60 Day Notice

54894

Federal Register / Vol. 89, No. 127 / Tuesday, July 2, 2024 / Notices

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100437; File No. SR–NYSE–
2024–23]

Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Designation of a Longer Period for
Commission Action on Proposed Rule
Change To Amend Section 703.12(II) of
the NYSE Listed Company Manual To
Expand the Circumstances Under
Which Rights May Be Listed on the
NYSE

lotter on DSK11XQN23PROD with NOTICES1

For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–14519 Filed 7–1–24; 8:45 am]
BILLING CODE 8011–01–P

June 26, 2024.

On April 29, 2024, the New York
Stock Exchange LLC (‘‘NYSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Section 703.12(II) of the NYSE
Listed Company Manual to expand the
circumstances under which rights may
be listed on the NYSE by allowing
issuers to (i) issue rights to more than
existing shareholders for a class of
securities that is listed or to be listed on
the Exchange, and (ii) list and trade
rights on the Exchange prior to listing
the security into which such rights will
be exercisable. The proposed rule
change was published for comment in
the Federal Register on May 15, 2024.3
The Commission has received no
comments on the proposal.
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is June 29, 2024.
The Commission is extending this 45day time period.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change.
1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 100102
(May 10, 2024), 89 FR 42543.
4 15 U.S.C. 78s(b)(2).
2 17

VerDate Sep<11>2014

Accordingly, the Commission, pursuant
to section 19(b)(2) of the Act,5
designates August 13, 2024, as the date
by which the Commission shall either
approve or disapprove, or institute
proceedings to determine whether to
disapprove, the proposed rule change
(File No. SR–NYSE–2024–23).

17:34 Jul 01, 2024

Jkt 262001

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–822, OMB Control No.
3235–0777]

Proposed Collection; Comment
Request; Extension: Rules 15Fi–3
Through 15Fi–5
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
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rules 15Fi–3 through
15Fi–5 (17 CFR 240.15Fi–3 through
240.15Fi–5), under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rules 15Fi–3 through 15Fi–5 (17 CFR
240.15Fi–3 through 240.15Fi–5) under
the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) require registered
security-based swap dealers (‘‘SBS
dealer’’) and registered major securitybased swap participants (‘‘major SBS
participant’’) (each SBS dealer and each
major SBS participant hereafter referred
to as an ‘‘SBS Entity’’) to apply specific
risk mitigation techniques to portfolios
of security-based swaps not submitted
for clearing. Rules 15Fi–3 through 15Fi–
5 impose a collection of information
requirements on SBS Entities.
Specifically, Rule 15Fi–3 requires SBS
Entities to reconcile outstanding
security-based swaps with applicable
counterparties on a periodic basis. Rule
15Fi–4 requires SBS Entities to engage

PO 00000

5 15
6 17

U.S.C. 78s(b)(2).
CFR 200.30–3(a)(31).

Frm 00133

Fmt 4703

Sfmt 4703

in certain forms of portfolio
compression exercises with their
counterparties, as appropriate. Rule
15Fi–5 requires SBS Entities to execute
written security-based swap trading
relationship documentation with each
of its counterparties prior to, or
contemporaneously with, executing a
security-based swap transaction, and to
periodically audit the policies and
procedures governing such
documentation.
Rules 15Fi–3 through 15Fi–5 have
been promulgated pursuant to Section
15F(i)(2) of the Exchange Act, which
requires that the Commission ‘‘adopt
rules governing documentation
standards for security-based swap
dealers and major security-based swap
participants.’’ Accordingly, the
collections of information are at the
heart of each of the underlying
documentation requirements of the
rules, such that not conducting them (or
reducing the frequency of collection)
would not be consistent with the
statutory provisions. Moreover, the
policies and procedures required to be
established, maintained, and followed
pursuant to Rules 15Fi–3 through 15Fi–
5 are instrumental in focusing and
assessing compliance with the
underlying rules, consistent with how
similar requirements are used in
numerous other Commission rules.
Thus, eliminating such collections (or
reducing the frequency of collection)
also would be inconsistent with the
applicable statutory provisions and the
intended effects of the rules.
The Commission estimated that
approximately 53 entities may fit within
the definition of SBS dealer, and up to
five entities may fit within the
definition of major SBS participant.
Thus, the Commission estimated that
approximately 58 entities would be
required to register with the
Commission as SBS Entities and would
be subject to Rules 15Fi–3 through
15Fi–5. Of the 58 entities that would be
required to register with the
Commission as SBS Entities, the
Commission estimated that
approximately 20 would be duallyregistered with the Commodity Futures
Trading Commission (‘‘CFTC’’) as swap
dealers or major swap participants. As
the Rules 15Fi–3 through 15Fi–5 are
largely similar to those adopted by the
CFTC, dually-registered entities may
have procedures and systems in place to
collect the information, thereby
minimizing compliance burdens. The
Commission estimated that the total
annual industry burden under 15Fi–3
through 15Fi–5 is approximately
464,836 hours per year.

E:\FR\FM\02JYN1.SGM

02JYN1

Federal Register / Vol. 89, No. 127 / Tuesday, July 2, 2024 / Notices
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
estimates of the burden of the proposed
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 30, 2024.
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.
Please direct your written comments
to: David Bottom, 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 26, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–14482 Filed 7–1–24; 8:45 am]
BILLING CODE 8011–01–P

[Release No. 34–100429; File No. PCAOB–
2024–04]

Public Company Accounting Oversight
Board; Notice of Filing of Proposed
Rules on Amendment to PCAOB Rule
3502 Governing Contributory Liability

lotter on DSK11XQN23PROD with NOTICES1

June 26, 2024.

Pursuant to Section 107(b) of the
Sarbanes-Oxley Act of 2002 (‘‘SarbanesOxley’’ or the ‘‘Act’’), notice is hereby
given that on June 20, 2024, the Public
Company Accounting Oversight Board
(the ‘‘Board’’ or the ‘‘PCAOB’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rules described in items I and
II below, which items have been
prepared by the Board. The Commission
is publishing this notice to solicit
comments on the proposed rules from
interested persons.
I. Board’s Statement of the Terms of
Substance of the Proposed Rules
On June 12, 2024, the Board adopted
an amendment to PCAOB Rule 3502,

17:34 Jul 01, 2024

Jkt 262001

II. Board’s Statement of the Purpose of,
and Statutory Basis for, the Proposed
Rules
In its filing with the Commission, the
Board included statements concerning
the purpose of, and basis for, the
proposed rules and discussed any
comments it received on the proposed
rules. The text of these statements may
be examined at the places specified in
Item IV below. The Board has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements. In addition,
to the extent that Section 103(a)(3)(C) of
the Act applies to the proposed rules,
the Board is requesting that the
Commission approve the proposed
rules, pursuant to that provision, for
application to audits of emerging growth
companies (‘‘EGCs’’), as that term is
defined in Section 3(a)(80) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’). The Board’s request
is set forth in section D.
A. Board’s Statement of the Purpose of,
and Statutory Basis for, the Proposed
Rules

SECURITIES AND EXCHANGE
COMMISSION

VerDate Sep<11>2014

Responsibility Not to Knowingly or
Recklessly Contribute to Violations
(collectively, the ‘‘proposed rules’’). The
text of the proposed rules appears in
Exhibit A to the SEC Filing Form 19b–
4 and is available on the Board’s website
at https://pcaobus.org/about/rulesrulemaking/rulemaking-dockets/docket053 and at the Commission’s Public
Reference Room.

(a) Purpose
Congress authorized the Board to
promulgate rules and standards to
govern auditor conduct.1 To that end, in
2005, the Board codified auditors’
longstanding ethical obligation not to
contribute to firms’ violations in PCAOB
Rule 3502, Responsibility Not to
Knowingly or Recklessly Contribute to
Violations.2 For well over a decade now,
the Board has brought enforcement
proceedings against associated persons
pursuant to Rule 3502.
Yet Rule 3502’s current formulation
contains an incongruity that places
negligent contributors to firms’
violations beyond the rule’s reach. That
incongruity stems from the notion that
1 See Section 103(a)(1) of Sarbanes-Oxley; see
also, e.g., id. 101(c)(2), (c)(4), (c)(6) & (g)(1).
2 Ethics and Independence Rules Concerning
Independence, Tax Services, and Contingent Fees,
PCAOB Release No. 2005–014, at 9 (July 26, 2005),
available at https://pcaobus.org/Rulemaking/
Docket017/2005-07-26_Release_2005-014.pdf (‘‘The
Board proposed [Rule 3502] to codify the ethical
obligation of associated persons of registered firms
not to cause registered firms to commit [ ]
violations.’’).

PO 00000

Frm 00134

Fmt 4703

Sfmt 4703

54895

registered firms, like any legal entity,
can act only through natural persons. It
logically follows that when a registered
firm is found to have acted negligently,
it is likely that such negligence is
attributable to at least one natural
person’s negligence.
Rule 3502, however, at present
requires a level of culpability higher
than negligence—at least recklessness—
before the Board can impose sanctions
against associated persons who directly
and substantially contribute to firms’
negligence-based violations. Put another
way, Rule 3502 requires a showing of
more than negligence by individuals for
the Board to sanction them for conduct
resulting in negligence by firms. Thus,
under current Rule 3502, associated
persons who do not exercise reasonable
care and contribute to firms’ violations
may escape liability and
accountability—even while the firms
committing the violations do not. The
Board believes that amending Rule 3502
addresses this incongruity, and
therefore better protects investors and
promotes quality audits.
(b) Statutory Basis
The statutory basis for the proposed
rules is Title I of the Act.
B. Board’s Statement on Burden on
Competition
Not applicable. The Board’s
consideration of the economic impacts
of the proposed rules is discussed in
section D below.
C. Board’s Statement on Comments on
the Proposed Rules Received From
Members, Participants or Others
The Board released the proposed rule
amendment for public comment in
PCAOB Release No. 2023–007
(September 19, 2023). The Board
received 28 written comment letters;
one comment letter was subsequently
withdrawn. The Board has carefully
considered all comments received. The
Board’s response to the comments it
received and the changes made to the
rules in response to the comments
received are discussed below.
Introduction
In the Sarbanes-Oxley Act of 2002
(‘‘Sarbanes-Oxley’’ or the ‘‘Act’’),
Congress established the Board in the
wake of a series of high-profile
corporate collapses that laid bare
auditor misconduct and the need for a
new type of oversight of the public
accounting industry.3 As part of its
3 Public Law 107–204, 15 U.S.C. 7201 et seq.; see
S. Rep. No. 107–205, at 3 (2002) (‘‘The purpose of
[Sarbanes-Oxley] is to address the systemic and

E:\FR\FM\02JYN1.SGM

Continued

02JYN1