Document ID: SEC-2022-0654-0001
Agency: sec
Document Type: Proposed Rule
Title: Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews: Amendments Regarding the Definition of 'Exchange' and Alternative Trading Systems That Trade U.S. Treasury and Agency Securities, National Market System Stocks, and Other Securities
Posted Date: 2022-05-12T04:00Z

[Federal Register Volume 87, Number 92 (Thursday, May 12, 2022)]
[Proposed Rules]
[Pages 29059-29061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10195]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 232, 240, 242, 249, and 275

[Release Nos. 34-94868; IA-6018; File Nos. S7-02-22; S7-03-22]
RIN 3235-AN07; 3235-AM45

Reopening of Comment Periods for ``Private Fund Advisers; 
Documentation of Registered Investment Adviser Compliance Reviews'' and 
``Amendments Regarding the Definition of `Exchange' and Alternative 
Trading Systems (ATSs) That Trade U.S. Treasury and Agency Securities, 
National Market System (NMS) Stocks, and Other Securities''

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rules; reopening of comment periods.

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[[Page 29060]]

SUMMARY: The Securities and Exchange Commission (``Commission'') is 
reopening the comment period for a release proposing new rules and 
amendments to an existing rule under the Investment Advisers Act of 
1940 (``Advisers Act'') that would affect private fund advisers and 
proposing amendments to the Advisers Act compliance rule, which would 
affect all registered investment advisers (``Advisers Act Proposing 
Release''). The Commission is also reopening the comment period for a 
release proposing amendments to its rules under the Securities Exchange 
Act of 1934 (``Exchange Act'') that would amend a rule under the 
Exchange Act, which defines certain terms used in the statutory 
definition of ``exchange'' under the Exchange Act, re-propose 
amendments to Regulation ATS for ATSs that trade government securities 
as defined under the Exchange Act or repurchase and reverse repurchase 
agreements on government securities (``Government Securities ATSs''), 
re-propose amendments to Regulation SCI to apply to ATSs that meet 
certain volume thresholds in U.S. Treasury Securities or in a debt 
security issued or guaranteed by a U.S. executive agency or government-
sponsored enterprise (``Agency Securities''), amend the fair access 
rule for ATSs, and amend Form ATS-N, Form ATS-R, and Form ATS 
(``Exchange Act Proposing Release''). These actions will allow 
interested persons additional time to analyze the issues and prepare 
their comments, which would benefit the Commission in its consideration 
of final rules.

DATES: The comment periods for the proposed rules published in the 
Federal Register on March 24, 2022, at 87 FR 16886, and March 18, 2022, 
at 87 FR 15496 are reopened. Comments should be received on or before 
June 13, 2022.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/submitcomments.htm).
     Send an email to [email protected]. Please include 
File Number S7-03-22 for the Advisers Act Proposing Release and File 
Number S7-02-22 for the Exchange Act Proposing Release on the subject 
line.

Paper Comments

     Send paper comments to Vanessa A. Countryman, Secretary, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-1090.

All submissions should refer to the file number for the specific action 
being commented upon. 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 of 
submission. The Commission will post all comments on the Commission's 
website (https://www.sec.gov/rules/proposed.shtml). Comments are also 
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 a.m. and 3 p.m. Operating 
conditions may limit access to the Commission's Public Reference Room. 
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.
    Studies, memoranda, or other substantive items may be added by the 
Commission or staff to the comment file during this rulemaking. A 
notification of the inclusion in the comment file of any such materials 
will be made available on our website. To ensure direct electronic 
receipt of such notifications, sign up through the ``Stay Connected'' 
option at www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: For questions about File Number S7-03-
22 (Advisers Act Proposing Release), contact Robert Holowka, Attorney-
Adviser; Thomas Strumpf, Senior Counsel; Melissa Roverts Harke, Senior 
Special Counsel; Christine Schleppegrell, Acting Branch Chief; Michael 
C. Neus, Private Funds Attorney Fellow, Investment Adviser Regulation 
Office; or Marc Mehrespand, Branch Chief, Chief Counsel's Office, at 
(202) 551-6787 or [email protected], Division of Investment Management, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-8549.
    For questions about File Number S7-02-22 (Exchange Act Proposing 
Release), contact, for Regulation ATS: Tyler Raimo, Assistant Director, 
at (202) 551-6227; Matthew Cursio, Special Counsel, at (202) 551-5748; 
David Garcia, Special Counsel, at (202) 551-5681; Megan Mitchell, 
Special Counsel, at (202) 551-4887; Amir Katz, Special Counsel, at 
(202) 551-7653; and Joanne Kim, Attorney Advisor, at (202) 551-4393; 
and for Regulation SCI: David Liu, Special Counsel, at (312) 353-6265 
and Sara Hawkins, Special Counsel, at (202) 551-5523, Office of Market 
Supervision, Division of Trading and Markets, Securities and Exchange 
Commission, 100 F Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: 

I. Private Fund Advisers; Documentation of Registered Investment 
Adviser Compliance Reviews

    The Commission has requested comment on the Advisers Act Proposing 
Release,\1\ which proposes new rules and amendments to existing rules 
under the Advisers Act. The proposed rules would require registered 
investment advisers to private funds to provide transparency to their 
investors regarding the full cost of investing in private funds and the 
performance of such private funds. The proposed rules also would 
require a registered private fund adviser to obtain an annual financial 
statement audit of each private fund it advises and, in connection with 
an adviser-led secondary transaction, a fairness opinion from an 
independent opinion provider. In addition, the proposed rules would 
prohibit all private fund advisers, including those that are not 
registered with the Commission, from engaging in certain sales 
practices, conflicts of interest, and compensation schemes that are 
contrary to the public interest and the protection of investors. All 
private fund advisers would also be prohibited from providing 
preferential treatment to certain investors in a private fund, unless 
the adviser discloses such treatment to other current and prospective 
investors. The proposed rules include corresponding amendments to the 
Advisers Act books and records rule to facilitate compliance with these 
proposed new rules and assist our examination staff. Finally, the 
proposed rules would amend the Advisers Act compliance rule, which 
would affect all registered investment advisers, to better enable our 
staff to conduct examinations. The original comment period for the 
Advisers Act Proposing Release ended on April 25, 2022.
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    \1\ See Advisers Act Release No. 5955 (February 9, 2022), 87 FR 
16886 (March 24, 2022).
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II. Amendments Regarding the Definition of `Exchange' and Alternative 
Trading Systems (ATSs) That Trade U.S. Treasury and Agency Securities, 
National Market System (NMS) Stocks, and Other Securities

    The Commission has requested comment on the Exchange Act

[[Page 29061]]

Proposing Release,\2\ which proposes amendments to its rules under the 
Exchange Act that would amend 17 CFR 240.3b-16 under the Exchange Act, 
which defines certain terms used in the statutory definition of 
``exchange'' under Section 3(a)(1) of the Exchange Act to include 
systems that offer the use of non-firm trading interest and 
communication protocols to bring together buyers and sellers of 
securities. In addition, the Exchange Act Proposing Release is re-
proposing amendments to the Commission's regulations under the Exchange 
Act that were initially proposed in September 2020 for ATSs to take 
into consideration systems that may fall within the definition of 
exchange because of the proposed amendments in the Exchange Act 
Proposing Release and operate as an ATS. In the Exchange Act Proposing 
Release, the Commission is also re-proposing, with certain revisions, 
amendments to its regulations for Government Securities ATSs. In the 
Exchange Act Proposing Release, the Commission is proposing to amend 
Form ATS-N for NMS Stock ATSs, which would require existing NMS Stock 
ATSs to amend their existing disclosures. In addition, in the Exchange 
Act Proposing Release the Commission is proposing to amend the fair 
access rule for ATSs. The Commission is also proposing to require 
electronic filing of and to modernize Form ATS-R and Form ATS, which 
would require existing Form ATS filers to amend their existing 
disclosures. Further, in the Exchange Act Proposing Release the 
Commission is re-proposing amendments to its regulations regarding 
systems compliance and integrity to apply to ATSs that meet certain 
volume thresholds in U.S. Treasury Securities or in Agency Securities. 
The original comment period for the Exchange Act Proposing Release 
ended on April 18, 2022.
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    \2\ See Securities Exchange Act Release No. 94062 (January 26, 
2022), 87 FR 15496 (March 18, 2022).
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III. Reopening of Comment Periods

    The Commission believes that providing the public additional time 
to consider and comment on the matters addressed in the Advisers Act 
Proposing Release and the Exchange Act Proposing Release would benefit 
the Commission in its consideration of final rules. Therefore, the 
Commission is reopening the comment periods for Release No. IA-5955 
``Private Fund Advisers; Documentation of Registered Investment Adviser 
Compliance Reviews'' and Release No. 34-94062 ``Amendments Regarding 
the Definition of `Exchange' and Alternative Trading Systems (ATSs) 
That Trade U.S. Treasury and Agency Securities, National Market System 
(NMS) Stocks, and Other Securities'' until June 13, 2022.

    By the Commission.

    Dated: May 9, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10195 Filed 5-11-22; 8:45 am]
BILLING CODE 8011-01-P