Submission for OMB Review; Comment Request; Extension: Rule 7d-2, 59477-59478 [2022-21201]

Download as PDF Federal Register / Vol. 87, No. 189 / Friday, September 30, 2022 / Notices 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 by October 31, 2022 to (i) MBX.OMB.OIRA.SEC_desk_officer@ omb.eop.gov and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/ o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: September 26, 2022. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–21200 Filed 9–29–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–464, OMB Control No. 3235–0527] jspears on DSK121TN23PROD with NOTICES Submission for OMB Review; Comment Request; Extension: Rule 7d–2 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. 350l-3520), the Securities and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension and approval of the collection of information discussed below. In Canada, as in the United States, individuals can invest a portion of their earnings in tax-deferred retirement savings accounts (‘‘Canadian retirement accounts’’). These accounts, which operate in a manner similar to individual retirement accounts in the United States, encourage retirement savings by permitting savings on a taxdeferred basis. Individuals who establish Canadian retirement accounts while living and working in Canada and who later move to the United States (‘‘Canadian-U.S. Participants’’ or ‘‘participants’’) often continue to hold their retirement assets in their Canadian retirement accounts rather than prematurely withdrawing (or ‘‘cashing out’’) those assets, which would result in immediate taxation in Canada. VerDate Sep<11>2014 18:52 Sep 29, 2022 Jkt 256001 Once in the United States, however, these participants historically have been unable to manage their Canadian retirement account investments. Most investment companies (‘‘funds’’) that are ‘‘qualified companies’’ for Canadian retirement accounts are not registered under the U.S. securities laws. Securities of those unregistered funds, therefore, generally cannot be publicly offered and sold in the United States without violating the registration requirement of the Investment Company Act of 1940 (‘‘Investment Company Act’’).1 As a result of this registration requirement, Canadian-U.S. Participants previously were not able to purchase or exchange securities for their Canadian retirement accounts as needed to meet their changing investment goals or income needs. The Commission issued a rulemaking in 2000 that enabled Canadian-U.S. Participants to manage the assets in their Canadian retirement accounts by providing relief from the U.S. registration requirements for offers of securities of foreign issuers to CanadianU.S. Participants and sales to Canadian retirement accounts.2 Rule 7d–2 under the Investment Company Act 3 permits foreign funds to offer securities to Canadian-U.S. Participants and sell securities to Canadian retirement accounts without registering as investment companies under the Investment Company Act. Rule 7d–2 contains a ‘‘collection of information’’ requirement within the meaning of the Paperwork Reduction Act of 1995.4 Rule 7d–2 requires written offering materials for securities offered or sold in reliance on that rule to disclose prominently that those securities and the fund issuing those securities are not registered with the Commission, and that those securities and the fund issuing those securities are exempt from registration under U.S. securities laws. Rule 7d–2 does not require any documents to be filed with the Commission. Rule 7d–2 requires written offering documents for securities offered or sold 1 15 U.S.C. 80a. In addition, the offering and selling of securities that are not registered pursuant to the Securities Act of 1933 (‘‘Securities Act’’) is generally prohibited by U.S. securities laws. 15 U.S.C. 77. 2 See Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Accounts, Release Nos. 33–7860, 34–42905, IC–24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking also included new rule 237 under the Securities Act, permitting securities of foreign issuers to be offered to Canadian-U.S. Participants and sold to Canadian retirement accounts without being registered under the Securities Act. 17 CFR 230.237. 3 17 CFR 270.7d–2. 4 44 U.S.C. 3501–3502. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 59477 in reliance on the rule to disclose prominently that the securities are not registered with the Commission and may not be offered or sold in the United States unless registered or exempt from registration under the U.S. securities laws, and also to disclose prominently that the fund that issued the securities is not registered with the Commission. The burden under the rule associated with adding this disclosure to written offering documents is minimal and is non-recurring. The foreign issuer, underwriter, or broker-dealer can redraft an existing prospectus or other written offering material to add this disclosure statement, or may draft a sticker or supplement containing this disclosure to be added to existing offering materials. In either case, based on discussions with representatives of the Canadian fund industry, the staff estimates that it would take an average of 10 minutes per document to draft the requisite disclosure statement. The staff estimates that there are 4,312 publicly offered Canadian funds that potentially would rely on the rule to offer securities to participants and sell securities to their Canadian retirement accounts without registering under the Investment Company Act.5 The staff estimates that all of these funds have previously relied upon the rule and have already made the one-time change to their offering documents required to rely on the rule. The staff estimates that 216 (5 percent) additional Canadian funds would newly rely on the rule each year to offer securities to Canadian-U.S. Participants and sell securities to their Canadian retirement accounts, thus incurring the paperwork burden required under the rule. The staff estimates that each of those funds, on average, distributes 3 different written offering documents concerning those securities, for a total of 648 offering documents. The staff therefore estimates that 216 respondents would make 648 responses by adding the new disclosure statement to 648 written offering documents. The staff therefore estimates that the annual burden associated with the rule 7d–2 disclosure requirement would be 108 hours (648 offering documents × 10 minutes per document). The total annual cost of these burden hours is estimated to be $49,140 (108 5 Investment Company Institute, 2021 Investment Company Fact Book (2021) at 276, tbl. 66, available at https://www.ici.org/system/files/2021-05/2021_ factbook.pdf. Since the last renewal, we understand that the Investment Company Institute has changed its methodology to enhance the accuracy of how it estimates the number of Canadian funds. The estimate used for this renewal reflects this change in methodology and the number of estimated Canadian funds has increased from the last renewal. E:\FR\FM\30SEN1.SGM 30SEN1 59478 Federal Register / Vol. 87, No. 189 / Friday, September 30, 2022 / Notices hours × $455 per hour of attorney time).6 These burden hour estimates are based upon the Commission staff’s experience and discussions with the fund industry. The estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act. These estimates are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Compliance with the collection of information requirements of the rule is mandatory and is necessary to comply with the requirements of the rule in general. 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 by October 31, 2022 to (i) MBX.OMB.OIRA.SEC_desk_officer@ omb.eop.gov and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/ o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: September 26, 2022. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–21201 Filed 9–29–22; 8:45 am] jspears on DSK121TN23PROD with NOTICES BILLING CODE 8011–01–P 6 The Commission’s estimate concerning the wage rate for attorney time is based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association (‘‘SIFMA’’). The $455 per hour figure for an Attorney is based on SIFMA’s Management & Professional Earnings in the Securities Industry 2013, updated for 2022, modified by Commission staff 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 discussed in footnote 5, since the last renewal, we understand that the Investment Company Institute has changed its methodology to enhance the accuracy of how it estimates the number of Canadian funds. The estimate used for this renewal reflects this change in methodology and the hourly burden has increased from the last renewal. VerDate Sep<11>2014 18:52 Sep 29, 2022 Jkt 256001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95909; File No. SR–IEX– 2022–07] Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX Rule 11.270 (Cleary Erroneous Executions) September 26, 2022. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on September 21, 2022, the Investors Exchange LLC (‘‘IEX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Pursuant to the provisions of Section 19(b)(1) under the Act,4 and Rule 19b– 4 thereunder,5 the Exchange is filing with the Commission a proposed rule change to amend IEX Rule 11.270 (Clearly Erroneous Executions). IEX has designated this rule change as ‘‘noncontroversial’’ under Section 19(b)(3)(A) of the Act 6 and provided the Commission with the notice required by Rule 19b–4(f)(6) thereunder.7 The text of the proposed rule change is available at the Exchange’s website at www.iextrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statement may be examined at the places specified in Item IV below. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 4 15 U.S.C. 78s(b)(1). 5 17 CFR 240.19b–4. 6 15 U.S.C. 78s(b)(3)(A). 7 17 CFR 240.19b–4. 2 15 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 The self-regulatory organization 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 1. Purpose The purpose of the proposed rule change is to amend IEX Rule 11.270 (Clearly Erroneous Executions). On September 1, 2022, the Commission approved the proposal of Cboe BZX Exchange, Inc. (‘‘BZX’’), to adopt on a permanent basis its pilot program for Clearly Erroneous Executions in BZX Rule 11.17.8 Based on the BZX approval, the Exchange proposes substantially identical amendments to IEX Rule 11.270 to: (1) limit the circumstances where clearly erroneous review would continue to be available during Regular Market Hours,9 when the National Market System Plan to Address Extraordinary Market Volatility (the ‘‘LULD Plan’’) 10 already provides similar protections for trades occurring at prices that may be deemed erroneous. The Exchange believes that these changes are appropriate as the LULD Plan has been approved by the Commission on a permanent basis,11 and in light of amendments to the LULD Plan, including changes to the applicable Price Bands 12 around the open and close of trading. Further, the proposed rule change is based on and substantively identical to the recentlyapproved changes to BZX Rule 11.17. The only differences between this proposed rule change and the BZX rule change are: (i) IEX’s Clearly Erroneous Execution rule is not a pilot program,13 and therefore does not need to be made permanent; (ii) IEX and BZX use different terms to define trading sessions (i.e., the Exchange uses the terms Regular Market Hours, Pre-Market 8 See Securities Exchange Act Release No. 95658 (September 1, 2022) (SRCboeBZX–2022–037) (‘‘BZX approval’’). 9 The term ‘‘Regular Market Hours’’ or ‘‘Regular Market Session’’ means the time between 9:30 a.m. and 4:00 p.m. Eastern Time. See IEX Rule 1.160(gg). 10 See Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012). 11 See Securities Exchange Act Release No. 85623 (April 11, 2019), 84 FR 16086 (April 17, 2019). (File No. 4–631) (‘‘Amendment Eighteen’’). 12 ‘‘Price Bands’’ refers to the term provided in Section V of the LULD Plan. 13 IEX’s Clearly Erroneous Execution rule has been effective, and not a pilot, since IEX’s approval for registration as a national securities exchange in 2016. See Securities Exchange Act Release No. 78101 (June 17, 2016), 81 FR 41142 (June 23, 2016) (File No. 10–222). E:\FR\FM\30SEN1.SGM 30SEN1

Agencies

[Federal Register Volume 87, Number 189 (Friday, September 30, 2022)]
[Notices]
[Pages 59477-59478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21201]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-464, OMB Control No. 3235-0527]


Submission for OMB Review; Comment Request; Extension: Rule 7d-2

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. 350l-3520), the Securities and Exchange 
Commission (the ``Commission'') has submitted to the Office of 
Management and Budget a request for extension and approval of the 
collection of information discussed below.
    In Canada, as in the United States, individuals can invest a 
portion of their earnings in tax-deferred retirement savings accounts 
(``Canadian retirement accounts''). These accounts, which operate in a 
manner similar to individual retirement accounts in the United States, 
encourage retirement savings by permitting savings on a tax-deferred 
basis. Individuals who establish Canadian retirement accounts while 
living and working in Canada and who later move to the United States 
(``Canadian-U.S. Participants'' or ``participants'') often continue to 
hold their retirement assets in their Canadian retirement accounts 
rather than prematurely withdrawing (or ``cashing out'') those assets, 
which would result in immediate taxation in Canada.
    Once in the United States, however, these participants historically 
have been unable to manage their Canadian retirement account 
investments. Most investment companies (``funds'') that are ``qualified 
companies'' for Canadian retirement accounts are not registered under 
the U.S. securities laws. Securities of those unregistered funds, 
therefore, generally cannot be publicly offered and sold in the United 
States without violating the registration requirement of the Investment 
Company Act of 1940 (``Investment Company Act'').\1\ As a result of 
this registration requirement, Canadian-U.S. Participants previously 
were not able to purchase or exchange securities for their Canadian 
retirement accounts as needed to meet their changing investment goals 
or income needs.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a. In addition, the offering and selling of 
securities that are not registered pursuant to the Securities Act of 
1933 (``Securities Act'') is generally prohibited by U.S. securities 
laws. 15 U.S.C. 77.
---------------------------------------------------------------------------

    The Commission issued a rulemaking in 2000 that enabled Canadian-
U.S. Participants to manage the assets in their Canadian retirement 
accounts by providing relief from the U.S. registration requirements 
for offers of securities of foreign issuers to Canadian-U.S. 
Participants and sales to Canadian retirement accounts.\2\ Rule 7d-2 
under the Investment Company Act \3\ permits foreign funds to offer 
securities to Canadian-U.S. Participants and sell securities to 
Canadian retirement accounts without registering as investment 
companies under the Investment Company Act.
---------------------------------------------------------------------------

    \2\ See Offer and Sale of Securities to Canadian Tax-Deferred 
Retirement Savings Accounts, Release Nos. 33-7860, 34-42905, IC-
24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking 
also included new rule 237 under the Securities Act, permitting 
securities of foreign issuers to be offered to Canadian-U.S. 
Participants and sold to Canadian retirement accounts without being 
registered under the Securities Act. 17 CFR 230.237.
    \3\ 17 CFR 270.7d-2.
---------------------------------------------------------------------------

    Rule 7d-2 contains a ``collection of information'' requirement 
within the meaning of the Paperwork Reduction Act of 1995.\4\ Rule 7d-2 
requires written offering materials for securities offered or sold in 
reliance on that rule to disclose prominently that those securities and 
the fund issuing those securities are not registered with the 
Commission, and that those securities and the fund issuing those 
securities are exempt from registration under U.S. securities laws. 
Rule 7d-2 does not require any documents to be filed with the 
Commission.
---------------------------------------------------------------------------

    \4\ 44 U.S.C. 3501-3502.
---------------------------------------------------------------------------

    Rule 7d-2 requires written offering documents for securities 
offered or sold in reliance on the rule to disclose prominently that 
the securities are not registered with the Commission and may not be 
offered or sold in the United States unless registered or exempt from 
registration under the U.S. securities laws, and also to disclose 
prominently that the fund that issued the securities is not registered 
with the Commission. The burden under the rule associated with adding 
this disclosure to written offering documents is minimal and is non-
recurring. The foreign issuer, underwriter, or broker-dealer can 
redraft an existing prospectus or other written offering material to 
add this disclosure statement, or may draft a sticker or supplement 
containing this disclosure to be added to existing offering materials. 
In either case, based on discussions with representatives of the 
Canadian fund industry, the staff estimates that it would take an 
average of 10 minutes per document to draft the requisite disclosure 
statement.
    The staff estimates that there are 4,312 publicly offered Canadian 
funds that potentially would rely on the rule to offer securities to 
participants and sell securities to their Canadian retirement accounts 
without registering under the Investment Company Act.\5\ The staff 
estimates that all of these funds have previously relied upon the rule 
and have already made the one-time change to their offering documents 
required to rely on the rule. The staff estimates that 216 (5 percent) 
additional Canadian funds would newly rely on the rule each year to 
offer securities to Canadian-U.S. Participants and sell securities to 
their Canadian retirement accounts, thus incurring the paperwork burden 
required under the rule. The staff estimates that each of those funds, 
on average, distributes 3 different written offering documents 
concerning those securities, for a total of 648 offering documents. The 
staff therefore estimates that 216 respondents would make 648 responses 
by adding the new disclosure statement to 648 written offering 
documents. The staff therefore estimates that the annual burden 
associated with the rule 7d-2 disclosure requirement would be 108 hours 
(648 offering documents x 10 minutes per document). The total annual 
cost of these burden hours is estimated to be $49,140 (108

[[Page 59478]]

hours x $455 per hour of attorney time).\6\
---------------------------------------------------------------------------

    \5\ Investment Company Institute, 2021 Investment Company Fact 
Book (2021) at 276, tbl. 66, available at https://www.ici.org/system/files/2021-05/2021_factbook.pdf. Since the last renewal, we 
understand that the Investment Company Institute has changed its 
methodology to enhance the accuracy of how it estimates the number 
of Canadian funds. The estimate used for this renewal reflects this 
change in methodology and the number of estimated Canadian funds has 
increased from the last renewal.
    \6\ The Commission's estimate concerning the wage rate for 
attorney time is based on salary information for the securities 
industry compiled by the Securities Industry and Financial Markets 
Association (``SIFMA''). The $455 per hour figure for an Attorney is 
based on SIFMA's Management & Professional Earnings in the 
Securities Industry 2013, updated for 2022, modified by Commission 
staff 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 discussed in footnote 5, since the last 
renewal, we understand that the Investment Company Institute has 
changed its methodology to enhance the accuracy of how it estimates 
the number of Canadian funds. The estimate used for this renewal 
reflects this change in methodology and the hourly burden has 
increased from the last renewal.
---------------------------------------------------------------------------

    These burden hour estimates are based upon the Commission staff's 
experience and discussions with the fund industry. The estimates of 
average burden hours are made solely for the purposes of the Paperwork 
Reduction Act. These estimates are not derived from a comprehensive or 
even a representative survey or study of the costs of Commission rules.
    Compliance with the collection of information requirements of the 
rule is mandatory and is necessary to comply with the requirements of 
the rule in general. 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 
by October 31, 2022 to (i) [email protected] 
and (ii) David Bottom, Director/Chief Information Officer, Securities 
and Exchange Commission, c/o John Pezzullo, 100 F Street NE, 
Washington, DC 20549, or by sending an email to: [email protected].

    Dated: September 26, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21201 Filed 9-29-22; 8:45 am]
BILLING CODE 8011-01-P
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