIN 2.1.1R and 11; PRA Fundamental Rule 7; FCA SUP
15.3.1R, 15.3.11R, 15.3.12G, 15.3.14G, 15.3.15R, 15.3.17R and 15.3.21R;
FCA CASS 6.6.57R, 7.15.33R and Schedule 2; PRA Notifications Rules 2.1,
2.4, 2.5, 2.6, 2.8 and 2.9; FCA SYSC 18.6.1R and 18.6.4G; FCA IFPRU
2.4.1R; and PRA General Organisational Requirements 2A.2, 2A.1(2) and
2A.3 through 2A.6;

    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order;
    (3) This Order does not extend to the requirements of Exchange act
rule 18a-8(e) relating to Exchange Act rule 18a-2 or to the
requirements of Exchange Act rule 18a-8(h) as applied to such
requirements; and
    (4) This Order does not extend to the requirements of Exchange act
rule 18a-8(e) relating to Exchange Act rule 18a-4 or to the
requirements of Exchange Act rule 18a-8(h) as applied to such
requirements;
    (ii) Paragraph (f)(4)(i) is subject to the following further
conditions:
    (A) The Covered Entity:
    (1) Simultaneously sends a copy of any notice required to be sent
by UK law cited in this paragraph of the Order to the Commission in the
manner specified on the Commission's website; and
    (2) Includes with the transmission the contact information of an
individual who can provide further information about the matter that is
the subject of the notice;
    (B) This Order does not extend to the requirements of paragraphs
(a)(2) and (b)(3), and of Exchange Act rule 18a-8 relating to Exchange
Act rule 18a-2 or to the requirements of Exchange Act rule 18a-8(h) as
applied to such requirements;
    (C) This Order does not extend to the requirements of paragraph (g)
of rule 18a-8 or to the requirements of Exchange Act rule 18a-8(h) as
applied to such requirements.
    (5) Securities Counts. The requirements of Exchange Act rule 18a-9,
provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA CASS 6.2.1R, 6.2.2R, 6.3.4A-1R, 6.3.6AR, 6.6.2R,
6.6.3R, 6.6.33G, 6.6.34R, 6.6.4R, 6.6.47G, 6.6.5G, 6.6.8R, 7.12.1R,
7.12.2R, 7.13.12R, 7.13.32R(3), 7.13.33R(3), 7.15.2R, 7.15.5R, 7.15.9R,
7.15.3R, 7.15.8R, 7.15.20R, 7.15.21G, 10.1.2G, 10.1.3R, 10.1.7 and
10.1.9E; FCA SUP 3.10.4R-3.10.7R; UK MiFID Org Reg articles 74 and 75;
UK EMIR article 11(1)(b); and UK EMIR RTS articles 12 and 13; and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order.
    (6) Daily Trading Records. The requirements of Exchange Act section
15F(g), provided that:
    (1) The Covered Entity is subject to and complies with the
requirements of FCA COND at paragraphs 2C, 2D, 3B, 3C, 5D and 5F; PRA
Fundamental Rules 2 and 6; FCA PRIN 2.1.1.R(2) and (3); PRA
Recordkeeping Rule 2.1; and FCA SYSC 9.1.1AR; and
    (2) The Covered Entity applies substituted compliance for the
requirements of Exchange Act section 15F(e) and Exchange Act rules 18a-
1 through 18a-1d pursuant to this Order.
    (7) Examination and Production of Records. Notwithstanding the
forgoing provisions of paragraph (f) of this Order, this Order does not
extend to, and Covered Entities remain subject to, the requirement of
Exchange Act section 15F(f) to keep books and records open to
inspection by any representative of the Commission and the requirement
of Exchange Act rule 18a-6(g) to furnish promptly to a representative
of the Commission legible, true, complete, and current copies of those
records of the Covered Entity that are required to be preserved under
Exchange Act rule 18a-6, or any other records of the Covered Entity
that are subject to examination or required to be made or maintained
pursuant to Exchange Act section 15F that are requested by a
representative of the Commission.
    (8) English Translations. Notwithstanding the forgoing provisions
of paragraph (f) of this Order, to the extent documents are not
prepared in the English language, Covered Entities must promptly
furnish to a representative of the Commission upon request an English
translation of any record, report, or notification of the Covered
Entity that is required to be made, preserved, filed, or subject to
examination pursuant to Exchange Act section 15F of this Order.

(g) Definitions

    (1) ``Covered Entity'' means an entity that:
    (i) Is a security-based swap dealer or major security-based swap
participant registered with the Commission;
    (ii) Is not a ``U.S. person,'' as that term is defined in rule
3a71-3(a)(4) under the Exchange Act;
    (iii) Is a ``MiFID investment firm'' or ``third country investment
firm,'' as such terms are defined in the FCA Handbook Glossary, that
has permission from the FCA or PRA under Part 4A of FSMA to carry on
regulated activities relating to investment services and activities in
the United Kingdom; and
    (iv) Is supervised by the FCA under the fixed supervision model
and, if the firm is a PRA-authorized person, also supervised by the PRA
as a Category 1 firm.
    (2) ``Capital Requirements Regulations 2013'' means the UK Capital
Requirements Regulations 2013, as amended from time to time.
    (3) ``Companies Act'' means the UK Companies Act 2006, as amended
from time to time.
    (4) ``FCA'' means the UK's Financial Conduct Authority.
    (5) ``FCA BIFPRU'' means the Prudential Sourcebook for Banks,
Building Societies and Investment Firms of the FCA Handbook, as amended
from time to time.
    (6) ``FCA CASS'' means the Client Asset Sourcebook of the FCA
Handbook, as amended from time to time.
    (7) ``FCA COBS'' means the Conduct of Business Sourcebook of the
FCA Handbook, as amended from time to time.
    (8) ``FCA COND'' means the Threshold Conditions of the FCA
Handbook, as amended from time to time.
    (9) ``FCA Enforcement Guide'' means the Enforcement Guide of the
FCA Handbook, as amended from time to time.
    (10) ``FCA FCG'' means the Financial Crime Guide of the FCA
Handbook, as amended from time to time.
    (11) ``FCA FIT'' means the Fit and Proper test for Employees and
Senior Personnel Sourcebook of the FCA Handbook, as amended from time
to time.
    (12) ``FCA Handbook'' means the FCA's Handbook of rules and
guidance, as amended from time to time.
    (13) ``FCA Handbook Glossary'' means the Glossary part of the FCA's
Handbook of rules and guidance, as amended from time to time.
    (14) ``FCA IFPRU'' means the Prudential Sourcebook for Investment
Firms of the FCA Handbook, as amended from time to time.
    (15) ``FCA PRIN'' means the Principles for Businesses Sourcebook of
the FCA Handbook, as amended from time to time.
    (16) ``FCA PROD'' means the Product Intervention and Product
Governance Sourcebook of the FCA Handbook, as amended from time to
time.
    (17) ``FCA SUP'' means the Supervision Sourcebook of the FCA
Handbook, as amended from time to time.
    (18) ``FCA SYSC'' means the Senior Management Arrangements, Systems
and Controls Sourcebook of the FCA Handbook, as amended from time to
time.
    (19) ``FSMA'' means the UK's Financial Services and Markets Act
2000, as amended from time to time.
    (20) ``ICVC'' means investment company with variable capital as
defined in the FCA Handbook Glossary.

    (21) ``MLR 2017'' means the UK's Money Laundering, Terrorist
Financing and Transfer of Funds (Information on the Payer) Regulations
2017, as amended from time to time.
    (22) ``PRA'' means the UK's Prudential Regulation Authority.
    (23) ``PRA Capital Buffer Rules'' means the Capital Buffer Part of
the PRA Rulebook for CRR Firms, as amended from time to time.
    (24) ``PRA Certification Rules'' means the Certification Part of
the PRA Rulebook for CRR Firms, as amended from time to time.
    (25) ``PRA Definition of Capital Rules'' means the Definition of
Capital Part of the PRA Rulebook for CRR Firms, as amended from time to
time.
    (26) ``PRA Fitness and Proprietary Rules'' means the Fitness and
Propriety Part of the PRA Rulebook for CRR Firms, as amended from time
to time.
    (27) ``PRA Fundamental Rules'' means the Fundamental Rules Part of
the PRA Rulebook for CRR Firms, as amended from time to time.
    (28) ``PRA General Organisational Requirements'' means the General
Organisational Requirements Part of the PRA Rulebook for CRR Firms, as
amended from time to time.
    (29) ``PRA Internal Capital Adequacy Assessment Rules'' means the
Internal Capital Adequacy Assessment Part of the PRA Rulebook for CRR
Firms, as amended from time to time.
    (30) ``PRA Internal Liquidity Adequacy Assessment Rules'' means the
Internal Liquidity Adequacy Assessment Part of the PRA Rulebook for CRR
Firms, as amended from time to time.
    (31) ``PRA Liquidity Coverage Requirement--UK Designated Investment
Firms Rules'' means the PRA Liquidity Coverage Requirement--UK
Designated Investment Firms Part of the PRA Rulebook for CRR Firms, as
amended from time to time.
    (32) ``PRA Notifications Rules'' means the Notifications Part of
the PRA Rulebook for CRR Firms, as amended from time to time.
    (33) ``PRA Outsourcing Rules'' means the Outsourcing Part of the
PRA Rulebook for CRR Firms, as amended from time to time.
    (34) ``PRA Recordkeeping Rules'' means the Recordkeeping Part of
the PRA Rulebook for CRR Firms, as amended from time to time.
    (35) ``PRA Regulatory Reporting Rules'' means the Regulatory
Reporting Part of the PRA Rulebook for CRR Firms, as amended from time
to time.
    (36) ``PRA Remuneration Rules'' means the Remuneration Part of the
PRA Rulebook for CRR Firms, as amended from time to time.
    (37) ``PRA Risk Control Rules'' means the Risk Control Part of the
PRA Rulebook for CRR Firms, as amended from time to time.
    (38) ``PRA Rulebook'' or ``PRA Rulebook for CRR Firms'' means the
PRA's Rulebook for Capital Requirement Regulation Firms, as amended
from time to time.
    (39) ``PRA Rulebook Glossary'' means the Glossary part of the PRA
Rulebook for CRR Firms, as amended from time to time.
    (40) ``PRA Senior Management Functions Rules'' means the Senior
Management Functions Part of the PRA Rulebook for CRR Firms, as amended
from time to time.
    (41) ``Prudentially regulated'' means a Covered Entity that has a
``prudential regulator'' as that term is defined in Exchange Act
section 3(a)(74).
    (42) ``SMR'' means the Senior Managers Regime that forms part of
the Senior Managers and Certification Regime, as amended from time to
time.
    (43) ``UK'' means the United Kingdom.
    (44) ``UK CRR'' means the UK version of Regulation (EU) No 575/
2013, as amended from time to time.
    (45) ``UK CRR Reporting ITS'' means the UK version of Commission
Implementing Regulation (EU) 680/2014.
    (46) ``UK EMIR'' means the UK version of the ``European Market
Infrastructure Regulation,'' Regulation (EU) No 648/2012, as amended
from time to time.
    (47) ``UK EMIR Margin RTS'' means the UK version of Commission
Delegated Regulation (EU) 2016/2251, as amended from time to time.
    (48) ``UK EMIR RTS'' means UK version of Commission Delegated
Regulation (EU) No 149/2013, as amended from time to time.
    (49) ``UK MAR'' means the UK version of Market Abuse Regulation
(EU) 596/2014, as amended from time to time.
    (50) ``UK MAR Investment Recommendations Regulation'' means the UK
version of Commission Delegated Regulation (EU) 2016/958, as amended
from time to time.
    (51) ``UK MiFID Org Reg'' means the UK version of Commission
Delegated Regulation (EU) 2017/565, as amended from time to time.
    (52) ``UK MiFIR'' means the UK version of the ``Markets in
Financial Instruments Regulation,'' Regulation (EU) 600/2014, as
amended from time to time.
    (53) ``UK Regulated Activities Order'' means the Financial Services
and Markets Act 2000 (Regulated Activities) Order (SI 2001/544), as
amended from time to time.

[FR Doc. 2021-07255 Filed 4-7-21; 8:45 am]
BILLING CODE 8011-01-P