60 Day Notice

3235-0540.pdf

Rule 17a-25, Electronic Submission of Securities Trading Data by Exchange Members, Brokers, and Dealers.

60 Day Notice

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35586

Federal Register / Vol. 87, No. 112 / Friday, June 10, 2022 / Notices

100 F Street NE, Washington, DC
20549–2736
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
(the ‘‘Commission’’) is soliciting
comments on the collections of
information summarized below. The
Commission plans to submit these
existing collections of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Section 17(a) of the Investment
Company Act of 1940 (15 U.S.C. 80a–1
et seq.) (the ‘‘Act’’), generally prohibits
affiliated persons of a registered
investment company (‘‘fund’’) from
borrowing money or other property
from, or selling or buying securities or
other property to or from, the fund or
any company that the fund controls.1
Section 2(a)(3) of the Act defines
‘‘affiliated person’’ of a fund to include
its investment advisers.2 Rule 17a–10
(17 CFR 270.17a–10) permits (i) a
subadviser 3 of a fund to enter into
transactions with funds the subadviser
does not advise but that are affiliated
persons of a fund that it does advise
(e.g., other funds in the fund complex),
and (ii) a subadviser (and its affiliated
persons) to enter into transactions and
arrangements with funds the subadviser
does advise, but only with respect to
discrete portions of the subadvised fund
for which the subadviser does not
provide investment advice.
To qualify for the exemptions in rule
17a–10, the subadvisory relationship
must be the sole reason why section
17(a) prohibits the transaction. In
addition, the advisory contracts of the
subadviser entering into the transaction,
and any subadviser that is advising the
purchasing portion of the fund, must
prohibit the subadvisers from consulting
with each other concerning securities
transactions of the fund, and limit their
responsibility to providing advice with
respect to discrete portions of the fund’s
portfolio.4 This requirement regarding
the prohibitions and limitations in
advisory contracts of subadvisers
relying on the rule constitutes a
collection of information under the
PRA.5
The staff assumes that all existing
funds with subadvisory contracts
amended those contracts to comply with
the adoption of rule 17a–10 in 2003,
which conditioned certain exemptions
1 15

U.S.C. 80a–17(a).
U.S.C. 80a–2(a)(3)(E).
3 As defined in rule 17a–10(b)(2). 17 CFR
270.17a–10(b)(2).
4 17 CFR 270.17a–10(a)(2).
5 44 U.S.C. 3501.
2 15

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upon these contractual alterations, and
therefore there is no continuing burden
for those funds.6 However, the staff
assumes that all newly formed
subadvised funds, and funds that enter
into new contracts with subadvisers,
will incur the one-time burden by
amending their contracts to add the
terms required by the rule.
Based on an analysis of fund filings,
the staff estimates that approximately
314 funds enter into new subadvisory
agreements each year.7 Based on
discussions with industry
representatives, the staff estimates that
it will require approximately 3 attorney
hours to draft and execute additional
clauses in new subadvisory contracts in
order for funds and subadvisers to be
able to rely on the exemptions in rule
17a–10. Because these additional
clauses are identical to the clauses that
a fund would need to insert in their
subadvisory contracts to rely on rules
10f–3 (17 CFR 270.10f–3), 12d3–1 (17
CFR 270.12d3–1), and 17e–1 (17 CFR
270.17e–1), and because we believe that
funds that use one such rule generally
use all of these rules, we apportion this
3 hour time burden equally among all
four rules. Therefore, we estimate that
the burden allocated to rule 17a–10 for
this contract change would be 0.75
hours.8 Assuming that all 314 funds that
enter into new subadvisory contracts
each year make the modification to their
contract required by the rule, we
estimate that the rule’s contract
modification requirement will result in
236 burden hours annually, with an
associated cost of approximately
$107,380.9
6 Transactions of Investment Companies With
Portfolio and Subadviser Affiliates, Investment
Company Act Release No. 25888 (Jan. 14, 2003) [68
FR 3153, (Jan. 22, 2003)]. We assume that funds
formed after 2003 that intended to rely on rule 17a–
10 would have included the required provision as
a standard element in their initial subadvisory
contracts.
7 Based on data from form N–CEN filings, as of
March 2022, there are 12,468 registered funds
(open-end funds, closed-end funds, and exchangetraded funds), 4,870 funds of which have
subadvisory relationships (approximately 39%).
Based on Form N–1A and Form N–2 filings, there
were 806 new registered funds in 2020. 806 new
funds × 39% = 314 funds.
8 This estimate is based on the following
calculation: 3 hours ÷ 4 rules = 0.75 hours.
9 These estimates are based on the following
calculations: (0.75 hours × 314 portfolios = 236
burden hours); ($455 per hour × 236 hours =
$107,380 total cost). The Commission’s estimates
concerning the wage rates for attorney time are
based on salary information for the securities
industry compiled by the Securities Industry and
Financial Markets Association. The estimated wage
figure is based on published rates for in-house
attorneys, modified to account for a 1,800-hour
work-year and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead, yielding an effective hourly rate of

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The estimate of average burden hours
is made solely for the purposes of the
PRA. The estimate is not derived from
a comprehensive or even a
representative survey or study of the
costs of Commission rules. Complying
with this collection of information
requirement is necessary to obtain the
benefit of relying on rule 17a–10.
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 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
estimate of the burden 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
by August 9, 2022.
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, Acting Director/Chief
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: June 6, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–12495 Filed 6–9–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–482, OMB Control No.
3235–0540]

Proposed Collection; Comment
Request; Extension: Rule 17a–25
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
$455. See Securities Industry and Financial Markets
Association, Report on Management & Professional
Earnings in the Securities Industry 2013.

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Federal Register / Vol. 87, No. 112 / Friday, June 10, 2022 / Notices

jspears on DSK121TN23PROD with NOTICES1

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’’) is soliciting comments
on the existing collection of information
provided for in Rule 17a–25 (17 CFR
204.17a–25) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et.
seq.).
Paragraph (a)(1) of Rule 17a–25
requires registered broker-dealers to
electronically submit securities
transaction information, including
identifiers for prime brokerage
arrangements, average price accounts,
and depository institutions, in a
standardized format when requested by
the Commission staff. In addition,
Paragraph (c) of Rule 17a–25 requires
broker-dealers to submit, and keep
current, contact person information for
electronic blue sheets (‘‘EBS’’) requests.
The Commission uses the information
for enforcement inquiries or
investigations and trading
reconstructions, as well as for
inspections and examinations.
The Commission estimates that it
sends approximately 13,558 electronic
blue sheet requests per year to clearing
broker-dealers that in turn submit an
average 223,057 responses.1 It is
estimated that each broker-dealer that
responds electronically will take 8
minutes, and each broker-dealer that
responds manually will take 11⁄2 hours
to prepare and submit the securities
trading data requested by the
Commission. The annual aggregate hour
burden for electronic and manual
response firms is estimated to be 29,924
(223,057 × 8 ÷ 60 = 29,741 hours) + (122
× 1.5 = 183 hours), respectively.2
Written comments are invited on: (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s estimate
1 A single EBS request has a unique number
assigned to each request (e.g., ’’0900001’’).
However, the number of broker-dealer responses
generated from one EBS request can range from one
to several thousand. EBS requests are sent directly
to clearing firms, as the clearing firm is the
repository for trading data for securities
transactions information provided by the clearing
firm and the correspondent firms. Clearing brokers
respond for themselves and other firms they clear
for. There were 446,113 responses during the 24month period, for an average of 223,057 annual
responses.
2 Few respondents submit manual EBS responses.
The small percentage of respondents that submit
manual responses do so by hand, via email,
spreadsheet, disk, or other electronic media. Thus,
the number of manual submissions (approximately
122 per year) has minimal effect on the total annual
burden hours.

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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 by August 9, 2022.
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
Information Office, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
[email protected]
Dated: June 6, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–12497 Filed 6–9–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95041; File No. SR–
NYSEAMER–2022–22]

Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the NYSE
American Options Fee Schedule
June 3, 2022.

Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on May 31,
2022, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. 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 amend the
NYSE American Options Fee Schedule
(‘‘Fee Schedule’’) regarding credits
1 15

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

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35587

relating to the BOLD Mechanism. The
Exchange proposes to implement the fee
change effective June 1, 2022. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, 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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to modify
credits associated with the BOLD
Mechanism, a trading mechanism for
automated order handling for eligible
orders in designated classes pursuant to
NYSE American Rule 994NY.
Currently, BOLD Initiating Orders
receive the better of a $0.12 per contract
credit or a higher credit earned by
qualifying for the American Customer
Engagement (‘‘ACE’’) Program.4 As set
forth in Section I.E. of the Fee Schedule,
the ACE Program provides qualifying
participants with per contract credits
applicable to Electronic options
transactions, including those executed
via the BOLD Mechanism.
The Exchange now proposes to
modify Section I.M. of the Fee Schedule
to provide that the credit available to
BOLD Initiating Orders would be the
better of $0.12 or, to the extent an ATP
Holder would qualify for a higher credit
via the ACE Program, $0.13.5
The Exchange notes that the fees and
credits relating to the BOLD
Mechanism, as originally established,6
4 See Fee Schedule, Section I.M. BOLD
Mechanism Fees & Credits.
5 The Exchange notes that this proposed change
would only impact the credit relating to BOLD
Initiating Orders, and the ACE Program credits
outlined in Section I.E. remain unchanged.
6 See Securities Exchange Act Release No. 80964
(June 19, 2017), 82 FR 28726 (June 23, 2017) (SR–
NYSEMKT–2017–37) (Notice of Filing and
Immediate Effectiveness of Proposed Change to
Modify the NYSE Amex Options Fee Schedule).

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