Document ID: SEC-2017-0558-0001
Agency: sec
Document Type: Notice
Title: Orders: Extending a Temporary Exemption from Compliance with Rules under the Securities Exchange Act
Posted Date: 2017-04-06T04:00Z

[Federal Register Volume 82, Number 65 (Thursday, April 6, 2017)]
[Notices]
[Pages 16867-16868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06793]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80359]

Order Extending a Temporary Exemption From Compliance With Rules 
13n-1 to 13n-12 Under the Securities Exchange Act of 1934

March 31, 2017.

I. Introduction

    The Securities and Exchange Commission (``Commission'') is 
extending certain exemptions previously granted in connection with 
requirements applicable to security-based swap data repositories 
(``SDR'').
    The Commission adopted Rules 13n-1 to 13n-12 (the ``SDR Rules'') 
under the Securities Exchange Act of 1934 (``Exchange Act'') on 
February 15, 2015, with a compliance date of March 18, 2016.\1\ 
Following the adoption of the SDR Rules, the Commission, pursuant to 
its authority in Section 36 of the Exchange Act, granted several 
temporary exemptions \2\ from compliance with the SDR Rules and also 
extended exemptions from the provisions of the Dodd-Frank Act set forth 
in a Commission order providing temporary exemptions and other 
temporary relief from compliance with certain provisions of the 
Exchange Act concerning security-based swaps \3\

[[Page 16868]]

(``SDR Relief''). The most current temporary extension expires on April 
1, 2017.\4\ These actions have provided the Commission with additional 
time to review and consider the applications for registration as an SDR 
(the ``Pending SDR Applications'') submitted by DTCC Data Repository 
(U.S.) LLC (``DDR'') and ICE Trade Vault, LLC (``ICE Trade Vault'') \5\ 
Commission staff understands that DDR and ICE Trade Vault (collectively 
the ``SDR Applicants'') intend to file amendments to their respective 
applications for registration as SDRs.
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    \1\ See Exchange Act Release No. 74246 (Feb. 11, 2015), 80 FR 
14438 (Mar. 19, 2015).
    \2\ See infra note 4.
    \3\ See Temporary Exemptions and Other Temporary Relief, 
Together with Information on Compliance Dates for New Provisions of 
the Exchange Act Applicable to Security-Based Swaps, Exchange Act 
Release No. 64678 (June 15, 2011), 76 FR 36287 (June 22, 2011) (the 
``DFA Effective Date Order''). With respect to Commission regulation 
of SDRs, the DFA Effective Date Order provided exemptions from 
Exchange Act Sections 13(n)(5)(D)(i), 13(n)(5)(F), 13(n)(5)(G), 
13(n)(5)(H), 13(n)(7)(A), 13(n)(7)(B), and 13(n)(7)(C). Each 
exemption provided by the DFA Effective Date Order will expire on 
the earlier of (1) the date the Commission grants registration to an 
SDR and (2) the earliest compliance date set forth in any of the 
final rules regarding the registration of SDRs. In addition, the 
Commission granted temporary exemptions from Exchange Act Section 
29(b) in connection with the above listed provisions of the Exchange 
Act until such date as the Commission specifies.
    \4\ On March 18, 2016, the Commission granted a temporary 
exemption from the SDR Rules until June 30, 2016. See Exchange Act 
Release No. 34-77400 (Mar. 18, 2016), 81 FR 15599 (Mar. 23, 2016). 
On June 30, 2016, the Commission extended the temporary exemption 
until October 5, 2016. See Exchange Act Release No. 34-78215 (June 
30, 2016), 81 FR 44337 (July 7, 2016), corrected at Exchange Act 
Release No. 34-78215A (June 30, 2016), 81 FR 45336 (July 13, 2016). 
On September 29, 2016, the Commission again extended the temporary 
exemption until April 1, 2017. See Exchange Act Release No. 34-78975 
(Sept. 29, 2016), 81 FR 69122 (Oct. 5, 2016).
    \5\ See Exchange Act Release No. 77699 (Apr. 22, 2016), 81 FR 
25475 (Apr. 28, 2016) (``ICE Trade Vault Notice'') and Exchange Act 
Release No. 78216 (June 30, 2016), 81 FR 44379 (July 7, 2016) (``DDR 
Notice''). During the same period, the Commission amended the SDR 
Rules on August 29, 2016 to require SDRs to make data available to 
regulators and other authorities to enable them to share information 
and more effectively oversee the security-based swap market. See 
Exchange Act Release No. 78716 (Aug. 29, 2016), 81 FR 60585 (Sep. 2, 
2016) (``Data Access Rule'').
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    To provide the SDR Applicants additional time to file their amended 
applications, and for the Commission to review and consider any such 
amended applications, the Commission is extending the temporary 
exemption from compliance with the SDR Rules \6\ and the SDR Relief 
until the later of (i) May 1, 2017 or (ii) for any SDR Applicant \7\ 
that files with the Commission prior to May 1, 2017 amendments to its 
Pending SDR Application, September 29, 2017. Given the amount of time 
that has elapsed since the adoption of the SDR Rules, the Commission 
currently does not intend to provide any further extensions to the 
exemption and SDR Relief.
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    \6\ This relief applies to the SDR Rules as amended to include 
the Data Access Rule.
    \7\ Any extension of the exemption and SDR Relief provided to an 
SDR Applicant pursuant to this order shall be applicable to any 
affiliate of the SDR Applicant in the event that any affiliate 
engages in activity related to SDR functions prior to the 
applicant's registration. See, e.g., Exhibit F to DDR's Form SDR 
application and non-confidential exhibits thereto are available at 
https://www.sec.gov/rules/other/2016/dtcc-data-repository-form-sdr.htm.
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II. Discussion

    The SDR Rules Release states that SDRs were required to be in 
compliance with the SDR Rules by March 18, 2016.\8\ The SDR Rules 
Release also notes that, absent an exemption, any SDR must be 
registered with the Commission and in compliance with the federal 
securities laws and the rules and regulations thereunder (including the 
applicable Dodd-Frank Act provisions and all of the SDR Rules) by that 
date.
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    \8\ See Exchange Act Release No. 74246 (Feb. 11, 2015), 80 FR 
14438 (Mar. 19, 2015) (``SDR Rules Release'').
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    ICE Trade Vault filed with the Commission a Form SDR seeking 
registration as an SDR on March 29, 2016, and amended that form on 
April 18, 2016. The Commission's notice of ICE Trade Vault's 
application for registration as an SDR was published in the Federal 
Register on April 28, 2016.\9\ The comment period closed on May 31, 
2016. The Commission received six comment letters on the ICE Trade 
Vault application.
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    \9\ See ICE Trade Vault Notice.
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    DDR filed with the Commission a Form SDR seeking registration as an 
SDR on April 6, 2016 and amended that form on April 25, 2016. The 
Commission's notice of DDR's application for registration as an SDR was 
published in the Federal Register on July 7, 2016.\10\ The comment 
period closed on August 8, 2016. The Commission received four comment 
letters on the DDR application.
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    \10\ See DDR Notice.
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    The SDR Applicants each have indicated to Commission staff that 
they intend to file amendments to the Pending SDR Applications. These 
amendments would provide revised information about the manner in which 
DDR and ICE Trade Vault propose to operate as SDRs.
    The Commission urges the SDR Applicants to finalize and file 
expeditiously any amendments to the Pending SDR Applications by May 1, 
2017, in which case the exemption and the SDR Relief will extend to 
September 29, 2017.\11\
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    \11\ As the Commission explained in the SDR Rules Release, an 
SDR application ``must include information sufficient to allow the 
Commission to assess the applicant's ability to comply with the 
federal securities laws and the rules and regulations thereunder.'' 
See SDR Rules Release, 80 FR at 14465 n.313 (also noting that 
``General Instruction 7 to Form SDR, as adopted, provides that `[a] 
form that is not prepared and executed in compliance with applicable 
requirements may be deemed as not acceptable for filing.' . . . If 
the application is not complete, then the application will not be 
deemed to have been filed for the Commission's review'').
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    Subject to certain exceptions, Section 36 of the Exchange Act 
authorizes the Commission, by rule, regulation, or order, to exempt, 
either conditionally or unconditionally, any person, security, or 
transaction, or any class or classes of persons, securities, or 
transactions, from any provision or provisions of the Exchange Act or 
any rule or regulation thereunder, to the extent that such exemption is 
necessary or appropriate in the public interest, and is consistent with 
the protection of investors.\12\ The Commission finds that it is 
necessary and appropriate in the public interest, and consistent with 
the protection of investors, to grant a temporary exemption from 
compliance with the SDR Rules and extend the SDR Relief. The comment 
letters raise important matters for the Commission's consideration. In 
addition, this is the first opportunity for the Commission to evaluate 
the policies and procedures of an SDR, which will have significant 
consequences for the Commission's regulatory regime for security-based 
swaps and the robustness of transaction reporting. In this regard, 
these SDR applications raise important issues of first impression for 
the Commission's consideration. The Commission therefore believes that 
it is necessary and appropriate in the public interest, and is 
consistent with the protection of investors, to provide additional time 
for the Commission to consider the Pending SDR Applications, including 
comments received and any possible amendments to the Pending SDR 
Applications.
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    \12\ See 15 U.S.C. 78mm.
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III. Conclusion

    Accordingly, the Commission hereby grants, pursuant to Section 36 
of the Exchange Act, a temporary exemption from compliance with the SDR 
Rules and an extension of the SDR Relief until the later of (i) May 1, 
2017 or (ii) for any SDR Applicant that files with the Commission prior 
to May 1, 2017 amendments to its Pending SDR Application, September 29, 
2017.

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017-06793 Filed 4-5-17; 8:45 am]
BILLING CODE 8011-01-P