30 Day Notice

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Federal Register / Vol. 87, No. 137 / Tuesday, July 19, 2022 / Notices

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–779; OMB Control No.
3235–0732]

Submission for OMB Review;
Comment Request: Extension:
Business Conduct Standards for
Security-Based Swap Dealers and
Major Security-Based Swap
Participants
Upon Written Request, Copies Available
From: U.S. Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736

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Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Business Conduct Standards for
Security-Based Swap Dealers and Major
Security-Based Swap Participants.1 (17
CFR 240.3a67–10, 240.3a71–
3,240.3a71–6, 240.15Fh–1 through
15Fh–6 and 240.15Fk–1), under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.).
In 2010, Congress passed the DoddFrank Act, establishing a comprehensive
framework for regulating the over-thecounter swaps markets. As required by
Title VII of the Dodd-Frank Act, new
section 15F(h) of the Exchange Act
established business conduct standards
for security-based swap (‘‘SBS’’) Dealers
and Major SBS Participants
(‘‘collectively ‘‘SBS Entities’’) in their
dealings with counterparties, including
special entities. In 2016, in order to
implement the Dodd-Frank Act, the
Commission adopted the BCS Rules for
SBS Dealers and Major SBS
Participants,2 a comprehensive set of
business conduct standards and chief
compliance officer requirements
applicable to SBS Entities, that are
designed to enhance transparency,
facilitate informed customer decisionmaking, and heighten standards of
1 Business Conduct Standards for Security-Based
Swap Dealers and Major Security-Based Swap
Participants, Exchange Act Release 77617 (Apr. 14,
2016), 81 FR 29959 (May 13, 2016). See also
Business Conduct Standards for Security-Based
Swap Dealers and Major Security-Based Swap
Participants; Correction, Exchange Act Release
77617A (May 19, 2016), 81 FR 32643 (May 24,
2016). (together, ‘the Business Conduct Rules for
SBSDs and MSBSPs’’ or ‘‘BCS Rules’’)
2 Id.

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professional conduct to better protect
investors.3
Rules 15Fh–1 through 15Fh–6 and
15Fk–1 require SBS Entities to:
• Verify whether a counterparty is an
eligible contract participant and
whether it is a special entity;
• Disclose to the counterparty
material information about the SBS,
including material risks, characteristics,
incentives and conflicts of interest;
• Provide the counterparty with
information concerning the daily mark
of the SBS;
• Provide the counterparty with
information regarding the ability to
require clearing of the SBS;
• Communicate with counterparties
in a fair and balanced manner based on
principles of fair dealing and good faith;
• Establish a supervisory and
compliance infrastructure; and
• Designate a chief compliance officer
that is required to fulfill the described
duties and provide an annual
compliance report.
The rules also require SBS Dealers to:
• Determine that recommendations
they make regarding SBS are suitable for
their counterparties.
• Establish, maintain and enforce
written policies and procedures
reasonably designed to obtain and retain
a record of the essential facts concerning
each known counterparty that are
necessary to conduct business with such
counterparty; and
• Comply with rules designed to
prevent ‘‘pay-to-play.’’
The rules also define what it means to
‘‘act as an advisor’’ to a special entity,
and require an SBS Dealer who acts as
an advisor to a special entity to:
• Make a reasonable determination
that any security-based swap or trading
strategy involving a security-based swap
recommended by the SBS Dealer is in
the best interests of the special entity
whose identity is known at a reasonably
sufficient time prior to the execution of
the transaction to permit the SBS Dealer
to comply with this obligation; and
• Make reasonable efforts to obtain
such information that the SBS Dealer
considers necessary to make a
reasonable determination that a
3 Commission staff has prepared separate
supporting statements pursuant to the Paperwork
Reduction Act (‘‘PRA’’) regarding final Rules 3a71–
3(c) and 3a71–6, which address the cross-border
application of the business conduct standards and
the availability of substituted compliance. The
Office of Management and Budget (‘‘OMB’’) has
assigned control number 3235–0717 to Rule 3a71–
3(c) and 3235–0715 to Rule 3a71–6. Rule 3a67–
10(d) is a definitional rule and does not have a PRA
burden associated with it. Rules 3a71–3(a), 15Fh–
1 and 15Fh–2(b) and (c) address scope of the rules
and definitions and so do not have PRA burdens
associated with them.

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security-based swap or trading strategy
involving a security-based swap is in
the best interests of the known special
entity.
In addition, the rules require SBS
Entities acting as counterparties to
special entities to reasonably believe
that the counterparty has an
independent representative who meets
the following requirements:
• Has sufficient knowledge to
evaluate the transaction and risks;
• Is not subject to a statutory
disqualification;
• Undertakes a duty to act in the best
interests of the special entity;
• Makes appropriate and timely
disclosures to the special entity of
material information concerning the
security-based swap;
• Evaluates, consistent with any
guidelines provided by the special
entity, the fair pricing and the
appropriateness of the security-based
swap;
• Is independent of the security-based
swap dealer or major security-based
swap participant that is the
counterparty to a proposed securitybased swap.
Under the rules, the special entity’s
independent representative must also be
subject to pay-to-play regulations, and if
the special entity is an ERISA plan, the
independent representative must be an
ERISA fiduciary.
The information that must be
collected pursuant to the BCS Rules is
intended to increase accountability and
transparency in the market. The
information will therefore help establish
a framework that protects investors and
promotes efficiency, competition and
capital formation.
Based on a review of recent data, as
of 2020, the Commission estimates the
number of respondents to be as follows:
44 SBS Dealers, 0 Major SBS
Participants, for a total of 44 ‘‘SBS
Entities’’.4 Further, we estimate that
approximately 41 of these 44 SBS
Entities will be dually registered with
the CFTC as Swap Entities. We also
estimate that there are currently 15,187
security-based swap market participants
of which 11,531 are also swap market
participants. In 2020, there were
approximately 354,814 security-based
swap transactions between an SBS
Dealer and counterparty that is not an
SBS Dealer of which 225,924 were new
and 6,841 amended trades (totaling
232,765). The Commission estimates
there are 329 independent, third-party
representatives and 23 in-house
4 Unless otherwise noted, estimates were derived
from the DTCC–TIW data set (November 2006
through December 2020).

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43083

Federal Register / Vol. 87, No. 137 / Tuesday, July 19, 2022 / Notices
independent representatives.5 We
estimate that there are approximately
11,219 unique SBS Dealer and non-SBSDealer pairs. We have used these
estimates in calculating the hour and
cost burdens for the rule provisions that
Section

Type of burden

15Fh–3(b), (c), (d):
Disclosures—SBS Entities ..............................
15Fh–3(b), (c), (d):
Disclosures—SBS Transactions Between
SBS Dealer and Non-SBSD Counterparty.
15Fh–3(e), (f):
Know Your Counterparty and Recommendations (SBS Dealers).
15Fh–3(g):
Fair and Balanced Communications ...............
15Fh–3(h):
Supervision ......................................................
15Fh–5:
SBS Entities Acting as Counterparties to Special Entities.
15Fh–5:
SBS Entities Acting as Counterparties to Special Entities.
15Fh–6:
Political Contributions ......................................
15Fk–1:
Chief Compliance Officer ................................

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[FR Doc. 2022–15315 Filed 7–18–22; 8:45 am]
BILLING CODE 8011–01–P

Ongoing
annual burden

Ongoing
annual burden

Industry-wide
annual burden

Industry-wide
annual burden

Hours

Cost

Hours

Cost

44

4,120

$0

181,280

$0

Reporting ...............

232,765

1

0

232,765

0

Reporting ...............

44

128

0

5,610

0

Reporting ...............

44

2

3,600

88

158,400

Reporting ...............

44

540

4,800

23,760

211,200

Reporting ...............

44

352

0

15,488

0

Third-Party Disclosure.

44

352

0

15,488

0

Reporting ...............

44

1

25,600

44

1,126,400

Reporting ...............

44

273

7,200

12,012

316,800

................................

..........................

..........................

..........................

486,535

1,812,800

An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent by
August 18, 2022 to (i) www.reginfo.gov/
public/do/PRAMain and (ii) David
Bottom, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549, or by
sending an email to: PRA_Mailbox@
sec.gov.
Dated: July 13, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.

Respondents

the BCS Rules, as described above, is
approximately 486,535 hours and
$1,812,800 calculated as follows:

Reporting ...............

Total ..........................................................

5 See,

we anticipate have a ‘‘collection of
information’’ burden within the
meaning of the PRA.
The Commission estimates that the
aggregate burden of the ongoing
reporting and disclosures required by

SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34648; 812–15319]

Quaker Investment Trust and
Community Capital Management, LLC
July 13, 2022.

Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:

Notice of an application under section
6(c) of the Investment Company Act of
1940 (‘‘Act’’) for an exemption from
section 15(a) of the Act, and rule 18f–
2 under the Act, as well as from certain
disclosure requirements in rule 20a–1
under the Act, Item 19(a)(3) of Form N–
1A, Items 22(c)(1)(ii), 22(c)(1)(iii),
22(c)(8) and 22(c)(9) of Schedule 14A
under the Securities Exchange Act of
1934, and Sections 6–07(2)(a), (b), and
(c) of Regulation S–X (‘‘Disclosure
Requirements’’).
Summary of Application: The
requested exemption would permit
Applicants to enter into and materially
amend subadvisory agreements with
certain subadvisors without shareholder
approval and grant relief from the
Disclosure Requirements as they relate
to fees paid to the subadvisors.

Applicants: Quaker Investment Trust
and Community Capital Management,
LLC.
Filing Dates: The application was
filed on April 14, 2022, and amended on
June 10, 2022 and June 29, 2022.
Hearing or Notification of Hearing: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
[email protected] and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on August 8, 2022, and
should be accompanied by proof of
service on the 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
emailing the Commission’s Secretary.

Exchange Act Rule 15Fh–5.

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