60 Day Notice

Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices
(‘‘ISG’’) 21 the Exchange shares
information and coordinates inquiries
and investigations with other exchanges
designed to address potential
intermarket manipulation and trading
abuses. Accordingly, there is a strong
nexus between the ORF and the
Exchange’s regulatory activities with
respect to customer trading activity of
its members and member organizations.
The Exchange’s proposal to amend
Options 7, Section 6D of the Phlx
Pricing Schedule to make clear that the
ORF is assessed to member
organizations and note ‘‘member
organization’’ next to the term
‘‘member’’ in one place is reasonable,
equitable and not unfairly
discriminatory. The proposed
amendments will bring greater clarity to
the ORF rule text by utilizing the
defined terms ‘‘member’’ and ‘‘member
organization’’ correctly.

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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 not
necessary or appropriate in furtherance
of the purposes of the Act. This
proposal does not create an unnecessary
or inappropriate intra-market burden on
competition because the ORF applies to
all customer activity, thereby raising
regulatory revenue to offset regulatory
expenses. It also supplements the
regulatory revenue derived from noncustomer activity. The Exchange notes,
however, the proposed change is not
designed to address any competitive
issues. Indeed, this proposal does not
create an unnecessary or inappropriate
inter-market burden on competition
because it is a regulatory fee that
supports regulation in furtherance of the
purposes of the Act. The Exchange is
obligated to ensure that the amount of
regulatory revenue collected from the
ORF, in combination with its other
regulatory fees and fines, does not
exceed regulatory costs.
The Exchange’s proposal to amend
Options 7, Section 6D of the Phlx
Pricing Schedule to make clear that the
ORF is assessed to member
organizations and note ‘‘member
organization’’ next to the term
‘‘member’’ in one place does not impose
an undue burden on competition. The
proposed amendments will bring greater
21 ISG is an industry organization formed in 1983
to coordinate intermarket surveillance among the
SROs by cooperatively sharing regulatory
information pursuant to a written agreement
between the parties. The goal of the ISG’s
information sharing is to coordinate regulatory
efforts to address potential intermarket trading
abuses and manipulations.

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19:02 Mar 31, 2021

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clarity to the ORF rule text by utilizing
the defined terms ‘‘member’’ and
‘‘member organization’’ correctly.
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 is effective
upon filing pursuant to Section
19(b)(3)(A) 22 of the Act and
subparagraph (f)(2) of Rule 19b–4 23
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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) 24 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 No. SR–
Phlx–2021–16 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 No.
SR–Phlx–2021–16. 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
22 15

U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
24 15 U.S.C. 78s(b)(2)(B).

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 No.
SR–Phlx–2021–16, and should be
submitted on or before April 22, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–06672 Filed 3–31–21; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–321, OMB Control No.
3235–0358]

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 11a–3

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 collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of

23 17

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CFR 200.30–3(a)(12).

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Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices

Management and Budget for extension
and approval.
Section 11(a) of the Investment
Company Act of 1940 (‘‘Act’’) (15 U.S.C.
80a–11(a)) provides that it is unlawful
for a registered open-end investment
company (‘‘fund’’) or its underwriter to
make an offer to the fund’s shareholders
or the shareholders of any other fund to
exchange the fund’s securities for
securities of the same or another fund
on any basis other than the relative net
asset values (‘‘NAVs’’) of the respective
securities to be exchanged, ‘‘unless the
terms of the offer have first been
submitted to and approved by the
Commission or are in accordance with
such rules and regulations as the
Commission may have prescribed in
respect of such offers.’’ Section 11(a)
was designed to prevent ‘‘switching,’’
the practice of inducing shareholders of
one fund to exchange their shares for
the shares of another fund for the
purpose of exacting additional sales
charges.
Rule 11a–3 (17 CFR 270.11a–3) under
the Act is an exemptive rule that
permits open-end investment
companies (‘‘funds’’), other than
insurance company separate accounts,
and funds’ principal underwriters, to
make certain exchange offers to fund
shareholders and shareholders of other
funds in the same group of investment
companies. The rule requires a fund,
among other things, (i) to disclose in its
prospectus and advertising literature the
amount of any administrative or
redemption fee imposed on an exchange

transaction, (ii) if the fund imposes an
administrative fee on exchange
transactions, other than a nominal one,
to maintain and preserve records with
respect to the actual costs incurred in
connection with exchanges for at least
six years, and (iii) give the fund’s
shareholders a sixty day notice of a
termination of an exchange offer or any
material amendment to the terms of an
exchange offer (unless the only material
effect of an amendment is to reduce or
eliminate an administrative fee, sales
load or redemption fee payable at the
time of an exchange).
The rule’s requirements are designed
to protect investors against abuses
associated with exchange offers, provide
fund shareholders with information
necessary to evaluate exchange offers
and certain material changes in the
terms of exchange offers, and enable the
Commission staff to monitor funds’ use
of administrative fees charged in
connection with exchange transactions.
The staff estimates that there are
approximately 1,397 active open-end
investment companies registered with
the Commission as of October 2020. The
staff estimates that 25 percent of these
funds (349 funds) impose a nonnominal administrative fee on exchange
transactions. The staff estimates that the
recordkeeping requirement of the rule
requires approximately 1 hour annually
of clerical time (at an estimated $63 per
hour) 1 per fund, for a total of 349 hours
for all funds (at a total annual cost of
$21,987).2

The staff estimates that 5 percent of
these 1,397 funds (or 70 funds)
terminate an exchange offer or make a
material change to the terms of their
exchange offer each year, requiring the
fund to comply with the notice
requirement of the rule. The staff
estimates that complying with the
notice requirement of the rule requires
approximately 1 hour of attorney time
(at an estimated $419 per hour) 3 and 2
hours of clerical time (at an estimated
$63 per hour) per fund, for a total of
approximately 210 hours for all funds to
comply with the notice requirement (at
a total annual cost of $38,150).4 The
staff estimates that such notices will be
enclosed with other written materials
sent to shareholders, such as annual
shareholder reports or account
statements, and therefore any burdens
associated with mailing required notices
are accounted for in the burdens
associated with Form N–1A registration
statements for funds.
The recordkeeping and notice
requirements together impose an
estimated total burden of 559 hours on
all funds (at a total annual cost of
$60,137).5 The total number of
respondents is 419, each responding
once a year.6 The burdens associated
with the disclosure requirement of the
rule are accounted for in the burdens
associated with the Form N–1A
registration statement for funds.
Table 1 below summarizes the
currently-approved and updated
burdens associated with rule 11a–3.

TABLE 1—SUMMARY OF BURDEN ESTIMATES FOR RULE 11a–3
Internal burden

Wage rate

Cost of internal burden

CURRENTLY–APPROVED BURDEN ESTIMATES
Recordkeeping Requirement ...........................................
Respondents ....................................................................
Total .................................................................................
Notice Requirement .........................................................
Respondents ....................................................................
Total .................................................................................

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Total Responses ......................................................
(Recordkeeping + Notice) ........................................

1 This estimate of $63 per hour for clerical work
and the other estimated wage rates below are
derived from the Securities Industry and Financial
Markets Association’s (‘‘SIFMA’’) Office Salaries in
the Securities Industry 2013, modified to account
for an 1800-hour work-year and multiplied by 5.35
to account for bonuses, firm size, employee benefits
and overhead (updated for inflation).
2 This estimate is based on the following
calculations: (1,397 funds × 25% = 349 funds); (349
× 1 (clerical hour) = 349 clerical hours); (349 × $63
= $21,987 total annual cost for recordkeeping
requirement).

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19:02 Mar 31, 2021

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1 hour ................................
402 funds ...........................
402 hours ..........................
1 hour ................................
2 hours ..............................
80 funds .............................
240 hours ..........................

$59/hr. (clerk) ....................
............................................
............................................
$392/hr. (attorney) .............
$59/hr. (clerk) ....................
............................................
............................................

482 .....................................

3 The estimate of $419 per hour for an Attorney
is derived from SIFMA’s Management &
Professional Earnings in the Securities Industry
2013, modified to account for an 1800-hour workyear and multiplied by 5.35 to account for bonuses,
firm size, employee benefits and overhead (adjusted
for inflation).
4 This estimate is based on the following
calculations: (1,397 (funds) × 5% = 70 funds); (70
× 1 (attorney hour) = 70 total attorney hours); (70
(funds) × 2 (clerical hours) = 140 total clerical
hours); (70 (attorney hours) + 140 (clerical hours)
= 210 total hours); (70 (attorney hours) × $419 =

PO 00000

$59.
402 funds.
$23,718.
$392.
$118.
80 funds.
$40,800.

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$29,330 total attorney cost); (140 (clerical hours) ×
$63 = $8,820 clerical cost); ($29,330 + $8,820 =
$38,150 total annual cost).
5 This estimate is based on the following
calculations: (210 (notice hours) + 349
(recordkeeping hours) = 559 total hours); ($38,150
(notice costs) + $21,987 (recordkeeping costs) =
$60,137 total annual costs).
6 This estimate is based on the following
calculation: (349 funds responding to recordkeeping
requirement + 70 funds responding to notice
requirement = 419 total respondents).

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Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices
TABLE 1—SUMMARY OF BURDEN ESTIMATES FOR RULE 11a–3—Continued

Total Burden .............................................................
(Recordkeeping + Notice) ........................................

Internal burden

Wage rate

642 hours ..........................

............................................

Cost of internal burden
$64,518.

UPDATED BURDEN ESTIMATES
Recordkeeping Requirement ...........................................
Respondents ....................................................................
Total .................................................................................
Notice Requirement .........................................................
Respondents ....................................................................
Total .................................................................................
Total Responses ......................................................
(Recordkeeping + Notice) ........................................

419

Total Burden .............................................................
(Recordkeeping + Notice) ........................................

559 hours ..........................

The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules and forms.
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 requested 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(s) 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 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].
jbell on DSKJLSW7X2PROD with NOTICES

1 hour ................................
349 funds ...........................
349 hours ..........................
1 hour ................................
2 hours ..............................
70 funds .............................
210 hours ..........................

Dated: March 29, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–06731 Filed 3–31–21; 8:45 am]
BILLING CODE 8011–01–P

19:02 Mar 31, 2021

............................................

$60,137

[Release No. 34–91425; File No. SR–
PEARL–2021–09]

Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 2614, Orders and Order
Instructions, To Adopt and Make
Available the Reserve Quantity
Instruction for Orders on the MIAX
PEARL Equities Platform
March 26, 2021.

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 March 23,
2021, MIAX PEARL, LLC (‘‘MIAX
PEARL’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. 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
The Exchange is filing a proposed rule
change to amend Exchange Rule 2614,
Orders and Order Instructions, to adopt
the Reserve Quantity instruction.
The text of the proposed rule change
is available on the Exchange’s website at
http://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, and at the Commission’s Public
Reference Room.
1

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$63.
349 funds.
$21,987.
$419.
$126.
70 funds.
$38,150.

SECURITIES AND EXCHANGE
COMMISSION

2

VerDate Sep<11>2014

$63/hr. (clerk) ....................
............................................
............................................
$419/hr. (attorney) .............
$63/hr. (clerk) ....................
............................................
............................................

PO 00000

15 U.S.C. 78s(b)(1).
17 CFR 240.19b–4.

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Fmt 4703

II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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. The
Exchange 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 purpose of the proposed rule
change is to amend Exchange Rule 2614,
Orders and Order Instructions, to adopt
the Reserve Quantity instruction that
would be available to orders in equity
securities traded on the Exchange’s
equity trading platform (referred to
herein as ‘‘MIAX Pearl Equities’’). In
sum, a Reserve Quantity instruction
would enable a User 3 to specify that a
portion of their order be displayed and
another portion of their order be nondisplayed. The proposed operation of
the Reserve Quantity instruction is well
established in the equity markets and is
based on similar functionality offered at
other exchanges.4
3 Exchange Rule 1901 defines the term ‘‘User’’ as
‘‘any Member or Sponsored Participant who is
authorized to obtain access to the System pursuant
to Exchange Rule 2602.’’
4 See, e.g., Cboe BYX Exchange, Inc. (‘‘BYX’’) and
Cboe BZX Exchange, Inc. Rules 11.9(c)(1), Cboe

Continued

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