Proposed Collection; Comment Request, 64566-64569 [2021-25173]
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Federal Register / Vol. 86, No. 220 / Thursday, November 18, 2021 / Notices
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2021–67 on the subject line.
Paper Comments
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• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2021–67. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
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 the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSE–2021–67, and
should be submitted on or before
December 9, 2021.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25125 Filed 11–17–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–653, OMB Control No.
3235–0703]
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:
Regulation SCI, Form SCI
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’’) is soliciting comments
on the collection of information
provided for in Regulation Systems
Compliance and Integrity (‘‘Regulation
SCI’’) (17 CFR 242.1000–1007) and
Form SCI (17 CFR 249.1900) under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) (15 U.S.C. 78a et seq.).
The Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Regulation SCI requires certain key
market participants to, among other
things: (1) Have comprehensive policies
and procedures in place to help ensure
the robustness and resiliency of their
technological systems, and also that
their technological systems operate in
compliance with the federal securities
laws and with their own rules; and (2)
provide certain notices and reports to
the Commission to improve
Commission oversight of securities
market infrastructure.
Regulation SCI advances the goals of
the national market system by
enhancing the capacity, integrity,
resiliency, availability, and security of
the automated systems of entities
important to the functioning of the U.S.
securities markets, as well as reinforcing
the requirement that such systems
operate in compliance with the
Exchange Act and rules and regulations
thereunder, thus strengthening the
infrastructure of the U.S. securities
markets and improving its resilience
24 17
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when technological issues arise. In this
respect, Regulation SCI establishes an
updated and formalized regulatory
framework, thereby helping to ensure
more effective Commission oversight of
such systems.
Respondents consist of national
securities exchanges and associations,
registered clearing agencies, exempt
clearing agencies, plan processors, and
alternative trading systems. There are
currently 47 respondents, and the
Commission staff estimates that, on
average, 2 new respondents may become
SCI entities each year, 1 of which would
be a self-regulatory organization
(‘‘SRO’’). Accordingly, Commission staff
estimates that over the next three years
there will be an average of 49
respondents per year.
In addition, in December 2020, the
Commission adopted amendments to
Regulation SCI in connection with
updates to the national market system
for the collection, consolidation, and
dissemination of information with
respect to quotations for and
transactions in national market system
(‘‘NMS’’) stocks (‘‘Infrastructure
Amendments’’). Specifically, the
Commission adopted a definition of
‘‘SCI competing consolidator’’ that will
subject competing consolidators to
Regulation SCI, after a transition period,
if they are above a specified
consolidated market data gross revenue
threshold.1 The Infrastructure
Amendments increased the number of
respondents to the collections of
information in Regulation SCI, and the
Commission estimates that seven
competing consolidators will meet this
definition and be subject to the
requirements of Regulation SCI.2 Rule
1001(a) requires each SCI entity to
establish, maintain, and enforce written
policies and procedures reasonably
designed to ensure that its SCI systems
and, for purposes of security standards,
indirect SCI systems, have levels of
capacity, integrity, resiliency,
availability, and security, adequate to
maintain the SCI entity’s operational
capability and promote the maintenance
of fair and orderly markets. The
Commission staff estimates that the total
annual initial recordkeeping burden for
7 new respondents will be 4,511 hours,
and the annual ongoing recordkeeping
burden for all 54 respondents will be,
1 See Securities Exchange Act Release No. 34–
90610 (December 9, 2020), 86 FR 18596 (April 9,
2021) (File No. S7–03–20) (‘‘Infrastructure Adopting
Release’’).
2 Some of these respondents were estimated to
incur no, or only part of, the estimated initial
burdens because they were already subject to
Regulation SCI (i.e., as plan processors, SROs or
affiliates of SROs).
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on average, 12,528 hours. The
Commission staff estimates that the 7
new respondents would incur, on
average, an annual initial internal cost
of compliance of $1,513,382, as well as
outside legal or consulting costs of
$305,500. In addition, all respondents
will incur, on average, an estimated
ongoing annual internal cost of
compliance of $4,205,412.
Rule 1001(b) requires each SCI entity
to establish, maintain, and enforce
written policies and procedures
reasonably designed to ensure that its
SCI systems operate in a manner that
complies with the Exchange Act and the
rules and regulations thereunder and
the entity’s rules and governing
documents, as applicable. The
Commission staff estimates that the total
annual initial recordkeeping burden for
7 new respondents will be 1,755 hours,
and the annual ongoing recordkeeping
burden for all respondents will be, on
average, 8,010 hours. The Commission
staff estimates that the 7 new
respondents would incur an initial
internal cost of compliance of $660,270,
as well as outside legal or consulting
costs of $175,500. In addition, all
respondents will incur, on average, an
estimated ongoing annual internal cost
of compliance of $2,539,890.
Rule 1001(c) requires each SCI entity
to establish, maintain, and enforce
reasonably designed written policies
and procedures that include the criteria
for identifying responsible SCI
personnel, the designation and
documentation of responsible SCI
personnel, and escalation procedures to
quickly inform responsible SCI
personnel of potential SCI events. The
Commission staff estimates that the total
annual initial recordkeeping burden for
7 new respondents will be 741 hours,
and the annual ongoing recordkeeping
burden for all respondents will be, on
average, 2,106. The Commission staff
estimates that the 7 new respondents
would incur an initial internal cost of
compliance of $276,432, and all
respondents will incur, on average, an
estimated ongoing annual internal cost
of compliance of $839,592.
Rule 1004 requires each SCI entity to
establish standards for the designation
of certain members or participants for
BC/DR plan testing, to designate
members or participants in accordance
with these standards, to require
participation by designated members or
participants in such testing at least
annually, and to coordinate such testing
on an industry- or sector-wide basis
with other SCI entities. The Commission
staff estimates that the total annual
initial recordkeeping burden for 9 new
respondents will be 2,700 hours, and
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the annual ongoing recordkeeping
burden for all respondents that are not
plan processors will be, on average,
7,290 hours. The Commission staff
estimates that the 7 new respondents
would incur an initial internal cost of
compliance of $804,735. In addition, all
respondents that are not plan processors
will incur, on average, an estimated
ongoing annual internal cost of
compliance of $1,939,950. In addition,
the Commission staff estimates that the
2 plan processor respondents will incur
an estimated ongoing annual cost of
$108,000 for outside legal services
($54,000 per plan processor respondent
× 2 respondents).
Rule 1002(b)(1) requires each SCI
entity, upon any responsible SCI
personnel having a reasonable basis to
conclude that an SCI event has
occurred, to notify the Commission
immediately. The Commission staff
estimates that the total annual ongoing
burden for all 54 respondents will be,
on average, 432 hours. The Commission
staff estimates that respondents will
incur, on average, an estimated ongoing
annual internal cost of compliance of
$133,030.
Rule 1002(b)(2) requires each SCI
entity, within 24 hours of any
responsible SCI personnel having a
reasonable basis to conclude that the
SCI event has occurred, to submit a
written notification to the Commission
pertaining to the SCI event on a good
faith, best efforts basis. These
notifications are required to be
submitted on Form SCI. The
Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 6,480
hours. The Commission staff estimates
that respondents will incur, on average,
an estimated ongoing annual internal
cost of compliance of $2,134,890.
Rule 1002(b)(3) requires each SCI
entity to provide updates to the
Commission pertaining to an SCI event
on a regular basis, or at such frequency
as reasonably requested by a
representative of the Commission, until
the SCI event is resolved and the SCI
entity’s investigation of the SCI event is
closed. The Commission staff estimates
that the total annual ongoing burden for
all 54 respondents will be, on average,
567 hours. The Commission staff
estimates that all respondents will
incur, on average, an estimated ongoing
annual internal cost of compliance of
$177,106.50.
Rule 1002(b)(4) requires each SCI
entity to submit written interim reports,
as necessary, and a written final report
regarding an SCI event to the
Commission. These reports are required
to be submitted on Form SCI. The
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Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 9,450
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of
$3,297,510.
Rule 1002(b)(5) requires each SCI
entity to submit to the Commission
quarterly reports containing a summary
description of any systems disruption or
systems intrusion that has had, or the
SCI entity reasonably estimates would
have, no or a de minimis impact on the
SCI entity’s operations or on market
participants. These reports are required
to be submitted on Form SCI. The
Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 8,640
hours. The Commission staff estimates
that respondents will incur, on average,
an estimated ongoing annual internal
cost of compliance of $2,919,348.
In addition, the Commission staff
estimates that all 54 respondents will
incur, on average, annual costs of
$313,200 for outside legal advice in
preparation of certain notifications
required by Rule 1002(b).
Rule 1002(c)(1)(i) requires each SCI
entity, promptly after any responsible
SCI personnel has a reasonable basis to
conclude that an SCI event (other than
a systems intrusion) has occurred, to
disseminate certain information to its
members or participants. The
Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 1,134
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of
$741,557.50.
Rule 1002(c)(1)(ii) requires each SCI
entity, when known, to promptly
disseminate additional information
about an SCI event (other than a systems
intrusion) to its members or
participants. Rule 1002(c)(1)(iii)
requires each SCI entity to provide to its
members or participants regular updates
of any information required to be
disseminated under Rules 1002(c)(1)(i)
and (ii) until the SCI event is resolved.
The Commission staff estimates that the
total annual ongoing burden for all 54
respondents will be, on average, 6,318
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of
$2,496,096.
Rule 1002(c)(2) requires each SCI
entity to disseminate certain
information regarding a systems
intrusion to its members or participants,
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and provides an exception when the SCI
entity determines that dissemination of
such information would likely
compromise the security of its SCI
systems or indirect SCI systems, or an
investigation of the systems intrusion,
and documents the reasons for such
determination. The Commission staff
estimates that the total annual ongoing
burden for all 54 respondents will be,
on average, 540 hours. The Commission
staff estimates that all respondents will
incur, on average, an estimated ongoing
annual internal cost of compliance of
$212,827.25.
In addition, the Commission staff
estimates that all 54 respondents will
incur, on average, annual costs of
$179,280 for outside legal advice in
preparation of certain notifications
required by Rule 1002(c).
Rule 1003(a)(1) requires each SCI
entity to submit to the Commission
quarterly reports describing completed,
ongoing, and planned material changes
to its SCI systems and security of
indirect SCI systems during the prior,
current, and subsequent calendar
quarters. These reports are required to
be submitted on Form SCI. The
Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 27,000
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of
$8,063,820.
Rule 1003(a)(2) requires each SCI
entity to promptly submit a
supplemental report notifying the
Commission of a material error in or
material omission from a report
previously submitted under Rule
1003(a)(1). These reports are required to
be submitted on Form SCI. The
Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 810
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of $256,716.
Rule 1003(b)(1) requires each SCI
entity to conduct an SCI review of its
compliance with Regulation SCI not less
than once each calendar year, with an
exception for penetration test reviews,
which are required to be conducted not
less than once every three years. Rule
1003(b)(1) also provides an exception
for assessments of SCI systems directly
supporting market regulation or market
surveillance, which are required to be
conducted at a frequency based on the
risk assessment conducted as part of the
SCI review, but in no case less than
once every three years. Rule 1003(b)(2)
requires each SCI entity to submit a
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report of the SCI review to senior
management no more than 30 calendar
days after completion of the review. The
Commission staff estimates that the total
annual ongoing burden for all 54
respondents will be, on average, 37,260
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of
$11,934,810.
Rule 1003(b)(3) requires each SCI
entity to submit the report of the SCI
review to the Commission and to its
board of directors or the equivalent of
such board, together with any response
by senior management, within 60
calendar days after its submission to
senior management. These reports are
required to be submitted on Form SCI.
The Commission staff estimates that the
total annual ongoing burden for all 54
respondents will be, on average, 54
hours. The Commission staff estimates
that all respondents will incur, on
average, an estimated ongoing annual
internal cost of compliance of $22,248.
In addition, the Commission staff
estimates that all respondents will
incur, on average, annual costs of
$2,700,000 for outside legal advice in
preparation of certain notifications
required by Rule 1003(b).
Rule 1006 requires each SCI entity,
with a few exceptions, to file any
notification, review, description,
analysis, or report to the Commission
required under Regulation SCI
electronically on Form SCI through the
EFFS. An SCI entity will submit to the
Commission an EAUF to register each
individual at the SCI entity who will
access the EFFS system on behalf of the
SCI entity. The Commission staff
estimates that the total annual initial
burden for 7 new respondents will be
1.95 hours, and the annual ongoing
burden for all respondents will be, on
average, 8.1 hours. The Commission
staff estimates that the 7 new
respondents would incur an initial
internal cost of compliance of $806. In
addition, all 54 respondents will incur,
on average, an estimated ongoing annual
internal cost of compliance of $3,348, as
well as outside costs to obtain a digital
ID of $2,700.
Rule 1002(a) requires each SCI entity,
upon any responsible SCI personnel
having a reasonable basis to conclude
that an SCI event has occurred, to begin
to take appropriate corrective action.
The Commission staff estimates that the
total annual initial recordkeeping
burden for 7 new respondents will be
741 hours, and the annual ongoing
recordkeeping burden for all 54
respondents will be, on average, 2,106
hours. The Commission staff estimates
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that the 7 new respondents would incur
an initial internal cost of compliance of
$276,432. In addition, all 54
respondents will incur, on average, an
estimated ongoing annual internal cost
of compliance of $831,438.
Rule 1003(a)(1) requires each SCI
entity to establish reasonable written
criteria for identifying a change to its
SCI systems and the security of indirect
SCI systems as material. The
Commission staff estimates that the total
annual initial recordkeeping burden for
7 new respondents will be 741 hours,
and the annual ongoing recordkeeping
burden for all 54 respondents will be,
on average, 1,458 hours. The
Commission staff estimates that the 7
new respondents would incur an initial
internal cost of compliance of $276,432.
In addition, all 54 respondents will
incur, on average, an estimated ongoing
annual internal cost of compliance of
$622,944.
Regulation SCI also requires SCI
entities to identify certain types of
events and systems. The Commission
staff estimates that the total annual
initial recordkeeping burden for 7 new
respondents will be 1,287 hours, and
the annual ongoing recordkeeping
burden for all 54 respondents will be,
on average, 2,106 hours. The
Commission staff estimates that the 7
new respondents would incur an initial
internal cost of compliance of $453,089.
In addition, all 54 respondents will
incur, on average, an estimated ongoing
annual internal cost of compliance of
$831,438.
Rules 1005 and 1007 establish
recordkeeping requirements for SCI
entities other than SROs. The
Commission staff estimates that for 6
new respondents that are not SROs the
average annual initial burden would be
935 hours, and the annual ongoing
burden for all 18 respondents will be,
on average, 450 hours. The Commission
staff estimates that 6 new respondents
would incur an estimated internal
initial internal cost of compliance of
$64,515, as well as a one-time cost of
$5,400 to modify existing recordkeeping
systems. In addition, all 18 respondents
will incur, on average, an estimated
ongoing internal cost of compliance of
$31,050.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
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(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.
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.
Please direct your written comments
to: David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
Mailbox@sec.gov.
Dated: November 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25173 Filed 11–17–21; 8:45 am]
BILLING CODE 8011–01–P
[Release Nos. 33–11007; 34–93573; File No.
265–28]
Investor Advisory Committee Meeting
The Securities and Exchange
Commission Investor Advisory
Committee, established pursuant to
Section 911 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act of 2010, is providing notice that it
will hold a public meeting. The public
is invited to submit written statements
to the Committee.
DATES: The meeting will be held on
Thursday, December 2, 2021 from 10:00
a.m. until 4:00 p.m. (ET). Written
statements should be received on or
before December 1, 2021.
ADDRESSES: The meeting will be
conducted by remote means and/or at
the Commission’s headquarters, 100 F
St NE, Washington, DC 20549. The
meeting will be webcast on the
Commission’s website at www.sec.gov.
Written statements may be submitted by
any of the following methods:
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SUMMARY:
Electronic Statements
D Use the Commission’s internet
submission form (https://www.sec.gov/
rules/other.shtml); or
D Send an email message to rulescomments@sec.gov. Please include File
No. 265–28 on the subject line; or
Jkt 256001
Marc Oorloff Sharma, Chief Counsel,
Office of the Investor Advocate, at (202)
551–3302, Securities and Exchange
Commission, 100 F Street, NE,
Washington, DC 20549.
The
meeting will be open to the public,
except during that portion of the
meeting reserved for an administrative
work session during lunch. Persons
needing special accommodations to take
part because of a disability should
notify the contact person listed in the
section above entitled FOR FURTHER
INFORMATION CONTACT.
The agenda for the meeting includes:
opening remarks, announcement of new
officers, and announcement regarding a
disclosure subcommittee; welcome
remarks; approval of previous meeting
minutes; a panel discussion regarding
crypto and digital assets: helping to
ensure investor protection and market
integrity in the face of new technologies;
a panel discussion regarding the SEC’s
potential role in addressing elder
financial abuse issues; a discussion of a
recommendation regarding individual
retirement accounts; subcommittee
reports; and a non-public administrative
session.
SUPPLEMENTARY INFORMATION:
Securities and Exchange
Commission.
ACTION: Notice of meeting.
AGENCY:
17:11 Nov 17, 2021
D Send paper statements to Vanessa
A. Countryman, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
No. 265–28. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method.
Statements also will be available for
website viewing and printing in the
Commission’s Public Reference Room,
100 F Street NE, Room 1503,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. All statements
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly.
FOR FURTHER INFORMATION CONTACT:
SECURITIES AND EXCHANGE
COMMISSION
VerDate Sep<11>2014
Paper Statements
Dated: November 15, 2021.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2021–25188 Filed 11–17–21; 8:45 am]
BILLING CODE 8011–01–P
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64569
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–603, OMB Control No.
3235–0658]
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 22e–3
Notice is hereby given that, under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520), the Securities and
Exchange Commission (the
‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Section 22(e) of the Investment
Company Act [15 U.S.C. 80a–22(e)]
(‘‘Act’’) generally prohibits funds,
including money market funds, from
suspending the right of redemption, and
from postponing the payment or
satisfaction upon redemption of any
redeemable security for more than seven
days. The provision was designed to
prevent funds and their investment
advisers from interfering with the
redemption rights of shareholders for
improper purposes, such as the
preservation of management fees.
Although section 22(e) permits funds to
postpone the date of payment or
satisfaction upon redemption for up to
seven days, it does not permit funds to
suspend the right of redemption for any
amount of time, absent certain specified
circumstances or a Commission order.
Rule 22e–3 under the Act [17 CFR
270.22e–3] exempts money market
funds from section 22(e) to permit them
to suspend redemptions in order to
facilitate an orderly liquidation of the
fund. Specifically, rule 22e–3 permits a
money market fund to suspend
redemptions and postpone the payment
of proceeds pending board-approved
liquidation proceedings if: (i) The fund’s
board of directors, including a majority
of disinterested directors, determines
pursuant to § 270.2a–7(c)(8)(ii)(C) that
the extent of the deviation between the
fund’s amortized cost price per share
and its current net asset value per share
calculated using available market
quotations (or an appropriate substitute
that reflects current market conditions)
may result in material dilution or other
unfair results to investors or existing
shareholders; (ii) the fund’s board of
directors, including a majority of
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]]>Agencies
[Federal Register Volume 86, Number 220 (Thursday, November 18, 2021)]
[Notices]
[Pages 64566-64569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25173]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-653, OMB Control No. 3235-0703]
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:
Regulation SCI, Form SCI
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'') is soliciting comments on the collection of
information provided for in Regulation Systems Compliance and Integrity
(``Regulation SCI'') (17 CFR 242.1000-1007) and Form SCI (17 CFR
249.1900) under the Securities Exchange Act of 1934 (``Exchange Act'')
(15 U.S.C. 78a et seq.). The Commission plans to submit this existing
collection of information to the Office of Management and Budget
(``OMB'') for extension and approval.
Regulation SCI requires certain key market participants to, among
other things: (1) Have comprehensive policies and procedures in place
to help ensure the robustness and resiliency of their technological
systems, and also that their technological systems operate in
compliance with the federal securities laws and with their own rules;
and (2) provide certain notices and reports to the Commission to
improve Commission oversight of securities market infrastructure.
Regulation SCI advances the goals of the national market system by
enhancing the capacity, integrity, resiliency, availability, and
security of the automated systems of entities important to the
functioning of the U.S. securities markets, as well as reinforcing the
requirement that such systems operate in compliance with the Exchange
Act and rules and regulations thereunder, thus strengthening the
infrastructure of the U.S. securities markets and improving its
resilience when technological issues arise. In this respect, Regulation
SCI establishes an updated and formalized regulatory framework, thereby
helping to ensure more effective Commission oversight of such systems.
Respondents consist of national securities exchanges and
associations, registered clearing agencies, exempt clearing agencies,
plan processors, and alternative trading systems. There are currently
47 respondents, and the Commission staff estimates that, on average, 2
new respondents may become SCI entities each year, 1 of which would be
a self-regulatory organization (``SRO''). Accordingly, Commission staff
estimates that over the next three years there will be an average of 49
respondents per year.
In addition, in December 2020, the Commission adopted amendments to
Regulation SCI in connection with updates to the national market system
for the collection, consolidation, and dissemination of information
with respect to quotations for and transactions in national market
system (``NMS'') stocks (``Infrastructure Amendments''). Specifically,
the Commission adopted a definition of ``SCI competing consolidator''
that will subject competing consolidators to Regulation SCI, after a
transition period, if they are above a specified consolidated market
data gross revenue threshold.\1\ The Infrastructure Amendments
increased the number of respondents to the collections of information
in Regulation SCI, and the Commission estimates that seven competing
consolidators will meet this definition and be subject to the
requirements of Regulation SCI.\2\ Rule 1001(a) requires each SCI
entity to establish, maintain, and enforce written policies and
procedures reasonably designed to ensure that its SCI systems and, for
purposes of security standards, indirect SCI systems, have levels of
capacity, integrity, resiliency, availability, and security, adequate
to maintain the SCI entity's operational capability and promote the
maintenance of fair and orderly markets. The Commission staff estimates
that the total annual initial recordkeeping burden for 7 new
respondents will be 4,511 hours, and the annual ongoing recordkeeping
burden for all 54 respondents will be,
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on average, 12,528 hours. The Commission staff estimates that the 7 new
respondents would incur, on average, an annual initial internal cost of
compliance of $1,513,382, as well as outside legal or consulting costs
of $305,500. In addition, all respondents will incur, on average, an
estimated ongoing annual internal cost of compliance of $4,205,412.
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\1\ See Securities Exchange Act Release No. 34-90610 (December
9, 2020), 86 FR 18596 (April 9, 2021) (File No. S7-03-20)
(``Infrastructure Adopting Release'').
\2\ Some of these respondents were estimated to incur no, or
only part of, the estimated initial burdens because they were
already subject to Regulation SCI (i.e., as plan processors, SROs or
affiliates of SROs).
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Rule 1001(b) requires each SCI entity to establish, maintain, and
enforce written policies and procedures reasonably designed to ensure
that its SCI systems operate in a manner that complies with the
Exchange Act and the rules and regulations thereunder and the entity's
rules and governing documents, as applicable. The Commission staff
estimates that the total annual initial recordkeeping burden for 7 new
respondents will be 1,755 hours, and the annual ongoing recordkeeping
burden for all respondents will be, on average, 8,010 hours. The
Commission staff estimates that the 7 new respondents would incur an
initial internal cost of compliance of $660,270, as well as outside
legal or consulting costs of $175,500. In addition, all respondents
will incur, on average, an estimated ongoing annual internal cost of
compliance of $2,539,890.
Rule 1001(c) requires each SCI entity to establish, maintain, and
enforce reasonably designed written policies and procedures that
include the criteria for identifying responsible SCI personnel, the
designation and documentation of responsible SCI personnel, and
escalation procedures to quickly inform responsible SCI personnel of
potential SCI events. The Commission staff estimates that the total
annual initial recordkeeping burden for 7 new respondents will be 741
hours, and the annual ongoing recordkeeping burden for all respondents
will be, on average, 2,106. The Commission staff estimates that the 7
new respondents would incur an initial internal cost of compliance of
$276,432, and all respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $839,592.
Rule 1004 requires each SCI entity to establish standards for the
designation of certain members or participants for BC/DR plan testing,
to designate members or participants in accordance with these
standards, to require participation by designated members or
participants in such testing at least annually, and to coordinate such
testing on an industry- or sector-wide basis with other SCI entities.
The Commission staff estimates that the total annual initial
recordkeeping burden for 9 new respondents will be 2,700 hours, and the
annual ongoing recordkeeping burden for all respondents that are not
plan processors will be, on average, 7,290 hours. The Commission staff
estimates that the 7 new respondents would incur an initial internal
cost of compliance of $804,735. In addition, all respondents that are
not plan processors will incur, on average, an estimated ongoing annual
internal cost of compliance of $1,939,950. In addition, the Commission
staff estimates that the 2 plan processor respondents will incur an
estimated ongoing annual cost of $108,000 for outside legal services
($54,000 per plan processor respondent x 2 respondents).
Rule 1002(b)(1) requires each SCI entity, upon any responsible SCI
personnel having a reasonable basis to conclude that an SCI event has
occurred, to notify the Commission immediately. The Commission staff
estimates that the total annual ongoing burden for all 54 respondents
will be, on average, 432 hours. The Commission staff estimates that
respondents will incur, on average, an estimated ongoing annual
internal cost of compliance of $133,030.
Rule 1002(b)(2) requires each SCI entity, within 24 hours of any
responsible SCI personnel having a reasonable basis to conclude that
the SCI event has occurred, to submit a written notification to the
Commission pertaining to the SCI event on a good faith, best efforts
basis. These notifications are required to be submitted on Form SCI.
The Commission staff estimates that the total annual ongoing burden for
all 54 respondents will be, on average, 6,480 hours. The Commission
staff estimates that respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $2,134,890.
Rule 1002(b)(3) requires each SCI entity to provide updates to the
Commission pertaining to an SCI event on a regular basis, or at such
frequency as reasonably requested by a representative of the
Commission, until the SCI event is resolved and the SCI entity's
investigation of the SCI event is closed. The Commission staff
estimates that the total annual ongoing burden for all 54 respondents
will be, on average, 567 hours. The Commission staff estimates that all
respondents will incur, on average, an estimated ongoing annual
internal cost of compliance of $177,106.50.
Rule 1002(b)(4) requires each SCI entity to submit written interim
reports, as necessary, and a written final report regarding an SCI
event to the Commission. These reports are required to be submitted on
Form SCI. The Commission staff estimates that the total annual ongoing
burden for all 54 respondents will be, on average, 9,450 hours. The
Commission staff estimates that all respondents will incur, on average,
an estimated ongoing annual internal cost of compliance of $3,297,510.
Rule 1002(b)(5) requires each SCI entity to submit to the
Commission quarterly reports containing a summary description of any
systems disruption or systems intrusion that has had, or the SCI entity
reasonably estimates would have, no or a de minimis impact on the SCI
entity's operations or on market participants. These reports are
required to be submitted on Form SCI. The Commission staff estimates
that the total annual ongoing burden for all 54 respondents will be, on
average, 8,640 hours. The Commission staff estimates that respondents
will incur, on average, an estimated ongoing annual internal cost of
compliance of $2,919,348.
In addition, the Commission staff estimates that all 54 respondents
will incur, on average, annual costs of $313,200 for outside legal
advice in preparation of certain notifications required by Rule
1002(b).
Rule 1002(c)(1)(i) requires each SCI entity, promptly after any
responsible SCI personnel has a reasonable basis to conclude that an
SCI event (other than a systems intrusion) has occurred, to disseminate
certain information to its members or participants. The Commission
staff estimates that the total annual ongoing burden for all 54
respondents will be, on average, 1,134 hours. The Commission staff
estimates that all respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $741,557.50.
Rule 1002(c)(1)(ii) requires each SCI entity, when known, to
promptly disseminate additional information about an SCI event (other
than a systems intrusion) to its members or participants. Rule
1002(c)(1)(iii) requires each SCI entity to provide to its members or
participants regular updates of any information required to be
disseminated under Rules 1002(c)(1)(i) and (ii) until the SCI event is
resolved. The Commission staff estimates that the total annual ongoing
burden for all 54 respondents will be, on average, 6,318 hours. The
Commission staff estimates that all respondents will incur, on average,
an estimated ongoing annual internal cost of compliance of $2,496,096.
Rule 1002(c)(2) requires each SCI entity to disseminate certain
information regarding a systems intrusion to its members or
participants,
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and provides an exception when the SCI entity determines that
dissemination of such information would likely compromise the security
of its SCI systems or indirect SCI systems, or an investigation of the
systems intrusion, and documents the reasons for such determination.
The Commission staff estimates that the total annual ongoing burden for
all 54 respondents will be, on average, 540 hours. The Commission staff
estimates that all respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $212,827.25.
In addition, the Commission staff estimates that all 54 respondents
will incur, on average, annual costs of $179,280 for outside legal
advice in preparation of certain notifications required by Rule
1002(c).
Rule 1003(a)(1) requires each SCI entity to submit to the
Commission quarterly reports describing completed, ongoing, and planned
material changes to its SCI systems and security of indirect SCI
systems during the prior, current, and subsequent calendar quarters.
These reports are required to be submitted on Form SCI. The Commission
staff estimates that the total annual ongoing burden for all 54
respondents will be, on average, 27,000 hours. The Commission staff
estimates that all respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $8,063,820.
Rule 1003(a)(2) requires each SCI entity to promptly submit a
supplemental report notifying the Commission of a material error in or
material omission from a report previously submitted under Rule
1003(a)(1). These reports are required to be submitted on Form SCI. The
Commission staff estimates that the total annual ongoing burden for all
54 respondents will be, on average, 810 hours. The Commission staff
estimates that all respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $256,716.
Rule 1003(b)(1) requires each SCI entity to conduct an SCI review
of its compliance with Regulation SCI not less than once each calendar
year, with an exception for penetration test reviews, which are
required to be conducted not less than once every three years. Rule
1003(b)(1) also provides an exception for assessments of SCI systems
directly supporting market regulation or market surveillance, which are
required to be conducted at a frequency based on the risk assessment
conducted as part of the SCI review, but in no case less than once
every three years. Rule 1003(b)(2) requires each SCI entity to submit a
report of the SCI review to senior management no more than 30 calendar
days after completion of the review. The Commission staff estimates
that the total annual ongoing burden for all 54 respondents will be, on
average, 37,260 hours. The Commission staff estimates that all
respondents will incur, on average, an estimated ongoing annual
internal cost of compliance of $11,934,810.
Rule 1003(b)(3) requires each SCI entity to submit the report of
the SCI review to the Commission and to its board of directors or the
equivalent of such board, together with any response by senior
management, within 60 calendar days after its submission to senior
management. These reports are required to be submitted on Form SCI. The
Commission staff estimates that the total annual ongoing burden for all
54 respondents will be, on average, 54 hours. The Commission staff
estimates that all respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $22,248.
In addition, the Commission staff estimates that all respondents
will incur, on average, annual costs of $2,700,000 for outside legal
advice in preparation of certain notifications required by Rule
1003(b).
Rule 1006 requires each SCI entity, with a few exceptions, to file
any notification, review, description, analysis, or report to the
Commission required under Regulation SCI electronically on Form SCI
through the EFFS. An SCI entity will submit to the Commission an EAUF
to register each individual at the SCI entity who will access the EFFS
system on behalf of the SCI entity. The Commission staff estimates that
the total annual initial burden for 7 new respondents will be 1.95
hours, and the annual ongoing burden for all respondents will be, on
average, 8.1 hours. The Commission staff estimates that the 7 new
respondents would incur an initial internal cost of compliance of $806.
In addition, all 54 respondents will incur, on average, an estimated
ongoing annual internal cost of compliance of $3,348, as well as
outside costs to obtain a digital ID of $2,700.
Rule 1002(a) requires each SCI entity, upon any responsible SCI
personnel having a reasonable basis to conclude that an SCI event has
occurred, to begin to take appropriate corrective action. The
Commission staff estimates that the total annual initial recordkeeping
burden for 7 new respondents will be 741 hours, and the annual ongoing
recordkeeping burden for all 54 respondents will be, on average, 2,106
hours. The Commission staff estimates that the 7 new respondents would
incur an initial internal cost of compliance of $276,432. In addition,
all 54 respondents will incur, on average, an estimated ongoing annual
internal cost of compliance of $831,438.
Rule 1003(a)(1) requires each SCI entity to establish reasonable
written criteria for identifying a change to its SCI systems and the
security of indirect SCI systems as material. The Commission staff
estimates that the total annual initial recordkeeping burden for 7 new
respondents will be 741 hours, and the annual ongoing recordkeeping
burden for all 54 respondents will be, on average, 1,458 hours. The
Commission staff estimates that the 7 new respondents would incur an
initial internal cost of compliance of $276,432. In addition, all 54
respondents will incur, on average, an estimated ongoing annual
internal cost of compliance of $622,944.
Regulation SCI also requires SCI entities to identify certain types
of events and systems. The Commission staff estimates that the total
annual initial recordkeeping burden for 7 new respondents will be 1,287
hours, and the annual ongoing recordkeeping burden for all 54
respondents will be, on average, 2,106 hours. The Commission staff
estimates that the 7 new respondents would incur an initial internal
cost of compliance of $453,089. In addition, all 54 respondents will
incur, on average, an estimated ongoing annual internal cost of
compliance of $831,438.
Rules 1005 and 1007 establish recordkeeping requirements for SCI
entities other than SROs. The Commission staff estimates that for 6 new
respondents that are not SROs the average annual initial burden would
be 935 hours, and the annual ongoing burden for all 18 respondents will
be, on average, 450 hours. The Commission staff estimates that 6 new
respondents would incur an estimated internal initial internal cost of
compliance of $64,515, as well as a one-time cost of $5,400 to modify
existing recordkeeping systems. In addition, all 18 respondents will
incur, on average, an estimated ongoing internal cost of compliance of
$31,050.
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimates of the burden of the proposed collection of information; (c)
ways to enhance the quality, utility, and clarity of the information to
be collected; and
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(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.
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.
Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to:
[email protected].
Dated: November 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25173 Filed 11-17-21; 8:45 am]
BILLING CODE 8011-01-P
