60 day notice

3235-0200 60 Day Notice.pdf

Rule 15c3-1; Net Capital Requirements for Brokers and Dealers

60 day notice

OMB: 3235-0200

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Federal Register / Vol. 85, No. 24 / Wednesday, February 5, 2020 / Notices
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, protect investors and the public
interest because the proposed
conforming grammatical or nonsubstantive changes would add clarity,
transparency and consistency to the
Exchange’s disciplinary rules. The
Exchange believes that market
participants would benefit from the
increased clarity, thereby reducing
potential confusion. Similarly, the
Exchange believes that the proposed
changes would also make the
Exchange’s disciplinary rules more
consistent with the rules of NYSE Arca,
thereby ensuring that persons subject to
the Exchange’s jurisdiction, regulators,
and the investing public can more easily
navigate and understand the Exchange’s
rules.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not intended to
address competitive issues but rather is
concerned solely with amending the
disciplinary rules to make conforming
grammatical or non-substantive changes
based on the disciplinary rules of the
Exchange’s affiliate NYSE Arca.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.

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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
8 15
9 17

U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).

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18:54 Feb 04, 2020

of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 10 of the Act to
determine whether the proposed rule
change 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–
NYSENAT–2020–02 on the subject line.
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–NYSENAT–2020–02. 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
10 15

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U.S.C. 78s(b)(2)(B).

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filing also will be available for
inspection and copying at the principal
offices 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–NYSENAT–2020–02, and
should be submitted on or before
February 26, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–02192 Filed 2–4–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–197, OMB Control No.
3235–0200]

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.
Extension:
Rule 15c3–1.

Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 15c3–1 (17 CFR
240.15c3–1), under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 15c3–1 requires brokers-dealers
to have at all times sufficient liquid
assets to meet their current liabilities,
particularly the claims of customers.
The rule facilitates the monitoring of the
financial condition of broker-dealers by
the Commission and the various selfregulatory organizations. It is estimated
that broker-dealer respondents
registered with the Commission and
subject to the collection of information
requirements of Rule 15c3–1 incur an
aggregate annual time burden of
approximately 76,981 hours to comply
11 17

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CFR 200.30–3(a)(12).

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Federal Register / Vol. 85, No. 24 / Wednesday, February 5, 2020 / Notices

with this rule and an aggregate annual
external cost of approximately $299,000.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
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.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
[email protected].
Dated: January 31, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–02230 Filed 2–4–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–312, OMB Control No.
3235–0354]

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.

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Extension:
Rule 19b–1.

1 17

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l–3520), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection 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.

VerDate Sep<11>2014

Section 19(b) of the Investment
Company Act of 1940 (the ‘‘Act’’) (15
U.S.C. 80a–19(b)) authorizes the
Commission to regulate registered
investment company (‘‘fund’’)
distributions of long-term capital gains
made more frequently than once every
twelve months. Accordingly, rule 19b–
1 under the Act (17 CFR 270.19b–1)
regulates the frequency of fund
distributions of capital gains. Rule 19b–
1(c) states that the rule does not apply
to a unit investment trust (‘‘UIT’’) if it
is engaged exclusively in the business of
investing in certain eligible securities
(generally, fixed-income securities),
provided that: (i) The capital gains
distribution falls within one of five
categories specified in the rule 1 and (ii)
the distribution is accompanied by a
report to the unitholder that clearly
describes the distribution as a capital
gains distribution (the ‘‘notice
requirement’’).2 Rule 19b–1(e) permits a
fund to apply to the Commission for
permission to distribute long-term
capital gains that would otherwise be
prohibited by the rule if the fund did
not foresee the circumstances that
created the need for the distribution.
The application must set forth the
pertinent facts and explain the
circumstances that justify the
distribution.3 An application that meets
those requirements is deemed to be
granted unless the Commission denies
the request within 15 days after the
Commission receives the application.
Commission staff estimates that three
funds will file an application under rule
19b–1(e) each year.4 The staff
understands that if a fund files an
application it generally uses outside
counsel to prepare the application. The
cost burden of using outside counsel is
discussed in Item 13 below. The staff
estimates that, on average, a fund’s
investment adviser would spend
approximately 4 hours to review an
application, including 3.5 hours by an
assistant general counsel at a cost of
$466 per hour and 0.5 hours by an
administrative assistant at a cost of $81
per hour, and the fund’s board of
directors would spend an additional 1

18:54 Feb 04, 2020

Jkt 250001

CFR 270.19b–1(c)(1).
notice requirement in rule 19b–1(c)(2)
supplements the notice requirement of section 19(a)
[15 U.S.C. 80a–19(a)], which requires any
distribution in the nature of a dividend payment to
be accompanied by a notice disclosing the source
of the distribution.
3 Rule 19b–1(e) also requires that the application
comply with rule 0–2 [17 CFR 270.02] under the
Act, which sets forth the general requirements for
papers and applications filed with the Commission
pursuant to the Act and rules thereunder.
4 This estimate is based on the average number of
applications filed with the Commission pursuant to
rule 19b–1(e) in the prior three-year period.
2 The

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hour at a cost of $4,465 per hour, for a
total of 5 hours.5 Thus, the staff
estimates that the annual hour burden of
the collection of information imposed
by rule 19b–1(e) would be
approximately five hours per fund, at a
cost of $6,136.50.6 Because the staff
estimates that, each year, three funds
will file an application pursuant to rule
19b–1(e), the total burden for the
information collection is 15 hours at a
cost of $18,409.50.7
Commission staff estimates that there
is no hour burden associated with
complying with the collection of
information component of rule 19b–1(c).
As noted above, Commission staff
understands that funds that file an
application under rule 19b–1(e)
generally use outside counsel to prepare
the application.8 The staff estimates
that, on average, outside counsel spends
10 hours preparing a rule 19b–1(e)
application, including eight hours by an
associate and two hours by a partner.
Outside counsel billing arrangements
and rates vary based on numerous
factors, but the staff has estimated the
average cost of outside counsel as $400
per hour, based on information received
from funds, intermediaries, and their
counsel. The staff therefore estimates
that the average cost of outside counsel
preparation of the rule 19b–1(e)
exemptive application is $4,000.9
Because the staff estimates that, each
year, five funds will file an application
pursuant to rule 19b–1(e), the total
annual cost burden imposed by the
exemptive application requirements of
5 The estimate for assistant general counsels is
from SIFMA’s Management & Professional Earnings
in the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour workyear and inflation and multiplied by 5.35 to account
for bonuses, firm size, employee benefits and
overhead. The estimate for administrative assistants
is from SIFMA’s Office Salaries in the Securities
Industry 2013, modified by Commission staff to
account for an 1800-hour work-year and inflation
and multiplied by 2.93 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.
6 This estimate is based on the following
calculations: $1,631 (3.5 hours × $466 = $1,631)
plus $40.5 (0.5 hours × $81 = $40.5) plus $4,465
equals $6,136.50 (cost of one application).
7 This estimate is based on the following
calculation: $6,136.50 (cost of one application)
multiplied by 3 applications = $18,409.50 total cost.
8 This understanding is based on conversations
with representatives from the fund industry.
9 This estimate is based on the following
calculation: 10 hours multiplied by $400 per hour
equals $4,000.

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