60 day notice

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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.

jbell on DSKJLSW7X2PROD with NOTICES

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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Sfmt 4703

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

jbell on DSKJLSW7X2PROD with NOTICES

rule 19b–1(e) is estimated to be
$12,000.10
The Commission staff estimates that
there are approximately 2,230 UITs 11
that may rely on rule 19b–1(c) to make
capital gains distributions. The staff
estimates that, on average, these UITs
rely on rule 19b–1(c) once a year to
make a capital gains distribution.12 In
most cases, the trustee of the UIT is
responsible for preparing and sending
the notices that must accompany a
capital gains distribution under rule
19b–1(c)(2). These notices require
limited preparation, the cost of which
accounts for only a small, indiscrete
portion of the comprehensive fee
charged by the trustee for its services to
the UIT. The staff believes that as a
matter of good business practice, and for
tax preparation reasons, UITs would
collect and distribute the capital gains
information required to be sent to
unitholders under rule 19b–1(c) even in
the absence of the rule. The staff
estimates that the cost of preparing a
notice for a capital gains distribution
under rule 19b–1(c)(2) is approximately
$50. There is no separate cost to mail
the notices because they are mailed with
the capital gains distribution. Thus, the
staff estimates that the capital gains
distribution notice requirement imposes
an annual cost on UITs of
approximately $111,500.13 The staff
therefore estimates that the total cost
imposed by rule 19b–1 is $123,500.14
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Written comments are invited on: (a)
Whether the collection of information is
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 burden of
the collection of information; (c) ways to
10 This estimate is based on the following
calculation: $4,000 multiplied by 3 funds equals
$12,000.
11 See 2019 Investment Company Fact Book,
Investment Company Institute, available at https://
www.ici.org/pdf/2019_factbook.pdf.
12 The number of times UITs rely on the rule to
make capital gains distributions depends on a wide
range of factors and, thus, can vary greatly across
years and UITs. UITs may distribute capital gains
biannually, annually, quarterly, or at other
intervals. Additionally, a number of UITs are
organized as grantor trusts, and therefore do not
generally make capital gains distributions under
rule 19b–1(c), or may not rely on rule 19b–1(c) as
they do not meet the rule’s requirements.
13 This estimate is based on the following
calculation: 2,230 UITs multiplied by $50 equals
$111,500.
14 $111,500 (total cost associated with rule 19b–
1(c)) + $12,000 (total cost associated with rule 19b–
1(e)) = $123,500.

VerDate Sep<11>2014

18:54 Feb 04, 2020

Jkt 250001

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 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. 2020–02232 Filed 2–4–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88090; File No. SR-Nasdaq2019–089]

Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Designation of a Longer Period for
Commission Action on a Proposed
Rule Change To Amend Rule 5815 To
Preclude Stay During Hearing Panel
Review of Staff Delisting
Determinations in Certain
Circumstances
January 30, 2020.

On November 27, 2019, The Nasdaq
Stock Market LLC (‘‘Nasdaq’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Nasdaq Rule 5815 regarding
review of Nasdaq Staff Delisting
Determinations by Hearings Panels to
preclude the stay of a Nasdaq Staff
Delisting Determination during the
review period in specified
circumstances. The proposed rule
change was published for comment in
the Federal Register on December 17,
2019.3 The Commission has received no
comment letters on the proposed rule
change.
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 87716
(Dec. 11, 2019), 84 FR 69007.
4 15 U.S.C. 78s(b)(2).

notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is January 31,
2020. The Commission is extending this
45-day time period.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change.
Accordingly, the Commission, pursuant
to Section 19(b)(2) of the Act,5
designates March 16, 2020 as the date
by which the Commission shall either
approve or disapprove, or institute
proceedings to determine whether to
disapprove, the proposed rule change
(File No. SR–Nasdaq–2019–089).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–02186 Filed 2–4–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88092; File No. SR–NSCC–
2020–001]

Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Enhance National
Securities Clearing Corporation’s
Automated Customer Account
Transfer Service (ACATS) Transfer
Processes and Make Certain
Clarifications in Rule 50
January 30, 2020.

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 January
24, 2020, National Securities Clearing
Corporation (‘‘NSCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule

1 15
2 17

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6655

5 Id.
6 17

CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15

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