30 Day Notice

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Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Notices

previously approved collection of
information discussed below.
Rule 489 (17 CFR 230.489) under the
Securities Act of 1933 (15 U.S.C. 77a et
seq.) requires foreign banks and foreign
insurance companies and holding
companies and finance subsidiaries of
foreign banks and foreign insurance
companies that are exempted from the
definition of ‘‘investment company’’ by
virtue of rules 3a–1 (17 CFR 270.3a–1),
3a–5 (17 CFR 270.3a–5), and 3a–6 (17
CFR 270.3a–6) under the Investment
Company Act of 1940 (15 U.S.C. 80a–1
et seq.) to file Form F–N (17 CFR
239.43) to appoint an agent for service
of process when making a public
offering of securities in the United
States. The information is collected so
that the Commission and private
plaintiffs may serve process on foreign
entities in actions and administrative
proceedings arising out of or based on
the offer or sales of securities in the
United States by such foreign entities.
The Commission received an average
of 25 Form F–N filings per year over the
last three years (2020–2022). The
Commission has previously estimated
that the total annual burden associated
with information collection and Form
F–N preparation and submission is one
hour per filing. Based on the
Commission’s experience with
disclosure documents generally, the
Commission continues to believe that
this estimate is appropriate. Thus the
estimated total annual burden for rule
489 and Form F–N is 25 hours.
Estimates of the average burden hours
are made solely for the purposes of the
Paperwork Reduction Act and are not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules and forms.
Compliance with the collection of
information requirements of rule 489
and Form F–N is mandatory to obtain
the benefit of the exemption. Responses
to the collection of information 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 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 by January 22, 2024 to (i)
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov and (ii) David Bottom,

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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: December 18, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–28117 Filed 12–20–23; 8:45 am]
BILLING CODE P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–240, OMB Control No.
3235–0216]

Submission for OMB Review;
Comment Request; Extension: Rule
19a–1
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
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. 3501–3520), 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.
Section 19(a) (15 U.S.C. 80a–19(a)) of
the Investment Company Act of 1940
(the ‘‘Act’’) (15 U.S.C. 80a) makes it
unlawful for any registered investment
company to pay any dividend or similar
distribution from any source other than
the company’s net income, unless the
payment is accompanied by a written
statement to the company’s
shareholders which adequately
discloses the sources of the payment.
Section 19(a) authorizes the
Commission to prescribe the form of
such statement by rule.
Rule 19a–1 (17 CFR 270. 19a–1) under
the Act, entitled ‘‘Written Statement to
Accompany Dividend Payments by
Management Companies,’’ sets forth
specific requirements for the
information that must be included in
statements made pursuant to section
19(a) by or on behalf of management
companies.1 The rule requires that the
statement indicate what portions of
distribution payments are made from
net income, net profits from the sale of
a security or other property (‘‘capital
gains’’) and paid-in capital. When any
part of the payment is made from capital
1 Section 4(3) of the Act (15 U.S. C. 80a–4(3))
defines ‘‘management company’’ as ‘‘any
investment company other than a face amount
certificate company or a unit investment trust.’’

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gains, rule 19a–1 also requires that the
statement disclose certain other
information relating to the appreciation
or depreciation of portfolio securities. If
an estimated portion is subsequently
determined to be significantly
inaccurate, a correction must be made
on a statement made pursuant to section
19(a) or in the first report to
shareholders following the discovery of
the inaccuracy.
The purpose of rule 19a–1 is to afford
fund shareholders adequate disclosure
of the sources from which distribution
payments are made. The rule is
intended to prevent shareholders from
confusing income dividends with
distributions made from capital sources.
Absent rule 19a–1, shareholders might
receive a false impression of fund gains.
Based on a review of filings made
with the Commission, the staff estimates
that approximately 12,900 series of
registered investment companies that
are management companies may be
subject to rule 19a–1 each year,2 and
that each portfolio on average mails two
statements per year to meet the
requirements of the rule.3 The staff
further estimates that the time needed to
make the determinations required by the
rule and to prepare the statement
required under the rule is
approximately 1 hour per statement.
The total annual burden for all
portfolios therefore is estimated to be
approximately 25,800 burden hours.4
The staff estimates that approximately
one-third of the total annual burden
(8,600 hours) would be incurred by a
paralegal with an average hourly wage
rate of approximately $253 per hour,5
and approximately two-thirds of the
annual burden (17,200 hours) would be
incurred by a compliance clerk with an
average hourly wage rate of $82 per
2 This estimate is as of December 2022 and is
based on the Commission staff’s review of EDGAR
filings through July 31, 2023; the number of
management investment company portfolios that
make distributions for which compliance with rule
19a–1 is required depends on a wide range of
factors and can vary greatly across years; therefore,
the calculation of estimated burden hours below is
based on the total number of management
investment company portfolios, each of which may
be subject to rule 19a–1.
3 A few portfolios make monthly distributions
from sources other than net income, so the rule
requires them to send out a statement 12 times a
year; other portfolios never make such
distributions.
4 This estimate is based on the following
calculation: 12,900 management investment
company portfolios × 2 statements per year × 1 hour
per statement = 25,800 burden hours.
5 Hourly rates are derived from the Securities
Industry and Financial Markets Association
(‘‘SIFMA’’), Management and Professional Earnings
in the Securities Industry 2013, modified to account
for an 1800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.

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Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Notices

khammond on DSKJM1Z7X2PROD with NOTICES

hour.6 The staff therefore estimates that
the aggregate annual burden, in dollars,
of the hours needed to comply with the
paperwork requirements of the rule is
approximately $3,586,200 ((8,600 hours
× $253 = $2,175,800) + (17,200 hours ×
$82 = $1,410,400)). It is estimated that
there is no cost burden of rule 19a–1
other than these estimates.
To comply with state law, many
investment companies already must
distinguish the different sources from
which a shareholder distribution is paid
and disclose that information to
shareholders. Thus, many investment
companies would be required to
distinguish the sources of shareholder
dividends whether or not the
Commission required them to do so
under rule 19a–1.
These estimates are made solely for
the purposes of the Paperwork
Reduction Act, and are not derived from
a comprehensive or even a
representative survey or study of the
costs of Commission rules. Compliance
with the collection of information
required by rule 19a–1 is mandatory for
management companies that make
statements to shareholders pursuant to
section 19(a) of the Act. 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 January 22, 2024 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: December 18, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–28118 Filed 12–20–23; 8:45 am]
BILLING CODE 8011–01–P
6 Hourly rates are derived from SIFMA’s Office
Salaries in the Securities Industry 2013, modified
to account for an 1800-hour work-year and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.

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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99191; File No. SR–BOX–
2023–30]

Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend IM–7150–1 and
Rule 7250 (Quote Mitigation)
December 15, 2023.

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 December
11, 2023, BOX Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
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 amend IM–
7150–1 and Rule 7250 (Quote
Mitigation). The text of the proposed
rule change is available from the
principal office of the Exchange, at the
Commission’s Public Reference Room
and also on the Exchange’s internet
website at https://
rules.boxexchange.com/rulefilings.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization 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 modernize and improve the
operation of the rules. Specifically, the
Exchange is proposing to amend: (1)
1 15
2 17

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U.S.C. 78s(b)(1).
CFR 240.19b–4.

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IM–7150–1 to remove certain language
to provide better consistency with the
surveillance the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
currently provides for the Exchange;
and (2) Rule 7250 (Quote Mitigation) to
update and clarify the quote mitigation
process used by the Exchange. The
Exchange is proposing to make such
changes in response to requests from
Exchange Regulation Staff in an effort to
improve the efficacy of the Exchange’s
existing regulatory framework.
IM–7150–1
IM–7150–1 (a) currently provides
that: ‘‘it shall be considered conduct
inconsistent with just and equitable
principles of trade for any Initiating
Participant to engage in a pattern of
conduct where the Initiating Participant
submits Primary Improvement Orders
into the PIP process for two (2) contracts
or less for the purpose of manipulating
the PIP process in order to gain a higher
allocation percentage than the Initiating
Participant would have otherwise
received in accordance with the
allocation procedures set forth in Rule
7150.’’ 3 The Exchange now proposes to
remove the language that states, ‘‘2
contracts or less.’’
FINRA currently provides
surveillance for this requirement for the
Exchange and other options exchanges.
FINRA’s surveillance program monitors
for manipulative activity by a market
participant and includes surveillance
designed to detect activity where an
Initiating Participant submits Primary
Improvement Orders into the PIP
process for four (4) contracts or less for
the purpose of manipulating the PIP
process in order to gain a higher
allocation percentage than the Initiating
Participant would have otherwise
received. Even though IM–7150–1 as
written, notates that a pattern of orders
for two (2) contracts may indicate
manipulation of the PIP Process, FINRA
has identified the potential for
manipulation for orders greater than two
(2) contracts and expanded such
surveillance accordingly. For example,
unbundling an order for 50 contracts
into four (4) lots may have the same
effect as unbundling the order for two
(2) contracts.4 Under the current rule
3 See

IM–7150–1.
example, for one instance of 100 contracts,
the BOX Firm ID would be entitled to an allocation
of at least 40% or 40 contracts. If the customer order
is sent as multiple small PIPs for 2 contracts, the
BOX Participant would receive at least 50% of each
PIP sent (2 * .40 = .8, rounded up to 1 contract).
Therefore, the total allocation of the original 100
contract order would be at least 50% or 50
contracts, rather than 40% or 40 contracts, a
potential over allocation of at least 10 contracts.
4 For

Continued

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