SEC Division of Corporation Finance no-action letter: Voya Financial, Inc.

March 8, 2017
Pamela L. Marcogliese, Esq.
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006-1470
Re: In the Matter of Voya Financial Advisors, Inc.
Voya Financial, Inc. – Waiver Request of Ineligible Issuer Status under Rule 405 of the Securities Act Dear Ms. Marcogliese:
This is in response to your letter dated March 7, 2017, written on behalf of Voya Financial, Inc. (“Voya”) and constituting an application for relief from Voya being considered an “ineligible issuer” under clause (1)(vi) of the definition of ineligible issuer in Rule 405 of the Securities Act of 1933 (“Securities Act”). Voya requests relief from being considered an ineligible issuer under Rule 405, due to the entry on March 8, 2017 of a Commission Order (“Order”) pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Voya Financial Advisors, Inc. (“VFA”). The Order requires that, among other things, VFA cease and desist from committing or causing any violations and any future violations of Sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. Based on the facts and representations in your letter, and assuming VFA complies with the Order, the Commission has determined that Voya has made a showing of good cause under clause (2) of the definition of ineligible issuer in Rule 405 and that Voya will not be considered an ineligible issuer by reason of the entry of the Order. Accordingly, the relief described above from Voya being an ineligible issuer under Rule 405 of the Securities Act is hereby granted. Any different facts from those represented or failure to comply with the terms of the Order would require us to revisit our determination that good cause has been shown and could constitute grounds to revoke or further condition the waiver. The Commission reserves the right, in its sole discretion, to revoke or further condition the waiver under those circumstances. For the Commission, by the Division of Corporation Finance, pursuant to delegated authority. Sincerely, /s/ Chief, Office of Enforcement Liaison Division of Corporation Finance

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WASHINGTON,D.C. •PARIS• BRUSSELS •LONDON• MOSCOW FRANKFURT•COLOGNE•ROME• MILAN •HONGKONG BEIJING•BUENOSAIRES• SÅOPAULO• ABU DHABI • SEOUL CLEARYGOTTLIEBSTEEN & HAMILTON LLP Writer'sDirectDial: +1 212 225 2556 E-Mail: pmarcogliese (Dс~DјT.co1n r VICTOR I. LEWKOW LESLIE N. DILVERI AN LEE C. BUCHHEIT JAMES M. PEACLEE THOMAS MOLONVV DAVIDG. CAB EL JONATHAN I. BLACKMAN MICHAELL. RYAN ROBERT P DAVID TARIN Z. REICH RICHARD 5. LINGER STEVEN G. HOROWITZ JANESACANCAN STEVEN M. LIEB CRAIG B. BROD EDWARD J. ROSEN LAWRENCE FRIEDMAN NICOLASGRANAR CHRISTOPHERE. AUSTIN BETH GROSSHANDLER HOWANCS. ZELBO DAVIDE. BRODSKY ARTHURH. KOHN RICHARD) COOPER JEFFREYS. LEWID PAUL J. SHIM STEVEN L. WILNER ERIKAW. NIJENHUIS ANDRESDELA CRUZ DAVIDC. LOPEZ JAMELL. BROMLEY MICHAELA. GERBTENZANG LEWISJ LIMAN LEVL. DASCIN NEILQ. WHORICKEY JORGEU. JUANTORENA MICHAEL D. WEINBERGER DAVIDLEINWAND DIANAL. WOLLMAN JEFFREYA. RODENTHAL ETHAN A. KUNGSBERG MICHAELD. DAYAN CARMINED. BOCCUZZI.JR. JEFFREYD. KARFE KIMBERLY BROWN BLACKLOW BINENTJ. RAYMOND BUNG K. KANG LEONARD C. JACOBY NANDRAL. FLOW FRANCISCOL. CEETERO FRANCESCAL OOELL WILLIAM L. 'CRAE JASON FACTOR MARGARETS. PEPONIB LISAM. BCH WEITZER JUAN I. GIRALDEZ DUANE MCLAUGNLIN BREONS. PEACE MEREDITH E. KITLER. CHÁNTALE. KOAOULA BENET J. O'REILLY ADAM E. FLEIBHER SEAN A. O'NEAL GLENN MCGRORY MATТHENN P. CALERNO MICHAEL J. ALBANO VICTORL. HOU ROGERA. COOPER AMFR. BHAPIRO JENNIFERKENNEDY PARK ELIZABETH LENAS LUKEA.BAREFOOT PAMELAL. MAROOGLIEDE PAULI TIGER JONATHAN S. KOLODNER DANIELILAN MEYERI. FEDIDA ADRIAN R. LEIPBIC ELIZABETN VIGENS ADAM J. BRENNEMAN ARID MACKINNON JAMESE. LANGSTON JAREDGERBER COLIN D. LLOYD COREYM GOODMAN RISHIZUTSHI JANE VANLARE DAVIDH. HERRINGTON KIMBERLYH. SPOERRI AARON J. MEYERS DANIELC. REYNOLDS RERIDENТ PARTRERE SANDRAM. ROCKB S.DOUGLAS BORIBKY JUDITH KASSEL DAVIDE. WEBB PENELOPEL CHRIDTOPHOROU BOAZC. MORAG MARYE. ALCOCK. HEIDEH. ILGENFRITZ HUGH C. OINRCI'.JR. KATHLEEN M. EMBERGER WALLACEL. LARDON, JR. AVRAI E. LUFT ANDREWWEAVER HELENAK. GRANNID GRPNTM BINDER JOHN V. HARRIDON CAROLINE F. lAYDAY RAHUL MUKHI NEILR. MARKEL HUMAYUN KHALID CHRISC. LEE KENNETH S. BLAZEJEWDKI KNOSL. MCILWAIN ~~nаΡe~rcbu~REL LOUISEM. PARENT m cou~REL BY ELECTRONIC MAILANDFEDERALEXPRESS TimHenseler Chief, Office of EnforcementLiaison Division of Corporation Finance U.S. SecuritiesandExchange Commission 100 FStreet, N.E. Washington,DC20549 Re: IntheMatterof Voya Financial Advisors, Inc. Dear Mr. Henseler:
We submit thisletteron behalf of our client Voya Financial, Inc. ("VFI")inconnection with the settlement of the above-referenced administrativeandcease-and-desist proceeding by the U.S. SecuritiesandExchange Commission ("Commission") against VFI's indirect subsidiary Voya Financial Advisors, Inc. ("VFA" or"Respondent"),dually registered with the Commission as abroker-dealerandan investment adviser. VFIisan NYSE-listed companyandfilesdisclosure reportsasrequired by the Securities Exchange Act of 1934,asamended (the "Exchange Act").Asindicatedinitsmost recentAmlual Report on Form10-K,VFI currentlyis awell-known seasoned issuer ("WKSI"). PursuanttoRule405("Rule405")of the Securities Act of 1933,asamended ("Securities Act"), VFI hereby respectfully requests that the Commission (or the Division of Corporation Finance ("Division"), pursuanttothe delegation of authority of the Commissions ) determine that, forgood cause shown, itisnotnecessary under the circumstances that VFI be considered an "ineligible issuer" under Rule405 andtherefore waive the disqualification that would result ' CFR. § 200.30-1(а)(10). Cleary GottliebSteen&Hamilton LLP or an affiliated entity haD an officeineach of the cities listed above.

when the Commission enters an order (the "Order")inthe above-referenced proceedings. VFI requests that this determination be effective upon the entry of the Order against theRespondent inthe above-referenced administrative proceeding. Thisletteristhefirstrequest by VFI regarding the waiver of any disqualification from WKSIstatusunder Rule405. Back~round TheRespondenthas engagedinsettlement discussions with the Division of Enforcement ("Division of Enforcement")and,as aresult of these discussions, theRespondentwill submit an offerof settlement pursuanttowhich it consentstothe entry of the Order. Under the terms of the offerof settlement, theRespondenthas neither admittednordenied any of the findings that will beinthe Order, exceptas tojurisdictionandsubjectmatter. The Order will state that startingin 2006,theRespondentfailedtodisclose that it received mutualfund service andadministrativeservicefees fromathirdparty clearingbroker, andthat theRespondentdidnotadequately implement its policy of disclosingallmaterial conflicts of interest. The Order will find that, based on such conduct, theRespondentviolated Sections206(2), 206(4) and 207of the Investment Advisers Act of 1940(the "Advisers Act"),andRule206(4)-7 thereunder. Under the terms of the Order, pursuanttoSection15(b)of the Exchange Act,and Sections203(e) and 203(k)of the Advisers Act, theRespondentwill be: (1)orderedtoceaseand desist from committing or causing any violationsandany future violations of Sections206(2), 206(4) and 207of the Advisers ActandRule206(4)-7thereunder;(2)censuredand (3)ordered topay disgorgement of $2,621,324.00,prejudgment interest of $119,557.77 anda civilmoney penalty of $300,000.00. Discussion In2005,the Commission revised the registration, communications,andoffering processes under the Securities Act (the "Securities OfferingReformRules").zAspartof the Securities OfferingReformRules, the Commission addedanew category of issuer, the "WKS1." Inordertoqualifyas aWKSI, an issuer mustnotbe an "ineligible issuer." The Securities OfferingReformRules also permit, under Rules163, 164 and 433 of the Securities Act, expanded communications with potential investors by issuers thatarenotdeemed ineligible issuers. Under Rule405,an issuer will be an ineligible issuer if, among other things:
(vi) Within the past three years ... , the issuer or any entity thatatthetimewasa subsidiary of the issuer wasmadethe subject of any judicial or administrative decree or order arisingoutof agovernmental action that:
2 Securities OfferingReform,Securities ActReleaseNo.8591 (July19, 2005), 70Fed. Reg. 44,722(Aug. 3, 2005).

(A)
(B)
(C)
Prohibits certain conduct or activities regarding, including future violations of, the anti-fraud provisions of thefederalsecurities laws; Requires that thepersonceaseanddesist from violating the anti-fraud provisions of thefederalsecurities laws; or Determines that thepersonviolated the anti-fraud provisions of thefederal securities laws.3 Pursuanttothis ruleandbased on actions involving its indirect subsidiary VFA specified inthe Order, VF' would become an ineligible issuer upon the entry of the Order absentawaiver from the Commission. Under Rule405,the Commission (or the Division pursuanttodelegated authority) may grant waivers of ineligible issuerstatus"uponashowing of good cause, that itisnotnecessary under the circumstances that the issuer be considered an ineligible issuer."4 Inthe Division's RevisedStatementon Well-Known Seasoned Issuer Waivers (the "RevisedStatement"),issued onApril 24, 2014,it identifies certainfactors relevanttoits assessmentindetermining whether an issuer has shown good cause that ineligible issuerstatusis notnecessaryforthepublicinterest or the protection of investors, namely:

1. Thenatureof the violation or convictionandwhether it involved disclosureforwhich
   the issuer or any of its subsidiaries was responsible or calls into question the ability of the issuertoproduce reliable disclosure currentlyand inthe future;
2. Whether the conduct involvedacriminal conviction or scienter-based violation,as
   opposedto a civilor administrative non-scienter-based violation;
3. Who was responsibleforandwhat was the duration of the misconduct;
4. What remedialstepsthe issuer took;and
5. What the impact would be if the waiver requestisdenied.5
   The RevisedStatementalso addresses the issuer's burdentoshowgood cause. The Division states that where thereis acriminal conviction orascienter-based violation involving disclosureforwhich the issuer or any of its subsidiaries was responsible, the issuer's burden to showgood cause thatawaiverisjustified would be significantly greater. ReasonsforGrantimaWaiver з Rule405, 17C.F.R. § 230.405(definition of "ineligible issuer"). 4 1d, s See Division of Corporation Finance "RevisedStatementon Well-Known Seasoned Issuer Waivers," Apri124, 2014.

VFІ believes thereisgood cause that itisnotnecessary under the circumstancesforitto be considered an ineligible issuer.As morefully described below, VFI respectfully requests that the Commission determine that, under the circumstances, it shouldnotbe considered an ineligible issuer. Natureof the Violations Describedinthe Order The Order will state that theRespondentdisclosed on its FormADVits relationship with acertain thirdpartybroker-dealerandthat theno-transaction-feefeatureof itsno-transaction-fee mutualfund program("NTFProgram")maypresentits investment adviser representatives with anincentive torecommend mutualfunds inthe NTFProgram. However, the Order will state that theRespondentfailedtodiscloseinits FormADV,inadvisory agreements with clients or otherwise certain compensation it received through anarrangementwithathirdpartybroker￾dealerandconflicts arising from that compensation,inparticular, that it received payments from such thirdpartybroker-dealer based on the Respondent's client assets investedinthe NTF Programmutual finds or that these payments maypresentan additional conflict of interest. Additionally, the Order will state that theRespondentdidnotdisclosetoits advisory clients the administrativeservicesfee payments it began receivingas aresult of an AdministrativeServices Fee Agreement it entered intoin April 2014,even though it representedinsuchdocumentithad done so. The disclosure violationtobe describedinthe Order, which falls under Section206(2) andSection207of the Advisers Act, involved only theRespondent,which sits two levels below VFIinVFI's organizational structure, identified only this issue relatingtothe Respondent's disclosures,anddidnotinvolve orhaveany impact on any of VFI's other entitiesuptoand including VFI itself. The Order willnotstate that VFI failedtocomply with disclosure requirements applicabletoVFI,as aWKSI or otherwise, under the Securities Act or the Exchange Act or that VFImadeany misrepresentationsinits ownpublicdisclosures.Infact, the disclosure policiesand proceduresapplicabletotheRespondent andthe responsibilities of the individuals responsibleforthe violationstobe describedinthe Orderarecompletelyseparate anddistinct from the disclosure policiesand proceduresapplicabletoVFIandthe responsibilities of the individuals responsibleforthe disclosures of VFI.Inaddition,noneof the individuals responsibleforthe disclosuresattheRespondent haveany responsibilityforany disclosures of VFI. Accordingly, the violationstobe describedinthe Orderdonotcall into question the ability of VFItoprovide reliable disclosure currentlyand inthe future. Criminal Convictions or Scienter-Based Violations The Order willnotstate that VFI or theRespondentengagedinany conduct involvinga criminal conviction or scienter-based violation. The violationstobe describedinthe Order, which fall under Section206(2) andSection206(4)of the Advisers Act,arenotscienter-based violations. Furthermore, the violationstobe describedinthe Order willnotgive
risetoor constituteacriminal conviction.

ResponsibilityforandDuration of the Violations Describedinthe Order The violationstobe describedinthe Order involved only theRespondent anddidnot involve any of VFI's other entities, including VFI itself. The violationstobe described involved only the Respondent's practicesanddisclosures relatingtocompensation received through an arrangementwithathirdpartybroker-dealer. The violations didnotinvolve any offerings by VFI of its securities or disclosures relatedtoVFIand,asnoted above, the violationstobe describedinthe Orderdonotstate that VFImadeany omissions or misrepresentationsinits written materialsanddisclosures. Additionally, other than the violationstobe describedinthe Order, theRespondentbelieves it maintained robust disclosure regarding revenue sharing.As a result of violationstobe describedinthe Order, theRespondentwill update its disclosureand enhance its disclosure processesinaccordance with the requirements of the Order. NooneatVF', oratVoya Holdings Inc., whichisthe directholdingcompanyforthe Respondent,knew about the circumstances thatgaverisetothe violationstobe describedinthe Order.Asdiscussed above, the disclosure policiesand proceduresfortheRespondent andVFI arecompletelyseparate. The Order will state that the Respondent's failuretodisclose certain compensation received through anarrangementwithathirdpartybroker-dealer beganin 2006. The violations tobe describedinthe Order continuedoverthis period because theRespondentdidnot havea sufficiently robust processforlinking compensation received from third partiestodisclosure of conflicts of interestinits FormADV.However, since June2015,theRespondenthas undertaken significant effortsandcontinuestotakestepsdesignedtoensure that these problems willnot recur,asdiscussedinthe next section of thisletter,including revision of its policiesand proceduresforupdating disclosures duetoproduct enhancements, the receipt of revenue from productand serviceproviders, itsbusinesspracticesandregulatory actionstowhich itissubject. RemedialStepsTakenandtobe Taken The violationsatissue werefirstidentifiedtotheRespondentby the Division of EnforcementinJune2015. Since thistime,theRespondenthas worked with the Division of Enforcementtoupdate its disclosure. Additionally, theRespondentwill update its policiesand proceduresrelatedtothe receipt of compensation, conflicts of interestanddisclosure. Toaddress the issuestobe describedinthe Order, since June2015theRespondenthas undertaken significant efforts,andcontinuestotakesteps,designedtoensure that these problems willnotrecur.Inparticular,inthefirstquarter of 2016,theRespondentimplemented new policiesand proceduresrelatedtothe receipt of compensation, conflicts of interestanddisclosure. Inparticular, such policies seektobetter tie revenue received from third partiestodisclosurein its FormADVby requiring representatives fromall relevantdepartments within theRespondent tomeet onaregular ongoingbasistoreview revenues received from third parties, any conflicts of
interest that arise from such compensation,aswellasany requirementsfordisclosureas a result of such compensation. Further, theRespondenthas createdanew dual-reporting structure, requiring that disclosure be cleared through the Respondent's Chief Compliance Officer,aswell asthe Respondent's Chief LegalCounsel.

Further, theRespondenthasmadethe decisiontodiscontinue the receipt of the administrativeservicesfee payments discussedinthe Orderandwill implement new fee-related contractual arrangements byDecember 15, 2016. Inaddition, theRespondenthas reorganized its compliance department partiallyas a result of the violationstobe describedinthe Order, including appointinganew Chief Compliance Officer,DanBurkolt,on July18, 2016.Asof January1, 2017,Mr. Burkott also serves asChief Compliance Officer of the registered investment adviser.Inadditionto appointinganew Chief Compliance Officer, theRespondenthas addedanew paralegaltoits disclosureteamas aresult of the violations describedinthe Order. Impact if the Waiver RequestisDenied Asthe Divisionisaware, VF' has an automatically effective Form S-3ASR registration statement(the "VFI WKSI Shelf'), whichisavailable onlytoWKSIs ("WKSI Shelf'). Loss of WKSIstatuswould significantly impact the ability of VFItoquicklyandeffectively access the capital markets. Losing WKSIstatuswould eliminate many of the advantagesforVFI of using shelf registration statements. Among other things, VFІ would be requiredtopayallfees upfront atthetimeof registrationandinclude additional informationinits registration statements. VFI's registration statements would also be subjectto areview period, limiting its flexibilityandability toaccess the capital markets when market conditionsareadvantageous withatransaction tailoredtomarket demands, which would resultinincreased uncertaintyas tothe potential timingforexecuting transactions under the registrationstatement.As adirect result, depending on thetiming andmarket conditions, VFI may be forcedtorestrict its capital raising efforts from securitiessalestoprivateofferings. The proceduralandfinancial flexibility that the automatic shelf registration process providesiscritically importantinfacilitating swift execution of VFI's fundingandcapital raising activitiesforVFIandits shareholders.Inaddition, VFI's inabilityto use free-writing prospectuses ("FWPs") that can includemarketingmaterial that facilitates an offering (including using thirdpartyoffering participants) could harm VF"s abilitytoefficiently respondtomarket conditions. VFI filed the VFI WKSI Shelf on June18, 2014,which registeredavariety of securities, including debt securities, guarantees of debt securities, common stock, preferred stock, warrants and units. In2015,VFI completed its separation fromING GroepNV,its former parent company ("iNG"). Inconnection with this separation, pursuantto aregistration rights agreement between VFIandING, INGhas sold approximately$3.5billion of common stock registered under the VFI WKSI Shelf througha seriesof transactions.INGcontinuestohold certain of VFI's securities thataresubjecttoregistration rights agreement, namely, warrantsandthe shares of common stock underlying the warrants. The warrantsheldbyINGandthe shares of common stock underlying such warrantsareregistrable upon the demand of ING.Because
thesalesof such shares will be dependent on market conditions, VFI cannot predict if or whenINGwill seek totake advantage of these rights under the registration rights agreement,anditispossible they maydosoin multipletransactions.As aresult, the inabilitytosell such warrantsandunderlying

Sincerel
March?, 2017 shares pursuanttothe VFI WKSI Shelf would adversely affect VFI's abilitytoefficiently respondtosuch contractual demands. VFI also has issuedandmay issue debt securitiesinthe financial markets fromtime to time tofinance its operations, subjecttomarket conditionsandother considerations.Forexample, inJune2016, VFI issued $800million aggregateprincipalamount of seniornotesregistered under the VFI WKSI Shelf. Additionally,in 2013,the yearprior tothe VFI WKSI Shelf, VFI issued$3 billion aggregateprincipalamount of notesduring the year. It issued suchnotesona privateplacementbasisbecause it wasnotyet WKSI eligibleand hadtoincur thetimeand expense of registering the exchange of the restrictednotes forunrestrictednotespursuantto multipleA/Bexchangeoffers. Because VFI expectsto continue tofinance its operations, subject tomarket conditions, through the issuance of debtinthepublicmarkets, the inability of VFIto use the VFI WKSI Shelf would adversely affect its abilitytoefficientlyandcost-effectively take advantage of market conditions.

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RequestforWaiver
Insum, these factssupportaconclusion that VFI can demonstrateandhas demonstrated that ineligible issuerstatusisnotnecessaryforthepublicinterest or the protection of investors. Forthe foregoing reasons, VFI respectfully submits that, based on thefactorsdescribed above, itisnotnecessary under the circumstancesforVFItobe deemed an ineligible issuerand that good cause existsforthe relief requestedinthisletter. The facts alsosupportaconclusion that the granting of awaiver would be entirely consistent with the guidelinesforrelief establishedinthe RevisedStatement. Furthermore, because the conducttobe describedinthe OrderdoesnotrelatetoVFI's abilitytoproduce reliable disclosureas aWKSI, including with respecttooffering securities, grantingawaivertoVFIinthis instance would be consistent with thepublicinterestandthe protection of investors. We therefore respectfully request that the Commission (or the Division pursuantto delegated authority) makeadetermination that VFIisgrantedawaiver from designationasan ineligible issueratthetimethat the Orderisissued by the Commission. Please contactmeat 212-225-2556or by emailatpmarcogliese@cgsh.comif you should haveany questions regarding this request. Ратеlа-([ . Marcogliese cc: PatriciaJ. Walsh, Voya Financial, Inc. Trevor Ogle, Voya Financial, Inc. CraigB. Brod,Cleary GottliebSteen&HamiltonLLP