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iv. Additional Conditions Applicable to Exchange Act Rule 18a-8
    Under the proposed Order, substituted compliance in connection with
the notification requirements of Exchange Act rule 18a-8 is subject to
the condition that the SBS Entity: (1) Simultaneously transmits to the
principal office of the Commission or to an email address provided on
the Commission's website a copy of any notice required to be sent by
the French notification laws; 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.\109\
The purpose of this condition is to alert the Commission to financial
or operational problems that could adversely affect the firm--the
objective of Exchange Act rule 18a-8.
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    \109\ See para. (f)(4)(ii) to the proposed Order.
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    In addition, under the proposed Order, substituted compliance in
connection with the notification requirements of Exchange Act rule 18a-
8 is subject to the conditions that if the firm is not exempt from
Exchange Act rule 18a-4, the SBS Entity complies with the notification
requirements of Exchange Act rules 18a-8(e) and 18a-8(g) that relate to
Exchange Act rule 18a-4.\110\ Exchange Act rule 18a-8(e) requires
notification if the firm discovers or is notified by an independent
public accountant the existence of any material weakness that relates
to Exchange Act rule 18a-4. Exchange Act rule 18a-8(g) requires
notification if the firm fails to make in its special reserve account
for the exclusive benefit of security-based swap customers a deposit,
as required by Exchange Act rule 18a-4(c). As discussed above,
substituted compliance is not available for Exchange Act rule 18a-4.
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    \110\ See para. (f)(4)(iii) and (iv) to the proposed Order.
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3. Examination and Production of Records
    Every SBS Entity registered with the Commission, whether complying
directly with Exchange Act requirements or relying on substituted
compliance as a means of complying with the Exchange Act, is required
to satisfy the inspection and production requirements imposed on such
entities under the Exchange Act.\111\ Covered entities may make, keep,
and preserve records, subject to the conditions described above, in a
manner prescribed by applicable European and French requirements. The
Commission notes that as an element of its substituted compliance
application, the French Authorities have provided the Commission with
adequate assurances that no law or policy would impede the ability of
any entity that is directly supervised by the authority and that may
register with the Commission ``to provide prompt access to the
Commission to such entity's books and records or to submit to onsite
inspection or examination by the Commission.'' Consistent with those
assurances and the requirements that apply to all registered SBS
Entities under the Exchange Act, SBS Entities will need to keep books
and records open to inspection by any representative of the Commission
and to furnish promptly to a representative of the Commission legible,
true, complete, and current copies of those records of the firm that
these entities are required to preserve under Exchange Act rule 18a-6
(which would include records for which a positive substituted
compliance determination is being made with respect to Exchange Act
rule 18a-6 under this order), or any other records of the firm 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.\112\
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    \111\ See Exchange Act section 15F(f); Exchange Act rule 18a-
6(g).
    \112\ See para. (f)(6) to the proposed Order.
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IX. Additional Considerations Regarding Supervisory and Enforcement
Effectiveness in France

A. General Considerations

    As noted above, Exchange Act rule 3a71-6 provides that the
Commission's assessment of the comparability of the requirements of the
foreign financial regulatory system must account for ``the
effectiveness of the supervisory program administered, and the
enforcement authority exercised'' by the foreign financial regulatory
authority. This prerequisite accounts for the understanding that
substituted compliance determinations should reflect the reality of the
foreign regulatory framework, in that rules that appear high-quality on
paper nonetheless should not form the basis for substituted compliance
if--in practice--market participants are permitted to fall short of
their regulatory obligations. This prerequisite, however, also
recognizes that differences among the supervisory and enforcement
regimes should not be assumed to reflect flaws in one regime or
another.\113\
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    \113\ See generally Business Conduct Adopting Release, 81 FR at
30079.
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    In connection with these considerations, the French Authorities'
Application includes information regarding the French supervisory and
enforcement framework applicable to derivatives markets and market
participants. This includes information regarding the supervisory and
enforcement authority afforded to the AMF and the ACPR to promote
compliance with applicable requirements, applicable supervisory and
enforcement tools and capabilities, consequences of non-compliance, and
the application of the AMF's and ACPR's supervisory and enforcement
practices in the cross-border context. After review of this
information, the Commission preliminarily believes that the framework
is reasonably designed to promote compliance with the laws where
substituted compliance has been requested.

B. Supervisory Framework in France

    Supervision of credit institutions located in France is conducted
by the AMF, the ACPR, and the ECB. Supervision of investment firms
located in France is conducted by the AMF and

the ACPR (together, credit institutions and investment firms are
referred to as ``firms'').\114\ The day-to-day supervision of the
firms' security-based swap activities is conducted by the AMF; the
ACPR's supervisory powers pertain to licensing matters and prudential
requirements. The ACPR is the primary supervisor for margin and AML
requirements. The AMF and the ACPR cooperate closely and have frequent
communications regarding the supervision of firms to accomplish their
respective missions. The ECB, through joint supervisory teams
(``JSTs''), supervises firms for compliance with the CRD and CRR,
including all capital requirements. The AMF, the ACPR, and the ECB have
the ability to request records needed for supervision from firms
through the supervisory process. In addition, the AMF, the ACPR, and
the ECB set annual priorities and conduct thematic reviews, which are
used to enhance supervision in specific regulatory areas. The results
of these thematic reviews are made public to provide transparency to
the industry.
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    \114\ Starting in 2021, the ECB will also supervise significant
investment firms under the framework described in this section.
---------------------------------------------------------------------------

    The AMF uses a risk-based approach to supervision whereby
investment firms are categorized within four Tiers. Tier 1 firms
receive the most supervisory attention and the staff has been told that
all firms that use substituted compliance will be treated as Tier 1
firms. The AMF's supervisory team maintains a constant dialogue with
Tier 1 firms, including weekly calls with compliance officers and
regular in-person meetings with senior operational management. The AMF
assigns two portfolio managers to each firm that provides investment
services.\115\ One portfolio manager covers market activity and one
portfolio manager covers the retail, private banking, depository
activities, and marketing activities of the firm.
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    \115\ The staff was told that all firms applying to be a
security-based swap dealer with the SEC provide investment services.
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    The AMF's supervision of a Tier 1 firm focuses in part on review
and analysis of numerous types of data that is submitted by firms to
the AMF or the ACPR. The portfolio manager in charge of monitoring
market activity works closely with the data driven supervision
(``DDS'') team, a group that analyzes the regulatory reporting data
submitted by each firm to understand changes at the firm. The portfolio
managers also review the annual compliance report submitted by the
firms each year. The report covers numerous topics at the firm
including compliance with the recordkeeping requirements, the best
execution requirements, the anti-market abuse regulations, and how
conflicts of interest are handled and controlled. In addition, the ACPR
requires firms to file an internal control report each year, and the
parts of the report that are applicable to the AMF's remit are shared
with the AMF. The portfolio manager reviews these reports and compares
the reports from one year to the next. Where inconsistencies are noted,
the portfolio manager will compare them against other internal AMF
information about the firm, as well as complaints that have been
submitted and significant incidents that are reported to the AMF.
    If the AMF identifies an issue at a Tier 1 firm, the AMF will
follow up with the firm in a variety of ways. The AMF may schedule a
follow-up meeting or request additional information. The AMF may also
send the firm a letter from the General Secretary of the AMF or one of
the AMF directors describing the violation of law. In addition, the AMF
may ask the firm to carry out an internal or external audit on the
topic, or request that the firm undertake specific corrective measures
and report back with details on corrective action taken. The AMF could
also start an onsite inspection of the firm. Inspections are carried
out through an inspection division separate and apart from the
supervisory team.
    The ACPR also uses a risk-based approach to supervision, assessing
the size, business model, complexity, and risk profile of the
supervised entity. Supervisors are assigned based on this risk profile
ranging in number from two supervisors for the least complex investment
firms to up to twenty supervisors for the most significant banks. At
least two supervisors for each Tier 1 firm focus on AML issues. All
supervisors interact with the firm on a daily basis through phone calls
and meetings, and review the annual report on internal controls, which
includes information on capital and liquidity as well as the AML
control framework of the firm. The ACPR also uses onsite inspectors to
investigate areas of concern, conduct a general review of the firm, or
validate a specific risk methodology. The ACPR allocates about a
quarter of its onsite inspectors to AML inspections every year.
    Where the ACPR detects issues at a firm, it will take corrective
measures that its staff believe are proportional to the conduct. For
example, the first step may be asking the firm, in writing, to take
corrective measures, which is accompanied by enhanced monitoring and
communication with the ACPR on the matter. The ACPR may also conduct on
onsite inspections. When these corrective measures fail, the ACPR may
open an enforcement proceeding.
    Supervision of the CRD and CRR, which includes a firm's capital
requirements, is conducted through the ECB's single supervisory
mechanism and executed by JSTs comprising of ECB staff, ACPR staff, and
staff from other countries in the EU where the significant institution
has a subsidiary or branch. The ACPR assigns multiple supervisors to
the JST for a significant institution headquartered in France. The head
of the JST is from the ECB and generally is not from the country where
the significant institution is located. As part of its day-to-day
supervision, the JST analyzes the supervisory reporting, financial
statements, and internal documentation of supervised entities. The JSTs
hold regular and ad hoc meetings with the supervised entities at
various levels of staff seniority. They conduct ongoing risk analyses
of approved risk models, and analyze and assess the recovery plans of
supervised entities. The various supervisory activities typically
result in supervisory measures addressed to the supervised institution.
Supervisory activities and decisions result in a number of routine
steps such as the monitoring of compliance by the JST and, if
necessary, enforcement measures and sanctions. In addition to ongoing
supervision, the JST may conduct in-depth reviews on certain topics by
organizing a dedicated onsite mission (e.g., an inspection or an
internal model investigation). The onsite inspections are carried out
by an independent inspection team, which works in close cooperation
with the respective JST.
    For each firm, the JST conducts a Supervisory Review and Evaluation
Process (``SREP''), which measures the risks for each bank. The SREP
shows where a firm stands in terms of capital requirements and the way
it handles risks. To develop the SREP, supervisors review the
sustainability of each firm's business model, governance and risk
management at the firm, capital risks, and liquidity and funding risks.
Once the SREP is developed, the firm will receive a letter setting
forth specific measures that must be implemented the following year
based on the firm's individual profile. For example, the SREP may ask
the firm to hold additional capital or set forth qualitative
requirements related to the firm's governance structure or management.

C. Enforcement Authority in France

    The MFC and SSM Regulations are applicable to the distribution of

enforcement authority relating to security-based swaps in France. With
respect to regulated entities, the AMF is primarily responsible for
enforcement of recordkeeping and reporting requirements. ACPR is
primarily responsible for the enforcement of prudential recordkeeping
and reporting requirements regarding investment firms; and the ECB is
primarily responsible for the enforcement of prudential recordkeeping
and reporting requirements regarding credit institutions.
i. The AMF
    The AMF's investigations may arise from information gathered during
market supervision, monitoring of listed companies, alerts raised by
the AMF's Market Surveillance Directorate or other AMF divisions, and
information sent to the AMF by foreign authorities. AMF's investigative
powers include, but are not limited to, obtaining hard copy and
electronic documents, interviewing external experts, accessing business
premises, and summoning persons likely to provide useful information
for interviews.
    The Enforcement Committee is the body empowered to determine
sanctions in an enforcement matter. Sanctions available to the
Enforcement Committee include freezing assets, banning a person from
certain professional activity, imposing a monetary penalty, withdrawing
the authorization of an asset management company or the status of a
market operator, and requiring corrective statements to be published.
The AMF also has the power to enter into settlements with respondents
and as part of a settlement may require the respondent to cease all
ongoing violations. Settlements may also include the payment of
compensation to harmed investors. French law imposes a five year
statute of limitations for AMF matters.
ii. The ECB and the ACPR
    As noted above, the ACPR conducts supervisory inspections relating
to prudential recordkeeping and reporting requirements for investment
firms. When breaches of the requirements occur, the Supervisory Board
of the ACPR is empowered to decide on the appropriate measures whether
administrative, enforcement or disciplinary. These measures may include
injunctions, ``mesures de police administrative'' (including warnings,
formal notices, conservative measures and the appointment of a
provisional administrator), and coercive fines. Additionally, the
Supervisory Board may decide to introduce disciplinary proceedings for
anti-money laundering and counter terrorist financing. The decision-
making body in charge of the decision to sanction is a separate body,
the Sanctions Committee, to which the Supervisory Board refers the
case.
    With respect to credit institutions, the ACPR conducts supervisory
activity through JSTs, under the SSM Regulation. Where it identifies a
failure to comply with obligations under applicable regulations, a JST
may decide effective, proportionate and dissuasive sanctions.
Misconduct detected by the JSTs is addressed primarily by the ECB.
Under the SSM Regulations, the ECB is empowered to address issues of
noncompliance with applicable European Union law by directly imposing
enforcement measures on supervised entities or requiring the ACPR to
use its national enforcement powers. It also may choose to impose
administrative penalties or request that the ACPR open sanctioning
proceedings. In particular, the ECB may impose administrative pecuniary
penalties, and may impose fines and periodic penalty payments per day
of infringement. Where appropriate, the ECB may exercise its
enforcement authority in parallel with supervisory measures.

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 French and
EU 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.
    Commenters also are invited to address any differences between
French regulatory requirements and frameworks and the German
requirements and frameworks that formed the basis for the Commission's
grant of substituted compliance in connection with Germany.\116\ Given
the Commission's substituted compliance determination with respect to
Germany, should the Commission allow German branches of French Covered
Entities to use substituted compliance in circumstances where
responsibility for ensuring compliance with any provision of MiFID, MAR
or any other EU requirement adopted pursuant to MiFID or MAR listed in
paragraphs (b) through (f) of this Order is allocated to the
Bundesanstalt f[uuml]r Finanzdienstleistungsaufsicht (``BaFin''), the
German financial authority? If so, should such reliance be conditioned
on the MOU between the SEC and BaFin addressing substituted compliance
under those circumstances? Similarly, should the Commission allow
French branches of German Covered Entities to use substituted
compliance in circumstances where responsibility for ensuring
compliance with any provision of MiFID, MAR or any other EU requirement
adopted pursuant to MiFID or MAR listed in paragraphs (b) through (e)
of the German Substituted Compliance Order is allocated to the AMF and/
or the ACPR? If so, should such reliance be conditioned on the MOU
between the SEC and the French Authorities addressing substituted
compliance under those circumstances?
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    \116\ See note 1, supra.
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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 risk management systems, trade
acknowledgement and verification, portfolio reconciliation and dispute
reporting, portfolio reconciliation 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.
    Commenters further are invited to address any differences between
French regulatory requirements and frameworks and the German
requirements and frameworks that formed the basis for the Commission's
conditional grant of substituted compliance in connection with Germany
for those risk control requirements.\117\
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    \117\ See generally German Notice and Proposed Order, 85 FR at
72730-32.
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C. Capital and Margin Requirements

    The Commission further requests comment regarding the comparability
analysis of French and EU capital requirements with Exchange Act
capital

requirements for non-prudentially regulated security-based swap
dealers. Are there any conditions that should be applied to substituted
compliance for these capital requirements to promote comparable
regulatory outcomes? For example, given the objectives of Rule 18a-1,
should the Commission consider including a condition that requires a
non-prudentially regulated security-based swap dealer to maintain a
minimum amount of liquid assets, such a minimum ratio of liquid assets
to illiquid assets? If so, should the ratio of liquid assets to
illiquid assets be 80% to 20%, 70% to 30%, 60% to 40% or some other
ratio? In terms of defining liquid and illiquid assets, should the
Commission consider assets that are allowable as capital under Exchange
Act rule 18a-1 as liquid and assets that are not allowable as capital
under that rule as illiquid?
    In addition, should the Commission consider including a condition
that would require non-prudentially regulated security-based swap
dealers to be subject to a specific liquidity requirement, such as a
requirement to maintain a pool of highly liquid assets to cover cash
outflows during a 30-day period of stress?
    The Commission further requests comment on whether it should
consider including a condition that non-prudentially regulated
security-based swap dealers must maintain equity capital equal or Tier
1 capital at least equal to the minimum fixed-dollar capital
requirements under Exchange Act rule 18a-1? For example, should there
be a condition that that firm maintain equity capital or Tier 1 capital
of at least $20 million?
    The Commission further requests comment on what specific types of
non-prudentially regulated security-based swap dealers in France would
be relying on a substituted compliance determination with respect to
capital requirements under Exchange Act rule 18a-1. For example, 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 notes that the comparability analysis for capital
for France focuses on Covered Entities that are subject to the
prudential capital regime under CRR and CRD. The Commission requests
comment on how the Commission should consider the effects of subsequent
amendments to the capital requirements of the CRR and CRD on Covered
Entities in the context of the proposed order, particularly with
respect to amendments to the CRD (e.g., CRD V), which would require
changes to implementing French laws.
    The Commission further requests comment on whether any investment
firms that may be relying on the Commission's proposed substituted
compliance determination would be covered under the new capital regime
under the EU's IFR. 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 EU and France? If so, explain how they are
comparable to the capital requirements for non-prudentially regulated
security-based swap dealers under the Exchange Act.
    The Commission further requests comment on whether there would be
any non-prudentially regulated major security-based swap participants
that would be seeking substituted compliance with respect to Exchange
Act rule 18a-2.
    The Commission further requests comment regarding the Commission's
preliminary view that French and EU margin requirements are comparable
to the Exchange Act margin requirements for non-prudentially regulated
security-based swap dealers and major security-based swap participants.
Are there any conditions that should be applied to substituted
compliance for the margin requirements to promote comparable regulatory
outcomes?

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.
    Commenters further are invited to address any differences between
French regulatory requirements and frameworks and the German
requirements and frameworks that formed the basis for the Commission's
conditional grant of substituted compliance in connection with Germany
for those internal supervision and chief compliance officers
requirements, as well as additional Exchange Act section 15F(j)
requirements.\118\
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    \118\ See generally German Notice and Proposed Order, 85 FR at
72732-34.
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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.
    Commenters further are invited to address any differences between
French regulatory requirements and frameworks and the German
requirements and frameworks that formed the basis for the Commission's
conditional grant of substituted compliance in connection with Germany
for certain of those counterparty protection requirements. Would the
responses to any of the questions about counterparty protection
requirements that the Commission asked in connection with the German
substituted compliance request differ if those questions applied to
French regulatory requirements and frameworks?

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 additional Exchange Act section 15F(f)
requirements. 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. Do French and EU law taken as a
whole produce regulatory outcomes that are comparable to those of
Exchange Act section 15(f) and Exchange Act rules 18a-5, 18a-6, 18a-7,
18a-8, and 18a-9 thereunder?
    Commenters further are invited to address any differences between
French regulatory requirements and frameworks and the German
requirements and frameworks that formed the basis for the Commission's
conditional grant of substituted compliance in connection with Germany
for recordkeeping, reporting, notification, and securities

count requirements, as well as additional Exchange Act section 15F(f)
requirements
    Commenters particularly are invited to address the proposed
condition with respect to Exchange Act rule 18a-5 that the SBS Entity:
(a) 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 (b) upon request furnish
promptly to representatives of the Commission the records required by
those rules. Do the relevant French and EU 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 French and EU 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 France produce this information to
the French Authorities or other European 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)?
    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 SBS 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 the French Authorities
and/or other European authorities. Should the Commission require SBS
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 French Authorities and/or other
European authorities? 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 French Authorities
and/or other European authorities; 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 four conditions. For example, comment is sought on the
element of the third and fourth conditions that would permit the
reports of the independent public accountant to be prepared in
accordance with GAAS in France or the EU. How do those standards
compare to U.S. GAAS? In addition, should the Commission include a
condition in the final order that the independent public accountant
must meet the Commission's independence standards for public
accountants? Further, the third condition would require SBS Entities
that are not required under French or EU laws 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 French or EU laws only require certain investment firms (depending
on their size) to have their financial statements audited. Do the firms
in France 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?
    Further, if the Commission makes a positive substituted compliance
determination with respect to a substantive requirement, should the
Commission make a positive substituted compliance determination with
respect to the linked record making and record preservation
requirement? In particular, in this circumstance, should a positive
substituted compliance determination be made with respect to the
recordkeeping, reporting, and notification rules that are linked to
other Exchange Act rules which include provisions that address: (1)
Unverified security-based swap transactions (Exchange Act rules 18a-
5(a)(15) and (b)(11), and 18a-6(b)(1)(i) and (b)(2)(i)); (2) compliance
with business conduct requirements (Exchange Act rules 18a-5(a)(16) and
(17), and (b)(12) and (13), 18a-6(b)(1)(i), (b)(1)(xii), (b)(2)(i), and
18a-6(b)(2)(vii)); (3) preservation of records relating to certain risk
mitigation requirements (Exchange Act rules 18a-6(d)(4) and (5); (4)
segregation requirements (Exchange Act rules 18a-5(a)(13) and (14), and
(b)(9) and (10), 18a-6(b)(1)(viii)(L) and (b)(2)(v), 18a-7(c)(3) and
(4), and 18a-8(g)); (5) capital requirements (Exchange Act rules 18a-
5(a)(9) and (b)(1)(v), 18a-7(a)(3), and 18a-8(b); and (6) margin
requirements (Exchange Act rules 18a-5(a)(12) and (b)(1)(viii))? If so,
explain why.
    Finally, commenters are invited to address whether the French
substituted compliance order should be conditioned on the SBS Entity
furnishing to a representative of the Commission upon request an
English translation of any record, report, or notification of the SBS
Entity that is required to be made, preserved, filed, or subject to
examination pursuant to Exchange Act section 15F or the French
substituted compliance order. Should this condition be included in any
substituted compliance order addressing a jurisdiction where SBS
Entities' records, reports, or notifications are not required to use
the English language? Should the German substituted compliance order be
amended to include such a condition?
    Are there any French SBS Entities that are not expected to be
exempt from Exchange Act rule 18a-4? If so, should the final Order
include a condition

requiring SBS Entities to file with the Commission the supporting
schedules required by Exchange Act rule 18a-7(c)(2)(ii) that relate to
Exchange Act rule 18a-4 (i.e., Computation for Determination of
Security-Based Swap Customer Reserve Requirements and Information
Relating to the Possession or Control Requirements for Security-Based
Swap Customers) if the SBS Entity is not exempt from Exchange Act rule
18a-4?

G. Supervisory and Enforcement Issues

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

    By the Commission.

    Dated: December 22, 2020.
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 French Republic and the European Union 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 ``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
MiFID, provisions of MFC that implement MiFID and/or other EU and
French requirements adopted pursuant to those provisions, the Covered
Entity's relevant security-based swap activities constitute
``investment services'' or ``investment activities,'' as defined in
MiFID article 4(1)(2) and in MFC L.321-1, and fall within the scope of
the Covered Entity's authorization from the AMF or from the ACPR after
approval by the AMF of the Covered Firm's program of operations to
provide investment services and/or perform investment activities in the
French Republic.
    (2) Counterparties as ``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 MiFID, provisions of
MFC that implement MiFID and/or other EU and French requirements
adopted pursuant to those provisions, the relevant counterparty (or
potential counterparty) to the Covered Entity is a ``client'' (or
potential ``client''), as defined in MiFID article 4(1)(9) and as used
in the relevant provision of MFC.
    (3) Security-based swaps as ``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
MiFID, provisions of MFC that implement MiFID and/or other EU and
French requirements adopted pursuant to those provisions, the relevant
security-based swap is a ``financial instrument,'' as defined in MiFID
article 4(1)(15) and in MFC L.211-1 and D.211-1A.
    (4) Covered Entity as ``institution.'' For each condition in
paragraph (b) through (f) of this Order that requires the application
of, and the Covered Entity's compliance with, the provisions of CRD,
provisions of MFC that implement CRD, CRR and/or other EU and French
requirements adopted pursuant to those provisions, the Covered Entity
is an ``institution,'' as defined in CRD article 3(1)(3) and CRR
article 4(1)(3), and is either a credit institution or finance company,
each as defined in MFC L.511-1.
    (5) Memorandum of Understanding with the French Authorities. The
Commission and the AMF and the ACPR have a supervisory and enforcement
memorandum of understanding and/or other arrangement 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.
    (6) Memorandum of Understanding Regarding ECB-Owned Information.
The Commission and the ECB and/or the AMF and/or the ACPR have a
supervisory and enforcement memorandum of understanding and/or other
arrangement addressing cooperation with respect to this Order as it
pertains to information owned by the ECB 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.
    (7) 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 an email address
provided 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.
    (8) European Union Cross-Border Matters. If, in relation to a
particular service provided by a Covered Entity, responsibility for
ensuring compliance with any provision of MiFID or any other EU or
French requirement adopted pursuant to MiFID listed in paragraphs (b)
through (f) of this Order is allocated to an authority of the Member
State of the European Union in whose territory a Covered Entity
provides the service, the AMF or the ACPR must be the authority
responsible for supervision and enforcement of that provision or
requirement in relation to the particular service. If responsibility
for ensuring compliance with any provision of MAR or any other EU
requirement adopted pursuant to MAR listed in paragraphs (b) through
(f) of this Order is allocated to one or more authorities of a Member
State of the European Union, one of such authorities must be the AMF or
the ACPR.
    (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: MiFID articles 16(4) and 16(5); MFC
L. 533-10.II (4) and (5); MiFID Org Reg articles 21-24; CRD articles
74, 76 and 79-87; MFC L. 511-41-1-B and L. 511-41-1-C, L. 511-55
through L. 511-57, L. 511-60 through L.

511-66, L. 511-89 through L. 511-97; Internal Control Order articles
106, 111, 114-15, 121-22, 130-34, 146-86, 211-12, 214-15; Prudential
Supervision and Risk Assessment Order article 7; CRR articles 286-88
and 293; and EMIR Margin RTS article 2.
    (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 MiFID article 25(6), MFC
article L. 533-15, MiFID Org Reg articles 59-61, EMIR article 11(1)(a)
and 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 EMIR article 11(1)(b) and EMIR RTS article 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 competent authorities pursuant to 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 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:
    (i) The Covered Entity is subject to and complies with the
requirements of MiFID article 25(5), MFC article L. 533-15, MiFID Org
Reg articles 24, 58, 73 and applicable parts of Annex I, and EMIR
Margin RTS article 2; and
    (ii) The Covered Entity does not treat the applicable counterparty
as an ``eligible counterparty'' for purposes of MiFID article 30 and
MFC article L. 533-14, in relation to the MiFID and MFC provisions
specified in paragraph (b)(5)(i).
    (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 through 18a-1d, provided that the Covered
Entity is subject to and complies with the capital requirements of the
CRR, including recitals 40, 43 and 87, and articles 26, 28, 50-52, 61-
63, 92, 111, 113(1), 114-122, 143, 153(8), 177(2), 283, 290, 300-311,
312(2), 362-377, 382-383, 412(1), 413(1), 416(1), 427(1), 413, 429,
430, and 499; MiFid Org. Reg., article 23(1); BRRD, articles 27(1),
31(2), 31(1)(a) and (5), 32(5), 45(6) and 81(1); CRD, articles 73, 79,
86, 97, 98(1)(e), 98(6), 99, 100(1), 102(1), 104, 104(1), 105, 129,
129(1), 130, 130(1), 130(5), 131, 133, 133(1), 133(4), 141, 142,
142(2), and 142(4); MFC articles L. 511-13, L. 511-15, 511-41-1 A, 511-
41-1 A(XIV), L. 511-41-1 B, L. 511-41-1 C, L. 511-41-3, L. 511-41-3.II,
L. 511-41-3.III, L. 511-41-3.IV, L. 511-41-4, L. 511-41-5, L. 511-42,
L. 532-6, L. 533-2-1, L. 533-2-2, L. 533-2-3, L. 612-24, R. 612-30, L.
612-32, R. 612-32, L. 612-33.I, L. 612-33.II, L. 612-40, L. 613-44, L.
613-49. L. 613-49.II, L. 613-50.I, L. 631-2-1; Decree of 3 November
2014 on internal control, articles 10, 94-197, and 211-230; Ministerial
Order on the Supervisory Review and Evaluation Process, articles 6-10;
Decree of 3 November 2014 relating to capital buffers, articles 2, 16,
23, 37, 38, 56-64; and EMIR Margin RTS, recital 31, articles 2, 3(b),
7, and 19(1)(d)-(e), (3) and (8).
    (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: EMIR article 11; EMIR Margin
RTS; 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); MiFID Org Reg. article
23(1); CRD articles 74 and 79(b); MFC articles L.511-41-1-B, L.533-2-2,
L.533-29, I al. 1, and L. 511-55 al. 1; and Decree of 3 November 2014
on internal control, article 114.
    (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);
    (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 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: MiFID articles 16 and
23; MFC articles L. 533-2, L.533-10.II and III, L. 533-24 and L. 533-
24-1; MiFID Org Reg articles 21-37, 72-76 and Annex IV; CRD articles
74, 76, 79-87, 88(1), 91(1)-(2), 91(7)-(9) and 92-95; and MFC L. 511-
41-1-B and L. 511-41-1-C, L. 511-51, L. 511-52.I, L. 511.53, L. 511-55
through L. 511-69, L. 511-71 through 86, L. 511-89 through L. 511-97,
L. 511-102, R. 511-16-2 and R. 511-16-3; Internal Control Order
articles 106, 111, 114, 115, 121-22, 130-34, 146-86, 211-12, 214-15;
Prudential Supervision and Risk Assessment Order article 7.
    (4) Additional condition to paragraph (d)(1). Paragraph (d)(1)
further is conditioned on the requirement that Covered Entities comply
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 a
security-based swap, provided that the Covered Entity is subject to and
complies with the requirements of MiFID article 24(4);

MFC L. 533-12.II and D. 533-15; and MiFID Org Reg articles 48-50, in
each case in relation to that security-based swap.
    (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 a security-based
swap, provided that the Covered Entity, in relation to that security-
based swap, is subject to and complies with the requirements of either:
    (i) MiFID article 23(2)-(3); MFC L. 533-10.II(3); and MiFID Org Reg
articles 33-35;
    (ii) MiFID article 24(9); MFC L. 533-12-4; MiFID Delegated
Directive article 11(5); and AMF General Regulation article 314-17; or
    (iii) MAR article 20(1).
    (3) ``Know your counterparty.'' The requirements of Exchange Act
rule 15Fh-3(e), provided that the Covered Entity is subject to and
complies with the requirements of MiFID article 16(2); MFC L 533-
10.II(2); MiFID Org Reg articles 21-22, 25-26 and applicable parts of
Annex I; CRD articles 74(1) and 85(1); MFC L. 511-55 and L. 511-41-1-B;
MLD articles 11 and 13; MFC L. 561-5, L. 561-5-1, L. 561-6, L. 561-10,
L. 561-4-1, R. 561-5, R. 561-5-1, R. 561-5-2, R. 561-5-4, R. 561-7, R.
561-10-3, R. 561-11-1 and R. 561-12; MLD articles 8(3) and 8(4)(a) as
applied to internal policies, controls and procedures regarding
recordkeeping of customer due diligence activities; and MFC L. 561-4-1
as applied to vigilance measures regarding recordkeeping of customer
due diligence activities, in each case in relation to that security-
based swap.
    (4) Suitability. The requirements of Exchange Act rule 15Fh-3(f),
provided that:
    (i) The Covered Entity is subject to and complies with the
requirements of MiFID articles 24(2)-(3) and 25(1)-(2); MFC L. 533-24,
L. 533-24-1, L. 533-12(I), L. 533-12-6 and L. 533-13(I); and MiFID Org
Reg articles 21(1)(b) and (d), 54 and 55, in each case in relation to
the recommendation of a security-based swap or trading strategy
involving a security-based swap that is provided by or on behalf of the
Covered Entity; and
    (ii) The counterparty to which the Covered Entity makes the
recommendation is a ``professional client'' mentioned in MiFID Annex II
section I and MFC D. 533-11 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), provided that the Covered Entity, in relation to
the relevant communication, is subject to and complies with the
requirements of:
    (i) Either MiFID articles 24(1), (3) and MFC L. 533-11 and L. 533-
12.I or MiFID article 30(1) and MFC L. 533-20; and
    (ii) MiFID articles 24(4)-(5); MFC L. 533-12(II)-(III) and D. 533-
15; MiFID Org Reg articles 46-48; MAR articles 12(1)(c) and 15; and MAR
Investment Recommendations Regulation article 5.
    (6) Daily mark disclosure. The requirements of Exchange Act rule
15Fh-3(c), 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 EMIR articles 11(1)(b) and
11(2) and EMIR RTS article 13.
    (f) Substituted compliance in connection with recordkeeping,
reporting, notification, and securities count requirements.
    This Order extends to the following provisions related to
Commission requirements to:
    (1) Make and keep current certain records. The requirements to make
and keep current records of Exchange Act rule 18a-5 applicable to
security-based swap dealers and major security-based swap participants;
provided that:
    (i) The Covered Entity is subject to and complies with the
following requirements: CRR articles 103 and 105; EMIR articles 9(2),
11(1), and 39(4)-(5); EMIR RTS 148/2013; MiFID articles 9(1), 16(3),
16(6)-16(9), 25(1), 25(2), 25(5), and 25(6); MiFID Delegated Directive
articles 2 and 8; MiFID Org Reg. articles 16(7), 21(1)(a), 35, 59, 72,
73, 74, 75, 76, Annex I, and Annex IV; MiFIR article 25; MLD4 articles
11 and 13; EBA/ESMA Guidelines on Management Suitability guidelines 74,
75, and 172, and Annex III; CRD articles 73, 88, 91(1), and 91(8); MFC
articles L. 511-41-1-B, L. 511-51 through L. 511-103, L. 533-2-2, L.
533-10 II and III, L. 533-13, L. 533-14, L. 533-15, L. 533-25, L. 561-
4-1, L. 561-5, L. 561-5-1, L. 561-6, R. 561-5, R. 561-5-1, R. 561-5-2,
R. 561-5-3, R. 561-7, R. 561-10 II, R. 561-10-3, R. 561-11-1, R. 561-
12, R. 561-15, R. 561-16, R. 561-18, R. 561-19; Internal Control Order;
Decree of 6 September 2017 articles 3 and 10; Ministerial Order on the
Supervisory Review and Evaluation Process; and AMF General Regulation
article 312-6;
    (ii)(A) The Covered Entity preserves 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
    (B) The Covered Entity upon request furnishes promptly to
representatives of the Commission the records required by those rules;
    (iii) The Covered Entity makes and keeps current the records
required by Exchange Act rules 18a-5(a)(13) and (14) (if not
prudentially regulated) or Exchange Act rules 18a-5(b)(9) and (10) (if
prudentially regulated) if the Covered Entity is not exempt from the
requirements of Exchange Act rule 18a-4;
    (iv) The Covered Entity makes and keeps current the records
required by Exchange Act rule 18a-5(a)(16) (if not prudentially
regulated) or Exchange Act rule 18a-5(b)(12) (if prudentially
regulated); and
    (v) Except with respect to requirements of Exchange Act rules 15Fh-
3 and 15Fk-1 to which this Order extends pursuant paragraphs (d)(2) and
(e), the Covered Entity makes and keeps current the records required by
Exchange Act rule 18a-5(a)(17) (if not prudentially regulated) or
Exchange Act rule 18a-5(b)(13) (if prudentially regulated).
    (2) Preserve records. The record preservation requirements of
Exchange Act rule 18a-6 applicable to security-based swap dealers and
major security-based swap participants; provided that:
    (i) The Covered Entity is subject to and complies with the
following requirements: CRD articles 73, 75-88, 91(1), and 91(8); CRR
articles 99, 104(1)(j), 176, 286, 293(1)(d), 294, 394, 415-428, and
430; CRR Reporting ITS article 14 and Annexes I-V, VIII-XIII; EMIR
articles 9(1), 9(2), and 11; MiFID articles 9(1), 16(2), 16(3), 16(5),
16(6) 24(9), 25(5), 25(6), and 69(2); MiFID Org Reg. articles 21(1)(a),
21(2), 22(3)(c), 23, 24, 25(2), 26, 29(2)(c), 31(1), 35, 58, 59, 72(1),
72(3), 73, and 76; MiFIR articles 16(2), 16(5), 16(6), 16(7), 25(1),
25(5), 31(1) and 72; MLD4 articles 11 and 13; EMIR RTS; EBA/ESMA
Guidelines on Management Suitability guidelines 74, 75, and 172, and
Annex III; EBA/GL/2016/10 on ICAAP/ILAAP; EBA Guidelines on Outsourcing
section 13.3; MiFID Delegated Directive article 11; MFC articles L.
321-8-4, L. 511-41-1-B, L. 511-51 through L. 511-88, L. 533-2, L. 533-
10, L. 533-14, L. 533-15, L. 561-4-1, L. 561-5, L. 561-5-1, L. 561-6,
L. 621-8-4, L. 621-9, L. 621-10, R. 561-5, R. 561-5-1, R. 561-5-2, R.
561-5-3, R. 561-7, R. 561-10 II, R. 561-10-3, R. 561-11-1, R. 561-12,
R. 561-15, R. 561-16, R. 561-18, R. 561-19; AMF General Regulation
articles 314-16 and

314-17; Internal Control Order article 258; Ministerial Order on the
Supervisory Review and Evaluation Process; and ACPR Instruction no.
2017-I-24, as amended or superseded from time to time;
    (ii) The Covered Entity preserves the records required by Exchange
Act rule 18a-6(b)(1)(viii)(L) (if not prudentially regulated) or
Exchange Act rule 18a-6(b)(2)(v) (if prudentially regulated) if the
Covered Entity is not exempt from the requirements of Exchange Act rule
18a-4;
    (iii) Except with respect to requirements of Exchange Act rules
15Fh-3 and 15Fk-1 to which this Order extends pursuant to paragraphs
(d)(2) and (e), the Covered Entity preserves the records required by
Exchange Act rule 18a-6(b)(1)(xii) (if not prudentially regulated) or
Exchange Act rule 18a-6(b)(2)(vii) (if prudentially regulated); and
    (iv) The Covered Entity preserves the records required by Exchange
Act rule 18a-6(b)(1)(xi) and (b)(1)(xiii) (if not prudentially
regulated) or Exchange Act rule 18a-6(b)(2)(vi) and (b)(2)(viii) (if
prudentially regulated).
    (3) File Reports. The reporting requirements of Exchange Act rule
18a-7 applicable to security-based swap dealers and major security-
based swap participants; provided that:
    (i) The Covered Entity is subject to and complies with the
following requirements: CRR articles 26(2), 99, 104(1)(j), 132(5), 154,
191, 321, 325bi, 350, 353, 368, 394, 415-428, 430, and 431-455; CRR
Reporting ITS chapter 2 and Annexes I-V and VII-XIII; CRD article 89;
MiFID article 16(8)-(10); MiFID Delegated Directive articles 2, 8,
72(2), Annex I; Commission Delegated Regulation (EU) 2017/1443, as
amended or superseded from time to time; MFC articles L. 511-45 and L.
533-10; Accounting Directive article 34; Decree of 6 September 2017
articles 3 and 10; French Commerce Code articles L. 232-1, R. 232-1
through R. 232-8, and L. 823-1 through L. 823-8-1; and AMF General
Regulation articles 312-6 and 312-7;
    (ii) 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 France;
    (iii) With respect to financial statements the Covered Entity is
required to file annually with French and/or European authorities,
including a report of an independent public accountant covering the
financial statements, the Covered Entity (if not prudentially
regulated):
    (A) Simultaneously transmits to the principal office of the
Commission or to an email address provided on the Commission's website
a copy of such annual financial statements and the report of the
independent public accountant covering the annual financial statements;
    (B) Includes with the transmission the contact information of an
individual who can provide further information about the annual
financial statements and report;
    (C) 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 French or EU 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
France or the EU that the independent public accountant uses to perform
audit and attestation services; and
    (D) 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 France or the EU that the independent public
accountant uses to perform audit and attestation services.
    (4) Provide Notification. The notification requirements of Exchange
Act rule 18a-8 applicable to security-based swap dealers and major
security-based swap participants; provided that:
    (i) The Covered Entity is subject to and complies with the
following requirements: CRD IV article 71; MiFID article 73; MFC
articles L. 511-33 II, L. 634-1, and L. 634-2;
    (ii) The Covered Entity:
    (A) Simultaneously transmits to the principal office of the
Commission or to an email address provided on the Commission's website
a copy of any notice required to be sent by the French and EU laws
referenced in paragraph (f)(3)(i) of this order; and
    (B) 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;
    (iii) The Covered Entity complies with notification requirements of
Exchange Act rule 18a-8(e) that relate to Exchange Act rule 18a-4 if
the Covered Entity is not exempt from Exchange Act rule 18a-4; and
    (iv) The Covered Entity complies with notification requirements of
Exchange Act rule 18a-8(g) if the Covered Entity is not exempt from
Exchange Act rule 18a-4.
    (5) Perform Securities Count. The securities count requirements of
Exchange Act rule 18a-9 applicable to non-prudentially regulated
security-based swap dealers and major security-based swap participants;
provided that:
    (i) The Covered Entity is subject to and complies with the
following requirements: MiFID Delegated Directive articles 2 and 8;
MiFID Org Reg. articles 74 and 75; EMIR article 11(1)(b); Decree of 6
September 2017 articles 3 and 10; AMF General Regulation articles 312-6
and 312-7.
    (6) Examination and Production of Records. Notwithstanding the
forgoing provisions of paragraph (f) of this Order, security-based swap
dealers and major security-based swap participants remains 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.
    (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; and
    (iii) Is an investment firm authorized by the AMF to provide
investment services or perform investment activities in the French
Republic or a credit institution authorized by the ACPR after approval
by the AMF of the credit institution's program of operations to provide
investment services or perform investment activities in the French
Republic.

    (2) ``MiFID'' means the ``Markets in Financial Instruments
Directive,'' Directive 2014/65/EU, as amended or superseded from time
to time.
    (3) ``MFC'' means France's ``Code mon[eacute]taire et financier,''
as amended or superseded from time to time.
    (4) ``Internal Control Order'' means the French AMF's
Arr[ecirc]t[eacute] of 3 November 2014 on Internal Control of Companies
in the Banking, Payment Services and Investment Services Sector Subject
to the Supervision of the Authorit[eacute] de Contr[ocirc]le Prudentiel
et de R[eacute]solution, as amended or superseded from time to time.
    (5) ``Prudential Supervision and Risk Assessment Order'' means the
French ministerial order on prudential supervision and risk assessment,
as amended or superseded from time to time.
    (6) ``MiFID Org Reg'' means Commission Delegated Regulation (EU)
2017/565, as amended or superseded from time to time.
    (5) ``MiFID Delegated Directive'' means Commission Delegated
Directive (EU) 2017/593, as amended or superseded from time to time.
    (6) ``MLD'' means Directive (EU) 2015/849, as amended or superseded
from time to time.
    (7) ``MiFIR'' means Regulation (EU) 600/2014, as amended or
superseded from time to time.
    (8) ``EMIR'' means the ``European Market Infrastructure
Regulation,'' Regulation (EU) 648/2012, as amended or superseded from
time to time.
    (9) ``EMIR RTS'' means Commission Delegated Regulation (EU) 149/
2013, as amended or superseded from time to time.
    (10) ``EMIR Margin RTS'' means Commission Delegated Regulation (EU)
2016/2251, as amended or superseded from time to time.
    (11) ``CRR Reporting ITS'' means Commission Implementing Regulation
(EU) 680/2014, as amended or superseded from time to time.
    (12) ``CRD'' means Directive 2013/36/EU, as amended or superseded
from time to time.
    (13) ``CRR'' means Regulation (EU) 575/2013, as amended or
superseded from time to time.
    (14) ``MAR'' means the ``Market Abuse Regulation,'' Regulation (EU)
596/2014, as amended or superseded from time to time.
    (15) ``MAR Investment Recommendations Regulation'' means Commission
Delegated Regulation (EU) 2016/958, as amended or superseded from time
to time.
    (16) ``AMF'' means the French Autorit[eacute] des March[eacute]s
Financiers.
    (17) ``ACPR'' means the French Authorit[eacute] de Contr[ocirc]le
Prudentiel et de R[eacute]solution.
    (18) ``ECB'' means the European Central Bank.
    (19) ``Accounting Directive'' means Directive 2013/34/EU of the
European Parliament and of the Council of 26 June 2013, as amended or
superseded from time to time.
    (20) ``Decree of 6 September 2017'' means France's Decree number
2017-1324 of 6 September 2017, as amended or superseded from time to
time.
    (21) ``AMF General Regulation'' means France's ``R[egrave]glement
G[eacute]n[eacute]ral de L'Autorit[eacute] des March[eacute]s
Financiers,'' as amended or superseded from time to time.
    (22) ``Ministerial Order on the Supervisory Review and Evaluation
Process'' means France's Arr[ecirc]t[eacute] of 3 November 2014 on the
Process for Prudential Supervision and Risk Assessment of Banking
Service Providers and Investment Firms Other than Portfolio Management
Companies, as amended or superseded from time to time.
    (23) ``French Commerce Code'' means the French Commercial Code, as
amended or superseded from time to time.
    (24) ``Prudentially regulated'' means a Covered Entity that has a
``prudential regulator'' as that term is defined in Exchange Act
section 3(a)(74).
    (25) ``Decree of 3 November 2014 on internal control'' means
Arr[ecirc]t[eacute] of 3 November 2014 on internal control of companies
in the banking, payment services and investment services sector subject
to the supervision of the ACPR.
    (26) ``Decree of 3 November 2014 relating to capital buffers''
means Arr[ecirc]t[eacute] of 3 November 2014 relating to the capital
buffers of banking service providers and investment firms other than
portfolio management companies.
    (27) ``BRRD'' means Bank Recovery and Resolution Directive 2014/59/
EU of the European Parliament and of the Council of 15 May 2014, as
amended or superseded from time to time.

[FR Doc. 2020-28697 Filed 12-28-20; 8:45 am]
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[Federal Register Volume 85, Number 97 (Tuesday, May 19, 2020)]
[Notices]
[Page 29943]
[FR Doc No: 2020-10640]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-10009-76-OAR]

Request for Nominations for the 2020 Clean Air Excellence Awards
Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Request for nominations for Clean Air Excellence Awards.

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SUMMARY: This notice announces the competition for the 2020 Clean Air
Excellence Awards Program. The Environmental Protection Agency (EPA)
established the Clean Air Excellence Awards Program in February 2000 to
recognize outstanding and innovative efforts that support progress in
achieving clean air.

DATES: All submissions of entries for the Clean Air Excellence Awards
Program must be postmarked by Friday, July 31, 2020.

FOR FURTHER INFORMATION CONTACT: Additional information on this awards
program, including the entry form, can be found on EPA's Clean Air Act
Advisory Committee (CAAAC) website: https://www.epa.gov/caaac. Any
member of the public who wants further information may contact Ms.
Catrice Jefferson, Office of Air and Radiation, U.S. EPA by telephone
at<PHONE_NUMBER> or by email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Awards Project Notice, Pursuant to 42 U.S.C.
7403(a)(1) and (2) and sections 103(a)(1) and (2) of the Clean Air Act
(CAA), notice is hereby given that the EPA's Office of Air and
Radiation (OAR) announces the opening of competition for the 2020 Clean
Air Excellence Awards Program (CAEAP). The intent of the program is to
recognize and honor outstanding, innovative efforts that help to make
progress in achieving cleaner air. The CAEAP is open to both public and
private entities. Entries are limited to efforts related to air quality
in the United States. There are five general award categories: (1)
Clean Air Technology; (2) Community Action; (3) Education/Outreach; (4)
State/Tribal/Local Air Quality Policy Innovations; and (5)
Transportation Efficiency Innovations. There are also two special
awards categories: (1) Thomas W. Zosel Outstanding Individual
Achievement Award; and (2) Gregg Cooke Visionary Program Award. Awards
are given periodically and are for recognition only. This year's awards
will help commemorate the 50th anniversary of the EPA and Clean Air
Act. Entries can recognize achievements that meet the criteria of the
awards program that have occurred at any point in the past 50 years.
Please note that past award recipients are also eligible to apply.
    Entry Requirements: All applicants are asked to submit their entry
on a CAEAP entry form, contained in the CAEAP Entry Package, which may
be obtained from the CAAAC website at https://www.epa.gov/caaac or on
the CAEA website at http://epa.gov/air/cleanairawards/entry.html.
Applicants can also contact Ms. Catrice Jefferson, Office of Air and
Radiation, U.S. EPA by telephone at<PHONE_NUMBER> or by email at
<EMAIL_ADDRESS>The entry form is a simple, five-part form
asking for general information on the applicant; a narrative
description of the project; award certificate information; three (3)
independent references for the proposed entry; and your knowledge of
EPA awards programs and resources. Applicants should also submit
additional support documentation as necessary. Specific directions and
information on filing an entry form are included in the Entry Package.
    Judging and Award Criteria: EPA staff will use a screening process,
with input from outside subject experts, as needed. Members of the
CAAAC will provide advice to EPA on the entries. The EPA Assistant
Administrator for Air and Radiation will make the final award
decisions. Entries will be judged using both general criteria and
criteria specific to each individual category. These criteria are
listed in the 2020 Entry Package.

    Dated: May 13, 2020.
Catrice Jefferson,
Management Analyst, Office of Air and Radiation.
[FR Doc. 2020-10640 Filed 5-18-20; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 76, Number 249 (Wednesday, December 28, 2011)]
[Rules and Regulations]
[Page 81363]
[FR Doc No: 2011-33183]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 113

[Docket No. FDA-2007-N-0265] (formerly 2007N-0026)

Temperature-Indicating Devices; Thermally Processed Low-Acid
Foods Packaged in Hermetically Sealed Containers; Correction

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule; correction.

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SUMMARY: The Food and Drug Administration (FDA) is correcting a final
rule that appeared in the Federal Register of Thursday, March 3, 2011
(76 FR 11892). The final rule amended FDA's regulations for thermally
processed low-acid foods packaged in hermetically sealed containers to
allow for use of other temperature-indicating devices, in addition to
mercury-in-glass thermometers, during processing. The final rule was
published with one error. This document corrects that error.

DATES: Effective March 5, 2012.

FOR FURTHER INFORMATION CONTACT: Mischelle B. Ledet, Center for Food
Safety and Applied Nutrition (HFS-625), Food and Drug Administration,
5100 Paint Branch Pkwy., College Park, MD 20740,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In FR Doc. 2011-4475, appearing on page
11892, in the Federal Register of Thursday, March 3, 2011, the
following correction is made:

Sec.  113.40  [Corrected]

    On page 11921, in the third column, seventh line from the bottom,
in Sec.  113.40(g)(2)(i)(A), the word ``implemented'' is corrected to
read ``instrumented''.

    Dated: December 21, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-33183 Filed 12-27-11; 8:45 am]
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