cfr_sections
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63 rows where part_number = 275 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 17:17:5.0.1.1.22.0.36.1 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.0-2 General procedures for serving non-residents. | SEC | [65 FR 57448, Sept. 22, 2000] | (a) General procedures for serving process, pleadings, or other papers on non-resident investment advisers, general partners and managing agents. Under Forms ADV and ADV-NR [17 CFR 279.1 and 279.4], a person may serve process, pleadings, or other papers on a non-resident investment adviser, or on a non-resident general partner or non-resident managing agent of an investment adviser by serving any or all of its appointed agents: (1) A person may serve a non-resident investment adviser, non-resident general partner, or non-resident managing agent by furnishing the Commission with one copy of the process, pleadings, or papers, for each named party, and one additional copy for the Commission's records. (2) If process, pleadings, or other papers are served on the Commission as described in this section, the Secretary of the Commission (Secretary) will promptly forward a copy to each named party by registered or certified mail at that party's last address filed with the Commission. (3) If the Secretary certifies that the Commission was served with process, pleadings, or other papers pursuant to paragraph (a)(1) of this section and forwarded these documents to a named party pursuant to paragraph (a)(2) of this section, this certification constitutes evidence of service upon that party. (b) Definitions. For purposes of this section: (1) Managing agent means any person, including a trustee, who directs or manages, or who participates in directing or managing, the affairs of any unincorporated organization or association other than a partnership. (2) Non-resident means: (i) An individual who resides in any place not subject to the jurisdiction of the United States; (ii) A corporation that is incorporated in or that has its principal office and place of business in any place not subject to the jurisdiction of the United States; and (iii) A partnership or other unincorporated organization or association that has its principal office and place of business in any place not subject to the jurisdiction of the Un… | ||||||
| 17:17:5.0.1.1.22.0.36.10 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203-1 Application for investment adviser registration. | SEC | [65 FR 57448, Sept. 22, 2000; 65 FR 81737, Dec. 27, 2000 as amended at 84 FR 33630, July 12, 2019; 87 FR 38977, June 30, 2022] | (a) Form ADV. (1) To apply for registration with the Commission as an investment adviser, you must complete Form ADV (17 CFR 279.1) by following the instructions in the form and you must file Part 1A of Form ADV, the firm brochure(s) required by Part 2A of Form ADV and Form CRS required by Part 3 of Form ADV electronically with the Investment Adviser Registration Depository (IARD) unless you have received a hardship exemption under § 275.203-3. You are not required to file with the Commission the brochure supplements required by Part 2B of Form ADV. Information on how to file with the IARD is available on the Commission's website at http://www.sec.gov/iard. If you are not required to deliver a brochure or Form CRS to any clients, you are not required to prepare or file a brochure or Form CRS, as applicable, with the Commission. If you are not required to deliver a brochure supplement to any clients for any particular supervised person, you are not required to prepare a brochure supplement for that supervised person. (2)(i) On or after June 30, 2020, the Commission will not accept any initial application for registration as an investment adviser that does not include a Form CRS that satisfies the requirements of Part 3 of Form ADV. (ii) Beginning on May 1, 2020, any initial application for registration as an investment adviser filed prior to June 30, 2020, must include a Form CRS that satisfies the requirements of Part 3 of Form ADV by no later than June 30, 2020. (b) When filed. Each Form ADV is considered filed with the Commission upon acceptance by the IARD. (c) Filing fees. You must pay FINRA (the operator of the IARD) a filing fee. The Commission has approved the amount of the filing fee. No portion of the filing fee is refundable. Your completed application for registration will not be accepted by FINRA, and thus will not be considered filed with the Commission, until you have paid the filing fee. (d) Form ADV-NR —(1) General Requirements. Each non-resident, as defined in 17 CFR 275.0-2(b)(2… | ||||||
| 17:17:5.0.1.1.22.0.36.11 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203-2 Withdrawal from investment adviser registration. | SEC | [65 FR 57449, Sept. 22, 2000] | (a) Form ADV-W. You must file Form ADV-W (17 CFR 279.2) to withdraw from investment adviser registration with the Commission (or to withdraw a pending registration application). (b) Electronic filing. Once you have filed your Form ADV (17 CFR 279.1) (or any amendments to Form ADV) electronically with the Investment Adviser Registration Depository (IARD), any Form ADV-W you file must be filed with the IARD, unless you have received a hardship exemption under § 275.203-3. (c) Effective date—upon filing. Each Form ADV-W filed under this section is effective upon acceptance by the IARD, provided however that your investment adviser registration will continue for a period of sixty days after acceptance solely for the purpose of commencing a proceeding under section 203(e) of the Act (15 U.S.C. 80b-3(e)). (d) Filing fees. You do not have to pay a fee to file Form ADV-W through the IARD. (e) Form ADV-W is a report. Each Form ADV-W required to be filed under this section is a “report” within the meaning of sections 204 and 207 of the Act (15 U.S.C. 80b-4 and 80b-7). | ||||||
| 17:17:5.0.1.1.22.0.36.12 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203-3 Hardship exemptions. | SEC | [65 FR 57449, Sept. 22, 2000; 65 FR 81738, Dec. 27, 2000, as amended at 68 FR 42248, July 17, 2003; 73 FR 4694, Jan. 28, 2008] | This section provides two “hardship exemptions” from the requirement to make Advisers Act filings electronically with the Investment Adviser Registration Depository (IARD). (a) Temporary hardship exemption —(1) Eligibility for exemption. If you are registered or are registering with the Commission as an investment adviser and submit electronic filings on the Investment Adviser Registration Depository (IARD) system, but have unanticipated technical difficulties that prevent you from submitting a filing to the IARD system, you may request a temporary hardship exemption from the requirements of this chapter to file electronically. (2) Application procedures. To request a temporary hardship exemption, you must: (i) File Form ADV-H (17 CFR 279.3) in paper format with no later than one business day after the filing that is the subject of the ADV-H was due; and (ii) Submit the filing that is the subject of the Form ADV-H in electronic format with the IARD no later than seven business days after the filing was due. (3) Effective date—upon filing. The temporary hardship exemption will be granted when you file a completed Form ADV-H. (b) Continuing hardship exemption —(1) Eligibility for exemption. If you are a “small business” (as described in paragraph (b)(5) of this section), you may apply for a continuing hardship exemption. The period of the exemption may be no longer than one year after the date on which you apply for the exemption. (2) Application procedures. To apply for a continuing hardship exemption, you must file Form ADV-H at least ten business days before a filing is due. The Commission will grant or deny your application within ten business days after you file Form ADV-H. (3) Effective date—upon approval. You are not exempt from the electronic filing requirements until and unless the Commission approves your application. If the Commission approves your application, you may submit your filings to FINRA in paper format for the period of time for which the exemption is granted. (4) Crit… | ||||||
| 17:17:5.0.1.1.22.0.36.13 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203(l)-1 Venture capital fund defined. | SEC | [76 FR 39702, July 6, 2011, as amended at 83 FR 1302, Jan. 11, 2018; 85 FR 13741, Mar. 10, 2020] | (a) Venture capital fund defined. For purposes of section 203( l ) of the Act (15 U.S.C. 80b-3( l )), a venture capital fund is any entity described in subparagraph (A), (B), or (C) of section 203(b)(7) of the Act (15 U.S.C. 80b-3(b)(7)) (other than an entity that has elected to be regulated or is regulated as a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53)) or any entity described in subparagraph (A) or (B) of section 203(b)(8) of the Act (15 U.S.C. 80b-3(b)(8)) (other than an entity that has elected to be regulated or is regulated as a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53)) or any private fund that: (1) Represents to investors and potential investors that it pursues a venture capital strategy; (2) Immediately after the acquisition of any asset, other than qualifying investments or short-term holdings, holds no more than 20 percent of the amount of the fund's aggregate capital contributions and uncalled committed capital in assets (other than short-term holdings) that are not qualifying investments, valued at cost or fair value, consistently applied by the fund; (3) Does not borrow, issue debt obligations, provide guarantees or otherwise incur leverage, in excess of 15 percent of the private fund's aggregate capital contributions and uncalled committed capital, and any such borrowing, indebtedness, guarantee or leverage is for a non-renewable term of no longer than 120 calendar days, except that any guarantee by the private fund of a qualifying portfolio company's obligations up to the amount of the value of the private fund's investment in the qualifying portfolio company is not subject to the 120 calendar day limit; (4) Only issues securities the terms of which do not provide a holder with any right, except in extraordinary circumstances, to withdraw, redeem or require the repurchase of such securities but may entitle holders to receive distributions made to all holders pr… | ||||||
| 17:17:5.0.1.1.22.0.36.14 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203(m)-1 Private fund adviser exemption. | SEC | [76 FR 39703, July 6, 2011, as amended at 83 FR 1302, Jan. 11, 2018; 85 FR 13741, Mar. 10, 2020] | (a) United States investment advisers. For purposes of section 203(m) of the Act (15 U.S.C. 80b-3(m)), an investment adviser with its principal office and place of business in the United States is exempt from the requirement to register under section 203 of the Act if the investment adviser: (1) Acts solely as an investment adviser to one or more qualifying private funds; and (2) Manages private fund assets of less than $150 million. (b) Non-United States investment advisers. For purposes of section 203(m) of the Act (15 U.S.C. 80b-3(m)), an investment adviser with its principal office and place of business outside of the United States is exempt from the requirement to register under section 203 of the Act if: (1) The investment adviser has no client that is a United States person except for one or more qualifying private funds; and (2) All assets managed by the investment adviser at a place of business in the United States are solely attributable to private fund assets, the total value of which is less than $150 million. (c) Frequency of Calculations. For purposes of this section, calculate private fund assets annually, in accordance with General Instruction 15 to Form ADV (§ 279.1 of this chapter). (d) Definitions. For purposes of this section: (1) Assets under management means the regulatory assets under management as determined under Item 5.F of Form ADV (§ 279.1 of this chapter), except the following shall be excluded from the definition of assets under management for purposes of this section: (i) The regulatory assets under management attributable to a private fund that is an entity described in subparagraph (A), (B), or (C) of section 203(b)(7) of the Act (15 U.S.C. 80b- 3(b)(7)) (other than an entity that has elected to be regulated or is regulated as a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53)); and (ii) The regulatory assets under management attributable to a private fund that is an entity described in subparagraph (A… | ||||||
| 17:17:5.0.1.1.22.0.36.15 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203A-1 Eligibility for SEC registration; Switching to or from SEC registration. | SEC | [76 FR 43011, July 19, 2011] | (a) Eligibility for SEC registration of mid-sized investment advisers. If you are an investment adviser described in section 203A(a)(2)(B) of the Act (15 U.S.C. 80b-3a(a)(2)(B)): (1) Threshold for SEC registration and registration buffer. You may, but are not required to register with the Commission if you have assets under management of at least $100,000,000 but less than $110,000,000, and you need not withdraw your registration unless you have less than $90,000,000 of assets under management. (2) Exceptions. This paragraph (a) does not apply if: (i) You are an investment adviser to an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a) or to a company which has elected to be a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-54), and has not withdrawn the election; or (ii) You are eligible for an exemption described in § 275.203A-2 of this chapter. (b) Switching to or from SEC registration —(1) State-registered advisers—switching to SEC registration. If you are registered with a state securities authority, you must apply for registration with the Commission within 90 days of filing an annual updating amendment to your Form ADV reporting that you are eligible for SEC registration and are not relying on an exemption from registration under sections 203(l) or 203(m) of the Act (15 U.S.C. 80b-3(l), (m)). (2) SEC-registered advisers—switching to State registration. If you are registered with the Commission and file an annual updating amendment to your Form ADV reporting that you are not eligible for SEC registration and are not relying on an exemption from registration under sections 203(l) or 203(m) of the Act (15 U.S.C. 80b-3(l), (m)), you must file Form ADV-W (17 CFR 279.2) to withdraw your SEC registration within 180 days of your fiscal year end (unless you then are eligible for SEC registration). During this period while you are registered with both the Commission and one or more state securities authorit… | ||||||
| 17:17:5.0.1.1.22.0.36.16 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203A-2 Exemptions from prohibition on Commission registration. | SEC | [62 FR 28133, May 22, 1997, as amended at 63 FR 39715, 39716, July 24, 1998; 65 FR 57450, Sept. 22, 2000; 67 FR 77625, Dec. 18, 2003; 76 FR 43012, July 19, 2011; 89 FR 24712, Apr. 9, 2024] | The prohibition of section 203A(a) of the Act (15 U.S.C. 80b-3a(a)) does not apply to: (a) Pension consultants. (1) An investment adviser that is a “pension consultant,” as defined in this section, with respect to assets of plans having an aggregate value of at least $200,000,000. (2) An investment adviser is a pension consultant, for purposes of paragraph (a) of this section, if the investment adviser provides investment advice to: (i) Any employee benefit plan described in section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”) [29 U.S.C. 1002(3)]; (ii) Any governmental plan described in section 3(32) of ERISA (29 U.S.C. 1002(32)); or (iii) Any church plan described in section 3(33) of ERISA (29 U.S.C. 1002(33)). (3) In determining the aggregate value of assets of plans, include only that portion of a plan's assets for which the investment adviser provided investment advice (including any advice with respect to the selection of an investment adviser to manage such assets). Determine the aggregate value of assets by cumulating the value of assets of plans with respect to which the investment adviser was last employed or retained by contract to provide investment advice during a 12-month period ended within 90 days of filing an annual updating amendment to Form ADV (17 CFR 279.1). (b) Investment advisers controlling, controlled by, or under common control with an investment adviser registered with the Commission. An investment adviser that controls, is controlled by, or is under common control with, an investment adviser eligible to register, and registered with, the Commission (“registered adviser”), provided that the principal office and place of business of the investment adviser is the same as that of the registered adviser. For purposes of this paragraph, control means the power to direct or cause the direction of the management or policies of an investment adviser, whether through ownership of securities, by contract, or otherwise. Any person that directly or indirectly has … | ||||||
| 17:17:5.0.1.1.22.0.36.17 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.203A-3 Definitions. | SEC | [62 FR 28134, May 22, 1997, as amended at 63 FR 39715, July 24, 1998; 69 FR 72088, Dec. 10, 2004; 76 FR 43012, July 19, 2011] | For purposes of section 203A of the Act (15 U.S.C. 80b-3a) and the rules thereunder: (a)(1) Investment adviser representative. “Investment adviser representative” of an investment adviser means a supervised person of the investment adviser: (i) Who has more than five clients who are natural persons (other than excepted persons described in paragraph (a)(3)(i) of this section); and (ii) More than ten percent of whose clients are natural persons (other than excepted persons described in paragraph (a)(3)(i) of this section). (2) Notwithstanding paragraph (a)(1) of this section, a supervised person is not an investment adviser representative if the supervised person: (i) Does not on a regular basis solicit, meet with, or otherwise communicate with clients of the investment adviser; or (ii) Provides only impersonal investment advice. (3) For purposes of this section: (i) “Excepted person” means a natural person who is a qualified client as described in § 275.205-3(d)(1). (ii) “Impersonal investment advice” means investment advisory services provided by means of written material or oral statements that do not purport to meet the objectives or needs of specific individuals or accounts. (4) Supervised persons may rely on the definition of “client” in § 275.202(a)(30)-1 to identify clients for purposes of paragraph (a)(1) of this section, except that supervised persons need not count clients that are not residents of the United States. (b) Place of business. “Place of business” of an investment adviser representative means: (1) An office at which the investment adviser representative regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients; and (2) Any other location that is held out to the general public as a location at which the investment adviser representative provides investment advisory services, solicits, meets with, or otherwise communicates with clients. (c) Principal office and place of business. “Principal office and place of business” of… | ||||||
| 17:17:5.0.1.1.22.0.36.18 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | §§ 275.203A-4--275.203A-6 [Reserved] | SEC | ||||||||
| 17:17:5.0.1.1.22.0.36.19 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204-1 Amendments to Form ADV. | SEC | [65 FR 57450, Sept. 22, 2000; 65 FR 81738, Dec. 27, 2000, as amended at 68 FR 42248, July 17, 2003; 73 FR 4694, Jan. 28, 2008; 75 FR 49267, Aug. 12, 2010; 76 FR 43013, July 19, 2011; 81 FR 60458, Sept. 1, 2016; 84 FR 33630, July 12, 2019] | (a) When amendment is required. You must amend your Form ADV (17 CFR 279.1): (1) Parts 1 and 2: (i) At least annually, within 90 days of the end of your fiscal year; and (ii) More frequently, if required by the instructions to Form ADV. (2) Part 3 at the frequency required by the instructions to Form ADV. (b) Electronic filing of amendments. (1) Subject to paragraph (c) of this section, you must file all amendments to Part 1A, Part 2A, and Part 3 of Form ADV electronically with the IARD, unless you have received a continuing hardship exemption under § 275.203-3. You are not required to file with the Commission amendments to brochure supplements required by Part 2B of Form ADV. (2) If you have received a continuing hardship exemption under § 275.203-3, you must, when you are required to amend your Form ADV, file a completed Part 1A, Part 2A and Part 3 of Form ADV on paper with the SEC by mailing it to FINRA. (c) Filing fees. You must pay FINRA (the operator of the IARD) an initial filing fee when you first electronically file Part 1A of Form ADV. After you pay the initial filing fee, you must pay an annual filing fee each time you file your annual updating amendment. No portion of either fee is refundable. The Commission has approved the filing fees. Your amended Form ADV will not be accepted by FINRA, and thus will not be considered filed with the Commission, until you have paid the filing fee. (d) Amendments to Form ADV are reports. Each amendment required to be filed under this section is a “report” within the meaning of sections 204 and 207 of the Act (15 U.S.C. 80b-4 and 80b-7). (e) Transition to Filing Form CRS. If you are registered with the Commission or have an application for registration pending with the Commission prior to June 30, 2020, you must amend your Form ADV by electronically filing with IARD your initial Form CRS that satisfies the requirements of Part 3 of Form ADV (as amended effective September 30, 2019) beginning on May 1, 2020 and by no later than June 30, 2020. This n… | ||||||
| 17:17:5.0.1.1.22.0.36.2 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.0-3 References to rules and regulations. | SEC | [30 FR 4129, Mar. 30, 1965] | The term rules and regulations refers to all rules and regulations adopted by the Commission pursuant to the Act, including the forms for registration and reports and the accompanying instructions thereto. | ||||||
| 17:17:5.0.1.1.22.0.36.20 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204-2 Books and records to be maintained by investment advisers. | SEC | [26 FR 5002, June 6, 1961] | (a) Every investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b-3) shall make and keep true, accurate and current the following books and records relating to its investment advisory business; (1) A journal or journals, including cash receipts and disbursements, records, and any other records of original entry forming the basis of entries in any ledger. (2) General and auxiliary ledgers (or other comparable records) reflecting asset, liability, reserve, capital, income and expense accounts. (3) A memorandum of each order given by the investment adviser for the purchase or sale of any security, of any instruction received by the investment adviser concerning the purchase, sale, receipt or delivery of a particular security, and of any modification or cancellation of any such order or instruction. Such memoranda shall show the terms and conditions of the order, instruction, modification or cancellation; shall identify the person connected with the investment adviser who recommended the transaction to the client and the person who placed such order; and shall show the account for which entered, the date of entry, and the bank, broker or dealer by or through whom executed where appropriate. Orders entered pursuant to the exercise of discretionary power shall be so designated. (4) All check books, bank statements, cancelled checks and cash reconciliations of the investment adviser. (5) All bills or statements (or copies thereof), paid or unpaid, relating to the business of the investment adviser as such. (6) All trial balances, financial statements, and internal audit working papers relating to the business of such investment adviser. (7) Originals of all written communications received and copies of all written communications sent by such investment adviser relating to: (i) Any recommendation made or proposed to be made and any advice given or proposed to be given; (ii) Any receipt, disbursement or delivery of funds or securities; (iii) The placing or execution… | ||||||
| 17:17:5.0.1.1.22.0.36.21 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204-3 Delivery of brochures and brochure supplements. | SEC | [75 FR 49268, Aug. 12, 2010, as amended at 81 FR 60458, Oct. 31, 2016; 84 FR 33630, July 12, 2019; 87 FR 22447, Apr. 15, 2022] | (a) General requirements. If you are registered under the Act as an investment adviser, you must deliver a brochure and one or more brochure supplements to each client or prospective client that contains all information required by Part 2 of Form ADV [17 CFR 279.1]. (b) Delivery requirements. You (or a supervised person acting on your behalf) must: (1) Deliver to a client or prospective client your current brochure before or at the time you enter into an investment advisory contract with that client. (2) Deliver to each client, annually within 120 days after the end of your fiscal year and without charge, if there are material changes in your brochure since your last annual updating amendment: (i) A current brochure, or (ii) The summary of material changes to the brochure as required by Item 2 of Form ADV, Part 2A that offers to provide your current brochure without charge, accompanied by the Web site address (if available) and an e-mail address (if available) and telephone number by which a client may obtain the current brochure from you, and the Web site address for obtaining information about you through the Investment Adviser Public Disclosure (IAPD) system. (3) Deliver to each client or prospective client a current brochure supplement for a supervised person before or at the time that supervised person begins to provide advisory services to the client; provided, however, that if investment advice for a client is provided by a team comprised of more than five supervised persons, a current brochure supplement need only be delivered to that client for the five supervised persons with the most significant responsibility for the day-to-day advice provided to that client. For purposes of this section, a supervised person will provide advisory services to a client if that supervised person will: (i) Formulate investment advice for the client and have direct client contact; or (ii) Make discretionary investment decisions for the client, even if the supervised person will have no direct client contact. (… | ||||||
| 17:17:5.0.1.1.22.0.36.22 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204-4 Reporting by exempt reporting advisers. | SEC | [76 FR 43013, July 19, 2011] | (a) Exempt reporting advisers. If you are an investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Act (15 U.S.C. 80b-3(l) or 80b-3(m)), you must complete and file reports on Form ADV (17 CFR 279.1) by following the instructions in the Form, which specify the information that an exempt reporting adviser must provide. (b) Electronic filing. You must file Form ADV electronically with the Investment Adviser Registration Depository (IARD) unless you have received a hardship exemption under paragraph (e) of this section. Information on how to file with the IARD is available on the Commission's Web site at http://www.sec.gov/iard. (c) When filed. Each Form ADV is considered filed with the Commission upon acceptance by the IARD. (d) Filing fees. You must pay FINRA (the operator of the IARD) a filing fee. The Commission has approved the amount of the filing fee. No portion of the filing fee is refundable. Your completed Form ADV will not be accepted by FINRA, and thus will not be considered filed with the Commission, until you have paid the filing fee. (e) Temporary hardship exemption —(1) Eligibility for exemption. If you have unanticipated technical difficulties that prevent submission of a filing to the IARD, you may request a temporary hardship exemption from the requirements of this chapter to file electronically. (2) Application procedures. To request a temporary hardship exemption, you must: (i) File Form ADV-H (17 CFR 279.3) in paper format no later than one business day after the filing that is the subject of the ADV-H was due; and (ii) Submit the filing that is the subject of the Form ADV-H in electronic format with the IARD no later than seven business days after the filing was due. (3) Effective date—upon filing. The temporary hardship exemption will be granted when you file a completed Form ADV-H. (f) Final report. You must file a final report in accordance with instructions in Form ADV when: (1) You cease operation as… | ||||||
| 17:17:5.0.1.1.22.0.36.23 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204-5 Delivery of Form CRS. | SEC | [84 FR 33631, July 12, 2019, as amended at 87 FR 22447, Apr. 15, 2022] | (a) General requirements. If you are registered under the Act as an investment adviser, you must deliver Form CRS, required by Part 3 of Form ADV [17 CFR 279.1], to each retail investor. (b) Delivery requirements. You (or a supervised person acting on your behalf) must: (1) Deliver to each retail investor your current Form CRS before or at the time you enter into an investment advisory contract with that retail investor. (2) Deliver to each retail investor who is an existing client your current Form CRS before or at the time you: (i) Open a new account that is different from the retail investor's existing account(s); (ii) Recommend that the retail investor roll over assets from a retirement account into a new or existing account or investment; or (iii) Recommend or provide a new investment advisory service or investment that does not necessarily involve the opening of a new account and would not be held in an existing account. (3) Post the current Form CRS prominently on your website, if you have one, in a location and format that is easily accessible for retail investors. (4) Communicate any changes made to Form CRS to each retail investor who is an existing client within 60 days after the amendments are required to be made and without charge. The communication can be made by delivering the amended Form CRS or by communicating the information through another disclosure that is delivered to the retail investor. (5) Deliver a current Form CRS to each retail investor within 30 days upon request. (c) Other disclosure obligations. Delivering Form CRS in compliance with this section does not relieve you of any other disclosure obligations you have to your retail investors under any Federal or State laws or regulations. (d) Definitions. For purposes of this section: (1) Current Form CRS means the most recent version of the Form CRS. (2) Retail investor means a natural person, or the legal representative of such natural person, who seeks to receive or receives services primarily for personal, fa… | ||||||
| 17:17:5.0.1.1.22.0.36.24 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204(b)-1 Reporting by investment advisers to private funds. | SEC | [76 FR 71174, Nov. 16, 2011, as amended at 88 FR 38202, June 12, 2023; 89 FR 18060, Mar. 12, 2024] | (a) Reporting by investment advisers to private funds on Form PF. If you are an investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b-3), you act as an investment adviser to one or more private funds and, as of the end of your most recently completed fiscal year, you managed private fund assets of at least $150 million, you must complete and file a report on Form PF (17 CFR 279.9) by following the instructions in the Form, which specify the information that an investment adviser must provide. Your initial report on Form PF is due no later than the last day on which your next update would be timely in accordance with paragraph (e) if you had previously filed the Form; provided that you are not required to file Form PF with respect to any fiscal quarter or fiscal year ending prior to the date on which your registration becomes effective. (b) Electronic filing. You must file Form PF electronically with the Form PF filing system on the Investment Adviser Registration Depository (IARD). Information on how to file Form PF is available on the Commission's Web site at http://www.sec.gov/iard. (c) When filed. Each Form PF is considered filed with the Commission upon acceptance by the Form PF filing system. (d) Filing fees. You must pay the operator of the Form PF filing system a filing fee as required by the instructions to Form PF. The Commission has approved the amount of the filing fee. No portion of the filing fee is refundable. Your completed Form PF will not be accepted by the operator of the Form PF filing system, and thus will not be considered filed with the Commission, until you have paid the filing fee. (e) Updates to Form PF. You must file an updated Form PF: (1) At least annually, no later than the date specified in the instructions to Form PF; and (2) More frequently, if required by the instructions to Form PF. You must file all updated reports electronically with the Form PF filing system. (f) Temporary hardship exemption. (1) If you have… | ||||||
| 17:17:5.0.1.1.22.0.36.25 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.204A-1 Investment adviser codes of ethics. | SEC | [69 FR 41708, July 9, 2004, as amended at 76 FR 81806, Dec. 29, 2011; 81 FR 83554, Nov. 21, 2016] | (a) Adoption of code of ethics. If you are an investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b-3), you must establish, maintain and enforce a written code of ethics that, at a minimum, includes: (1) A standard (or standards) of business conduct that you require of your supervised persons, which standard must reflect your fiduciary obligations and those of your supervised persons; (2) Provisions requiring your supervised persons to comply with applicable Federal securities laws; (3) Provisions that require all of your access persons to report, and you to review, their personal securities transactions and holdings periodically as provided below; (4) Provisions requiring supervised persons to report any violations of your code of ethics promptly to your chief compliance officer or, provided your chief compliance officer also receives reports of all violations, to other persons you designate in your code of ethics; and (5) Provisions requiring you to provide each of your supervised persons with a copy of your code of ethics and any amendments, and requiring your supervised persons to provide you with a written acknowledgment of their receipt of the code and any amendments. (b) Reporting requirements —(1) Holdings reports. The code of ethics must require your access persons to submit to your chief compliance officer or other persons you designate in your code of ethics a report of the access person's current securities holdings that meets the following requirements: (i) Content of holdings reports. Each holdings report must contain, at a minimum: (A) The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each reportable security in which the access person has any direct or indirect beneficial ownership; (B) The name of any broker, dealer or bank with which the access person maintains an account in which any securities are held for the access person's direct or indirect … | ||||||
| 17:17:5.0.1.1.22.0.36.26 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.205-1 Definition of “investment performance” of an investment company and “investment record” of an appropriate index of securities prices. | SEC | [37 FR 17468, Aug. 29, 1972] | (a) Investment performance of an investment company for any period shall mean the sum of: (1) The change in its net asset value per share during such period; (2) The value of its cash distributions per share accumulated to the end of such period; and (3) The value of capital gains taxes per share paid or payable on undistributed realized long-term capital gains accumulated to the end of such period; expressed as a percentage of its net asset value per share at the beginning of such period. For this purpose, the value of distributions per share of realized capital gains, of dividends per share paid from investment income and of capital gains taxes per share paid or payable on undistributed realized long-term capital gains shall be treated as reinvested in shares of the investment company at the net asset value per share in effect at the close of business on the record date for the payment of such distributions and dividends and the date on which provision is made for such taxes, after giving effect to such distributions, dividends and taxes. (b) Investment record of an appropriate index of securities prices for any period shall mean the sum of: (1) The change in the level of the index during such period; and (2) The value, computed consistently with the index, of cash distributions made by companies whose securities comprise the index accumulated to the end of such period; expressed as a percentage of the index level at the beginning of such period. For this purpose cash distributions on the securities which comprise the index shall be treated as reinvested in the index at least as frequently as the end of each calendar quarter following the payment of the dividend. Exhibit I [ Method of computing the investment record of the standard & poor's 500 stock composite index for calendar 1971] 1 Source: Standard & Poor's Trade and Securities Statistics, Jan. 1972, p. 33. 2 Id. See Standard & Poor's Trade and Securities Statistics Security and Price Index Record—1970 Edition, p. 133 for explanation… | ||||||
| 17:17:5.0.1.1.22.0.36.27 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.205-2 Definition of “specified period” over which the asset value of the company or fund under management is averaged. | SEC | [37 FR 24896, Nov. 22, 1972] | (a) For purposes of this rule: (1) Fulcrum fee shall mean the fee which is paid or earned when the investment company's performance is equivalent to that of the index or other measure of performance. (2) Rolling period shall mean a period consisting of a specified number of subperiods of definite length in which the most recent subperiod is substituted for the earliest subperiod as time passes. (b) The specified period over which the asset value of the company or fund under management is averaged shall mean the period over which the investment performance of the company or fund and the investment record of an appropriate index of securities prices or such other measure of investment performance are computed. (c) Notwithstanding paragraph (b) of this section, the specified period over which the asset value of the company or fund is averaged for the purpose of computing the fulcrum fee may differ from the period over which the asset value is averaged for computing the performance related portion of the fee, only if: (1) The performance related portion of the fee is computed over a rolling period and the total fee is payable at the end of each subperiod of the rolling period; and (2) The fulcrum fee is computed on the basis of the asset value averaged over the most recent subperiod or subperiods of the rolling period. | ||||||
| 17:17:5.0.1.1.22.0.36.28 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.205-3 Exemption from the compensation prohibition of section 205(a)(1) for investment advisers. | SEC | [63 FR 39027, July 21, 1998, as amended at 69 FR 72088, Dec. 10, 2004; 77 FR 10368, Feb. 22, 2012; 86 FR 62475, Nov. 10, 2021 | (a) General. The provisions of section 205(a)(1) of the Act (15 U.S.C. 80b-5(a)(1)) will not be deemed to prohibit an investment adviser from entering into, performing, renewing or extending an investment advisory contract that provides for compensation to the investment adviser on the basis of a share of the capital gains upon, or the capital appreciation of, the funds, or any portion of the funds, of a client, Provided, That the client entering into the contract subject to this section is a qualified client, as defined in paragraph (d)(1) of this section. (b) Identification of the client. In the case of a private investment company, as defined in paragraph (d)(3) of this section, an investment company registered under the Investment Company Act of 1940, or a business development company, as defined in section 202(a)(22) of the Act (15 U.S.C. 80b-2(a)(22)), each equity owner of any such company (except for the investment adviser entering into the contract and any other equity owners not charged a fee on the basis of a share of capital gains or capital appreciation) will be considered a client for purposes of paragraph (a) of this section. (c) Transition rules —(1) Registered investment advisers. If a registered investment adviser entered into a contract and satisfied the conditions of this section that were in effect when the contract was entered into, the adviser will be considered to satisfy the conditions of this section; Provided, however, that if a natural person or company who was not a party to the contract becomes a party (including an equity owner of a private investment company advised by the adviser), the conditions of this section in effect at that time will apply with regard to that person or company. (2) Registered investment advisers that were previously not registered. If an investment adviser was not required to register with the Commission pursuant to section 203 of the Act (15 U.S.C. 80b-3) and was not registered, section 205(a)(1) of the Act will not apply to an advisory contr… | ||||||
| 17:17:5.0.1.1.22.0.36.29 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(3)-1 Exemption of investment advisers registered as broker-dealers in connection with the provision of certain investment advisory services. | SEC | [40 FR 38159, Aug. 27, 1975] | (a) An investment adviser which is a broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934 shall be exempt from section 206(3) in connection with any transaction in relation to which such broker or dealer is acting as an investment adviser solely (1) by means of publicly distributed written materials or publicly made oral statements; (2) by means of written materials or oral statements which do not purport to meet the objectives or needs of specific individuals or accounts; (3) through the issuance of statistical information containing no expressions of opinion as to the investment merits of a particular security; or (4) any combination of the foregoing services: Provided, however, That such materials and oral statements include a statement that if the purchaser of the advisory communication uses the services of the adviser in connection with a sale or purchase of a security which is a subject of such communication, the adviser may act as principal for its own account or as agent for another person. (b) For the purpose of this Rule, publicly distributed written materials are those which are distributed to 35 or more persons who pay for such materials, and publicly made oral statements are those made simultaneously to 35 or more persons who pay for access to such statements. The requirement that the investment adviser disclose that it may act as principal or agent for another person in the sale or purchase of a security that is the subject of investment advice does not relieve the investment adviser of any disclosure obligation which, depending upon the nature of the relationship between the investment adviser and the client, may be imposed by subparagraphs (1) or (2) of section 206 or the other provisions of the federal securities laws. | ||||||
| 17:17:5.0.1.1.22.0.36.3 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.0-4 General requirements of papers and applications. | SEC | [41 FR 39019, Sept. 14, 1976, as amended at 44 FR 4666, Jan. 23, 1979; 47 FR 58239, Dec. 30, 1982; 68 FR 42248, July 17, 2003; 76 FR 71877, Nov. 21, 2011; 87 FR 38976, June 30, 2022] | (a) Filings. (1) All papers required to be filed with the Commission shall, unless otherwise provided by the rules and regulations, be delivered through the mails or otherwise to the Secretary of the Securities and Exchange Commission, Washington, DC 20549. Except as otherwise provided by the rules and regulations, such papers shall be deemed to have been filed with the Commission on the date when they are actually received by it. (2) All filings required to be made electronically with the Investment Adviser Registration Depository (“IARD”) shall, unless otherwise provided by the rules and regulations in this part, be deemed to have been filed with the Commission upon acceptance by the IARD. Filings required to be made through the IARD on a day that the IARD is closed shall be considered timely filed with the Commission if filed with the IARD no later than the following business day. (3) Filings required to be made through the IARD during the period in December of each year that the IARD is not available for submission of filings shall be considered timely filed with the Commission if filed with the IARD no later than the following January 7. Each year the IARD shuts down to filers for several days during the end of December to process renewals of state notice filings and registrations. During this period, advisers are not able to submit filings through the IARD. Check the Commission's Web site at http://www.sec.gov/iard for the dates of the annual IARD shutdown. (b) Formal specifications respecting applications. Every application for an order under any provision of the Act, for which a form with instructions is not specifically prescribed, and every amendment to such application, shall be filed electronically pursuant to 17 CFR part 232 (Regulation S-T). Any filings made in paper, including filings made pursuant to a hardship exemption under Regulation S-T, shall be filed in quintuplicate. One copy shall be signed by the applicant, but the other four copies may have facsimile or typed signatures. Such … | ||||||
| 17:17:5.0.1.1.22.0.36.30 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(3)-2 Agency cross transactions for advisory clients. | SEC | [42 FR 29301 June 8, 1977, as amended at 48 FR 41379, Sept. 15, 1983; 62 FR 28135, May 22, 1997] | (a) An investment adviser, or a person registered as a broker-dealer under section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) and controlling, controlled by, or under common control with an investment adviser, shall be deemed in compliance with the provisions of sections 206(3) of the Act (15 U.S.C. 80b-6(3)) in effecting an agency cross transaction for an advisory client, if: (1) The advisory client has executed a written consent prospectively authorizing the investment adviser, or any other person relying on this rule, to effect agency cross transactions for such advisory client, provided that such written consent is obtained after full written disclosure that with respect to agency cross transactions the investment adviser or such other person will act as broker for, receive commissions from, and have a potentially conflicting division of loyalties and responsibilities regarding, both parties to such transactions; (2) The investment adviser, or any other person relying on this rule, sends to each such client a written confirmation at or before the completion of each such transaction, which confirmation includes (i) a statement of the nature of such transaction, (ii) the date such transaction took place, (iii) an offer to furnish upon request, the time when such transaction took place, and (iv) the source and amount of any other remuneration received or to be received by the investment adviser and any other person relying on this rule in connection with the transaction, Provided, however, That if, in the case of a purchase, neither the investment adviser nor any other person relying on this rule was participating in a distribution, or in the case of a sale, neither the investment adviser nor any other person relying on this rule was participating in a tender offer, the written confirmation may state whether any other remuneration has been or will be received and that the source and amount of such other remuneration will be furnished upon written request of such customer; (3) The investment a… | ||||||
| 17:17:5.0.1.1.22.0.36.31 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(4)-1 Investment adviser marketing. | SEC | [86 FR 13024, Mar. 5, 2021, as amended at 87 FR 22447, Apr. 15, 2022] | As a means reasonably designed to prevent fraudulent, deceptive, or manipulative acts, practices, or courses of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)), it is unlawful for any investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b-3), directly or indirectly, to disseminate any advertisement that violates any of paragraphs (a) through (d) of this section. (a) General prohibitions. An advertisement may not: (1) Include any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it was made, not misleading; (2) Include a material statement of fact that the adviser does not have a reasonable basis for believing it will be able to substantiate upon demand by the Commission; (3) Include information that would reasonably be likely to cause an untrue or misleading implication or inference to be drawn concerning a material fact relating to the investment adviser; (4) Discuss any potential benefits to clients or investors connected with or resulting from the investment adviser's services or methods of operation without providing fair and balanced treatment of any material risks or material limitations associated with the potential benefits; (5) Include a reference to specific investment advice provided by the investment adviser where such investment advice is not presented in a manner that is fair and balanced; (6) Include or exclude performance results, or present performance time periods, in a manner that is not fair and balanced; or (7) Otherwise be materially misleading. (b) Testimonials and endorsements. An advertisement may not include any testimonial or endorsement, and an adviser may not provide compensation, directly or indirectly, for a testimonial or endorsement, unless the investment adviser complies with the conditions in paragraphs (b)(1) through (3) of this section, subject to the exemptions in paragraph (… | ||||||
| 17:17:5.0.1.1.22.0.36.32 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(4)-2 Custody of funds or securities of clients by investment advisers. | SEC | [75 FR 1484, Jan. 11, 2010] | (a) Safekeeping required. If you are an investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b-3), it is a fraudulent, deceptive, or manipulative act, practice or course of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)) for you to have custody of client funds or securities unless: (1) Qualified custodian. A qualified custodian maintains those funds and securities: (i) In a separate account for each client under that client's name; or (ii) In accounts that contain only your clients' funds and securities, under your name as agent or trustee for the clients. (2) Notice to clients. If you open an account with a qualified custodian on your client's behalf, either under the client's name or under your name as agent, you notify the client in writing of the qualified custodian's name, address, and the manner in which the funds or securities are maintained, promptly when the account is opened and following any changes to this information. If you send account statements to a client to which you are required to provide this notice, include in the notification provided to that client and in any subsequent account statement you send that client a statement urging the client to compare the account statements from the custodian with those from the adviser. (3) Account statements to clients. You have a reasonable basis, after due inquiry, for believing that the qualified custodian sends an account statement, at least quarterly, to each of your clients for which it maintains funds or securities, identifying the amount of funds and of each security in the account at the end of the period and setting forth all transactions in the account during that period. (4) Independent verification. The client funds and securities of which you have custody are verified by actual examination at least once during each calendar year, except as provided below, by an independent public accountant, pursuant to a written agreement between you and the accou… | ||||||
| 17:17:5.0.1.1.22.0.36.33 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | §§ 275.206(4)-(3)--275.206(4)-4 [Reserved] | SEC | ||||||||
| 17:17:5.0.1.1.22.0.36.34 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(4)-5 Political contributions by certain investment advisers. | SEC | [75 FR 41069, July 14, 2010, as amended at 76 FR 43013, July 19, 2011; 77 FR 28477, May 15, 2012] | (a) Prohibitions. As a means reasonably designed to prevent fraudulent, deceptive or manipulative acts, practices, or courses of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)), it shall be unlawful: (1) For any investment adviser registered (or required to be registered) with the Commission, or unregistered in reliance on the exemption available under section 203(b)(3) of the Advisers Act (15 U.S.C. 80b-3(b)(3)), or that is an exempt reporting adviser, as defined in section 275.204-4(a), to provide investment advisory services for compensation to a government entity within two years after a contribution to an official of the government entity is made by the investment adviser or any covered associate of the investment adviser (including a person who becomes a covered associate within two years after the contribution is made); and (2) For any investment adviser registered (or required to be registered) with the Commission, or unregistered in reliance on the exemption available under section 203(b)(3) of the Advisers Act (15 U.S.C. 80b-3(b)(3)), or that is an exempt reporting adviser, or any of the investment adviser's covered associates: (i) To provide or agree to provide, directly or indirectly, payment to any person to solicit a government entity for investment advisory services on behalf of such investment adviser unless such person is: (A) A regulated person; or (B) An executive officer, general partner, managing member (or, in each case, a person with a similar status or function), or employee of the investment adviser; and (ii) To coordinate, or to solicit any person or political action committee to make, any: (A) Contribution to an official of a government entity to which the investment adviser is providing or seeking to provide investment advisory services; or (B) Payment to a political party of a State or locality where the investment adviser is providing or seeking to provide investment advisory services to a government entity. (b) Exceptions —(1) De minimis ex… | ||||||
| 17:17:5.0.1.1.22.0.36.35 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(4)-6 Proxy voting. | SEC | [68 FR 6593, Feb. 7, 2003] | If you are an investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b-3), it is a fraudulent, deceptive, or manipulative act, practice or course of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)), for you to exercise voting authority with respect to client securities, unless you: (a) Adopt and implement written policies and procedures that are reasonably designed to ensure that you vote client securities in the best interest of clients, which procedures must include how you address material conflicts that may arise between your interests and those of your clients; (b) Disclose to clients how they may obtain information from you about how you voted with respect to their securities; and (c) Describe to clients your proxy voting policies and procedures and, upon request, furnish a copy of the policies and procedures to the requesting client. | ||||||
| 17:17:5.0.1.1.22.0.36.36 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(4)-7 Compliance procedures and practices. | SEC | [68 FR 74730, Dec. 24, 2003, as amended at 88 FR 63386, Sept. 14, 2023; 89 FR 91253, Nov. 19, 2024] | If you are an investment adviser registered or required to be registered under section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3), it shall be unlawful within the meaning of section 206 of the Act (15 U.S.C. 80b-6) for you to provide investment advice to clients unless you: (a) Policies and procedures. Adopt and implement written policies and procedures reasonably designed to prevent violation, by you and your supervised persons, of the Act and the rules that the Commission has adopted under the Act; (b) Annual review. Review, no less frequently than annually, the adequacy of the policies and procedures established pursuant to this section and the effectiveness of their implementation; and (c) Chief compliance officer. Designate an individual (who is a supervised person) responsible for administering the policies and procedures that you adopt under paragraph (a) of this section. | ||||||
| 17:17:5.0.1.1.22.0.36.37 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.206(4)-8 Pooled investment vehicles. | SEC | [72 FR 44761, Aug. 9, 2007] | (a) Prohibition. It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)) for any investment adviser to a pooled investment vehicle to: (1) Make any untrue statement of a material fact or to omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading, to any investor or prospective investor in the pooled investment vehicle; or (2) Otherwise engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in the pooled investment vehicle. (b) Definition. For purposes of this section “pooled investment vehicle” means any investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a)) or any company that would be an investment company under section 3(a) of that Act but for the exclusion provided from that definition by either section 3(c)(1) or section 3(c)(7) of that Act (15 U.S.C. 80a-3(c)(1) or (7)). | ||||||
| 17:17:5.0.1.1.22.0.36.38 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.222-1 Definitions. | SEC | [62 FR 28135, May 22, 1997, as amended at 76 FR 43014, July 19, 2011] | For purposes of section 222 (15 U.S.C. 80b-18a) of the Act: (a) Place of business. “Place of business” of an investment adviser means: (1) An office at which the investment adviser regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients; and (2) Any other location that is held out to the general public as a location at which the investment adviser provides investment advisory services, solicits, meets with, or otherwise communicates with clients. (b) Principal office and place of business. “Principal office and place of business” of an investment adviser means the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser. | ||||||
| 17:17:5.0.1.1.22.0.36.39 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.222-2 Definition of “client” for purposes of the national de minimis standard. | SEC | [76 FR 43014, July 19, 2011] | For purposes of section 222(d)(2) of the Act (15 U.S.C. 80b-18a(d)(2)), an investment adviser may rely upon the definition of “client” provided by § 275.202(a)(30)-1, without giving regard to paragraph (b)(4) of that section. | ||||||
| 17:17:5.0.1.1.22.0.36.4 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.0-5 Procedure with respect to applications and other matters. | SEC | [41 FR 39020, Sept. 14, 1976, as amended at 61 FR 49962, Sept. 24, 1996] | The procedure hereinbelow set forth will be followed with respect to any proceeding initiated by the filing of an application, or upon the Commission's own motion, pursuant to any section of the Act or any rule or regulation thereunder, unless in the particular case a different procedure is provided: (a) Notice of the initiation of the proceeding will be published in the Federal Register and will indicate the earliest date upon which an order disposing of the matter may be entered. The notice will also provide that any interested person may, within the period of time specified therein, submit to the Commission in writing any facts bearing upon the desirability of a hearing on the matter and may request that a hearing be held, stating his reasons therefor and the nature of his interest in the matter. (b) An order disposing of the matter will be issued as of course following the expiration of the period of time referred to in paragraph (a) of this section, unless the Commission thereafter orders a hearing on the matter. (c) The Commission will order a hearing on the matter, if it appears that a hearing is necessary or appropriate in the public interest or for the protection of investors, (1) upon the request of any interested person or (2) upon its own motion. (d) Definition of application. For purposes of this rule, an “application” means any application for an order of the Commission under the Act other than an application for registration as an investment adviser. | ||||||
| 17:17:5.0.1.1.22.0.36.5 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.0-6 Incorporation by reference in applications. | SEC | [84 FR 12738, Apr. 2, 2019] | (a) Exhibits. Any document or part thereof, including any financial statement or part thereof, filed with the Commission pursuant to any Act administered by the Commission may be incorporated by reference as an exhibit to any application filed with the Commission by the same or any other person. If any modification has occurred in the text of any document incorporated by reference since the filing thereof, the registrant must file with the reference a statement containing the text of any such modification and the date thereof. (b) General. Include an express statement clearly describing the specific location of the information you are incorporating by reference. The statement must identify the document where the information was originally filed or submitted and the location of the information within that document. The statement must be made at the particular place where the information is required, if applicable. Information must not be incorporated by reference in any case where such incorporation would render the disclosure incomplete, unclear, or confusing. For example, unless expressly permitted or required, disclosure must not be incorporated by reference from a second document if that second document incorporates information pertinent to such disclosure by reference to a third document. (c) Definition of Application. For purposes of this rule, an “application” means any application for an order of the Commission under the Act other than an application for registration as an investment adviser. | ||||||
| 17:17:5.0.1.1.22.0.36.6 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.0-7 Small entities under the Investment Advisers Act for purposes of the Regulatory Flexibility Act. | SEC | [63 FR 35515, June 30, 1998, as amended at 65 FR 57448, Sept. 22, 2000; 76 FR 43011, July 19, 2011] | (a) For purposes of Commission rulemaking in accordance with the provisions of Chapter Six of the Administrative Procedure Act (5 U.S.C. 601 et seq. ) and unless otherwise defined for purposes of a particular rulemaking proceeding, the term small business or small organization for purposes of the Investment Advisers Act of 1940 shall mean an investment adviser that: (1) Has assets under management, as defined under Section 203A(a)(3) of the Act (15 U.S.C. 80b-3a(a)(2)) and reported on its annual updating amendment to Form ADV (17 CFR 279.1), of less than $25 million, or such higher amount as the Commission may by rule deem appropriate under Section 203A(a)(1)(A) of the Act (15 U.S.C. 80b-3a(a)(1)(A)); (2) Did not have total assets of $5 million or more on the last day of the most recent fiscal year; and (3) Does not control, is not controlled by, and is not under common control with another investment adviser that has assets under management of $25 million or more (or such higher amount as the Commission may deem appropriate), or any person (other than a natural person) that had total assets of $5 million or more on the last day of the most recent fiscal year. (b) For purposes of this section: (1) Control means the power, directly or indirectly, to direct the management or policies of a person, whether through ownership of securities, by contract, or otherwise. (i) A person is presumed to control a corporation if the person: (A) Directly or indirectly has the right to vote 25 percent or more of a class of the corporation's voting securities; or (B) Has the power to sell or direct the sale of 25 percent or more of a class of the corporation's voting securities. (ii) A person is presumed to control a partnership if the person has the right to receive upon dissolution, or has contributed, 25 percent or more of the capital of the partnership. (iii) A person is presumed to control a limited liability company (LLC) if the person: (A) Directly or indirectly has the right to vote 25 percent or more of a… | ||||||
| 17:17:5.0.1.1.22.0.36.7 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.202(a)(1)-1 Certain transactions not deemed assignments. | SEC | [51 FR 32907, Sept. 17, 1986; 64 FR 2567, Jan. 15, 1999] | A transaction which does not result in a change of actual control or management of an investment adviser is not an assignment for purposes of section 205(a)(2) of the Act. | ||||||
| 17:17:5.0.1.1.22.0.36.8 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.202(a)(11)(G)-1 Family offices. | SEC | [76 FR 37994, June 29, 2011, as amended at 81 FR 60457, Sept. 1, 2016] | (a) Exclusion. A family office, as defined in this section, shall not be considered to be an investment adviser for purpose of the Act. (b) Family office. A family office is a company (including its directors, partners, members, managers, trustees, and employees acting within the scope of their position or employment) that: (1) Has no clients other than family clients; provided that if a person that is not a family client becomes a client of the family office as a result of the death of a family member or key employee or other involuntary transfer from a family member or key employee, that person shall be deemed to be a family client for purposes of this section for one year following the completion of the transfer of legal title to the assets resulting from the involuntary event; (2) Is wholly owned by family clients and is exclusively controlled (directly or indirectly) by one or more family members and/or family entities; and (3) Does not hold itself out to the public as an investment adviser. (c) Grandfathering. A family office as defined in paragraph (a) of this section shall not exclude any person, who was not registered or required to be registered under the Act on January 1, 2010, solely because such person provides investment advice to, and was engaged before January 1, 2010 in providing investment advice to: (1) Natural persons who, at the time of their applicable investment, are officers, directors, or employees of the family office who have invested with the family office before January 1, 2010 and are accredited investors, as defined in Regulation D under the Securities Act of 1933; (2) Any company owned exclusively and controlled by one or more family members; or (3) Any investment adviser registered under the Act that provides investment advice to the family office and who identifies investment opportunities to the family office, and invests in such transactions on substantially the same terms as the family office invests, but does not invest in other funds advised by the family offic… | ||||||
| 17:17:5.0.1.1.22.0.36.9 | 17 | Commodity and Securities Exchanges | II | 275 | PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 | § 275.202(a)(30)-1 Foreign private advisers. | SEC | [76 FR 39701, July 6, 2011] | (a) Client. You may deem the following to be a single client for purposes of section 202(a)(30) of the Act (15 U.S.C. 80b-2(a)(30)): (1) A natural person, and: (i) Any minor child of the natural person; (ii) Any relative, spouse, spousal equivalent, or relative of the spouse or of the spousal equivalent of the natural person who has the same principal residence; (iii) All accounts of which the natural person and/or the persons referred to in this paragraph (a)(1) are the only primary beneficiaries; and (iv) All trusts of which the natural person and/or the persons referred to in this paragraph (a)(1) are the only primary beneficiaries; (2)(i) A corporation, general partnership, limited partnership, limited liability company, trust (other than a trust referred to in paragraph (a)(1)(iv) of this section), or other legal organization (any of which are referred to hereinafter as a “legal organization”) to which you provide investment advice based on its investment objectives rather than the individual investment objectives of its shareholders, partners, limited partners, members, or beneficiaries (any of which are referred to hereinafter as an “owner”); and (ii) Two or more legal organizations referred to in paragraph (a)(2)(i) of this section that have identical owners. (b) Special rules regarding clients. For purposes of this section: (1) You must count an owner as a client if you provide investment advisory services to the owner separate and apart from the investment advisory services you provide to the legal organization, provided, however, that the determination that an owner is a client will not affect the applicability of this section with regard to any other owner; (2) You are not required to count an owner as a client solely because you, on behalf of the legal organization, offer, promote, or sell interests in the legal organization to the owner, or report periodically to the owners as a group solely with respect to the performance of or plans for the legal organization's assets or similar matt… | ||||||
| 7:7:4.1.1.3.23.1.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | A | Subpart A—Administration | § 275.1 General scope and purpose. | FNS | [Amdt. 160, 45 FR 15898, Mar. 11, 1980, as amended by Amdt. 266, 52 FR 3407, Feb. 4, 1987; Amdt. 328, 56 FR 60051, Nov. 27, 1991; 75 FR 33436, June 11, 2010] | Under the Food and Nutrition Act of 2008, each State agency is responsible for the administration of SNAP in accordance with the Act, Regulations, and the State agency's plan of operation. To fulfill the requirements of the Act, each State agency shall have a system for monitoring and improving its administration of the program. The State agency is also responsible for reporting on its administration to FNS. These reports shall identify program deficiencies and the specific administrative action proposed to meet the program requirements established by the Secretary. If it is determined, however, that a State has failed without good cause to meet any of the program requirements established by the Secretary, or has failed to carry out the approved State plan of operation, the Department shall suspend and/or disallow from the State such funds as are determined to be appropriate in accordance with part 276 of this chapter. | |||
| 7:7:4.1.1.3.23.1.1.2 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | A | Subpart A—Administration | § 275.2 State agency responsibilities. | FNS | [Amdt. 160, 45 FR 15898, Mar. 11, 1980, as amended by Amdt. 266, 52 FR 3407, Feb. 4, 1987; 86 FR 44586, Aug. 13, 2021; 88 FR 23559, Apr. 18, 2023] | (a) Establishment of the performance reporting system. (1) The State agency shall establish a continuing performance reporting system to monitor program administration and program operations. The method for establishing each component of the system is identified and explained in subparts B through F of this part. The components of the State agency's performance reporting system shall be: (i) Data collection through management evaluation (ME) reviews and quality control (QC) reviews; (ii) Analysis and evaluation of data from all sources; (iii) Corrective action planning; (iv) Corrective action implementation and monitoring; and (v) Reporting to FNS on program performance. (2) The State agency must ensure corrective action is effected at the State and project area levels. (b) Staffing standards. The State agency shall employ sufficient State level staff to perform all aspects of the Performance Reporting System as required in this part of the regulations. The staff used to conduct QC reviews shall not have prior knowledge of either the household or the decision under review. Where there is prior knowledge, the reviewer must disqualify her/himself. Prior knowledge is defined as having: (1) Taken any part in the decision that has been made in the case; (2) any discussion of the case with staff who participated in the decision; or (3) any personal knowledge of or acquaintance with persons in the case itself. To ensure no prior knowledge on the part of QC or ME reviewers, local project area staff shall not be used to conduct QC or ME reviews; exceptions to this requirement concerning local level staff may be granted with prior approval from FNS. However, local personnel shall not, under any circumstances, participate in ME reviews of their own project areas. (c) Use of third party contractors. Any State agency procuring services of a contractor for quality control related services, including any project or training that involves the interpretation of SNAP regulations, policies, or handbooks for quality c… | |||
| 7:7:4.1.1.3.23.1.1.3 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | A | Subpart A—Administration | § 275.3 Federal monitoring. | FNS | [Amdt. 160, 45 FR 15898, Mar. 11, 1980, as amended by Amdt. 237, 47 FR 57669, Dec. 28, 1982; Amdt. 260, 49 FR 6303, Feb. 17, 1984; Amdt. 266, 52 FR 3407, Feb. 4, 1987; 53 FR 1604, Jan. 21, 1988; 54 FR 23951, June 5, 1989; Amdt. 309, 55 FR 1672, Jan. 18, 1990; Amdt. 328, 56 FR 60051, Nov. 27, 1991; Amdt. 366, 62 FR 29658, June 2, 1997; Amdt. 373, 64 FR 38294, July 16, 1999; 68 FR 59523, Oct. 16, 2003; 75 FR 33436, June 11, 2010; 86 FR 44586, Aug. 13, 2021] | The Food and Nutrition Service shall conduct the review described in this section to determine whether a State agency is operating SNAP and the Performance Reporting System in accordance with program requirements. The Federal reviewer may consolidate the scheduling and conduction of these reviews to reduce the frequency of entry into the State agency. FNS regional offices will conduct additional reviews to examine State agency and project area operations, as considered necessary to determine compliance with program requirements. FNS shall notify the State agency of any deficiencies detected in program or system operations. Any deficiencies detected in program or system operations which do not necessitate long range analytical and evaluative measures for corrective action development shall be immediately corrected by the State agency. Within 60 days of receipt of the findings of each review established below, State agencies shall develop corrective action addressing all other deficiencies detected in either program or system operations and shall ensure that the State agency's own corrective action plan is amended and that FNS is provided this information at the time of the next formal semiannual update to the State agency's Corrective Action Plan, as required in § 275.17. (a) Reviews of State Agency's Administration/Operation of SNAP. FNS shall conduct an annual review of certain functions performed at the State agency level in the administration/operation of the program. FNS will designate specific areas required to be reviewed each fiscal year. (b) Reviews of State Agency's Management Evaluation System. FNS will review each State agency's management evaluation system on a biennial basis; however, FNS may review a State agency's management evaluation system on a more frequent basis if a regular review reveals serious deficiencies in the ME system. The ME review will include but not be limited to a determination of whether or not the State agency is complying with FNS regulations, an assessment of the State … | |||
| 7:7:4.1.1.3.23.1.1.4 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | A | Subpart A—Administration | § 275.4 Record retention. | FNS | [Amdt. 160, 45 FR 15898, Mar. 11, 1980, as amended by Amdt. 260, 49 FR 6304, Feb. 17, 1984; Amdt. 262, 49 FR 50597, Dec. 31, 1984; 75 FR 33436, June 11, 2010; 86 FR 44586, Aug. 13, 2021] | (a) The State agency shall maintain Performance Reporting System records to permit ready access to, and use of, these records. Performance Reporting System records include information used in data analysis and evaluation, corrective action plans, corrective action monitoring records in addition to ME review records and QC review records as explained in paragraphs (b) and (c) of this section. To be readily accessible, system records shall be retained and filed in an orderly fashion. Precautions should be taken to ensure that these records are retained without loss or destruction for the 3-year period required by these regulations. Information obtained on individual households for Performance Reporting System purposes shall be safeguarded in accordance with FNS policies on disclosure of information for SNAP. (b) ME review records consist of thorough documentation of review findings, sources from which information was obtained, procedures used to review SNAP requirements including sampling techniques and lists, and ME review plans. The State agency must submit documented evidence of review findings to the FNS Regional Office upon request for purposes of evaluating State corrective action plans. (c) QC review records consist of Forms FNS-380, Worksheet for Supplemental Nutrition Assistance Program, FNS-380-1, Quality Control Review Schedule, FNS-245, Negative Quality Control Review Schedule; other materials supporting the review decision, including all correspondence with the household and all case notes, digital or otherwise, taken or used by the eligibility worker that are applicable to the review period; sample lists; sampling frames; tabulation sheets; and reports of the results of all quality control reviews during each review period. | |||
| 7:7:4.1.1.3.23.2.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | B | Subpart B—Management Evaluation (ME) Reviews | § 275.5 Scope and purpose. | FNS | [Amdt. 160, 45 FR 15900, Mar. 11, 1980, as amended by Amdt. 262, 49 FR 50597, Dec. 31, 1984; Amdt. 266, 52 FR 3408, Feb. 4, 1987] | (a) Objectives. Each State agency shall ensure that project areas operate SNAP in accordance with the Act, regulations, and FNS-approved State Plan of Operation. To ensure compliance with program requirements, ME reviews shall be conducted to measure compliance with the provisions of FNS regulations. The objectives of an ME review are to: (1) Provide a systematic method of monitoring and assessing program operations in the project areas; (2) Provide a basis for project areas to improve and strengthen program operations by identifying and correcting deficiencies; and (3) Provide a continuing flow of information between the project areas, the States, and FNS, necessary to develop the solutions to problems in program policy and procedures. (b) Frequency of review. (1) State agencies shall conduct a review once every year for large project areas, once every two years for medium project areas, and once every three years for small project areas, unless an alternate schedule is approved by FNS. The most current and accurate information on active monthly caseload available at the time the review schedule is developed shall be used to determine project area size. (2) A request for an alternate review schedule shall be submitted for approval in writing with a proposed schedule and justification. In any alternate schedule, each project area must be reviewed at least once every three years. Approval of an alternate schedule is dependent upon a State agency's justification that the project areas that will be reviewed less frequently than required in paragraph (b)(1) of this section are performing adequately and that previous reviews indicate few problems or that known problems have been corrected. FNS retains the authority for approving any alternate schedule and may approve a schedule in whole or in part. Until FNS approval of an alternate schedule is obtained, the State agency shall conduct reviews in accordance with paragraph (b)(1) of this section. (3) FNS may require the State agency to conduct additional on-si… | |||
| 7:7:4.1.1.3.23.2.1.2 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | B | Subpart B—Management Evaluation (ME) Reviews | § 275.6 Management units. | FNS | [Amdt. 160, 45 FR 15900, Mar. 11, 1980; 45 FR 23637, Apr. 8, 1980, as amended by Amdt. 266, 52 FR 3408, Feb. 4, 1987] | (a) Establishment of management units. For the purpose of ME reviews, State agencies may, subject to FNS approval, establish “management units” which are different from project areas designated by FNS for participation in the program. For example, State-established welfare districts, regions or other administrative structures within a State may be so designated. Management units can be designated as either large, medium, or small for purposes of frequency of review. However, establishment of management units solely for the purpose of reducing the frequency of review will not be approved by FNS. (b) FNS approval of management units. State agencies shall submit requests for establishment of management units to FNS, which shall have final authority for approval of such units as well as any changes in those previously approved by FNS. (1) The following minimum criteria must be met prior to requesting FNS approval: (i) The proposed management unit must correspond with existing State-established welfare districts, regions, or other administrative structures; and (ii) The unit must have supervisory control over SNAP operations within that geographic area and have authority for implementation of corrective action. (2) In submitting the request for FNS approval, the State agency shall include the following information regarding the proposed management unit: (i) That the proposed management unit meets the minimum criteria described in paragraphs (b)(1) (i) and (ii) of this section; (ii) Geographic coverage, including the names of the counties/project areas within the unit and the identification (district or region number) and location (city) of the office which has supervisory control over the management unit; (iii) SNAP participation, including the number of persons and number of households; (iv) The number of certification offices; (v) The number of issuance units; (vi) The dollar value of allotments issued as reflected in the most recent available data; and (vii) Any other relevant information. | |||
| 7:7:4.1.1.3.23.2.1.3 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | B | Subpart B—Management Evaluation (ME) Reviews | § 275.7 Selection of sub-units for review. | FNS | [Amdt. 160, 45 FR 15900, Mar. 11, 1980; 45 FR 23638, Apr. 8, 1980; 45 FR 46784, July 11, 1980, as amended by Amdt. 266, 52 FR 3408, Feb. 4, 1987; 81 FR 2741, Jan. 19, 2016] | (a) Definition of sub-units. Sub-units are the physical locations of organizational entities within project areas responsible for operating various aspects of SNAP and include but are not limited to certification offices, call centers, and employment and training offices. (b) Selection of Sub-units for Review. State agencies shall select a representative number of sub-units of each category for review in order to determine a project area's compliance with program standards. | |||
| 7:7:4.1.1.3.23.2.1.4 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | B | Subpart B—Management Evaluation (ME) Reviews | § 275.8 Review coverage. | FNS | [Amdt. 266, 52 FR 3408, Feb. 4, 1987, as amended by Amdt. 356, 59 FR 29713, June 9, 1994] | (a) During each review period, State agencies shall review the national target areas of program operation specified by FNS. FNS will notify State agencies of the minimum program areas to be reviewed at least 90 days before the beginning of each annual review period, which is the Federal fiscal year. FNS may add additional areas during the review period if deemed necessary. The FNS headquarters office will add national target areas during the review period only for deficiencies of national scope. State agencies have 60 days in which to establish a plan schedule for such reviews. (b) State agencies shall be responsible for reviewing each national target area or other program requirement based upon the provisions of the regulations governing SNAP and the FNS-approved Plan of Operation. If FNS approves a State agency's request for a waiver from a program requirement, any different policy approved by FNS would also be reviewed. When, in the course of a review, a project area is found to be out of compliance with a given program requirement, the State agency shall identify the specifics of the problem including: the extent of the deficiency, the cause of the deficiency, and, as applicable, the specific procedural requirements the project area is misapplying. | |||
| 7:7:4.1.1.3.23.2.1.5 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | B | Subpart B—Management Evaluation (ME) Reviews | § 275.9 Review process. | FNS | [Amdt. 160, 45 FR 15900, Mar. 11, 1980; 45 FR 25375, Apr. 15, 1980, as amended by Amdt. 266, 52 FR 3409, Feb. 4, 1987; Amdt. 356, 59 FR 29713, June 9, 1994; 81 FR 2741, Jan. 19, 2016] | (a) Review procedures. State agencies shall review the program requirements specified for review in § 275.8 of this part using procedures that are adequate to identify problems and the causes of those problems. As each project area's operational structure will differ, State agencies shall review each program requirement applicable to the project area in a manner which will best measure the project area's compliance with each program requirement. (b) ME review plan. (1) State agencies shall develop a review plan prior to each ME review. This review plan shall specify whether each project area is large, medium, or small and shall contain: (i) Identification of the project area to be reviewed, program areas to be reviewed, the dates the review will be conducted, and the period of time that the review will cover; (ii) Information secured from the project area regarding its caseload and organization; (iii) Identification of the sub-units selected for review and the techniques used to select them; (iv) At State agency option it may also indicate whether the State agency is using the ME review process to perform non-discrimination reviews; and (v) A description of the review method(s) the State agency plans to use for each program area being reviewed. (2) ME review plans shall be maintained in an orderly fashion and be made available to FNS upon request. (c) Review methods. (1) State agenices shall determine the method of reviewing the program requirements associated with each program area. For some areas of program operation it may be necessary to use more than one method of review to determine if the project area is in compliance with program requirements. The procedures used shall be adequate to identify any problems and the causes of those problems. (2) State agencies shall ensure that the method used to review a program requirement does not bias the review findings. Bias can be introduced through leading questions, incomplete reviews, incorrect sampling techniques, etc. (d) Review worksheet. (1) S… | |||
| 7:7:4.1.1.3.23.3.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | C | Subpart C—Quality Control (QC) Reviews | § 275.10 Scope and purpose. | FNS | [Amdt. 149, 44 FR 45893, Aug. 3, 1979, as amended by Amdt. 260, 49 FR 6304, Feb. 17, 1984; 54 FR 7016, Feb. 15, 1989; Amdt. 328, 56 FR 60051, Nov. 27, 1991; Amdt. 373, 64 FR 38294, July 16, 1999; 75 FR 33436, June 11, 2010] | (a) As part of the Performance Reporting System, each State agency is responsible for conducting quality control reviews. For SNAP quality control reviews, a sample of households shall be selected from two different categories: Households which are participating in SNAP (called active cases) and households for which participation was denied, suspended or terminated (called negative cases). Reviews shall be conducted on active cases to determine if households are eligible and receiving the correct allotment of SNAP benefits. The determination of whether the household received the correct allotment will be made by comparing the eligibility data gathered during the review against the amount authorized on the master issuance file. Reviews of negative cases shall be conducted to determine whether the State agency's decision to deny, suspend or terminate the household, as of the review date, was correct. Quality control reviews measure the validity of SNAP cases at a given time (the review date) by reviewing against SNAP standards established in the Food and Nutrition Act of 2008 and the Regulations, taking into account any FNS authorized waivers to deviate from specific regulatory provisions. FNS and the State agency shall analyze findings of the reviews to determine the incidence and dollar amounts of errors, which will determine the State agency's liability for payment errors in accordance with the Food and Nutrition Act of 2008, as amended, and to plan corrective action to reduce excessive levels of errors for any State agency. (b) The objectives of quality control reviews are to provide: (1) A systematic method of measuring the validity of the SNAP caseload; (2) A basis for determining error rates; (3) A timely continuous flow of information on which to base corrective action at all levels of administration; and (4) A basis for establishing State agency liability for errors that exceed the National performance measure. (c) The review process is the activity necessary to complete reviews and document findings… | |||
| 7:7:4.1.1.3.23.3.1.2 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | C | Subpart C—Quality Control (QC) Reviews | § 275.11 Sampling. | FNS | [Amdt. 260, 49 FR 6304, Feb. 17, 1984; 49 FR 14495, Apr. 12, 1984, as amended by Amdt. 262, 49 FR 50598, Dec. 31, 1984; Amdt. 266, 52 FR 3409, Feb. 4, 1987; Amdt. 328, 56 FR 60051, Nov. 27, 1991; Amdt. 366, 62 FR 29658, June 2, 1997; Amdt. 373, 64 FR 38295, July 16, 1999; 68 FR 59523, Oct. 16, 2003; 75 FR 33436, June 11, 2010; 86 FR 44586, Aug. 13, 2021] | (a) Sampling plan. Each State agency shall develop a quality control sampling plan which demonstrates the integrity of its sampling procedures. (1) Content. The sampling plan shall include a complete description of the frame, the method of sample selection, and methods for estimating characteristics of the population and their sampling errors. The description of the sample frames shall include: source, availability, accuracy, completeness, components, location, form, frequency of updates, deletion of cases not subject to review, and structure. The description of the methods of sample selection shall include procedures for: estimating caseload size, overpull, computation of sampling intervals and random starts (if any), stratification or clustering (if any), identifying sample cases, correcting over-or undersampling, and monitoring sample selection and assignment. A time schedule for each step in the sampling procedures shall be included. (2) Criteria. Sampling plans proposing non-proportional or other alternative designs shall document compliance with the approval criteria in paragraph (b)(4) of this section. All sampling plans shall: (i) Conform to principles of probability sampling; (ii) Specify and explain the basis for the sample sizes chosen by the State agency; (iii) If the State agency has chosen an active sample size as specified in paragraph (b)(1)(iii) of this section, include a statement that, whether or not the sample size is increased to reflect an increase in participation as discussed in paragraph (b)(3) of this section, the State agency will not use the size of the sample chosen as a basis for challenging the resulting error rates. (iv) If the State agency has chosen a negative sample size as specified in paragraph (b)(2)(ii) of this section, include a statement that, whether or not the sample size is increased to reflect an increase in negative actions as discussed in paragraph (b)(3) of this section, the State agency will not use the size of the sample chosen as a basis for challengi… | |||
| 7:7:4.1.1.3.23.3.1.3 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | C | Subpart C—Quality Control (QC) Reviews | § 275.12 Review of active cases. | FNS | [Amdt. 260, 49 FR 6306, Feb. 17, 1984; 49 FR 14495, Apr. 12, 1984] | (a) General. A sample of households which were certified prior to, or during, the sample month and issued SNAP benefits for the sample month shall be selected for quality control review. These active cases shall be reviewed to determine if the household is eligible and, if eligible, whether the household is receiving the correct allotment. The determination of a household's eligibility shall be based on an examination and verification of all elements of eligibility (i.e., basic program requirements, resources, income, and deductions). The elements of eligibility are specified in §§ 273.1 and 273.3 through 273.9 of this chapter. The verified circumstances and the resulting benefit level determined by the quality control review shall be compared to the benefits authorized by the State agency as of the review date. When changes in household circumstances occur, the reviewer shall determine whether the changes were reported by the participant and handled by the agency in accordance with the rules set forth in §§ 273.12, 273.13 and 273.21 of this chapter, as appropriate. For active cases, the review date shall always fall within the sample month, either the first day of a calendar or fiscal month or the day of certification, whichever is later. The review of active cases shall include: a household case record review; a field investigation, except as provided in paragraph (b) of this section; the identification of any variances; an error analysis; and the reporting of review findings. (b) Household case record review. The reviewer shall examine the household case record to identify the specific facts relating to the household's eligibility and basis of issuance. If the reviewer is unable to locate the household case record, the reviewer shall identify as many of the pertinent facts as possible from the household issuance record. The case record review shall include all information applicable to the case as of the review month, including the application and worksheet in effect as of the review date. Documentation c… | |||
| 7:7:4.1.1.3.23.3.1.4 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | C | Subpart C—Quality Control (QC) Reviews | § 275.13 Review of negative cases. | FNS | [Amdt. 260, 49 FR 6309, Feb. 17, 1984, as amended at 53 FR 39443, Oct. 7, 1988; Amdt. 373, 64 FR 38296, July 16, 1999; 75 FR 33437, June 11, 2010; 86 FR 44587, Aug. 13, 2021] | (a) General. A sample of actions to deny applications, or suspend or terminate a household in the sample month shall be selected for quality control review. These negative actions shall be reviewed to determine whether the State agency's decision to deny, suspend, or terminate the household, as of the review date, was correct. Depending on the characteristics of individual State systems, the review date for negative cases could be the date of the agency's decision to deny, suspend, or terminate program benefits, the date on which the decision is entered into the computer system, or the date of the notice to the client. State agencies must consistently apply the same definition for review date to all sample cases of the same classification. The review of negative cases shall include a household case record review; an error analysis; and the reporting of review findings, including procedural problems with the action regardless of the validity of the decision to deny, suspend or terminate. In certain instances, contact with the household or a collateral contact may be permitted. (b) Household case record review. The reviewer shall examine the household case record and verify through documentation in it whether the reason given for the denial, suspension, or termination is correct. Through the review of the household case record, the reviewer shall complete the household case record sections and document the reasons for denial, suspension or termination on the Negative Quality Control Review Schedule, Form FNS-245. (c) Error analysis. (1) A negative case shall be considered valid if the reviewer is able to verify through documentation in the household case record that a household was correctly denied, suspended, or terminated from the program in accordance with the reason for the action given by the State agency in the notice. Whenever the reviewer is unable to verify the correctness of the State agency's decision to deny, suspend, or terminate a household's participation through such documentation, the QC re… | |||
| 7:7:4.1.1.3.23.3.1.5 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | C | Subpart C—Quality Control (QC) Reviews | § 275.14 Review processing. | FNS | [Amdt. 260, 49 FR 6310, Feb. 17, 1984, as amended by Amdt. 262, 49 FR 50598, Dec. 31, 1984; 75 FR 33438, June 11, 2010] | (a) General. Each State agency shall use FNS handbooks, worksheets, and schedules in the quality control review process. (b) Handbooks. The reviewer shall follow the procedures outlined in the Quality Control Review Handbook, FNS Handbook 310, to conduct quality control reviews. In addition, the sample of active and negative cases shall be selected in accordance with the sampling techniques described in the Quality Control Sampling Handbook, FNS Handbook 311. (c) Worksheets. The Form FNS-380, shall be used by the reviewer to record required information from the case record, plan and conduct the field investigation, and record findings which contribute to the determination of eligibility and basis of issuance in the review of active cases. In some instances, reviewers may need to supplement Form FNS-380 with other forms. The State forms for appointments, interoffice communications, release of information, etc., should be used when appropriate. (d) Schedules. Decisions reached by the reviewer in active case reviews shall be coded and recorded on the Integrated Review Worksheet, Form FNS-380-1. Such active case review findings must be substantiated by information recorded on the Integrated Review Worksheet, Form FNS-380. In negative case reviews, the review findings shall be coded and recorded on the Negative Quality Control Review Schedule, Form FNS-245, and supplemented as necessary with other documentation substantiating the findings. | |||
| 7:7:4.1.1.3.23.4.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | D | Subpart D—Data Analysis and Evaluation | § 275.15 Data management. | FNS | [Amdt. 160, 45 FR 15909, Mar. 11, 1980, as amended by Amdt. 266, 52 FR 3409, Feb. 4, 1987; Amdt. 320, 55 FR 6240, Feb. 22, 1990] | (a) Analysis. Analysis is the process of classifying data, such as by areas of program requirements or use of error-prone profiles, to provide a basis for studying the data and determining trends including significant characteristics and their relationships. (b) Evaluation. Evaluation is the process of determining the cause(s) of each deficiency, magnitude of the deficiency, and geographic extent of the deficiency, to provide the basis for planning and developing effective corrective action. (c) Each State agency must analyze and evaluate at the State and project area levels all management information sources available to: (1) Identify all deficiencies in program operations and systems; (2) Identify causal factors and their relationships; (3) Identify magnitude of each deficiency, where appropriate (This is the frequency of each deficiency occurring based on the number of program records reviewed and where applicable, the amount of loss either to the program or participants or potential participants in terms of dollars. The State agency shall include an estimate of the number of participants or potential participants affected by the existence of the deficiency, if applicable); (4) Determine the geographic extent of each deficiency (e.g., Statewide/individual project area or management unit); and, (5) Provide a basis for management decisions on planning, implementing, and evaluating corrective action. (d) In the evaluation of data, situations may arise where the State agency identifies the existence of a deficiency, but after reviewing all available management information sources sufficient information is not available to make a determination of the actual causal factor(s), magnitude, or geographic extent necessary for the development of appropriate corrective action. In these situations, the State agency shall be responsible for gathering additional data necessary to make these determinations. This action may include, but is not limited to, conducting additional full or partial ME reviews in one or mo… | |||
| 7:7:4.1.1.3.23.5.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | E | Subpart E—Corrective Action | § 275.16 Corrective action planning. | FNS | [Amdt. 160, 45 FR 15909, Mar. 11, 1980, as amended by Amdt. 169, 46 FR 7263, Jan. 23, 1981; Amdt. 262, 49 FR 50598, Dec. 31, 1984; Amdt. 266, 52 FR 3409, Feb. 4, 1987; Amdt. 328, 56 FR 60052, Nov. 27, 1991; 68 FR 59523, Oct. 16, 2003; 75 FR 33438, June 11, 2010; 81 FR 2741, Jan. 19, 2016] | (a) Corrective action planning is the process by which State agencies shall determine appropriate actions to reduce substantially or eliminate deficiencies in program operations and provide responsive service to eligible households. (b) The State agency and project area(s)/management unit(s), as appropriate, shall implement corrective action on all identified deficiencies. Deficiencies requiring action by the State agency or the combined efforts of the State agency and the project area(s)/management unit(s) in the planning, development, and implementation of corrective action are those which: (1) Result from a payment error rate of 6 percent or greater (actions to correct errors in individual cases, however, shall not be submitted as part of the State agency's corrective action plan); (2) Are the causes of other errors/deficiencies detected through quality control, including error rates of 1 percent or more in negative cases (actions to correct errors in individual cases, however, shall not be submitted as part of the State agency's corrective action plan); (3) Are identified by FNS reviews, GAO audits, contract audits, reports to FNS regarding the implementation of major changes (as discussed in § 272.15) or USDA audits or investigations at the State agency or project area level (except deficiencies in isolated cases as indicated by FNS); and, (4) Result from 5 percent or more of the State agency's QC sample being coded “not complete” as defined in § 275.12(g)(1) of this part. This standard shall apply separately to both active and negative samples. (5) Result in underissuances, improper denials, improper suspensions, improper termination, or improper systemic suspension of benefits to eligible households where such errors are caused by State agency rules, practices, or procedures. (c) The State agency shall ensure that appropriate corrective action is taken on all deficiencies including each case found to be in error by quality control reviews and those deficiencies requiring corrective action only at th… | |||
| 7:7:4.1.1.3.23.5.1.2 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | E | Subpart E—Corrective Action | § 275.17 State corrective action plan. | FNS | [Amdt. 160, 45 FR 15909, Mar. 11, 1980, as amended by Amdt. 266, 52 FR 3409, Feb. 4, 1987] | (a) State agencies shall prepare corrective action plans addressing those deficiencies specified in § 275.16(b) requiring action by the State agency or the combined efforts of the State agency and the project area(s)/management unit(s). This corrective action plan is an open-ended plan and shall remain in effect until all deficiencies in program operations have been reduced substantially or eliminated. State agencies shall provide updates to their corrective action plans through regular, semiannual updates. These semiannual updates shall be received by FNS by May 1st and November 1st respectively. Such updates must contain: (1) Any additional deficiencies identified since the previous corrective action plan update; (2) Documentation that a deficiency has been corrected and is therefore being removed from the plan; and (3) Any changes to planned corrective actions for previously reported deficiencies. (b) Content. State corrective action plans shall contain, but not necessarily be limited to, the following, based on the most recent information available: (1) Specific description and identification of each deficiency; (2) Source(s) through which the deficiency was detected; (3) Magnitude of each deficiency, if appropriate, as defined in § 275.15(c)(3) of this part; (4) Geographic extent of the deficiency (e.g., Statewide/project area or management unit—specific project areas in which the deficiency occurs); (5) Identification of causal factor(s) contributing to the occurrence of each deficiency; (6) Identification of any action already completed to eliminate the deficiency; (7) For each deficiency, an outline of actions to be taken, the expected outcome of each action, the target date for each action, and the date by which each deficiency will have been eliminated; and (8) For each deficiency, a description of the manner in which the State agency will monitor and evaluate the effectiveness of the corrective action in eliminating the deficiency. (c) FNS will provide technical assistance in developing … | |||
| 7:7:4.1.1.3.23.5.1.3 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | E | Subpart E—Corrective Action | § 275.18 Project area/management unit corrective action plan. | FNS | [Amdt. 160, 45 FR 15909, Mar. 11, 1980] | (a) The State agency shall ensure that corrective action plans are prepared at the project area/management unit level, addressing those deficiencies not required to be included in the State corrective action plan. State agencies may elect to prepare these plans for or in cooperation with the project area. These project area/management unit corrective action plans shall be open-ended and shall remain in effect until all deficiencies in program operations have been reduced substantially or eliminated. Any deficiencies detected through any source not previously reported to the State agency which require incorporation into the Project Area/Management Unit Corrective Action Plan shall be submitted to the State agency within 60 days of identification. As deficiencies are reduced substantially or eliminated, the project area/management unit shall notify the State agency in writing. The project area/management unit shall be responsible for documenting why each deficiency is being removed from the Plan. The removal of any deficiency from the Plan will be subject to State agency and FNS review and validation. (b) Content. Project area/management unit corrective action plans shall contain all the information necessary to enable the State agency to monitor and evaluate the corrective action properly. Also, State agencies shall establish requirements for project area/management units in planning, implementing and reporting corrective action to assist the State agency's efforts to fulfill its responsibilities for determining which deficiencies must be addressed in the State corrective action plan. States should consider requiring project area/management unit plans to include the following, based on the most recent information available: (1) Specific description and identification of each deficiency; (2) Source(s) through which the deficiency was detected; (3) Magnitude of each deficiency, if appropriate, as defined in § 275.15(c)(3) of this part; (4) Geographic extent of the deficiency (throughout the project area/manag… | |||
| 7:7:4.1.1.3.23.5.1.4 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | E | Subpart E—Corrective Action | § 275.19 Monitoring and evaluation. | FNS | [Amdt. 160, 45 FR 15909, Mar. 11, 1980] | (a) The State agency shall establish a system for monitoring and evaluating corrective action at the State and project area levels. Monitoring and evaluation shall be an ongoing process to determine that deficiencies are being substantially reduced or eliminated in an efficient manner and that the program provides responsive service to eligible households. (b) The State agency shall ensure that corrective action on all deficiencies identified in the State Corrective Action Plan and Project Area/Management Unit Corrective Action Plan is implemented and achieves the anticipated results within the specified time frames. The State agency shall monitor and evaluate corrective action at the State and project levels through a combination of reports, field reviews, and examination of current data available through program management tools and other sources. (c) In instances where the State agency and/or the project area/management unit determines that the proposed corrective action is not effective in reducing substantially or eliminating deficiencies, the State agency and/or the project area/management unit shall promptly reevaluate the deficiency, causes, and the corrective action taken, and develop and implement new corrective actions. | |||
| 7:7:4.1.1.3.23.6.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | F | Subpart F—Responsibilities for Reporting on Program Performance | § 275.20 ME review schedules. | FNS | [Amdt. 266, 52 FR 3410, Feb. 4, 1987] | (a) Each State agency shall submit its review schedule to the appropriate FNS regional office at least 60 days prior to the beginning of the next year's review period (the Federal fiscal year). These schedules must ensure that all project areas/management units will be reviewed within the required time limits. Each schedule shall identify the project areas/management units in each classification and list each project area to be reviewed by month or by quarter. A State agency may submit a request to use an alternate review schedule at any time. The alternate schedule shall not be effective until approved by FNS in accordance with § 275.5(b)(2). (b) State agencies shall notify the appropriate FNS regional office of all changes in review schedules. | |||
| 7:7:4.1.1.3.23.6.1.2 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | F | Subpart F—Responsibilities for Reporting on Program Performance | § 275.21 Quality control review reports. | FNS | [Amdt. 260, 49 FR 6310, Feb. 17, 1984, as amended by Amdt. 262, 49 FR 50598, Dec. 31, 1984; Amdt. 266, 52 FR 3410, Feb. 4, 1987; 75 FR 33438, June 11, 2010; 86 FR 44857, Aug. 13, 2021; 86 FR 49229, Sept. 2, 2021] | (a) General. Each State agency shall submit reports on the performance of quality control reviews in accordance with the requirements outlined in this section. These reports are designed to enable FNS to monitor the State agency's compliance with Program requirements relative to the Quality Control Review System. Every case selected for review during the sample month must be accounted for and reflected in the appropriate report(s). (b) Individual cases. The State agency shall report the review findings on each case selected for review during the sample month. For active cases, the State agency shall thoroughly document the Quality Control Review Schedule, Form FNS-380, to ensure any subsequent case reviewers fully understand household circumstances pertaining to the QC review as well as the reasons for the individual case finding and disposition. The State agency shall also code the findings on the Form FNS-380-1. For negative cases, the State agency shall submit a summary report, coded and documented on the Negative Quality Control Review Schedule, Form FNS-245, in enough detail to ensure subsequent case reviewers fully understand the reasons for the individual finding and disposition. The review findings shall be reported as follows: (1) The State agency shall utilize SNAPQCS, FNS' automated, web-based QC System, to report all required QC forms, supporting evidence, and information necessary to understand the disposition and final findings for active and negative sampled cases to FNS. Upon State agency request, FNS will consider approval of any technical changes in the review results after they have been reported to FNS. (2) The State agency shall have at least 115 days from the end of the sample month to dispose of and report the findings of all cases selected in a sample month. FNS may grant additional time as warranted upon request by a State agency for cause shown to complete and dispose of individual cases. (3) The State agency shall supply the FNS Regional Office with individual household case rec… | |||
| 7:7:4.1.1.3.23.6.1.3 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | F | Subpart F—Responsibilities for Reporting on Program Performance | § 275.22 Administrative procedure. | FNS | [Amdt. 160, 45 FR 15911, Mar. 11, 1980. Redesignated at 52 FR 3410, Feb. 4, 1987] | Reports on program performance are intended to provide the State an opportunity to determine compliance with program requirements, identify and resolve emerging problems, and assess the effectiveness of actions that have been taken to correct existing problems. States' reports enable FNS to assess the nationwide status of eligibility and basis of issuance determinations, to ensure State compliance with Federal requirements, to assist States in improving and strengthening their programs, and to develop Federal policies. Reports must be submitted in duplicate to the appropriate FNS Regional Office according to the time frames established in §§ 275.20, 275.21, and 275.22 of this part. | |||
| 7:7:4.1.1.3.23.7.1.1 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | G | Subpart G—Program Performance | § 275.23 Determination of State agency program performance. | FNS | [75 FR 33438, June 11, 2010, as amended at 80 FR 53243, Sept. 3, 2015; 86 FR 44587, Aug. 13, 2021] | (a) Determination of efficiency and effectiveness. FNS shall determine the efficiency and effectiveness of a State's administration of the Supplemental Nutrition Assistance Program by measuring State compliance with the standards contained in the Food and Nutrition Act, regulations, and the State Plan of Operation and State efforts to improve program operations through corrective action. This determination shall be made based on: (1) Reports submitted to FNS by the State; (2) FNS reviews of State agency operations; (3) State performance reporting systems and corrective action efforts; and (4) Other available information such as Federal audits and investigations, civil rights reviews, administrative cost data, complaints, and any pending litigation. (b) State agency error rates. FNS shall estimate each State agency's active case, payment, and negative case error rate based on the results of quality control review reports submitted in accordance with the requirements outlined in § 275.21. The determination of the correctness of the case shall be based on certification policy as set forth in part 273 of this chapter. (1) Demonstration projects. FNS shall make a determination for each individual project whether the reported results of reviews of active and negative demonstration project cases shall be included or excluded from the estimate of the active case error rate, payment error rate, and negative case error rate. (2) Determination of payment error rates. As specified in § 275.3(c), FNS will validate each State agency's estimated payment error rate by rereviewing the State agency's active case sample and ensuring that its sampling, estimation, and data management procedures are correct. (i) Once the Federal case reviews have been completed and all differences with the State agency have been identified, FNS shall calculate regressed error rates using the following linear regression equations. (A) y 1 ′ = y 1 + b 1 ( X 1 − x 1 ), where y 1 ′ is the average value of allotments overissued to … | |||
| 7:7:4.1.1.3.23.7.1.2 | 7 | Agriculture | II | C | 275 | PART 275—PERFORMANCE REPORTING SYSTEM | G | Subpart G—Program Performance | § 275.24 High performance bonuses. | FNS | [70 FR 6322, Feb. 7, 2005, as amended at 80 FR 53243, Sept. 3, 2015] | (a) General rule. (1) FNS will award bonuses totaling $48 million for each fiscal year to State agencies that show high or improved performance in accordance with the performance measures under paragraph (b) of this section. (2) FNS will award the bonuses no later than September 30th of the fiscal year following the performance measurement year. (3) A State agency is not eligible for a bonus payment in any fiscal year for which it has a liability amount established as a result of an excessive payment error rate in the same year. If a State is disqualified from receiving a bonus payment under this paragraph (a)(3), and the State is not tied for a bonus, the State with the next best performance will be awarded a bonus payment. (4) The determination whether, and in what amount, to award a performance bonus payment is not subject to administrative or judicial review. (5) In determining the amount of the award, FNS will first award a base amount of $100,000 to each State agency that is an identified winner in each category. Subsequently, FNS will divide the remaining money among the States in each category (see paragraph (b) of this section) in proportion to the size of their caseloads (the average number of households per month for the fiscal year for which performance is measured). (6) A State cannot be awarded two bonuses in the same category; the relevant categories are payment accuracy (which is outlined in paragraph (b)(1) of this section), negative error rate (which is outlined in paragraph (b)(2) of this section), or program access index (which is outlined in paragraph (b)(3) of this section). If a State is determined to be among the best and the most improved in a category, it will be awarded a bonus only for being the best. The next State in the best category will be awarded a bonus as being among the best States. (7) Where there is a tie to the fourth decimal point for the categories outlined in paragraphs (b)(1) through (b)(4) of this section, FNS will add the additional State(s) into the category … |
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