Extension of Exemptions for Security-Based Swaps

AGENCY:

Securities and Exchange Commission.

ACTION:

Interim final rule; extension.

SUMMARY:

We are adopting amendments to the expiration dates in our interim final rules that provide exemptions under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939 for those security-based swaps that prior to July 16, 2011 were security-based swap agreements and are defined as “securities” under the Securities Act and the Exchange Act as of July 16, 2011 due solely to the provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the amendments, the expiration dates in the interim final rules will be extended to February 11, 2017. If we adopt further rules relating to issues raised by the application of the Securities Act or the other federal securities laws to security-based swaps before February 11, 2017, we may determine to alter the expiration dates in the interim final rules as part of that rulemaking.

DATES:

The amendments are effective February 10, 2014. See Section I of the SUPPLEMENTARY INFORMATION concerning amendment of expiration dates in the interim final rules.

FOR FURTHER INFORMATION CONTACT:

Andrew Schoeffler, Special Counsel, Office of Capital Markets Trends, Division of Corporation Finance, at (202) 551-3860, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-3628.

SUPPLEMENTARY INFORMATION:

We are adopting amendments to the following rules: interim final Rule 240 under the Securities Act of 1933 (“Securities Act”), interim final Rules 12a-11 and 12h-1(i) under the Securities Exchange Act of 1934 (“Exchange Act”), and interim final Rule 4d-12 under the Trust Indenture Act of 1939 (“Trust Indenture Act”).

I. Amendment of Expiration Dates in the Interim Final Rules

A. Background Regarding the Adoption of the Interim Final Rules

In July 2011, we adopted interim final Rule 240 under the Securities Act, interim final Rules 12a-11 and 12h-1(i) under the Exchange Act, and interim final Rule 4d-12 under the Trust Indenture Act (collectively, the “interim final rules”). The interim final rules provide exemptions under the Securities Act, the Exchange Act, and the Trust Indenture Act for those security-based swaps that prior to July 16, 2011 (“Title VII effective date”) were “security-based swap agreements” and are defined as “securities” under the Securities Act and the Exchange Act as of the Title VII effective date due solely to the provisions of Title VII of the Dodd-Frank Act. The interim final rules exempt offers and sales of security-based swap agreements that became security-based swaps on the Title VII effective date from all provisions of the Securities Act, other than the Section 17(a) anti-fraud provisions, as well as from the Exchange Act registration requirements and from the provisions of the Trust Indenture Act, provided certain conditions are met. In February 2013, we adopted amendments to the interim final rules to extend the expiration dates in the interim final rules from February 11, 2013 to February 11, 2014.

Title VII amended the Securities Act and the Exchange Act to include “security-based swaps” in the definition of “security” for purposes of those statutes. As a result, “security-based swaps” became subject to the provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder applicable to “securities.” The interim final rules were intended to allow security-based swap agreements that became security-based swaps on the Title VII effective date to continue to trade as they did prior to the enactment of Title VII. We were concerned about disrupting the operation of the security-based swaps market until the compliance date for final rules that we may adopt further defining the terms “security-based swap” and “eligible contract participant.” We recognized that until we further defined such terms, market participants may be uncertain as to how to comply with the registration requirements of the Securities Act applicable to securities transactions, the registration requirements of the Exchange Act applicable to classes of securities, and the indenture provisions of the Trust Indenture Act.

We also needed additional time and market input to evaluate the implications under the Securities Act, the Exchange Act, and the Trust Indenture Act of including the term “security-based swap” in the definition of “security.” We understood from market participants that there were several types of trading platforms being used to effect transactions in security-based swaps, including security-based swap agreements that became security-based swaps on the Title VII effective date, that would likely register as security-based swap execution facilities (“security-based SEFs”) and that the use of trading platforms to effect security-based swap transactions would continue after the Title VII effective date. We also understood from market participants that if parties continued to engage in the same type of trading activities after the Title VII effective date that they were engaging in prior to the Title VII effective date with respect to security-based swap agreements that became security-based swaps on the Title VII effective date, such activities could raise concerns about the availability of exemptions from the registration requirements of the Securities Act and the Exchange Act. The interim final rules thus allow market participants to continue to use trading platforms to publish quotes for security-based swaps and enter into transactions involving security-based swaps that are the subject of individual negotiation without concern that such activities may not comply with the applicable provisions of the federal securities laws.

B. Comments Received on the Interim Final Rules

At the time of adoption of the interim final rules in July 2011, we requested comment on various aspects of the interim final rules. In particular, we requested comment on the following: (i) Whether security-based swaps are transacted or expected to be transacted following the full implementation of Title VII in a manner that would not permit the parties to rely on existing exemptions under the Securities Act and the Exchange Act; and (ii) whether we should consider additional exemptions under the Securities Act and the Exchange Act for security-based swaps traded on a national securities exchange or through a security-based SEF with eligible contract participants.

We received letters from three commenters regarding the interim final rules. One commenter opposed any exemptions for security-based swaps, including the exemptions provided in the interim final rules, but did not provide any explanation for the reason. The two other commenters supported the interim final rules. These commenters stated their view that the interim final rules were necessary and appropriate steps to prevent disruption of the security-based swaps market and to ensure the orderly implementation of Title VII. These commenters provided a description of the security-based swaps market as it currently functions and how it may function following the full implementation of Title VII. These commenters expressed concerns about the availability of exemptions from the registration requirements of the Securities Act for security-based swap transactions entered into solely between eligible contract participants due to the operation of security-based swap trading platforms and the publication or distribution of other information regarding security-based swaps. They indicated that certain communications involving security-based swaps, such as the publication or distribution of price quotes, may be available on or through trading platforms on an unrestricted basis, including following the full implementation of Title VII. They also indicated that security-based swap dealers publish and distribute communications they characterized as research regarding security-based swap transactions that may be broadly disseminated and could be available on an unrestricted basis. They were concerned that unrestricted access to these communications could affect the availability of exemptions from the registration requirements of the Securities Act, such as the exemption in Section 4(a)(2), for security-based swap transactions entered into solely between eligible contract participants. Based on their concerns regarding the availability of exemptions from the registration requirements of the Securities Act, these commenters requested that we adopt permanent relief from the registration requirements of Section 5 of the Securities Act for offers and sales of security-based swaps solely between eligible contract participants. These commenters also requested relief under the Exchange Act for offers and sales of security-based swaps solely between eligible contract participants. They were concerned that ambiguity regarding the definition of a “class” as applied to security-based swaps could raise concerns about the registration requirements of Section 12(g) of the Exchange Act. Finally, these commenters requested relief from Section 304(d) of the Trust Indenture Act for security-based swaps entered into solely between eligible contract participants. They believed that the protections of the Trust Indenture Act are not necessary for these transactions because they involve contracts between two counterparties who are capable of enforcing obligations under the security-based swaps directly.

Moreover, although not submitted in connection with the interim final rules, we received two comment letters from four commenters regarding the exemptions for security-based swap transactions involving an eligible clearing agency. These letters discussed issues arising with respect to security-based swap transactions not involving an eligible clearing agency and requested exemptions under the Securities Act, the Exchange Act, and the Trust Indenture Act for security-based swap transactions entered into between eligible contract participants. In adopting the exemptions for security-based swap transactions involving an eligible clearing agency, we indicated that these commenters' suggestions were more appropriate to be considered in connection with the interim final rules.

We subsequently extended the expiration dates in the interim final rules from February 11, 2013 to February 11, 2014 to enable us to continue our evaluation of the implications for security-based swaps as securities and determine whether other regulatory action is appropriate before the expiration date of the interim final rules. We indicated at that time that we were carefully considering the comments we had received on the interim final rules as part of our evaluation of the implications for security-based swaps resulting from the inclusion of the term “security-based swap” in the definition of “security” under the Securities Act and the Exchange Act. We also indicated that we were in the process of implementing the Title VII statutory provisions governing the registration and regulation of security-based SEFs. We had proposed rules to implement these provisions, but the particular characteristics of trading platforms that security-based SEFs will be permitted to operate would not be known until we adopted final rules for security-based SEFs. We indicated that we were evaluating the comments we had received on these proposed rules, but that we had not yet adopted final rules implementing the Title VII statutory provisions governing the registration and regulation of security-based SEFs. Moreover, we indicated that we were evaluating such comments in connection with our consideration of the comments we have received on the interim final rules given commenters' concerns regarding the operation of security-based swap trading platforms.

C. Extension of the Interim Final Rules

In this release, we are extending the expiration dates in the interim final rules from February 11, 2014 to February 11, 2017. We are still in the process of implementing Title VII, which imposes a comprehensive regime for the regulation of security-based swaps under the federal securities laws, including the clearing, exchange trading, and reporting of security-based swap transactions. We have adopted some rules under Title VII, including joint rules with the CFTC further defining certain Title VII definitions, rules establishing the procedure by which clearing agencies submit security-based swaps for determination as to whether those instruments should be subject to mandatory clearing under Title VII, and rules establishing standards for how registered clearing agencies should manage their risks and run their operations. We also have issued a policy statement proposing the sequencing of compliance dates for final rules that we may adopt to complete the implementation of the security-based swaps regulatory regime (“sequencing policy statement”). While we are working toward fulfilling the requirements of Title VII in a thorough and deliberative manner that includes significant public input and coordination with other regulators, we have not yet adopted final rules completing the implementation of the security-based swaps regulatory regime.

Subsequent to the extension of the expiration dates in the interim final rules in February 2013, we completed proposing nearly all of the rules required to be adopted by Title VII to implement the security-based swaps regulatory regime. Most recently, we proposed rules and interpretations addressing the application of the security-based swap provisions of Title VII to cross-border security-based swap transactions and to non-U.S. persons that act in capacities regulated under the Dodd-Frank Act. In light of the substantially complete picture of the proposed security-based swaps regulatory regime, as well as the fact that the CFTC has adopted nearly all of its rules required by Title VII to implement the swaps regulatory regime, we reopened the comment period for the proposals implementing the security-based swaps regulatory regime and the sequencing policy statement to provide the public with an additional opportunity to analyze and comment upon the proposed security-based swaps regulatory regime.

As we consider final rules completing implementation of the security-based swaps regulatory regime, we are evaluating the additional comments we received after reopening the comment period. We also are considering the CFTC's experiences with implementation of the swaps regulatory regime and the extent to which our final rules should harmonize with the CFTC's final rules implementing the swaps regulatory regime. However, we do not expect to complete such evaluation and adopt final rules before February 11, 2014, the current expiration date of the interim final rules. We do not believe that we can complete our evaluation of the implications for security-based swaps and determine whether other regulatory action is appropriate until we progress further in our consideration of final rules completing the implementation of the security-based swaps regulatory regime.

For example, we are considering final rules implementing the Title VII statutory provisions governing the registration and regulation of security-based SEFs. We have proposed rules to implement these provisions, but the particular characteristics of trading platforms that security-based SEFs will be permitted to operate will not be known until we adopt final rules for security-based SEFs. As discussed above, we received comments on the interim final rules that expressed concerns regarding the implications for security-based swaps under the Securities Act as a result of the possible operation of security-based SEFs. We believe that our determination about possible regulatory action for security-based swaps is directly affected by our consideration of final rules completing the implementation of the Title VII statutory provisions governing the registration and regulation of security-based SEFs.

If the interim final rules expire before we complete our evaluation of the implications for security-based swaps as securities and determine whether other regulatory action is appropriate, market participants entering into security-based swap transactions will have to consider whether they need to register the offer and sale of the security-based swaps under the Securities Act. Market participants also will have to consider whether they may be required to comply with the registration provisions of the Exchange Act applicable to classes of securities and the indenture provisions of the Trust Indenture Act. We believe that requiring compliance with these provisions while we evaluate the implications for security-based swaps as securities and determine whether other regulatory action is appropriate could have an impact on the operation of the security-based swaps market. Thus, the interim final rules are needed to allow market participants that meet the conditions of the interim final rules to continue to enter into security-based swap transactions without concern that such activities may not comply with the applicable provisions of the Securities Act, the Exchange Act, and the Trust Indenture Act.

Based on the foregoing, we believe that it is necessary and appropriate in the public interest and consistent with the protection of investors to continue providing the exemptions from all provisions of the Securities Act (other than the Section 17(a) antifraud provisions), the registration requirements of the Exchange Act relating to classes of securities, and the indenture provisions of the Trust Indenture Act for those security-based swaps that prior to the Title VII effective date were security-based swap agreements, provided certain conditions are met. Accordingly, due to the interrelationship between the interim final rules and the ongoing implementation of the security-based swaps regulatory regime, and based on our consideration of comments we have received to date on these matters, we have determined that it is necessary and appropriate to extend the expiration dates in the interim final rules from February 11, 2014 to February 11, 2017. If we adopt further rules relating to issues raised by the application of the Securities Act or the other federal securities laws to security-based swaps before February 11, 2017, we may determine to alter the expiration dates in the interim final rules as part of that rulemaking. We only are extending the expiration dates in the interim final rules; we are not making any other changes to the interim final rules.

II. Certain Administrative Law Matters

Section 553(b) of the Administrative Procedure Act generally requires an agency to publish notice of a proposed rulemaking in the Federal Register. This requirement does not apply, however, if the agency “for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” Further, the Administrative Procedure Act also generally requires that an agency publish an adopted rule in the Federal Register 30 days before it becomes effective. This requirement does not apply, however, if the agency finds good cause for making the rule effective sooner. We, for good cause, find that notice and solicitation of comment before adopting the amendments to the interim final rules is impracticable, unnecessary, or contrary to the public interest. We also find good cause not to delay the effective date of the amendments to the interim final rules.

For the reasons we discuss throughout this release, we believe that we have good cause to act immediately to adopt the amendments to the interim final rules to extend the expiration dates in the interim final rules. The extension of the expiration dates in the interim final rules is intended to minimize disruptions and costs to the security-based swaps market that could occur if the interim final rules expire. The interim final rules are needed to allow market participants that meet the conditions of the interim final rules to continue to enter into security-based swap transactions without concern that such activities will be subject to the registration requirements of the Securities Act and the Exchange Act and the indenture qualification provisions of the Trust Indenture Act while we complete our evaluation of the implications for security-based swaps and determine whether other regulatory action is appropriate.

As noted above, we currently are considering final rules completing the implementation of the security-based swaps regulatory regime. As part of such consideration, we are evaluating the additional comments we received after reopening the comment period for the proposals implementing the security-based swaps regulatory regime and the sequencing policy statement and the CFTC's experiences with implementation of the swaps regulatory regime. However, we do not expect to complete such evaluation and adopt final rules before February 11, 2014, the current expiration date of the interim final rules. We do not believe that we can complete our evaluation of the implications for security-based swaps and determine whether other regulatory action is appropriate until we progress further in our consideration of final rules completing the implementation of the security-based swaps regulatory regime. We believe that our determination regarding possible regulatory action for security-based swaps is directly affected by our consideration of final rules completing the implementation security-based swaps regulatory regime. Moreover, under the swaps regulatory regime as implemented, we are considering issues that may arise under the federal securities laws from the possible trading of security-based swaps on swap execution facilities.

Absent an extension, the interim final rules will expire on February 11, 2014. The interim final rules have been in place since July 2011 and market participants have relied on them to enter into security-based swap transactions. Extending the expiration dates in the interim final rules will not affect the substantive provisions of the interim final rules and will allow market participants that meet the conditions of the interim final rules to continue to enter into security-based swap transactions without concern that such activities will be subject to the registration requirements of the Securities Act and the Exchange Act and the indenture qualification provisions of the Trust Indenture Act while we complete our evaluation of the implications for security-based swaps as securities and determine whether other regulatory action is appropriate. Based on the foregoing and for the reasons we discuss throughout this release, we find that there is good cause to have the amendments to the interim final rules effective upon publication in the Federal Register and that notice and solicitation of comment in advance of the effectiveness of the amendments to the interim final rules is impracticable, unnecessary or contrary to the public interest.

III. Economic Analysis

We are mindful of the costs imposed by, and the benefits to be obtained from, our rules. Section 2(b) of the Securities Act and Section 3(f) of the Exchange Act require the Commission, whenever it engages in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action would promote efficiency, competition, and capital formation. In addition, Section 23(a)(2) of the Exchange Act requires the Commission, when making rules under the Exchange Act, to consider the impact such rules would have on competition. Section 23(a)(2) of the Exchange Act prohibits the Commission from adopting any rule that would impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.

As discussed above, we are adopting amendments to the interim final rules to extend the expiration dates in the interim final rules to February 11, 2017. Extending the expiration dates in the interim final rules is intended to minimize disruptions and costs to the security-based swaps market that could occur on the current expiration date of the interim final rules. The interim final rules are needed to allow market participants that meet the conditions of the interim final rules to continue to enter into security-based swap transactions without concern that such activities will be subject to the registration requirements of the Securities Act and the Exchange Act and the indenture qualification provisions of the Trust Indenture Act.

The interim final rules currently in effect serve as the economic baseline against which the costs and benefits, as well as the impact on efficiency, competition, and capital formation, of the amendments are measured. Because the extension of the expiration dates in the interim final rules maintains the status quo, we do not expect additional significant costs or benefits to result from the extension. We also do not expect the extension to have additional significant effects on efficiency, competition, or capital formation. The interim final rules will continue to exempt certain security-based swaps from all provisions of the Securities Act, other than the Section 17(a) antifraud provisions, as well as exempt these security-based swaps from Exchange Act registration requirements, and from the provisions of the Trust Indenture Act, provided certain conditions are met.

In the alternative, we could allow the interim final rules to expire by not extending their expiration date. In this scenario, market participants who continue to effect security-based swap transactions would have to determine whether another exemption from the registration requirements of the Securities Act is available so that they may be able to rely on that exemption. If no Securities Act exemptions are available for a security-based swap transaction following the expiration of the interim final exemptions, such a transaction would have to be registered under the Securities Act. The counterparties to such a transaction also would have to consider whether they need to comply with the registration requirements of the Exchange Act and the indenture provisions of the Trust Indenture Act. We believe that requiring compliance with these provisions at this time for security-based swap transactions between eligible contract participants likely would disrupt and impose new costs on this segment of the security-based swaps market. For example, if market participants are required to register the offer and sale of these security-based swaps under the Securities Act, they would have to incur the additional costs of such registration, including legal and accounting costs, as well as the costs associated with preparing the disclosure documents describing these security-based swaps. Market participants also may incur costs associated with the registration of these security-based swaps under the Exchange Act and compliance with the Trust Indenture Act, including preparing indentures and arranging for the services of a trustee.

It is also possible that if we were to allow the interim final rules to expire, efficiency and capital formation may be impaired. Failing to extend the expiration dates in the interim final rules may result in disruptions and costs to the security-based swaps market that could impede efficiency. Additionally, some market participants may not continue to participate in certain security-based swap transactions if compliance with these provisions were infeasible (economically or otherwise). In that case, capital formation may be impaired to the extent that some market participants use these security-based swap transactions to hedge risks, including those related to the issuance of the referenced securities (as may occur with equity swaps and the issuance of convertible bonds). For example, if registration of these transactions is required under our existing Securities Act registration scheme, issuers of security-based swaps may be forced to provide disclosure about their security-based swap positions that might not otherwise be disclosed to the market. This position disclosure could lead to a decreased use of security-based swaps by these market participants, which could potentially impair capital formation to the extent counterparties might use security-based swaps for hedging their exposure to issuers of referenced securities.

We also recognize that there would be other effects associated with letting the interim final rules expire. Without the exemptions provided for in the interim final rules, a market participant may have to file a registration statement covering the offer and sale of the security-based swaps, may have to register the class of security-based swaps that it has issued under the Exchange Act, and may have to satisfy the applicable provisions of the Trust Indenture Act, which would provide investors with additional information and in certain cases civil remedies. For example, a registration statement covering the offer and sale of the security-based swaps may provide certain information about the market participants, the security-based swap contract terms, and the identification of the particular reference securities, issuers, or loans underlying the security-based swap. Additionally, although investors currently may pursue antifraud actions in connection with the purchase and sale of security-based swaps under Section 10(b) of the Exchange Act, if market participants were required to file registration statements under the Securities Act, investors may also be able to pursue civil remedies under Sections 11 or 12 of the Securities Act.

IV. Paperwork Reduction Act

The interim final rules do not impose any new “collections of information” within the meaning of the Paperwork Reduction Act of 1995 (“PRA”), nor do they create any new filing, reporting, recordkeeping, or disclosure reporting requirements. Accordingly, we did not submit the interim final rules to the Office of Management and Budget for review in accordance with the PRA. We requested comment on whether our conclusion that there are no collections of information is correct, and we did not receive any comment.

V. Regulatory Flexibility Act Certification

We hereby certify pursuant to 5 U.S.C. 605(b) that extending the expiration dates in the interim final rules will not have a significant economic impact on a substantial number of small entities. The interim final rules apply only to counterparties that may engage in security-based swap transactions in reliance on the interim final rule providing an exemption under the Securities Act. The interim final rule under the Securities Act provides that the exemption is available only to security-based swaps that are entered into between eligible contract participants, as that term is defined in Section 1a(12) of the Commodity Exchange Act as in effect prior to the Title VII effective date, and other than with respect to persons determined by the CFTC to be eligible contract participants pursuant to Section 1a(12)(C) of the Commodity Exchange Act. Based on our existing information about the security-based swaps market, including our existing information about participants in the security-based swaps market, we believe that the interim final rules apply to few, if any, small entities. For this reason, the extension of the expiration dates in the interim final rules should not have a significant economic impact on a substantial number of small entities.

VI. Statutory Authority and Text of the Rules and Amendments

The amendments described in this release are being adopted under the authority set forth in Sections 19 and 28 of the Securities Act, Sections 12(h), 23(a) and 36 of the Exchange Act, and Section 304(d) of the Trust Indenture Act.

List of Subjects in 17 CFR Parts 230, 240 and 260

• Reporting and recordkeeping requirements
• Securities

Text of the Rules and Amendments

For the reasons set out in the preamble, the Commission amends 17 CFR parts 230, 240, and 260 as follows:

PART 230—GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

1. The authority citation for part 230 continues to read, in part, as follows:

Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77d note, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78 l, 78m, 78n, 78o, 78o-7 note, 78t, 78w, 78 ll (d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, sec. 201(a), 126 Stat. 313 (2012), unless otherwise noted.

2. In § 230.240(c), in the first sentence, remove the words “February 11, 2014” and add, in their place, the words “February 11, 2017”.

PART 240—GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934

3. The authority citation for part 240 continues to read, in part, as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78 l, 78m, 78n, 78n-1, 78o, 78o-4, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78 ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et seq.; 18 U.S.C. 1350; and 12 U.S.C. 5221(e)(3), unless otherwise noted.

4. In § 240.12a-11(b), in the first sentence, remove the words “February 11, 2014” and add, in their place, the words “February 11, 2017”.

5. In § 240.12h-1(i), in the second sentence, remove the words “February 11, 2014” and add, in their place, the words “February 11, 2017”.

PART 260—GENERAL RULES AND REGULATIONS, TRUST INDENTURE ACT OF 1939

6. The authority citation for part 260 continues to read as follows:

Authority: 15 U.S.C. 77eee, 77ggg, 77nnn, 77sss, 78 ll (d), 80b-3, 80b-4, and 80b-11.

7. In § 260.4d-12, in the second sentence, remove the words “February 11, 2014” and add, in their place, the words “February 11, 2017”.