Federal Register 30-day Notice

105152

Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Notices

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–MEMX–2024–47 and should be
submitted on or before January 16, 2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.56
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–30779 Filed 12–23–24; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–586, OMB Control No.
3235–0647]

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Submission for OMB Review;
Comment Request; Extension: Rule
204
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’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 204 (17 CFR 242.204), under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.).
Rule 204(a) provides that a participant
of a registered clearing agency must
deliver securities to a registered clearing
agency for clearance and settlement on
a long or short sale in any equity
security by settlement date, or if a
participant of a registered clearing
agency has a fail to deliver position at
a registered clearing agency in any
equity security for a long or short sale
transaction in the equity security, the
participant shall, by no later than the
beginning of regular trading hours on
the applicable close-out date,
immediately close out its fail to deliver
positions by borrowing or purchasing
securities of like kind and quantity. For
a short sale transaction, the participant
56 17

CFR 200.30–3(a)(12), (59).

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must close out a fail to deliver by no
later than the beginning of regular
trading hours on the settlement day
following the settlement date. If a
participant has a fail to deliver that the
participant can demonstrate on its books
and records resulted from a long sale, or
that is attributable to bona-fide market
making activities, the participant must
close out the fail to deliver by no later
than the beginning of regular trading
hours on the third consecutive
settlement day following the settlement
date. Rule 204 is intended to help
further the Commission’s goal of
reducing fails to deliver by maintaining
the reductions in fails to deliver
achieved by the adoption of temporary
Rule 204T, as well as other actions
taken by the Commission. In addition,
Rule 204 is intended to help further the
Commission’s goal of addressing
potentially abusive ‘‘naked’’ short
selling in all equity securities.
The information collected under Rule
204 will continue to be retained and/or
provided to other entities pursuant to
the specific rule provisions and will be
available to the Commission and selfregulatory organization (‘‘SRO’’)
examiners upon request. The
information collected will continue to
aid the Commission and SROs in
monitoring compliance with these
requirements. In addition, the
information collected will aid those
subject to Rule 204 in complying with
its requirements. These collections of
information are mandatory.
Several provisions under Rule 204
will impose a ‘‘collection of
information’’ within the meaning of the
Paperwork Reduction Act.
Allocation Notification Requirement:
As of quarter four of 2023, there were
3,429 registered broker-dealers.1 Each of
these broker-dealers could clear trades
through a participant of a registered
clearing agency and, therefore, become
subject to the notification requirements
of Rule 204(d). If a participant allocates
a fail to deliver position to a broker or
dealer pursuant to Rule 204(d), the
broker or dealer that has been allocated
the fail to deliver position in an equity
security must determine whether such
fail to deliver position was closed out in
accordance with Rule 204(a). If such
broker or dealer does not comply with
the provisions of Rule 204(a), such
broker or dealer must immediately
notify the participant that it has become
subject to the requirements of Rule
204(b). The Commission estimates that
1 The Commission’s Division of Economic and
Risk Analysis (‘‘DERA’’) estimates that there were
approximately 3,429 registered broker-dealers as of
quarter four of 2023, based on FOCUS filings data.

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a broker or dealer could have to make
such determination and notification
with respect to approximately 2.44
equity securities per day.2 The
Commission estimates a total of
2,108,424 potential notifications in
accordance with Rule 204(d) across all
registered broker-dealers that could be
allocated responsibility to close out a
fail to deliver position per year (3,429
registered broker-dealers notifying
participants once per day 3 on 2.44
equity securities, multiplied by 252
trading days in 2023). The total
estimated annual burden hours per year
will be approximately 337,348 burden
hours (2,108,424 multiplied by 0.16
hours/notification 4).
Demonstration Requirement for Fails
to Deliver on Long Sales: As of
December 29, 2023, there were 129
participants of NSCC that were
registered as broker-dealers. If a
participant of a registered clearing
agency has a fail to deliver position in
an equity security at a registered
clearing agency and determined that
such fail to deliver position resulted
from a long sale, the Commission
estimates that a participant of a
registered clearing agency will have to
make such a determination with respect
to approximately 30 securities per day.5
The Commission estimates a total of
975,240 potential demonstrations in
accordance with Rule 204(a)(1) across
all broker-dealer participants per year
(129 participants checking for
compliance once per day on 30
securities, multiplied by 252 trading
days in 2023). The total approximate
estimated annual burden hours per year
2 DERA estimates that there were approximately
8,378 average daily fail to deliver positions during
2023. Across 3,429 registered broker-dealers, the
number of securities per registered broker-dealer
per trading day is approximately 2.44 (8,378 ÷
3,429) equity securities.
3 Because failure to comply with the close-out
requirements of Rule 204(a) is a violation of the
rule, the Commission believes that a broker or
dealer would make the notification to a participant
that it is subject to the borrowing requirements of
Rule 204(b) at most once per day.
4 See Amendments to Regulation SHO, Exchange
Act Release No. 60388 (July 27, 2009), 74 FR 38265
(July 31, 2009) (‘‘Rule 204 Adopting Release’’) (July
27, 2009) (making permanent the amendments to
Regulation SHO contained in Interim Final
Temporary Rule 204T and incorporating by
reference the time estimates from the Rule 204T
Adopting Release for compliance with the
notification, demonstration, and certification
requirements of Rule 204).
5 DERA estimates that during 2023 approximately
46.6% of trade volume was long. DERA estimates
that there were approximately 8,378 average daily
fail to deliver positions during 2023. Across 129
broker-dealer participants of the NSCC, the number
of securities per participant per day is
approximately 65 (8,378 ÷ 129) equity securities.
46.64% of 65 equity securities per trading day
equals approximately 30 securities per day.

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ddrumheller on DSK120RN23PROD with NOTICES1

Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Notices
will be approximately 156,038 burden
hours (975,240 multiplied by 0.16
hours/demonstration 6).
Pre-Borrow Notification Requirement:
As of December 29, 2023, there were
129 participants of NSCC that were
registered as broker-dealers. If a
participant of a registered clearing
agency has a fail to deliver position in
an equity security, the participant must
determine whether the fail to deliver
position was closed out in accordance
with Rule 204(a). The Commission
estimates that a participant of a
registered clearing agency will have to
make such determination with respect
to approximately 65 equity securities
per day.7 The Commission estimates a
total of 2,113,020 potential notifications
in accordance with Rule 204(c) across
all participants per year (129 brokerdealer participants notifying brokerdealers once per day on 65 securities,
multiplied by 252 trading days in 2023).
The total estimated annual burden
hours per year will be approximately
338,083 burden hours (2,113,020
multiplied by 0.16 hours/notification 8).
Certification Requirement: As of
quarter four 2023, there were 3,429
registered broker-dealers. Each of these
broker-dealers may clear trades through
a participant of a registered clearing
agency. If the broker-dealer determines
that it has not incurred a fail to deliver
position on settlement date for a long or
short sale in an equity security for
which the participant has a fail to
deliver position at a registered clearing
agency or has purchased or borrowed
securities in accordance with the prefail credit provision of Rule 204(e), the
Commission estimates that a brokerdealer could have to make such
determination with respect to
approximately 2.44 securities per day.9
The Commission estimates that each
such registered broker-dealer could have
to certify to a participant that the
broker-dealer has not incurred a fail to
deliver position on settlement date for a
long or short sale in an equity security
for which the participant has a fail to
deliver position at a registered clearing
agency or, alternatively, that the brokerdealer is in compliance with the
requirements set forth in the pre-fail
credit provision of Rule 204(e),
2,108,424 times per year (3,429
registered broker-dealers certifying once
per day on 2.44 securities, multiplied by
252 trading days in 2023). The total
approximate estimated annual burden
hours per year will be approximately
supra note 4.
supra note 5.
8 See supra note 4.
9 See supra note 2.

337,348 burden hours (2,108,424
multiplied by 0.16 hours/
certification 10).
Pre-Fail Credit Demonstration
Requirement: As of quarter four 2023,
there were 3,429 registered brokerdealers. If a broker-dealer purchased or
borrowed securities in accordance with
the conditions specified in Rule 204(e)
and determined that it had a net long
position or net flat position on the
settlement day for which the brokerdealer is claiming pre-fail credit, the
Commission estimates that a brokerdealer could have to make such
determination with respect to
approximately 2.44 securities per day.11
The Commission estimates that the total
number of times per year that such
registered broker-dealers could have to
demonstrate on their respective books
and records that the broker-dealer has a
net long position or net flat position on
the settlement day for which the brokerdealer is claiming pre-fail credit is
2,108,424 times per year (3,429
registered broker-dealers checking for
compliance once per day on 2.44 equity
securities, multiplied by 252 trading
days in 2023). The total approximate
estimated annual burden hours per year
will be 337,348 burden hours (2,108,424
multiplied by 0.16 hours/
demonstration 12).
The total aggregate annual burden for
the collection of information undertaken
pursuant to all five provisions is thus
1,506,165 hours per year (337,348 +
156,038 + 338,083 + 337,348 + 337,348).
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.
The public may view and comment
on this information collection request
at: https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202410-3235-002
or send an email comment to
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov within 30 days of the day
after publication of this notice by
January 27, 2025.
Dated: December 19, 2024.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–30770 Filed 12–23–24; 8:45 am]
BILLING CODE 8011–01–P

6 See

10 See

supra note 4.
supra note 2.
12 See supra note 4.

7 See

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11 See

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105153

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–637, OMB Control No.
3235–0687]

Proposed Collection; Comment
Request; Extension: Rule 239
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
(‘‘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 239 (17 CFR 230.239) provides
exemptions under the Securities Act of
1933 (15 U.S.C. 77a et seq.), the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) and the Trust
Indenture Act of 1939 (U.S.C. 77aaa et
seq.) for security-based swaps issued by
certain clearing agencies satisfying
certain conditions. The purpose of the
information required by Rule 239 is to
make certain information about
security-based swaps that may be
cleared by the registered or the exempt
clearing agencies available to eligible
contract participants and other market
participants. We estimate that each
registered or exempt clearing agency
issuing security-based swaps in its
function as a central counterparty will
spend approximately 2 hours each time
it provides or update the information in
its agreements relating to security-based
swaps or on its website. We estimate
that each registered or exempt clearing
agency will provide or update the
information approximately 20 times per
year. In addition, we estimate that 75%
of the 2 hours per response (1.5 hours)
is prepared internally by the clearing
agency for a total annual reporting
burden of 180 hours (1.5 hours per
response × 20 times × 6 respondents).
Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden imposed by 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

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