Proposed Collection; Comment Request, 11384-11385 [2017-03421]

Download as PDF 11384 Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices (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: February 15, 2017. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–03393 Filed 2–21–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–259, OMB Control No. 3235–0269] Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549–2736. sradovich on DSK3GMQ082PROD with NOTICES Extension: Rule 17f–5. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit the existing collection of information to the Office of Management and Budget for extension and approval. Rule 17f–5 (17 CFR 270.17f–5) under the Investment Company Act of 1940 [15 U.S.C. 80a] (the ‘‘Act’’) governs the custody of the assets of registered management investment companies (‘‘funds’’) with custodians outside the United States. Under rule 17f–5, a fund or its foreign custody manager (as delegated by the fund’s board) may maintain the fund’s foreign assets in the care of an eligible fund custodian under certain conditions. If the fund’s board delegates to a foreign custody manager authority to place foreign assets, the fund’s board must find that it is VerDate Sep<11>2014 16:05 Feb 21, 2017 Jkt 241001 reasonable to rely on each delegate the board selects to act as the fund’s foreign custody manager. The delegate must agree to provide written reports that notify the board when the fund’s assets are placed with a foreign custodian and when any material change occurs in the fund’s custody arrangements. The delegate must agree to exercise reasonable care, prudence, and diligence, or to adhere to a higher standard of care. When the foreign custody manager selects an eligible foreign custodian, it must determine that the fund’s assets will be subject to reasonable care if maintained with that custodian, and that the written contract that governs each custody arrangement will provide reasonable care for fund assets. The contract must contain certain specified provisions or others that provide at least equivalent care. The foreign custody manager must establish a system to monitor the performance of the contract and the appropriateness of continuing to maintain assets with the eligible foreign custodian. The collection of information requirements in rule 17f–5 are intended to provide protection for fund assets maintained with a foreign bank custodian whose use is not authorized by statutory provisions that govern fund custody arrangements,1 and that is not subject to regulation and examination by U.S. regulators. The requirement that the fund board determine that it is reasonable to rely on each delegate is intended to ensure that the board carefully considers each delegate’s qualifications to perform its responsibilities. The requirement that the delegate provide written reports to the board is intended to ensure that the delegate notifies the board of important developments concerning custody arrangements so that the board may exercise effective oversight. The requirement that the delegate agree to exercise reasonable care is intended to provide assurances to the fund that the delegate will properly perform its duties. The requirements that the foreign custody manager determine that fund assets will be subject to reasonable care with the eligible foreign custodian and under the custody contract, and that each contract contain specified provisions or equivalent provisions, are intended to ensure that the delegate has evaluated the level of care provided by the custodian, that it weighs the adequacy of contractual provisions, and that fund assets are protected by minimal contractual safeguards. The 1 See PO 00000 section 17(f) of the Act. 15 U.S.C. 80a–17(f). Frm 00049 Fmt 4703 Sfmt 4703 requirement that the foreign custody manager establish a monitoring system is intended to ensure that the manager periodically reviews each custody arrangement and takes appropriate action if developing custody risks may threaten fund assets.2 Commission staff estimates that each year, approximately 97 registrants 3 could be required to make an average of one response per registrant under rule 17f–5, requiring approximately 2.5 hours of board of director time per response, to make the necessary findings concerning foreign custody managers. The total annual burden associated with these requirements of the rule is up to approximately 243 hours (97 registrants × 2.5 hours per registrant). The staff further estimates that during each year, approximately 15 global custodians 4 are required to make an average of 4 responses per custodian concerning the use of foreign custodians other than depositories. The staff estimates that each response will take approximately 270 hours, requiring approximately 1080 total hours annually per custodian (270 hours × 4 responses per custodian). The total annual burden associated with these requirements of the rule is approximately 16,200 hours (15 global custodians × 1080 hours per custodian). Therefore, the total annual burden of all collection of information requirements of rule 17f–5 is estimated to be up to 16,443 hours (243 + 16,200). The total annual cost of burden hours is estimated to be $4,522,392 ((243 hours × $4,144/ hour for board of director’s time) + (16,200 hours × $217/hour for a trust administrator’s time)).5 Compliance with the collection of information requirements of the rule is necessary to obtain the benefit of relying on the 2 The staff believes that subcustodian monitoring does not involve ‘‘collection of information’’ within the meaning of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) (‘‘Paperwork Reduction Act’’). 3 This figure is an estimate of the number of new funds each year, based on data reported by funds for 2014, 2015, and 2016. In practice, not all funds will use foreign custody managers. The actual figure therefore may be smaller. 4 This estimate is based on staff research. 5 Based on fund industry representations, the staff estimated in 2014 that the average cost of board of director time, for the board as a whole, was $4,000 per hour. Adjusting for inflation, the staff estimates that the current average cost of board of director time is approximately $4,144 per hour. The $217/ hour figure for a trust administrator is from SIFMA’s Management & Professional Earnings in the Securities Industry 2013, modified by Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead. E:\FR\FM\22FEN1.SGM 22FEN1 Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices rule’s permission for funds to maintain their assets in foreign custodians. 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 and forms. Written comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has 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 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: February 15, 2017. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–03421 Filed 2–21–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80046; File No. SR–BX– 2017–008] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Implementation Date of Its Functionality Relating to Post-Only Orders and Orders With Midpoint Pegging, and Its Trade-Now Functionality sradovich on DSK3GMQ082PROD with NOTICES February 15, 2017. 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 3, 2017, NASDAQ BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Sep<11>2014 16:05 Feb 21, 2017 Jkt 241001 ‘‘Commission’’) the proposed rule change as described in Items I and II 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 extend the implementation date of its functionality relating to Post-Only Orders and Orders with Midpoint Pegging, and its TradeNow functionality. There is no rule text for this proposed rule change. 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 BX is filing this proposal to extend the implementation date of its functionality relating to Post-Only Orders and Orders with Midpoint Pegging, and its Trade-Now functionality. The functionality relating to Post-Only Orders and Orders with Midpoint Pegging was approved by the SEC on November 10, 2016,3 and the Trade-Now functionality was submitted on an immediately effective basis on November 8, 2016.4 Under the new Post-Only functionality, the behavior of Post-Only orders would be altered when the adjusted price of such orders lock or cross a non-displayed price on the Exchange’s Book. Specifically, if the adjusted price of the Post-Only Order would lock or cross a non-displayed price on the Exchange’s Book, the Post3 See Securities Exchange Act Release No. 79290 (November 10, 2016), 81 FR 81184 (November 17, 2016) (SR–BX–2016–046) (‘‘Post-Only Approval Order’’). 4 See Securities Exchange Act Release No. 79281 (November 10, 2016), 81 FR 81203 (November 17, 2016) (SR–BX–2016–059). PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 11385 Only order would be posted in the same manner as a Price to Comply Order. However, the Post-Only Order would execute if (i) it is priced at $1.00 or more, or (ii) it is priced below $1.00 and the value of price improvement associated with executing against an Order on the Exchange Book (as measured against the original limit price of the Order) equals or exceeds the sum of fees charged for such execution and the value of any rebate that would be provided if the Order posted to the Exchange Book and subsequently provided liquidity.5 Additionally, if the Post-Only Order would not lock or cross a Protected Quotation but would lock or cross a Non-Displayed Order on the Exchange’s Book, the Post-Only Order would be posted, ranked, and displayed at its limit price. The Post-Only Order would execute if (i) it is priced at $1.00 or more, or (ii) it is priced below $1.00 and the value of price improvement associated with executing against an Order on the Exchange Book equals or exceeds the sum of fees charged for such execution and the value of any rebate that would be provided if the Order posted to the Exchange Book and subsequently provided liquidity.6 BX also proposed to change its Midpoint Peg Post-Only Order, so that, if the Inside Bid and Inside Offer are crossed, any existing Order with Midpoint Pegging would be rejected and any new Order with Midpoint Pegging would be cancelled.7 Under BX’s Trade-Now functionality, participants could enter an instruction to have a locked resting buy (sell) order execute against the locking sell (buy) order. BX proposed to offer the functionality on its OUCH, RASH, FLITE and FIX protocols. Depending on the protocol used by the participant to access the BX system, the participant could either specify that the order execute against locking interest automatically, or the participant would be required to send a Trade Now instruction to the Exchange once the order has become locked. BX proposed to offer the Trade Now instruction for all orders that may be sent to the BX book and that are not subject to other BX rules regarding the display and execution of those orders.8 BX initially proposed to implement the new Post-Only, Midpoint Pegging and Trade-Now functionality on 5 See Post-Only Approval Order, supra note 3. 6 Id. 7 Id. 8 See Securities Exchange Act Release No. 79281 (November 10, 2016), 81 FR 81203 (November 17, 2016) (SR–BX–2016–059). E:\FR\FM\22FEN1.SGM 22FEN1

Agencies

[Federal Register Volume 82, Number 34 (Wednesday, February 22, 2017)]
[Notices]
[Pages 11384-11385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-03421]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-259, OMB Control No. 3235-0269]


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:
    Rule 17f-5.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collection of 
information summarized below. The Commission plans to submit the 
existing collection of information to the Office of Management and 
Budget for extension and approval.
    Rule 17f-5 (17 CFR 270.17f-5) under the Investment Company Act of 
1940 [15 U.S.C. 80a] (the ``Act'') governs the custody of the assets of 
registered management investment companies (``funds'') with custodians 
outside the United States. Under rule 17f-5, a fund or its foreign 
custody manager (as delegated by the fund's board) may maintain the 
fund's foreign assets in the care of an eligible fund custodian under 
certain conditions. If the fund's board delegates to a foreign custody 
manager authority to place foreign assets, the fund's board must find 
that it is reasonable to rely on each delegate the board selects to act 
as the fund's foreign custody manager. The delegate must agree to 
provide written reports that notify the board when the fund's assets 
are placed with a foreign custodian and when any material change occurs 
in the fund's custody arrangements. The delegate must agree to exercise 
reasonable care, prudence, and diligence, or to adhere to a higher 
standard of care. When the foreign custody manager selects an eligible 
foreign custodian, it must determine that the fund's assets will be 
subject to reasonable care if maintained with that custodian, and that 
the written contract that governs each custody arrangement will provide 
reasonable care for fund assets. The contract must contain certain 
specified provisions or others that provide at least equivalent care. 
The foreign custody manager must establish a system to monitor the 
performance of the contract and the appropriateness of continuing to 
maintain assets with the eligible foreign custodian.
    The collection of information requirements in rule 17f-5 are 
intended to provide protection for fund assets maintained with a 
foreign bank custodian whose use is not authorized by statutory 
provisions that govern fund custody arrangements,\1\ and that is not 
subject to regulation and examination by U.S. regulators. The 
requirement that the fund board determine that it is reasonable to rely 
on each delegate is intended to ensure that the board carefully 
considers each delegate's qualifications to perform its 
responsibilities. The requirement that the delegate provide written 
reports to the board is intended to ensure that the delegate notifies 
the board of important developments concerning custody arrangements so 
that the board may exercise effective oversight. The requirement that 
the delegate agree to exercise reasonable care is intended to provide 
assurances to the fund that the delegate will properly perform its 
duties.
---------------------------------------------------------------------------

    \1\ See section 17(f) of the Act. 15 U.S.C. 80a-17(f).
---------------------------------------------------------------------------

    The requirements that the foreign custody manager determine that 
fund assets will be subject to reasonable care with the eligible 
foreign custodian and under the custody contract, and that each 
contract contain specified provisions or equivalent provisions, are 
intended to ensure that the delegate has evaluated the level of care 
provided by the custodian, that it weighs the adequacy of contractual 
provisions, and that fund assets are protected by minimal contractual 
safeguards. The requirement that the foreign custody manager establish 
a monitoring system is intended to ensure that the manager periodically 
reviews each custody arrangement and takes appropriate action if 
developing custody risks may threaten fund assets.\2\
---------------------------------------------------------------------------

    \2\ The staff believes that subcustodian monitoring does not 
involve ``collection of information'' within the meaning of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (``Paperwork 
Reduction Act'').
---------------------------------------------------------------------------

    Commission staff estimates that each year, approximately 97 
registrants \3\ could be required to make an average of one response 
per registrant under rule 17f-5, requiring approximately 2.5 hours of 
board of director time per response, to make the necessary findings 
concerning foreign custody managers. The total annual burden associated 
with these requirements of the rule is up to approximately 243 hours 
(97 registrants x 2.5 hours per registrant). The staff further 
estimates that during each year, approximately 15 global custodians \4\ 
are required to make an average of 4 responses per custodian concerning 
the use of foreign custodians other than depositories. The staff 
estimates that each response will take approximately 270 hours, 
requiring approximately 1080 total hours annually per custodian (270 
hours x 4 responses per custodian). The total annual burden associated 
with these requirements of the rule is approximately 16,200 hours (15 
global custodians x 1080 hours per custodian). Therefore, the total 
annual burden of all collection of information requirements of rule 
17f-5 is estimated to be up to 16,443 hours (243 + 16,200). The total 
annual cost of burden hours is estimated to be $4,522,392 ((243 hours x 
$4,144/hour for board of director's time) + (16,200 hours x $217/hour 
for a trust administrator's time)).\5\ Compliance with the collection 
of information requirements of the rule is necessary to obtain the 
benefit of relying on the

[[Page 11385]]

rule's permission for funds to maintain their assets in foreign 
custodians.
---------------------------------------------------------------------------

    \3\ This figure is an estimate of the number of new funds each 
year, based on data reported by funds for 2014, 2015, and 2016. In 
practice, not all funds will use foreign custody managers. The 
actual figure therefore may be smaller.
    \4\ This estimate is based on staff research.
    \5\ Based on fund industry representations, the staff estimated 
in 2014 that the average cost of board of director time, for the 
board as a whole, was $4,000 per hour. Adjusting for inflation, the 
staff estimates that the current average cost of board of director 
time is approximately $4,144 per hour. The $217/hour figure for a 
trust administrator is 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 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 and forms.
    Written comments are invited on: (a) Whether the collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information has 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 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: February 15, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03421 Filed 2-21-17; 8:45 am]
 BILLING CODE 8011-01-P