Proposed Collection; Comment Request; Extension: Rule 17a-6, 56463-56464 [2022-19804]

Download as PDF Federal Register / Vol. 87, No. 177 / Wednesday, September 14, 2022 / Notices 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– MRX–2022–14 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. khammond on DSKJM1Z7X2PROD with NOTICES All submissions should refer to File Number SR–MRX–2022–14. 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–MRX–2022–14 and should be submitted on or before October 5, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.43 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–19814 Filed 9–13–22; 8:45 am] BILLING CODE 8011–01–P 43 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:31 Sep 13, 2022 Jkt 256001 SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–506, OMB Control No. 3235–0564] Proposed Collection; Comment Request; Extension: Rule 17a–6 Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 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 (the ‘‘Commission’’) is soliciting comments on the collections of information summarized below. The Commission plans to submit these existing collections of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Section 17(a) of the Investment Company Act of 1940 (the ‘‘Act’’) generally prohibits affiliated persons of a registered investment company (‘‘fund’’) from borrowing money or other property from, or selling or buying securities or other property to or from, the fund or any company that the fund controls. Rule 17a–6 (17 CFR 270.17a– 6) permits a fund, or a company controlled by the fund, and a ‘‘portfolio affiliate’’ of the fund (a company that is an affiliated person of the fund because the fund controls the company, or holds five percent or more of the company’s outstanding voting securities) to engage in principal transactions that would otherwise be prohibited under section 17(a) of the Act under certain conditions. A fund may not rely on the exemption in the rule to enter into a principal transaction with a portfolio affiliate if certain prohibited participants (e.g., directors, officers, employees, or investment advisers of the fund) have a financial interest in a party to the transaction. Rule 17a–6 specifies certain interests that are not ‘‘financial interests,’’ including 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. A board making this finding is required to record the basis for the finding in its meeting minutes. This recordkeeping requirement is a collection of information under the Paperwork Reduction Act of 1995 (‘‘PRA’’). The rule is designed to permit transactions between funds and their portfolio affiliates in circumstances in which it is unlikely that the affiliate would be in a position to take advantage PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 56463 of the fund. In determining whether a financial interest is ‘‘material,’’ the board of the fund should consider whether the nature and extent of the interest in the transaction is sufficiently small that a reasonable person would not believe that the interest affected the determination of whether to enter into the transaction or arrangement or the terms of the transaction or arrangement. The information collection requirements in rule 17a–6 are intended to ensure that Commission staff can review, in the course of its compliance and examination functions, the basis for a board of director’s finding that the financial interest of an otherwise prohibited participant in a party to a transaction with a portfolio affiliate is not material. Based on public filings made with the Commission, we estimate that annually 335 funds and their series (collectively, ‘‘funds’’) may rely on rule 17a–6 to engage in otherwise prohibited transactions under section 17(a) of the 1940 Act. This estimate is based on publicly available Form N–CEN filings. Solely for the purposes of this PRA extension, we assume that each of these funds has engaged in one transaction per reporting period that resulted in a paperwork burden pursuant to rule 17a– 6. We estimate that compliance with the recordkeeping requirement for rule 17a– 6 will impose a burden of .2 hours (12 minutes) for each transaction for which there is a paperwork burden. Therefore, we estimate 67 burden hours to be associated with rule 17a–6 recordkeeping requirements annually, with an associated internal cost of $5,762. The estimate of burden hours and burden costs is made solely for the purposes of the PRA. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Complying with this collection of information requirement is necessary to obtain the benefit of relying on rule 17a–6. 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. 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 estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of E:\FR\FM\14SEN1.SGM 14SEN1 56464 Federal Register / Vol. 87, No. 177 / Wednesday, September 14, 2022 / Notices 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 by November 14, 2022. 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, Acting 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: September 8, 2022. J. Matthew DeLesDernier, Deputy Secretary. In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2022–19804 Filed 9–13–22; 8:45 am] 1. Purpose BILLING CODE 8011–01–P MRX proposes to amend its Pricing Schedule at Options 7, Section 6, Ports and Other Services, to assess port fees, which are not assessed today, and which have not been assessed since MRX’s inception in 2016.3 The proposed changes are designed to update fees for MRX’s services to reflect their current value—rather than their value when it was established six years ago—based on MRX’s ability to deliver value to its customers through technology, liquidity and functionality. Newly-opened exchanges often charge no fees for certain services, such as ports, in order to attract order flow to an exchange, and later amend their fees to reflect the true value of those services.4 Allowing newly-opened exchanges time to build and sustain market share before charging non-transactional fees encourages market entry and promotes competition. The proposed port fees within Options 7, Section 6, Ports and Other Services, are described below. This proposal reflects MRX’s assessment that it has gained sufficient market share to compete effectively against the other 15 options exchanges SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95710; File No. SR–MRX– 2022–12] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend MRX’s Pricing Schedule at Options 7, Section 6 September 8, 2022. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 25, 2022, Nasdaq MRX, LLC (‘‘MRX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change khammond on DSKJM1Z7X2PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The Exchange proposes to amend MRX’s Pricing Schedule at Options 7, Section 6. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/mrx/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 18:31 Sep 13, 2022 Jkt 256001 3 The Exchange initially filed the proposed pricing changes on May 2, 2022 (SR–MRX–2022– 04) instituting fees for membership, ports and market data. On June 29, 2022, the Exchange withdrew that filing, and submitted separate filings for membership, ports and market data. SR–MRX– 2022–06 replaced the port fees set forth in SR– MRX–2022–04. Thereafter, SR–MRX–2022–06 was withdrawn on July 1, 2022 and replaced with SR– MRX–2022–09. The instant filing replaces SR– MRX–2022–09 which was withdrawn on August 25, 2022. 4 See, e.g., Securities Exchange Act Release No 90076 (October 2, 2020), 85 FR 63620 (October 8, 2020) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt the Initial Fee Schedule and Other Fees for MEMX LLC). PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 without waiving fees for ports. These types of fees are assessed by options exchanges that compete with MRX in the sale of exchange services. New exchanges commonly waive connectivity fees to attract market participants, facilitating their entry into the market and, once there is sufficient depth and breadth of liquidity, ‘‘graduate’’ to compete against established exchanges and charge fees that reflect the value of their services.5 If MRX is incorrect in this assessment, that error will be reflected in MRX’s ability to compete with other options exchanges.6 The Exchange proposes to amend fees for the following ports within Options 7, Section 6: (1) FIX,7 (2) SQF; 8 (3) SQF 5 For example, MIAX Emerald commenced operations as a national securities exchange registered on March 1, 2019. See Securities Exchange Act Release No. 84891 (December 20, 2018), 83 FR 67421 (December 28, 2018) (File No. 10–233) (order approving application of MIAX Emerald, LLC for registration as a national securities exchange). MIAX Emerald filed to adopt its transaction fees and certain of its nontransaction fees in its filing SR–EMERALD–2019– 15. See Securities Exchange Act Release No. 85393 (March 21, 2019), 84 FR 11599 (March 27, 2019) (SR–EMERALD–2019–15) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish the MIAX Emerald Fee Schedule). MIAX Emerald waived its one-time application fee and monthly Trading Permit Fees assessable to EEMs and Market Makers among other fees within SR–EMERALD–2019–15. 6 Nasdaq recently announced that, beginning in 2022, Nasdaq plans to migrate its North American markets to Amazon Web Services in a phased approach, starting with Nasdaq MRX, a U.S. options market. The proposed fee changes are entirely unrelated to this effort. 7 ‘‘Financial Information eXchange’’ or ‘‘FIX’’ is an interface that allows Members and their Sponsored Customers to connect, send, and receive messages related to orders and auction orders to the Exchange. Features include the following: (1) execution messages; (2) order messages; (3) risk protection triggers and cancel notifications; and (4) post trade allocation messages. See Supplementary Material .03(a) to Options 3, Section 7. 8 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an interface that allows Market Makers to connect, send, and receive messages related to quotes, Immediate-or-Cancel Orders, and auction responses to the Exchange. Features include the following: (1) options symbol directory messages (e.g., underlying and complex instruments); (2) system event messages (e.g., start of trading hours messages and start of opening); (3) trading action messages (e.g., halts and resumes); (4) execution messages; (5) quote messages; (6) Immediate-or-Cancel Order messages; (7) risk protection triggers and purge notifications; (8) opening imbalance messages; (9) auction notifications; and (10) auction responses. The SQF Purge Interface only receives and notifies of purge requests from the Market Maker. Market Makers may only enter interest into SQF in their assigned options series. See Supplementary Material .03(c) to Options 3, Section 7. E:\FR\FM\14SEN1.SGM 14SEN1

Agencies

[Federal Register Volume 87, Number 177 (Wednesday, September 14, 2022)]
[Notices]
[Pages 56463-56464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19804]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-506, OMB Control No. 3235-0564]


Proposed Collection; Comment Request; Extension: Rule 17a-6

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

    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 (the ``Commission'') is soliciting comments on the 
collections of information summarized below. The Commission plans to 
submit these existing collections of information to the Office of 
Management and Budget (``OMB'') for extension and approval.
    Section 17(a) of the Investment Company Act of 1940 (the ``Act'') 
generally prohibits affiliated persons of a registered investment 
company (``fund'') from borrowing money or other property from, or 
selling or buying securities or other property to or from, the fund or 
any company that the fund controls. Rule 17a-6 (17 CFR 270.17a-6) 
permits a fund, or a company controlled by the fund, and a ``portfolio 
affiliate'' of the fund (a company that is an affiliated person of the 
fund because the fund controls the company, or holds five percent or 
more of the company's outstanding voting securities) to engage in 
principal transactions that would otherwise be prohibited under section 
17(a) of the Act under certain conditions. A fund may not rely on the 
exemption in the rule to enter into a principal transaction with a 
portfolio affiliate if certain prohibited participants (e.g., 
directors, officers, employees, or investment advisers of the fund) 
have a financial interest in a party to the transaction. Rule 17a-6 
specifies certain interests that are not ``financial interests,'' 
including 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. A board making this finding is required to 
record the basis for the finding in its meeting minutes. This 
recordkeeping requirement is a collection of information under the 
Paperwork Reduction Act of 1995 (``PRA'').
    The rule is designed to permit transactions between funds and their 
portfolio affiliates in circumstances in which it is unlikely that the 
affiliate would be in a position to take advantage of the fund. In 
determining whether a financial interest is ``material,'' the board of 
the fund should consider whether the nature and extent of the interest 
in the transaction is sufficiently small that a reasonable person would 
not believe that the interest affected the determination of whether to 
enter into the transaction or arrangement or the terms of the 
transaction or arrangement. The information collection requirements in 
rule 17a-6 are intended to ensure that Commission staff can review, in 
the course of its compliance and examination functions, the basis for a 
board of director's finding that the financial interest of an otherwise 
prohibited participant in a party to a transaction with a portfolio 
affiliate is not material.
    Based on public filings made with the Commission, we estimate that 
annually 335 funds and their series (collectively, ``funds'') may rely 
on rule 17a-6 to engage in otherwise prohibited transactions under 
section 17(a) of the 1940 Act. This estimate is based on publicly 
available Form N-CEN filings. Solely for the purposes of this PRA 
extension, we assume that each of these funds has engaged in one 
transaction per reporting period that resulted in a paperwork burden 
pursuant to rule 17a-6. We estimate that compliance with the 
recordkeeping requirement for rule 17a-6 will impose a burden of .2 
hours (12 minutes) for each transaction for which there is a paperwork 
burden. Therefore, we estimate 67 burden hours to be associated with 
rule 17a-6 recordkeeping requirements annually, with an associated 
internal cost of $5,762.
    The estimate of burden hours and burden costs is made solely for 
the purposes of the PRA. The estimate is not derived from a 
comprehensive or even a representative survey or study of the costs of 
Commission rules. Complying with this collection of information 
requirement is necessary to obtain the benefit of relying on rule 17a-
6. 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.
    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 
estimate of the burden of the collection of information; (c) ways to 
enhance the quality, utility, and clarity of the information collected; 
and (d) ways to minimize the burden of the collection of

[[Page 56464]]

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 by 
November 14, 2022.
    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, Acting 
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: September 8, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-19804 Filed 9-13-22; 8:45 am]
BILLING CODE 8011-01-P
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