[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Rules and Regulations]
[Pages 2046-2056]
[FR Doc No: 2018-00347]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 230

[Release No. 33-10450; File No. S7-09-14]
RIN 3235-AL41

Treatment of Certain Communications Involving Security-Based
Swaps That May Be Purchased Only by Eligible Contract Participants

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: We are adopting a rule under the Securities Act of 1933
(``Securities Act'') to provide that certain communications involving
security-based swaps will not be deemed to constitute ``offers'' of
such security-based swaps for purposes of Section 5 of the Securities
Act. The final rule covers the publication or distribution of price
quotes that relate to security-based swaps that may be purchased only
by persons who are eligible contract participants (``covered SBS'') and
are traded or processed on or through certain trading platforms. The
final rule also covers a broker, dealer, or security-based swap
dealer's publication or distribution of written communications that
discuss covered SBS and that meet the definition of ``research report''
in Rule 139(d) under the Securities Act and certain other conditions.

DATES: Effective January 16, 2018.

FOR FURTHER INFORMATION CONTACT: Andrew Schoeffler, Special Counsel,
Office of Capital Markets Trends, Division of Corporation Finance, at
(202) 551-3860, U.S. Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549-3628.

SUPPLEMENTARY INFORMATION: We are adopting Rule 135d under the
Securities Act.\1\
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    \1\ 15 U.S.C. 77a et seq.
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I. Background and Summary

    On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall
Street Reform and Consumer Protection Act (``Dodd-Frank Act'') \2\ into
law. Title VII of the Dodd-Frank Act (``Title VII'') provides the
Securities and Exchange Commission (``SEC'' or the ``Commission'') and
the Commodity Futures Trading Commission (``CFTC'') with the authority
to regulate over-the-counter derivatives. Under Title VII, the CFTC
regulates ``swaps,'' the SEC regulates ``security-based swaps,'' and
the CFTC and SEC jointly regulate ``mixed swaps.'' \3\
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    \2\ Public Law 111-203, 124 Stat. 1376 (2010).
    \3\ The SEC and the CFTC, in consultation with the Board of
Governors of the Federal Reserve System, jointly further defined the
product and intermediary terms used in Title VII, including
``swap,'' ``security-based swap,'' ``swap dealer,'' ``security-based
swap dealer,'' ``major swap participant,'' ``major security-based
swap participant,'' ``eligible contract participant,'' and
``security-based swap agreement.'' See Further Definition of ``Swap
Dealer,'' ``Security-Based Swap Dealer,'' ``Major Swap
Participant,'' ``Major Security-Based Swap Participant'' and
``Eligible Contract Participant'', Release No. 34-66868 (Apr. 27,
2012), 77 FR 30596 (May 23, 2012) (``Intermediary Definitions
Adopting Release''), and Further Definition of ``Swap,'' ``Security-
Based Swap,'' and ``Security-Based Swap Agreement''; Mixed Swaps;
Security-Based Swap Agreement Recordkeeping, Release No. 33-9338
(Jul. 18, 2012), 77 FR 48208 (Aug. 13, 2012) (``Product Definitions
Adopting Release'').
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    Title VII amended the Securities Act and the Securities Exchange
Act of 1934 (``Exchange Act'') \4\ to include ``security-based swaps''
in the definition of ``security.'' \5\ As a result, ``security-based
swaps'' are subject to the Securities Act and the Exchange Act and the
rules and regulations thereunder. Section 5 of the Securities Act
requires that any offer or sale of a security must either be registered
under the Securities Act or be made pursuant to an exemption from
registration.\6\ As a result, counterparties

entering into security-based swap transactions need either to rely on
an available exemption from the registration requirements of the
Securities Act or register such transactions. Title VII also amended
the Securities Act to prohibit offers and sales of security-based swaps
to persons who are not ``eligible contract participants'' (``ECPs'')
\7\ unless a registration statement is in effect as to the security-
based swaps.\8\
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    \4\ 15 U.S.C. 78a et seq.
    \5\ See Sections 761(a)(2) and 768(a)(1) of the Dodd-Frank Act
(amending Section 3(a)(10) of the Exchange Act [15 U.S.C.
78c(a)(10)] and Section 2(a)(1) of the Securities Act [15 U.S.C.
77b(a)(1)], respectively).
    \6\ See 15 U.S.C. 77e.
    \7\ The term ``eligible contract participant'' is defined in
Section 1a(18) of the Commodity Exchange Act [7 U.S.C. 1a(18)]. The
definition of the term ``eligible contract participant'' in the
Securities Act refers to the definition of ``eligible contract
participant'' in the Commodity Exchange Act. See Section 5(e) of the
Securities Act [15 U.S.C. 77e(e)]. The SEC and the CFTC have adopted
final rules further defining the term ``eligible contract
participant.'' See Intermediary Definitions Adopting Release.
    \8\ See Section 768(b) of the Dodd-Frank Act (adding new Section
5(d) of the Securities Act [15 U.S.C. 77e(d)]). Section 105(c)(1) of
the Jumpstart Our Business Startups Act subsequently re-designated
Section 5(d) of the Securities Act as Section 5(e). See Public Law
112-106, 126 Stat. 306 (2012).
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    Because security-based swaps are included in the definition of
``security,'' the publication or distribution of certain communications
involving security-based swaps on an unrestricted basis could be viewed
as offers of those security-based swaps within the meaning of Section
2(a)(3) of the Securities Act.\9\ Further, such communications also may
be considered offers to non-ECPs, even though such persons are not
permitted to purchase the security-based swaps unless, as noted above,
a registration statement under the Securities Act is in effect as to
such security-based swaps.\10\ If there are no Securities Act
exemptions available with respect to a security-based swap transaction,
the required registration of such transactions could negatively affect
the security-based swaps market.
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    \9\ See 15 U.S.C. 77b(a)(3).
    \10\ See footnote 8 above and accompanying text.
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    On September 8, 2014, the Commission proposed a rule to address the
treatment of certain communications involving covered SBS, in
particular price quotes relating to covered SBS that are traded or
processed on or through a facility either registered as a national
securities exchange or as a security-based swap execution facility
(``security-based SEF''), or exempt from registration as a security-
based SEF pursuant to a rule, regulation, or order of the Commission
(``SBS price quotes'').\11\ Under the proposed rule, the publication or
distribution of SBS price quotes would not be deemed to constitute an
offer, an offer to sell, or a solicitation of an offer to buy or
purchase the security-based swaps that are the subject of such
communications or any guarantees of such security-based swaps for
purposes of Section 5 of the Securities Act.\12\ The purpose of the
proposed rule was to further the goal of Title VII to bring the trading
of security-based swaps onto regulated trading platforms while avoiding
unintended consequences arising from the application of the Securities
Act to the dissemination of price quotes on such platforms.
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    \11\ See Treatment of Certain Communications Involving Security-
Based Swaps That May Be Purchased Only By Eligible Contract
Participants, Release No. 33-9643 (Sep. 8, 2014), 79 FR 54224 (Sep.
11, 2014) (``Proposing Release'').
    \12\ See Proposing Release. Security-based swaps may be
guaranteed to provide protection against a counterparty's default. A
guarantee of a security is itself a security for purposes of the
Securities Act. See Section 2(a)(1) of the Securities Act [15 U.S.C.
77b(a)(1)]. As a result, the publication or distribution of SBS
price quotes also may be viewed as offers of any guarantees of the
security-based swaps that are the subject of the SBS price quotes.
Because we believe that a guarantee of a security-based swap is part
of the security-based swap transaction, the proposed rule also would
deem the publication or distribution of SBS price quotes to not
constitute an offer, an offer to sell, or a solicitation of an offer
to buy or purchase any guarantees of the security-based swaps that
are the subject of the SBS price quotes.
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    The Proposing Release requested comment on all aspects of the
proposed rule, including whether the proposed rule should cover other
types of communications, such as communications characterized as
research that discuss security-based swaps.\13\ We have reviewed and
considered all of the comments that we received relating to the
proposed rule. As described in detail below, we are adopting the rule
substantially as proposed, with one substantive addition addressing
written communications that discuss covered SBS and meet the definition
of ``research report'' in Rule 139(d) under the Securities Act \14\ and
certain other conditions (``SBS-related research reports''). The final
rule provides that a broker, dealer, or security-based swap dealer's
publication or distribution of SBS-related research reports will not be
deemed to be an offer of the security-based swaps that are the subject
of such communication or any guarantees of such security-based swaps
for purposes of Section 5 of the Securities Act.
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    \13\ See Proposing Release (79 FR at 54233 through 34). The
Proposing Release discussed the types of communications covered and
not covered by the proposed rule and included an extensive request
for comment about communications characterized as research that
discuss security-based swaps. See Proposing Release (79 FR at 54232
through 34).
    \14\ Rule 139(d) defines a research report as ``a written
communication, as defined in Rule 405, that includes information,
opinions, or recommendations with respect to securities of an issuer
or an analysis of a security or an issuer, whether or not it
provides information reasonably sufficient upon which to base an
investment decision.'' See 17 CFR 230.139(d).
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    The final rule does not affect the treatment of research reports
under existing Securities Act Rules 137, 138 and 139 (the ``Research
Rules'').\15\ As a result, communications relating to offerings of
securities underlying security-based swaps, including by operation of
Section 2(a)(3) of the Securities Act,\16\ must be analyzed separately
under the Research Rules. In that case, any discussion of a security-
based swap in a research report would be analyzed under the final rule,
while any discussion of securities underlying such security-based swap
(which could be in the same research reports discussing the security-
based swap) would be analyzed under the Research Rules.
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    \15\ The Research Rules are safe harbors that describe the
circumstances in which a broker or dealer may publish or distribute
securities research around the time of a securities offering without
violating Section 5 of the Securities Act. See 17 CFR 230.137, 17
CFR 230.138 and 17 CFR 230.139. The Commission has not previously
addressed the applicability of the Research Rules in the context of
research discussing security-based swaps because most security-based
swaps were not securities prior to the effective date of Title VII.
    \16\ See 15 U.S.C. 77b(a)(3). Section 2(a)(3) provides, among
other things, that ``[a]ny offer or sale of a security-based swap by
or on behalf of the issuer of the securities upon which such
security-based swap is based or is referenced, an affiliate of the
issuer, or an underwriter, shall constitute a contract for sale of,
sale of, offer for sale, or offer to sell such securities.''
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    While the provisions of Title VII relating to security-based SEFs
have not yet been fully implemented,\17\ given that market participants
currently are publishing and distributing SBS-related research reports,
we believe that it is appropriate at this time to adopt the final rule.
As one commenter noted,\18\ if

SBS-related research reports are published or distributed on an
unrestricted basis, such communications may be viewed as an offer. As a
result, they may affect the availability of Securities Act exemptions
for transactions in the security-based swaps that may be discussed in
the research reports.\19\ Such communications also may constitute an
illegal offer to non-ECPs if there is no effective registration
statement under the Securities Act because no Securities Act exemptions
are available for offers and sales of security-based swaps to non-ECPs.
In addition, potential uncertainty about the availability of Securities
Act exemptions for transactions between ECPs may lead some market
participants to not engage in security-based swap transactions or
withhold or limit the publication or distribution of SBS-related
research reports. This in turn could reduce the information available
to investors and other market participants in the security-based swaps
market, credit markets, and securities markets generally. We believe
that the final rule is needed at this time to reduce this uncertainty.
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    \17\ There are many types of platforms currently in operation on
or through which security-based swap transactions are effected. See
Proposing Release (79 FR at 54225) and pages 18 through 20 (79 FR at
54228 through 29). While certain of these platforms may be required
to register as security-based SEFs upon the full implementation of
Title VII, they currently are not required to do so pursuant to
exemptive relief adopted by the Commission. See Temporary Exemptions
and Other Temporary Relief, Together with Information on Compliance
Dates for New Provisions of the Securities Exchange Act of 1934
Applicable to Securities-Based Swaps, Exchange Act Release No. 64678
(Jun. 15, 2011), 76 FR 36287 (Jun. 22, 2011). The final rule covers
the dissemination of price quotes relating to security-based swaps
that are traded or processed on or through exempt security-based
SEFs. As such, platforms currently operating pursuant to the
Commission's exemptive relief could rely upon the final rule in the
event that there is uncertainty about dissemination of price quotes
affecting the availability of exemptions from the registration
requirements of the Securities Act.
    \18\ See footnote 23 below and accompanying text.
    \19\ For example, the commenter noted that if such
communications were deemed to be an offer, the exemption in Section
4(a)(2) may not be available. Id.
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    We are not extending the expiration date of the interim final
exemptions or adopting one commenter's request for an exemption from
the registration and other provisions of the Securities Act for
security-based swap transactions between ECPs.\20\ We do not believe
that either course would address the identified concern about the
availability of existing Securities Act exemptions for transactions
between ECPs. For example, neither course would address the concern
that certain communications involving security-based swaps could be
considered offers to non-ECPs. As noted above, such offers must be
registered under the Securities Act because no exemptions from the
registration requirements of the Securities Act are available for
offers and sales of security-based swaps to non-ECPs.\21\ As such,
neither course would remove uncertainty about whether certain
communications involving security-based swaps would be deemed to be
offers to non-ECPs and thereby require registration of the relevant
security-based swaps under the Securities Act.
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    \20\ See footnotes 41 and 44 below and accompanying text.
    \21\ See footnote 8 above and accompanying text.
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II. Discussion of the Final Rule

A. Comments

    We received four comment letters, each of which supported the
proposed rule.\22\ We discuss and respond to the comments received
below.
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    \22\ See letter from Chris Barnard, dated October 27, 2014;
letter from Daniel E. Glatter, Deputy General Counsel, GFI Group
Inc., dated November 10, 2014 (``GFI Letter''); letter from Bryan
Levin, Greenspring Funding, dated October 16, 2014; and letter from
Kyle Brandon, Managing Director, Securities Industry and Financial
Markets Association, dated December 8, 2014 (``SIFMA Letter'').
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1. Comments on the Applicability of the Proposed Rule to Research
Reports
    One commenter argued that the proposed rule should be expanded to
cover written communications involving ``research'' discussing
security-based swaps.\23\ This commenter argued that such written
communications are not meaningfully different from other types of
securities research produced and distributed by broker-dealers and
their affiliates in the ordinary course of business. The commenter
noted that such written communications are produced and distributed by
broker-dealers' or their affiliates' research departments and are
subject to the same policies and procedures as other securities
research.\24\ The commenter also noted that such written communications
often are included within other published securities research, such as
general credit research, and in such materials credit analysts
frequently discuss security-based swaps in the context of more general
analyses of credit markets, credit strategies, or credit worthiness of
an issuer.\25\ Further, the commenter noted that such written
communications included in other credit research or research reports
may be published or distributed by broker-dealers or their affiliates
through a variety of channels, which, depending on the particular firm,
may include proprietary platforms as well as third-party research
aggregators.\26\ Such written communications included in other credit
research or research reports may be made accessible to existing
clients, including clients that are not ECPs, and in some cases may be
made accessible to the general public.\27\
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    \23\ See SIFMA Letter.
    \24\ Id. See, e.g., Regulation Analyst Certification [17 CFR
242.500 through 242.505] and FINRA Rules 2241 (Research Analysts and
Research Reports) and 2242 (Debt Research Analysts and Debt Research
Reports).
    \25\ See SIFMA Letter. Such research generally discusses
security-based swaps in the following contexts: (i) Providing an
investment recommendation as to a specific security-based swap by
offering views on the security or a relative value analysis against
another security; (ii) referring to security-based swaps in
connection with an analysis of credit markets or proposed credit
trading strategies; or (iii) discussing one or more security-based
swaps in the context of covering other securities of the related
issuer as an indicator of the overall creditworthiness of such
issuer. Id.
    \26\ Id.
    \27\ Id.
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    Because of the manner in which such written communications are
disseminated, the commenter was concerned that the publication or
distribution of such communications may be deemed to be an offer of the
relevant security-based swaps, including to non-ECPs.\28\ According to
the commenter, there could be no exemption available for such offer
because of the possible dissemination to or accessibility by non-
ECPs.\29\ Further, the commenter noted that determining whether an
exemption is available for each particular security-based swap
transaction as a result of such written communications would be a time-
consuming and fact-intensive judgment call.\30\ The commenter noted
that if no Securities Act exemptions are available for a security-based
swap transaction because such written communications are viewed as an
offer, market participants may withhold or limit the publication or
distribution of such written communications.\31\
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    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ Id.
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    The commenter described the possible effects of a limitation on the
publication or distribution of such written communications on the
security-based swaps market and securities markets generally. According
to the commenter, such written communications inform market
participants' investment decisions.\32\ For example, such written
communications assist ECPs in determining the pricing of security-based
swaps, such as credit default swaps, including with respect to the
relative value of a given security-based swap in relation to other
securities.\33\ In addition, the commenter indicated that such written
communications also have informational value to securities markets
generally, including to non-ECPs.\34\ Market participants, whether
transacting in security-based swaps or not, may find such written
communications useful in analyzing underlying issuers or securities
because such communications provide views on

markets, sectors, and/or issuers.\35\ For example, credit default swaps
can be an indicator of an issuer's creditworthiness.\36\ Further, the
commenter noted that such written communications may be disseminated
about swaps based on broad indices of securities or issuers (which are
subject to a different regulatory regime).\37\ A different treatment of
communications discussing security-based swaps (i.e., those swaps based
on a single security, an issuer or a narrow-based security index) could
result in incomplete information being available to the security-based
swaps market and securities markets generally.\38\
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    \32\ Id.
    \33\ Id.
    \34\ Id.
    \35\ Id.
    \36\ Id.
    \37\ Id.
    \38\ Id.
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2. Comments on Other Matters
    As we noted in the Proposing Release,\39\ we previously adopted
interim final rules to provide exemptions under the Securities Act, the
Exchange Act, and the Trust Indenture Act of 1939 (``Trust Indenture
Act'') \40\ for those security-based swaps that prior to the effective
date of Title VII were ``security-based swap agreements'' and are
defined as ``securities'' under the Securities Act and the Exchange Act
due solely to the provisions of Title VII (collectively, the ``interim
final exemptions'').\41\ We adopted the interim final exemptions
because, among other things, we were concerned about disrupting the
operation of the security-based swaps market while we evaluated the
implications for security-based swaps under the Securities Act and the
Exchange Act as a result of the inclusion of the term ``security-based
swap'' in the definition of ``security.'' The interim final exemptions
expire on February 11, 2018.\42\
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    \39\ See Proposing Release (79 FR at 54226 and 54234).
    \40\ 15 U.S.C. 77aaa et seq.
    \41\ See Rule 240 under the Securities Act [17 CFR 230.240],
Rules 12a-11 and Rule 12h-1(i) under the Exchange Act [17 CFR
240.12a-11 and 17 CFR 240.12h-1], and Rule 4d-12 under the Trust
Indenture Act [17 CFR 260.4d-12]. See also Exemptions for Security-
Based Swaps, Release No. 33-9231 (Jul. 1, 2011), 76 FR 40605 (Jul.
11, 2011). The category of security-based swaps covered by the
interim final exemptions involves those that would have been defined
as ``security-based swap agreements'' prior to the enactment of
Title VII. See Section 2A of the Securities Act [15 U.S.C. 77b(b)-
1)] and Section 3A of the Exchange Act [15 U.S.C. 78c-1], each as in
effect prior to the Title VII effective date. For example, the vast
majority of security-based swap transactions involve single-name
credit default swaps, which would have been ``security-based swap
agreements'' prior to the Title VII effective date. In contrast, the
definition of ``security-based swap agreement'' did not include
security-based swaps that are based on or reference only loans and
indexes only of loans. The Division of Corporation Finance issued a
no-action letter that addressed the availability of the interim
final exemptions to offers and sales of security-based swaps that
are based on or reference only loans or indexes only of loans. See
Cleary Gottlieb Steen & Hamilton LLP (Jul. 15, 2011). As noted in
the Proposing Release, this no-action letter will remain in effect
for so long as the interim final exemptions remain in effect.
    \42\ See Exemptions for Security-Based Swaps, Release No. 33-
10305 (Feb. 10, 2017), 82 FR 10703 (Feb. 15, 2017).
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    The Proposing Release requested comment as to whether the
expiration date of the interim final exemptions should be altered,
including possibly shortening or further extending the expiration
date.\43\ The Commission did not receive any comments addressing
whether we should alter the expiration date of the interim final
exemptions, but we did receive one comment that addressed issues
relating to the interim final exemptions.\44\ The commenter requested
that we consider adopting an exemption from the registration and other
provisions of the Securities Act, other than the anti-fraud provisions
of Section 17(a), for security-based swap transactions between
ECPs.\45\ The commenter argued that an exemption from the registration
and other provisions of the Securities Act is needed to provide legal
certainty as to whether security-based swap transactions effected on
security-based SEFs are exempt from the registration requirements of
the Securities Act.\46\ In particular, the commenter argued that
certain activities engaged in by the operator of a security-based SEF
may create uncertainty as to the availability of exemptions from
Section 5 of the Securities Act for such transactions.\47\
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    \43\ See Proposing Release (79 FR at 54234).
    \44\ See GFI Letter. The commenter submitted a previous comment
letter requesting exemptions under the Securities Act, the Exchange
Act, and the Trust Indenture Act for security-based swap
transactions entered into between ECPs and effected through any
trading platform similar to the exemptions we adopted for security-
based swap transactions involving an eligible clearing agency. See
Proposing Release (79 FR at 54231 through 32).
    \45\ Id.
    \46\ Id.
    \47\ Id.
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    We do not believe that the exemption suggested by the commenter
would provide the legal certainty the commenter seeks. The operator of
a security-based SEF will facilitate security-based swap transactions
by providing the trading platform on or through which other parties
will offer and sell security-based swaps to each other. The examples
provided by the commenter primarily relate to activities typically
conducted by brokers or dealers. Market participants regularly
communicate with each other to facilitate and execute transactions, and
the examples appear to be no different from the activities typically
conducted by brokers or dealers in connection with other private
offerings of securities effected on trading platforms. The commenter
did not explain why such activities in the context of security-based
swap transactions would affect the ability of market participants to
rely upon existing Securities Act exemptions. In contrast, the rule we
are adopting today addresses a unique feature of security-based swaps
regulation--balancing the prohibition on offers and sales to non-ECPs
with the need to disseminate information broadly to market
participants, which may incidentally include non-ECPs. The final rule
addresses the concern that certain communications involving SBS price
quotes and SBS-related research reports could be viewed as offers to
non-ECPs in violation of Section 5(e) of the Securities Act. The
exemption suggested by the commenter would not address the concern that
certain communications could be considered offers to non-ECPs or
provide greater certainty in the security-based swaps market because it
would not address this concern. As such, we believe that the final rule
better addresses this concern.
    We are not persuaded that there is a need for an exemption from the
registration and other provisions of the Securities Act for security-
based swap transactions between ECPs. As we finalize our regulation of
security-based SEFs, we will remain mindful as to whether the
regulation of particular communications presents barriers to the
efficient operation of the security-based swaps market that are not
necessary to protect investors. Further, we are taking no action as to
the interim final exemptions, and our adoption of the final rule in
this release will not affect the interim final exemptions. The interim
final exemptions expire on February 11, 2018.\48\
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    \48\ See footnote 42 above and accompanying text.
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B. Final Rule

    We are adopting Rule 135d under the Securities Act substantially as
proposed, with one substantive addition concerning SBS-related research
reports. We believe that the final rule is necessary and appropriate so
that the publication or distribution of SBS price quotes will not cause
unintended consequences for the operation of security-based swap
trading platforms following the full implementation of Title VII. We
also believe that the final rule is necessary and appropriate so that

a broker, dealer, or security-based swap dealer's ability to publish or
distribute SBS-related research reports will not be restricted in a
manner that would limit the availability of information about security-
based swaps to investors and other market participants.
    We note that although the final rule provides that the publication
or distribution of SBS price quotes and SBS-related research reports
will not be deemed to be offers for purposes of Section 5 of the
Securities Act, the final rule will not otherwise affect the provisions
of any exemptions from the registration requirements of the Securities
Act. As a result, market participants will still need to make a
determination as to whether an exemption from the registration
requirements of the Securities Act is available with respect to a
security-based swap transaction, including whether such transaction
complies with any applicable conditions of the exemption. We also note
that the final rule applies to any communication of SBS price quotes or
SBS-related research reports regardless of whether transactions in the
relevant security-based swaps are effected bilaterally in the over-the-
counter market or on or through security-based swap trading platforms,
or are subsequently cleared in transactions involving an eligible
clearing agency.\49\
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    \49\ For security-based swap transactions involving an eligible
clearing agency, the exemptions we adopted under the Securities Act,
the Exchange Act, and the Trust Indenture Act will continue to be
available. See Rule 239 under the Securities Act [17 CFR 230.239],
Rules 12a-10 and 12h-1(h) under the Exchange Act [17 CFR 240.12a-10
and 240.12h-1(h)], and Rule 4d-11 under the Trust Indenture Act [17
CFR 260.4d-11]. See also Exemptions for Security-Based Swaps Issued
By Certain Clearing Agencies, Release No. 33-9308 (Mar. 30, 2012),
77 FR 20536 (Apr. 5, 2012). These exemptions do not apply to
security-based swap transactions not involving an eligible clearing
agency, even if the security-based swaps subsequently are cleared in
transactions involving an eligible clearing agency. Id.
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1. SBS Price Quotes
    The final rule allows SBS price quotes to be published or
distributed without such dissemination being considered an offer of the
relevant security-based swaps or any guarantees thereof for purposes of
Section 5 of the Securities Act.\50\ The scope of dissemination methods
covered by the final rule is broad. The final rule applies to the
initial publication or distribution of SBS price quotes on security-
based swap trading platforms. It also applies to any subsequent
republication or redistribution of SBS price quotes on or through
mediums other than security-based swap trading platforms, including on-
line information services, as it is possible that participants in
security-based swap trading platforms that receive the SBS price quotes
could further disseminate the SBS price quotes without restriction. We
do not believe that the treatment of the SBS price quotes under the
final rule should depend on who republishes or redistributes the SBS
price quotes or where they are republished or redistributed, so long as
only ECPs may purchase the relevant security-based swaps.
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    \50\ The term ``security-based swap'' includes mixed swaps. The
term ``mixed swap'' is defined in Section 3(a)(68)(D) of the
Exchange Act [15 U.S.C. 78c(a)(68)(D)]. See Section IV of the
Product Definitions Adopting Release.
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    The final rule applies to SBS price quotes, which could take a
number of forms depending on the type of trading platform model,
including indicative quotes, executable quotes, bids and offers, and
other pricing information and other types of quote information that may
develop in the future. We are not defining the specific type of SBS
price quotes with respect to which the final rule will apply because we
do not want to limit the types of trading platform models that
currently or may in the future exist.\51\ This approach is intended to
allow flexibility in the final rule as organized markets for the
trading of security-based swaps continue to develop.
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    \51\ The Proposing Release discussed five examples of trading
platforms that represent broadly the types of models for the trading
of security-based swaps, including single-dealer request for quote
platforms, aggregator-type platforms, multi-dealer request for quote
platforms, limit order book systems, and electronic brokering
platforms. See Proposing Release (79 FR at 545228 through 29). These
examples may not represent every single trading method in existence
today and the discussion was intended to give an overview of the
models without providing the nuances of each particular model.
Certain of these trading platforms may become security-based SEFs
following the full implementation of Title VII.
---------------------------------------------------------------------------

    The final rule addresses price quotes relating to security-based
swaps that are traded or processed on or through registered or exempt
security-based SEFs and national securities exchanges because the Title
VII provisions applicable to these entities, as well as existing
requirements applicable to national securities exchanges, require them
to make their trading platforms available or price quotes on their
platforms available to all participants without limitation.
    We believe that the final rule with respect to SBS price quotes is
necessary and appropriate in the public interest. One of the goals of
Title VII is to bring the trading of security-based swaps onto
regulated trading platforms, such as security-based SEFs and national
securities exchanges, which should help advance the objective of
greater transparency for the trading of security-based swaps. We
believe that increased transparency in the security-based swaps market
could help lower transaction costs associated with market participant
risk mitigating strategies and thereby lower the cost of capital and
facilitate the capital formation process. If the publication or
distribution of SBS price quotes is unrestricted, no Securities Act
exemptions may be available with respect to transactions in the
relevant security-based swaps because such communications may be viewed
as an offer of those security-based swaps, including to non-ECPs.
Accordingly, we believe that the final rule is needed so that the
publication or distribution of SBS price quotes will not cause
unintended consequences for the operation of security-based swap
trading platforms by affecting the ability of market participants to
rely on available exemptions from the registration requirements of the
Securities Act or requiring that such transactions be registered under
the Securities Act because they are viewed as offers to non-ECPs.
    We also believe that the final rule with respect to SBS price
quotes is consistent with the protection of investors. We believe that
the final rule strikes an appropriate balance between providing more
certainty to market participants while ensuring that the interests of
non-ECPs are adequately protected. Security-based swaps that are not
registered under the Securities Act are permitted to be sold only to
ECPs, and therefore the final rule is limited to the publication or
distribution of SBS price quotes that relate to security-based swaps
that may be purchased only by ECPs. Treating the publication or
distribution of SBS price quotes as not being offers of the relevant
security-based swaps will not harm non-ECPs because they will not be
able to purchase such security-based swaps. Further, security-based
swap transactions entered into solely between ECPs will be subject to
the comprehensive regulatory regime of Title VII once it has been fully
implemented, including transaction reporting, trade acknowledgment and
verification, and business conduct standards.\52\ In addition, the
final rule

relates to the treatment of communications involving SBS price quotes
as offers for purposes of Section 5 of the Securities Act and will
preserve the other protections of the federal securities laws,
including the Commission's ability to pursue an antifraud action in the
offer and sale of the securities under Section 17(a) of the Securities
Act.\53\
---------------------------------------------------------------------------

    \52\ See, e.g., Regulation SBSR--Reporting and Dissemination of
Security-Based Swap Information, Release No. 34-74244 (Feb. 11,
2015), 80 FR 14564 (Mar. 19, 2015), and Release No. 34-78321 (Jul.
14, 2016), 81 FR 53545 (Aug. 12, 2016); Trade Acknowledgment and
Verification of Security-Based Swap Transactions, Release No. 34-
78011 (Jun. 8, 2016), 81 FR 39807 (Jun. 17, 2016); and Business
Conduct Standards for Security-Based Swap Dealers and Major
Security-Based Swap Participants, Release No. 34-77617 (Apr. 14,
2016), 81 FR 29959 (May 13, 2016) (``Business Conduct Standards
Adopting Release''). The business conduct standards generally
require, among other things, disclosure by security-based swap
dealers and major security-based swap participants to counterparties
of (i) the material risks and characteristics of the security-based
swap, and certain clearing rights, (ii) the material incentives or
conflicts of interest that a security-based swap dealer or major
security-based swap participant may have in connection with the
security-based swap, and (iii) the daily mark of the security-based
swap (collectively, the ``Business Conduct Standards''). See
Business Conduct Standards Adopting Release. The Business Conduct
Standards also require that security-based swap dealers and major
security-based swap participants verify that a counterparty meets
the eligibility requirements of an ECP. See Business Conduct
Standards Adopting Release.
    \53\ See 15 U.S.C. 77q(a).
---------------------------------------------------------------------------

    The final rule also will enable security-based swap dealers to
publish or distribute SBS price quotes on an unrestricted basis without
concern that such publication or distribution could jeopardize the
availability of exemptions from the registration requirements of the
Securities Act for transactions involving the relevant security-based
swaps. Unrestricted access to SBS price quotes will improve market
transparency by providing all investors with the same information on
the pricing of security-based swap transactions.
    Therefore, we believe that the final rule with respect to SBS price
quotes is necessary or appropriate in the public interest, and
consistent with the protection of investors.
2. SBS-Related Research Reports
    We believe that written communications discussing security-based
swaps that fall within the definition of ``research report'' in Rule
139(d) under the Securities Act should be treated similarly to other
research involving securities offered pursuant to exemptions from the
registration requirements of the Securities Act and should not be
considered to be an offer.\54\ We previously have noted the value of
securities research in providing information to investors and the
securities markets generally.\55\ We believe that failing to exclude
such written communications from the definition of ``offer'' under the
Securities Act could have an adverse effect on the information
available to investors and other market participants in the security-
based swaps market, credit markets and securities markets generally.
Further, we believe that written communications discussing security-
based swaps and security-based swap agreements should have consistent
regulatory treatment.
---------------------------------------------------------------------------

    \54\ This approach is consistent with a commenter's views. See
SIFMA Letter.
    \55\ See Securities Offering Reform, Release No. 33-8591 (Jul.
19, 2005), 70 FR 44722 (Aug. 3, 2005) (``Securities Offering Reform
Adopting Release'').
---------------------------------------------------------------------------

    The Research Rules generally apply in the context of registered
offerings. They also apply in the context of two types of unregistered
offerings: Rule 144A and Regulation S offerings.\56\ Under the Research
Rules, research reports meeting certain conditions are not considered
offers or general solicitation or general advertising in connection
with offerings relying on Rule 144A and are not deemed to be directed
selling efforts or to be inconsistent with the offshore transaction
requirements of Regulation S. The Commission addressed these types of
unregistered offerings in the Research Rules because it was concerned
that the restrictions in Rule 144A and in Regulation S had resulted in
brokers and dealers unnecessarily withholding regularly published
securities research.\57\ Security-based swaps offerings typically are
not transacted in registered offerings or in reliance on Rule 144A or
Regulation S and, as a result, the Research Rules currently do not
cover written communications discussing security-based swaps.
---------------------------------------------------------------------------

    \56\ See paragraphs (b) and (c), respectively, of Rules 138 and
139 under the Securities Act [17 CFR 230.138(b), 17 CFR 230.138(c),
17 CFR 230.139(b) and 17 CFR 230.139(c)].
    \57\ See Securities Offering Reform Adopting Release.
---------------------------------------------------------------------------

    The final rule imposes several conditions on the publication or
distribution of such written communications. First, the written
communications must discuss covered SBS.\58\ Second, the broker,
dealer, or security-based swap dealer must publish or distribute
research reports on the issuer underlying the security-based swap or
its securities in the regular course of its business and the
publication or distribution of the research report must not represent
the initiation of publication of research reports about such issuer or
its securities or the reinitiation of such publication following
discontinuation of publication of such research reports. Third, the
written communications must be a ``research report'' as defined in Rule
139(d) under the Securities Act.\59\ The final rule clarifies that the
term ``issuer'' as used in the definition of ``research report'' is (i)
the issuer of a security or loan referenced in the security-based swap,
(ii) each issuer or issuer of a security in a narrow-based security
index referenced in the security-based swap, or (iii) each issuer
referenced in the security-based swap (each, a ``Referenced Issuer'').
This provision makes clear that the ``issuer'' referenced in the
definition of ``research report'' for purposes of the final rule is the
Referenced Issuer and not the counterparties to the security-based
swap.\60\
---------------------------------------------------------------------------

    \58\ See footnote 50 above.
    \59\ See footnote 14 above. The definition of ``research
report'' in Rule 138 under the Securities Act is the same as the
definition of that term in Rule 139 under the Securities Act. See 17
CFR 230.138.
    \60\ The security-based swaps market generally involves
bilateral contracts privately negotiated between security-based swap
dealers and sophisticated counterparties who must qualify as ECPs,
with no secondary resale market. As a result of the bilateral nature
of the security-based swap, each party could be viewed as the issuer
of a security-based swap to the other party.
---------------------------------------------------------------------------

    The conditions to the final rule are similar to the conditions that
apply to research reports covered by Rules 138 and 139 in the context
of unregistered offerings transacted in reliance on Rule 144A or
Regulation S.\61\ Rules 138 and 139 include other conditions that apply
to communications used in unregistered offerings transacted in reliance
on Rule 144A and Regulation S that limit the types of issuers whose
securities may be the subject of the securities research that is
covered by the Research Rules. However, in the context of security-
based swaps, a Referenced Issuer typically is not involved in the
offering of the security-based swap.\62\ As such, we do not believe
that it is necessary to limit the types of issuers that may be the
subject of SBS-related research reports.
---------------------------------------------------------------------------

    \61\ See footnote 56 above.
    \62\ Footnotes 15 and 16 above and accompanying text address
transactions where the issuer may be involved in the offering of the
security-based swaps.
---------------------------------------------------------------------------

    We believe that the final rule with respect to SBS-related research
reports is necessary and appropriate in the public interest. As noted
above, absent the provisions of the final rule, unrestricted
publication or distribution of SBS-related research reports may affect
the availability of Securities Act exemptions from registration and may
constitute making ``offers'' to non-ECPs. Accordingly, we believe that
the final rule is necessary so that the publication or distribution of
SBS-related research reports will not impede the continuous

flow of essential information into the security-based swaps market and
security markets generally, affect the ability of market participants
to rely on available exemptions from the registration requirements of
the Securities Act, or require registration of the transactions under
the Securities Act because they are viewed as offers to non-ECPs.
    We also believe that the final rule is consistent with the
protection of investors. The availability of the final rule is
conditioned on the satisfaction of certain requirements similar to the
Research Rules. These requirements were included in the Research Rules
to permit the dissemination of securities research around the time of
an offering while avoiding offering abuses.\63\ We believe that these
requirements, which were designed to ensure that appropriate investor
protections are maintained, will be similarly effective in avoiding
offering abuses in the security-based swaps context. Further, the final
rule applies with respect to covered SBS. Excluding the publication or
distribution of SBS-related research reports from the definition of
``offer'' will not harm non-ECPs because they will not be able to
purchase the relevant security-based swaps, as discussed above.
Finally, the final rule has no effect on other provisions of the
federal securities laws, including the application of the registration
requirements of the Securities Act to transactions involving securities
referenced in security-based swaps as well as the continued application
of the antifraud provisions of the federal securities laws to
transactions in security-based swaps or the securities referenced in
such security-based swaps.
---------------------------------------------------------------------------

    \63\ See Securities Offering Reform Adopting Release.
---------------------------------------------------------------------------

    Therefore, we believe that the final rule with respect to SBS-
related research reports is necessary or appropriate in the public
interest, and consistent with the protection of investors.

III. Other Matters

    If any of the provisions of these rules, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect other provisions or application of such provisions to
other persons or circumstances that can be given effect without the
invalid provision or application.
    Section 553(d) of the Administrative Procedure Act generally
requires an agency to publish an adopted rule in the Federal Register
30 days before it becomes effective.\64\ This requirement does not
apply, however, if the adopted rule is a ``substantive rule which
grants or recognizes an exemption or relieves a restriction.'' \65\ We
find that the final rule is a substantive rule which relieves a
restriction. As explained above, under current law, there is
uncertainty as to whether the publication or distribution of SBS price
quotes or SBS-related research reports could be viewed as an ``offer''
of the relevant security-based swaps within the meaning of the
Securities Act. If such communications are deemed to be an offer, the
relevant security-based swaps consequently would not be able to be
offered or sold absent an effective registration statement under the
Securities Act. The final rule relieves this restriction and dispels
market uncertainty by providing that the publication or distribution of
SBS price quotes and SBS-related research reports will not be deemed
offers of the relevant security-based swaps for purposes of Section 5
of the Securities Act.
---------------------------------------------------------------------------

    \64\ See 5 U.S.C. 553(d).
    \65\ See 5 U.S.C. 553(d)(1).
---------------------------------------------------------------------------

IV. Economic Analysis

    We are sensitive to the economic consequences and effects,
including costs and benefits, of our rules. The discussion below
addresses the potential economic consequences and effects of the final
rule and alternatives, including the costs and benefits, as well as the
potential effects on efficiency, competition, and capital
formation.\66\
---------------------------------------------------------------------------

    \66\ Section 2(b) of the Securities Act requires that the
Commission, when engaging in rulemaking that requires it to consider
whether an action is necessary or appropriate in the public
interest, to also consider whether the action will promote
efficiency, competition, and capital formation. 15 U.S.C. 77b(b). We
have integrated our consideration of these issues into this economic
analysis.
---------------------------------------------------------------------------

    The final rule does not itself establish the scope or nature of the
substantive requirements for security-based swaps following the full
implementation of Title VII or their related costs and benefits. The
rules implementing the substantive requirements under Title VII will be
subject to their own economic analysis. The costs and benefits
described below therefore are those that may arise in connection with
the final rule.

A. Baseline

    To assess the economic impact of the final rule, we are using as
our baseline the regulation of security-based swaps as it exists at the
time of this release, taking into account applicable rules adopted by
the Commission, including the interim final exemptions affecting
security-based swaps under the Securities Act and the Exchange Act.
    As part of the economic analysis in the Business Conduct Standards
Adopting Release, we provided an extensive description of the security-
based swaps market, including a detailed analysis of the participants
in the security-based swaps market and the levels of security-based
swaps trading activity.\67\ The present release addresses a narrower
aspect of the security-based swaps market, and we refer market
participants to the more comprehensive discussion set forth in the
Business Conduct Standards Adopting Release for additional context. In
particular, we noted in the Business Conduct Standards Adopting Release
that the single-name credit default swaps market--a significant part of
the security-based swaps market generally--involves thousands of
distinct counterparties but with a heavy concentration of transactions
among a relatively small number of dealer entities.\68\ The notional
size of the single-name credit default swaps market is in the trillions
of dollars annually, corresponding to hundreds of thousands of
individual transactions, and with approximately 80% of transactions
between dealers.\69\ Among the non-dealer market participants, private
funds are the largest constituent group, followed by Dodd-Frank Act-
defined special entities and investment companies registered under the
Investment Company Act of 1940.\70\ More broadly, the analysis shows
that although the dollar volume of transactions in the security-based
swaps market is large, there are fewer market participants than for
other securities markets.\71\
---------------------------------------------------------------------------

    \67\ See footnote 52 above.
    \68\ See Business Conduct Standards Adopting Release.
    \69\ Id.
    \70\ Id.
    \71\ Id.
---------------------------------------------------------------------------

    As noted above,\72\ we adopted the interim final exemptions to
exempt offers and sales of security-based swap agreements that became
security-based swaps on the effective date of Title VII from all
provisions of the Securities Act, other than the Section 17(a) anti-
fraud provisions, as well as from the Exchange Act registration
requirements and from the provisions of the Trust Indenture Act,
provided that the transactions are entered into solely between ECPs.
Currently, certain market participants may rely on the interim final
exemptions to continue to enter into security-based swap transactions
as they

did prior to the effective date of Title VII without concern they would
have to comply with the provisions of the Securities Act.
---------------------------------------------------------------------------

    \72\ See footnote 41 above and accompanying text.
---------------------------------------------------------------------------

    The interim final exemptions are available, however, only for
certain types of transactions involving security-based swaps. The
security-based swaps covered by the interim final exemptions are only
those that would have been ``security-based swap agreements'' prior to
the effective date of Title VII, which is a narrower category of
security-based swaps than under Title VII.\73\ In addition, the persons
who may enter into security-based swaps covered by the interim final
exemptions may be different from those entering into ``security-based
swap agreements'' prior to the effective date of Title VII because the
definition of ``eligible contract participant'' under Title VII is
narrower than the pre-Title VII definition.\74\ Any security-based swap
transaction that cannot rely on the interim final exemptions would have
to rely on another available exemption from the registration
requirements of the Securities Act, such as the exemption in Section
4(a)(2),\75\ or would have to be registered under the Securities Act.
However, no Securities Act exemptions are available with respect to
security-based swap transactions involving non-ECPs because Title VII
amended the Securities Act to require that all offers and sales of
security-based swaps to non-ECPs must be registered under the
Securities Act.\76\
---------------------------------------------------------------------------

    \73\ See Section 3(a)(68) of the Exchange Act for the definition
of ``security-based swap.'' 15 U.S.C. 78c(a)(68). See footnote 41
above regarding the definition of ``security-based swap agreement.''
    \74\ The amendments to the definition of ``eligible contract
participant'' increased the dollar threshold for certain persons
and, with respect to natural persons, replaced a ``total assets''
test with an ``amounts invested on a discretionary basis'' test. See
Section 1a(12) of the Commodity Exchange Act [7 U.S.C. 1a(12)], as
in effect prior to the effective date of Title VII, and Section
1(a)(18) of the Commodity Exchange Act, as re-designated and amended
by Section 721 of the Dodd-Frank Act. The definition of the term
``eligible contract participant'' in the Securities Act and in the
Exchange Act refers to the definition of ``eligible contract
participant'' in the Commodity Exchange Act. See footnote 7 above.
    \75\ See 15 U.S.C. 77d(a)(2).
    \76\ See footnote 8 above and accompanying text.
---------------------------------------------------------------------------

    The interim final exemptions are self-executing and as such are
available without any action by the Commission or its staff. As a
result, market participants must make their own determinations as to
whether such exemptions are available with respect to a particular
security-based swap transaction. Given that such exemptions are self-
executing, we do not have any data or other quantifiable information
regarding the use of such exemptions, including which market
participants are effecting transactions in reliance on such exemptions
or the number of transactions effected in reliance on such exemptions.
    If we do not take other action, the interim final exemptions will
expire on February 11, 2018. Although the analysis below considers the
economic consequences and effects of the final rule under the current
baseline, which includes the interim final exemptions, we also consider
the potential impact of the final rule without the interim final
exemptions in our discussion of alternatives.

B. Analysis of the Final Rule

    Under the final rule, certain communications involving security-
based swaps are not considered ``offers'' for purposes of Section 5 of
the Securities Act. However, unlike the interim final exemptions, the
final rule is not itself an exemption from the registration
requirements of the Securities Act. As a result, while the types of
communications covered by the final rule are not considered offers,
market participants engaging in any security-based swap transaction
will have to either satisfy the conditions of existing exemptions under
the Securities Act or register such transactions under the Securities
Act.
    Security-based swaps are transacted through hundreds of thousands
of individual transactions annually, but because the available
registration exemptions are self-executing, we do not know what
fraction of market participants that engage in these transactions
currently rely on the interim final exemptions as opposed to other
exemptions from registration under the Securities Act.\77\ For
transactions involving security-based swaps that do not satisfy the
conditions of the interim final exemptions, the final rule will assist
market participants in evaluating how they should analyze certain
communications that may affect their transactions. In particular,
market participants will be able to assess the availability of
exemptions from the registration requirements of the Securities Act
without concern that certain communications will affect the
availability of such exemptions.
---------------------------------------------------------------------------

    \77\ Given that these exemptions, including the exemption in
Section 4(a)(2) of the Securities Act, are self-executing, we do not
have any data or other quantifiable information regarding the number
of market participants that may be effecting security-based swap
transactions in reliance on these exemptions. However, we believe
that a significant portion of market participants engaging in these
transactions are eligible to rely on the interim final exemptions
because the vast majority of security-based swap transactions
involve single-name credit default swaps, which would have been
``security-based swap agreements'' prior to the effective date of
Title VII. See footnote 73 above and accompanying text.
---------------------------------------------------------------------------

    The final rule is self-executing in that the publication or
distribution of SBS price quotes or SBS-related research reports is
excluded from the definition of ``offer'' and thereby will not be
deemed to be an offer to buy or purchase the security-based swaps that
are the subject of the SBS price quotes or SBS-related research reports
or any guarantees of such security-based swaps that are securities for
purposes of Section 5 of the Securities Act without any action by the
Commission or its staff. Because the final rule is self-executing, the
only cost of being able to rely on the final rule is to determine its
applicability. In addition, the final rule does not create any new
filing, reporting, recordkeeping, or disclosure reporting requirements
for any market participants.
    Excluding the types of communications covered by the final rule
from the definition of ``offer'' will have minimal economic
consequences or effects on the ability of market participants to enter
into security-based swap transactions compared with the baseline.\78\
For example, as compared to the baseline, the final rule does not
affect the ability of market participants to enter into security-based
swap transactions in reliance on available exemptions under the
Securities Act, such as the exemption in Section 4(a)(2). While the
interim final exemptions have limited conditions,\79\ which differ from
the conditions of the exemption under Section 4(a)(2) (including with
respect to the communications that are the subject of the final rule),
some security-based swap transactions engaged in after the effective
date of Title VII may have been effected in reliance on Section 4(a)(2)
rather than in reliance on the interim final exemptions. Further, the
protections that currently exist under the interim final exemptions and
under Section 4(a)(2) still apply. For example, the interim final
exemptions do not limit or otherwise affect the antifraud

provisions of the federal securities laws, including Section 17(a) of
the Securities Act.
---------------------------------------------------------------------------

    \78\ The baseline used in this analysis takes into account the
interim final exemptions and the fact that Title VII has not been
fully implemented. As noted above, unless further action is taken,
the interim final exemptions will expire on February 11, 2018. In
the discussion of alternatives below, we consider the economic
consequences and effects of the final rule without the interim final
exemptions.
    \79\ See footnote 41 above and accompanying text. In that regard
we note, for example, that security-based swaps based on single
loans would not be within the definition of ``security-based swap
agreement'' in effect prior to the effective date of Title VII.
---------------------------------------------------------------------------

    The final rule does not impose new requirements on market
participants. Further, because the final rule is available with respect
to any security-based swap transaction involving an ECP, we do not
believe that the final rule impairs competition between the different
types of trading venues and methods that differ in the extent to which
they make SBS price quotes available to the public and differ in their
level of public SBS price quotes. Moreover, we believe that the final
rule furthers the goal of Title VII to bring the trading of security-
based swaps onto regulated trading platforms, which should help advance
the objective of greater transparency and a more competitive
environment for the trading of security-based swaps. As a result, we
believe that increased transparency and competitiveness in the
security-based swaps market could help lower transaction costs
associated with market participant hedging (risk mitigating) strategies
and thereby lower the cost of capital and facilitate the capital
formation process. We also note that investors and other users of SBS-
related research reports may benefit from the additional information
provided by security-based swaps research included in research on other
securities.
    We believe that the costs associated with the final rule are
minimal. The final rule does not impose additional costs on market
participants to determine ECP status.\80\ In addition, non-ECPs are not
permitted to purchase any security-based swaps that are the subject of
the SBS price quotes or SBS-related research reports within the scope
of the final rule, and the Securities Act registration requirements
continue to apply to security-based swap transactions involving such
non-ECPs. As a result of these limitations, the exclusion of the SBS
price quotes and SBS-related research reports from being deemed offers
should not increase the potential for unlawful sales of security-based
swaps to non-ECPs.
---------------------------------------------------------------------------

    \80\ The determination of whether a person is an ECP is part of
the Business Conduct Standards, which require that security-based
swap dealers and major security-based swap participants verify the
ECP eligibility of their security-based swap counterparties. See
footnote 52 above.
---------------------------------------------------------------------------

    We recognize that a consequence of the final rule is that the vast
majority of offers and sales of security-based swap transactions that
potentially could be implicated by the final rule are unlikely to be
registered under the Securities Act (with the consequent unavailability
of certain remedies). As a result, and as is the case under the interim
final exemptions, there will not be an effective registration statement
under the Securities Act covering the offer and sale of such security-
based swaps. A registration statement would provide certain information
about the market participants, the security-based swap contract terms,
and the identification of the particular reference securities, issuers,
or loans underlying the security-based swaps. Further, while an
investor will be able to pursue an antifraud action in connection with
the purchase and sale of the securities in these security-based swap
transactions under Section 10(b) of the Exchange Act, an investor will
not be able to pursue civil remedies under Section 11 or 12(a)(2) of
the Securities Act because the offer and sale of the securities in
these security-based swap transactions will not be registered under the
Securities Act. In addition, an investor may be limited in its ability
to pursue civil remedies under Section 12(a)(1) of the Securities Act
because the publication or distribution of quotes for security-based
swaps will not be deemed to be an offer for purposes of Section 5 of
the Securities Act. However, the Commission could still pursue an
antifraud action in the offer and sale of the securities in these
security-based swap transactions under Section 17(a) of the Securities
Act.
    We note that the Business Conduct Standards require, among other
things, that certain disclosures be made to certain ECPs.\81\ Such
disclosures include (i) the material risks and characteristics of the
security-based swap, and certain clearing rights, (ii) the material
incentives or conflicts of interest that a security-based swap dealer
or major security-based swap participant may have in connection with
the security-based swap, and (iii) the daily mark of the security-based
swap.\82\ While the information to be conveyed in the daily mark is not
equivalent to that in a registration statement, we believe it could
provide a counterparty with a useful and meaningful reference point
against which to assess, among other things, the calculation of
variation margin for a security-based swap or portfolio of security-
based swaps, and otherwise inform the counterparty's understanding of
its financial relationship with the security-based swap dealer or major
security-based swap participant.\83\ Moreover, because under the
Business Conduct Standards security-based swap dealers and major
security-based swap participants are required to provide the same
valuation to all of their counterparties, and because counterparties
could interact with multiple security-based swap dealers and major
security-based swap participants, counterparties should have greater
confidence of equal treatment as they now have the ability to observe
when valuations differ among security-based swap dealers and major
security-based swap participants.
---------------------------------------------------------------------------

    \81\ See footnote 52 above. The Commission has adopted rules to
implement the Business Conduct Standards provisions of the Dodd-
Frank Act.
    \82\ Id.
    \83\ For instance, under the Business Conduct Standards, the
required disclosure of the daily mark consists of, for a cleared
security-based swap, providing counterparties with the daily end-of-
day settlement price received by the security-based swap dealer or
major security-based swap participant from the appropriate clearing
agency, and, for an uncleared security-based swap, the midpoint
between the bid and offer prices for a particular security-based
swap, or the calculated equivalent of the midpoint as of the close
of business. Id.
---------------------------------------------------------------------------

    As noted above, to the extent that a security-based swap
transaction does not meet the conditions of the interim final
exemptions, the counterparties to such transaction likely are effecting
the transaction in reliance on an available exemption from the
registration requirements of the Securities Act. The final rule will
benefit these counterparties because they will be able to assess the
availability of an exemption from the registration requirements of the
Securities Act without concern that the publication or distribution of
SBS price quotes or SBS-related research reports for the security-based
swap that is the subject of the transaction may compromise the
availability of an exemption. The final rule also will benefit these
counterparties by clarifying that the publication or distribution of
SBS price quotes or SBS-related research reports does not constitute an
offer of the security-based swaps that are the subject of such SBS
price quotes or SBS-related research reports to non-ECPs. As noted
above, no exemptions from the registration requirements of the
Securities Act are available with respect to offers of security-based
swaps to non-ECPs. As a result, without the final rule, these
counterparties would be required to incur the costs associated with
registration under the Securities Act.
    Unlike an equity or debt security, a security-based swap
transaction could entail an ongoing financial commitment (i.e.,
economic exposure) between the dealer (or its affiliate) and the ECP
client, whereby a client loss could result in a dealer gain of equal
measure. The

dealer (or its affiliate) would, at least initially, take the opposite
economic exposure as that of the client, who may be entering into the
transaction based on information provided by the dealer's research or
the research of its affiliate. In such instances, the research may not
be considered independent.
    While the final rule's treatment of SBS-related research reports
could facilitate these types of transactions, which have the potential
for a conflict of interest, we note that such communications are
permissible today under the interim final exemptions, and that the
additional disclosures required by the Business Conduct Standards
should make such potential conflicts transparent to ECPs. Further, the
Business Conduct Standards require detailed descriptions of any
material risks and other characteristics of a security-based swap,
which may mitigate any bias introduced in the SBS-related research
reports.
    It remains possible, however, that some market participants may use
the provisions under the final rule to disseminate SBS-related research
reports with the intent of making an offer or for solicitation
purposes, particularly given the lower cost of disseminating these
reports compared to registration statements. The potential for market
participants to misuse the final rule in this manner should be
mitigated by the fact that the final rule covers only communications
made in connection with security-based swaps that may be sold only to
ECPs and would not cover other security-based swaps that may be offered
or sold to non-ECPs. Further, the final rule incorporates other
safeguards similar to those in the Research Rules.\84\
---------------------------------------------------------------------------

    \84\ See footnote 61 above and accompanying text.
---------------------------------------------------------------------------

C. Alternatives Considered

    One alternative to the final rule that we considered was to take no
action at this time to address issues arising under the Securities Act
for certain communications involving security-based swaps. This
alternative would affect all security-based swap transactions,
including those currently relying on the interim final exemptions. At
this time, all security-based swap transactions either must be
registered under the Securities Act or rely on an available exemption
from registration. If we take no action with respect to the treatment
of communications involving security-based swaps, the publication or
distribution of SBS price quotes or SBS-related research reports could
be deemed to constitute an offer, an offer to sell, or a solicitation
of an offer to buy or purchase security-based swaps. If considered
offers, such communications could affect the availability of exemptions
from the registration requirements of the Securities Act. If no
Securities Act exemptions are available with respect to a security-
based swap transaction, such transactions would require registration.
    We believe that taking no action could disrupt and impose
unnecessary costs on this segment of the security-based swaps market
because it would perpetuate uncertainty as to whether certain
communications involving SBS price quotes or SBS-related research
reports will be deemed offers for purposes of Section 5 of the
Securities Act. Without the final rule, the risk that these
communications will be deemed offers might lead some market
participants either not to engage in these security-based swap
transactions, which could impede the market, or to register the offer
and sale of the security-based swap transactions, which would likely
increase costs for market participants. This risk also may lead some
market participants to withhold or limit the publication or
distribution of SBS-related research reports, which could reduce the
amount and quality of the information available to investors and other
market participants in the security-based swaps market, credit markets
and securities markets generally.
    We believe that the final rule facilitates capital formation and
promotes efficiency by lowering the costs of security-based swap
transactions relative to what would be required without the final rule.
Without the final rule and following the expiration of the interim
final exemptions, we believe that the operation of the registration
provisions of the Securities Act could have unintended consequences for
the operation of security-based swap trading platforms and the ability
of market participants to enter into these security-based swap
transactions in reliance on available exemptions from the registration
requirements of the Securities Act following the full implementation of
Title VII. Following the expiration of the interim final exemptions, we
anticipate that the final rule will facilitate a more efficient market
place for these security-based swap transactions.
    Without the final rule, a market participant may choose not to
continue to participate in these types of transactions if compliance
with the registration requirements of the Securities Act is required.
This would likely curtail the use of trading platforms and venues that
make use of broad communications methods for the public dissemination
of SBS price quotes. As noted above, one of the goals of Title VII is
to bring the trading of security-based swaps onto regulated trading
platforms. In the absence of applicable Securities Act exemptions for a
security-based swap transaction because the dissemination of price
quotes for security-based swaps could be viewed as offers of those
security-based swaps, the costs of the required registration of such
transactions under the Securities Act could limit the incentive for
market participants to engage in security-based swap transactions on
regulated trading platforms. In response to the lack of an available
exemption from registration, some market participants may also seek to
restructure their operations to minimize their transactions in, or
contact with, the United States in an effort to avoid having to
register these transactions under the Securities Act. If market
participants were to determine not to engage in security-based swap
transactions due to the lack of an available exemption from
registration, or to restructure their operations and thus avoid U.S.
exposure because of the lack of such an exemption, such actions could
affect the number of price quotes for, and the liquidity of, certain
types of security-based swaps, which could have a detrimental effect on
the ability of U.S. market participants to obtain credit exposure or
hedge risk, and could have a more general adverse impact on the
liquidity and price discovery of security-based swap transactions. This
effect would be inconsistent with the tenet of increased transparency
that is central to the legislative intent of Title VII.
    If market participants continue to engage in security-based swap
transactions without the final rule and register these transactions
under the Securities Act, they would incur increased compliance costs
associated with such registration. Additionally, there is unlikely to
be a commensurate benefit to registration given that the investors
typically in greater need of the investor protections provided by
registration are likely not ECPs, and those investors are not eligible
to purchase any security-based swaps that are the subject of the
communications within the scope of the final rule.
    While the use of a shelf registration statement may be available to
some participants and would lessen the costs of registration compared
to the costs for participants who were not able to use a shelf
registration statement, there would be costs whether or not a shelf

registration statement is available.\85\ Given the eligibility criteria
for using a shelf registration statement, the use of a shelf
registration statement is likely to be available to a majority of
market participants. However, to the extent that there is a decrease in
the dissemination of certain communications related to security-based
swaps in the absence of the final rule, such a decline may be
concentrated among market participants who cannot lower their costs by
using a shelf registration statement.
---------------------------------------------------------------------------

    \85\ Certain market participants could reduce the registration
burden by using the Form S-3 registration statement for their
securities offerings. We previously have estimated that 50 or fewer
entities ultimately may have to register with us as security-based
swap dealers. See Business Conduct Standards Adopting Release. These
entities (or their affiliates) are likely to be seasoned or well-
known seasoned issuers that are eligible to use the Form S-3
registration statement for their securities offerings. In
particular, these entities (or their affiliates) are likely to have
a Form S-3 shelf registration statement that is effective under the
Securities Act. A shelf registration statement covers the offer and
sale of securities that are not necessarily to be sold in a single
offering immediately upon effectiveness; instead, the securities are
typically sold in a number of ``takedowns'' over a period of time or
on a continuous basis. A shelf registration statement allows issuers
to conduct multiple types and amounts of securities offerings using
the same registration statement. If these entities (or their
affiliates) are required to register the offer and sale of the
securities in security-based swap transactions, they would likely
use their shelf registration statements for the offerings. For
takedowns off their shelf registration statements, an entity (or its
affiliate) would file a prospectus supplement under the Securities
Act that contains the specific terms of the offering. As a result of
the shelf registration procedure, these entities (including their
affiliates) would incur lower costs relating to the takedown for
each security-based swap transaction than they would otherwise incur
if they had to use a non-shelf registration statement for the
security-based swap transactions. While the use of a shelf
registration statement would reduce the registration burden for
qualifying market participants, it may not be available to all
market participants.
---------------------------------------------------------------------------

    Another alternative to the final rule would be to deem only SBS
price quotes as not constituting offers for purposes of Section 5 of
the Securities Act. To the extent SBS-related research reports are
deemed to be offers for purposes of Section 5, dealers or their
affiliates may not include information about security-based swaps in
research reports, which may otherwise be useful to some investors.
However, inclusion of this information may create conflicts of interest
problems unique to the security-based swaps market, as discussed above.

V. Paperwork Reduction Act

    The final rule does not impose any new ``collections of
information'' within the meaning of the Paperwork Reduction Act of 1995
(``PRA''),\86\ nor does it create any new filing, reporting,
recordkeeping, or disclosure reporting requirements. Accordingly, we
are not submitting the final rule to the Office of Management and
Budget for review in accordance with the PRA.\87\
---------------------------------------------------------------------------

    \86\ 44 U.S.C. 3501 et seq.
    \87\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act Certification

    Under Section 605(b) of the Regulatory Flexibility Act,\88\ we
certified that proposed Rule 135d under the Securities Act would not
have a significant economic impact on a substantial number of small
entities. This certification, including our basis for the
certification, was included in Part VII of the Proposing Release. We
solicited comments on the potential impact of the proposed rule on
small entities but received none. We are adopting this rule as proposed
with one substantive addition concerning SBS-related research reports.
We do not believe that this substantive addition alters the basis upon
which the certification in the Proposing Release was made. Accordingly,
we certify that Rule 135d under the Securities Act will not have a
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \88\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

VII. Statutory Authority

    The rule described in this release is being adopted under the
authority set forth in Sections 5, 19, and 28 of the Securities Act.

List of Subjects in 17 CFR Part 230

    Reporting and recordkeeping requirements, Securities.

    For the reasons set out above, we are amending title 17, chapter II
of the Code of Federal Regulations as follows:

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

0
1. The authority citation for part 230 continues to read, in part, as
follows:

    Authority:  15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h,
77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-
7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-
30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126
Stat. 313 (2012), unless otherwise noted.
* * * * *

0
2. Section 230.135d is added to read as follows:

Sec.  230.135d  Communications involving security-based swaps.

    (a) For the purposes only of Section 5 of the Act (15 U.S.C. 77e),
the publication or distribution of quotes relating to security-based
swaps that may be purchased only by persons who are eligible contract
participants (as defined in Section 1a(18) of the Commodity Exchange
Act (7 U.S.C. 1a(18))) and are traded or processed on or through a
trading system or platform that either is registered as a national
securities exchange under Section 6(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78f(a)) or as a security-based swap execution
facility under Section 3D(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c-4(a)), or is exempt from registration as a security-based
swap execution facility under Section 3D(a) of the Securities Exchange
Act of 1934 pursuant to a rule, regulation, or order of the Commission
shall not be deemed to constitute an offer, an offer to sell, or a
solicitation of an offer to buy or purchase any security-based swap or
any guarantee of such security-based swap that is a security; and
    (b) For the purposes only of Section 5 of the Act (15 U.S.C. 77e),
a broker, dealer, or security-based swap dealer's publication or
distribution of a research report (as defined in Sec.  230.139(d)) that
discusses security-based swaps that may be purchased only by persons
who are eligible contract participants (as defined in Section 1a(18) of
the Commodity Exchange Act (7 U.S.C. 1a(18))) shall not be deemed to
constitute an offer, an offer to sell, or a solicitation of an offer to
buy or purchase any security-based swap or any guarantee of such
security-based swap that is a security, provided that the broker,
dealer, or security-based swap dealer publishes or distributes research
reports on the issuer underlying the security-based swap or its
securities in the regular course of its business and the publication or
distribution of the research report does not represent the initiation
of publication of research reports about such issuer or its securities
or the reinitiation of such publication following discontinuation of
publication of such research reports. For purposes of this section, the
term issuer as used in the definition of ``research report'' means the
issuer of any security or loan referenced in the security-based swap,
each issuer of a security in a narrow-based security index referenced
in the security-based swap, or each issuer referenced in the security-
based swap.

    By the Commission.

    Dated: January 5, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018-00347 Filed 1-12-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 108 (Tuesday, June 5, 2012)]
[Notices]
[Pages 33211-33212]
[FR Doc No: 2012-13508]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER12-1842-000]

 The Finerty Group, Inc.; Supplemental Notice That Initial
Market-Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
The Finerty Group, Inc.'s application for market-based rate authority,
with an accompanying rate tariff, noting that such application includes
a request for blanket authorization, under 18 CFR Part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR Part 34, of future issuances of securities and assumptions of
liability, is June 18, 2012.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the

Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive email notification
when a document is added to a subscribed docket(s). For assistance with
any FERC Online service, please email<EMAIL_ADDRESS>or
call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

    Dated: May 29, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-13508 Filed 6-4-12; 8:45 am]
BILLING CODE 6717-01-P


                 PAPERWORK REDUCTION ACT SUBMISSION WORKSHEET
                    Part II: Information Collection Detail

IMPORTANT:  A separate Part II must be completed for each Information Collection (IC) activity associated with the ICR.  If more than one Part II is required, create a separate Part II document for each IC.  For more information see OEI's ICR website at http://intranet.epa.gov/icrintra/.  There you will find information on completing this form (see OEI's ICRAS instructions under the Prepare an ICR tab) and information on how break your ICR into ICs (see OMB's ROCIS IC Q&A under the Download Guidance tab).
1. Title of Information Collection:  Federal Implementation Plans Under the Clean Air Act for Indian Reservations in ID, OR, and WA
2. Is this a common form?
  Yes
  No

(Select Yes to identify forms that EPA is willing to host for potential use by other Federal Agencies.)

3. Obligation to respond (check one):
       Voluntary
       Required to obtain or retain benefits
        Mandatory

Note: Only one selection may be made.  If multiple categories apply, you must create additional ICs to account for the burden associated with each category.
4. Frequency of reporting (only to be completed if there are reporting requirements, check all that apply):

  Hourly
  Daily
  Weekly
  Monthly
  Yearly
    Every Decade
    Quarterly
    Semi-Annually
  Biennially
  Once
  Occasionally
5.  CFR Citation(s) for the information collection under review (if applicable):

Title  Rule for the registration of air pollution sources and the reporting of emissions   Part  40  Section  49.138
Title              Part              Section
Title              Part              Section
Title              Part              Section
6. Information Collection Instruments/Forms (if applicable) :

Form Name:  Annual source registration
Form Number:  7630-4
URL (required if electronic) :  http://yosemite.epa.gov/R10/tribal.nsf/programs/farr-registration
Is this form available electronically?        Yes        No
If yes, can this form be submitted electronically?        Yes        No

Form Name:  Change of ownership
Form Number:  7630-5
URL (required if electronic) :  http://yosemite.epa.gov/R10/tribal.nsf/programs/farr-registration
Is this form available electronically?        Yes        No
If yes, can this form be submitted electronically?        Yes        No

Form Name:  Report of closure/Report of relocation
Form Number:  7630-6 & 7630-7
URL (required if electronic) :  http://yosemite.epa.gov/R10/tribal.nsf/programs/farr-registration
Is this form available electronically?        Yes        No
If yes, can this form be submitted electronically?        Yes        No

Attach additional sheets if necessary.

Note: Instruments/Forms must be submitted/uploaded as a separate attachment.

7.  Federal Enterprise Architecture Business Reference Model:

Line of Business (check one) :                                                                         Subfunction (check one) :
  Environmental Management
  Environmental Monitoring and Forecasting
  Environmental Remediation
  Pollution Prevention and Control
  Health
  Illness Prevention
  Immunization Management
  Public Health Monitoring
  Health Care Services
  Consumer Health and Safety
  Natural Resources
  Water Resource Management
  Conservation, Marine and Land Management
  Recreational Resource Management and Tourism
  Agricultural Innovation and Services
Note: Most EPA ICRs will be aligned with the Environmental Management FEA Line of Business.  Other likely categories are also listed.  For a full listing of the FEA Business Reference Model categories and definitions, see: http://www.whitehouse.gov/omb/egov/documents/FY07_Ref_Model_Mapping_QuickGuide.pdf.
8. Privacy Act System of Records (if applicable) :

Title:
Federal Register Citation:    Volume                Page Number                Publication Date
9. Respondents

Total Number:  158
Small Entity Number:  146
Percentage of responses collected electronically:  0

Affected Public (check one) :

  Individuals or Households
  Private Sector (if private sector, check all that apply)
                  Business or other for-profit
                  Not-for-profit institutions
                  Farms
  State, Local, or Tribal Governments
  Federal Government

Note:  Only one selection may be made.  If multiple categories apply, you must create additional ICs to account for the burden associated with each category.  Selecting multiple subcategories within "Private Sector" will not affect then number of ICs required.
10. Frequency: How often on average will each respondent respond to the Information Collection?

Calculated Annual Frequency:  1
   (responses per respondent per year)

Calculated Annual Number of Responses:  158
  Year

  Hour
  Business hour
  Day
  Business Day
  Week
  Month
  Decade
  Quarter
  Half-year

Number of Respondents 1  per

11. Hour and Cost Burden: Enter the hours and cost (per response) broken out by reporting, record keeping, and third party disclosure:

                              Hours per Response
                           Total Annual Hour Burden
                               Cost per Response
                           Total Annual Cost Burden
Reporting
                                      6.1
                                      967

Recordkeeping

Third Party Disclosure

Total
                                      6.1
                                      967

IMPORTANT: "Cost per Response" and "Total Annual Cost Burden" should include Capital/Startup and O&M costs only.

12. Annual Responses and Burden Change

                                Total Requested
                       Program Change due to New Statute
                    Program Change due to Agency Discretion
                  Change due to Adjustment in Agency Estimate
                      Change due to Violation of the PRA
                              Currently Approved
Annual Responses
                                      158

                                      20

                                      138
Annual Hour Burden
                                      967

                                      60

                                      907
Annual Cost Burden
                                       0

                                       0

                                       0