60 Day Notice

Federal Register / Vol. 85, No. 190 / Wednesday, September 30, 2020 / Notices
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–21545 Filed 9–29–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 90001/September 25, 2020/SR–
NYSE–2019–67]

Securities Exchange Act of 1934;
Order Granting Petition for Review,
Scheduling Filing of Statements, and
Denying New York Stock Exchange
LLC’s Motion To Lift the Stay; In the
Matter of the New York Stock
Exchange LLC Regarding an Order
Approving a Proposed Rule Change,
as Modified by Amendment No. 2, To
Modify Chapter One of the Listed
Company Manual To Modify the
Provisions Relating to Direct Listings
This matter comes before the
Securities and Exchange Commission
(‘‘Commission’’) on petition to review
the approval, pursuant to delegated
authority, of the New York Stock
Exchange LLC (‘‘NYSE’’) proposed rule
change to amend Chapter One of the
Listed Company Manual to modify the
provisions relating to direct listings.1
On December 20, 2019, the
Commission issued a notice of filing of
the proposed rule change, as modified
by Amendment No. 1, filed with the
Commission pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 2 and Rule
19b–4 3 thereunder.4 On February 13,
2020, a longer time period was
designated within which to act on the
proposed rule change.5 On March 26,
2020, proceedings were instituted under
Section 19(b)(2)(B) of the Exchange Act 6
to determine whether to approve or
disapprove the proposed rule change.7
On June 22, 2020, NYSE filed
Amendment No. 2 to the proposed rule
change, replacing the proposed rule
change, as modified by Amendment No.

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1 The

proposed rule change relates to direct
listings that also involve a primary capital raising.
This matter does not affect NYSE’s current rules
related to direct listings that do not involve a
primary capital raising.
2 15 U.S.C. 78s(b)(1).
3 17 CFR 240.19b–4.
4 See Exchange Act Release No. 87821, 84 FR
72065 (Dec. 30, 2019). NYSE filed the proposed rule
change on December 11, 2019. On December 13,
2019, NYSE filed Amendment No. 1 to the
proposed rule change, which amended and
replaced the proposed rule change in its entirety.
5 See Exchange Act Release No. 88190, 85 FR
8981 (Feb. 20, 2020).
6 15 U.S.C. 78s(b)(2)(B).
7 See Exchange Act Release No. 88485, 85 FR
18292 (Apr. 1, 2020).

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1, in its entirety. On June 24, 2020, the
Commission issued a notice of filing of
Amendment No. 2 to the proposed rule
change.8 On June 24, 2020, a longer time
period was designated for Commission
action on proceedings to determine
whether to approve or disapprove the
proposed rule change.9 On August 26,
2020, after consideration of the record
for the proposed rule change, the
Division of Trading and Markets
(‘‘Division’’), pursuant to delegated
authority,10 approved the proposed rule
change, as modified by Amendment No.
2 (‘‘Approval Order’’).11
On August 31, 2020, pursuant to
Commission Rule of Practice 430,12 the
Council of Institutional Investors (‘‘CII’’)
filed with the Commission a notice of
intention for review of the Approval
Order. Pursuant to Commission Rule of
Practice 431(e), the Approval Order was
stayed by the CII filing with the
Commission the notice of intention to
petition for review.13 On September 4,
2020, NYSE filed a motion for the
Commission to lift the automatic stay of
the Approval Order and a brief in
support of its motion to lift the stay. On
September 8, 2020, CII filed a brief in
opposition to NYSE’s motion to lift the
automatic stay. On September 8, 2020,
pursuant to Commission Rule of
Practice 430,14 the CII filed a petition for
review of the Approval Order. On
September 11, 2020, NYSE filed a reply
brief in support of its motion to lift the
stay.
Pursuant to Rule 431 of the Rules of
Practice,15 the petition for review of the
Approval Order of CII is granted.
Further, the Commission hereby
establishes that any party to the action
or other person may file a written
statement in support of or in opposition
to the Approval Order on or before
October 16, 2020.
Finally, the Commission finds that it
is inappropriate to lift the automatic
stay during the pendency of the
Commission’s review.16 CII argues that
the proposed rule change makes
changes to the initial public offering
(‘‘IPO’’) market that are ‘‘so significant
8 See Exchange Act Release No. 89148, 85 FR
39246 (June 30, 2020).
9 See Exchange Act Release No. 89147, 85 FR
39226 (June 30, 2020).
10 17 CFR 200.30–3(a)(12).
11 See Exchange Act Release No. 89684, 85 FR
54454 (Sept. 1, 2020).
12 17 CFR 201.430.
13 17 CFR 201.431(e).
14 17 CFR 201.430.
15 17 CFR 201.431.
16 See Exchange Act Release No. 60988 (Nov. 12,
2009) (refusing to lift automatic stay because the
petitioner ‘‘raised important policy issues that
warrant Commission consideration prior to
allowing’’ rule change to go into effect).

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that the Commission should maintain
the stay’’ while it considers ‘‘the
adequacy of investor protections’’ and
other policy issues under the proposed
rule change. We do not believe that
NYSE has identified a compelling
reason that lifting the automatic stay
furthers the public interest, particularly
in light of the policy considerations CII
has identified. We do not believe it to
be in the public interest to alter the
status quo while the Commission
considers the issues raised by the
proposed rule change before it becomes
effective. We accordingly deny NYSE’s
motion to lift the stay.
For the reasons stated above, it is
hereby:
ORDERED that the petition of CII for
review of the Division’s action to
approve the proposed rule change by
delegated authority be GRANTED; and
It is further ORDERED that any party
or other person may file a statement in
support of or in opposition to the action
made pursuant to delegated authority on
or before October 16, 2020.
It is further ORDERED that NYSE’s
Motion to Lift the Automatic Stay is
hereby denied; and
It is further ORDERED that the August
26, 2020, order approving the proposed
rule change, as modified by Amendment
No. 2 (File No. SR–NYSE–2019–67),
shall remain stayed.
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–21598 Filed 9–29–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0214, SEC File No.
270–238]

Proposed Collection; Comment
Request
Extension:
Rule 17a–7

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit the existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 17a–7 (17 CFR 270.17a–7) (the
‘‘rule’’) under the Investment Company
Act of 1940 (15 U.S.C. 80a–1 et seq.)
(the ‘‘Act’’) is entitled ‘‘Exemption of
certain purchase or sale transactions

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61794

Federal Register / Vol. 85, No. 190 / Wednesday, September 30, 2020 / Notices

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between an investment company and
certain affiliated persons thereof.’’ It
provides an exemption from section
17(a) of the Act for purchases and sales
of securities between registered
investment companies (‘‘funds’’), that
are affiliated persons (‘‘first-tier
affiliates’’) or affiliated persons of
affiliated persons (‘‘second-tier
affiliates’’), or between a fund and a
first- or second-tier affiliate other than
another fund, when the affiliation arises
solely because of a common investment
adviser, director, or officer. Rule 17a–7
requires funds to keep various records
in connection with purchase or sale
transactions effected in reliance on the
rule. The rule requires the fund’s board
of directors to establish procedures
reasonably designed to ensure that the
rule’s conditions have been satisfied.
The board is also required to determine,
at least on a quarterly basis, that all
affiliated transactions effected during
the preceding quarter in reliance on the
rule were made in compliance with
these established procedures. If a fund
enters into a purchase or sale
transaction with an affiliated person, the
rule requires the fund to compile and
maintain written records of the
transaction.1 The Commission’s
examination staff uses these records to
evaluate for compliance with the rule.
While most funds do not commonly
engage in transactions covered by rule
17a–7, the Commission staff estimates
that nearly all funds have adopted
procedures for complying with the
rule.2 Of the approximately 2,915
currently active funds, the staff
estimates that virtually all have already
adopted procedures for compliance with
rule 17a–7. This is a one-time burden,
and the staff therefore does not estimate
an ongoing burden related to the
policies and procedures requirement of
the rule for funds.3 The staff estimates
that there are approximately 90 new
funds that register each year, and that
each of these funds adopts the relevant
policies and procedures. The staff
estimates that it takes approximately 4
hours to develop and adopt these
1 The written records are required to set forth a
description of the security purchased or sold, the
identity of the person on the other side of the
transaction, and the information or materials upon
which the board of directors’ determination that the
transaction was in compliance with the procedures
was made.
2 Unless stated otherwise, these estimates are
based on conversations with the examination and
inspections staff of the Commission and fund
representatives.
3 Based on our reviews and conversations with
fund representatives, we understand that funds
rarely, if ever, need to make changes to these
policies and procedures once adopted, and
therefore we do not estimate a paperwork burden
for such updates.

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policies and procedures. Therefore, the
total annual burden related to
developing and adopting these policies
and procedures would be approximately
360 hours.4
Of the 2,915 existing funds, the staff
assumes that approximately 25%, (or
729) enter into transactions affected by
rule 17a–7 each year (either by the fund
directly or through one of the fund’s
series), and that the same percentage
(25%, or 23 funds) of the estimated 90
funds that newly register each year will
also enter into these transactions, for a
total of 752 5 companies that are affected
by the recordkeeping requirements of
rule 17a–7. These funds must keep
records of each of these transactions,
and the board of directors must
quarterly determine that all relevant
transactions were made in compliance
with the company’s policies and
procedures. The rule generally imposes
a minimal burden of collecting and
storing records already generated for
other purposes.6 The staff estimates that
the burden related to making these
records and for the board to review all
transactions would be 3 hours annually
for each respondent, (2 hours spent by
compliance attorneys and 1 hour spent
by the board of directors) 7 or 2,256 total
hours each year.8
Based on these estimates, the staff
estimates the combined total annual
burden hours associated with rule 17a–
7 is 2,616 hours.9 The staff also
estimates that there are approximately
752 respondents and 6,016 total
responses.10
The estimates of burden hours are
made solely for the purposes of the
Paperwork Reduction Act, and are not
4 This

estimate is based on the following
calculations: (4 hours × 90 new funds = 360 hours).
5 This estimate is based on the following
calculation: (729 + 23 = 752).
6 Commission staff believes that rule 17a–7 does
not impose any costs associated with record
preservation in addition to the costs that funds
already incur to comply with the record
preservation requirements of rule 31a–2 under the
Act. Rule 31a–2 requires companies to preserve
certain records for specified periods of time.
7 The staff estimates that funds that rely on rule
17a–7 annually enter into an average of 8 rule 17a–
7 transactions each year. The staff estimates that the
compliance attorneys of the companies spend
approximately 15 minutes per transaction on this
recordkeeping, and the board of directors spends a
total of 1 hour annually in determining that all
transactions made that year were done in
compliance with the company’s policies and
procedures.
8 This estimate is based on the following
calculation: (3 hours × 752 companies = 2,256
hours).
9 This estimate is based on the following
calculation: (360 hours + 2,256 hours = 2,616 total
hours).
10 This estimate is based on the following
calculations: 752 funds that engage in rule 17a–7
transactions × 8 transactions per year = 6,016.

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derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. The
collection of information required by
rule 17a–7 is necessary to obtain the
benefits of the rule. Responses will not
be kept confidential. 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 collections of information
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 collections of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burdens of the collections
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: September 24, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–21542 Filed 9–29–20; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting; Cancellation
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: 85 FR 60845,

September 28, 2020.
PREVIOUSLY ANNOUNCED TIME AND DATE OF
THE MEETING: Wednesday, September 30,

2020 at 10:00 a.m.
The Open
Meeting scheduled for Wednesday,
September 30, 2020 at 10:00 a.m., has
been cancelled.

CHANGES IN THE MEETING:

CONTACT PERSON FOR MORE INFORMATION:

For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.

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