30 Day Notice

3235-0769.pdf

Rule 139b Disclosure of Standardized Performance

30 Day Notice

OMB: 3235-0769

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Federal Register / Vol. 87, No. 179 / Friday, September 16, 2022 / Notices

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potential subscribers the ability to use
and test the Intraday Open-Close
historical data prior to purchasing
additional months and will therefore
encourage and promote new users to
purchase the Intraday Open-Close
historical data. The Exchange believes
that the proposed discount is equitable
and not unfairly discriminatory because
it will apply equally to all Members and
non-Members who have not previously
purchased Intraday Open-Close
historical data. Also as noted above,
another exchange offers a free trial to
new users for a similar data product 13
and the Exchange itself recently offered
a similar free trial.14 Lastly, the
purchase of this data product is
discretionary and not compulsory.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange operates in a highly
competitive environment in which the
Exchange must continually adjust its
fees to remain competitive. Because
competitors are free to modify their own
fees in response, the Exchange believes
that the degree to which fee changes in
this market may impose any burden on
competition is extremely limited.
As discussed above, Open-Close Data
is subject to direct competition from
several other options exchanges that
offer substitutes to Open-Close.
Moreover, purchase of Open-Close is
optional. It is designed to help investors
understand underlying market trends to
improve the quality of investment
decisions, but is not necessary to
execute a trade.
The proposed rule change is grounded
in the Exchange’s efforts to compete
more effectively. The Exchange is
proposing to provide a free trial for
market participants to test investment
strategies and trading models, and
develop market sentiment indicators.
This change will not cause any
unnecessary or inappropriate burden on
intermarket competition, but rather will
promote competition by encouraging
new market participants to investigate
the product. Other exchanges are, of
course, free to match this change or
undertake other competitive responses,
enhancing overall competition. Indeed,
as discussed, another exchange
13 See Nasdaq ISE, Options 7 Pricing Schedule,
Section 10A., Nasdaq ISE Open/Close Trade Profile
End of Day.
14 See Securities Exchange Act Release No. 34–
94911 (May 13, 2022), 87 FR 30520 (May 19, 2022)
(SR–CboeBZX–2022–030).

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currently offers a similar free-trial
period for similar data.15
The proposed rule change will not
cause any unnecessary or inappropriate
burden on intramarket competition.
Particularly, the proposed rule change
will apply to all Members and nonMembers who have never made an adhoc request to purchase Intraday OpenClose historical data. Moreover,
purchase of Intraday Open-Close
historical files is discretionary and not
compulsory.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 16 and paragraph (f) of Rule
19b–4 17 thereunder. At any time within
60 days of the filing of the 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 will institute proceedings
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:

57001

Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeBZX–2022–047. 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
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
Number SR–CboeBZX–2022–047 and
should be submitted on or before
October 7, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–20032 Filed 9–15–22; 8:45 am]
BILLING CODE 8011–01–P

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 Number SR–
CboeBZX–2022–047 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
15 See Nasdaq ISE, Options 7 Pricing Schedule,
Section 10A., Nasdaq ISE Open/Close Trade Profile
End of Day.
16 15 U.S.C. 78s(b)(3)(A).
17 17 CFR 240.19b–4(f).

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SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–815, OMB Control No.
3235–0769]

Submission for OMB Review;
Comment Request; Extension: Rule
139b
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
18 17

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CFR 200.30–3(a)(12).

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khammond on DSKJM1Z7X2PROD with NOTICES

57002

Federal Register / Vol. 87, No. 179 / Friday, September 16, 2022 / Notices

Notice is hereby given that the
Securities and Exchange Commission
(the ‘‘Commission’’) has, in accordance
with the Paperwork Reduction Act of
1995 (Pub. L. 104–13, 44 U.S.C. 3501 et
seq.) (‘‘PRA’’), has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information,
‘‘Rule 139b Disclosure of Standardized
Performance,’’ in connection with the
Rule 139b (17 CFR 230.139b) under the
Securities Act of 1933 (15 U.S.C. 77a et
seq.) (‘‘Securities Act’’) that was
adopted by the Commission on
November 30, 2018, as discussed
below.1
As directed by the Fair Access to
Investment Research Act of 2017 (Pub.
L. 115–66, 131 Stat. 1196 (2017) (the
‘‘FAIR Act’’), the Commission adopted
rule 139b under the Securities Act to
extend the safe harbor under rule 139 to
a ‘‘covered investment fund research
report.’’ Specifically, rule 139b provides
a safe harbor to a broker-dealer who
publishes or distributes, in the regular
course of its business, research reports
concerning one or more ‘‘covered
investment fund(s)’’ while participating
in the distribution of a covered
investment fund’s securities.
In the Adopting Release, the
Commission adopted the provision that
rule 139b include a standardized
performance requirement. The
Commission believes that standardized
performance presentation is an
appropriate requirement because
investors tend to consider fund
performance a significant factor in
evaluating or comparing investment
companies, and the requirement
addresses potential investor confusion if
a communication were not easily
recognizable as research as opposed to
an advertising prospectus or
supplemental sales literature. Rule 139b
requires that research reports about
open-end funds that include
performance information must present it
in accordance with paragraphs (d), (e),
and (g) of rule 482. Rule 139b also
requires that research reports about
closed-end funds that include
performance information must present it
in accordance with instructions to item
4.1(g) of Form N–2. Performance
measures calculated by broker-dealers
are not required to be kept confidential
and there is no mandatory retention
period. The Commission anticipates that
compliance with these performance
measures for each fund discussed in a
research report, and for which the
1 See Release No. 33–10580 (Nov. 30, 2018) [83
FR 64180 (Dec. 13, 2018)] (‘‘Adopting Release’’).
Rule 139b became effective on January 14, 2019.

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performance measures apply, would
increase compliance costs for brokerdealers seeking to publish or distribute
a covered investment fund research
report.
It is difficult to provide estimates of
the burdens and costs for those brokerdealers that will include performance
information in a rule 139b research
report. As discussed in the Adopting
Release, this is difficult to estimate
because current data collected does not
reflect the affiliate exclusion, does not
include the entire universe of covered
investment funds, and it is uncertain
what percentage of communications
currently filed as rule 482 advertising
prospectuses (or rule 34b–1
supplemental sales materials) will
instead be published in reliance of rule
139b, as covered investment fund
research reports.2 For purposes of the
PRA, we estimate that 10% of the rule
482 and rule 34b–1 communications
currently filed by broker-dealers with
FINRA (approximately 48,341) could be
considered as rule 139b covered
investment fund research reports. We
estimate that broker-dealers will publish
annually 4,834 (10% of 48,341) covered
investment fund research reports.
Moreover, we assume for purposes of
the PRA that all estimated rule 139b
research reports will include fund
performance information. We further
estimate that 1,169 broker-dealers
would likely be respondents to the
collection of information with a
frequency of 4.1 responses per year.3
Additionally, we estimate that each
research report will require 3 hours of
ongoing internal burden hours by a
broker-dealers’ personnel to comply
with the rule 139b collection of
information requirements, which for
each broker-dealer is estimated to be
12.3 internal burden hours.4 In sum, we
estimate that rule 139b’s requirements
will impose a total annual internal hour
burden of 14,379 hours on brokerdealers.5 We do not think there is an
external cost burden associated with
this collection of information.
This collection of information
requirement would not be mandatory
2 See Adopting Release, supra note 1, n. 413 and
accompanying paragraph.
3 Based on information provided by FINRA, for
the period January 1, 2021 through December 31,
2021, there were an aggregate of 48,341 filings that
were coded as either Rule 482 or Rule 34b–1 filings.
Furthermore, the Commission estimates that for the
period January 1, 2021 through December 31, 2021,
there were 4,834 covered investment fund research
reports/1,169 broker-dealers = 4.1 annual responses
per broker-dealer.
4 4.1 annual responses per broker-dealer × 3
internal burden hours = 12.3 annual internal
burden hours per broker-dealer.
5 12.3 annual burden hours * 1,169 brokerdealers.

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for broker-dealers seeking to rely upon
rule 139b, but would be necessary for
those broker-dealers that would like to
provide performance information in
their covered investment fund research
reports. Responses to the information
collections 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.
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 by October 17, 2022 to (i)
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission, c/
o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: [email protected].
Dated: September 12, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–20019 Filed 9–15–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95737; File No. SR–C2–
2022–016]

Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fees
Schedule Relating to the Sale of OpenClose Volume Data
September 12, 2022.

Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 1, 2022, Cboe C2 Exchange,
Inc. (the ‘‘Exchange’’ or ‘‘C2’’) 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 Exchange.
The Commission is publishing this
notice to solicit comments on the
1 15
2 17

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U.S.C. 78s(b)(1).
CFR 240.19b–4.

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