Proposed Collection; Comment Request, 40609-40610 [2017-18074]
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Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices
statement explaining that the client is
consenting to principal transactions,
followed by a cross-reference to a
specific document provided to the client
containing the disclosure in (a)(i)–(iii)
above and to the specific page or pages
on which such disclosure is located;
provided, however, that if the Applicant
requires time to modify its electronic
systems to provide the specific page
cross-reference required by clause (b),
the Applicant may, while updating such
electronic systems, and for no more than
90 days from the date of the Order,
instead provide a cross-reference to a
specific document provided to the client
containing the disclosure in (a)(i)–(iii)
above and to the specific section in such
document in which such disclosure is
located. Transition provision: To the
extent that the Applicant obtained fully
informed written revocable consent
from an advisory client for purposes of
rule 206(3)–3T(a)(3) prior to January 1,
2017, the Applicant may rely on this
Order with respect to such client
without obtaining additional
prospective consent from such client.
5. The Applicant, prior to the
execution of each transaction in reliance
on this Order, will: (a) Inform the
advisory client, orally or in writing, of
the capacity in which it may act with
respect to such transaction; and (b)
obtain consent from the advisory client,
orally or in writing, to act as principal
for its own account with respect to such
transaction.
6. The Applicant will send a written
confirmation at or before completion of
each such transaction that includes, in
addition to the information required by
rule 10b–10 under the Exchange Act, a
conspicuous, plain English statement
informing the advisory client that the
Applicant: (a) Disclosed to the client
prior to the execution of the transaction
that the Applicant may be acting in a
principal capacity in connection with
the transaction and the client authorized
the transaction; and (b) sold the security
to, or bought the security from, the
client for its own account.
7. The Applicant will send to the
client, no less frequently than annually,
written disclosure containing a list of all
transactions that were executed in the
client’s account in reliance upon this
Order, and the date and price of each
such transaction.
8. The Applicant is a broker-dealer
registered under section 15 of the
Exchange Act and each account for
which the Applicant relies on this Order
is a brokerage account subject to the
Exchange Act, and the rules thereunder,
and the rules of the self-regulatory
organization(s) of which it is a member.
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9. Each written disclosure required as
a condition to this Order will include a
conspicuous, plain English statement
that the client may revoke the written
consent referred to in Condition 4 above
without penalty at any time by written
notice to the Applicant in accordance
with reasonable procedures established
by the Applicant, but in all cases such
revocation must be given effect within
5 business days of the Applicant’s
receipt thereof.
10. The Applicant will maintain
records sufficient to enable verification
of compliance with the conditions of
this Order. Such records will include,
without limitation: (a) Documentation
sufficient to demonstrate compliance
with each disclosure and consent
requirement under this Order; (b) in
particular, documentation sufficient to
demonstrate that, prior to the execution
of each transaction in reliance on this
Order, the Applicant informed the
advisory client of the capacity in which
it may act with respect to the
transaction and that it received the
advisory client’s consent (if the
Applicant informs the client orally of
the capacity in which it may act with
respect to such transaction or obtains
oral consent, such records may, for
example, include recordings of
telephone conversations or
contemporaneous written notations);
and (c) documentation sufficient to
enable assessment of compliance by the
Applicant with sections 206(1) and (2)
of the Advisers Act in connection with
its reliance on this Order.3 In each case,
such records will be maintained and
preserved in an easily accessible place
for a period of not less than five years,
the first two years in an appropriate
office of the Applicant, and be available
for inspection by the staff of the
Commission.
11. The Applicant will adopt written
compliance policies and procedures
reasonably designed to ensure, and the
Applicant’s chief compliance officer
will monitor, the Applicant’s
compliance with the conditions of this
Order. The Applicant’s chief
compliance officer will, on at least a
quarterly basis, conduct testing
reasonably sufficient to verify such
compliance. Such written policies and
procedures, monitoring and testing will
address, without limitation: (a)
Compliance by the Applicant with its
disclosure and consent requirements
3 For example, under sections 206(1) and (2), an
adviser may not engage in any transaction on a
principal basis with a client that is not consistent
with the best interests of the client or that
subrogates the client’s interests to the adviser’s
own. Cf. Investment Advisers Act Release No. 2106
(Jan. 31, 2003) (adopting Rule 206(4)–6).
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40609
under this Order; (b) the integrity and
operation of electronic systems
employed by the Applicant in
connection with its reliance on this
Order; (c) compliance by the Applicant
with its recordkeeping obligations under
this Order; and (d) whether there is any
evidence of the Applicant engaging in
‘‘dumping’’ in connection with its
reliance on this Order.4 The Applicant’s
chief compliance officer will document
the frequency and results of such
monitoring and testing, and the
Applicant will maintain and preserve
such documentation in an easily
accessible place for a period of not less
than five years, the first two years in an
appropriate office of the Applicant, and
be available for inspection by the staff
of the Commission.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–18090 Filed 8–24–17; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
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:
Form 24F–2; SEC File No. 270–399, OMB
Control No. 3235–0456
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission (the
‘‘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 24f–2 (17 CFR 270.24f–2) under
the Investment Company Act of 1940
(15 U.S.C. 80a) requires any open-end
management companies (‘‘mutual
funds’’), unit investment trusts (‘‘UITs’’)
or face-amount certificate companies
4 See Report of the Securities and Exchange
Commission, Investment Trusts and Investment
Companies, H.R. Doc. No. 279, 76th Cong., 2d Sess.,
pt. 3, at 2581, 2589 (1939); Hearings on S.3580
Before a Subcommittee of the Commission on
Banking and Currency, 76th Cong., 3d Sess. 209,
212–23 (1940); Hearings on S. 3580 Before the
Subcomm. of the Comm. on Banking and Currency,
76th Cong., 3d Sess. 322 (1940).
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(collectively, ‘‘funds’’) deemed to have
registered an indefinite amount of
securities to file, not later than 90 days
after the end of any fiscal year in which
it has publicly offered such securities,
Form 24F–2 (17 CFR 274.24) with the
Commission. Form 24F–2 is the annual
notice of securities sold by funds that
accompanies the payment of registration
fees with respect to the securities sold
during the fiscal year.
The Commission estimates that 7,284
funds file Form 24F–2 on the required
annual basis. The average annual
burden per respondent for Form 24F–2
is estimated to be two hours. The total
annual burden for all respondents to
Form 24F–2 is estimated to be 14,568
hours.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules.
Compliance with the collection of
information required by Form 24F–2 is
mandatory. The Form 24F–2 filing that
must be made to the Commission is
available to the public. 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.
The Commission requests written
comments 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 burdens 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: August 22, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–18074 Filed 8–24–17; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81448; File No. SR–FINRA–
2017–026]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Clarify Application of
FINRA Rule 11140 (Transactions in
Securities ‘‘Ex-Dividend,’’ ‘‘Ex-rights’’
or ‘‘Ex-Warrants’’) in Connection With
the Implementation of the Shortened
Settlement Cycle (T+2) on September
5, 2017
August 21, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘SEA’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on August 17, 2017, Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by FINRA. FINRA
has designated the proposed rule change
as constituting a ‘‘non-controversial’’
rule change under paragraph (f)(6) of
Rule 19b–4 under the Act,3 which
renders the proposal effective upon
receipt of this filing by the Commission.
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
FINRA is proposing to address the
application of FINRA Rule 11140
(Transactions in Securities ‘‘ExDividend,’’ ‘‘Ex-Rights’’ or ‘‘ExWarrants’’) as it relates to establishing
ex-dividend dates in connection with
the implementation of the T+2
settlement cycle on September 5, 2017.
No change to the text of FINRA Rule
11140(b)(1) is required by this proposal.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
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in Item IV below. FINRA 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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Background
On March 22, 2017, the SEC adopted
amendments to SEA Rule 15c6–1(a) to
shorten the standard settlement cycle
for U.S. secondary market transactions
in equities, corporate and municipal
bonds, unit investment trusts and
financial instruments composed of these
products, from three business days after
the trade date (‘‘T+3’’) to two business
days after the trade date (‘‘T+2’’).4 The
industry-wide initiative is designed to
reduce a number of risks, including
credit risk, market risk, and liquidity
risk and, as a result, reduce systemic
risk for U.S. market participants.5 The
compliance date for the rule
amendments is September 5, 2017.
In support of this initiative, FINRA
proposed changes to its rules pertaining
to securities settlement by, among other
things, amending the definition of
‘‘regular way’’ settlement as occurring
on T+2.6 On February 9, 2017, the SEC
approved FINRA’s amendments to the
applicable rules, including Rule
11140(b), that establish or reference T+3
to conform to T+2, and these
amendments will become effective on
September 5, 2017.7
During the transition period the
industry and self-regulatory
organizations (‘‘SROs’’), including The
Depository Trust Company (‘‘DTC’’)
which processes corporate action
events, have raised concern that the
4 See Securities Exchange Act Release No. 80295
(March 22, 2017), 82 FR 15564 (March 29, 2017)
(Securities Transaction Settlement Cycle) (File No.
S7–22–16) (stating that, as amended, SEA Rule
15c6–1(a) will prohibit broker-dealers from
effecting or entering into a contract for the purchase
or sale of a security (other than an exempted
security, government security, municipal security,
commercial paper, bankers’ acceptances or
commercial bills) that provides for payment of
funds and delivery of securities later than the
second business day after the date of the contract,
unless otherwise expressly agreed to by the parties
at the time of the transaction).
5 See supra note 4.
6 See Securities Exchange Act Release No. 79648
(December 21, 2016), 81 FR 95705 (December 28,
2016) (Notice of Filing of File No. SR–FINRA–
2016–047).
7 See Securities Exchange Act Release No. 80004
(February 9, 2017), 82 FR 10835 (February 15, 2017)
(Order Approving File No. SR–FINRA–2016–047)
and Securities Exchange Act Release No. 80004A
(March 6, 2017), 82 FR 13517 (March 13, 2017)
(Correction to Order Approving File No. SR–
FINRA–2016–047).
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[Federal Register Volume 82, Number 164 (Friday, August 25, 2017)]
[Notices]
[Pages 40609-40610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18074]
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SECURITIES AND EXCHANGE COMMISSION
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:
Form 24F-2; SEC File No. 270-399, OMB Control No. 3235-0456
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission
(the ``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 24f-2 (17 CFR 270.24f-2) under the Investment Company Act of
1940 (15 U.S.C. 80a) requires any open-end management companies
(``mutual funds''), unit investment trusts (``UITs'') or face-amount
certificate companies
[[Page 40610]]
(collectively, ``funds'') deemed to have registered an indefinite
amount of securities to file, not later than 90 days after the end of
any fiscal year in which it has publicly offered such securities, Form
24F-2 (17 CFR 274.24) with the Commission. Form 24F-2 is the annual
notice of securities sold by funds that accompanies the payment of
registration fees with respect to the securities sold during the fiscal
year.
The Commission estimates that 7,284 funds file Form 24F-2 on the
required annual basis. The average annual burden per respondent for
Form 24F-2 is estimated to be two hours. The total annual burden for
all respondents to Form 24F-2 is estimated to be 14,568 hours.
The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act, and is not derived from a
comprehensive or even a representative survey or study of the costs of
Commission rules.
Compliance with the collection of information required by Form 24F-
2 is mandatory. The Form 24F-2 filing that must be made to the
Commission is available to the public. 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.
The Commission requests written comments 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
burdens 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: August 22, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-18074 Filed 8-24-17; 8:45 am]
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