Submission for OMB Review; Comment Request, 41262-41263 [2020-14750]
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Federal Register / Vol. 85, No. 132 / Thursday, July 9, 2020 / Notices
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of LTSE and on its internet
website at https://
longtermstockexchange.com/.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–LTSE–2020–10 and should
be submitted on or before July 30, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–14741 Filed 7–8–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–505, OMB Control No.
3235–0562]
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
jbell on DSKJLSW7X2PROD with NOTICES
Extension:
Rule 17d–1
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
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information discussed below.
Section 17(d) (15 U.S.C. 80a–17(d)) of
the Investment Company Act of 1940
(15 U.S.C. 80a et seq.) (the ‘‘Act’’)
prohibits first- and second-tier affiliates
of a fund, the fund’s principal
underwriters, and affiliated persons of
18 17
CFR 200.30–3(a)(12).
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16:40 Jul 08, 2020
Jkt 250001
the fund’s principal underwriters, acting
as principal, to effect any transaction in
which the fund or a company controlled
by the fund is a joint or a joint and
several participant in contravention of
the Commission’s rules. Rule 17d–1 (17
CFR 270.17d–1) prohibits an affiliated
person of or principal underwriter for
any fund (a ‘‘first-tier affiliate’’), or any
affiliated person of such person or
underwriter (a ‘‘second-tier affiliate’’),
acting as principal, from participating in
or effecting any transaction in
connection with a joint enterprise or
other joint arrangement in which the
fund is a participant, unless prior to
entering into the enterprise or
arrangement ‘‘an application regarding
[the transaction] has been filed with the
Commission and has been granted by an
order.’’ In reviewing the proposed
affiliated transaction, the rule provides
that the Commission will consider
whether the proposal is (i) consistent
with the provisions, policies, and
purposes of the Act, and (ii) on a basis
different from or less advantageous than
that of other participants in determining
whether to grant an exemptive
application for a proposed joint
enterprise, joint arrangement, or profitsharing plan.
Rule 17d–1 also contains a number of
exceptions to the requirement that a
fund must obtain Commission approval
prior to entering into joint transactions
or arrangements with affiliates. For
example, funds do not have to obtain
Commission approval for certain
employee compensation plans, certain
tax-deferred employee benefit plans,
certain transactions involving small
business investment companies, the
receipt of securities or cash by certain
affiliates pursuant to a plan of
reorganization, certain arrangements
regarding liability insurance policies
and transactions with ‘‘portfolio
affiliates’’ (companies that are affiliated
with the fund solely as a result of the
fund (or an affiliated fund) controlling
them or owning more than five percent
of their voting securities) so long as
certain other affiliated persons of the
fund (e.g., the fund’s adviser, persons
controlling the fund, and persons under
common control with the fund) are not
parties to the transaction and do not
have a ‘‘financial interest’’ in a party to
the transaction. The rule excludes from
the definition of ‘‘financial interest’’ any
interest that the fund’s board of
directors (including a majority of the
directors who are not interested persons
of the fund) finds to be not material, as
long as the board records the basis for
its finding in their meeting minutes.
Thus, the rule contains two filing and
recordkeeping requirements that
PO 00000
Frm 00037
Fmt 4703
Sfmt 4703
constitute collections of information.
First, rule 17d–1 requires funds that
wish to engage in a joint transaction or
arrangement with affiliates to meet the
procedural requirements for obtaining
exemptive relief from the rule’s
prohibition on joint transactions or
arrangements involving first- or secondtier affiliates. Second, rule 17d–1
permits a portfolio affiliate to enter into
a joint transaction or arrangement with
the fund if a prohibited participant has
a financial interest that the fund’s board
determines is not material and records
the basis for this finding in their
meeting minutes. These requirements of
rule 17d–1 are designed to prevent fund
insiders from managing funds for their
own benefit, rather than for the benefit
of the funds’ shareholders.
Based on an analysis of past filings,
Commission staff estimates that 23
funds file applications under section
17(d) and rule 17d–1 per year. The staff
understands that funds that file an
application generally obtain assistance
from outside counsel to prepare the
application. The cost burden of using
outside counsel is discussed below. The
Commission staff estimates that each
applicant will spend an average of 154
hours to comply with the Commission’s
applications process. The Commission
staff therefore estimates the annual
burden hours per year for all funds
under rule 17d–1’s application process
to be 3,542 hours at a cost of
$1,528,120.1 The Commission,
therefore, requests authorization to
increase the inventory of total burden
hours per year for all funds under rule
17d–1 from the current authorized
burden of 2,772 hours to 3,542 hours.
The increase is due to an increase in the
number of funds that filed applications
for exemptions under rule 17d–1.
As noted above, the Commission staff
understands that funds that file an
application under rule 17d–1 generally
use outside counsel to assist in
preparing the application. The staff
estimates that, on average, funds spend
1 The Commission staff estimates that a senior
executive, such as the fund’s chief compliance
officer, will spend an average of 62 hours and a
mid-level compliance attorney will spend an
average of 92 hours to comply with this collection
of information: 62 hours + 92 hours = 154 hours.
23 funds × 154 burden hours = 3,542 burden hours.
The Commission staff estimate that the chief
compliance officer is paid $530 per hour and the
compliance attorney is paid $365 per hour. ($530
per hour × 62 hours) + ($365 per hour × 92 hours)
= $66,440 per fund. $66,440 × 23 funds =
$1,528,120. The $530 and $365 per hour figures are
based on salary information compiled by SIFMA’s
Management & Professional Earnings in the
Securities Industry, 2013. The Commission staff has
modified SIFMA’s information 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.
E:\FR\FM\09JYN1.SGM
09JYN1
Federal Register / Vol. 85, No. 132 / Thursday, July 9, 2020 / Notices
jbell on DSKJLSW7X2PROD with NOTICES
an additional $93,131 for outside legal
services in connection with seeking
Commission approval of affiliated joint
transactions. Thus, the staff estimates
that the total annual cost burden
imposed by the exemptive application
requirements of rule 17d–1 is
$2,142,013.2
We estimate that funds currently do
not rely on the exemption from the term
‘‘financial interest’’ with respect to any
interest that the fund’s board of
directors (including a majority of the
directors who are not interested persons
of the fund) finds to be not material.
Accordingly, we estimate that annually
there will be no transactions under rule
17d–1 that will result in this aspect of
the collection of information.
Based on these calculations, the total
annual hour burden is estimated to be
3,542 hours and the total annual cost
burden is estimated to be $2,142,013.
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 these collections of
information requirement is necessary to
obtain the benefit of relying on rule
17d–1. 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.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) www.reginfo.gov/public/do/
PRAMain and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
Dated: July 2, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–14750 Filed 7–8–20; 8:45 am]
BILLING CODE 8011–01–P
2 The estimate is based on the following
calculation: $93,131 × 23 funds = $2,142,013.
VerDate Sep<11>2014
16:40 Jul 08, 2020
Jkt 250001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89217; File No. SR–
CboeBZX–2020–029]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Order Granting
Approval of Proposed Rule Change, as
Modified by Amendment No. 1, To List
and Trade Shares of the JPMorgan
Large Cap Growth ETF Under Rule
14.11(k), Managed Portfolio Shares
July 2, 2020.
I. Introduction
On March 25, 2020, Cboe BZX
Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) 1 of the Securities
Exchange Act of 1934 (‘‘Act’’) 2 and Rule
19b–4 thereunder,3 a proposed rule
change to list and trade shares of the
JPMorgan Large Cap Growth ETF under
Rule 14.11(k), Managed Portfolio
Shares. The proposed rule change was
published for comment in the Federal
Register on Apri1 9, 2020.4 On April 29,
2020, the Exchange filed Amendment
No. 1 to the proposed rule change.5 On
May 15, 2020, pursuant to Section
19(b)(2) of the Act,6 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.7 The Commission has
received no comments on the proposed
rule change. This order approves the
proposed rule change, as modified by
Amendment No. 1.
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 88551
(April 3, 2020), 85 FR 19971 (‘‘Notice’’).
5 In Amendment No. 1, the Exchange added the
word ‘‘each’’ to clarify that the Adviser has
implemented and will maintain a ‘‘fire wall’’ with
respect to each affiliate broker-dealer regarding
access to information concerning the composition
and/or changes to the Fund’s portfolio and Creation
Basket (as defined below). Because the change in
Amendment No. 1 clarifies a statement in the
proposal and does not materially alter the substance
of the proposed rule change or raise any novel
regulatory issues, Amendment No. 1 is not subject
to notice and comment. Amendment No. 1 is
available on the Commission’s website at https://
www.sec.gov/comments/sr-cboebzx-2020-029/
srcboebzx2020029-7135317-216172.pdf.
6 15 U.S.C. 78s(b)(2).
7 See Securities Exchange Act Release No. 88888,
85 FR 31016 (May 21, 2020). The Commission
designated July 8, 2020, as the date by which the
Commission shall approve or disapprove, or
institute proceedings to determine whether to
disapprove, the proposed rule change.
PO 00000
1 15
2 15
Frm 00038
Fmt 4703
Sfmt 4703
41263
II. Description of the Proposed Rule
Change, as Modified by Amendment
No. 1 8
The Exchange proposes to list and
trade shares of the JPMorgan Large Cap
Growth ETF (‘‘Fund’’) under BZX Rule
14.11(k), which governs the listing and
trading of any series of Managed
Portfolio Shares on the Exchange.9 The
shares of the Fund (‘‘Shares’’) will be
issued by J.P. Morgan Exchange-Traded
Fund Trust (‘‘Trust’’), a statutory trust
organized under the laws of the State of
Delaware and registered with the
Commission as an open-end
management investment company.10
The investment adviser to the Trust will
be J.P. Morgan Investment Management
Inc. (the ‘‘Adviser’’). JPMorgan
Distribution Services, Inc. will serve as
the distributor of the Fund’s Shares.
A. Description of the Fund
The Exchange states that the Fund’s
holdings will conform to the
permissible investments as set forth in
the Exemptive Application and
Exemptive Order and the holdings will
be consistent with all requirements in
the Exemptive Application and
8 For more information regarding the Fund and
the Shares, see Notice, supra note 4.
9 As defined in BZX Rule 14.11(k)(3)(A), the term
‘‘Managed Portfolio Share’’ means a security that (a)
represents an interest in an investment company
(‘‘Investment Company’’) registered under the
Investment Company Act of 1940 (‘‘1940 Act’’)
organized as an open-end management investment
company, that invests in a portfolio of securities
selected by the Investment Company’s investment
adviser consistent with the Investment Company’s
investment objectives and policies; (b) is issued in
a creation unit, or multiples thereof, in return for
a designated portfolio of instruments (and/or an
amount of cash) with a value equal to the next
determined net asset value and delivered to the
Authorized Participant (as defined in the
Investment Company’s Form N–1A filed with the
Commission) through a confidential account; (c)
when aggregated into a redemption unit, or
multiples thereof, may be redeemed for a
designated portfolio of instruments (and/or an
amount of cash) with a value equal to the next
determined net asset value delivered to the
confidential account for the benefit of the
Authorized Participant; and (d) the portfolio
holdings for which are disclosed within at least 60
days following the end of every fiscal quarter.
10 The Trust is registered under the 1940 Act. On
February 3, 2020, the Trust filed a registration
statement on Form N–1A relating to the Fund (File
No. 811–22903) (‘‘Registration Statement’’). The
Trust has submitted an application for exemptive
relief (‘‘Exemptive Application’’) (File No. 812–
15093). The Exchange states that the Exemptive
Application incorporates by reference the terms and
conditions of the exemptive relief granted to
Precidian ETFs Trust, et al. See Investment
Company Act Release No. 33477, May 20, 2019
(‘‘Exemptive Order’’). The Exchange states that it
expects any exemptive relief granted to the Trust to
be substantively identical to the Exemptive Order.
The Exchange represents that the Fund will not be
listed or traded on the Exchange until it receives all
necessary exemptive relief and its Registration
Statement is effective.
E:\FR\FM\09JYN1.SGM
09JYN1
]]>Agencies
[Federal Register Volume 85, Number 132 (Thursday, July 9, 2020)]
[Notices]
[Pages 41262-41263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14750]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-505, OMB Control No. 3235-0562]
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:
Rule 17d-1
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 (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for extension of the previously approved
collection of information discussed below.
Section 17(d) (15 U.S.C. 80a-17(d)) of the Investment Company Act
of 1940 (15 U.S.C. 80a et seq.) (the ``Act'') prohibits first- and
second-tier affiliates of a fund, the fund's principal underwriters,
and affiliated persons of the fund's principal underwriters, acting as
principal, to effect any transaction in which the fund or a company
controlled by the fund is a joint or a joint and several participant in
contravention of the Commission's rules. Rule 17d-1 (17 CFR 270.17d-1)
prohibits an affiliated person of or principal underwriter for any fund
(a ``first-tier affiliate''), or any affiliated person of such person
or underwriter (a ``second-tier affiliate''), acting as principal, from
participating in or effecting any transaction in connection with a
joint enterprise or other joint arrangement in which the fund is a
participant, unless prior to entering into the enterprise or
arrangement ``an application regarding [the transaction] has been filed
with the Commission and has been granted by an order.'' In reviewing
the proposed affiliated transaction, the rule provides that the
Commission will consider whether the proposal is (i) consistent with
the provisions, policies, and purposes of the Act, and (ii) on a basis
different from or less advantageous than that of other participants in
determining whether to grant an exemptive application for a proposed
joint enterprise, joint arrangement, or profit-sharing plan.
Rule 17d-1 also contains a number of exceptions to the requirement
that a fund must obtain Commission approval prior to entering into
joint transactions or arrangements with affiliates. For example, funds
do not have to obtain Commission approval for certain employee
compensation plans, certain tax-deferred employee benefit plans,
certain transactions involving small business investment companies, the
receipt of securities or cash by certain affiliates pursuant to a plan
of reorganization, certain arrangements regarding liability insurance
policies and transactions with ``portfolio affiliates'' (companies that
are affiliated with the fund solely as a result of the fund (or an
affiliated fund) controlling them or owning more than five percent of
their voting securities) so long as certain other affiliated persons of
the fund (e.g., the fund's adviser, persons controlling the fund, and
persons under common control with the fund) are not parties to the
transaction and do not have a ``financial interest'' in a party to the
transaction. The rule excludes from the definition of ``financial
interest'' any interest that the fund's board of directors (including a
majority of the directors who are not interested persons of the fund)
finds to be not material, as long as the board records the basis for
its finding in their meeting minutes.
Thus, the rule contains two filing and recordkeeping requirements
that constitute collections of information. First, rule 17d-1 requires
funds that wish to engage in a joint transaction or arrangement with
affiliates to meet the procedural requirements for obtaining exemptive
relief from the rule's prohibition on joint transactions or
arrangements involving first- or second-tier affiliates. Second, rule
17d-1 permits a portfolio affiliate to enter into a joint transaction
or arrangement with the fund if a prohibited participant has a
financial interest that the fund's board determines is not material and
records the basis for this finding in their meeting minutes. These
requirements of rule 17d-1 are designed to prevent fund insiders from
managing funds for their own benefit, rather than for the benefit of
the funds' shareholders.
Based on an analysis of past filings, Commission staff estimates
that 23 funds file applications under section 17(d) and rule 17d-1 per
year. The staff understands that funds that file an application
generally obtain assistance from outside counsel to prepare the
application. The cost burden of using outside counsel is discussed
below. The Commission staff estimates that each applicant will spend an
average of 154 hours to comply with the Commission's applications
process. The Commission staff therefore estimates the annual burden
hours per year for all funds under rule 17d-1's application process to
be 3,542 hours at a cost of $1,528,120.\1\ The Commission, therefore,
requests authorization to increase the inventory of total burden hours
per year for all funds under rule 17d-1 from the current authorized
burden of 2,772 hours to 3,542 hours. The increase is due to an
increase in the number of funds that filed applications for exemptions
under rule 17d-1.
---------------------------------------------------------------------------
\1\ The Commission staff estimates that a senior executive, such
as the fund's chief compliance officer, will spend an average of 62
hours and a mid-level compliance attorney will spend an average of
92 hours to comply with this collection of information: 62 hours +
92 hours = 154 hours. 23 funds x 154 burden hours = 3,542 burden
hours. The Commission staff estimate that the chief compliance
officer is paid $530 per hour and the compliance attorney is paid
$365 per hour. ($530 per hour x 62 hours) + ($365 per hour x 92
hours) = $66,440 per fund. $66,440 x 23 funds = $1,528,120. The $530
and $365 per hour figures are based on salary information compiled
by SIFMA's Management & Professional Earnings in the Securities
Industry, 2013. The Commission staff has modified SIFMA's
information 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.
---------------------------------------------------------------------------
As noted above, the Commission staff understands that funds that
file an application under rule 17d-1 generally use outside counsel to
assist in preparing the application. The staff estimates that, on
average, funds spend
[[Page 41263]]
an additional $93,131 for outside legal services in connection with
seeking Commission approval of affiliated joint transactions. Thus, the
staff estimates that the total annual cost burden imposed by the
exemptive application requirements of rule 17d-1 is $2,142,013.\2\
---------------------------------------------------------------------------
\2\ The estimate is based on the following calculation: $93,131
x 23 funds = $2,142,013.
---------------------------------------------------------------------------
We estimate that funds currently do not rely on the exemption from
the term ``financial interest'' with respect to any interest that the
fund's board of directors (including a majority of the directors who
are not interested persons of the fund) finds to be not material.
Accordingly, we estimate that annually there will be no transactions
under rule 17d-1 that will result in this aspect of the collection of
information.
Based on these calculations, the total annual hour burden is
estimated to be 3,542 hours and the total annual cost burden is
estimated to be $2,142,013.
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 these collections of
information requirement is necessary to obtain the benefit of relying
on rule 17d-1. 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.
The public may view background documentation for this information
collection at the following website: www.reginfo.gov. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom,
Director/Chief Information Officer, Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by
sending an email to: [email protected].
Dated: July 2, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14750 Filed 7-8-20; 8:45 am]
BILLING CODE 8011-01-P
