30 Day Notice

Federal Register / Vol. 89, No. 170 / Tuesday, September 3, 2024 / Notices
necessary or appropriate in furtherance
of the purpose of the Exchange Act.
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 written 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)(ii) of the Exchange Act 193
and Rule 19b–4(f)(2) thereunder,194
because it establishes or changes a due,
or fee.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend the rule change if
it appears to the Commission that the
action is necessary or appropriate in the
public interest, for the protection of
investors, or would otherwise further
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
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:

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Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBYX–2024–029 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–CboeBYX–2024–029. 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
193 15
194 17

U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).

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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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeBYX–2024–029 and should be
submitted on or before September 24,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.195
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–19659 Filed 8–30–24; 8:45 am]

Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matter of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations
and enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information, please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: August 29, 2024.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–19818 Filed 8–29–24; 11:15 am]
BILLING CODE 8011–01–P

BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
2 p.m. on Thursday,
September 5, 2024.
PLACE: The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
TIME AND DATE:

195 17

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CFR 200.30–3(a)(12).

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SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–237, OMB Control No.
3235–0226]

Submission for OMB Review;
Comment Request; Extension: Rule
10f–3
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
(‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension and approval of
the collections of information discussed
below.
Section 10(f) of the Investment
Company Act of 1940 (the ‘‘Act’’)
prohibits a registered investment
company (‘‘fund’’) from purchasing any
security during an underwriting or
selling syndicate if the fund has certain

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Federal Register / Vol. 89, No. 170 / Tuesday, September 3, 2024 / Notices

affiliated relationships with a principal
underwriter for the security.1 Congress
enacted this provision in 1940 to protect
funds and their shareholders by
preventing underwriters from
‘‘dumping’’ unmarketable securities on
affiliated funds.
Rule 10f–3 under the Act permits a
fund to engage in a securities
transaction that otherwise would violate
Section 10(f) if, among other things: (i)
the fund’s directors have approved
procedures for purchases made in
reliance on the rule, regularly review
fund purchases to determine whether
they comply with these procedures, and
approve necessary changes to the
procedures; and (ii) a written record of
each transaction effected under the rule
is maintained for six years, the first two
of which in an easily accessible place.2
Rule 10f–3 also conditionally allows
managed portions of fund portfolios to
purchase securities offered in otherwise
off–limits primary offerings. To qualify
for this exemption, Rule 10f–3 requires
that the subadviser that is advising the
purchaser be contractually prohibited
from providing investment advice to
any other portion of the fund’s portfolio
and consulting with any other of the
fund’s advisers that is a principal
underwriter or affiliated person of a
principal underwriter concerning the
fund’s securities transactions.
These requirements provide a
mechanism for fund boards to oversee
compliance with the rule. The required
recordkeeping facilitates the
Commission staff’s review of Rule 10f–
3 transactions during routine fund
inspections and, when necessary, in
connection with enforcement actions.
The staff estimates that approximately
745 funds engage in at least one Rule
10f–3 transaction each year, for a total
of 745 such transactions.3 Rule 10f–3
requires that the purchasing fund create
a written record of each transaction that
includes, among other things,
information about from whom the
securities were purchased and the terms
of the transaction. The staff estimates
that it takes an average fund
approximately 30 minutes per
transaction at a time cost of $131 per
1 15

U.S.C. 80a–10(f).
CFR 270.10f–3.
3 These estimates are based on the average
number of fund filings on Form N–CEN made with
the Commission for fiscal years 2021 through 2023;
although business development companies
(‘‘BDCs’’) may also rely on Rule 10f–3, they do not
file on Form N–CEN, so our estimates for purposes
of this PRA exclude BDCs; further, because Form
N–CEN does not require any specific information
about Rule 10f–3 transactions, we assume for
purposes of this PRA that that each fund reported
to have relied on Rule 10f–3 engaged in one such
transaction annually.

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2 17

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transaction to document each
transaction.4 Thus, annually funds
spend approximately 373 hours 5 at an
internal cost of $97,595 documenting
these transactions.6
The funds also must maintain and
preserve these transactional records in
accordance with the rule’s
recordkeeping requirement, and the staff
estimates that it takes a fund
approximately 20 minutes per
transaction at a time cost of $28 per
transaction to comply with this part of
the rule.7 The staff estimates that
annually, in the aggregate, funds spend
approximately 248 hours 8 at a cost of
$20,832 to comply with this aspect of
Rule 10f–3’s recordkeeping
requirements.9
In addition, fund boards must, no less
than quarterly, examine each of these
transactions to ensure that they comply
with the fund’s policies and procedures.
The information or materials upon
which the board relied in making its
determination also must be maintained.
The staff estimates that it takes a fund
1 hour per quarter at a cost of $262 per
quarter to comply with the maintenance
requirement of the rule.10 Thus
annually, in the aggregate, funds spend
approximately 2,980 hours 11 annually
at a total internal cost of $780,760 to
comply with this recordkeeping
requirement.12
The staff further estimates that
reviewing and revising as needed
written procedures for Rule 10f–3
transactions takes, on average for each
4 The staff estimates that this task is shared
between a compliance clerk ($84/hour) and a
compliance attorney ($440/hour), for a blended
hourly wage rate of $262 ($84 + $440 ÷ 2 = $262)
and a half-hour blended wage rate of $131 ($262 ÷
2 = $131); all hourly wage rates are derived from
SIFMA’s Management & Professional Earnings in
the Securities Industry (2013), modified by
Commission staff to account for an 1800-hour workyear and inflation and multiplied by 5.35 to account
for bonuses, firm size, employee benefits and
overhead.
5 This estimate is based on the following
calculation: (0.5 hours × 745 transactions =
approximately, 373 hours).
6 This estimate is based on the following
calculation: (745 transactions × $131 = $97,595).
7 The wage figure of $28 is one third of an average
compliance clerk’s hourly wage rate of $84 ($84 ÷
3 = $28).
8 This estimate is based on the following
calculations: (20 minutes × 745 transactions =
14,900 minutes; 14,900 minutes/60 = 248 hours).
9 This estimate is based on the following
calculation: (248 hours × $84 = $20,832).
10 The staff estimates that a compliance clerk
spends half an hour preparing the report and a
compliance attorney spends half an hour reviewing
the report, for a blended hourly wage rate of $262
per hour. See supra note 4.
11 This estimate is based on the following
calculation: (1 hour per quarter × 4 quarters × 745
funds = 2,980 hours).
12 This estimate is based on the following
calculation: (2,980 hours × $262 = $780,760).

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fund, two hours of a compliance
attorney’s time at a cost of
approximately $880 13 per year.14 Thus,
annually, in the aggregate, the staff
estimates that funds spend a total of
approximately 1,490 hours 15 at a cost of
approximately $655,600 16 on
monitoring and revising Rule 10f–3
procedures.
Based on an analysis of Form N–CEN
filings, the staff estimates that
approximately 589 new funds enter into
sub-advisory agreements each year.17
Based on discussions with industry
representatives, the staff estimates that
it will require approximately 0.75
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 10f–3.18 Assuming
that all 589 new funds that enter into
new subadvisory contracts each year
make the modification to their
subadvisory contracts required by the
rule, we estimate that Rule 10f–3’s
subadvisory contract requirement will
require a total of 442 burden hours
annually for new funds, with an
associated aggregate internal cost of
approximately $221,200.19
The staff estimates that complying
with Rule 10f–3’s requirements imposes
an internal burden of 5,408 hours at an
internal cost of approximately
$1,755,155. This estimate does not
include the time spent to report a fund’s
13 This estimate is based on the following
calculation: (2 hours × $440 = $880).
14 These averages take into account the fact that
in most years, fund attorneys and boards spend
little or no time modifying procedures and in other
years, they spend significant time doing so.
15 This estimate is based on the following
calculation: (745 funds × 2 hours = 1,490 hours).
16 This estimate is based on the following
calculation: (745 funds × $880 = $655,600).
17 Based on the average number of subadvisory
agreements entered into by funds during fiscal years
2021–2023, as filed with the Commission on Form
N–CEN, we estimate that approximately 559 new
open-end funds and 30 new closed-end funds, or a
total of 589 new funds enter into new subadvisory
agreements each year (559 + 30 = 589 new funds);
we understand that existing funds may also enter
into new subadvisory agreements, but in many
cases would benefit from having previously drafted
Rule 10f–3 clauses in prior or existing subadvisory
contracts.
18 Because such clauses are identical to the
clauses that a fund would need to insert in their
subadvisory contracts to rely on Rules 12d3–1, 17a–
10, and 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
to all four rules; therefore, we estimate that the
burden allocated to Rule 10f–3 for this contract
change would be 0.75 hours (3 hours ÷ 4 rules =
.75 hours/rule); the staff further estimates that the
average hourly wage rate for an attorney to perform
this service is $375/hour.
19 These estimates are based on the following
calculations: (0.75 hours × 589 new funds =
approximately 442 burden hours); ($500 per hour
× 442 hours = approximately, $221,200 total cost).

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Federal Register / Vol. 89, No. 170 / Tuesday, September 3, 2024 / Notices
reliance on Rule 10f–3 on Form N–CEN,
which is subject to a separate PRA
information collection.
The collection of information required
by Rule 10f–3 is necessary to obtain the
benefits of the rule. 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 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 October 3, 2024 to (i)
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov and (ii) Austin Gerig,
Director/Chief Data Officer, Securities
and Exchange Commission, c/o
Oluwaseun Ajayi, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: [email protected].
Dated: August 27, 2024.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–19628 Filed 8–30–24; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–233, OMB Control No.
3235–0223]

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Submission for OMB Review;
Comment Request; Extension: Rule
17f–2
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. 350l et seq.), 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 17f–2 (17 CFR 270.17f–2),
entitled ‘‘Custody of Investments by
Registered Management Investment
Company,’’ establishes safeguards for
arrangements in which a registered
management investment company or
business development company
(‘‘fund’’) is deemed to maintain custody

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of its own assets, such as when the fund
maintains its assets in a facility that
provides safekeeping but not custodial
services.1 The rule includes four
distinct requirements that are an
information collection under the
Paperwork Reduction Act. First, fund’s
directors must prepare a resolution
designating not more than five fund
officers or responsible employees who
may have access to the fund’s assets.
Secondly, the fund’s board must vote to
approve this resolution. Third, the
designated access persons (two or more
of whom must act jointly when
handling fund assets) must prepare a
written notation providing certain
information about each deposit or
withdrawal of fund assets and must
transmit the notation to another officer
or director designated by the directors.
Lastly, an independent public
accountant must verify the fund’s assets
three times each year, and two of those
examinations must be unscheduled.2
Rule 17f–2’s requirements are
designed to safeguard fund assets from
loss by requiring certain specific
controls when those assets are not
placed and maintained in the custody of
a bank or other custodian as permitted
under section 17(f) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
17(f)) (‘‘Act’’) and the rules thereunder.
Specifically, the requirement that
directors designate access persons is
intended to ensure that directors
evaluate the trustworthiness of insiders
who handle fund assets. The
requirements that access persons act
jointly in handling fund assets, prepare
a written notation of each transaction,
and transmit the notation to another
designated person are intended to
reduce the risk of misappropriation of
fund assets by access persons, and to
ensure that adequate records are
prepared, reviewed by a responsible
third person, and available for
examination by the Commission. The
requirement that auditors verify fund
assets without notice twice each year is
intended to provide an additional
deterrent to the misappropriation of
fund assets and to detect any
irregularities. Less frequent
1 The rule generally requires all assets to be
deposited in the safekeeping of a ‘‘bank or other
company whose functions and physical facilities
are supervised by Federal or State authority.’’
2 The accountant must transmit to the
Commission promptly after each examination a
certificate describing the examination on Form N–
17f–2; the preparation and filing of Form N–17f–2,
which largely serves as a cover-sheet for the
accountant’s certification of their audit, is covered
by a separate information collection; the third
(scheduled) examination may coincide with the
annual verification required for every fund by
section 30(g) of the Act (15 U.S.C. 80a–29(g)).

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examinations by a fund’s accountants
could impair the ability of the
Commission’s examination staff to
ascertain the fund’s compliance with
the rule.
The Commission staff estimates that
each fund makes 974 responses and
spends an average of 252 hours annually
in complying with the rule’s
requirements.3 Commission staff
estimates that on an annual basis it
takes: (i) 0.5 hours of fund accounting
personnel at a total cost of $126 and 1
hour of fund attorney personnel time at
a cost of $484, for a total of 1.5 hours
and a cost of $610 to draft director
resolutions; 4 (ii) 0.5 hours of the fund’s
board of directors at a total cost of
$2,385 to adopt the resolution; 5 (iii) 244
hours for the fund’s accounting
personnel at a total cost of $81,086 to
prepare written notations of
transactions; 6 and (iv) 3 hours for the
fund’s controller or administrator at a
total cost of $1,704 to assist the
independent public accountants when
they perform verifications of fund
assets.7 The total of these four
requirements would then be 249 hours
at a cost of $84,081 per respondent.8
Commission staff estimates that
approximately 165 funds file Form N–
17f–2 each year.9 Thus, the total annual
3 The 974 responses are: 1 (one) response to draft
and adopt the resolution and 973 notations;
estimates of the number of hours are based on
conversations with individuals in the fund
industry; the actual number of hours may vary
significantly depending on individual fund assets.
4 The estimate relating to fund accounting
personnel is based on the following calculation: 0.5
(burden hours per fund) × $252 (senior accountant’s
hourly rate) = approximately $126; unless otherwise
indicated, the hourly wage figures used herein are
from the Securities Industry and Financial Markets
Association’s Management & Professional Earnings
in the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits
and overhead.
5 The staff has estimated the average cost of board
of director time as $4,770 per hour, which was last
adjusted for inflation through 2019; this is a
combined cost for the entire board and assumes as
average of 9 board members per board.
6 Respondents estimated that each fund makes
973 responses on an annual basis and spends a total
of 0.25 hours per response; the staff assumes that
the fund personnel involved are Accounts Payable
Manager ($237 hourly rate), Senior Operations
Manager ($425 hourly rate) and General Accounting
Manager ($337 hourly rate); the blended average
hourly rate of these personnel is $333 ($333 = (237
+ 425 + 337)/3); the total estimated cost of
preparing notations is based on the following
calculation: 974 × 0.25 × $333 = $81,086.
7 This estimate is based on the following
calculation: 3×$568 (fund controller’s hourly rate)
= $1,704.
8 249 = 0.5 + 1 + 0.5 + 3 + 244; $84,081 = 126
+ 484 + $2,385 + 81,086 + 1,704.
9 On average, each year approximately 165 funds
filed Form N–17f–2 with the Commission during

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