Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 32993 

19 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 80b–5(a)(1). 

2Under section 205(e), the Commission may 

determine that persons do not need the protections 

of section 205(a)(1) on the basis of such factors as 

‘‘financial sophistication, net worth, knowledge of 

and experience in financial matters, amount of 

assets under management, relationship with a 

registered investment adviser, and such other 

factors as the Commission determines are consistent 

with [section 205].’’ 15 U.S.C. 80b–5(e). 

subparagraph (f)(6) of Rule 19b–4 

thereunder.19

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2021–36 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to: Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2021–36. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website 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. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2021–36 and should 

be submitted on or before July 14, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13105 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Thursday, 

June 24, 2021. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

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. 

In the event that the time, date, or 

location of this meeting changes, an 

announcement of the change, along with 

the new time, date, and/or place of the 

meeting will be posted on the 

Commission’s website at https://

www.sec.gov. 

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), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to examinations 

and enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information, please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Dated: June 17, 2021. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–13155 Filed 6–17–21; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 5756] 

Order Approving Adjustment for 

Inflation of the Dollar Amount Tests in 

Rule 205–3 Under the Investment 

Advisers Act of 1940 

June 17, 2021. 

I. Background 

Section 205(a)(1) of the Investment 

Advisers Act of 1940 (‘‘Advisers Act’’) 

generally prohibits an investment 

adviser from entering into, extending, 

renewing, or performing any investment 

advisory contract that provides for 

compensation to the adviser based on a 

share of capital gains on, or capital 

appreciation of, the funds of a client 

(also known as performance 

compensation or performance fees).1

Section 205(e) authorizes the Securities 

and Exchange Commission 

(‘‘Commission’’) to exempt any advisory 

contract from the performance fee 

prohibition if the contract is with any 

person that the Commission determines 

does not need the protections of the 

prohibition, on the basis of certain 

factors described in that section.2 Rule 

205–3 under the Advisers Act exempts 

an investment adviser from the 

prohibition against charging a client 

performance fees when the client is a 


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32994 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 

3The exemption applies to the entrance into, 

performance, renewal, and extension of advisory 

contracts. See rule 205–3(a). 4See rule 205–3(d)(1)(i)–(ii); see also Order 

Approving Adjustment for Inflation of the Dollar 

Amount Tests in Rule 205–3 under the Investment 

Advisers Act of 1940, Advisers Act Release No. 

4421 (June 14, 2016) [81 FR 39985 (June 20, 2016)] 

(‘‘2016 Order’’). Rule 205–3 includes other 

definitions of ‘‘qualified client’’ that do not 

reference specific dollar amount tests. See, e.g., rule 

205–3(d)(1)(ii)(B) and rule 205–3(d)(1)(iii). 

5Public Law 111–203, 124 Stat. 1376 (2010). 

6See section 418 of the Dodd-Frank Act 

(requiring the Commission to issue an order every 

five years revising dollar amount tests in a rule that 

exempts a person or transaction from section 

205(a)(1) of the Advisers Act if the dollar amount 

test was a factor in the Commission’s determination 

that the persons do not need the protections of that 

section). 

7See Order Approving Adjustment for Inflation of 

the Dollar Amount Tests in Rule 205–3 under the 

Investment Advisers Act of 1940, Advisers Act 

Release No. 3236 (July 12, 2011) [76 FR 41838 (July 

15, 2011)] (‘‘2011 Order’’). The 2011 Order was 

effective as of September 19, 2011. Id. 

8See rule 205–3(e). 

9See 2016 Order, supra footnote 4. The 2016 

Order was effective as of August 15, 2016. Id. As 

a result of the 2016 Order, the dollar amount 

threshold of the net worth test was increased to 

$2,100,000, but the dollar amount threshold of the 

assets-under-management test remained at 

$1,000,000. Id. 

10See Performance-Based Investment Advisory 

Fees, Advisers Act Release No. 5733 (May 10, 2021) 

[86 FR 26685 (May 17, 2021)]. Because the amount 

of the Commission’s inflation adjustment 

calculations are larger than the rounding amount 

specified under rule 205–3, the dollar amount of 

both tests would be adjusted as a result of the 

Commission’s inflation adjustment calculation 

effected pursuant to the rule. 

11See id. at section II.A. 

12See rule 205–3(c)(1) (‘‘If a registered investment 

adviser entered into a contract and satisfied the 

conditions of this [section] that were in effect when 

the contract was entered into, the adviser will be 

considered to satisfy the conditions of this [section]; 

Provided, however, that if a natural person or 

company who was not a party to the contract 

becomes a party (including an equity owner of a 

private investment company advised by the 

adviser), the conditions of this [section] in effect at 

that time will apply with regard to that person or 

company.’’); see also Investment Adviser 

Performance Compensation, Advisers Act Release 

No. 3198 (May 10, 2011) [76 FR 27959 (May 13, 

2011)], at section II.B.3. The 2011 Order and 2016 

Order each applied to contractual relationships 

entered into on or after the effective date and did 

not apply retroactively to contractual relationships 

previously in existence. See Investment Adviser 

Performance Compensation, Advisers Act Release 

No. 3372 (Feb. 15, 2012) [77 FR 10358 (Feb. 22, 

2012)], at section I, n.16; 2016 Order, supra footnote 

4, at section III. 

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

2 17 CFR 240.19b–4. 

‘‘qualified client.’’ 3 The rule allows an 

adviser to charge performance fees if the 

client has at least a certain dollar 

amount in assets under management 

(currently, $1,000,000) with the adviser 

immediately after entering into the 

advisory contract (‘‘assets-undermanagement test’’) or if the adviser 

reasonably believes, immediately prior 

to entering into the contract, that the 

client has a net worth of more than a 

certain dollar amount (currently, 

$2,100,000) (‘‘net worth test’’).4

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act (‘‘DoddFrank Act’’) 5 amended section 205(e) of 

the Advisers Act to provide that, by July 

21, 2011 and every five years thereafter, 

the Commission shall, by order, adjust 

for the effects of inflation the dollar 

amount thresholds included in rules 

issued under section 205(e), rounded to 

the nearest multiple of $100,000.6 The 

Commission issued an order to revise 

the dollar amount thresholds of the 

assets-under-management and net worth 

tests (to $1,000,000 and $2,000,000, 

respectively, as discussed above) on July 

12, 2011.7 Rule 205–3 codifies the 

threshold amounts revised by the 2011 

Order and states that the Commission 

will issue an order on or about May 1, 

2016, and approximately every five 

years thereafter, adjusting for inflation 

the dollar amount thresholds of the 

rule’s assets-under-management and net 

worth tests based on the Personal 

Consumption Expenditures Chain-Type 

Price Index (‘‘PCE Index,’’ published by 

the United States Department of 

Commerce).8 On June 14, 2016, the 

Commission issued an order adjusting 

for inflation, as appropriate, the dollar 

amount thresholds of the assets-undermanagement test and the net worth test 

(to $1,000,000 and $2,100,000, 

respectively).9

II. Adjustment of Dollar Amount 

Thresholds 

On May 10, 2021, the Commission 

published a notice of intent to issue an 

order that would adjust for inflation the 

dollar amount thresholds of the assetsunder-management test and the net 

worth test.10 The Commission stated 

that, based on calculations that take into 

account the effects of inflation by 

reference to historic and current levels 

of the PCE Index, the dollar amount of 

the assets-under-management test 

would increase from $1,000,000 to 

$1,100,000, and the dollar amount of the 

net worth test would increase from 

$2,100,000 to $2,200,000.11 These dollar 

amounts—which are rounded to the 

nearest multiple of $100,000 as required 

by section 205(e) of the Advisers Act— 

would reflect inflation from 2016 to the 

end of 2020. 

The Commission’s notice established 

a deadline of June 4, 2021 for 

submission of requests for a hearing. No 

requests for a hearing have been 

received by the Commission. 

III. Effective Date of the Order 

This Order is effective as of August 

16, 2021. To the extent that contractual 

relationships are entered into prior to 

the Order’s effective date, the dollar 

amount test adjustments in the Order 

would not generally apply retroactively 

to such contractual relationships, 

subject to the transition rules 

incorporated in rule 205–3.12

IV. Conclusion 

Accordingly, pursuant to section 

205(e) of the Advisers Act and section 

418 of the Dodd-Frank Act, 

It is hereby ordered that, for purposes 

of rule 205–3(d)(1)(i) under the Advisers 

Act [17 CFR 275.205–3(d)(1)], a 

qualified client means a natural person 

who, or a company that, immediately 

after entering into the contract has at 

least $1,100,000 under the management 

of the investment adviser; and 

It is further ordered that, for purposes 

of rule 205–3(d)(1)(ii)(A) under the 

Advisers Act [17 CFR 275.205– 

3(d)(1)(ii)(A)], a qualified client means a 

natural person who, or a company that, 

the investment adviser entering into the 

contract (and any person acting on his 

behalf) reasonably believes, 

immediately prior to entering into the 

contract, has a net worth (together, in 

the case of a natural person, with assets 

held jointly with a spouse) of more than 

$2,200,000. 

By the Commission. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13192 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92197; File No. SR–ICC– 

2021–013] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule Change Relating to the 

ICC End-of-Day Price Discovery 

Policies and Procedures 

June 16, 2021. 

I. Introduction 

On April 23, 2021, ICE Clear Credit 

LLC (‘‘ICC’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (the ‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

revise and update ICC’s End-of-Day 

Price Discovery Policies and Procedures 

(the ‘‘Pricing Policy’’). The Pricing 

Policy formalizes ICC’s end-of-day 

(‘‘EOD’’) price discovery process that 

provides prices for cleared credit default 


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