[Federal Register Volume 80, Number 126 (Wednesday, July 1, 2015)]
[Rules and Regulations]
[Page 37538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16048]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 275
[Release No. IA-4129; File No. S7-18-09]
RIN 3235-AK39
Political Contributions by Certain Investment Advisers: Ban on
Third-Party Solicitation; Notice of Compliance Date
AGENCY: Securities and Exchange Commission.
ACTION: Notice of compliance date.
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SUMMARY: The Securities and Exchange Commission (``Commission'' or
``SEC'') previously set and extended the compliance date for the ban on
third-party solicitation until nine months after the compliance date of
a final rule adopted by the Commission by which municipal advisors must
register under the Securities Exchange Act of 1934 (``final municipal
advisor registration rule'') and indicated that notice with respect
thereto would be provided in the Federal Register. This notice of
compliance date is being published to provide the notice of the
compliance date.
DATES: The compliance date for the ban on third-party solicitation
under 17 CFR 275.206(4)-5 [rule 206(4)-5] is July 31, 2015.
FOR FURTHER INFORMATION CONTACT: Sirimal R. Mukerjee, Senior Counsel,
or Sarah A. Buescher, Branch Chief, at (202) 551-6787 or
IArules@sec.gov, Investment Adviser Regulation Office, Division of
Investment Management, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-8549.
SUPPLEMENTARY INFORMATION: The Commission adopted rule 206(4)-5 [17 CFR
275.206(4)-5] (``Pay to Play Rule'') under the Investment Advisers Act
of 1940 [15 U.S.C. 80b] to prohibit an investment adviser from
providing advisory services for compensation to a government client for
two years after the adviser or certain of its executives or employees
(``covered associates'') make a contribution to certain elected
officials or candidates.\1\ Rule 206(4)-5 also prohibits an adviser and
its covered associates from providing or agreeing to provide, directly
or indirectly, payment to any third-party for a solicitation of
advisory business from any government entity on behalf of such adviser,
unless such third-party is a ``regulated person'' (``third-party
solicitor ban'').\2\ Rule 206(4)-5 defines a ``regulated person'' as an
SEC-registered investment adviser,\3\ a registered broker or dealer
subject to pay to play restrictions adopted by a registered national
securities association,\4\ or a registered municipal advisor subject to
pay to play restrictions adopted by the Municipal Securities Rulemaking
Board (``MSRB'').\5\ In addition, the Commission must find, by order,
that these pay to play rules: (i) Impose substantially equivalent or
more stringent restrictions on broker-dealers or municipal advisors
than the Pay to Play Rule imposes on investment advisers; and (ii) are
consistent with the objectives of the Pay to Play Rule.\6\
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\1\ Political Contributions by Certain Investment Advisers,
Investment Advisers Act Rel. No. 3043 (July 1, 2010) [75 FR 41018
(July 14, 2010)] (``Pay to Play Release'').
\2\ See id. at Section II.B.2.(b). See also 17 CFR 275.206(4)-
5(a)(2)(i)(A).
\3\ See 17 CFR 275.206(4)-5(f)(9)(i).
\4\ See 17 CFR 275.206(4)-5(f)(9)(ii). While rule 206(4)-5
applies to any registered national securities association, the
Financial Industry Regulatory Authority (``FINRA'') is currently the
only registered national securities association under section 19(a)
of the Securities Exchange Act of 1934 [15 U.S.C. 78s(b)]. As such,
for convenience, we will refer directly to FINRA in this notice of
compliance date when describing the exception for certain broker-
dealers from the third-party solicitor ban.
\5\ See 17 CFR 275.206(4)-5(f)(9)(iii). On June 22, 2011, the
Commission amended the Pay to Play Rule to add municipal advisors to
the definition of ``regulated persons.'' See Rules Implementing
Amendments to the Investment Advisers Act of 1940, Investment
Advisers Act Rel. No. 3221 (June 22, 2011) [76 FR 42950 (July 19,
2011)] (``Municipal Advisor Addition Release''). The Commission
adopted final rules with respect to the registration of municipal
advisors on September 20, 2013. See Registration of Municipal
Advisors, Exchange Act Release No. 70462 (Sept. 20, 2013) [78 FR
67468 (Nov. 12, 2013)] (``Municipal Advisor Registration Release'').
\6\ See 17 CFR 275.206(4)-5(f)(9).
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Rule 206(4)-5 became effective on September 13, 2010 and the
compliance date for the third-party solicitor ban was set to September
13, 2011.\7\ When the Commission added municipal advisors to the
definition of regulated person, the Commission also extended the third-
party solicitor ban's compliance date to June 13, 2012.\8\ In the
absence of a final municipal advisor registration rule, the Commission
extended the third-party solicitor ban's compliance date from June 13,
2012 to nine months after the compliance date of the final rule,\9\
which is July 31, 2015.\10\
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\7\ See Pay to Play Release at section III.
\8\ See Municipal Advisor Addition Release at section II.D.1.
\9\ See Political Contributions by Certain Investment Advisers:
Ban on Third-Party Solicitation; Extension of Compliance Date,
Investment Advisers Act Rel. No. 3418 (June 8, 2012) [77 FR 35263
(June 13, 2012)] (``Extension Release'').
\10\ The final date on which a municipal advisor must file a
complete application for registration was October 31, 2014. See
Municipal Advisor Registration Release at section V.
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This notice of compliance date is technical in nature and serves
solely to fulfill the Commission's commitment to provide the notice for
the compliance date it previously set.\11\
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\11\ See the Extension Release.
Dated: June 25, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015-16048 Filed 6-30-15; 8:45 am]
BILLING CODE 8011-01-P