Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations 1295 

V. Regulatory Flexibility Act 

Pursuant to section 605(b) of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), the FCA hereby certifies that 

this final rule will not have a significant 

economic impact on a substantial 

number of small entities. Each of the 

banks in the System, considered 

together with its affiliated associations, 

has assets and annual income in excess 

of the amounts that would qualify them 

as small entities. Therefore, System 

institutions are not ‘‘small entities’’ as 

defined in the Regulatory Flexibility 

Act. 

List of Subjects in 12 CFR Part 622 

Administrative practice and 

procedure, Crime, Investigations, 

Penalties. 

For the reasons stated in the 

preamble, part 622 of chapter VI, title 12 

of the Code of Federal Regulations is 

amended as follows: 

PART 622—RULES OF PRACTICE AND 

PROCEDURE 

■ 1. The authority citation for part 622 

continues to read as follows: 

Authority: Secs. 5.9, 5.10, 5.17, 5.25–5.37 

of the Farm Credit Act (12 U.S.C. 2243, 2244, 

2252, 2261–2273); 28 U.S.C. 2461 note; and 

42 U.S.C. 4012a(f). 

■ 2. Revise § 622.61 to read as follows: 

§ 622.61 Adjustment of civil money 

penalties by the rate of inflation under the 

Federal Civil Penalties Inflation Adjustment 

Act of 1990, as amended. 

(a) The maximum amount of each 

civil money penalty within FCA’s 

jurisdiction is adjusted in accordance 

with the Federal Civil Penalties 

Inflation Adjustment Act of 1990, as 

amended (28 U.S.C. 2461 note), as 

follows: 

(1) Amount of civil money penalty 

imposed under section 5.32 of the Act 

for violation of a final order issued 

under section 5.25 or 5.26 of the Act: 

The maximum daily amount is $2,269 

for violations that occur on or after 

January 15, 2018. 

(2) Amount of civil money penalty for 

violation of the Act or regulations: The 

maximum daily amount is $1,026 for 

each violation that occurs on or after 

January 15, 2018. 

(b) The maximum civil money penalty 

amount assessed under 42 U.S.C. 

4012a(f) is: $385 for each violation that 

occurs on or after January 16, 2009, but 

before July 1, 2013, with total penalties 

under such statute not to exceed 

$120,000 for any single institution 

during any calendar year; $2,000 for 

each violation that occurs on or after 

July 1, 2013, but before August 1, 2016, 

with no cap on the total amount of 

penalties that can be assessed against 

any single institution during any 

calendar year; and $2,133 for each 

violation that occurs on or after January 

15, 2018, with no cap on the total 

amount of penalties that can be assessed 

against any single institution during any 

calendar year. 

Dated: January 8, 2018. 

Dale L. Aultman, 

Secretary, Farm Credit Administration Board. 

[FR Doc. 2018–00336 Filed 1–10–18; 8:45 am] 

BILLING CODE 6705–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 211 

[Release No. SAB 117] 

Staff Accounting Bulletin No. 117 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Publication of Staff Accounting 

Bulletin. 

SUMMARY: This staff accounting bulletin 

modifies portions of the interpretive 

guidance included in the Staff 

Accounting Bulletin Series in order to 

make the relevant interpretive guidance 

consistent with authoritative accounting 

guidance and Securities and Exchange 

Commission rules and regulations. 

Specifically, the staff is updating the 

Series in order to bring existing 

guidance into conformity with the 

Financial Accounting Standards Board 

Accounting Standards Codification 

Topic 321, Investments—Equity 

Securities. 

DATES: Effective: January 11, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Brian Staniszewski, Professional 

Accounting Fellow, Office of the Chief 

Accountant at (202) 551–5300 or 

Lindsay McCord, Associate Chief 

Accountant, Division of Corporation 

Finance at (202) 551–3400, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549. 

SUPPLEMENTARY INFORMATION: The 

statements in staff accounting bulletins 

are not rules or interpretations of the 

Commission, nor are they published as 

bearing the Commission’s official 

approval. They represent interpretations 

and practices followed by the Division 

of Corporation Finance and the Office of 

the Chief Accountant in administering 

the disclosure requirements of the 

federal securities laws. 

List of Subjects in 17 CFR Part 211 

Accounting, Reporting and 

recordkeeping requirements, Securities. 

Dated: November 29, 2017. 

Brent J. Fields, 

Secretary. 

Accordingly, part 211 of title 17 of the 

Code of Federal Regulations is amended 

as follows: 

PART 211—INTERPRETATIONS 

RELATING TO FINANCIAL REPORTING 

MATTERS 

■ 1. Add an authority citation for part 

211 to read as follows: 

Authority: 15 U.S.C. 77g, 15 U.S.C. 77s(a), 

15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b), 

17 CFR 78l(b) and 13(b), 17 CFR 78m(b) and 

15 U.S.C. 80a–8, 30(e) 15 U.S.C. 80a–29(e), 

15 U.S.C. 80a–30, and 15 U.S.C. 80a–37(a). 

■ 2. Amend the table in subpart B by 

adding an entry for Staff Accounting 

Bulletin No. 117 at the end of the table 

to read as follows: 

Subpart B—Staff Accounting Bulletins 

Subject Release No. Date Fed. Reg. Vol. and page 

*******

Publication of Staff Accounting Bulletin No. 117 .......... SAB–117 1/11/2018 [INSERT Federal Register CITATION]. 

Note: The text of SAB 117 will not appear 

in the Code of Federal Regulations. 

Staff Accounting Bulletin No. 117 

This staff accounting bulletin 

modifies portions of the interpretive 

guidance included in the Staff 

Accounting Bulletin Series in order to 

make the relevant interpretive guidance 

consistent with current authoritative 

accounting and auditing guidance and 

Securities and Exchange Commission 

(‘‘Commission’’) rules and regulations. 


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1296 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations 

1Prior to the adoption of ASC Topic 321, FASB 

ASC Topic 320, Investments—Debt and Equity 

Securities, permitted investments in equity 

securities with readily determinable fair values to 

be classified as (1) available-for-sale, with changes 

in fair value recognized in other comprehensive 

income, or as (2) trading securities, with changes in 

fair value recognized in net income. 

1Unless otherwise noted, when we refer to the 

Advisers Act, or any paragraph of the Advisers Act, 

we are referring to 15 U.S.C. 80b of the United 

States Code [15 U.S.C. 80b], at which the Advisers 

Act is codified, and when we refer to Advisers Act 

rules, or any paragraph of these rules, we are 

referring to title 17, part 275 of the Code of Federal 

Regulations [17 CFR part 275], in which these rules 

are published. 

2Public Law 114–94, 129 Stat. 1312 (Dec. 4, 

2015). 

3An SBIC is (other than an entity that has elected 

to be regulated or is regulated as a business 

development company pursuant to section 54 of the 

Investment Company Act of 1940): (A) A small 

business investment company that is licensed 

under the Small Business Investment Act of 1958 

(‘‘SBIA’’), (B) an entity that has received from the 

Small Business Administration notice to proceed to 

qualify for a license as a small business investment 

company under the SBIA, which notice or license 

has not been revoked, or (C) an applicant that is 

affiliated with 1 or more licensed small business 

investment companies described in subparagraph 

(A) and that has applied for another license under 

the SBIA, which application remains pending. 

Advisers Act section 203(b)(7). 

Specifically, the staff is updating the 

Series in order to bring existing 

guidance into conformity with the 

Financial Accounting Standards Board 

(‘‘FASB’’) Accounting Standards 

Codification (‘‘ASC’’) Topic 321, 

Investments—Equity Securities (‘‘ASC 

Topic 321’’). The FASB adopted ASC 

Topic 321 through its issuance of 

Accounting Standards Update No. 

2016–01, Financial Instruments— 

Overall (Subtopic 825–10): Recognition 

and Measurement of Financial Assets 

and Financial Liabilities. 

The following describes the changes 

made to the Staff Accounting Bulletin 

Series that are presented at the end of 

this release: 

1. Topic 5: Miscellaneous Accounting 

a. Topic 5.M in the Staff Accounting 

Bulletin Series entitled Other Than 

Temporary Impairment of Certain 

Investments in Equity Securities (‘‘Topic 

5.M’’) is no longer applicable upon a 

registrant’s adoption of ASC Topic 321. 

Topic 5.M provided the staff’s views on 

evaluating whether an impairment loss 

should be recognized in net income for 

investments in equity securities that 

were measured at fair value with 

changes in fair value presented in other 

comprehensive income.1 ASC Topic 321 

establishes new guidance that 

eliminates the ability to present changes 

in the fair value of investments in equity 

securities within other comprehensive 

income. After a registrant adopts ASC 

Topic 321, investments in equity 

securities that previously qualified for 

presenting changes in fair value within 

other comprehensive income will be 

measured at fair value with changes in 

fair value presented immediately in net 

income. Therefore, ASC Topic 321 

eliminates the need for Topic 5.M. 

Accordingly, the staff hereby amends 

the Staff Accounting Bulletin Series as 

follows: 

* * * * * 

Topic 5: Miscellaneous Accounting 

* * * * * 

M.1. Impact of a Registrant’s Adoption 

of FASB ASC Topic 321, Investments— 

Equity Securities—Overall 

Topic 5.M is no longer applicable 

upon a registrant’s adoption of ASC 

Topic 321. Topic 5.M provided the 

staff’s views on evaluating whether an 

impairment loss should be recognized 

in net income for investments in equity 

securities that were measured at fair 

value with changes in fair value 

presented in other comprehensive 

income. ASC Topic 321 establishes new 

guidance that eliminates the ability to 

present changes in the fair value of 

investments in equity securities within 

other comprehensive income, which 

eliminates the need for Topic 5.M. 

Registrants that have not yet adopted 

ASC Topic 321 should continue to refer 

to Topic 5.M. 

* * * * * 

[FR Doc. 2018–00352 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 275 

[Release No. IA–4839; File No. S7–05–17] 

RIN 3235–AM02 

Exemptions From Investment Adviser 

Registration for Advisers to Small 

Business Investment Companies 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Final rule. 

SUMMARY: We are adopting amendments 

to the rule that defines a venture capital 

fund (rule 203(l)–1) and the rule that 

implements the private fund adviser 

exemption (rule 203(m)–1) under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’) in order to reflect 

changes made by title LXXIV, sections 

74001 and 74002 of the Fixing 

America’s Surface Transportation Act of 

2015 (the ‘‘FAST Act’’), which amended 

sections 203(l) and 203(m) of the 

Advisers Act. Title LXXIV, section 

74001 of the FAST Act amended the 

exemption from investment adviser 

registration for any adviser solely to one 

or more ‘‘venture capital funds’’ in 

Advisers Act section 203(l) by deeming 

‘‘small business investment companies’’ 

to be ‘‘venture capital funds’’ for 

purposes of the exemption. 

Accordingly, we are amending the 

definition of a venture capital fund to 

include ‘‘small business investment 

companies.’’ Title LXXIV, section 74002 

of the FAST Act amended the 

exemption from investment adviser 

registration for any adviser solely to 

‘‘private funds’’ with less than $150 

million in assets under management in 

Advisers Act section 203(m) by 

excluding the assets of ‘‘small business 

investment companies’’ when 

calculating ‘‘private fund assets’’ 

towards the registration threshold of 

$150 million. Accordingly, we are 

amending the definition of ‘‘assets 

under management’’ in the rule that 

implements the private fund adviser 

exemption to exclude the assets of 

‘‘small business investment 

companies.’’ 

DATES: Effective March 12, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer Songer, Senior Counsel, or Sara 

Cortes, Assistant Director, at (202) 551– 

6787 or IArules@sec.gov, Investment 

Adviser Regulation Office, Division of 

Investment Management, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–8549. 

SUPPLEMENTARY INFORMATION: The 

Commission is adopting amendments to 

rules 203(l)–1 [17 CFR 275.203(l)\1] and 

203(m)–1 [17 CFR 275.203(m)–1] under 

the Investment Advisers Act of 1940 [15 

U.S.C. 80b].1

Table of Contents 

I. Background 

II. Discussion 

A. Amendment to Rule 203(l)–1 

B. Amendment to Rule 203(m)–1 

III. Effective Date 

IV. Economic Analysis 

A. Introduction and Economic Justification 

B. Costs and Benefits 

C. Efficiency, Competition, and Capital 

Formation 

V. Paperwork Reduction Act Analysis 

VI. Regulatory Flexibility Act Certification 

VII. Statutory Authority 

I. Background 

Prior to the enactment of the Fixing 

America’s Surface Transportation Act of 

2015 (the ‘‘FAST Act’’),2 we believe that 

investment advisers to small business 

investment companies (‘‘SBICs’’) 3

primarily relied upon an exemption 


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