Document ID: SEC-2015-0904-0001
Agency: sec
Document Type: Notice
Title: Applications and Temporary Orders: UBS AG, et al.
Posted Date: 2015-05-27T04:00Z

[Federal Register Volume 80, Number 101 (Wednesday, May 27, 2015)]
[Notices]
[Pages 30297-30301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12754]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31612; File No. 812-14465]

UBS AG, et al.; Notice of Application and Temporary Order

May 20, 2015.
AGENCY: Securities and Exchange Commission (``Commission'')

ACTION: Temporary order and notice of application for a permanent order 
under section 9(c) of the Investment Company Act of 1940 (``Act'').

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Summary of Application: Applicants have received a temporary order 
(``Temporary Order'') exempting them from section 9(a) of the Act, with 
respect to a guilty plea entered on May 20, 2015, by UBS AG (``UBS AG'' 
or the ``Settling Firm'') in the United States District Court for the 
District of Connecticut (the ``District Court'') in connection with a 
plea agreement (``Plea Agreement'') between the Settling Firm and the 
United States Department of Justice (``DOJ''), until the Commission 
takes final action on an application for a permanent order (the 
``Permanent Order,'' and with the Temporary Order, the ``Orders''). 
Applicants also have applied for a Permanent Order.

Applicants: UBS AG (``UBS AG'' or the ``Settling Firm''), UBS IB Co-
Investment 2001 GP Limited (``ESC GP''), UBS Alternative and 
Quantitative Investments LLC (``UBS Alternative''), UBS O'Connor LLC 
(``UBS O'Connor''), UBS Global Asset Management (Americas) Inc. (``UBS 
Global AM Americas''), and UBS Global Asset Management (US) Inc. (``UBS 
Global AM US'') (each an ``Applicant'' and together, the 
``Applicants'').

Filing Date: The application was filed on May 20, 2015.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving Applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on June 15, 2015, and should be accompanied by proof of service on 
Applicants, in the form of an affidavit, or for lawyers, a certificate 
of service. Pursuant to rule 0-5 under the Act, hearing requests should 
state the nature of the writer's interest, any facts bearing upon the 
desirability of a hearing on the matter, the reason for the request, 
and the issues contested. Persons who wish to be notified of a hearing 
may request notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants: UBS AG and ESC GP: 
c/o UBS Investment Bank, 677 Washington Boulevard, Stamford, CT 06901; 
UBS Alternative: 677 Washington Boulevard, Stamford, CT 06901; UBS 
O'Connor and UBS Global AM Americas: One North Wacker Drive, Chicago, 
IL 60606; UBS Global AM US: 1285 Avenue of the Americas, 12th Floor, 
New York, NY 10019.

FOR FURTHER INFORMATION CONTACT: David Joire, Senior Counsel, Parisa 
Haghshenas, Senior Counsel, or Holly Hunter-Ceci, Branch Chief, at 
(202) 551-6825 (Division of Investment Management, Chief Counsel's 
Office).

SUPPLEMENTARY INFORMATION: The following is a temporary order and a 
summary of the application. The complete application may be obtained 
via the Commission's Web site by searching for the file number, or an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicants' Representations

    1. As set forth below, the Applicants collectively serve as 
investment adviser (as defined in section 2(a)(20) of the Act) to 90 
investment management companies registered under the Act or series 
thereof and to two employees' securities companies (``ESCs''), and as 
principal underwriter (as defined in section 2(a)(29) of the Act) to 
eight open-end registered investment companies under the Act (``Open-
End Funds'') (each a ``Fund,'' collectively, ``Funds'').
    2. UBS AG, a company organized under the laws of Switzerland, is a

[[Page 30298]]

Swiss-based global financial services firm. UBS AG and its subsidiaries 
provide global wealth management, securities, and retail and commercial 
banking services. UBS AG provides investment advisory services to two 
ESCs.\1\ Other than the investment services provided to the two ESCs, 
UBS AG does not engage in, and will not engage in, Fund Service 
Activities (as hereinafter defined) and acknowledges that it may not 
provide Fund Service Activities in reliance on the Orders without 
seeking further relief from the Commission. ESC GP, a company 
established under the laws of the Cayman Islands, is the general 
partner of the two ESCs and provides investment advisory services to 
the ESCs. The ESCs have completed their investment programs and only 
hold cash pending final distribution and liquidation, which will occur 
as soon as practicable. UBS AG and the ESC GP do not receive any 
compensation for the investment advisory services provided to the ESCs. 
ESC GP is a direct, wholly owned subsidiary of UBS AG. The two ESCs 
were established to provide investment opportunities for highly 
compensated key employees, officers, directors and current consultants 
of UBS AG and its affiliates.
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    \1\ In the Matter of UBS AG, et al.; Notice of Application, Inv. 
Co. Act Rel. No. 31019 (Apr. 17, 2014); Order, Inv. Co. Act Rel. No. 
31042 (May 13, 2014).
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    3. UBS Alternative, a Delaware limited liability company, is a 
wholly-owned subsidiary of UBS AG and is registered as an investment 
adviser under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). UBS Alternative is the investment adviser to the following 
funds: A&Q Equity Opportunity Fund LLC, A&Q Event Fund LLC, A&Q 
Alternative Fixed-Income Strategies Fund LLC, A&Q Long/Short Strategies 
Fund LLC, A&Q Multi-Strategy Fund LLC, A&Q Technology Fund LLC, A&Q 
Aggregated Alpha Strategies Fund LLC, and A&Q Masters Fund LLC. UBS 
O'Connor, a Delaware limited liability company, is a wholly-owned 
subsidiary of UBS AG and is registered as an investment adviser under 
the Advisers Act. UBS O'Connor is the investment adviser to the 
O'Connor Equus fund. UBS Global AM US and UBS Global AM Americas are 
corporations organized under the laws of Delaware. UBS Global AM 
Americas is registered as an investment adviser under the Advisers Act. 
UBS Global AM US is registered under the Securities Exchange Act of 
1934 (the ``Exchange Act'') as a broker-dealer. UBS Global AM US and 
UBS Global AM Americas are each indirect, wholly owned subsidiaries of 
UBS AG. UBS Global AM Americas provides investment advisory services to 
the UBS Managed Municipal Trust, UBS RMA Money Fund Inc., UBS RMA Tax-
Free Fund Inc., Fort Dearborn Income Securities Inc., Global High 
Income Fund Inc., Managed High Yield Plus Fund Inc., Strategic Global 
Income Fund, Inc., UBS Funds, UBS Investment Trust, UBS Money Series, 
UBS PACE Select Advisors Trust, UBS Relationship Funds, SMA 
Relationship Trust, Master Trust funds and provides sub-advisory 
services to the Curian Variable Series Trust, EQ Advisors Trust, 
Lincoln Variable Insurance Products Trust, MFS Series Trust XIII, 
Nationwide Mutual Funds Series, Pacific Life Funds, Pacific Select 
Fund, and the VALIC Company II. UBS Global AM US serves as principal 
underwriter to the UBS Investment Trust, UBS Money Series, UBS Managed 
Municipal Trust, UBS RMA Money Fund, Inc., UBS RMA Tax-Free Fund, Inc., 
UBS PACE Select Advisors Trust, UBS Funds, and the SMA Relationship 
Trust. While no existing company of which the Settling Firm is an 
``affiliated person'' within the meaning of section 2(a)(3) of the Act 
(``Affiliated Person'') (other than the Applicants) currently serves as 
an investment adviser or depositor of any investment company registered 
under the Act (``RIC''), ESC, or investment company that has elected to 
be treated as a business development company under the Act (``BDC''), 
or principal underwriter for any Open-End Fund, unit investment trust 
registered under the Act (``UIT''), or face-amount certificate company 
registered under the Act (``FACC'') (such activities, collectively 
``Fund Service Activities''), Applicants request that any relief 
granted by the Commission pursuant to the application also apply to any 
existing company of which the Settling Firm is an Affiliated Person and 
to any other company of which the Settling Firm may become an 
Affiliated Person in the future (together with the Applicants, the 
``Covered Persons'') with respect to any activity contemplated by 
section 9(a) of the Act.\2\
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    \2\ The Applicants and other Covered Persons may, if the Orders 
are granted, in the future act in any of the capacities contemplated 
by section 9(a) of the Act subject to the applicable conditions of 
the Orders.
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    4. On December 18, 2012, the Criminal Division, Fraud Section 
(``DOJ Criminal Division'') of the DOJ and the Settling Firm entered 
into a Non-Prosecution Agreement (``LIBOR NPA'') related to the LIBOR 
Conduct, described and defined below.
    5. After identifying certain foreign exchange (``FX'') issues 
resulting from an internal review, the Settling Firm notified the DOJ 
Criminal Division (as well as the Antitrust Division of the DOJ and 
other authorities) that it had identified evidence of potential FX 
market trading coordination and thereafter provided extensive 
cooperation to the DOJ Criminal Division and other relevant authorities 
in connection with investigations into FX-related conduct. The DOJ 
Criminal Division determined that the Settling Firm had breached the 
LIBOR NPA. Relevant considerations in reaching that determination 
included certain conduct, namely certain employees engaging in 
fraudulent and deceptive currency trading and sales practices in 
conducting certain FX market transactions with customers via telephone, 
email, and/or electronic chat, to the detriment of UBS AG's customers, 
and colluding with other participants in certain FX markets (the ``FX 
Conduct'').
    6. Pursuant to the Plea Agreement, entered into on May 20, 2015, by 
the Settling Firm and the DOJ Criminal Division, the Settling Firm 
entered a plea of guilty (the ``Guilty Plea'') on May 20, 2015 in the 
District Court to the offense charged in the one-count criminal 
Information filed in District Court on May 20, 2015 (the 
``Information''). The Information charges that between approximately 
2001 and in or about 2010, the Settling Firm devised and engaged in a 
scheme to defraud counterparties to interest rate derivatives 
transactions by secretly manipulating benchmark interest rates to which 
the profitability of those transactions was tied (the ``LIBOR 
Conduct''). Specifically, the Information charges that the Settling 
Firm committed wire fraud in furtherance of that scheme in violation of 
Title 18, United States Code, Sections, 1343 and 2 on or about June 29, 
2009 by transmitting or causing the transmission of certain electronic 
communications.
    7. Pursuant to the Plea Agreement, the Settling Firm agreed to, 
among other things, a fine of $203 million and a term of probation of 
three years. The Applicants expect that the District Court will enter a 
judgment against the Settling Firm (the ``Judgment'') that will require 
remedies that are materially the same as set forth in the Plea 
Agreement.
    8. The Settling Firm has entered into settlements with several 
other authorities related to the FX Conduct and has agreed to a number 
of undertakings to address the conduct. On November 12, 2014, the 
Settling Firm

[[Page 30299]]

reached a settlement with the U.S. Commodity Futures Trading Commission 
(``CFTC'') to resolve certain findings by the CFTC (the ``CFTC Order'') 
and with the U.K. Financial Conduct Authority (``FCA'') to resolve 
certain findings by the FCA (the ``FCA Order''). On November 11, 2014, 
the Swiss Financial Market Supervisory Authority (``FINMA'') issued an 
order concluding its formal proceedings with respect to the FX Conduct 
and precious metals (``PM'') trading (``FINMA Order''). Additionally, 
on May 20, 2015, the Board of Governors of the Federal Reserve System 
(``Fed'') and the State of Connecticut Department of Banking (``CT 
DOB'') issued a cease and desist order and imposed a civil money 
penalty upon consent of the Settling Firm related to the FX Conduct 
(the ``Fed-CTDOB Order'').

Applicants' Legal Analysis

    1. Section 9(a)(1) of the Act provides, in pertinent part, that a 
person may not serve or act as an investment adviser or depositor of 
any registered investment company or a principal underwriter for any 
registered open-end investment company, registered unit investment 
trust, or registered face-amount certificate company, if such person 
within ten years has been convicted of any felony or misdemeanor, 
including those arising out of such person's conduct as a bank or an 
Affiliated Person of a bank. Section 2(a)(10) of the Act defines the 
term ``convicted'' to include a plea of guilty. Section 9(a)(3) of the 
Act extends the prohibitions of section 9(a)(1) to a company any 
affiliated person of which has been disqualified under the provisions 
of section 9(a)(1). Section 2(a)(3) of the Act defines ``affiliated 
person'' to include, among others, any person directly or indirectly 
controlling, controlled by, or under common control with, the other 
person. The Settling Firm is an Affiliated Person of each of the other 
Applicants within the meaning of section 2(a)(3) of the Act. Therefore, 
the Applicants state that the Guilty Plea would result in a 
disqualification of each Applicant for ten years under section 9(a)(3) 
were they to act in any of the capacities listed in section 9(a) 
because the Settling Firm would become the subject of a conviction 
described in section 9(a)(1).
    2. Section 9(c) of the Act provides that, upon application, the 
Commission shall by order grant an exemption from the disqualification 
provisions of section 9(a) of the Act, either unconditionally or on an 
appropriate temporary or other conditional basis, to any person if that 
person establishes that: (a) The prohibitions of section 9(a), as 
applied to the person, are unduly or disproportionately severe; or (b) 
the conduct of the person has been such as not to make it against the 
public interest or the protection of investors to grant the exemption. 
Applicants have filed an application pursuant to section 9(c) seeking a 
Temporary Order and a Permanent Order exempting the Applicants and 
other Covered Persons from the disqualification provisions of section 
9(a) of the Act. The Applicants and other Covered Persons may, if the 
relief is granted, in the future act in any of the capacities 
contemplated by section 9(a) of the Act subject to the applicable terms 
and conditions of the Orders.
    3. Applicants believe they meet the standards for exemption 
specified in section 9(c). Applicants assert that (i) the scope of the 
Conduct was limited and did not involve the Adviser Applicants (as 
defined below), Fund Service Activities, or ESCs with respect to which 
the Settling Firm engaged in Fund Service Activities, (ii) application 
of the statutory bar would impose significant hardships on the Funds 
and their shareholders, (iii) the prohibitions of section 9(a), if 
applied to the Adviser Applicants and other Covered Persons, would be 
unduly or disproportionately severe, and (iv) the Conduct did not 
constitute conduct that would make it against the public interest or 
protection of investors to grant the exemption from section 9(a).
    4. Applicants represent that both the LIBOR Conduct and the FX 
Conduct (collectively, the ``Conduct'') did not involve any of the 
Applicants acting as an investment adviser or depositor of any RIC or 
ESC (including as general partner providing investment advisory 
services to the ESCs), or principal underwriter for any Open-End Fund, 
UIT or FACC (``Adviser Applicants''). The Settling Firm is an Adviser 
Applicant only to the extent that it provides investment advisory 
services to the two ESCs. The Conduct similarly did not involve any 
RIC, Open-End Fund, UIT or FACC with respect to which the Applicants 
engaged in Fund Service Activities. No traders identified by the 
Settling Firm or any U.S. or non-U.S. regulatory or enforcement agency 
as being responsible for the Conduct provided Fund Service Activities 
to the Funds. Moreover, the FX Conduct that occurred after the LIBOR 
NPA, and which is the basis for the breach of the LIBOR NPA, was 
extremely limited in scope. The Applicants assert that the LIBOR 
Conduct only involved approximately 14 of the approximately 65,000 
total employees of the Settling Firm and its affiliates; similarly, the 
FX Conduct involved less than ten employees. The Applicants assert that 
of the individuals identified as having been responsible for the FX 
Conduct who remain employees of Settling Firm, except as noted below, 
all have been terminated.\3\ Applicants assert that, in light of the 
limited scope of the Conduct, it would be unduly and disproportionately 
severe to impose a section 9(a) disqualification on the Applicants. 
Applicants further represent that Adviser Applicants did not engage in 
the Conduct, and depriving the Funds of the Fund Service Activities 
performed by an Adviser Applicant because of the activities of the 
Settling Firm would be an unduly severe result, both for the Adviser 
Applicant's financial position and for the shareholders of the Funds, 
who would be deprived of the knowledge and expertise of a key service 
provider. Similarly, Applicants assert that depriving the shareholders 
of the ESCs of the Fund Service Activities of the Settling Firm would 
be unduly severe given that none of the employees of the Settling Firm 
who were responsible for the Conduct provide any Fund Service 
Activities to the ESCs. Applicants assert that the conduct of the 
Applicants has not been such to make it against the public interest or 
the protection of investors to grant the exemption from section 9(a).
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    \3\ All of the individuals at the Settling Firm and its 
affiliates who were identified as being responsible for the LIBOR 
Conduct have either resigned or have had their employment 
terminated.
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    5. Applicants assert that the inability of the Adviser Applicants 
to continue providing such services to the Funds (including as general 
partner providing investment advisory services to ESCs) would result in 
the Funds and their shareholders facing potential hardship, as 
described in greater detail in the application. Applicants assert that 
neither the protection of investors nor the public interest would be 
served by permitting the section 9(a) disqualifications to apply to the 
Adviser Applicants because those disqualifications would deprive the 
Funds of the Fund Service Activities provided by the Adviser Applicants 
(including as general partner providing investment advisory services to 
ESCs) that shareholders expected the Funds would receive when they 
decided to invest in the Funds. Applicants also outline a number of 
other uncertainties, inefficiencies, and expenses that they submit 
would result from the prohibitions of section 9(a) and operate to the 
detriment of the financial

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interests of the Funds and their shareholders.
    6. Applicants assert that if the Adviser Applicants were barred 
under section 9(a) from providing Fund Service Activities to the Funds 
and were unable to obtain the requested exemption, the effect on their 
business and employees would be unduly and disproportionately severe. 
Applicants state that the Adviser Applicants have committed substantial 
capital and other resources to establishing expertise in advising, sub-
advising and underwriting Funds. Applicants further state that 
prohibiting the Adviser Applicants from engaging in Fund Service 
Activities would not only adversely affect their business, but would 
also adversely affect their employees who are involved in these 
activities. Many of these employees could experience significant 
difficulties in finding alternative, fund-related employment. 
Applicants assert that, with respect to the Settling Firm and ESC GP in 
particular, their disqualification from providing advisory or sub-
advisory services to the ESCs would not be in the public interest or in 
furtherance of the protection of investors in light of the fact that 
the ESCs have completed their investment programs and only hold cash 
pending final distribution and liquidation. In addition, Applicants 
assert that if the Applicants or Covered Persons are unable to expand 
their businesses in the future because of the imposition of the section 
9(a) disqualification, it could also have an adverse impact on their 
businesses.
    7. Applicants represent that: (i) None of the current or former 
directors, officers or employees of Applicants (other than certain 
personnel of the Settling Firm who were not involved in any of the 
Applicants' Fund Service Activities) had any knowledge of, or had any 
involvement in, the Conduct; (ii) no current or former employee of any 
Applicant or of any other Covered Person who previously has been or who 
subsequently may be identified by any Applicant, or any U.S. or non-
U.S. regulatory or enforcement agencies as having been responsible for 
the Conduct will have any involvement in providing Fund Service 
Activities on behalf of any Covered Person or will be an officer, 
director, or employee of any Applicant or of any other Covered Person; 
\4\ (iii) no employee of any Applicant or of any other Covered Person 
who was involved in the Conduct had any, or will have any future, 
involvement in the Covered Persons' activities in any capacity 
described in section 9(a) of the Act; and (iv) because the personnel of 
the Applicants (other than certain personnel of the Settling Firm who 
were not involved in any of the Applicants' Fund Service Activities) 
did not have any involvement in the Conduct, shareholders of those 
Funds were not affected any differently than if those Funds had 
received services from any other non-affiliated investment adviser or 
principal underwriter.
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    \4\ However, in the case of three employees, UBS AG has delayed 
taking final action to terminate such employees in order to ensure 
their ongoing cooperation with governmental investigations and/or to 
comply with applicable foreign labor laws. Subject to these issues, 
UBS AG will terminate the employment of all of these employees 
within four months of the entry of the Plea Agreement. Because of 
foreign labor laws, UBS may be required to provide a notice of 
termination which may delay the final termination of employment 
beyond that four month period. In any event, however, the employment 
of the employees will be terminated, and the employees will have no 
further association with UBS or its affiliates in any capacity, no 
later than eight months after the date of the Guilty Plea. The 
Settling Firm will notify the Chief Counsel of the Division of 
Investment Management when all employees of the Settling Firm 
responsible for the FX Conduct have been terminated or are no longer 
employed by the Settling Firm. UBS has already terminated several 
employees of the Settling Firm who engaged in misconduct relating to 
the FX business, including two employees who engaged in collusive 
conduct at other institutions.
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    8. Except as set forth in Section III.E. in the application, 
Applicants have agreed that neither they nor any of the other Covered 
Persons will employ any of the current or former employees of Settling 
Firm or any other Covered Person who previously have been or who 
subsequently may be identified by the Settling Firm or any U.S. or non-
U.S. regulatory or enforcement agency as having been responsible for 
the Conduct without first making a further application to the 
Commission pursuant to section 9(c).
    9. Applicants have also agreed that each Applicant and Covered 
Person will adopt and implement policies and procedures reasonably 
designed to ensure it will comply with the terms and conditions of the 
Orders granted under section 9(c).
    10. In addition, the Settling Firm has agreed to comply in all 
material respects with the material terms and conditions of the Plea 
Agreement, the CFTC Order, the Fed-CTDOB Order, the FCA Order, the 
FINMA Order or any other orders issued by regulatory or enforcement 
agencies addressing the Conduct. Applicants further state that the 
Settling Firm has undertaken certain remedial measures, as described in 
greater detail in the application, related to the Conduct. These 
include certain remedial measures as required by the Plea Agreement, 
the CFTC Order, the Fed-CTDOB Order, the FCA Order, and the FINMA Order 
including (but not limited to) developing and maintaining monitoring 
systems and performing periodic internal audits and annual external 
audits, conducting an audit of specific areas to ensure its culture, 
governance arrangements, policies, procedures, systems, and controls 
are appropriate and adequate to effectively manage specific risks with 
respect to the FX business, and implementing and improving control 
measures to avoid conflicts of interest between client trading and the 
active proprietary trading. Specifically, Applicants represent that the 
Settling Firm has taken a number of steps to enhance its internal 
controls, policies and procedures relating to its FX activities. These 
changes, include, but are not limited to the following: transitioning 
its FX business to adopt principles, systems, and controls more akin to 
that of regulated markets by, for example, introducing continuous 
transaction monitoring and detailed time stamping of orders to ensure 
it can conduct additional forensic analysis of trading activity, 
improving compliance monitoring, intraday supervision and operational 
risk management assessment to more swiftly detect inappropriate 
activity, strengthened front office processes, and enhanced guidance 
and training.
    11. As a result, Applicants submit that the conduct of the 
Applicants has been such as not to make it against the public interest 
or the protection of investors to grant the exemption from Section 
9(a).
    12. To provide further assurance that the exemptive relief being 
requested herein would be consistent with the public interest and the 
protection of the investors, the Applicants agree that they will, as 
soon as reasonably practical, distribute to the board of directors or 
trustees (``Board'') of the Funds (excluding, for this purpose, the 
ESCs) written materials describing the circumstances that led to the 
Guilty Plea, any impact on the Funds and the application. The written 
materials will include an offer to discuss the materials at an in-
person meeting with each Board for which the Applicants provide Fund 
Service Activities, including the directors who are not ``interested 
persons'' of the Funds as defined in section 2(a)(19) of the Act and 
their independent legal counsel as defined in rule 0-1(a)(6) under the 
Act. The Applicants undertake to provide the Funds' Boards with all 
information concerning the Plea Agreement and the application necessary 
for the Funds to fulfill their disclosure and other obligations under 
the federal securities laws and will provide them a copy of

[[Page 30301]]

the Judgment as entered by the District Court.
    13. Applicants state that the Settling Firm and the other 
Applicants have previously received exemptive orders under section 9(c) 
of the Act, as the result of conduct that triggered section 9(a), as 
described in greater detail in the application.

Applicants' Conditions

    Applicants agree that any order granted by the Commission pursuant 
to the application will be subject to the following conditions:
    1. Any temporary exemption granted pursuant to the application 
shall be without prejudice to, and shall not limit the Commission's 
rights in any manner with respect to, any Commission investigation of, 
or administrative proceedings involving or against, Covered Persons, 
including, without limitation, the consideration by the Commission of a 
permanent exemption from section 9(a) of the Act requested pursuant to 
the application or the revocation or removal of any temporary 
exemptions granted under the Act in connection with the application.
    2. Except as set forth in Section III.E. of the application, 
neither the Applicants nor any of the other Covered Persons will employ 
any of the current or former employees of the Settling Firm or any 
other Covered Person who previously have been or who subsequently may 
be identified by the Settling Firm or any U.S. or non-U.S. regulatory 
or enforcement agency as having been responsible for the Conduct, 
without first making a further application to the Commission pursuant 
to section 9(c).
    3. Each Applicant and Covered Person will adopt and implement 
policies and procedures reasonably designed to ensure that it will 
comply with the terms and conditions of the Orders within 60 days of 
the date of the Permanent Order or, with respect to condition 4, such 
date as may be contemplated by the Plea Agreement, or the CFTC Order, 
the Fed-CTDOB Order, the FCA Order, the FINMA Order, or any other 
orders issued by regulatory or enforcement agencies addressing the 
Conduct.
    4. The Settling Firm will comply in all material respects with the 
material terms and conditions of the Plea Agreement, with the material 
terms of the CFTC Order, the Fed-CTDOB Order, the FCA Order, the FINMA 
Order, or any other orders issued by regulatory or enforcement agencies 
addressing the Conduct.
    5. Applicants will provide written notification to the Chief 
Counsel of the Commission's Division of Investment Management with a 
copy to the Chief Counsel of the Commission's Division of Enforcement 
of a material violation of the terms and conditions of any of the 
Orders within 30 days of discovery of the material violation.

Temporary Order

    The Commission has considered the matter and finds that Applicants 
have made the necessary showing to justify granting a temporary 
exemption.
    Accordingly,
    It is hereby ordered, pursuant to section 9(c) of the Act, that the 
Applicants and any other Covered Persons are granted a temporary 
exemption from the provisions of section 9(a), solely with respect to 
the guilty plea entered into pursuant to the Plea Agreement, subject to 
the representations and conditions in the application, from May 20, 
2015 until the Commission takes final action on their application for a 
permanent order.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-12754 Filed 5-26-15; 8:45 am]
 BILLING CODE 8011-01-P