Proposed Collection; Comment Request; Extension: Rule 2a-5, 71903-71904 [2023-22970]
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ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices
waiver request, the Exchange states that
the proposal will further the interests of
investors and the public by making
available a risk functionality by which
Members (and each Member’s Users)
can manage their risk on the Exchange’s
options platform, MEMX Options. These
risk settings will allow each User to
configure a risk profile applicable to
their risk tolerance and as necessary in
the context of their overall risk
management program, which the
Exchange believes will assist in
maintaining the Exchange as a fair and
orderly market that better serves the
interest of investors. Additionally, as
discussed above, the proposed changes
will not impose any significant or
undue burden on competition because
Options Members can decide how they
wish to utilize the risk settings offered
in the context of their overall risk
mitigation strategy.
Further, the Exchange launched
MEMX Options on September 27, 2023.
Waiver of the 30-day operative delay
would allow the Exchange to implement
the proposed change to offer the
proposed risk settings immediately,
which would benefit Members and
investors by enabling the Exchange to
provide additional functionality for
Options Members to manage their risk.
The Exchange states that these controls
are designed to protect investors and the
public interest because the proposed
risk mitigation functionality will aid
Members in minimizing their financial
exposure and reducing the potential for
market-disrupting events. For these
reasons, and because the proposal does
not raise any new or novel issues that
have not been previously considered by
the Commission, the Commission
believes that waiver of the operative
delay is consistent with the protection
of investors and the public interest.
Accordingly, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.38
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
38 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
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18:01 Oct 17, 2023
Jkt 262001
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–
MEMX–2023–28 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.
All submissions should refer to file
number SR–MEMX–2023–28. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–MEMX–2023–28 and should be
submitted on or before November 8,
2023.
39 17
PO 00000
CFR 200.30–3(a)(12) and (a)(59).
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Fmt 4703
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71903
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.39
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–22925 Filed 10–17–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–XXX, OMB Control No.
3235–0779]
Proposed Collection; Comment
Request; Extension: Rule 2a–5
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. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit the existing collection
of information to the Office of
Management and Budget for extension
and approval.
Section 2(a)(41) of the Investment
Company Act of 1940 (‘‘Investment
Company Act’’) 1 requires funds to value
their portfolio investments using the
market value of their portfolio securities
when market quotations for those
securities are ‘‘readily available,’’ and,
when a market quotation for a portfolio
security is not readily available, by
using the fair value of that security, as
determined in good faith by the fund’s
board.2 The aggregate value of a fund’s
investments is the primary determinant
of the fund’s net asset value (‘‘NAV’’),
which for many funds determines the
price at which their shares are offered
and redeemed (or repurchased).3
Rule 2a–5 provides requirements for
determining in good faith the fair value
of the investments of a registered
investment company or companies that
have elected to be treated as business
development companies under the
Investment Company Act (‘‘BDCs’’ and,
collectively, ‘‘funds’’) for purposes of
section 2(a)(41) of the Investment
Company Act and rule 2a–4
1 15
2 15
U.S.C. 80a–1 et seq.
U.S.C. 80a–2(a)(41). See also 17 CFR 270.2a–
4.
3 See 15 U.S.C. 80a–22(c) and 23(c). See also 17
CFR 270.22c–1(a).
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18OCN1
ddrumheller on DSK120RN23PROD with NOTICES1
71904
Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices
thereunder.4 Under the rule, fair value
as determined in good faith requires
assessing and managing material risks
associated with fair value
determinations; selecting, applying, and
testing fair value methodologies; and
overseeing and evaluating any pricing
services used. The rule also permits a
fund’s board to designate a ‘‘valuation
designee’’ to perform fair value
determinations. The valuation designee
can be the adviser of the fund or an
officer of an internally managed fund.5
When a board designates the
performance of determinations of fair
value to a valuation designee for some
or all of the fund’s investments under
the rule, the rule requires the board to
oversee the valuation designee’s
performance of fair value
determinations.
To facilitate the board’s oversight, the
rule also includes certain reporting and
other requirements in the case of
designation to a valuation designee.6 As
relevant here, the rule requires, if the
board designates performance of fair
value determinations to a valuation
designee, that the valuation designee
report to the board in both periodic and
as needed reports on a per-fund basis.
Specifically, on a periodic basis, the
valuation designee must provide to the
board:
• Quarterly Reports. At least
quarterly, in writing, (1) any reports or
materials requested by the board related
to the fair value of designated
investments or the valuation designee’s
process for fair valuing fund
investments and (2) a summary or
description of material fair value
matters that occurred in the prior
quarter. This summary or description
must include (1) any material changes
in the assessment and management of
valuation risks, including any material
changes in conflicts of interest of the
valuation designee (and any other
service provider), (2) any material
changes to, or material deviations from,
the fair value methodologies, and (3)
any material changes to the valuation
designee’s process for selecting and
overseeing pricing services, as well as
any material events related to the
valuation designee’s oversight of pricing
services.
• Annual Reports. At least annually,
in writing, an assessment of the
adequacy and effectiveness of the
valuation designee’s process for
determining the fair value of the
4 See Good Faith Determinations of Fair Value,
Investment Company Act Release No. 34128 (Dec.
7, 2020) (‘‘Adopting Release’’).
5 Rule 2a–5(e)(4).
6 Rule 2a–5(b).
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18:01 Oct 17, 2023
Jkt 262001
designated portfolio of investments. At
a minimum, this annual report must
include a summary of the results of the
testing of fair value methodologies
required under the rule and an
assessment of the adequacy of resources
allocated to the process for determining
the fair value of designated investments,
including any material changes to the
roles or functions of the persons
responsible for determining fair value.
Further, the rule requires the
valuation designee to provide a written
notification to the board of the
occurrence of matters that materially
affect the fair value of the designated
portfolio of investments (defined as
‘‘material matters’’) within a time period
determined by the board, but in no
event later than five business days after
the valuation designee becomes aware
of the material matter. Material matters
in this instance include, as examples, a
significant deficiency or material
weakness in the design or effectiveness
of the valuation designee’s fair value
determination process or of material
errors in the calculation of net asset
value. The valuation designee must also
provide such timely follow-on reports as
the board may reasonably determine are
appropriate.7
The Commission staff estimates that
9,800 funds are subject to rule 2a–5. The
internal annual burden estimate is 34
hours for a fund. Based on these
estimates, the total annual burden hours
associated with the rule is estimated to
be 333,200 hours. The estimated burden
hours associated with rule 2a–5 have
increased by 15,810 hours from the
current allocation of 317,390 hours. The
external cost associated with this
collection of information is
approximately $3,674 per fund, and the
total annual external cost burden is
$36,005,200. The estimated external
cost has increased by $6,319,900 from
the current estimate of $29,685,300.
These increases are due to an increase
in the estimated number of affected
entities, as well as in the estimated
hourly burden and the external cost
associated with the information
collection requirements.
The estimate of average burden hours
is made solely for purposes of the
Paperwork Reduction Act and is not
derived from a comprehensive or even
a representative survey or study of the
cost of Commission rules. The
collection of information required by
rule 2a–5 is necessary to obtain the
benefits of the rule. Other information
provided to the Commission in
connection with staff examinations or
investigations is kept confidential
subject to the provisions of applicable
law. If information collected pursuant to
rule 2a–5 is reviewed by the
Commission’s examination staff, it is
accorded the same level of
confidentiality accorded to other
responses provided to the Commission
in the context of its examination and
oversight program.
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
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 December 18, 2023.
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: October 13, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–22970 Filed 10–17–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98728; File No. SR–
EMERALD–2023–28]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule Related to the Options
Regulatory Fee
October 12, 2023.
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 October
5, 2023, MIAX Emerald, LLC (‘‘MIAX
Emerald’’ or ‘‘Exchange’’) filed with the
1 15
7 Rule
PO 00000
2a–5(b).
Frm 00088
2 17
Fmt 4703
Sfmt 4703
E:\FR\FM\18OCN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
18OCN1
]]>Agencies
[Federal Register Volume 88, Number 200 (Wednesday, October 18, 2023)]
[Notices]
[Pages 71903-71904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22970]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-XXX, OMB Control No. 3235-0779]
Proposed Collection; Comment Request; Extension: Rule 2a-5
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. 3501-3520), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collections
of information summarized below. The Commission plans to submit the
existing collection of information to the Office of Management and
Budget for extension and approval.
Section 2(a)(41) of the Investment Company Act of 1940
(``Investment Company Act'') \1\ requires funds to value their
portfolio investments using the market value of their portfolio
securities when market quotations for those securities are ``readily
available,'' and, when a market quotation for a portfolio security is
not readily available, by using the fair value of that security, as
determined in good faith by the fund's board.\2\ The aggregate value of
a fund's investments is the primary determinant of the fund's net asset
value (``NAV''), which for many funds determines the price at which
their shares are offered and redeemed (or repurchased).\3\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a-1 et seq.
\2\ 15 U.S.C. 80a-2(a)(41). See also 17 CFR 270.2a-4.
\3\ See 15 U.S.C. 80a-22(c) and 23(c). See also 17 CFR 270.22c-
1(a).
---------------------------------------------------------------------------
Rule 2a-5 provides requirements for determining in good faith the
fair value of the investments of a registered investment company or
companies that have elected to be treated as business development
companies under the Investment Company Act (``BDCs'' and, collectively,
``funds'') for purposes of section 2(a)(41) of the Investment Company
Act and rule 2a-4
[[Page 71904]]
thereunder.\4\ Under the rule, fair value as determined in good faith
requires assessing and managing material risks associated with fair
value determinations; selecting, applying, and testing fair value
methodologies; and overseeing and evaluating any pricing services used.
The rule also permits a fund's board to designate a ``valuation
designee'' to perform fair value determinations. The valuation designee
can be the adviser of the fund or an officer of an internally managed
fund.\5\ When a board designates the performance of determinations of
fair value to a valuation designee for some or all of the fund's
investments under the rule, the rule requires the board to oversee the
valuation designee's performance of fair value determinations.
---------------------------------------------------------------------------
\4\ See Good Faith Determinations of Fair Value, Investment
Company Act Release No. 34128 (Dec. 7, 2020) (``Adopting Release'').
\5\ Rule 2a-5(e)(4).
---------------------------------------------------------------------------
To facilitate the board's oversight, the rule also includes certain
reporting and other requirements in the case of designation to a
valuation designee.\6\ As relevant here, the rule requires, if the
board designates performance of fair value determinations to a
valuation designee, that the valuation designee report to the board in
both periodic and as needed reports on a per-fund basis.
---------------------------------------------------------------------------
\6\ Rule 2a-5(b).
---------------------------------------------------------------------------
Specifically, on a periodic basis, the valuation designee must
provide to the board:
Quarterly Reports. At least quarterly, in writing, (1) any
reports or materials requested by the board related to the fair value
of designated investments or the valuation designee's process for fair
valuing fund investments and (2) a summary or description of material
fair value matters that occurred in the prior quarter. This summary or
description must include (1) any material changes in the assessment and
management of valuation risks, including any material changes in
conflicts of interest of the valuation designee (and any other service
provider), (2) any material changes to, or material deviations from,
the fair value methodologies, and (3) any material changes to the
valuation designee's process for selecting and overseeing pricing
services, as well as any material events related to the valuation
designee's oversight of pricing services.
Annual Reports. At least annually, in writing, an
assessment of the adequacy and effectiveness of the valuation
designee's process for determining the fair value of the designated
portfolio of investments. At a minimum, this annual report must include
a summary of the results of the testing of fair value methodologies
required under the rule and an assessment of the adequacy of resources
allocated to the process for determining the fair value of designated
investments, including any material changes to the roles or functions
of the persons responsible for determining fair value.
Further, the rule requires the valuation designee to provide a
written notification to the board of the occurrence of matters that
materially affect the fair value of the designated portfolio of
investments (defined as ``material matters'') within a time period
determined by the board, but in no event later than five business days
after the valuation designee becomes aware of the material matter.
Material matters in this instance include, as examples, a significant
deficiency or material weakness in the design or effectiveness of the
valuation designee's fair value determination process or of material
errors in the calculation of net asset value. The valuation designee
must also provide such timely follow-on reports as the board may
reasonably determine are appropriate.\7\
---------------------------------------------------------------------------
\7\ Rule 2a-5(b).
---------------------------------------------------------------------------
The Commission staff estimates that 9,800 funds are subject to rule
2a-5. The internal annual burden estimate is 34 hours for a fund. Based
on these estimates, the total annual burden hours associated with the
rule is estimated to be 333,200 hours. The estimated burden hours
associated with rule 2a-5 have increased by 15,810 hours from the
current allocation of 317,390 hours. The external cost associated with
this collection of information is approximately $3,674 per fund, and
the total annual external cost burden is $36,005,200. The estimated
external cost has increased by $6,319,900 from the current estimate of
$29,685,300. These increases are due to an increase in the estimated
number of affected entities, as well as in the estimated hourly burden
and the external cost associated with the information collection
requirements.
The estimate of average burden hours is made solely for purposes of
the Paperwork Reduction Act and is not derived from a comprehensive or
even a representative survey or study of the cost of Commission rules.
The collection of information required by rule 2a-5 is necessary to
obtain the benefits of the rule. Other information provided to the
Commission in connection with staff examinations or investigations is
kept confidential subject to the provisions of applicable law. If
information collected pursuant to rule 2a-5 is reviewed by the
Commission's examination staff, it is accorded the same level of
confidentiality accorded to other responses provided to the Commission
in the context of its examination and oversight program.
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 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 December 18, 2023.
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: October 13, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-22970 Filed 10-17-23; 8:45 am]
BILLING CODE 8011-01-P
