Submission for OMB Review; Comment Request, 14757-14758 [2014-05755]
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Federal Register / Vol. 78, No. 51 / Monday, March 17, 2014 / Notices
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
tkelley on DSK3SPTVN1PROD with NOTICES
Extension:
Rule 17d–1, OMB Control No. 3235–0562,
SEC File No. 270–505.
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’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information discussed below.
Section 17(d) (15 U.S.C. 80a–17(d)) of
the Investment Company Act of 1940
(15 U.S.C. 80a et seq.) (the ‘‘Act’’)
prohibits first- and second-tier affiliates
of a fund, the fund’s principal
underwriters, and affiliated persons of
the fund’s principal underwriters, acting
as principal, to effect any transaction in
which the fund or a company controlled
by the fund is a joint or a joint and
several participant in contravention of
the Commission’s rules. Rule 17d–1 (17
CFR 270.17d–1) prohibits an affiliated
person of or principal underwriter for
any fund (a ‘‘first-tier affiliate’’), or any
affiliated person of such person or
underwriter (a ‘‘second-tier affiliate’’),
acting as principal, from participating in
or effecting any transaction in
connection with a joint enterprise or
other joint arrangement in which the
fund is a participant, unless prior to
entering into the enterprise or
arrangement ‘‘an application regarding
[the transaction] has been filed with the
Commission and has been granted by an
order.’’ In reviewing the proposed
affiliated transaction, the rule provides
that the Commission will consider
whether the proposal is (i) consistent
with the provisions, policies, and
purposes of the Act, and (ii) on a basis
different from or less advantageous than
that of other participants in determining
whether to grant an exemptive
application for a proposed joint
enterprise, joint arrangement, or profitsharing plan.
Rule 17d–1 also contains a number of
exceptions to the requirement that a
fund must obtain Commission approval
prior to entering into joint transactions
or arrangements with affiliates. For
example, funds do not have to obtain
Commission approval for certain
employee compensation plans, certain
VerDate Mar<15>2010
18:45 Mar 14, 2014
Jkt 232001
tax-deferred employee benefit plans,
certain transactions involving small
business investment companies, the
receipt of securities or cash by certain
affiliates pursuant to a plan of
reorganization, certain arrangements
regarding liability insurance policies
and transactions with ‘‘portfolio
affiliates’’ (companies that are affiliated
with the fund solely as a result of the
fund (or an affiliated fund) controlling
them or owning more than five percent
of their voting securities) so long as
certain other affiliated persons of the
fund (e.g., the fund’s adviser, persons
controlling the fund, and persons under
common control with the fund) are not
parties to the transaction and do not
have a ‘‘financial interest’’ in a party to
the transaction. The rule excludes from
the definition of ‘‘financial interest’’ any
interest that the fund’s board of
directors (including a majority of the
directors who are not interested persons
of the fund) finds to be not material, as
long as the board records the basis for
its finding in their meeting minutes.
Thus, the rule contains two filing and
recordkeeping requirements that
constitute collections of information.
First, rule 17d–1 requires funds that
wish to engage in a joint transaction or
arrangement with affiliates to meet the
procedural requirements for obtaining
exemptive relief from the rule’s
prohibition on joint transactions or
arrangements involving first- or secondtier affiliates. Second, rule 17d–1
permits a portfolio affiliate to enter into
a joint transaction or arrangement with
the fund if a prohibited participant has
a financial interest that the fund’s board
determines is not material and records
the basis for this finding in their
meeting minutes. These requirements of
rule 17d–1 are designed to prevent fund
insiders from managing funds for their
own benefit, rather than for the benefit
of the funds’ shareholders.
Based on an analysis of past filings,
Commission staff estimates that 13
funds file applications under section
17(d) and rule 17d–1 per year. The staff
understands that funds that file an
application generally obtain assistance
from outside counsel to prepare the
application. The cost burden of using
outside counsel is discussed below. The
Commission staff estimates that each
applicant will spend an average of 154
hours to comply with the Commission’s
applications process. The Commission
staff therefore estimates the annual
burden hours per year for all funds
under rule 17d–1’s application process
to be 2,002 hours at a cost of $726,206.1
1 The Commission staff estimates that a senior
executive, such as the fund’s chief compliance
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
14757
The Commission, therefore, requests
authorization to increase the inventory
of total burden hours per year for all
funds under rule 17d–1 from the current
authorized burden of 1,232 hours to
2,002 hours. The increase is due to an
increase in the number of funds that
filed applications for exemptions under
rule 17d–1.
As noted above, the Commission staff
understands that funds that file an
application under rule 17d–1 generally
use outside counsel to assist in
preparing the application. The staff
estimates that, on average, funds spend
an additional $93,131 for outside legal
services in connection with seeking
Commission approval of affiliated joint
transactions. Thus, the staff estimates
that the total annual cost burden
imposed by the exemptive application
requirements of rule 17d–1 is
$1,210,703.2
We estimate that funds currently do
not rely on the exemption from the term
‘‘financial interest’’ with respect to any
interest that the fund’s board of
directors (including a majority of the
directors who are not interested persons
of the fund) finds to be not material.
Accordingly, we estimate that annually
there will be no transactions under rule
17d–1 that will result in this aspect of
the collection of information.
Based on these calculations, the total
annual hour burden is estimated to be
2,002 hours and the total annual cost
burden is estimated to be $1,024,441.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
the costs of Commission rules.
Complying with these collections of
information requirement is necessary to
obtain the benefit of relying on rule
17d–1. 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
officer, will spend an average of 62 hours and a
mid-level compliance attorney will spend an
average of 92 hours to comply with this collection
of information: 62 hours + 92 hours = 154 hours.
13 funds × 154 burden hours = 2,002 burden hours.
The Commission staff estimate that the chief
compliance officer is paid $441 per hour and the
compliance attorney is paid $310 per hour. ($441
per hour × 62 hours) + ($310 per hour × 92 hours)
= $55,862 per fund. $55,862 × 13 funds = $726,206.
The $441 and $310 per hour figures are based on
salary information compiled by SIFMA’s
Management & Professional Earnings in the
Securities Industry, 2012. The Commission staff has
modified SIFMA’s information to account for an
1800-hour work year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead.
2 The estimate is based on the following
calculation: $93,131 × 13 funds = $1,210,703.
E:\FR\FM\17MRN1.SGM
17MRN1
14758
Federal Register / Vol. 78, No. 51 / Monday, March 17, 2014 / Notices
information unless it displays a
currently valid OMB control number.
The public may view the background
documentation for this information
collection at the following Web site,
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to:
Shagufta_Ahmed@omb.eop.gov; and (ii)
Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
100 F Street NE., Washington, DC 20549
or send an email to:
PRA_Mailbox@sec.gov. Comments must
be submitted to OMB within 30 days of
this notice.
Dated: March 11, 2014.
Kevin M. O’Neill,
Deputy Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2014–05755 Filed 3–14–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71684; File No. SR–NYSE–
2014–09]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending the
NYSE Price List and To Make the Fee
Changes Operative March 1, 2014
March 11, 2014.
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 February
24, 2014, New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III, below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
tkelley on DSK3SPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Price List to (i) amend the fee for certain
market at-the-close (‘‘MOC’’) and limit
at-the-close (‘‘LOC’’) orders; (ii) amend
1 15
2 17
18:45 Mar 14, 2014
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 those 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 parts of such
statements.
Jkt 232001
(charged to both sides) for all MOC and
LOC orders if a member organization
executes an average daily trading
volume (‘‘ADV’’) of MOC and LOC
activity on the Exchange in that month
of at least 0.375% of consolidated ADV
in NYSE-listed securities during the
billing month (‘‘NYSE CADV’’). The
Exchange proposes to add an alternative
way to qualify for the $0.00055 per
share per transaction fee. Specifically,
the Exchange proposes to charge
$0.00055 per share per transaction
(charged to both sides) for all MOC and
LOC orders if a member organization
executes an ADV of MOC and LOC
activity on the Exchange in that month
of at least 0.300% of NYSE CADV plus
an ADV of total close (MOC/LOC and
executions at the close) activity on the
Exchange in that month of at least
0.475% of NYSE CADV.
The Exchange also proposes to make
a non-substantive change to the Price
List to delete the language specifically
excluding odd lots through January 31,
2014, as that language is no longer
operative.3
MPL Orders
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The Exchange currently charges
$0.0025 per share for all MPL orders
that remove liquidity from the Exchange
if the security is priced $1.00 or more,
for all participants, including Floor
brokers and DMMs. The Exchange
proposes to increase the fee for MPL
orders that remove liquidity from the
Exchange if the security is priced $1.00
or more to $0.0026 per share. The
Exchange notes that this fee increase is
consistent with the other proposed fee
increases for taking liquidity, discussed
below.4
1. Purpose
Non-Floor Brokers
The Exchange proposes to amend its
Price List to (i) amend the fee for certain
MOC and LOC orders; (ii) amend the fee
for MPL orders; (iii) add a new credit for
certain non-Floor broker transactions;
(iv) increase the fee for certain nonFloor broker transactions; (v) increase
the fee for certain Floor broker
transactions; (vi) introduce additional
credits for certain Floor broker
transactions; (vii) increase the fee for
certain DMM transactions; (viii)
increase the credits for certain DMM
transactions; (ix) introduce a monthly
DMM credit for certain securities; and
(x) revise the credits for SLPs. The
proposed fees would be operative on
March 1, 2014.
The Exchange proposes to establish a
$0.0019 per share credit per transaction
for all non-Floor broker transactions that
add liquidity to the Exchange if the
member organization executes an ADV
during the billing month of at least 1
million shares in Retail Price
Improvement Orders (‘‘RPIs’’) 5 and a
MOC and LOC Orders
Currently, the Exchange charges
$0.00055 per share per transaction
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Mar<15>2010
the fee for Midpoint Passive Liquidity
(‘‘MPL’’) orders; (iii) add a new credit
for certain non-Floor broker
transactions; (iv) increase the fee for
certain non-Floor broker transactions;
(v) increase the fee for certain Floor
broker transactions; (vi) introduce
additional credits for certain Floor
broker transactions; (vii) increase the fee
for certain Designated Market Maker
(‘‘DMM’’) transactions; (viii) increase
the credits for certain DMM
transactions; (ix) introduce a monthly
DMM credit for certain securities; and
(x) revise the credits for Supplemental
Liquidity Providers (‘‘SLPs’’). The
proposed fees would be operative on
March 1, 2014. The text of the proposed
rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
3 See Securities Exchange Act Release No. 70997
(Dec. 5, 2013), 78 FR 75432 (Dec. 11, 2013) (SR–
NYSE–2013–78).
4 MPL Orders are not be eligible for any tiered or
additional credits or reduced fees even if the MPL
Orders contribute to a member organization
qualifying for an additional credit. As such, the
Exchange proposes to make conforming changes
consistent with this approach. Where the MPL
Order fee or credit does not differ from the current
fee or credit, the Exchange has not proposed a
change to the Price List.
5 ‘‘RPI’’ is defined in NYSE Rule 107C(a)(4) and
consists of non-displayed interest in NYSE-listed
securities that is priced better than the best
protected bid or best protected offer, as such terms
E:\FR\FM\17MRN1.SGM
17MRN1
]]>Agencies
[Federal Register Volume 79, Number 51 (Monday, March 17, 2014)]
[Notices]
[Pages 14757-14758]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05755]
[[Page 14757]]
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SECURITIES AND EXCHANGE COMMISSION
Submission for OMB Review; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Extension:
Rule 17d-1, OMB Control No. 3235-0562, SEC File No. 270-505.
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'') has submitted to the Office of Management
and Budget (``OMB'') a request for extension of the previously approved
collection of information discussed below.
Section 17(d) (15 U.S.C. 80a-17(d)) of the Investment Company Act
of 1940 (15 U.S.C. 80a et seq.) (the ``Act'') prohibits first- and
second-tier affiliates of a fund, the fund's principal underwriters,
and affiliated persons of the fund's principal underwriters, acting as
principal, to effect any transaction in which the fund or a company
controlled by the fund is a joint or a joint and several participant in
contravention of the Commission's rules. Rule 17d-1 (17 CFR 270.17d-1)
prohibits an affiliated person of or principal underwriter for any fund
(a ``first-tier affiliate''), or any affiliated person of such person
or underwriter (a ``second-tier affiliate''), acting as principal, from
participating in or effecting any transaction in connection with a
joint enterprise or other joint arrangement in which the fund is a
participant, unless prior to entering into the enterprise or
arrangement ``an application regarding [the transaction] has been filed
with the Commission and has been granted by an order.'' In reviewing
the proposed affiliated transaction, the rule provides that the
Commission will consider whether the proposal is (i) consistent with
the provisions, policies, and purposes of the Act, and (ii) on a basis
different from or less advantageous than that of other participants in
determining whether to grant an exemptive application for a proposed
joint enterprise, joint arrangement, or profit-sharing plan.
Rule 17d-1 also contains a number of exceptions to the requirement
that a fund must obtain Commission approval prior to entering into
joint transactions or arrangements with affiliates. For example, funds
do not have to obtain Commission approval for certain employee
compensation plans, certain tax-deferred employee benefit plans,
certain transactions involving small business investment companies, the
receipt of securities or cash by certain affiliates pursuant to a plan
of reorganization, certain arrangements regarding liability insurance
policies and transactions with ``portfolio affiliates'' (companies that
are affiliated with the fund solely as a result of the fund (or an
affiliated fund) controlling them or owning more than five percent of
their voting securities) so long as certain other affiliated persons of
the fund (e.g., the fund's adviser, persons controlling the fund, and
persons under common control with the fund) are not parties to the
transaction and do not have a ``financial interest'' in a party to the
transaction. The rule excludes from the definition of ``financial
interest'' any interest that the fund's board of directors (including a
majority of the directors who are not interested persons of the fund)
finds to be not material, as long as the board records the basis for
its finding in their meeting minutes.
Thus, the rule contains two filing and recordkeeping requirements
that constitute collections of information. First, rule 17d-1 requires
funds that wish to engage in a joint transaction or arrangement with
affiliates to meet the procedural requirements for obtaining exemptive
relief from the rule's prohibition on joint transactions or
arrangements involving first- or second-tier affiliates. Second, rule
17d-1 permits a portfolio affiliate to enter into a joint transaction
or arrangement with the fund if a prohibited participant has a
financial interest that the fund's board determines is not material and
records the basis for this finding in their meeting minutes. These
requirements of rule 17d-1 are designed to prevent fund insiders from
managing funds for their own benefit, rather than for the benefit of
the funds' shareholders.
Based on an analysis of past filings, Commission staff estimates
that 13 funds file applications under section 17(d) and rule 17d-1 per
year. The staff understands that funds that file an application
generally obtain assistance from outside counsel to prepare the
application. The cost burden of using outside counsel is discussed
below. The Commission staff estimates that each applicant will spend an
average of 154 hours to comply with the Commission's applications
process. The Commission staff therefore estimates the annual burden
hours per year for all funds under rule 17d-1's application process to
be 2,002 hours at a cost of $726,206.\1\ The Commission, therefore,
requests authorization to increase the inventory of total burden hours
per year for all funds under rule 17d-1 from the current authorized
burden of 1,232 hours to 2,002 hours. The increase is due to an
increase in the number of funds that filed applications for exemptions
under rule 17d-1.
---------------------------------------------------------------------------
\1\ The Commission staff estimates that a senior executive, such
as the fund's chief compliance officer, will spend an average of 62
hours and a mid-level compliance attorney will spend an average of
92 hours to comply with this collection of information: 62 hours +
92 hours = 154 hours. 13 funds x 154 burden hours = 2,002 burden
hours. The Commission staff estimate that the chief compliance
officer is paid $441 per hour and the compliance attorney is paid
$310 per hour. ($441 per hour x 62 hours) + ($310 per hour x 92
hours) = $55,862 per fund. $55,862 x 13 funds = $726,206. The $441
and $310 per hour figures are based on salary information compiled
by SIFMA's Management & Professional Earnings in the Securities
Industry, 2012. The Commission staff has modified SIFMA's
information to account for an 1800-hour work year and multiplied by
5.35 to account for bonuses, firm size, employee benefits, and
overhead.
---------------------------------------------------------------------------
As noted above, the Commission staff understands that funds that
file an application under rule 17d-1 generally use outside counsel to
assist in preparing the application. The staff estimates that, on
average, funds spend an additional $93,131 for outside legal services
in connection with seeking Commission approval of affiliated joint
transactions. Thus, the staff estimates that the total annual cost
burden imposed by the exemptive application requirements of rule 17d-1
is $1,210,703.\2\
---------------------------------------------------------------------------
\2\ The estimate is based on the following calculation: $93,131
x 13 funds = $1,210,703.
---------------------------------------------------------------------------
We estimate that funds currently do not rely on the exemption from
the term ``financial interest'' with respect to any interest that the
fund's board of directors (including a majority of the directors who
are not interested persons of the fund) finds to be not material.
Accordingly, we estimate that annually there will be no transactions
under rule 17d-1 that will result in this aspect of the collection of
information.
Based on these calculations, the total annual hour burden is
estimated to be 2,002 hours and the total annual cost burden is
estimated to be $1,024,441.
The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act. The estimate is not derived
from a comprehensive or even a representative survey or study of the
costs of Commission rules. Complying with these collections of
information requirement is necessary to obtain the benefit of relying
on rule 17d-1. 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
[[Page 14758]]
information unless it displays a currently valid OMB control number.
The public may view the background documentation for this
information collection at the following Web site, www.reginfo.gov.
Comments should be directed to: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503, or by sending an email to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Chief Information Officer,
Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street
NE., Washington, DC 20549 or send an email to: PRA_Mailbox@sec.gov.
Comments must be submitted to OMB within 30 days of this notice.
Dated: March 11, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-05755 Filed 3-14-14; 8:45 am]
BILLING CODE 8011-01-P
