Submission for OMB Review; Comment Request, 2617-2618 [2019-01367]

Download as PDF Federal Register / Vol. 84, No. 26 / Thursday, February 7, 2019 / Notices subject to the requirements in rule 17f– 4. The rule is elective, but most, if not all, funds use depository custody arrangements.4 Rule 17f–4 contains two general conditions. First, a fund’s custodian must be obligated, at a minimum, to exercise due care in accordance with reasonable commercial standards in discharging its duty as a securities intermediary to obtain and thereafter maintain financial assets. If the fund deals directly with a depository, the depository’s contract or written rules for its participants must provide that the depository will meet similar obligations. All funds that deal directly with securities depositories in reliance on rule 17f–4 should have either modified their contracts with the relevant securities depository, or negotiated a modification in the securities depository’s written rules when the rule was amended. Therefore, we estimate there is no ongoing burden associated with this collection of information.5 Second, the custodian must provide, promptly upon request by the fund, such reports as are available about the internal accounting controls and financial strength of the custodian. If a fund deals directly with a depository, the depository’s contract with or written rules for its participants must provide that the depository will provide similar financial reports. Custodians and depositories usually transmit financial reports to funds twice each year.6 The Commission staff estimates that 49 custodians spend approximately 914 hours (by support staff) annually in transmitting such reports to funds.7 In Banks and one active registered clearing agency. The Commission staff recognizes that not all of these entities may currently be acting as a securities depository for fund securities. 4 Based on responses to Item 18 of Form N–SAR (17 CFR 274.101), approximately 97 percent of funds’ custodians maintain some or all fund securities in a securities depository pursuant to rule 17f–4. 5 The Commission staff assumes that new funds relying on 17f–4 would choose to use a custodian instead of directly dealing with a securities depository because of the high costs associated with maintaining an account with a securities depository. Thus, new funds would not be subject to this condition. 6 The estimated 49 custodians would handle requests for reports from 3,917 fund clients (approximately 80 fund clients per custodian) and the depositories from the remaining 80 funds that choose to deal directly with a depository. It is our understanding based on staff conversations with industry representatives that custodians and depositories transmit these reports to clients in the normal course of their activities as a good business practice regardless of whether they are requested. Therefore, for purposes of this PRA estimate, the Commission staff assumes that custodians transmit the reports to all fund clients. 7 (3,917 fund clients × 2 reports) = 7,834 transmissions. The staff estimates that each VerDate Sep<11>2014 17:23 Feb 06, 2019 Jkt 247001 addition, approximately 80 funds (i.e., two percent of all funds) deal directly with a securities depository and may request periodic reports from their depository. Commission staff estimates that depositories spend approximately 19 hours (by support staff) annually transmitting reports to the 80 funds.8 The total annual burden estimate for compliance with rule 17f–4’s reporting requirement is therefore 933 hours.9 If a fund deals directly with a securities depository, rule 17f–4 requires that the fund implement internal control systems reasonably designed to prevent an unauthorized officer’s instructions (by providing at least for the form, content, and means of giving, recording, and reviewing all officers’ instructions). All funds that seek to rely on rule 17f–4 should have already implemented these internal control systems when the rule was amended. Therefore, there is no ongoing burden associated with this collection of information requirement.10 Based on the foregoing, the Commission staff estimates that the total annual hour burden of the rule’s collection of information requirements is 933 hours. The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act. This estimate is not derived from a comprehensive or even representative survey or study of the costs of Commission rules. 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 public may view the background documentation for this information collection at the following website, 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: transmission would take approximately 7 minutes for a total of approximately 914 hours (7 minutes × 7,834 transmissions). 8 (80 fund clients who may deal directly with a securities depository × 2 reports) = 160 transmissions. The staff estimates that each transmission would take approximately 7 minutes for a total of approximately 19 hours (7 minutes × 160 transmissions). 9 914 hours for custodians and 19 hours for securities depositories. 10 The Commission staff assumes that new funds relying on 17f–4 would choose to use a custodian instead of directly dealing with a securities depository because of the high costs associated with maintaining an account with a securities depository. Thus new funds would not be subject to this condition. PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 2617 Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 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: February 1, 2019. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–01372 Filed 2–6–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; 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: Rules 300–304 of Regulation Crowdfunding (Intermediaries), SEC File No. 270–774, OMB Control No. 3235– 0726. 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 Rules 300–304 of Regulation Crowdfunding.1 Rules 300–304 of Regulation Crowdfunding enumerate the requirements with which intermediaries must comply to participate in the offer and sale of securities in reliance on Section 4(a)(6) of the Securities Act of 1933 (‘‘Section 4(a)(6)’’). Rule 300 requires an intermediary to be registered with the Commission as a broker or as a funding portal and be a member of a registered national securities association.2 Rule 301 requires intermediaries to have a reasonable basis for believing that an issuer seeking to offer and sell securities in reliance on Section 4(a)(6) through the intermediary’s platform complies with the requirements in Section 4A(b) of the Securities Act and 1 See Regulation Crowdfunding, Exchange Act Release No. 76324 (Oct. 30, 2015), 80 FR 71387 (Nov. 16, 2015) (Final Rule) (‘‘Regulation Crowdfunding’’). 2 Currently, FINRA is the only registered national securities association. E:\FR\FM\07FEN1.SGM 07FEN1 2618 Federal Register / Vol. 84, No. 26 / Thursday, February 7, 2019 / Notices the related requirements in Regulation Crowdfunding. Rule 302 provides that no intermediary or associated person of an intermediary may accept an investment commitment in a transaction involving the offer or sale of securities made in reliance on Section 4(a)(6) until the investor has opened an account with the intermediary and the intermediary has obtained from the investor consent to electronic delivery of materials. Rule 303 requires an intermediary to make publicly available on its platform the information that an issuer of crowdfunding securities is required to provide to potential investors, in a manner that reasonably permits a person accessing the platform to save, download or otherwise store the information, for a minimum of 21 days before any securities are sold in the offering, during which time the intermediary may accept investment commitments. Rule 303 also requires intermediaries to comply with the requirements related to the maintenance and transmission of funds. An intermediary that is a registered broker is required to comply with the requirements of Rule 15c2–4 of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) (Transmission or Maintenance of Payments Received in Connection with Underwritings).3 An intermediary that is a registered funding portal must direct investors to transmit the money or other consideration directly to a qualified third party that has agreed in writing to hold the funds for the benefit of, and to promptly transmit or return the funds to, the persons entitled thereto in accordance with Regulation Crowdfunding. The rules also require intermediaries to implement and maintain systems to comply with the information disclosure, communication channels, and investor notification requirements. These requirements include providing disclosure about compensation at account opening (Rule 302), obtaining investor acknowledgements to confirm investor qualifications and review of educational materials (Rule 303), providing investor questionnaires (Rule 303), providing communication channels with third parties and among investors (Rule 303), notifying investors of investment commitments (Rule 303), confirming completed transactions (Rule 303) and confirming or reconfirming offering cancellations (Rule 304). The Commission staff estimates that there would be 62 intermediaries engaged in crowdfunding activity and therefore subject to Rules 300–304. The Commission staff estimates that annualized industry burden would be 15,621 hours to comply with Rules 300– 304. This estimate is composed of a onetime burden for new intermediaries to comply with the rules and develop the platform and ongoing burdens associated with maintaining the platform. The Commission staff estimates that the costs associated with complying with Rules 300–304 are estimated to be approximately a total amount of $5,772,327. These costs are composed of a one-time burden for new intermediaries to comply with the rules and develop the platform and ongoing burdens associated with maintaining the platform. 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 background documentation for this information collection at the following website: 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: Lindsay.M.Abate@omb.eop.gov and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: February 1, 2019. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–01367 Filed 2–6–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85033; File No. SR– NYSEArca–2018–98] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to Listing and Trading Shares of the iShares Commodity Multi-Strategy ETF Under NYSE Arca Rule 8.600–E; and Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change Relating to Listing and Trading Shares of the iShares Commodity Multi-Strategy ETF Under NYSE Arca Rule 8.600–E February 1, 2019. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on December 21, 2018, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 list and trade shares of the iShares Commodity Multi-Strategy ETF under NYSE Arca Rule 8.600–E (‘‘Managed Fund Shares’’). The proposed change is available on the Exchange’s website at www.nyse.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 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. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 3 17 CFR 240.15c2–4. VerDate Sep<11>2014 17:23 Feb 06, 2019 Jkt 247001 PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 E:\FR\FM\07FEN1.SGM 07FEN1

Agencies

[Federal Register Volume 84, Number 26 (Thursday, February 7, 2019)]
[Notices]
[Pages 2617-2618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01367]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; 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:
    Rules 300-304 of Regulation Crowdfunding (Intermediaries), SEC 
File No. 270-774, OMB Control No. 3235-0726.

    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 Rules 
300-304 of Regulation Crowdfunding.\1\
---------------------------------------------------------------------------

    \1\ See Regulation Crowdfunding, Exchange Act Release No. 76324 
(Oct. 30, 2015), 80 FR 71387 (Nov. 16, 2015) (Final Rule) 
(``Regulation Crowdfunding'').
---------------------------------------------------------------------------

    Rules 300-304 of Regulation Crowdfunding enumerate the requirements 
with which intermediaries must comply to participate in the offer and 
sale of securities in reliance on Section 4(a)(6) of the Securities Act 
of 1933 (``Section 4(a)(6)''). Rule 300 requires an intermediary to be 
registered with the Commission as a broker or as a funding portal and 
be a member of a registered national securities association.\2\
---------------------------------------------------------------------------

    \2\ Currently, FINRA is the only registered national securities 
association.
---------------------------------------------------------------------------

    Rule 301 requires intermediaries to have a reasonable basis for 
believing that an issuer seeking to offer and sell securities in 
reliance on Section 4(a)(6) through the intermediary's platform 
complies with the requirements in Section 4A(b) of the Securities Act 
and

[[Page 2618]]

the related requirements in Regulation Crowdfunding. Rule 302 provides 
that no intermediary or associated person of an intermediary may accept 
an investment commitment in a transaction involving the offer or sale 
of securities made in reliance on Section 4(a)(6) until the investor 
has opened an account with the intermediary and the intermediary has 
obtained from the investor consent to electronic delivery of materials. 
Rule 303 requires an intermediary to make publicly available on its 
platform the information that an issuer of crowdfunding securities is 
required to provide to potential investors, in a manner that reasonably 
permits a person accessing the platform to save, download or otherwise 
store the information, for a minimum of 21 days before any securities 
are sold in the offering, during which time the intermediary may accept 
investment commitments. Rule 303 also requires intermediaries to comply 
with the requirements related to the maintenance and transmission of 
funds. An intermediary that is a registered broker is required to 
comply with the requirements of Rule 15c2-4 of the Securities Exchange 
Act of 1934 (``Exchange Act'') (Transmission or Maintenance of Payments 
Received in Connection with Underwritings).\3\ An intermediary that is 
a registered funding portal must direct investors to transmit the money 
or other consideration directly to a qualified third party that has 
agreed in writing to hold the funds for the benefit of, and to promptly 
transmit or return the funds to, the persons entitled thereto in 
accordance with Regulation Crowdfunding.
---------------------------------------------------------------------------

    \3\ 17 CFR 240.15c2-4.
---------------------------------------------------------------------------

    The rules also require intermediaries to implement and maintain 
systems to comply with the information disclosure, communication 
channels, and investor notification requirements. These requirements 
include providing disclosure about compensation at account opening 
(Rule 302), obtaining investor acknowledgements to confirm investor 
qualifications and review of educational materials (Rule 303), 
providing investor questionnaires (Rule 303), providing communication 
channels with third parties and among investors (Rule 303), notifying 
investors of investment commitments (Rule 303), confirming completed 
transactions (Rule 303) and confirming or reconfirming offering 
cancellations (Rule 304).
    The Commission staff estimates that there would be 62 
intermediaries engaged in crowdfunding activity and therefore subject 
to Rules 300-304. The Commission staff estimates that annualized 
industry burden would be 15,621 hours to comply with Rules 300-304. 
This estimate is composed of a one-time burden for new intermediaries 
to comply with the rules and develop the platform and ongoing burdens 
associated with maintaining the platform. The Commission staff 
estimates that the costs associated with complying with Rules 300-304 
are estimated to be approximately a total amount of $5,772,327. These 
costs are composed of a one-time burden for new intermediaries to 
comply with the rules and develop the platform and ongoing burdens 
associated with maintaining the platform.
    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 background documentation for this information 
collection at the following website: 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: 
Lindsay.M.Abate@omb.eop.gov and (ii) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an 
email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 
30 days of this notice.

    Dated: February 1, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-01367 Filed 2-6-19; 8:45 am]
BILLING CODE 8011-01-P
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