62182 Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Proposed Rules 

product or a part of an identified 

banking product’’ and adding in its 

place ‘‘other than an excluded 

instrument or a part of an excluded 

instrument’’; and 

ii. Removing, in paragraphs (2) and 

(3)(iii)(B), the phrase ‘‘15 U.S.C. 

78(f)(a)’’ and adding in its place the 

phrase ‘‘15 U.S.C. 78f(a)’’; and 

d. Add the definitions for ‘‘Bank 

fund,’’ ‘‘Eligible contract participant,’’ 

‘‘Excluded instrument,’’ ‘‘Insurance 

company separate account,’’ ‘‘Insured 

branch,’’ and ‘‘Qualified forex 

customer’’ in alphabetical order. 

The additions read as follows: 

§ 48.2 Definitions. 

* * * * * 

Bank fund means a fund described in 

12 CFR 9.18(a)(1), (a)(2), or (c) that is 

subject to applicable requirements of 12 

CFR 9.18. 

* * * * * 

Eligible contract participant has the 

same meaning as in 17 CFR 1.3(m). 

Excluded instrument means an 

agreement, contract, or transaction that 

is exempt from regulation under the 

Commodity Exchange Act, including: 

(1) An identified banking product, as 

defined in section 402(b) of the Legal 

Certainty for Bank Products Act of 2000 

(7 U.S.C. 27(b)); 

(2) A banking product described in 

section 405(a) of the Legal Certainty for 

Bank Products Act of 2000 (7 U.S.C. 

27c(a)); 

(3) A hybrid instrument that is 

predominantly a security under section 

2(f) of the Commodity Exchange Act (7 

U.S.C. 2(f)); and 

(4) A hybrid instrument that is 

exempt from the provisions of the 

Commodity Exchange Act under 17 CFR 

34.3(a). 

* * * * * 

Insurance company separate account 

means a separate account established 

and maintained by an insurance 

company subject to regulation by a State 

insurance regulator or foreign insurance 

regulator. 

Insured branch has the same meaning 

as in section 3(s)(3) of the Federal 

Deposit Insurance Act (12 U.S.C. 

1813(s)(3)). 

* * * * * 

Qualified forex customer means a 

bank fund or an insurance company 

separate account. 

* * * * * 

4. Revise § 48.3(b) to read as follows: 

§ 48.3 Prohibited Transactions. 

* * * * * 

(b) If a national bank or an affiliate 

can cause retail forex transactions to be 

effected for a retail forex customer 

without the retail forex customer’s 

specific authorization, then the national 

bank may not act as the counterparty for 

any retail forex transaction with that 

retail forex customer. 

5. Revise the introductory text of 

§ 48.7(b)(1) to read as follows: 

§ 48.7 Recordkeeping. 

* * * * * 

(b) * * * 

(1) With respect to its active retail 

forex customer accounts over which it 

did not exercise investment discretion 

(other than retail forex proprietary 

accounts open for any period of time 

during the quarter or accounts belonging 

to a qualified forex customer), a national 

bank must prepare and maintain on a 

quarterly basis (calendar quarter): 

* * * * * 

6. Revise § 48.8 to read as follows: 

§ 48.8 Capital Requirements. 

(a) A national bank, other than a 

Federal branch or agency of a foreign 

bank that is not an insured branch, 

offering or entering into retail forex 

transactions must be well capitalized 

under 12 CFR part 6. 

(b) A Federal branch or agency of a 

foreign bank offering or entering into 

retail forex transactions must satisfy the 

requirements of 12 CFR 4.7(b)(1)(iii)(A) 

and (iv). 

7. Add § 48.18 to read as follows: 

§ 48.18 Counterparty Verification 

The OCC will not deem a national 

bank to have violated this part by 

engaging in a retail forex transaction 

without complying with this part’s 

requirements if: 

(a) The national bank’s counterparty 

represented in writing that it was an 

eligible contract participant or a 

qualified forex customer; 

(b) The national bank reasonably 

relied on that representation; 

(c) The national bank had reasonable 

policies and procedures in place to 

verify the counterparty’s status as an 

eligible contract participant or a 

qualified forex customer; and 

(d) The national bank followed those 

policies and procedures. 

Dated: October 5, 2012. 

Thomas J. Curry, 

Comptroller of the Currency. 

[FR Doc. 2012–25123 Filed 10–11–12; 8:45 am] 

BILLING CODE 4810–33–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2012–1070; Directorate 

Identifier 2012–NM–099–AD] 

RIN 2120–AA64 

Airworthiness Directives; Airbus 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to adopt a new 

airworthiness directive (AD) for all 

Airbus Model A300 B4–600, B4–600R, 

and F4–600R series airplanes, and 

Model A300 C4–605R Variant F 

airplanes (collectively called Model 

A300–600 series airplanes); and Airbus 

Model A310 series airplanes. This 

proposed AD was prompted by fuel 

system reviews conducted by the 

European Aviation Safety Agency 

(EASA). This proposed AD would 

require modifying the electrical control 

circuits of the inner, center, and trim 

tank pumps, as applicable. We are 

proposing this AD to reduce the 

potential of ignition sources inside fuel 

tanks, which, in combination with 

flammable fuel vapors, could result in 

fuel tank explosions and consequent 

loss of the airplane. 

DATES: We must receive comments on 

this proposed AD by November 26, 

2012. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE., 

Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE., 

Washington, DC, between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For service information identified in 

this proposed AD, contact Airbus SAS— 

EAW (Airworthiness Office), 1 Rond 

Point Maurice Bellonte, 31707 Blagnac 

Cedex, France; telephone +33 5 61 93 36 

96; fax +33 5 61 93 44 51; email 

account.airworth-eas@airbus.com; 

Internet http://www.airbus.com. You 

may review copies of the referenced 


wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Proposed Rules 62183 

service information at the FAA, 

Transport Airplane Directorate, 1601 

Lind Avenue SW., Renton, WA. For 

information on the availability of this 

material at the FAA, call 425–227–1221. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Operations office between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. The AD docket 

contains this proposed AD, the 

regulatory evaluation, any comments 

received, and other information. The 

street address for the Docket Operations 

office (telephone (800) 647–5527) is in 

the ADDRESSES section. Comments will 

be available in the AD docket shortly 

after receipt. 

FOR FURTHER INFORMATION CONTACT: Dan 

Rodina, Aerospace Engineer, 

International Branch, ANM–116, 

Transport Airplane Directorate, FAA, 

1601 Lind Avenue SW., Renton, WA 

98057–3356; telephone (425) 227- 2125; 

fax (425) 227–1149. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite you to send any written 

relevant data, views, or arguments about 

this proposed AD. Send your comments 

to an address listed under the 

ADDRESSES section. Include ‘‘Docket No. 

FAA–2012–1070; Directorate Identifier 

2012–NM–099–AD’’ at the beginning of 

your comments. We specifically invite 

comments on the overall regulatory, 

economic, environmental, and energy 

aspects of this proposed AD. We will 

consider all comments received by the 

closing date and may amend this 

proposed AD based on those comments. 

We will post all comments we 

receive, without change, to http:// 

www.regulations.gov, including any 

personal information you provide. We 

will also post a report summarizing each 

substantive verbal contact we receive 

about this proposed AD. 

Discussion 

The European Aviation Safety Agency 

(EASA), which is the Technical Agent 

for the Member States of the European 

Community, has issued EASA 

Airworthiness Directive 2012–0091, 

dated May 25, 2012 (referred to after 

this as ‘‘the MCAI’’), to correct an unsafe 

condition for the specified products. 

The MCAI states: 

[T]he FAA published Special Federal 

Aviation Regulation (SFAR) 88, and the Joint 

Aviation Authorities (JAA) published Interim 

Policy INT/POL/25/12. 

In the framework of these requirements, 

EASA have determined that the electrical 

power supply circuits of certain fuel pumps, 

installed on A300/A300–600, A310 and 

A300–600ST aeroplane, for which the 

canisters become uncovered during normal 

operation, could, under certain conditions, 

create an ignition source in the tank vapour 

space. 

This condition, if not corrected, could 

result in a fuel tank explosion and 

consequent loss of the aeroplane. 

To address this potential unsafe condition, 

Airbus developed a modification which 

includes the installation of Ground Fault 

Interrupters (GFI) into the inner, centre, and 

trim tank fuel pump control circuits, 

providing additional system protection by 

electrically isolating the pump in case of a 

ground fault condition downstream of the 

GFI. For the reasons described above, this AD 

requires modification of the affected fuel 

pumps control circuit by installing GFI. 

You may obtain further information by 

examining the MCAI in the AD docket. 

The FAA has examined the 

underlying safety issues involved in fuel 

tank explosions on several large 

transport airplanes, including the 

adequacy of existing regulations, the 

service history of airplanes subject to 

those regulations, and existing 

maintenance practices for fuel tank 

systems. As a result of those findings, 

we issued a regulation titled ‘‘Transport 

Airplane Fuel Tank System Design 

Review, Flammability Reduction and 

Maintenance and Inspection 

Requirements’’ (66 FR 23086, May 7, 

2001). In addition to new airworthiness 

standards for transport airplanes and 

new maintenance requirements, this 

rule included Special Federal Aviation 

Regulation No. 88 (‘‘SFAR 88,’’ 

Amendment 21–78, and subsequent 

Amendments 21–82 and 21–83). 

Among other actions, SFAR 88 (66 FR 

23086, May 7, 2001) requires certain 

type design (i.e., type certificate (TC) 

and supplemental type certificate (STC)) 

holders to substantiate that their fuel 

tank systems can prevent ignition 

sources in the fuel tanks. This 

requirement applies to type design 

holders for large turbine-powered 

transport airplanes and for subsequent 

modifications to those airplanes. It 

requires them to perform design reviews 

and to develop design changes and 

maintenance procedures if their designs 

do not meet the new fuel tank safety 

standards. As explained in the preamble 

to the rule, we intended to adopt 

airworthiness directives to mandate any 

changes found necessary to address 

unsafe conditions identified as a result 

of these reviews. 

In evaluating these design reviews, we 

have established four criteria intended 

to define the unsafe conditions 

associated with fuel tank systems that 

require corrective actions. The 

percentage of operating time during 

which fuel tanks are exposed to 

flammable conditions is one of these 

criteria. The other three criteria address 

the failure types under evaluation: 

single failures, single failures in 

combination with a latent condition(s), 

and in-service failure experience. For all 

four criteria, the evaluations included 

consideration of previous actions taken 

that may mitigate the need for further 

action. 

The Joint Aviation Authorities (JAA) 

has issued a regulation that is similar to 

SFAR 88 (66 FR 23086, May 7, 2001). 

(The JAA is an associated body of the 

European Civil Aviation Conference 

(ECAC) representing the civil aviation 

regulatory authorities of a number of 

European States who have agreed to cooperate in developing and 

implementing common safety regulatory 

standards and procedures.) Under this 

regulation, the JAA stated that all 

members of the ECAC that hold type 

certificates for transport category 

airplanes are required to conduct a 

design review against explosion risks. 

We have determined that the actions 

identified in this AD are necessary to 

reduce the potential of ignition sources 

inside fuel tanks, which, in combination 

with flammable fuel vapors, could result 

in fuel tank explosions and consequent 

loss of the airplane. 

Relevant Service Information 

Airbus has issued Mandatory Service 

Bulletins A300–28–6104 and A310–28– 

2170, both dated February 28, 2012. The 

actions described in this service 

information are intended to correct the 

unsafe condition identified in the 

MCAI. 

FAA’s Determination and Requirements 

of This Proposed AD 

This product has been approved by 

the aviation authority of another 

country, and is approved for operation 

in the United States. Pursuant to our 

bilateral agreement with the State of 

Design Authority, we have been notified 

of the unsafe condition described in the 

MCAI and service information 

referenced above. We are proposing this 

AD because we evaluated all pertinent 

information and determined an unsafe 

condition exists and is likely to exist or 

develop on other products of the same 

type design. 

Costs of Compliance 

Based on the service information, we 

estimate that this proposed AD would 

affect about 162 products of U.S. 

registry. We also estimate that it would 

take about 6 work-hours per product to 

comply with the basic requirements of 


wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
62184 Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Proposed Rules 

this proposed AD. The average labor 

rate is $85 per work-hour. Required 

parts would cost about $17,680 per 

product. Where the service information 

lists required parts costs that are 

covered under warranty, we have 

assumed that there will be no charge for 

these parts. As we do not control 

warranty coverage for affected parties, 

some parties may incur costs higher 

than estimated here. Based on these 

figures, we estimate the cost of the 

proposed AD on U.S. operators to be 

$2,946,780, or $18,190 per product. 

Authority for This Rulemaking 

Title 49 of the United States Code 

specifies the FAA’s authority to issue 

rules on aviation safety. Subtitle I, 

section 106, describes the authority of 

the FAA Administrator. ‘‘Subtitle VII: 

Aviation Programs,’’ describes in more 

detail the scope of the Agency’s 

authority. 

We are issuing this rulemaking under 

the authority described in ‘‘Subtitle VII, 

Part A, Subpart III, Section 44701: 

General requirements.’’ Under that 

section, Congress charges the FAA with 

promoting safe flight of civil aircraft in 

air commerce by prescribing regulations 

for practices, methods, and procedures 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We determined that this proposed AD 

would not have federalism implications 

under Executive Order 13132. This 

proposed AD would not have a 

substantial direct effect on the States, on 

the relationship between the national 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed above, I 

certify this proposed regulation: 

1. Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866; 

2. Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979); 

3. Will not affect intrastate aviation in 

Alaska; and 

4. Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

We prepared a regulatory evaluation 

of the estimated costs to comply with 

this proposed AD and placed it in the 

AD docket. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

2. The FAA amends § 39.13 by adding 

the following new AD: 

Airbus: Docket No. FAA–2012–1070; 

Directorate Identifier 2012–NM–099–AD. 

(a) Comments Due Date 

We must receive comments by November 

26, 2012. 

(b) Affected ADs 

None. 

(c) Applicability 

This AD applies to the airplanes identified 

in paragraphs (c)(1) and (c)(2) of this AD; 

certificated in any category. 

(1) All Airbus Model A300 B4–601, B4– 

603, B4–620, and B4–622 airplanes; Model 

A300 B4–605R and B4–622R airplanes; 

Model A300 F4–605R and F4–622R 

airplanes; and Model A300 C4–605R Variant 

F airplanes. 

(2) All Airbus Model A310–203, –204, 

–221, –222, –304, –322, –324, and –325 

airplanes. 

(d) Subject 

Air Transport Association (ATA) of 

America Code 28; Fuel. 

(e) Reason 

This AD was prompted by fuel system 

reviews conducted by the European Aviation 

Safety Agency (EASA). We are issuing this 

AD to reduce the potential of ignition sources 

inside fuel tanks, which, in combination with 

flammable fuel vapors, could result in fuel 

tank explosions and consequent loss of the 

airplane. 

(f) Compliance 

You are responsible for having the actions 

required by this AD performed within the 

compliance times specified, unless the 

actions have already been done. 

(g) Actions 

Within 48 months after the effective date 

of this AD, accomplish the actions specified 

in paragraph (g)(1) or (g)(2) of this AD, as 

applicable. 

(1) For Model A310 series airplanes: 

Modify the electrical control circuits of the 

inner, center, and trim tank pumps, as 

applicable, in accordance with the 

Accomplishment Instructions of Airbus 

Mandatory Service Bulletin A310–28–2170, 

dated February 28, 2012. 

(2) For Model A300–600 airplanes: Modify 

the electrical control circuits of the inner, 

center, and trim tank pumps, as applicable, 

in accordance with the Accomplishment 

Instructions of Airbus Mandatory Service 

Bulletin A300–28–6104, dated February 28, 

2012. 

(h) Other FAA AD Provisions 

The following provisions also apply to this 

AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, International 

Branch, ANM–116, Transport Airplane 

Directorate, FAA, has the authority to 

approve AMOCs for this AD, if requested 

using the procedures found in 14 CFR 39.19. 

In accordance with 14 CFR 39.19, send your 

request to your principal inspector or local 

Flight Standards District Office, as 

appropriate. If sending information directly 

to the International Branch, send it to ATTN: 

Dan Rodina, Aerospace Engineer, 

International Branch, ANM–116, Transport 

Airplane Directorate, FAA, 1601 Lind 

Avenue SW., Renton, WA 98057–3356; 

telephone (425) 227–2125; fax (425) 227– 

1149. Information may be emailed to: 9– 

ANM–116–AMOC–REQUESTS@faa.gov. 

Before using any approved AMOC, notify 

your appropriate principal inspector, or 

lacking a principal inspector, the manager of 

the local flight standards district office/ 

certificate holding district office. The AMOC 

approval letter must specifically reference 

this AD. 

(2) Airworthy Product: For any requirement 

in this AD to obtain corrective actions from 

a manufacturer or other source, use these 

actions if they are FAA-approved. Corrective 

actions are considered FAA-approved if they 

are approved by the State of Design Authority 

(or their delegated agent). You are required 

to assure the product is airworthy before it 

is returned to service. 

(i) Related Information 

(1) Refer to MCAI EASA Airworthiness 

Directive 2012–0091, dated May 25, 2012; 

and the service information identified in 

paragraphs (i)(1)(i) and (i)(1)(ii) of this AD; 

for related information. 

(i) Airbus Mandatory Service Bulletin 

A310–28–2170, dated February 28, 2012. 

(ii) Airbus Mandatory Service Bulletin 

A300–28–6104, dated February 28, 2012. 

(2) For service information identified in 

this AD, contact Airbus SAS—EAW 

(Airworthiness Office), 1 Rond Point Maurice 

Bellonte, 31707 Blagnac Cedex, France; 

telephone +33 5 61 93 36 96; fax +33 5 61 

93 44 51; email account.airwortheas@airbus.com; Internet http:// 

www.airbus.com. You may review copies of 

the referenced service information at the 

FAA, Transport Airplane Directorate, 1601 

Lind Avenue SW., Renton, WA. For 

information on the availability of this 

material at the FAA, call 425–227–1221. 


wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Proposed Rules 62185 

1Rule 206(3)–3T [17 CFR 275.206(3)–3T]. All 

references to rule 206(3)–3T and the various 

sections thereof in this release are to 17 CFR 

275.206(3)–3T and its corresponding sections. See 

also Temporary Rule Regarding Principal Trades 

with Certain Advisory Clients, Investment Advisers 

Act Release No. 2653 (Sep. 24, 2007) [72 FR 55022 

(Sep. 28, 2007)] (‘‘2007 Principal Trade Rule 

Release’’). 

2 482 F.3d 481 (D.C. Cir. 2007). In the FPA 

Decision, handed down on March 30, 2007, the 

Court of Appeals for the D.C. Circuit vacated 

(subject to a subsequent stay until October 1, 2007) 

rule 202(a)(11)–1 under the Advisers Act. Rule 

202(a)(11)–1 provided, among other things, that feebased brokerage accounts were not advisory 

accounts and were thus not subject to the Advisers 

Act. For further discussion of fee-based brokerage 

accounts, see 2007 Principal Trade Rule Release, 

Section I. 

3See 2007 Principal Trade Rule Release at nn.19– 

20 and Section VI.C. 

4As a consequence of the FPA Decision, brokerdealers offering fee-based brokerage accounts with 

an advisory component became subject to the 

Advisers Act with respect to those accounts, and 

the client relationship became fully subject to the 

Advisers Act. These broker-dealers—to the extent 

they wanted to continue to offer fee-based accounts 

and met the requirements for registration—had to: 

register as investment advisers, if they had not done 

so already; act as fiduciaries with respect to those 

clients; disclose all material conflicts of interest; 

and otherwise fully comply with the Advisers Act, 

including the restrictions on principal trading 

contained in section 206(3) of the Act. See 2007 

Principal Trade Rule Release, Section I. 

5See Temporary Rule Regarding Principal Trades 

with Certain Advisory Clients, Investment Advisers 

Act Release No. 2965 (Dec. 23, 2009) [74 FR 69009 

(Dec. 30, 2009)] (‘‘2009 Extension Release’’); 

Temporary Rule Regarding Principal Trades with 

Certain Advisory Clients, Investment Advisers Act 

Release No. 2965A (Dec. 31, 2009) [75 FR 742 (Jan. 

6, 2010)] (making a technical correction to the 2009 

Extension Release). 

6See 2009 Extension Release, Section II.c. 

7See Temporary Rule Regarding Principal Trades 

with Certain Advisory Clients, Investment Advisers 

Act Release No. 3118 (Dec. 1, 2010) [75 FR 75650 

(Dec. 6, 2010)] (proposing a two-year extension of 

rule 206(3)–3T’s sunset provision) (‘‘2010 Extension 

Proposing Release’’); Temporary Rule Regarding 

Principal Trades with Certain Advisory Clients, 

Investment Advisers Act Release No. 3128 (Dec. 28, 

2010) [75 FR 82236 (Dec. 30, 2010)] (‘‘2010 

Extension Release’’). 

8Public Law 111–203, 124 Stat. 1376 (2010). 

Under section 913 of the Dodd-Frank Act, we were 

required to conduct a study and provide a report 

to Congress concerning the obligations of brokerdealers and investment advisers, including 

standards of care applicable to those intermediaries 

and their associated persons. Section 913 also 

Continued 

Issued in Renton, Washington, on October 

3, 2012. 

John P. Piccola, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service. 

[FR Doc. 2012–25131 Filed 10–11–12; 8:45 am] 

BILLING CODE 4910–13–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 275 

[Release No. IA–3483; File No. S7–23–07] 

RIN 3235–AJ96 

Temporary Rule Regarding Principal 

Trades With Certain Advisory Clients 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule. 

SUMMARY: The Securities and Exchange 

Commission is proposing to amend rule 

206(3)–3T under the Investment 

Advisers Act of 1940, a temporary rule 

that establishes an alternative means for 

investment advisers that are registered 

with the Commission as broker-dealers 

to meet the requirements of section 

206(3) of the Investment Advisers Act 

when they act in a principal capacity in 

transactions with certain of their 

advisory clients. The amendment would 

extend the date on which rule 206(3)– 

3T will sunset from December 31, 2012 

to December 31, 2014. 

DATES: Comments must be received on 

or before November 13, 2012. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/proposed.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

23–07 on the subject line; or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number S7–23–07. This file number 

should be included on the subject line 

if email is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/proposed.

shtml). Comments are also available for 

Web site viewing and printing in the 

Commission’s Public Reference Room, 

100 F Street NE., Washington, DC 

20549, on official business days 

between the hours of 10:00 a.m. and 

3:00 p.m. All comments received will be 

posted without change; we do not edit 

personal identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Melissa S. Gainor, Attorney-Adviser, 

Vanessa M. Meeks, Attorney-Adviser, 

Sarah A. Buescher, Branch Chief, or 

Daniel S. Kahl, Assistant Director, at 

(202) 551–6787 or IArules@sec.gov, 

Office of Investment Adviser 

Regulation, Division of Investment 

Management, U.S. Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–8549. 

SUPPLEMENTARY INFORMATION: The 

Securities and Exchange Commission is 

proposing an amendment to temporary 

rule 206(3)–3T [17 CFR 275.206(3)–3T] 

under the Investment Advisers Act of 

1940 [15 U.S.C. 80b] that would extend 

the date on which the rule will sunset 

from December 31, 2012 to December 

31, 2014. 

I. Background 

On September 24, 2007, we adopted, 

on an interim final basis, rule 206(3)– 

3T, a temporary rule under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’) that provides an 

alternative means for investment 

advisers that are registered with us as 

broker-dealers to meet the requirements 

of section 206(3) of the Advisers Act 

when they act in a principal capacity in 

transactions with certain of their 

advisory clients.1 The purpose of the 

rule was to permit broker-dealers to sell 

to their advisory clients, in the wake of 

Financial Planning Association v. SEC 

(the ‘‘FPA Decision’’),2 certain securities 

held in the proprietary accounts of their 

firms that might not be available on an 

agency basis—or might be available on 

an agency basis only on less attractive 

terms 3—while protecting clients from 

conflicts of interest as a result of such 

transactions.4

As initially adopted on an interim 

final basis, rule 206(3)–3T was set to 

sunset on December 31, 2009. In 

December 2009, however, we adopted 

rule 206(3)–3T as a final rule in the 

same form in which it was adopted on 

an interim final basis in 2007, except 

that we extended the rule’s sunset date 

by one year to December 31, 2010.5 We 

deferred final action on rule 206(3)–3T 

in December 2009 because we needed 

additional time to understand how, and 

in what situations, the rule was being 

used.6

In December 2010, we further 

extended the rule’s sunset date by two 

years to December 31, 2012.7 We 

deferred final action on rule 206(3)–3T 

at that time in order to complete a study 

required by section 913 of the DoddFrank Wall Street Reform and Consumer 

Protection Act (the ‘‘Dodd-Frank Act’’) 8


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