30 Day Notice

Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Notices
(4) The Exchange has the appropriate
rules to facilitate transactions in the
Shares during all trading sessions;
(5) Prior to the commencement of
trading, the Exchange will inform its
ETP Holders in an Information Bulletin
of the special characteristics and risks
associated with trading the Shares; 27
(6) FINRA has implemented increased
sales practice and customer margin
requirements for FINRA members
applicable to inverse, leveraged and
inverse leveraged securities (which
include the Shares) and options on such
securities, as described in FINRA
Regulatory Notices 09–31 (June 2009),
09–53 (August 2009), and 09–65
(November 2009). ETP Holders that
carry customer accounts will be
required to follow the FINRA guidance
set forth in these notices;
(7) For initial and continued listing,
the Fund will be in compliance with
Rule 10A–3 under the Act; 28 and
(8) A minimum of 100,000 Shares of
the Fund will be outstanding at the
commencement of trading on the
Exchange.
Accordingly, the Commission finds
that the proposed rule change, as
modified by Amendment No. 1, is
consistent with Section 6(b)(5) of the
Act 29 and the rules and regulations
thereunder applicable to a national
securities exchange.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,30 that the
proposed rule change (SR–NYSEArca–
2021–28), as modified by Amendment
No. 1, be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–01564 Filed 1–26–22; 8:45 am]

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BILLING CODE 8011–01–P
27 The Exchange states that the Information
Bulletin will discuss the following: (1) The risks
involved in trading the Shares during the Opening
and Late Trading Sessions when an updated IFV
will not be calculated or publicly disseminated; (2)
the procedures for purchases and redemptions of
Shares in Creation Units and Redemption Units
(and that Shares are not individually redeemable);
(3) NYSE Arca Rule 9.2–E(a), which imposes a duty
of due diligence on its ETP Holders to learn the
essential facts relating to every customer prior to
trading the Shares; (4) how information regarding
the IFV is disseminated; (5) how information
regarding portfolio holdings is disseminated; (6) the
requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior
to or concurrently with the confirmation of a
transaction; and (7) trading information.
28 17 CFR 240.10A–3.
29 15 U.S.C. 78f(b)(5).
30 Id.
31 17 CFR 200.30–3(a)(12).

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Jkt 256001

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–401, OMB Control No.
3235–0459]

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
Extension:
Rule 3a–4

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l-3520), the Securities and
Exchange Commission (the
‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Rule 3a–4 (17 CFR 270.3a–4) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (‘‘Investment Company
Act’’ or ‘‘Act’’) provides a nonexclusive
safe harbor from the definition of
investment company under the Act for
certain investment advisory programs.
These programs, which include ‘‘wrap
fee’’ programs, generally are designed to
provide professional portfolio
management services on a discretionary
basis to clients who are investing less
than the minimum investments for
individual accounts usually required by
the investment adviser but more than
the minimum account size of most
mutual funds. Under wrap fee and
similar programs, a client’s account is
typically managed on a discretionary
basis according to pre-selected
investment objectives. Clients with
similar investment objectives often
receive the same investment advice and
may hold the same or substantially
similar securities in their accounts.
Because of this similarity of
management, some of these investment
advisory programs may meet the
definition of investment company under
the Act.
In 1997, the Commission adopted rule
3a–4, which clarifies that programs
organized and operated in accordance
with the rule are not required to register
under the Investment Company Act or
comply with the Act’s requirements.1
These programs differ from investment
1 Status of Investment Advisory Programs Under
the Investment Company Act of 1940, Investment
Company Act Rel. No. 22579 (Mar. 24, 1997) [62 FR
15098 (Mar. 31, 1997)] (‘‘Adopting Release’’). In
addition, there are no registration requirements
under section 5 of the Securities Act of 1933 for
programs that meet the requirements of rule 3a–4.
See 17 CFR 270.3a–4, introductory note.

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4311

companies because, among other things,
they provide individualized investment
advice to the client. The rule’s
provisions have the effect of ensuring
that clients in a program relying on the
rule receive advice tailored to the
client’s needs.
For a program to be eligible for the
rule’s safe harbor, each client’s account
must be managed on the basis of the
client’s financial situation and
investment objectives and in accordance
with any reasonable restrictions the
client imposes on managing the
account. When an account is opened,
the sponsor 2 (or its designee) must
obtain information from each client
regarding the client’s financial situation
and investment objectives, and must
allow the client an opportunity to
impose reasonable restrictions on
managing the account.3 In addition, the
sponsor (or its designee) must contact
the client annually to determine
whether the client’s financial situation
or investment objectives have changed
and whether the client wishes to impose
any reasonable restrictions on the
management of the account or
reasonably modify existing restrictions.
The sponsor (or its designee) must also
notify the client quarterly, in writing, to
contact the sponsor (or its designee)
regarding changes to the client’s
financial situation, investment
objectives, or restrictions on the
account’s management.
Additionally, the sponsor (or its
designee) must provide each client with
a quarterly statement describing all
activity in the client’s account during
the previous quarter. The sponsor and
personnel of the client’s account
manager who know about the client’s
account and its management must be
reasonably available to consult with the
client. Each client also must retain
certain indicia of ownership of all
securities and funds in the account.
The Commission staff estimates that
27,979,460 clients participate each year
in investment advisory programs relying
on rule 3a–4.4 Of that number, the staff
2 For purposes of rule 3a–4, the term ‘‘sponsor’’
refers to any person who receives compensation for
sponsoring, organizing or administering the
program, or for selecting, or providing advice to
clients regarding the selection of, persons
responsible for managing the client’s account in the
program.
3 Clients specifically must be allowed to designate
securities that should not be purchased for the
account or that should be sold if held in the
account. The rule does not require that a client be
able to require particular securities be purchased for
the account.
4 These estimates are based on an analysis of the
number of individual clients from Form ADV Item
5D(a)(1) and (b)(1) of advisers that report they
provide portfolio management to wrap programs as

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Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Notices

lotter on DSK11XQN23PROD with NOTICES1

estimates that 2,127,147 are new clients
and 25,852,313 are continuing clients.5
The staff estimates that each year the
investment advisory program sponsors’
staff engage in 1.5 hours per new client
and 1 hour per continuing client to
prepare, conduct and/or review
interviews regarding the client’s
financial situation and investment
objectives as required by the rule.6
Furthermore, the staff estimates that
each year the investment advisory
program sponsors’ staff spends 1 hour
per client each year to prepare and mail
quarterly client account statements,
including notices to update
information.7 Based on the estimates
above, the Commission estimates that
the total annual burden of the rule’s
paperwork requirements is 57,022,493
hours.8
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
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 OMB
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, c/o John R. Pezzullo,
Director/Chief Information Officer,
indicated in Form ADV Item 5I(2)(b) and (c), and
the number of individual clients of advisers that
identify as internet advisers in Form ADV Item
2A(11). From analysis comparing reported
individual client assets in Form ADV Item 5D(a)(3)
and 5D(b)(3) to reported wrap portfolio manager
assets in Form ADV Item 5I(2)(b) and (c), we
discount the estimated number of individual clients
of non-internet advisers providing portfolio
management to wrap programs by 10%.
5 These estimates are based on the number of new
clients expected due to average year-over-year
growth in individual clients from Form ADV Item
5D(a)(1) and (b)(1) (about 8%) and an assumed rate
of yearly client turnover of 10%.
6 These estimates are based upon consultation
with investment advisers that operate investment
advisory programs that rely on rule 3a–4.
7 The staff bases this estimate in part on the fact
that, by business necessity, computer records
already will be available that contain the
information in the quarterly reports.
8 This estimate is based on the following
calculation: (25,852,313 continuing clients × 1
hour) + (2,127,147 new clients × 1.5 hours) +
(27,979,460 total clients × (0.25 hours × 4
statements)) = 57,022,493 hours.

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Securities and Exchange Commission,
100 F Street NE, Washington, DC 20549
or send an email to: PRA_Mailbox@
sec.gov.
Comments must be submitted to OMB
within 30 days of this notice to
www.reginfo.gov/public/do/PRAMain.
Find this particular information
collection by selecting ‘‘Currently under
30-day Review—Open for Public
Comments’’ or by using the search
function.
Dated: January 21, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–01555 Filed 1–26–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0627]

Rule 17g–4 30 Day Notice 2021—
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
Extension:
Rule 17g–4

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’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 17g–4 (17 CFR 240.17g–4) under
the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) (‘‘Exchange Act’’).
The Credit Rating Agency Reform Act
of 2006 added a new section 15E,
‘‘Registration of Nationally Recognized
Statistical Rating Organizations,’’ 1 to
the Exchange Act. Pursuant to the
authority granted under section 15E of
the Exchange Act, the Commission
adopted Rule 17g–4, which requires that
a nationally recognized statistical rating
organization (‘‘NRSRO’’) establish,
maintain, and enforce written policies
and procedures to prevent the misuse of
material nonpublic information,
including policies and procedures
reasonably designed to prevent: (a) The
inappropriate dissemination of material
nonpublic information obtained in
connection with the performance of
credit rating services; (b) a person
within the NRSRO from trading on
1 15

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material nonpublic information; and (c)
the inappropriate dissemination of a
pending credit rating action.2
There are 9 credit rating agencies
registered with the Commission as
NRSROs under section 15E of the
Exchange Act, which have already
established the policies and procedures
required by Rule 17g–4. Based on staff
experience, an NRSRO is estimated to
spend an average of approximately 10
hours per year reviewing its policies
and procedures regarding material
nonpublic information and updating
them (if necessary), resulting in an
average industry-wide annual hour
burden of approximately 90 hours.3
An agency may not conduct or
sponsor a collection of information
unless it displays a currently valid OMB
control number. No person shall be
subject to any penalty for failing to
comply with a collection of information
subject to the PRA that does not display
a valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
>www.reginfo.gov<. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) >www.reginfo.gov/public/
do/PRAMain< and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission, c/
o John R. Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: [email protected].
Dated: January 21, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–01547 Filed 1–26–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–489, OMB Control No.
3235–0541]

Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
2 See 17 CFR 240.17g–4; Release No. 34–55231
(Feb. 2, 2007), 72 FR 6378 (Feb. 9, 2007); Release
No. 34–55857 (June 5, 2007), 72 FR 33564 (June 18,
2007).
3 9 currently registered NRSROs × 10 hours = 90
hours.

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