60 Day Notice

Federal Register / Vol. 86, No. 234 / Thursday, December 9, 2021 / Notices
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSE–2021–42 and should
be submitted by December 30, 2021.
Rebuttal comments should be submitted
by January 13, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.47
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–26625 Filed 12–8–21; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–586, OMB Control No.
3235–0647]

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

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Extension:
Rule 204

Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
provided for in Rule 204 (17 CFR
242.204) under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.). The
Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 204(a) provides that a participant
of a registered clearing agency must
deliver securities to a registered clearing
agency for clearance and settlement on
a long or short sale in any equity
security by settlement date, or if a
participant of a registered clearing
agency has a fail to deliver position at
a registered clearing agency in any
equity security for a long or short sale
transaction in the equity security, the
participant shall, by no later than the
beginning of regular trading hours on
the applicable close-out date,
immediately close out its fail to deliver
positions by borrowing or purchasing
securities of like kind and quantity. For
a short sale transaction, the participant
must close out a fail to deliver by no
later than the beginning of regular
trading hours on the settlement day
47 17

CFR 200.30–3(a)(57).

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following the settlement date. If a
participant has a fail to deliver that the
participant can demonstrate on its books
and records resulted from a long sale, or
that is attributable to bona-fide market
making activities, the participant must
close out the fail to deliver by no later
than the beginning of regular trading
hours on the third consecutive
settlement day following the settlement
date. Rule 204 is intended to help
further the Commission’s goal of
reducing fails to deliver by maintaining
the reductions in fails to deliver
achieved by the adoption of temporary
Rule 204T, as well as other actions
taken by the Commission. In addition,
Rule 204 is intended to help further the
Commission’s goal of addressing
potentially abusive ‘‘naked’’ short
selling in all equity securities.
The information collected under Rule
204 will continue to be retained and/or
provided to other entities pursuant to
the specific rule provisions and will be
available to the Commission and selfregulatory organization (‘‘SRO’’)
examiners upon request. The
information collected will continue to
aid the Commission and SROs in
monitoring compliance with these
requirements. In addition, the
information collected will aid those
subject to Rule 204 in complying with
its requirements. These collections of
information are mandatory.
Several provisions under Rule 204
will impose a ‘‘collection of
information’’ within the meaning of the
Paperwork Reduction Act.
I. Allocation Notification
Requirement: As of December 31, 2020,
there were 3,551 registered brokerdealers.1 Each of these broker-dealers
could clear trades through a participant
of a registered clearing agency and,
therefore, become subject to the
notification requirements of Rule
204(d). If a participant allocates a fail to
deliver position to a broker or dealer
pursuant to Rule 204(d), the broker or
dealer that has been allocated the fail to
deliver position in an equity security
must determine whether such fail to
deliver position was closed out in
accordance with Rule 204(a). If such
broker or dealer does not comply with
the provisions of Rule 204(a), such
broker or dealer must immediately
notify the participant that it has become
subject to the requirements of Rule
204(b). The Commission estimates that
a broker or dealer could have to make
such determination and notification
1 The Commission’s Division of Economic Risk
and Analysis (‘‘DERA’’) estimates that there were
approximately 3,551 registered broker-dealers as of
December 31, 2020.

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70155

with respect to approximately 2.1 equity
securities per day.2 The Commission
estimates a total of 1,886,646 potential
notifications in accordance with Rule
204(d) across all registered brokerdealers that could be allocated
responsibility to close out a fail to
deliver position per year (3,551
registered broker-dealers notifying
participants once per day 3 on 2.1 equity
securities, multiplied by 253 trading
days in 2020). The total estimated
annual burden hours per year will be
approximately 301,864 burden hours
(1,886,646 multiplied by 0.16 hours/
notification).4
II. Demonstration Requirement for
Fails to Deliver on Long Sales: As of
December 31, 2020, there were 127
participants of NSCC that were
registered as broker-dealers. If a
participant of a registered clearing
agency has a fail to deliver position in
an equity security at a registered
clearing agency and determined that
such fail to deliver position resulted
from a long sale, the Commission
estimates that a participant of a
registered clearing agency will have to
make such a determination with respect
to approximately 29 securities per day.5
The Commission estimates a total of
931,799 potential demonstrations in
accordance with Rule 204(a)(1) across
all broker-dealer participants per year
(127 participants checking for
compliance once per day on 29
securities, multiplied by 253 trading
days in 2020). The total approximate
estimated annual burden hours per year
will be approximately 149,088 burden
2 DERA estimates that there were approximately
7,450 average daily fail to deliver positions during
2020. Across 3,551 registered broker-dealers, the
number of securities per registered broker-dealer
per trading day is approximately 2.1 (7,450 ÷ 3,551)
equity securities.
3 Because failure to comply with the close-out
requirements of Rule 204(a) is a violation of the
rule, the Commission believes that a broker or
dealer would make the notification to a participant
that it is subject to the borrowing requirements of
Rule 204(b) at most once per day.
4 See Amendments to Regulation SHO, Exchange
Act Release No. 60388 (July 27, 2009), 74 FR 38265
(July 31, 2009) (‘‘Rule 204 Adopting Release’’) (July
27, 2009) (making permanent the amendments to
Regulation SHO contained in Interim Final
Temporary Rule 204T and incorporating by
reference the time estimates from the Rule 204T
Adopting Release for compliance with the
notification, demonstration, and certification
requirements of Rule 204).
5 DERA estimates that during 2020 approximately
49.2% of trade volume was long. DERA estimates
that there were approximately 7,450 average daily
fail to deliver positions during 2020. Across 127
broker-dealer participants of the NSCC, the number
of securities per participant per day is
approximately 59 (7,450 ÷ 127) equity securities.
49.2% of 59 equity securities per trading day equals
approximately 29 securities per day.

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Federal Register / Vol. 86, No. 234 / Thursday, December 9, 2021 / Notices

hours (931,799 multiplied by 0.16
hours/demonstration).6
III. Pre-Borrow Notification
Requirement: As of December 31, 2020,
there were 127 participants of NSCC
that were registered as broker-dealers. If
a participant of a registered clearing
agency has a fail to deliver position in
an equity security, the participant must
determine whether the fail to deliver
position was closed out in accordance
with Rule 204(a). The Commission
estimates that a participant of a
registered clearing agency will have to
make such determination with respect
to approximately 59 equity securities
per day.7 The Commission estimates a
total of 1,895,729 potential notifications
in accordance with Rule 204(c) across
all participants per year (127 brokerdealer participants notifying brokerdealers once per day on 59 securities,
multiplied by 253 trading days in 2020).
The total estimated annual burden
hours per year will be approximately
303,317 burden hours (1,895,729
multiplied by 0.16 hours/notification).8
IV. Certification Requirement: As of
December 31, 2020, there were 3,551
registered broker-dealers. Each of these
broker-dealers may clear trades through
a participant of a registered clearing
agency. If the broker-dealer determines
that it has not incurred a fail to deliver
position on settlement date for a long or
short sale in an equity security for
which the participant has a fail to
deliver position at a registered clearing
agency or has purchased or borrowed
securities in accordance with the prefail credit provision of Rule 204(e), the
Commission estimates that a brokerdealer could have to make such
determination with respect to
approximately 2.1 securities per day.9
The Commission estimates that each
such registered broker-dealer could have
to certify to a participant that the
broker-dealer has not incurred a fail to
deliver position on settlement date for a
long or short sale in an equity security
for which the participant has a fail to
deliver position at a registered clearing
agency or, alternatively, that the brokerdealer is in compliance with the
requirements set forth in the pre-fail
credit provision of Rule 204(e),
1,886,646 times per year (3,551
registered broker-dealers certifying once
per day on 2.1 securities, multiplied by
253 trading days in 2020). The total
approximate estimated annual burden
hours per year will be approximately
301,864 burden hours (1,886,646
supra note 4.
supra note 5.
8 See supra note 4.
9 See supra note 2.

multiplied by 0.16 hours/
certification).10
V. Pre-Fail Credit Demonstration
Requirement: As of December 31, 2020,
there were 3,551 registered brokerdealers. If a broker-dealer purchased or
borrowed securities in accordance with
the conditions specified in Rule 204(e)
and determined that it had a net long
position or net flat position on the
settlement day for which the brokerdealer is claiming pre-fail credit, the
Commission estimates that a brokerdealer could have to make such
determination with respect to
approximately 2.1 securities per day.11
The Commission estimates that the total
number of times per year that such
registered broker-dealers could have to
demonstrate on their respective books
and records that the broker-dealer has a
net long position or net flat position on
the settlement day for which the brokerdealer is claiming pre-fail credit is
1,886,646 times per year (3,551
registered broker-dealers checking for
compliance once per day on 2.1 equity
securities, multiplied by 253 trading
days in 2020). The total approximate
estimated annual burden hours per year
will be 301,864 burden hours (1,886,646
multiplied by 0.16 hours/
demonstration).12
The total aggregate annual burden for
the collection of information undertaken
pursuant to all five provisions is thus
1,357,997 hours per year (301,864 +
149,088 + 303,317 + 301,864 + 301,864).
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 to be 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

6 See
7 See

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17:41 Dec 08, 2021

supra note 4.
supra note 2.
12 See supra note 4.

Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
[email protected].
Dated: December 6, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–26675 Filed 12–8–21; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34 93713 File No. SR–
NASDAQ–2021–091]

Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify
Certain Annual Listing Fees To Be
Implemented on January 1, 2022
December 3, 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 November
22, 2021, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ 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 proposes to modify
certain listing fees. While changes
proposed herein are effective upon
filing, the Exchange has designated the
proposed amendments to be operative
on January 1, 2022.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
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

10 See
11 See

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U.S.C. 78s(b)(1).
CFR 240.19b–4.

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