Submission for OMB Review; Comment Request, 64128-64129 [2019-24971]
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64128
Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices
respondents 7) in miscellaneous clerical
expenses. The Commission estimates
that the total annual burden for the
filing of the supplemental information 8
and the monthly reports required under
Rule 6a–4(c) would be 24 hours (6
hours/respondent per year × 4
respondents 9) and $240 of
miscellaneous clerical expenses.
Compliance with Rule 6a–4 is
mandatory. Information received in
response to Rule 6a–4 shall not be kept
confidential; the information collected
is public information.
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: November 14, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–25096 Filed 11–19–19; 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
New Collection:
Rule 139b; OMB Control No. New
Collection, SEC File No. 270–815
Notice is hereby given that the
Securities and Exchange Commission
(the ‘‘Commission’’) has, in accordance
7 The
Commission notes that while there are
currently five Security Futures Product Exchanges,
one of those exchanges, NQLX, is dormant.
8 17 CFR 240.6a–4(c)
9 See supra footnote 7.
VerDate Sep<11>2014
17:21 Nov 19, 2019
Jkt 250001
with the Paperwork Reduction Act of
1995 (Pub. L. 104–13, 44 U.S.C. 3501 et
seq.) (‘‘PRA’’), submitted a sponsored
information collection request (‘‘ICR’’)
to the Office of Management and Budget
(‘‘OMB’’) for review and clearance for
the collection of information associated
with the new Rule 139b (17 CFR
230.139b) under the Securities Act of
1933 (15 U.S.C. 77a et seq.) (‘‘Securities
Act’’) that was adopted by the
Commission on November 30, 2018.1
The title for this collection of
information is: ‘‘Rule 139b Disclosure of
Standardized Performance.’’
As directed by the Fair Access to
Investment Research Act of 2017 (Pub.
L. 115–66, 131 Stat. 1196 (2017) (the
‘‘FAIR Act’’), the Commission adopted
new rule 139b under the Securities Act
to extend the safe harbor under rule 139
to a ‘‘covered investment fund research
report.’’ Specifically, new rule 139b
provides a safe harbor to a broker-dealer
who publishes or distributes in the
regular course of its business research
reports concerning one or more
‘‘covered investment fund(s)’’ while
participating in the distribution of a
covered investment fund’s securities.
In the Proposing Release, we solicited
comment on whether rule 139b should
include a standardized performance
disclosure requirement.2 In response to
comments received, we have decided to
adopt such a requirement.3 We believe
that standardized performance
presentation is an appropriate
requirement because investors tend to
consider fund performance a significant
factor in evaluating or comparing
investment companies, and the
requirement addresses potential
investor confusion if a communication
were not easily recognizable as research
as opposed to an advertising prospectus
or supplemental sales literature. Rule
139b requires that research reports
about open-end funds that include
performance information must present it
in accordance with paragraphs (d), (e),
and (g) of rule 482. Rule 139b also
requires that research reports about
closed-end funds that include
performance information must present it
in accordance with instructions to item
4.1(g) of Form N–2. Performance
measures calculated by broker-dealers
are not required to be kept confidential
and there is no mandatory retention
1 See Release No. 33–10580 (Nov. 30, 2018) [83
FR 64180 (Dec. 13, 2018)] (‘‘Adopting Release’’).
New rule 139b will be effective on January 14, 2019.
2 See Covered Investment Fund Research Reports,
Securities Act Release No. 10498 (May 23, 2018) [83
FR 26788 (June 8, 2018)] (‘‘Proposing Release’’) at
26803–04.
3 See Adopting Release, supra note I, at Section
II.C.
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
period. We anticipate that compliance
with these performance measures for
each fund discussed in a research
report, and for which the performance
measures apply, would increase
compliance costs for broker-dealers
seeking to publish or distribute a
covered investment fund research
report.
It is difficult to provide estimates of
the burdens and costs for those brokerdealers that will include performance
information in a rule 139b research
report. As discussed above, this is
difficult to estimate because current
data collected does not reflect the
affiliate exclusion, does not include the
entire universe of covered investment
funds, and it is uncertain what
percentage of communications currently
filed as rule 482 advertising
prospectuses (or rule 34b–1
supplemental sales materials) will
instead be published in reliance of rule
139b, as covered investment fund
research reports.4 For purposes of the
PRA, we estimate that 10% of the rule
482 and rule 34b–1 communications
currently filed by broker-dealers with
FINRA (approximately 65,000) could be
considered as rule 139b covered
investment fund research reports. We
estimate that broker-dealers will publish
annually 6,500 (10% of 65,000) covered
investment fund research reports.
Moreover, we assume for purposes of
the PRA that all estimated rule 139b
research reports will include fund
performance information. We further
estimate that 1,417 broker-dealers
would likely be respondents to the
collection of information with a
frequency of 4.6 responses per year.5 We
further estimate that 50% of these
broker-dealers will have experience in
complying with standardized
performance requirements under rule
482. For the 50% of this subset of
broker-dealers that do not have
experience with complying with rule
482, we estimate that there will be a
one-time implementation cost for each
broker-dealer of 5 internal burden
hours. Additionally, we estimate that
each research report will require 3 hours
of ongoing internal burden hours by a
broker-dealers’ personnel to comply
with the rule 139b collection of
information requirements, which for
each broker-dealer is estimated to be
4 See Adopting Release, supra note 1, n. 413 and
accompanying paragraph.
5 See Adopting Release, supra note 1, n. 414 and
accompanying text. 6,500 covered investment fund
research reports/1,417 broker-dealers = 4.6 annual
responses per broker-dealer.
E:\FR\FM\20NON1.SGM
20NON1
Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices
13.8 internal burden hours.6
Accordingly, we estimate that the
standardized performance presentation
requirements will result in an average
annual hour burden of about 16.3 hours
per broker-dealer 7 in the first year of
compliance and about 13.8 hours per
broker-dealer for each of the next two
years. Amortized over three years, the
average annual hour burden will be
about 14.63 hours per broker-dealer.8
In sum, we estimate that rule 139b’s
requirements will impose a total annual
internal hour burden of 20,731 hours on
broker-dealers.9 We do not think there
is an external cost burden associated
with this collection of information.
This information collection is subject
to the PRA. If approved, responses to
the new collection of information
requirement would not be mandatory
for broker-dealers seeking to rely upon
rule 139b but would be necessary for
those broker-dealers that would like to
provide performance information in
their covered investment fund research
reports. Responses to the information
collections 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 OMB
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: Lindsay.M.Abate@
omb.eop.gov; and (ii) Charles Riddle,
Acting Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Cynthia Roscoe, 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: November 13, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–24971 Filed 11–19–19; 8:45 am]
BILLING CODE 8011–01–M
annual responses per broker-dealer × 3
internal burden hours = 13.8 annual internal
burden hours per broker-dealer.
7 (50% of * 13.8 hours ongoing compliance) +
(50% * (13.8 hours ongoing compliance + 5 hours
of initial compliance hours)).
8 ((16.3 internal burden hours in year 1) + (13.8
internal burden hours in year 2) + (13.8 internal
burden hours in year 3)) / 3.
9 14.63 annualized burden hours * 1,417 brokerdealers.
6 4.6
VerDate Sep<11>2014
17:21 Nov 19, 2019
Jkt 250001
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
33682; 812–14625]
Blue Tractor ETF Trust and Blue
Tractor Group, LLC; Notice of
Application
November 14, 2019.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for
exemptive relief.
AGENCY:
Applicants
request an order under section 6(c) of
the Investment Company Act of 1940
(‘‘Act’’) for an exemption from sections
2(a)(32), 5(a)(1), 22(d), and 22(e) of the
Act and rule 22c–1 under the Act, under
sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and
17(a)(2) of the Act, and under section
12(d)(1)(J) of the Act for an exemption
from sections 12(d)(1)(A) and
12(d)(1)(B) of the Act. If granted, the
requested order would permit registered
open-end investment companies that are
exchange-traded funds (‘‘ETFs’’) and are
actively managed to operate without
being subject to a daily portfolio
transparency condition.
APPLICANTS: Blue Tractor Group, LLC
(‘‘Blue Tractor’’) and Blue Tractor ETF
Trust (the ‘‘Trust’’).
FILING DATES: The application was filed
on March 14, 2016, and amended on
September 28, 2016, February 1, 2017,
July 31, 2017, January 17, 2018, April
11, 2018, May 23, 2018, May 8, 2019,
June 20, 2019, August 2, 2019, October
21, 2019, and October 23, 2019.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
Applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on December 9, 2019 and
should be accompanied by proof of
service on Applicants, in the form of an
affidavit, or for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street, NE,
Washington, DC 20549–1090;
SUMMARY OF APPLICATION:
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
64129
Applicants: Blue Tractor ETF Trust,
Blue Tractor Group, LLC, 57 West 57th
Street 4th Floor, New York, NY 10019.
FOR FURTHER INFORMATION CONTACT:
Deepak T. Pai, Senior Counsel; Andrea
Ottomanelli Magovern, Branch Chief, at
(202) 551–6821 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
website by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
I. Introduction
1. Applicants seek to introduce a
novel type of actively-managed ETF that
would not be required to disclose its
portfolio holdings on a daily basis (each,
a ‘‘Fund’’). Due to their characteristics,
ETFs (including those proposed by
Applicants) are only permitted to
operate in reliance on Commission
exemptive relief from certain provisions
of the Act and rules thereunder.1
Accordingly, Applicants seek an order:
under section 6(c) of the Act for an
exemption from sections 2(a)(32),
5(a)(1), 22(d), and 22(e) of the Act and
rule 22c–1 thereunder; under sections
6(c) and 17(b) of the Act granting an
exemption from sections 17(a)(1) and
17(a)(2) of the Act; and under section
12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and (B) of the Act.
The requested order would permit: (a)
The Funds to issue shares (‘‘Shares’’)
redeemable in large aggregations only
(‘‘creation units’’); (b) secondary market
transactions in Shares to occur at
negotiated market prices rather than at
net asset value (‘‘NAV’’); (c) certain
Funds to pay redemption proceeds,
under certain circumstances, more than
seven days after the tender of Shares for
redemption; (d) certain affiliated
persons of a Fund to deposit securities
into, and receive securities from, the
Fund in connection with the purchase
and redemption of creation units; and
(e) certain registered management
investment companies and unit
investment trusts outside of the same
1 The Commission first granted exemptive relief
to operate ETFs in the early 1990s when the first
index-based ETFs were developed. See SPDR Trust
Series I, Investment Company Act Release Nos.
18959 (Sept. 17, 1992) (notice) and 19055 (Oct. 26,
1992) (order). See generally Exchange Traded
Funds, Investment Company Act Release No. 33646
(Sept. 25, 2019) (‘‘ETF Rule Adopting Release’’), at
section I. The Commission has also granted ETFs
exemptive relief from Sections 12(d)(1)(A) and (B)
of the Act. See generally Fund of Funds
Arrangements, Investment Company Act Release
No. 33329 (Dec. 19, 2018).
E:\FR\FM\20NON1.SGM
20NON1
]]>Agencies
[Federal Register Volume 84, Number 224 (Wednesday, November 20, 2019)]
[Notices]
[Pages 64128-64129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24971]
-----------------------------------------------------------------------
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
New Collection:
Rule 139b; OMB Control No. New Collection, SEC File No. 270-815
Notice is hereby given that the Securities and Exchange Commission
(the ``Commission'') has, in accordance with the Paperwork Reduction
Act of 1995 (Pub. L. 104-13, 44 U.S.C. 3501 et seq.) (``PRA''),
submitted a sponsored information collection request (``ICR'') to the
Office of Management and Budget (``OMB'') for review and clearance for
the collection of information associated with the new Rule 139b (17 CFR
230.139b) under the Securities Act of 1933 (15 U.S.C. 77a et seq.)
(``Securities Act'') that was adopted by the Commission on November 30,
2018.\1\ The title for this collection of information is: ``Rule 139b
Disclosure of Standardized Performance.''
---------------------------------------------------------------------------
\1\ See Release No. 33-10580 (Nov. 30, 2018) [83 FR 64180 (Dec.
13, 2018)] (``Adopting Release''). New rule 139b will be effective
on January 14, 2019.
---------------------------------------------------------------------------
As directed by the Fair Access to Investment Research Act of 2017
(Pub. L. 115-66, 131 Stat. 1196 (2017) (the ``FAIR Act''), the
Commission adopted new rule 139b under the Securities Act to extend the
safe harbor under rule 139 to a ``covered investment fund research
report.'' Specifically, new rule 139b provides a safe harbor to a
broker-dealer who publishes or distributes in the regular course of its
business research reports concerning one or more ``covered investment
fund(s)'' while participating in the distribution of a covered
investment fund's securities.
In the Proposing Release, we solicited comment on whether rule 139b
should include a standardized performance disclosure requirement.\2\ In
response to comments received, we have decided to adopt such a
requirement.\3\ We believe that standardized performance presentation
is an appropriate requirement because investors tend to consider fund
performance a significant factor in evaluating or comparing investment
companies, and the requirement addresses potential investor confusion
if a communication were not easily recognizable as research as opposed
to an advertising prospectus or supplemental sales literature. Rule
139b requires that research reports about open-end funds that include
performance information must present it in accordance with paragraphs
(d), (e), and (g) of rule 482. Rule 139b also requires that research
reports about closed-end funds that include performance information
must present it in accordance with instructions to item 4.1(g) of Form
N-2. Performance measures calculated by broker-dealers are not required
to be kept confidential and there is no mandatory retention period. We
anticipate that compliance with these performance measures for each
fund discussed in a research report, and for which the performance
measures apply, would increase compliance costs for broker-dealers
seeking to publish or distribute a covered investment fund research
report.
---------------------------------------------------------------------------
\2\ See Covered Investment Fund Research Reports, Securities Act
Release No. 10498 (May 23, 2018) [83 FR 26788 (June 8, 2018)]
(``Proposing Release'') at 26803-04.
\3\ See Adopting Release, supra note I, at Section II.C.
---------------------------------------------------------------------------
It is difficult to provide estimates of the burdens and costs for
those broker-dealers that will include performance information in a
rule 139b research report. As discussed above, this is difficult to
estimate because current data collected does not reflect the affiliate
exclusion, does not include the entire universe of covered investment
funds, and it is uncertain what percentage of communications currently
filed as rule 482 advertising prospectuses (or rule 34b-1 supplemental
sales materials) will instead be published in reliance of rule 139b, as
covered investment fund research reports.\4\ For purposes of the PRA,
we estimate that 10% of the rule 482 and rule 34b-1 communications
currently filed by broker-dealers with FINRA (approximately 65,000)
could be considered as rule 139b covered investment fund research
reports. We estimate that broker-dealers will publish annually 6,500
(10% of 65,000) covered investment fund research reports. Moreover, we
assume for purposes of the PRA that all estimated rule 139b research
reports will include fund performance information. We further estimate
that 1,417 broker-dealers would likely be respondents to the collection
of information with a frequency of 4.6 responses per year.\5\ We
further estimate that 50% of these broker-dealers will have experience
in complying with standardized performance requirements under rule 482.
For the 50% of this subset of broker-dealers that do not have
experience with complying with rule 482, we estimate that there will be
a one-time implementation cost for each broker-dealer of 5 internal
burden hours. Additionally, we estimate that each research report will
require 3 hours of ongoing internal burden hours by a broker-dealers'
personnel to comply with the rule 139b collection of information
requirements, which for each broker-dealer is estimated to be
[[Page 64129]]
13.8 internal burden hours.\6\ Accordingly, we estimate that the
standardized performance presentation requirements will result in an
average annual hour burden of about 16.3 hours per broker-dealer \7\ in
the first year of compliance and about 13.8 hours per broker-dealer for
each of the next two years. Amortized over three years, the average
annual hour burden will be about 14.63 hours per broker-dealer.\8\
---------------------------------------------------------------------------
\4\ See Adopting Release, supra note 1, n. 413 and accompanying
paragraph.
\5\ See Adopting Release, supra note 1, n. 414 and accompanying
text. 6,500 covered investment fund research reports/1,417 broker-
dealers = 4.6 annual responses per broker-dealer.
\6\ 4.6 annual responses per broker-dealer x 3 internal burden
hours = 13.8 annual internal burden hours per broker-dealer.
\7\ (50% of * 13.8 hours ongoing compliance) + (50% * (13.8
hours ongoing compliance + 5 hours of initial compliance hours)).
\8\ ((16.3 internal burden hours in year 1) + (13.8 internal
burden hours in year 2) + (13.8 internal burden hours in year 3)) /
3.
---------------------------------------------------------------------------
In sum, we estimate that rule 139b's requirements will impose a
total annual internal hour burden of 20,731 hours on broker-dealers.\9\
We do not think there is an external cost burden associated with this
collection of information.
---------------------------------------------------------------------------
\9\ 14.63 annualized burden hours * 1,417 broker-dealers.
---------------------------------------------------------------------------
This information collection is subject to the PRA. If approved,
responses to the new collection of information requirement would not be
mandatory for broker-dealers seeking to rely upon rule 139b but would
be necessary for those broker-dealers that would like to provide
performance information in their covered investment fund research
reports. Responses to the information collections 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 OMB 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: [email protected]; and (ii) Charles Riddle, Acting
Director/Chief Information Officer, Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549 or send an
email to: [email protected]. Comments must be submitted to OMB within
30 days of this notice.
Dated: November 13, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24971 Filed 11-19-19; 8:45 am]
BILLING CODE 8011-01-M
