Proposed Collection; Comment Request, 87638-87639 [2016-29085]
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Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Notices
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213
sradovich on DSK3GMQ082PROD with NOTICES
Extension:
Rule 17a–10, SEC File No. 270–507, OMB
Control No. 3235–0563
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 collections of information
summarized below. The Commission
plans to submit these existing
collections of information to the Office
of Management and Budget (‘‘OMB’’) for
extension and approval.
Section 17(a) of the Investment
Company Act of 1940 (the ‘‘Act’’),
generally prohibits affiliated persons of
a registered investment company
(‘‘fund’’) from borrowing money or other
property from, or selling or buying
securities or other property to or from,
the fund or any company that the fund
controls.1 Section 2(a)(3) of the Act
defines ‘‘affiliated person’’ of a fund to
include its investment advisers.2 Rule
17a–10 (17 CFR 270.17a–10) permits (i)
a subadviser 3 of a fund to enter into
transactions with funds the subadviser
does not advise but that are affiliated
persons of a fund that it does advise
(e.g., other funds in the fund complex),
and (ii) a subadviser (and its affiliated
persons) to enter into transactions and
arrangements with funds the subadviser
does advise, but only with respect to
discrete portions of the subadvised fund
for which the subadviser does not
provide investment advice.
To qualify for the exemptions in rule
17a–10, the subadvisory relationship
must be the sole reason why section
17(a) prohibits the transaction. In
addition, the advisory contracts of the
subadviser entering into the transaction,
and any subadviser that is advising the
purchasing portion of the fund, must
prohibit the subadvisers from consulting
with each other concerning securities
transactions of the fund, and limit their
responsibility to providing advice with
respect to discrete portions of the fund’s
portfolio.4 Section 17(a) of the
1 15
U.S.C. 80a–17(a).
U.S.C. 80a–2(a)(3)(E).
3 As defined in rule 17a–10(b)(2). 17 CFR
270.17a–10(b)(2).
4 17 CFR 270.17a–10(a)(2).
2 15
VerDate Sep<11>2014
19:12 Dec 02, 2016
Jkt 241001
Investment Company Act of 1940 (the
‘‘Act’’), generally prohibits affiliated
persons of a registered investment
company (‘‘fund’’) from borrowing
money or other property from, or selling
or buying securities or other property to
or from, the fund or any company that
the fund controls. Section 2(a)(3) of the
Act defines ‘‘affiliated person’’ of a fund
to include its investment advisers. Rule
17a–10 permits (i) a subadviser of a
fund to enter into transactions with
funds the subadviser does not advise
but that are affiliated persons of a fund
that it does advise (e.g., other funds in
the fund complex), and (ii) a subadviser
(and its affiliated persons) to enter into
transactions and arrangements with
funds the subadviser does advise, but
only with respect to discrete portions of
the subadvised fund for which the
subadviser does not provide investment
advice.
To qualify for the exemptions in rule
17a–10, the subadvisory relationship
must be the sole reason why section
17(a) prohibits the transaction. In
addition, the advisory contracts of the
subadviser entering into the transaction,
and any subadviser that is advising the
purchasing portion of the fund, must
prohibit the subadvisers from consulting
with each other concerning securities
transactions of the fund, and limit their
responsibility to providing advice with
respect to discrete portions of the fund’s
portfolio. This requirement regarding
the prohibitions and limitations in
advisory contracts of subadvisers
relying on the rule constitutes a
collection of information under the
Paperwork Reduction Act of 1995
(‘‘PRA’’).5
The staff assumes that all existing
funds with subadvisory contracts
amended those contracts to comply with
the adoption of rule 17a–10 in 2003,
which conditioned certain exemptions
upon these contractual alterations, and
therefore there is no continuing burden
for those funds.6 However, the staff
assumes that all newly formed
subadvised funds, and funds that enter
into new contracts with subadvisers,
will incur the one-time burden by
amending their contracts to add the
terms required by the rule.
Based on an analysis of fund filings,
the staff estimates that approximately
319 funds enter into new subadvisory
5 44
U.S.C. 3501.
of Investment Companies With
Portfolio and Subadviser Affiliates, Investment
Company Act Release No. 25888 (Jan. 14, 2003) [68
FR 3153, (Jan. 22, 2003)]. We assume that funds
formed after 2003 that intended to rely on rule 17a–
10 would have included the required provision as
a standard element in their initial subadvisory
contracts.
6 Transactions
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
agreements each year.7 Based on
discussions with industry
representatives, the staff estimates that
it will require approximately 3 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
17a–10. Because these additional
clauses are identical to the clauses that
a fund would need to insert in their
subadvisory contracts to rely on rules
10f–3, 12d3–1, 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 among all four rules. Therefore,
we estimate that the burden allocated to
rule 17a–10 for this contract change
would be 0.75 hours.8 Assuming that all
319 funds that enter into new
subadvisory contracts each year make
the modification to their contract
required by the rule, we estimate that
the rule’s contract modification
requirement will result in 239 burden
hours annually, with an associated cost
of approximately $90,820.9
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 this collection of
information requirement is necessary to
obtain the benefit of relying on rule
17a–10. 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 control number.
Written comments are invited on: (a)
Whether the proposed collection of
7 Based on data from Morningstar, as of June
2016, there are 12,485 registered funds (open-end
funds, closed-end funds, and exchange-traded
funds), 4,629 funds of which have subadvisory
relationships (approximately 37%). Based on data
from the 2016 ICI Factbook, 862 new funds were
established in 2015 (594 open-end funds + 258
exchange-traded funds + 10 closed-end funds (from
the ICI Research Perspective, April 2016)). 862 new
funds × 37% = 319 funds.
8 This estimate is based on the following
calculation: 3 hours ÷ 4 rules = 0.75 hours.
9 These estimates are based on the following
calculations: (0.75 hours × 319 portfolios = 239
burden hours); ($380 per hour × 239 hours =
$90,820 total cost). The Commission’s estimates
concerning the wage rates for attorney time are
based on salary information for the securities
industry compiled by the Securities Industry and
Financial Markets Association. The estimated wage
figure is based on published rates for in-house
attorneys, modified to account for a 1,800-hour
work-year and multiplied by 5.35 to account for
bonuses, firm size, employee benefits, and
overhead, yielding an effective hourly rate of $380.
See Securities Industry and Financial Markets
Association, Report on Management & Professional
Earnings in the Securities Industry 2013.
E:\FR\FM\05DEN1.SGM
05DEN1
Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Notices
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 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
in writing within 60 days of this
publication.
Please direct your written comments
to Pamela Dyson, Director/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.
Dated: November 22, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–29085 Filed 12–2–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79420; File No. SR–BX–
2016–062]
Self-Regulatory Organizations;
NASDAQ BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Chapter VI,
Section 5 To Extend the Penny Pilot
Program
November 29, 2016.
sradovich on DSK3GMQ082PROD with NOTICES
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 November
16, 2016, NASDAQ BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. 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
The Exchange proposes to amend
Chapter VI, Section 5 (Minimum
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
19:12 Dec 02, 2016
NASDAQ BX Rules
Options Rules
*
*
*
*
*
Chapter VI Trading Systems
*
*
*
*
*
Sec. 5 Minimum Increments
(a) The Board may establish minimum
quoting increments for options contracts
traded on BX Options. Such minimum
increments established by the Board
will be designated as a stated policy,
practice, or interpretation with respect
to the administration of this Section
within the meaning of Section 19 of the
Exchange Act and will be filed with the
SEC as a rule change for effectiveness
upon filing. Until such time as the
Board makes a change in the
increments, the following principles
shall apply:
(1)–(2) No Change.
(3) For a pilot period scheduled to
expire on [December 31, 2016] June 30,
2017 or the date of permanent approval,
if earlier, if the options series is trading
pursuant to the Penny Pilot program one
(1) cent if the options series is trading
at less than $3.00, five (5) cents if the
options series is trading at $3.00 or
higher, unless for QQQQs, SPY and
IWM where the minimum quoting
increment will be one cent for all series
regardless of price. A list of such
options shall be communicated to
membership via an Options Trader Alert
(‘‘OTA’’) posted on the Exchange’s Web
site.
The Exchange may replace any pilot
issues that have been delisted with the
next most actively traded multiply
listed options classes that are not yet
included in the pilot, based on trading
activity in the previous six months. The
replacement issues may be added to the
pilot on the second trading day
following [July 1, 2016] January 1, 2017.
(4) No Change.
(b) No Change.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s Web
3 References herein to Chapter and Series refer to
rules of the BX Options Market (‘‘BX Options’’),
unless otherwise noted.
1 15
VerDate Sep<11>2014
Increments),3 to extend through June 30,
2017 or the date of permanent approval,
if earlier, the Penny Pilot Program in
options classes in certain issues (‘‘Penny
Pilot’’ or ‘‘Pilot’’), and to change the
date when delisted classes may be
replaced in the Penny Pilot.
The text of the proposed rule change
is set forth below.
Proposed new language is italicized
and deleted text is in brackets.
Jkt 241001
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
87639
site at https://
nasdaqomxbx.cchwallstreet.com, at the
principal office of the Exchange, 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 purpose of this filing is to amend
Chapter VI, Section 5, to extend the
Penny Pilot through June 30, 2017 or the
date of permanent approval, if earlier,4
and to change the date when delisted
classes may be replaced in the Penny
Pilot. The Exchange believes that
extending the Penny Pilot will allow for
further analysis of the Penny Pilot and
a determination of how the program
should be structured in the future.
Under the Penny Pilot, the minimum
price variation for all participating
options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’),
the SPDR S&P 500 Exchange Traded
Fund (‘‘SPY’’) and the iShares Russell
2000 Index Fund (‘‘IWM’’), is $0.01 for
all quotations in options series that are
quoted at less than $3 per contract and
$0.05 for all quotations in options series
that are quoted at $3 per contract or
greater. QQQQ, SPY and IWM are
quoted in $0.01 increments for all
options series. The Penny Pilot is
currently scheduled to expire on
December 31, 2016.
The Exchange proposes to extend the
time period of the Penny Pilot through
June 30, 2017 or the date of permanent
approval, if earlier, and to provide a
revised date for adding replacement
issues to the Penny Pilot. The Exchange
proposes that any Penny Pilot Program
issues that have been delisted may be
4 The options exchanges in the U.S. that have
pilot programs similar to the Penny Pilot (together
‘‘pilot programs’’) are currently working on a
proposal for permanent approval of the respective
pilot programs.
E:\FR\FM\05DEN1.SGM
05DEN1
]]>Agencies
[Federal Register Volume 81, Number 233 (Monday, December 5, 2016)]
[Notices]
[Pages 87638-87639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29085]
[[Page 87638]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213
Extension:
Rule 17a-10, SEC File No. 270-507, OMB Control No. 3235-0563
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 collections of
information summarized below. The Commission plans to submit these
existing collections of information to the Office of Management and
Budget (``OMB'') for extension and approval.
Section 17(a) of the Investment Company Act of 1940 (the ``Act''),
generally prohibits affiliated persons of a registered investment
company (``fund'') from borrowing money or other property from, or
selling or buying securities or other property to or from, the fund or
any company that the fund controls.\1\ Section 2(a)(3) of the Act
defines ``affiliated person'' of a fund to include its investment
advisers.\2\ Rule 17a-10 (17 CFR 270.17a-10) permits (i) a subadviser
\3\ of a fund to enter into transactions with funds the subadviser does
not advise but that are affiliated persons of a fund that it does
advise (e.g., other funds in the fund complex), and (ii) a subadviser
(and its affiliated persons) to enter into transactions and
arrangements with funds the subadviser does advise, but only with
respect to discrete portions of the subadvised fund for which the
subadviser does not provide investment advice.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a-17(a).
\2\ 15 U.S.C. 80a-2(a)(3)(E).
\3\ As defined in rule 17a-10(b)(2). 17 CFR 270.17a-10(b)(2).
---------------------------------------------------------------------------
To qualify for the exemptions in rule 17a-10, the subadvisory
relationship must be the sole reason why section 17(a) prohibits the
transaction. In addition, the advisory contracts of the subadviser
entering into the transaction, and any subadviser that is advising the
purchasing portion of the fund, must prohibit the subadvisers from
consulting with each other concerning securities transactions of the
fund, and limit their responsibility to providing advice with respect
to discrete portions of the fund's portfolio.\4\ Section 17(a) of the
Investment Company Act of 1940 (the ``Act''), generally prohibits
affiliated persons of a registered investment company (``fund'') from
borrowing money or other property from, or selling or buying securities
or other property to or from, the fund or any company that the fund
controls. Section 2(a)(3) of the Act defines ``affiliated person'' of a
fund to include its investment advisers. Rule 17a-10 permits (i) a
subadviser of a fund to enter into transactions with funds the
subadviser does not advise but that are affiliated persons of a fund
that it does advise (e.g., other funds in the fund complex), and (ii) a
subadviser (and its affiliated persons) to enter into transactions and
arrangements with funds the subadviser does advise, but only with
respect to discrete portions of the subadvised fund for which the
subadviser does not provide investment advice.
---------------------------------------------------------------------------
\4\ 17 CFR 270.17a-10(a)(2).
---------------------------------------------------------------------------
To qualify for the exemptions in rule 17a-10, the subadvisory
relationship must be the sole reason why section 17(a) prohibits the
transaction. In addition, the advisory contracts of the subadviser
entering into the transaction, and any subadviser that is advising the
purchasing portion of the fund, must prohibit the subadvisers from
consulting with each other concerning securities transactions of the
fund, and limit their responsibility to providing advice with respect
to discrete portions of the fund's portfolio. This requirement
regarding the prohibitions and limitations in advisory contracts of
subadvisers relying on the rule constitutes a collection of information
under the Paperwork Reduction Act of 1995 (``PRA'').\5\
---------------------------------------------------------------------------
\5\ 44 U.S.C. 3501.
---------------------------------------------------------------------------
The staff assumes that all existing funds with subadvisory
contracts amended those contracts to comply with the adoption of rule
17a-10 in 2003, which conditioned certain exemptions upon these
contractual alterations, and therefore there is no continuing burden
for those funds.\6\ However, the staff assumes that all newly formed
subadvised funds, and funds that enter into new contracts with
subadvisers, will incur the one-time burden by amending their contracts
to add the terms required by the rule.
---------------------------------------------------------------------------
\6\ Transactions of Investment Companies With Portfolio and
Subadviser Affiliates, Investment Company Act Release No. 25888
(Jan. 14, 2003) [68 FR 3153, (Jan. 22, 2003)]. We assume that funds
formed after 2003 that intended to rely on rule 17a-10 would have
included the required provision as a standard element in their
initial subadvisory contracts.
---------------------------------------------------------------------------
Based on an analysis of fund filings, the staff estimates that
approximately 319 funds enter into new subadvisory agreements each
year.\7\ Based on discussions with industry representatives, the staff
estimates that it will require approximately 3 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
17a-10. Because these additional clauses are identical to the clauses
that a fund would need to insert in their subadvisory contracts to rely
on rules 10f-3, 12d3-1, 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 among all four rules. Therefore, we
estimate that the burden allocated to rule 17a-10 for this contract
change would be 0.75 hours.\8\ Assuming that all 319 funds that enter
into new subadvisory contracts each year make the modification to their
contract required by the rule, we estimate that the rule's contract
modification requirement will result in 239 burden hours annually, with
an associated cost of approximately $90,820.\9\
---------------------------------------------------------------------------
\7\ Based on data from Morningstar, as of June 2016, there are
12,485 registered funds (open-end funds, closed-end funds, and
exchange-traded funds), 4,629 funds of which have subadvisory
relationships (approximately 37%). Based on data from the 2016 ICI
Factbook, 862 new funds were established in 2015 (594 open-end funds
+ 258 exchange-traded funds + 10 closed-end funds (from the ICI
Research Perspective, April 2016)). 862 new funds x 37% = 319 funds.
\8\ This estimate is based on the following calculation: 3 hours
/ 4 rules = 0.75 hours.
\9\ These estimates are based on the following calculations:
(0.75 hours x 319 portfolios = 239 burden hours); ($380 per hour x
239 hours = $90,820 total cost). The Commission's estimates
concerning the wage rates for attorney time are based on salary
information for the securities industry compiled by the Securities
Industry and Financial Markets Association. The estimated wage
figure is based on published rates for in-house attorneys, modified
to account for a 1,800-hour work-year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits, and overhead,
yielding an effective hourly rate of $380. See Securities Industry
and Financial Markets Association, Report on Management &
Professional Earnings in the Securities Industry 2013.
---------------------------------------------------------------------------
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 this collection of
information requirement is necessary to obtain the benefit of relying
on rule 17a-10. 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 control
number.
Written comments are invited on: (a) Whether the proposed
collection of
[[Page 87639]]
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 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 in writing within 60 days of this publication.
Please direct your written comments to Pamela Dyson, Director/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.
Dated: November 22, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-29085 Filed 12-2-16; 8:45 am]
BILLING CODE 8011-01-P
