60 Day Notice

Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices
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 shall institute proceedings
under Section 19(b)(2)(B) 23 of the Act 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:

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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–
CboeEDGX–2024–027 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–CboeEDGX–2024–027. 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
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
23 15

U.S.C. 78s(b)(2)(B).

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19:25 Jun 27, 2024

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–CboeEDGX–2024–027 and
should be submitted on or before July
19, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14216 Filed 6–27–24; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–541, OMB Control No.
3235–0620]

Proposed Collection; Comment
Request; Extension: Rule 22c–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. 3501 et seq.) the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 22c–2 (17 CFR 270.22c–2) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (the ‘‘Investment
Company Act’’) requires the board of
directors (including a majority of
independent directors) of most
registered open-end investment
companies (‘‘funds’’) to either approve a
redemption fee of up to two percent or
determine that imposition of a
redemption fee is not necessary or
appropriate for the fund. Rule 22c–2
also requires a fund to enter into written
agreements with their financial
intermediaries (such as broker-dealers
and retirement plan administrators)
under which the fund, upon request,
can obtain certain shareholder identity
and trading information from the
intermediaries. The written agreement
must also allow the fund to direct the
intermediary to prohibit further
purchases or exchanges by specific
shareholders that the fund has
24 17

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identified as being engaged in
transactions that violate the fund’s
market timing policies. These
requirements enable funds to obtain the
information that they need to monitor
the frequency of short-term trading in
omnibus accounts and enforce their
market timing policies.
The rule includes three ‘‘collections
of information’’ within the meaning of
the Paperwork Reduction Act of 1995
(‘‘PRA’’).1 First, the rule requires boards
to either approve a redemption fee of up
to two percent or determine that
imposition of a redemption fee is not
necessary or appropriate for the fund.
Second, funds must enter into
information sharing agreements with all
of their ‘‘financial intermediaries’’ 2 and
maintain a copy of the written
information sharing agreement with
each intermediary in an easily
accessible place for six years. Third,
pursuant to the information sharing
agreements, funds must have systems
that enable them to request frequent
trading information upon demand from
their intermediaries, and to enforce any
restrictions on trading required by funds
under the rule.
The collections of information created
by rule 22c–2 are necessary for funds to
effectively assess redemption fees,
enforce their policies in frequent
trading, and monitor short-term trading,
including market timing, in omnibus
accounts. These collections of
information are mandatory for funds
that redeem shares within seven days of
purchase. The collections of information
also are necessary to allow Commission
staff to fulfill its examination and
oversight responsibilities.
Rule 22c–2(a)(1) requires the board of
directors of all registered open-end
management investment companies and
series thereof (except for money market
funds, ETFs, or funds that affirmatively
permit short-term trading of its
securities) to approve a redemption fee
for the fund, or instead make a
determination that a redemption fee is
1 44

U.S.C. 3501–3520.
rule defines a Financial Intermediary as: (i)
Any broker, dealer, bank, or other person that holds
securities issued by the fund in nominee name; (ii)
a unit investment trust or fund that invests in the
fund in reliance on section 12(d)(i)(E) of the Act;
and (iii) in the case of a participant directed
employee benefit plan that owns the securities
issued by the fund, a retirement plan’s
administrator under section 316(A) of the Employee
Retirement Security Act of 1974 (29 U.S.C.
1002(16)(A) or any person that maintains the plans’
participant records; Financial Intermediary does not
include any person that the fund treats as an
individual investor with respect to the fund’s
policies established for the purpose of eliminating
or reducing any dilution of the value of the
outstanding securities issued by the fund; Rule 22c–
2(c)(1).
2 The

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Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices

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either not necessary or appropriate for
the fund. Commission staff understands
that the boards of all funds currently in
operation have undertaken this process
for the funds they currently oversee, and
the rule does not require boards to
review this determination periodically
once it has been made. Accordingly, we
expect that only boards of newly
registered funds or newly created series
thereof would undertake this
determination. Commission staff
estimates that 3 funds (excluding money
market funds and ETFs) are newly
formed each year and would need to
make this determination.3
Commission staff estimates that it
takes 2 hours of the board’s time as a
whole (at a rate of $4,770 per hour) to
approve a redemption fee or make the
required determination on behalf of all
series of the fund. In addition,
Commission staff estimates that it takes
compliance personnel of the fund 8
hours (at a rate of $84 per hour) to
prepare trading, compliance, and other
information regarding the fund’s
operations to enable the board to make
its determination, and takes an internal
compliance attorney of the fund 3 hours
(at a rate of $440 per hour) to review
this information and present its
recommendations to the board.
Therefore, for each fund board that
undertakes this determination process,
Commission staff estimates it expends
13 hours 4 at a cost of $11,532.5 As a
result, Commission staff estimates that
the total time spent for all funds on this
process is 416 hours at a cost of
$369,024.6
Rule 22c–2(a)(2) requires a fund to
enter into information-sharing
agreements with each of its financial
3 This estimate is based on the average number of
registrants filing initial Form N–1A or N–3 from
2020 to 2022; this estimate does not carve out
money market funds, ETFs, or funds that
affirmatively permit short-term trading of their
securities, so this estimate corresponds to the outer
limit of the number of registrants that would have
to make this determination.
4 This calculation is based on the following
estimates: 2 hours of board time + 3 hours of
internal compliance attorney time + 8 hours of
compliance clerk time = 13 hours.
5 This calculation is based on the following
estimates: ($4,770 board time × 2 hours) + ($84
compliance time × 8 hours) + ($440 attorney time
× 3 hours) = $11,532.
The hourly wages used are from SIFMA’s
Management & Professional Earnings in the
Securities Industry 2013, modified by Commission
staff 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; the staff has estimated the average cost
of board of director time as $4,770 per hour for the
board as a whole, based on information received
from funds and their counsel.
6 This calculation is based on the following
estimates: 13 hours × 32 funds = 416 hours;
$11,532× 32 funds = $369,024.

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intermediaries. Commission staff
understands that all currently registered
funds have already entered into such
agreements with their intermediaries.
Funds enter into new relationships with
intermediaries from time to time,
however, which requires them to enter
into new information sharing
agreements. Commission staff
understands that, in general, funds enter
into information-sharing agreement
when they initially establish a
relationship with an intermediary,
which is typically executed as an
addendum to the distribution
agreement. The Commission staff
understands that most shareholder
information agreements are entered into
by the fund group (a group of funds
with a common investment adviser),
and estimates that there are currently
797 currently active fund groups.7
Commission staff estimates that, on
average, each active fund group enters
into relationships with 3 new
intermediaries each year. Commission
staff understands that funds generally
use a standard information sharing
agreement, drafted by the fund or an
outside entity, and modifies that
agreement according to the
requirements of each intermediary.
Commission staff estimates that
negotiating the terms and entering into
an information sharing agreement takes
a total of 4 hours of attorney time (at a
rate of $500 per hour) per intermediary.
Accordingly, Commission staff
estimates that it takes 12 hours at a cost
of $6,000 annually for each fund group 8
to enter into new information sharing
agreements and, in the aggregate
existing market participants incur a total
of 9,564 hours at a cost of $4,782,000.9
In addition, newly created funds
advised by new entrants (effectively
new fund groups) must enter into
information sharing agreements with all
of their financial intermediaries.
Commission staff estimates that there
are 38 new fund groups that form each
year that will have to enter into
information sharing agreements with
each of their intermediaries.10
Commission staff estimates that fund
groups formed by new advisers typically
have relationships with significantly
fewer intermediaries than existing fund
7 ICI, 2024 Investment Company Fact Book at Fig
2.8 (2024) (https://www.icifactbook.org/pdf/2024factbook.pdf).
8 This estimate is based on the following
calculations: 4 hours × 3 new intermediaries = 12
hours; 12 hours × $500 = $6,000).
9 This estimate is based on the following
calculations: (12 hours × 797 fund groups = 9,564
hours); 9,564 hours × $500 = $4,782,000).
10 ICI, 2024 Investment Company Fact Book at Fig
2.8 (2024) (https://www.icifactbook.org/pdf/2024factbook.pdf).

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groups, and estimates that new fund
groups will typically enter into 100
information sharing agreements with
their intermediaries when they begin
operations.11 As discussed previously,
Commission staff estimates that it takes
4 hours of attorney time (at a rate of
$500 per hour) per intermediary to enter
into information sharing agreements.
Therefore, Commission staff estimates
that each newly formed fund group will
incur 400 hours of attorney time at a
cost of $200,000 12 and that all newly
formed fund groups will incur a total of
15,200 hours at a cost of $7,600,000 to
enter into information sharing
agreements with their intermediaries.13
Rule 22c-2(a)(3) requires funds to
maintain records of all informationsharing agreements for 6 years in an
easily accessible place. Commission
staff understands that most shareholder
information agreements are stored at the
fund group level and estimates that
there are currently approximately 797
fund groups.14 Commission staff
understands that information-sharing
agreements are generally included as
addendums to distribution agreements
between funds and their intermediaries,
and that these agreements would be
stored as required by the rule as a matter
of ordinary business practice. Therefore,
Commission staff estimates that
maintaining records of informationsharing agreements requires 10 minutes
of time spent by a general clerk (at a rate
of $75 per hour) per fund, each year.
Accordingly, Commission staff
estimates that all funds will incur 133
hours at a cost of $9,975 15 in complying
with the recordkeeping requirement of
rule 22c-2(a)(3). Therefore, Commission
staff estimates that to comply with the
information sharing agreement
requirements of rule 22c-2(a)(2) and (3),
it requires a total of 24,897 hours at a
cost of $12,391,975.16
The Commission staff estimates that
on average, each fund group requests
11 Commission staff understands that funds
generally use a standard information sharing
agreement, drafted by the fund or an outside entity,
and then modifies that agreement according to the
requirements of each intermediary.
12 This estimate is based on the following
calculations: 4 hours × 100 intermediaries = 400
hours; 400 hours × $500 = $200,000.
13 This estimate is based on the following
calculations: (38 fund groups × 400 hours = 15,200
hours) ($500 × 15,200 = 7,600,000).
14 ICI, 2024 Investment Company Fact Book at Fig
2.8 (2024) (https://www.icifactbook.org/pdf/2024factbook.pdf).
15 This estimate is based on the following
calculations: (10 minutes × 797 fund groups = 7,970
minutes); (7,970 minutes/60 = 133 hours); (133
hours × $75 = $9,975).
16 This estimate is based on the following
calculations: (9,564 hours + 15,200 hours + 133
hours = 24,897 hours); ($4,782,000 + $7,600,000 +
$9,975 = $12,391,975).

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Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices

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shareholder information once a week,
and gives instructions regarding the
restriction of shareholder trades every
day, for a total of 417 responses related
to information sharing systems per fund
group each year, and a total 331,552
responses for all fund groups
annually.17 In addition, as described
above, the staff estimates that funds
make 32 responses related to board
determinations, 2,391 responses related
to new intermediaries of existing fund
groups, 3,800 responses related to new
fund group information sharing
agreements, and 797 responses related
to recordkeeping, for a total of 7,020
responses related to the other
requirements of rule 22c-2. Therefore,
the Commission staff estimates that the
total number of responses is 338,572
(331,552 + 7,020 = 338,572). The
Commission staff estimates that the total
hour burden for rule 22c-2 is 25,313
hours at a cost of $12,392,344.18
Responses provided to the
Commission will be accorded the same
level of confidentiality accorded to
other responses provided to the
Commission in the context of its
examination and oversight program.
Responses provided in the context of
the Commission’s examination and
oversight program are generally kept
confidential. Complying with the
information collections of rule 22c-2 is
mandatory for funds that redeem their
shares within 7 days of purchase. 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 27, 2024.
17 This estimate is based on the following
calculations: (52 + 365 = 417); (417 × 797 fund
groups = 331,552).
18 This estimate is based on the following
calculations: 416 hours (board determination) +
24,897 hours (information sharing agreements) =
25,313 total hours; $369,024 (board determination)
+ $12,391,975 (information sharing agreements) =
$12,392,344.

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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, Chief Information
Officer, Securities and Exchange
Commission, c/o John Pezzullo, 100 F
Street, NE Washington, DC 20549 or
send an email to: PRA_Mailbox@
sec.gov.
Dated: June 24, 2024.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14223 Filed 6–27–24; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100409; File No. SR–
CBOE–2024–022]

Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Rules
Relating to the Continuing Education
for Registered Persons as Provided
Under Exchange Rule 3.33.01
June 24, 2024.

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 June 12,
2024, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 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
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
its rules relating to the Continuing
Education for Registered Persons as
provided under Exchange Rule 3.33.01.
The text of the proposed rule change is
provided in Exhibit 5.
1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17

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The text of the proposed rule change
is also available on the Exchange’s
website (http://www.cboe.com/
AboutCBOE/CBOELegalRegulatory
Home.aspx), at the Exchange’s Office of
the Secretary, 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
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 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 proposed rule change amends
Exchange Rule 3.33.01 to reopen the
period by which certain participants in
the Maintaining Qualifications Program
(‘‘MQP’’) will be able to complete their
prescribed 2022 and 2023 continuing
education content.
In 2021, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
implemented rule changes, which
amended FINRA’s Continuing
Education (‘‘CE’’) Program requirements
to, among other things, provide eligible
individuals who terminate any of their
representative or principal registration
categories the option of maintaining
their qualification for any terminated
registration categories by completing
annual CE through a new program, the
MQP.5 Under FINRA Rule 1240.01, the
MQP designated a look-back provision
that, subject to specified conditions,
extended the option to participate in the
MQP to individuals who: (1) were
registered as a representative or
principal within two years immediately
prior to March 15, 2022 (the
implementation date of the MQP); and
(2) individuals who were participating
in the Financial Services Affiliate
5 See Securities Exchange Act Release No. 93097
(September 21, 2021), 86 FR 53358 (September 27,
2021) (Order Approving File No. SR–FINRA–2021–
015). Other exchanges, including Cboe Options,
subsequently filed copycat rule filings to align their
CE rules with those of FINRA. See Securities
Exchange Act Release No. 94513 (March 24, 2022),
87 FR 18446 (March 30, 2022), (SR–CBOE–2022–
012).

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