The Securities and Exchange Commission staff has granted no-action relief under the trade confirmation rule (Securities Exchange Act of 1934 Rule 10b-10) and the investment adviser recordkeeping rule relative to trades for customers (Investment Adviser Act of 1940 Rule 204-2(b)(3)) to Omgeo LLC Omgeo Central Trade Manager (Omgeo CTM) provides investment advisers with transaction information through a browser inquiry function in a form that can be viewed in three or fewer computer screens or through an electronic message from Omgeo CTM that contains all of the required Rule l0b-10 information, and that can be downloaded and printed. Omgeo requested relief from Rule l0b-10 for broker-dealers using Omgeo CTM with respect to (i) certain trade information provided by Omgeo CTM to investment advisers; and (ii) the manner in which that information is provided. Additionally, Omgeo requested relief from Rule 204 with respect to an SEC registered investment manager treating printed or downloaded Trade Components Information (TCI) as (i) an original communication; and (ii) a confirmation, without receiving a confirmation meeting the requirements of Rule l0b-10 directly from the broker-dealer.
The SEC staff granted no-action relief based on the following requirements: (i) the broker-dealer will, on request, provide all of the information required by Rule l0b-10 to the beneficial owner of the account whose securities are the subject of a trade in a manner agreed upon by the broker-dealer and the beneficial owner, either when requested or on a regular basis; and (ii) until such time as a third party interaction feature is available in Omgeo CTM, the broker-dealer will use Omgeo CTM to satisfy the requirements of Rule l0b-10 only for trades settled delivery versus payment or receive versus payment.
As regards Rule 204, the SEC staff granted no-action relief to any registered investment adviser that participates in the Omgeo CTM system provided that the investment adviser downloads or prints a paper copy of the TCI. The SECnoted that, in this case, the TCI: (i) will contain all of the information required under Rule 10b-10; and (ii) if accessed through a browser inquiry, will be in a form that can be viewed in three or fewer computer screens. http://www.sec.gov/divisions/marketreg/mr-noaction.shtml