Proposed Collection; Comment Request; Extension: Rule 18f-4, 4641-4642 [2024-01282]

Download as PDF Federal Register / Vol. 89, No. 16 / Wednesday, January 24, 2024 / Notices change will enhance the Exchange system by aligning its drill-through protection with the intended purpose of ISOs.13 The Exchange believes the proposed rule change may ultimately result in additional executions consistent with the expectations of users that submit ISOs, which ultimately benefits investors. The Exchange further believes the proposed rule change is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, as it will apply to ISOs of all users. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, because it will apply in the same manner to ISOs of all Trading Permit Holders. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, because it relates solely to the application of one of the Exchange’s price protection mechanisms to ISOs. Additionally, the proposed rule change substantively identical to a recent rule change by Cboe EDGX Exchange, Inc. (‘‘EDGX Options’’).14 The Exchange also notes at least one other options exchange excludes ISOs from certain of its price protection measures.15 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others ddrumheller on DSK120RN23PROD with NOTICES1 The Exchange neither solicited nor received comments on the proposed rule change. 13 The Exchange notes ISOs will continue to receive price protection, such as from the limit order fat finger check. See Rule 5.34(c)(1). 14 See SR–CboeEDGX–2023–082 (December 21, 2023). 15 See Miami International Securities Exchange, LLC (‘‘MIAX’’) Rule 515(c)(1) (ISOs excluded from MIAX’s price protection on non-market maker orders in non-proprietary products, which prevents orders from executing more than a specified number of increments away from the national best bid or offer (‘‘NBBO’’) at the time the order is received). VerDate Sep<11>2014 17:06 Jan 23, 2024 Jkt 262001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act 16 and Rule 19b–4(f)(6) 17 thereunder.18 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings 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– C2–2024–003 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–C2–2024–003. 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 16 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 17 17 PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 4641 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–C2–2024–003 and should be submitted on or before February 14, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–01305 Filed 1–23–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–821, OMB Control No. 3235–0776] Proposed Collection; Comment Request; Extension: Rule 18f–4 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 collection of information summarized below. The Commission plans to submit the existing collection of information to the Office of 19 17 E:\FR\FM\24JAN1.SGM CFR 200.30–3(a)(12). 24JAN1 ddrumheller on DSK120RN23PROD with NOTICES1 4642 Federal Register / Vol. 89, No. 16 / Wednesday, January 24, 2024 / Notices Management and Budget (‘‘OMB’’) for extension and approval. Rule 18f–4 (17 CFR 270.18f–4) under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) (the ‘‘Investment Company Act’’) permits a fund to enter into derivatives transactions, notwithstanding the prohibitions and restrictions on the issuance of senior securities under section 18 of the Investment Company Act. A fund that relies on rule 18f–4 to enter into derivatives transactions generally is required to: adopt a derivatives risk management program; have its board of directors approve the fund’s designation of a derivatives risk manager and receive direct reports from the derivatives risk manager about the derivatives risk management program; and comply with a VaR-based test designed to limit a fund’s leverage risk consistent with the investor protection purposes underlying section 18 of the Investment Company Act. Rule 18f–4 includes an exception from the derivatives risk management program requirement and limit on fund leverage risk if a fund limits its derivatives exposure to 10% of its net assets (the fund may exclude from this calculation derivatives transactions that it uses to hedge certain currency and interest rate risks). A fund relying on this exception will be required to adopt policies and procedures that are reasonably designed to manage its derivatives risks. Rule 18f–4 also includes an exception from the VaR-based limit on leverage risk for a leveraged/inverse fund that cannot comply with rule 18f–4’s limit on fund leverage risk and that, as of October 28, 2020, is: (1) in operation, (2) has outstanding shares issued in one or more public offerings to investors, and (3) discloses in its prospectus that it has a leverage multiple or inverse multiple that exceeds 200% of the performance or the inverse of the performance of the underlying index (for purposes of this Supporting Statement, such a fund is an ‘‘over-200% leveraged/inverse fund’’). A fund relying on this exception must disclose in its prospectus that it is not subject to rule 18f–4’s limit on fund leverage risk. Finally, rule 18f–4 permits funds to enter into reverse repurchase agreements (and similar financing transactions) and ‘‘unfunded commitments’’ to make certain loans or investments, and to invest in securities on a when-issued or forward-settling basis, or with a non-standard settlement cycle, subject to conditions tailored to these transactions. The respondents to rule 18f–4 are registered open- and closed-end management investment companies and VerDate Sep<11>2014 17:06 Jan 23, 2024 Jkt 262001 BDCs. Compliance with rule 18f–4 is mandatory for all funds that seek to engage, in reliance on the rule, in derivatives transactions and certain other transactions that the rule addresses, which would otherwise be subject to the restrictions of section 18 of the Investment Company Act. The information collection requirements of rule 18f–4 are designed to ensure that funds maintain the required written derivatives risk management programs that promote compliance with the federal securities laws and protect investors, and otherwise comply with the requirements of the rule. The information collections also assist the Commission’s examination staff in assessing the adequacy of funds’ derivatives risk management programs and their compliance with the other requirements of the rule, and identifying weaknesses in a fund’s derivatives risk management if violations occur or are uncorrected. The respondents to rule 18f–4 are registered open- and closed-end management investment companies and BDCs. Compliance with rule 18f–4 is mandatory for all funds that seek to engage, in reliance on the rule, in derivatives transactions and certain other transactions that the rule addresses, which would otherwise be subject to the restrictions of section 18 of the Investment Company Act. To the extent that records required to be created and maintained by funds under the rule are provided to the Commission in connection with examinations or investigations, such information will be kept confidential subject to the provisions of applicable law. 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 March 25, 2024. 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, Chief Information Officer, Securities and Exchange PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to: PRA_Mailbox@ sec.gov. Dated: January 18, 2024. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–01282 Filed 1–23–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99385; File No. SR–CBOE– 2024–004] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.34 January 18, 2024. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 3, 2024, Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 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 Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) proposes to amend Rule 5.34. The text of the proposed rule change is provided below. (additions are italicized; deletions are [bracketed]) * * * * * Rules of Cboe Exchange, Inc. * * * * * Rule 5.34. Order and Quote Price Protection Mechanisms and Risk Controls The System’s acceptance and execution of orders, quotes, and bulk messages, as applicable, pursuant to the Rules, including Rules 5.31 through 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\24JAN1.SGM 24JAN1

Agencies

[Federal Register Volume 89, Number 16 (Wednesday, January 24, 2024)]
[Notices]
[Pages 4641-4642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01282]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-821, OMB Control No. 3235-0776]


Proposed Collection; Comment Request; Extension: Rule 18f-4

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 
collection of information summarized below. The Commission plans to 
submit the existing collection of information to the Office of

[[Page 4642]]

Management and Budget (``OMB'') for extension and approval.
    Rule 18f-4 (17 CFR 270.18f-4) under the Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) (the ``Investment Company Act'') permits 
a fund to enter into derivatives transactions, notwithstanding the 
prohibitions and restrictions on the issuance of senior securities 
under section 18 of the Investment Company Act. A fund that relies on 
rule 18f-4 to enter into derivatives transactions generally is required 
to: adopt a derivatives risk management program; have its board of 
directors approve the fund's designation of a derivatives risk manager 
and receive direct reports from the derivatives risk manager about the 
derivatives risk management program; and comply with a VaR-based test 
designed to limit a fund's leverage risk consistent with the investor 
protection purposes underlying section 18 of the Investment Company 
Act. Rule 18f-4 includes an exception from the derivatives risk 
management program requirement and limit on fund leverage risk if a 
fund limits its derivatives exposure to 10% of its net assets (the fund 
may exclude from this calculation derivatives transactions that it uses 
to hedge certain currency and interest rate risks). A fund relying on 
this exception will be required to adopt policies and procedures that 
are reasonably designed to manage its derivatives risks.
    Rule 18f-4 also includes an exception from the VaR-based limit on 
leverage risk for a leveraged/inverse fund that cannot comply with rule 
18f-4's limit on fund leverage risk and that, as of October 28, 2020, 
is: (1) in operation, (2) has outstanding shares issued in one or more 
public offerings to investors, and (3) discloses in its prospectus that 
it has a leverage multiple or inverse multiple that exceeds 200% of the 
performance or the inverse of the performance of the underlying index 
(for purposes of this Supporting Statement, such a fund is an ``over-
200% leveraged/inverse fund''). A fund relying on this exception must 
disclose in its prospectus that it is not subject to rule 18f-4's limit 
on fund leverage risk.
    Finally, rule 18f-4 permits funds to enter into reverse repurchase 
agreements (and similar financing transactions) and ``unfunded 
commitments'' to make certain loans or investments, and to invest in 
securities on a when-issued or forward-settling basis, or with a non-
standard settlement cycle, subject to conditions tailored to these 
transactions.
    The respondents to rule 18f-4 are registered open- and closed-end 
management investment companies and BDCs. Compliance with rule 18f-4 is 
mandatory for all funds that seek to engage, in reliance on the rule, 
in derivatives transactions and certain other transactions that the 
rule addresses, which would otherwise be subject to the restrictions of 
section 18 of the Investment Company Act.
    The information collection requirements of rule 18f-4 are designed 
to ensure that funds maintain the required written derivatives risk 
management programs that promote compliance with the federal securities 
laws and protect investors, and otherwise comply with the requirements 
of the rule. The information collections also assist the Commission's 
examination staff in assessing the adequacy of funds' derivatives risk 
management programs and their compliance with the other requirements of 
the rule, and identifying weaknesses in a fund's derivatives risk 
management if violations occur or are uncorrected.
    The respondents to rule 18f-4 are registered open- and closed-end 
management investment companies and BDCs. Compliance with rule 18f-4 is 
mandatory for all funds that seek to engage, in reliance on the rule, 
in derivatives transactions and certain other transactions that the 
rule addresses, which would otherwise be subject to the restrictions of 
section 18 of the Investment Company Act. To the extent that records 
required to be created and maintained by funds under the rule are 
provided to the Commission in connection with examinations or 
investigations, such information will be kept confidential subject to 
the provisions of applicable law.
    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 March 25, 2024.
    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, 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: January 18, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-01282 Filed 1-23-24; 8:45 am]
BILLING CODE 8011-01-P
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