60 Day Notice

3235-0734 60 day notice.pdf

Rule 22c-1 (17 CFR 270.22c-1) under the Investment Company Act of 1940, Pricing of redeemable securities for distribution, redemption and repurchase

60 Day Notice

OMB: 3235-0734

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55648

Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices

Inter-Market Competition
The proposed amendments to the Tier
5 NOM Market Maker Rebate to Add
Liquidity in Penny Pilot Options do not
impose an undue burden on intermarket competition. The pricing
changes proposed above are generally
designed to attract additional order flow
to the Exchange, which strengthens the
Exchange’s competitive position.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues if they deem fee
levels at a particular venue to be
excessive, or rebate opportunities
available at other venues to be more
favorable. In such an environment, the
Exchange must continually adjust its
fees and rebates to remain competitive
with other exchanges that have been
exempted from compliance with the
statutory standards applicable to
exchanges. Because competitors are free
to modify their own fees and rebates in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which pricing
changes in this market may impose any
burden on competition is extremely
limited.
NOM is a relatively small market so
its ability to burden intermarket
competition is limited. Moreover, as
noted above, price competition between
exchanges is fierce, with liquidity and
market share moving freely between
exchanges in reaction to fee and credit
changes.
In sum, if the changes proposed
herein are unattractive to market
participants, it is likely that the
Exchange will lose market share as a
result. Accordingly, the Exchange does
not believe that the proposed changes
will impair the ability of members or
competing order execution venues to
maintain their competitive standing in
the financial markets.
Intra-Market Competition
The proposed amendments to the Tier
5 NOM Market Maker Rebate to Add
Liquidity in Penny Pilot Options do not
impose an undue burden on intramarket competition. Increasing the Tier
5 NOM Market Maker Rebate to Add
Liquidity in Penny Pilot Options and
also requiring participants to add more
volume on NOM and add liquidity on
The Nasdaq Stock Market will attract
liquidity to the Exchange. The
additional rebate incentive that is being
offered to Participants that qualify for
the Tier 5 rebate and also add NOM
Market Maker liquidity in Penny Pilot
Options and/or Non-Penny Pilot

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Options of above 0.50% of total industry
customer equity and ETF option ADV
contracts per day in a month will
further incentivize Market Makers to
direct order flow to the Exchange.
Greater liquidity benefits all market
participants by providing more trading
opportunities and attracting greater
participation by Market Makers. An
increase in the activity of these market
participants in turn facilitates tighter
spreads. Overall, the Exchange believes
that the tiered NOM Market Maker
Rebates to Add Liquidity in Penny Pilot
Options along with the proposed Tier 5
increased rebate incentive will continue
to reflect the progressively increasing
rebate requirements offered to NOM
Market Maker to incentivize them to
earn the highest possible rebates by
bringing the most order flow to the
Exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.26
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (http://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2019–084 on the subject line.
26 15

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U.S.C. 78s(b)(3)(A)(ii).

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Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2019–084. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (http://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NASDAQ–2019–084 and
should be submitted on or before
November 7, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22594 Filed 10–16–19; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
27 17

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CFR 200.30–3(a)(12).

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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
Extension:
Rule 22c–1, SEC File No. 270–793, OMB
Control No. 3235–0734

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 22c–1 (17 CFR 270.22c–1) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (the ‘‘Investment
Company Act’’ or ‘‘Act’’) enables a fund
to choose to use ‘‘swing pricing’’ as a
tool to mitigate shareholder dilution.
Rule 22c–1 is intended to promote
investor protection by providing funds
with an additional tool to mitigate the
potentially dilutive effects of
shareholder purchase or redemption
activity and a set of operational
standards that allow funds to gain
comfort using swing pricing as a means
of mitigating potential dilution.
The respondents to amended rule
22c–1 are open-end management
investment companies (other than
money market funds or exchange-traded
funds) that engage in swing pricing.
Compliance with rule 22c–1(a)(3) is
mandatory for any fund that chooses to
use swing pricing to adjust its NAV in
reliance on the rule.
While we are not aware of any funds
that have engaged in swing pricing,1 we
are estimating for the purpose of this
analysis that 5 fund complexes have
funds that may adopt swing pricing
policies and procedures in the future
pursuant to the rule. We estimate that
the total burden associated with the
preparation and approval of swing
pricing policies and procedures by those
fund complexes that would use swing
pricing will be 280 hours.2 We also
estimate that it will cost a fund complex
$43,406 to document, review and
initially approve these policies and
procedures, for a total cost of $217,030.3
1 No funds have engaged in swing pricing as
reported on Form N–CEN as of August 14, 2019.
2 This estimate is based on the following
calculation: (48 + 2 + 6) hours × 5 fund complexes
= 280 hours.
3 These estimates are based on the following
calculations: 24 hours × $201 (hourly rate for a
senior accountant) = $4,824; 24 hours × $463
(blended hourly rate for assistant general counsel
($433) and chief compliance officer ($493)) =
$11,112; 2 hours (for a fund attorney’s time to
prepare materials for the board’s determinations) ×
$340 (hourly rate for a compliance attorney) = $680;
6 hours × $4,465 (hourly rate for a board of 8
directors) = $26,790; ($4,824 + $11,112 + $680 +
$26,790) = $43,406; $43,406 × 5 fund complexes =

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Rule 22c–1 requires a fund that uses
swing pricing to maintain the fund’s
swing policies and procedures that are
in effect, or at any time within the past
six years were in effect, in an easily
accessible place.4 The rule also requires
a fund to retain a written copy of the
periodic report provided to the board
prepared by the swing pricing
administrator that describes, among
other things, the swing pricing
administrator’s review of the adequacy
of the fund’s swing pricing policies and
procedures and the effectiveness of their
implementation, including the impact
on mitigating dilution and any backtesting performed.5 The retention of
these records is necessary to allow the
staff during examinations of funds to
determine whether a fund is in
compliance with its swing pricing
policies and procedures and with rule
22c–1. We estimate a time cost per fund
complex of $292.6 We estimate that the
total for recordkeeping related to swing
pricing will be 20 hours, at an aggregate
cost of $1,460, for all fund complexes
that we believe include funds that have
adopted swing pricing policies and
procedures.7
Amortized over a three-year period,
we believe that the hour burdens and
time costs associated with rule 22c–1,
including the burden associated with
the requirements that funds adopt
policies and procedures, obtain board
approval, and periodic review of an
annual written report from the swing
pricing administrator, and retain certain
records and written reports related to
swing pricing, will result in an average
aggregate annual burden of 113.3 hours,
and average aggregate time costs of
$73,803.8
We request written comment on: (a)
Whether the collections of information
$217,030. The hourly wages used are from SIFMA’s
Management & Professional Earnings in the
Securities Industry 2013, modified by Commission
staff to account for an 1800-hour work-year and
inflation, and multiplied by 5.35 to account for
bonuses, firm size, employee benefits, and
overhead. The staff previously estimated in 2009
that the average cost of board of director time was
$4,000 per hour for the board as a whole, based on
information received from funds and their counsel.
Adjusting for inflation, the staff estimates that the
current average cost of board of director time is
approximately $4,465.
4 See rule 22c–1(a)(3)(iii).
5 See id.
6 This estimate is based on the following
calculations: 2 hours × $58 (hourly rate for a general
clerk) = $116; 2 hours × $88 (hourly rate for a senior
computer operator) = $176. $116 + $176 = $292.
7 These estimates are based on the following
calculations: 4 hours × 5 fund complexes = 20
hours. 5 fund complexes × $292 = $1,460.
8 These estimates are based on the following
calculations: (280 hours (year 1) + (3 × 20 hours)
(years 1, 2 and 3)) ÷ 3 = 113.3 hours; ($217,030 (year
1) + (3 × $1,460) (years 1, 2 and 3)) ÷ 3 = $73,803.

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55649

are necessary for the proper
performance of the functions of the
Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burdens of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
Please direct your written comments
to Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Candace
Kenner, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
[email protected].
Dated: October 10, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22578 Filed 10–16–19; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87275; File No. SR–ICEEU–
2019–020]

Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to the
ICE Clear Europe Clearing Rules and
Procedures
October 10, 2019.

Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 30, 2019, ICE Clear Europe
Limited (‘‘ICE Clear Europe’’ or the
‘‘Clearing House’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
changes described in Items I, II, and III
below, which Items have been primarily
prepared by ICE Clear Europe. ICE Clear
Europe filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) 4 thereunder,
such that the proposed rule change was
immediately effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17

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