Federal Register / Vol. 76, No. 2 / Tuesday, January 4, 2011 / Notices 407 

as recited in the current registration 

statements and reports filed by each 

under the Act. Finally, the Section 17 

Applicants submit that the proposed 

substitutions are consistent with the 

general purposes of the Act. 

25. To the extent that the in-kind 

purchases by the Insurance Company of 

the Replacement Funds’ shares are 

deemed to involve principal 

transactions among affiliated persons, 

the procedures described below should 

be sufficient to assure that the terms of 

the proposed transactions are reasonable 

and fair to all participants. The Section 

17 Applicants maintain that the terms of 

the proposed in-kind purchase 

transactions, including the 

consideration to be paid and received by 

each fund involved, are reasonable, fair 

and do not involve overreaching 

principally because the transactions will 

conform with all but one of the 

conditions enumerated in Rule 17a–7. 

The proposed transactions will take 

place at relative net asset value in 

conformity with the requirements of 

Section 22(c) of the Act and Rule 22c– 

1 thereunder with no change in the 

amount of any Contract owner’s contract 

value or death benefit or in the dollar 

value of his or her investment in any of 

the Separate Accounts. Contract owners 

will not suffer any adverse tax 

consequences as a result of the 

substitutions. The fees and charges 

under the Contracts will not increase 

because of the substitutions. Even 

though the Separate Accounts, the 

Insurance Companies, MIST and Met 

Series Fund may not rely on Rule 17a– 

7, the Section 17 Applicants believe that 

the Rule’s conditions outline the type of 

safeguards that result in transactions 

that are fair and reasonable to registered 

investment company participants and 

preclude overreaching in connection 

with an investment company by its 

affiliated persons. In addition, as stated 

above, the in-kind redemptions will 

only be made in accordance with the 

conditions set out in the Signature 

Financial Group no-action letter 

(December 29, 1999). 

26. The boards of MIST and Met 

Series Fund have adopted procedures, 

as required by paragraph (e)(1) of Rule 

17a–7, pursuant to which the series of 

each may purchase and sell securities to 

and from their affiliates. The Section 17 

Applicants will carry out the proposed 

Insurance Company in-kind purchases 

in conformity with all of the conditions 

of Rule 17a–7 and each series’ 

procedures thereunder, except that the 

consideration paid for the securities 

being purchased or sold may not be 

entirely cash. Nevertheless, the 

circumstances surrounding the 

proposed substitutions will be such as 

to offer the same degree of protection to 

each Replacement Fund from 

overreaching that Rule 17a–7 provides 

to them generally in connection with 

their purchase and sale of securities 

under that Rule in the ordinary course 

of their business. In particular, the 

Insurance Companies (or any of their 

affiliates) cannot effect the proposed 

transactions at a price that is 

disadvantageous to any of the 

Replacement Funds. Although the 

transactions may not be entirely for 

cash, each will be effected based upon 

(1) the independent market price of the 

portfolio securities valued as specified 

in paragraph (b) of Rule 17a–7, and (2) 

the net asset value per share of each 

fund involved valued in accordance 

with the procedures disclosed in its 

respective investment company 

registration statement and as required 

by Rule 22c–1 under the Act. No 

brokerage commission, fee, or other 

remuneration will be paid to any party 

in connection with the proposed in kind 

purchase transactions. 

27. The sale of shares of Replacement 

Funds for investment securities, as 

contemplated by the proposed 

Insurance Company in-kind purchases, 

is consistent with the investment 

policies and restrictions of the 

Investment Companies and the 

Replacement Funds because (a) the 

shares are sold at their net asset value, 

and (b) the portfolio securities are of the 

type and quality that the Replacement 

Funds would each have acquired with 

the proceeds from share sales had the 

shares been sold for cash. To assure that 

the second of these conditions is met, 

MetLife Advisers, LLC and the subadviser, as applicable, will examine the 

portfolio securities being offered to each 

Replacement Fund and accept only 

those securities as consideration for 

shares that it would have acquired for 

each such fund in a cash transaction. 

28. The Section 17 Applicants submit 

that the proposed Insurance Company 

in-kind purchases are consistent with 

the general purposes of the Act as stated 

in the Findings and Declaration of 

Policy in Section 1 of the Act and that 

the proposed transactions do not 

present any of the conditions or abuses 

that the Act was designed to prevent. 

29. The Section 17 Applicants request 

that the Commission issue an order 

pursuant to Section 17(b) of the Act 

exempting the Separate Accounts, the 

Insurance Companies, MIST, Met Series 

Fund and each Replacement Fund from 

the provisions of Section 17(a) of the 

Act to the extent necessary to permit the 

Insurance Companies on behalf of the 

Separate Accounts to carry out, as part 

of the substitutions, the in-kind 

purchase of shares of the Replacement 

Funds which may be deemed to be 

prohibited by Section 17(a) of the Act. 

Conclusion 

Applicants assert that for the reasons 

summarized above that the proposed 

substitutions and related transactions 

meet the standards of Section 26(c) of 

the Act and are consistent with the 

standards of Section 17(b) of the Act 

and that the requested orders should be 

granted. 

For the Commission, by the Division of 

Investment Management pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33117 Filed 1–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, January 6, 2011 at 2:00 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Aguilar, as duty 

officer, voted to consider the items 

listed for the Closed Meeting in a closed 

session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

January 6, 2011 will be: 

Formal order of investigation; 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

An adjudicatory matter; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 


jlentini on DSKJ8SOYB1PROD with NOTICES
408 Federal Register / Vol. 76, No. 2 / Tuesday, January 4, 2011 / Notices 

1 15 U.S.C. 78s(b)(1). 

2Securities Exchange Act Release No. 63301 

(November 17, 2010), 75 FR 70328. 

3The specific language of the proposed provision 

can be found at http://www.dtcc.com/downloads/ 

legal/rule_filings/2010/ficc/2010–08.pdf. 

4 15 U.S.C. 78q–1. 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

6 15 U.S.C. 78q–1(b)(3)(F). 

7 15 U.S.C. 78q–1. 

8 15 U.S.C. 78s(b)(2). 

9 17 CFR 200.30–3(a)(12). 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: December 29, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–33261 Filed 12–30–10; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63611; File No. SR–FICC– 

2010–08] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Approving Proposed Rule Change To 

Eliminate Certain Cash Adjustments 

Currently Processed by the MBSD 

December 28, 2010. 

I. Introduction 

On October 28, 2010, the Fixed 

Income Clearing Corporation (‘‘FICC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–FICC–2010– 

08 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’).1 The proposed rule change was 

published for comment in the Federal 

Register on November 17, 2010.2 No 

comment letters were received on the 

proposal. This order approves the 

proposal. 

II. Description 

FICC is eliminating the cash 

adjustments that are currently processed 

by the Mortgage-Backed Securities 

Division (‘‘MBSD’’) of FICC because they 

have low monetary impact and the 

clearance event (‘‘significant variance’’) 

they were originally designed to address 

no longer applies.3 Variance was 

originally established when mortgagebacked securities were physically 

settled and it was difficult to organize 

physical pools into $1 million par 

amounts for delivery. 

As a result of the netting of To Be 

Announced (‘‘TBA’’) transactions, a 

participant may have a settlement 

obligation to another participant with 

which it did not trade (‘‘SBON 

Obligations’’). SBON Obligations are 

created in multiples of $1 million par 

amounts and are assigned a uniform 

delivery price. Since the delivery price 

will differ from the participant’s original 

trade price, an adjustment is calculated 

for the difference between the delivery 

price and the trade price. This 

adjustment is referred to as the 

Settlement Balance Order Market 

Differential (‘‘SBOMD’’). 

Participants notify the MBSD when 

they have settled their SBON 

Obligations with their assigned 

counterparties through the Notification 

of Settlement (‘‘NOS’’) process. From the 

information supplied by both the 

delivering and receiving participants in 

their respective NOS, the MBSD 

determines whether the securities 

delivered were in $1 million par 

amounts or in a par amount within 

acceptable variance (plus or minus $100 

per million). In instances where the 

delivery was completed in $1 million 

par amounts, the MBSD takes no 

additional steps. 

Currently, if the delivery was cleared 

for a par amount within acceptable 

variance, the MBSD will calculate a 

cash adjustment to reconcile the 

difference between the original SBOMD 

(based on a $1 million par amount) and 

what the SBOMD should have been 

(based on the par amount delivered). As 

mortgage-backed securities migrated 

from physical to electronic settlement, 

acceptable variance has been reduced 

from an initial $50,000 per million to 

the current amount of $100 per million. 

MBSD is eliminating this cash 

adjustment process. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act 4 and the 

rules and regulations thereunder 

applicable to FICC.5 In particular, the 

Commission believes that by deleting a 

rule that covers a process that is no 

longer needed, FICC is providing its 

members with certainty and clarity of 

the clearance process to its members. 

The proposal is therefore consistent 

with the requirements of Section 

17A(b)(3)(F),6 which requires, among 

other things, that the rules of a clearing 

agency are designed to remove 

impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 

settlement of securities transactions. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the Act 7

and the rules and regulations 

thereunder. 

It Is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (File No. SR– 

FICC–2010–08) be, and hereby is, 

approved. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33163 Filed 1–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Reporting and Recordkeeping 

Requirements Under OMB Review 

AGENCY: Small Business Administration. 

ACTION: Notice of reporting requirements 

submitted for OMB review. 

SUMMARY: Under the provisions of the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35), Agencies are required to 

submit proposed reporting and 

recordkeeping requirements to OMB for 

review and approval, and to publish a 

notice in the Federal Register notifying 

the public that the agency has made 

such a submission. 

DATES: Submit comments on or before 

February 3, 2011. If you intend to 

comment but cannot prepare comments 

promptly, please advise the OMB 

Review and the Agency Clearance 

Officer before the deadline. 

Copies: Request for clearance (OMB 

83–1), supporting statement, and other 

documents submitted to OMB for 

review may be obtained from the 

Agency Clearance Officer. 

ADDRESSES: Address all comments 

concerning this notice to: Agency 

Clearance Officer, Jacqueline White, 

Small Business Administration, 409 3rd 

Street, SW., 5th Floor, Washington, DC 

20416; and OMB Reviewer, Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, New 

Executive Office Building, Washington, 

DC 20503. 

FOR FURTHER INFORMATION CONTACT: 

Jacqueline White. Agency Clearance 

Officer, (202) 205–7044. 

SUPPLEMENTARY INFORMATION: 

Title: Lender Advantage. 

Frequency: On Occasion. 


jlentini on DSKJ8SOYB1PROD with NOTICES