Rule 12h-1(f) 30 Day Federal Register Notice

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Federal Register / Vol. 85, No. 29 / Wednesday, February 12, 2020 / Notices

within its procedures continues and
focuses ICEEU’s ability to manage
financial resources with a conservative
approach to the permissible collateral
pool.
The Commission also notes that it has
previously found these policies and
procedures consistent with the Act 9 and
because there are no material changes,
believes that it continues to be
consistent with the Act.
Therefore, for the reasons discussed
above, the Commission finds that the
proposed rule change would promote
the prompt and accurate clearance and
settlement of securities transactions,
assure the safeguarding of securities and
funds in ICEEU’s custody or control,
and, in general, protect investors and
the public interest, consistent with the
Section 17A(b)(3)(F) of the Act.10

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B. Consistency With Rule 17Ad–
22(e)(3)(i)
Rule 17Ad–22(e)(3)(i) requires that
ICEEU establish, implement, maintain,
and enforce written policies and
procedures reasonably designed to, as
applicable, maintain a sound risk
management framework that identifies,
measures, monitors, and manages the
range of risks that it faces.
As described above, ICEEU’s
proposed Collateral Procedures, similar
to the Existing Policy, continues to list
various eligibility criteria for Permitted
Cover, factors for determining Haircuts,
and sets the framework for the amount
of each type of collateral that can be
accepted from a CM. The Commission
believes that by proposing Collateral
Procedures to follow in this regard,
ICEEU will be able to continue, in a
streamlined and focused fashion, to
mitigate collateral price and liquidation
risk through setting acceptable
Permitted Cover, Haircuts and
Concentration Limits and providing
guidelines for monitoring these
measures and managing any deviations
or related issues. The Commission also
believes that by documenting the
management of its collateral liquidation
risks in this way, ICEEU generally
enhances its financial stability by
ensuring that the collateral it accepts
from CMs continues to adequately meet
its obligations.
For these reasons, the Commission
finds that the proposed rule change is
consistent with Rule 17Ad–22(e)(3)(i).11
9 Securities Exchange Act Release No. 74955 (May
13, 2015), 80 FR 28733 (May 19, 2015) (SR–ICEEU–
2015–007).
10 15 U.S.C. 78q–1(b)(3)(F).
11 17 CFR 240.17Ad–22(e)(3)(i).

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C. Consistency With Rule 17Ad–22(e)(5)
Rule 17Ad–22(e)(5) requires that
ICEEU establish, implement, maintain
and enforce written policies and
procedures reasonably designed to, as
applicable, limit the assets it accepts as
collateral to those with low credit,
liquidity, and market risks, and set and
enforce appropriately conservative
haircuts and concentration limits if the
covered clearing agency requires
collateral to manage its or its
participants’ credit exposure; and
require a review of the sufficiency of its
collateral haircuts and concentration
limits to be performed not less than
annually.12
The Commission believes that the
factors and other considerations noted
above as described in the proposed
Collateral Procedures with respect
acceptable Permitted Cover, Haircuts,
and Concentration Limits, including
low credit risk of assets, transferability
of assets, market conditions, and
expectations of future volatility, will
continue to maintain ICEEU’s ability to
limit the assets it accepts as collateral to
those with low credit, liquidity, and
market risks, and set and enforce
appropriately conservative haircuts and
concentration limits. Further, the
Revised Policy and Collateral
Procedures continue to provide that
Concentration Limits be reviewed at
least monthly at a senior level and
Permitted Cover, Haircuts and
Concentration Limits are subject to
regular reviews and monitoring and
changed ad–hoc if needed.
For these reasons, the Commission
finds that the proposed rule change is
consistent with Rule 17Ad–22(e)(5).13
D. Consistency With Rule 17Ad–22(e)(2)
Rule 17Ad–22(e)(2) requires, among
other things, that ICEEU establish,
implement, maintain, and enforce
written policies and procedures
reasonably designed to provide for
governance arrangements that are clear
and transparent and specify clear and
direct lines of responsibility.14
As noted above, similar to the
Existing Policy, the proposed Revised
Policy and the Collateral Procedures
continue to describe the governance
relating to Permitted Cover, Haircuts,
and Concentration Limits. Specifically,
the Revised Policy provides that the
document owner is responsible for
ensuring that it remains up-to-date and
is reviewed in accordance with ICEEU’s
governance processes and will report
material breaches or unapproved
12 17

CFR 240.17Ad–22(e)(5).
CFR 240.17Ad–22(e)(5).
14 17 CFR 240.17Ad–22(e)(2)(i) and (v).
13 17

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deviations from this Policy to their Head
of Department, the Chief Risk Officer
and the Head of Compliance (or their
delegates) who together will determine
if further escalation should be made to
relevant senior executives, the Board
and/or competent authorities. Further,
the proposed Collateral Procedures state
that proposals to add, remove, change,
or set Permitted Cover, Haircuts or
Concentration Limits are reviewed and
approved at a senior level and
amendments would be published where
practicable by circular in advance of
taking effect to CMs and relevant
competent authorities. The Commission
therefore believes that this continues to
maintain ICEEU’s policies and
procedures in a manner reasonably
designed to provide for governance
arrangements that are clear and
transparent and specify clear and direct
lines of responsibility.
For these reasons, the Commission
finds that the proposed rule change is
consistent with Rule 17Ad–22(e)(2).15
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act, and in
particular, with the requirements of
Section 17A(b)(3)(F) of the Act 16 and
Rules 17Ad–22(e)(3)(i), (e)(5), and (e)(2)
thereunder.17
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 18 that the
proposed rule change (SR–ICEEU–2019–
019) be, and hereby is, approved.19
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–02748 Filed 2–11–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
15 17

CFR 240.17Ad–22(e)(2).
U.S.C. 78q–1(b)(3)(F).
17 17 CFR 240.17Ad–22(e)(3)(i),(e)(5),(e)(2).
18 15 U.S.C. 78s(b)(2).
19 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
20 17 CFR 200.30–3(a)(12).
16 15

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lotter on DSKBCFDHB2PROD with NOTICES

Federal Register / Vol. 85, No. 29 / Wednesday, February 12, 2020 / Notices
Extension:
Rule 12h–1(f), SEC File No. 270–570, OMB
Control No. 3235–0632

Dated: February 7, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget this
request for extension of the previously
approved collection of information
discussed below.
Rule 12h–1(f) (17 CFR 240.12h–1(f))
under the Securities Exchange Act of
1934 (‘‘Exchange Act’’) provides an
exemption from the Exchange Act
Section 12(g) registration requirements
for compensatory employee stock
options of issuers that are not required
to file periodic reports under the
Exchange Act. The information required
under Exchange Act Rule 12h–1 is not
filed with the Commission. Exchange
Act Rule 12h–1(f) permits issuers to
provide the required information to the
option holders either by: (i) Physical or
electronic delivery of the information;
or (ii) written notice to the option
holders of the availability of the
information on a password-protected
internet site. We estimate that it takes
approximately 2 burden hours per
response to prepare and provide the
information required under Rule 12h–
1(f) and it is prepared and provided by
approximately 40 respondents. We
estimate that 25% of the 2 hours per
response (0.5 hours per response) is
prepared by the company for a total
annual reporting burden of 20 hours (0.5
hours per response × 40 responses).
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.
The public may view the background
documentation for this information
collection at the following website,
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to:
[email protected]; and (ii)
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]. Comments must be
submitted to OMB within 30 days of
this notice.

[FR Doc. 2020–02782 Filed 2–11–20; 8:45 am]

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BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88135; File No. SR–FINRA–
2020–004]

Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Eliminate Transaction
Credits and Trade Reporting Fees
Applicable to Retail Participants That
Use the FINRA/Nasdaq Trade
Reporting Facility
February 6, 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 February
3, 2020, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
‘‘establishing or changing a due, fee or
other charge’’ under Section
19(b)(3)(A)(ii) of the Act 3 and Rule 19b–
4(f)(2) thereunder,4 which renders the
proposal effective upon receipt of this
filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to amend FINRA
Rules 7610A and 7620A to eliminate
transaction credits and trade reporting
fees applicable to Retail Participants
that use the FINRA/Nasdaq Trade
Reporting Facility Carteret (the ‘‘FINRA/
Nasdaq TRF Carteret’’) and the FINRA/
Nasdaq Trade Reporting Facility
Chicago (the ‘‘FINRA/Nasdaq TRF
Chicago’’) (collectively, the ‘‘FINRA/
Nasdaq TRF’’).
The text of the proposed rule change
is available on FINRA’s website at
http://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
1 15

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

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8079

II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The FINRA/Nasdaq TRF is a facility
of FINRA that is operated by Nasdaq,
Inc. (‘‘Nasdaq’’). In connection with the
establishment of the FINRA/Nasdaq
TRF, FINRA and Nasdaq entered into a
limited liability company agreement
(the ‘‘LLC Agreement’’). Under the LLC
Agreement, FINRA, the ‘‘SRO Member,’’
has sole regulatory responsibility for the
FINRA/Nasdaq TRF. Nasdaq, the
‘‘Business Member,’’ is primarily
responsible for the management of the
FINRA/Nasdaq TRF’s business affairs,
including establishing pricing for use of
the FINRA/Nasdaq TRF, to the extent
those affairs are not inconsistent with
the regulatory and oversight functions of
FINRA. Additionally, the Business
Member is obligated to pay the cost of
regulation and is entitled to the profits
and losses, if any, derived from the
operation of the FINRA/Nasdaq TRF.
Pursuant to the FINRA Rule 7600A
Series, FINRA/Nasdaq TRF participants
are charged fees and may qualify for fee
caps (Rule 7620A), and also may qualify
for revenue sharing payments for trade
reporting to the FINRA/Nasdaq TRF
(Rule 7610A). These rules are
administered by Nasdaq, in its capacity
as the Business Member and operator of
the FINRA/Nasdaq TRF on behalf of
FINRA,5 and Nasdaq collects all fees on
behalf of the FINRA/Nasdaq TRF.
Pursuant to FINRA Rule 7620A,
FINRA/Nasdaq TRF has a special
pricing program, known as the ‘‘Retail
Participant Program’’ 6 for which a
5 FINRA’s oversight of this function performed by
the Business Member is conducted through a
recurring assessment and review of TRF operations
by an outside independent audit firm.
6 To qualify as a ‘‘Retail Participant’’ and for
special pricing under the Retail Participant fee
schedule, a participant must complete and submit
to Nasdaq, as the Business Member, an application.

Continued

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