Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 70261 

10 17 CFR 200.30–3(a)(12). 

1See 17 CFR 240.17g–5(a)(3). 

2See Exchange Act Release No. 62120 (May 19, 

2010), 75 FR 28825 (May 24, 2010) (‘‘Order’’). 

3See id. at 28827–28 (setting forth conditions of 

relief). 

4See Exchange Act Release No. 63363 (Nov. 23, 

2010), 75 FR 73137 (Nov. 29, 2010) (‘‘First 

Extension Order’’). 

5See Exchange Act Release No. 65765 (Nov. 16, 

2011), 76 FR 72227 (Nov. 22, 2011) (‘‘Second 

Extension Order’’). 

6See Exchange Act Release No. 34–68286 (Nov. 

26, 2012), 77 FR 71201 (Nov. 29, 2012) (‘‘Third 

Extension Order’’). 

7See Exchange Act Release No. 34–70919 (Nov. 

22, 2013), 78 FR 70984 (Nov. 27, 2013) (‘‘Fourth 

Extension Order’’). 

8 17 CFR 240.17g–5(b) and (c). 

9 17 CFR 240.17g–5(a). 

10 15 U.S.C. 78o–7(a)(1)(B)(vi). 

11 17 CFR 240.17g–1. 

12 15 U.S.C. 78o–7(h). 

13See 17 CFR 240.17g–5(a)(3); see also Exchange 

Act Release No. 61050 (Nov. 23, 2009), 74 FR 63832 

(Dec. 4, 2009) (‘‘Adopting Release’’) at 63844–45. 

14Paragraph (b)(9) of Rule 17g–5 identifies the 

following conflict of interest: issuing or maintaining 

a credit rating for a security or money market 

instrument issued by an asset pool or as part of any 

asset-backed or mortgage-backed securities 

Continued 

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– 

DTC–2014–11 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–DTC–2014–11. 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 Web site (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 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. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of DTC and on DTC’s Web site at 

http://dtcc.com/legal/sec-rulefilings.aspx. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–DTC– 

2014–11 and should be submitted on or 

before December 16, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27841 Filed 11–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73649; File No. S7–04–09] 

Order Extending Temporary 

Conditional Exemption for Nationally 

Recognized Statistical Rating 

Organizations From Requirements of 

Rule 17g–5 Under the Securities 

Exchange Act of 1934 and Request for 

Comment 

November 19, 2014. 

I. Introduction 

On May 19, 2010, the Securities and 

Exchange Commission (‘‘Commission’’) 

conditionally exempted, with respect to 

certain credit ratings and until 

December 2, 2010, nationally recognized 

statistical rating organizations 

(‘‘NRSROs’’) from certain requirements 

in Rule 17g–5(a)(3) 1 under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’), which had a 

compliance date of June 2, 2010.2

Pursuant to the Order, an NRSRO is not 

required to comply with Rule 17g– 

5(a)(3) until December 2, 2010 with 

respect to credit ratings where: (1) The 

issuer of the structured finance product 

is a non-U.S. person; and (2) the NRSRO 

has a reasonable basis to conclude that 

the structured finance product will be 

offered and sold upon issuance, and that 

any arranger linked to the structured 

finance product will effect transactions 

of the structured finance product after 

issuance, only in transactions that occur 

outside the U.S. (‘‘covered 

transactions’’).3 On November 23, 2010, 

the Commission extended the 

conditional temporary exemption until 

December 2, 2011.4 On November 16, 

2011, the Commission extended the 

conditional temporary exemption until 

December 2, 2012.5 On November 26, 

2012, the Commission extended the 

conditional temporary exemption until 

December 2, 2013.6 On November 22, 

2013, the Commission extended the 

conditional temporary exemption until 

December 2, 2014.7 The Commission is 

extending the temporary conditional 

exemption exempting NRSROs from 

complying with Rule 17g–5(a)(3) with 

respect to rating covered transactions 

until December 2, 2015. 

II. Background 

Rule 17g–5 identifies, in paragraphs 

(b) and (c) of the rule, a series of 

conflicts of interest arising from the 

business of determining credit ratings.8

Paragraph (a) of Rule 17g–5 9 prohibits 

an NRSRO from issuing or maintaining 

a credit rating if it is subject to the 

conflicts of interest identified in 

paragraph (b) of Rule 17g–5 unless the 

NRSRO has taken the steps prescribed 

in paragraph (a)(1) (i.e., disclosed the 

type of conflict of interest in Exhibit 6 

to Form NRSRO in accordance with 

Section 15E(a)(1)(B)(vi) of the Exchange 

Act 10 and Rule 17g–1) 11 and paragraph 

(a)(2) (i.e., established and is 

maintaining and enforcing written 

policies and procedures to address and 

manage conflicts of interest in 

accordance with Section 15E(h) of the 

Exchange Act).12 Paragraph (c) of Rule 

17g–5 specifically prohibits seven types 

of conflicts of interest. Consequently, an 

NRSRO is prohibited from issuing or 

maintaining a credit rating when it is 

subject to these conflicts regardless of 

whether it had disclosed them and 

established procedures reasonably 

designed to address them. 

In December 2009, the Commission 

adopted subparagraph (a)(3) to Rule 

17g–5. This provision requires an 

NRSRO that is hired by an arranger to 

determine an initial credit rating for a 

structured finance product to take 

certain steps designed to allow an 

NRSRO that is not hired by the arranger 

to nonetheless determine an initial 

credit rating—and subsequently monitor 

that credit rating—for the structured 

finance product.13 In particular, under 

Rule 17g–5(a)(3), an NRSRO is 

prohibited from issuing or maintaining 

a credit rating when it is subject to the 

conflict of interest identified in 

paragraph (b)(9) of Rule 17g–5 (i.e., 

being hired by an arranger to determine 

a credit rating for a structured finance 

product) 14 unless it has taken the steps 


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70262 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 

transaction that was paid for by the issuer, sponsor, 

or underwriter of the security or money market 

instrument. 17 CFR 240.17g–5(b)(9). 

15 17 CFR 240.17g–5(a)(3). 

16Paragraph (e) of Rule 17g–5 requires that an 

NRSRO seeking to access the hired NRSRO’s 

Internet Web site during the applicable calendar 

year must furnish the Commission with the 

following certification: 

The undersigned hereby certifies that it will 

access the Internet Web sites described in 17 CFR 

240.17g–5(a)(3) solely for the purpose of 

determining or monitoring credit ratings. Further, 

the undersigned certifies that it will keep the 

information it accesses pursuant to 17 CFR 

240.17g–5(a)(3) confidential and treat it as material 

nonpublic information subject to its written policies 

and procedures established, maintained, and 

enforced pursuant to section 15E(g)(1) of the Act (15 

U.S.C. 78o–7(g)(1)) and 17 CFR 240.17g–4. Further, 

the undersigned certifies that it will determine and 

maintain credit ratings for at least 10% of the issued 

securities and money market instruments for which 

it accesses information pursuant to 17 CFR 

240.17g–5(a)(3)(iii), if it accesses such information 

for 10 or more issued securities or money market 

instruments in the calendar year covered by the 

certification. Further, the undersigned certifies one 

of the following as applicable: (1) In the most recent 

calendar year during which it accessed information 

pursuant to § 17 CFR 240.17g–5(a)(3), the 

undersigned accessed information for [Insert 

Number] issued securities and money market 

instruments through Internet Web sites described in 

17 CFR 240.17g–5(a)(3) and determined and 

maintained credit ratings for [Insert Number] of 

such securities and money market instruments; or 

(2) The undersigned previously has not accessed 

information pursuant to 17 CFR 240.17g–5(a)(3) 10 

or more times during the most recently ended 

calendar year. 

17 In particular, under paragraph (a)(3)(iii) of Rule 

17g–5, the arranger must represent to the hired 

NRSRO that it will: (1) Maintain the information 

described in paragraphs (a)(3)(iii)(C) and 

(a)(3)(iii)(D) of Rule 17g–5 available at an identified 

password-protected Internet Web site that presents 

the information in a manner indicating which 

information currently should be relied on to 

determine or monitor the credit rating; (2) Provide 

access to such password-protected Internet Web site 

during the applicable calendar year to any NRSRO 

that provides it with a copy of the certification 

described in paragraph (e) of Rule 17g–5 that covers 

that calendar year, provided that such certification 

indicates that the nationally recognized statistical 

rating organization providing the certification 

either: (i) determined and maintained credit ratings 

for at least 10% of the issued securities and money 

market instruments for which it accessed 

information pursuant to paragraph (a)(3)(iii) of Rule 

17g–5 in the calendar year prior to the year covered 

by the certification, if it accessed such information 

for 10 or more issued securities or money market 

instruments; or (ii) has not accessed information 

pursuant to paragraph (a)(3) of Rule 17g–5 10 or 

more times during the most recently ended calendar 

year; (3) Post on such password-protected Internet 

Web site all information the arranger provides to 

the NRSRO, or contracts with a third party to 

provide to the NRSRO, for the purpose of 

determining the initial credit rating for the security 

or money market instrument, including information 

about the characteristics of the assets underlying or 

referenced by the security or money market 

instrument, and the legal structure of the security 

or money market instrument, at the same time such 

information is provided to the NRSRO; and (4) Post 

on such password-protected Internet Web site all 

information the arranger provides to the NRSRO, or 

contracts with a third party to provide to the 

NRSRO, for the purpose of undertaking credit rating 

surveillance on the security or money market 

instrument, including information about the 

characteristics and performance of the assets 

underlying or referenced by the security or money 

market instrument at the same time such 

information is provided to the NRSRO. 

18Adopting Release at 63844. 

19 Id. 

20 Id. 

21 Id. 

22 Id. 

23 Id. 

24 Id. 

25See Order at 28828. 

26Letter from Masamichi Kono, Vice 

Commissioner for International Affairs, Financial 

Services Agency, Japan, dated Nov. 12, 2010 

(‘‘Japan FSA Letter’’); Letter from Masaru Ono, 

Executive Director, Securitization Forum of Japan, 

dated Nov. 12, 2010 (‘‘SFJ Letter’’); Letter from Rick 

Watson, Managing Director, Association for 

Financial Markets in Europe/European 

Securitisation Forum, dated Nov. 11, 2010 (‘‘AFME 

Letter’’); Letter from Jack Rando, Director, Capital 

Markets, Investment Industry Association of 

Canada, dated Sep. 22, 2010 (‘‘IIAC Letter’’); Letter 

from Christopher Dalton, Chief Executive Officer, 

Australian Securitisation Forum, dated Jun. 27, 

2010 (‘‘AuSF Letter’’); Letter from Takefumi Emori, 

Managing Director, Japan Credit Rating Agency, 

Ltd. (‘‘JCR’’), dated Jun. 25, 2010 (‘‘JCR Letter’’). 

27See Japan FSA Letter; SFJ Letter; AFME Letter; 

JCR Letter; AuSF Letter. 

28See AFME Letter; JCR Letter; AuSF Letter. 

29See Japan FSA Letter; AFME Letter; JCR Letter; 

AuSF Letter; IIAC Letter. With respect to local laws, 

we note that the European Commission in recent 

months has issued a relevant proposal for 

amendments to the European Union Regulation on 

Credit Ratings. See ‘‘Regulation of the European 

prescribed in paragraphs (a)(1) and (2) 

of Rule 17g–5 (discussed above) and the 

steps prescribed in new paragraph (a)(3) 

of Rule 17g–5.15 Rule 17g–5(a)(3), 

among other things, requires that the 

NRSRO must: 

• Maintain on a password-protected 

Internet Web site a list of each 

structured finance product for which it 

currently is in the process of 

determining an initial credit rating in 

chronological order and identifying the 

type of structured finance product, the 

name of the issuer, the date the rating 

process was initiated, and the Internet 

Web site address where the arranger 

represents the information provided to 

the hired NRSRO can be accessed by 

other NRSROs; 

• Provide free and unlimited access 

to such password-protected Internet 

Web site during the applicable calendar 

year to any NRSRO that provides it with 

a copy of the certification described in 

paragraph (e) of Rule 17g–5 that covers 

that calendar year; 16 and 

• Obtain from the arranger a written 

representation that can reasonably be 

relied upon that the arranger will, 

among other things, disclose on a 

password-protected Internet Web site 

the information it provides to the hired 

NRSRO to determine the initial credit 

rating (and monitor that credit rating) 

and provide access to the Web site to an 

NRSRO that provides it with a copy of 

the certification described in paragraph 

(e) of Rule 17g–5.17

The Commission stated in the 

Adopting Release that subparagraph 

Rule 17g–5(a)(3) is designed to address 

conflicts of interest and improve the 

quality of credit ratings for structured 

finance products by making it possible 

for more NRSROs to rate structured 

finance products.18 For example, the 

Commission noted that when an NRSRO 

is hired to rate a structured finance 

product, some of the information it 

relies on to determine the rating is 

generally not made public.19 As a result, 

structured finance products frequently 

are issued with ratings from only the 

one or two NRSROs that have been 

hired by the arranger, with the attendant 

conflict of interest that creates.20 The 

Commission stated that subparagraph 

Rule 17g–5(a)(3) was designed to 

increase the number of credit ratings 

extant for a given structured finance 

product and, in particular, to promote 

the issuance of credit ratings by 

NRSROs that are not hired by 

arrangers.21 The Commission’s goal in 

adopting the rule was to provide users 

of credit ratings with more views on the 

creditworthiness of structured finance 

products.22 In addition, the Commission 

stated that Rule 17g–5(a)(3) was 

designed to reduce the ability of 

arrangers to obtain better than 

warranted ratings by exerting influence 

over NRSROs hired to determine credit 

ratings for structured finance 

products.23 Specifically, by opening up 

the rating process to more NRSROs, the 

Commission intended to make it easier 

for the hired NRSRO to resist such 

pressure by increasing the likelihood 

that any steps taken to inappropriately 

favor the arranger could be exposed to 

the market through the credit ratings 

issued by other NRSROs.24

Rule 17g–5(a)(3) became effective on 

February 2, 2010, and the compliance 

date for Rule 17g–5(a)(3) was June 2, 

2010. 

III. Extension of Conditional 

Temporary Extension 

In the Order, the Commission 

requested comment generally, but also 

on a number of specific issues.25 The 

Commission received six comment 

letters in response to this solicitation of 

comment.26 The commenters expressed 

concern that the extraterritorial 

application of Rule 17g–5(a)(3) could, in 

the commenter’s view, among other 

things, disrupt local securitization 

markets,27 inhibit the ability of local 

firms to raise capital,28 and conflict with 

local laws.29 Several commenters also 


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Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 70263 

Parliament and of the Counsel on amending 

Regulation (EC) No 1060/2009 on credit rating 

agencies’’ (available at http://ec.europa.eu/internal_

market/securities/docs/agencies/100602_proposal_

en.pdf). 

30See Japan FSA Letter; SFJ Letter; AFME Letter; 

JCR Letter. 

31See Letter from Tom Deutsch, Executive 

Director, American Securitization Forum, and Chris 

Dalton, Chief Executive Officer, Australian 

Securitization Forum, dated Aug. 9, 2011 (‘‘ASF/

AuSF Letter 1’’); Letter from Jack Rando, Director, 

Capital Markets, Investment Industry Association of 

Canada, dated Nov. 2, 2011 (‘‘IIAC Letter 2’’). 

32See ASF/AuSF Letter 1. 

33Letter from Chris Barnard to the Commission, 

dated Nov. 23, 2011 (‘‘Barnard Letter’’); Letter from 

Tom Deutsch, Executive Director, American 

Securitization Forum and Chris Dalton, Chief 

Executive Officer, Australian Securitisation Forum, 

dated Aug. 28, 2012 (‘‘ASF/AuSF Letter 2’’). 

34See Barnard Letter; ASF/AuSF Letter 2. 

35See ASF/AuSF Letter 2. 

36See Letter from Chris Barnard to the 

Commission, dated Nov. 26, 2013. 

requested that the conditional 

temporary exemption be extended or 

made permanent.30 The First Extension 

Order again solicited public comment 

on issues raised in connection with the 

extra-territorial application of Rule 17g– 

5(a)(3).31 One commenter requested that 

the Order be made permanent, citing 

many of the same reasons set forth in 

prior comment letters.32 The Second 

Extension Order again solicited public 

comment on issues raised in connection 

with the extra-territorial application of 

Rule 17g–5(a)(3).33 Commenters 

supported the exemption regarding the 

extra-territorial application of the 

Rule,34 with one of those commenters 

again requesting that the Order be made 

permanent.35 The Third Extension 

Order again solicited public comment 

on issues raised in connection with the 

extra-territorial application of Rule 17g– 

5(a)(3). No comments were received. 

The Fourth Extension Order again 

solicited public comment on issues 

raised in connection with the extraterritorial application of Rule 17g– 

5(a)(3). One comment was received and 

the commenter supported the 

exemption regarding the extra-territorial 

application of the Rule.36

Given the continued concerns about 

potential disruptions of local 

securitization markets, and because the 

Commission’s consideration of the 

issues raised will benefit from 

additional time to engage in further 

dialogue with interested parties and to 

monitor market and regulatory 

developments, the Commission believes 

extending the conditional temporary 

exemption until December 2, 2015 is 

necessary or appropriate in the public 

interest, and is consistent with the 

protection of investors. 

IV. Request for Comment 

The Commission believes that it 

would be useful to continue to provide 

interested parties opportunity to 

comment. Comments may be submitted 

by any of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/exorders.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

04–09 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 Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F St. 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number S7–04–09. 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/

exorders.shtml). Comments are also 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F St. NE., 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 

V. Conclusion 

For the foregoing reasons, the 

Commission believes it would be 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors to extend the 

conditional temporary exemption 

exempting NRSROs from complying 

with Rule 17g–5(a)(3) with respect to 

rating covered transactions until 

December 2, 2015. 

Accordingly, 

It is hereby ordered, pursuant to 

Section 36 of the Exchange Act, that a 

nationally recognized statistical rating 

organization is exempt until December 

2, 2015 from the requirements in Rule 

17g–5(a)(3) (17 CFR 240.17g–5(a)(3)) for 

credit ratings where: 

(1) The issuer of the security or 

money market instrument is not a U.S. 

person (as defined under Securities Act 

Rule 902(k)); and 

(2) The nationally recognized 

statistical rating organization has a 

reasonable basis to conclude that the 

structured finance product will be 

offered and sold upon issuance, and that 

any arranger linked to the structured 

finance product will effect transactions 

of the structured finance product after 

issuance, only in transactions that occur 

outside the U.S. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–27846 Filed 11–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Bravo Enterprises Ltd.; 

Immunotech Laboratories, Inc.; Myriad 

Interactive Media, Inc.; Wholehealth 

Products, Inc.; Order of Suspension of 

Trading 

November 20, 2014. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of the issuers 

listed below. 

1. Bravo Enterprises Ltd. is a Nevada 

corporation with its principal place of 

business in Patchogue, New York. 

Questions have arisen concerning the 

accuracy and adequacy of publicly 

disseminated information, including 

information about the relationship 

between the company’s business 

prospects and the current Ebola crisis. 

The company is quoted on OTC Link 

(previously ‘‘Pink Sheets’’) operated by 

OTC Markets Group Inc. (‘‘OTC Link’’), 

under the stock symbol OGNG. 

2. Immunotech Laboratories, Inc. is a 

Nevada corporation with its principal 

place of business in Monrovia, 

California. Questions have arisen 

concerning the accuracy and adequacy 

of publicly disseminated information, 

including information about the 

relationship between the company’s 

business prospects and the current 

Ebola crisis. The company is quoted on 

OTC Link under the stock symbol 

IMMB. 

3. Myriad Interactive Media, Inc. is a 

Delaware corporation with its principal 

place of business in Toronto, Canada. 

Questions have arisen concerning the 

accuracy and adequacy of publicly 

disseminated information, including 

information about the relationship 

between the company’s business 

prospects and the current Ebola crisis. 


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