Proposed Collection; Comment Request; Extension: Rule 17f-4, 101664-101665 [2024-29578]

Download as PDF 101664 Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Notices lotter on DSK11XQN23PROD with NOTICES1 Exchange could obtain information to assist in detecting and deterring potential fraud or manipulation. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA. The Trust’s website will also include a form of the prospectus for the Trust that may be downloaded. The website will include the Shares’ ticker and CUSIP information, along with additional quantitative information updated on a daily basis for the Trust. The Trust’s website will include (1) daily trading volume, the prior Business Day’s reported NAV and closing price, and a calculation of the premium and discount of the closing price or midpoint of the Bid/Ask Price against the NAV; and (ii) data in chart format displaying the frequency distribution of discounts and premiums of the daily closing price or Bid/Ask Price against the NAV, within appropriate ranges, for at least each of the four previous calendar quarters. The Trust’s website will be publicly available prior to the public offering of Shares and accessible at no charge. Trading in Shares of the Trust will be halted if the circuit breaker parameters in NYSE Arca Rule 7.12–E have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of a new type of exchange-traded product based on the price of bitcoin and ether that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. 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 notes that the proposed rule change will facilitate the listing and trading of a new type of CommodityBased Trust Share based on the price of bitcoin and ether that would enhance competition among market participants, to the benefit of investors and the marketplace. VerDate Sep<11>2014 17:41 Dec 13, 2024 Jkt 265001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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– NYSEARCA–2024–104 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–NYSEARCA–2024–104. 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 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 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–NYSEARCA–2024–104 and should be submitted on or before January 6, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.42 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–29469 Filed 12–13–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–232, OMB Control No. 3235–0225] Proposed Collection; Comment Request; Extension: Rule 17f–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. 350l–3520) (the ‘‘Paperwork Reduction Act’’), the Securities and Exchange Commission (the ‘‘Commission’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. Section 17(f) (15 U.S.C. 80a–17(f)) under the Investment Company Act of 1940 (the ‘‘Act’’) 1 permits registered management investment companies and their custodians to deposit the securities they own in a system for the central handling of securities (‘‘securities 42 17 1 15 E:\FR\FM\16DEN1.SGM CFR 200.30–3(a)(12). U.S.C. 80a. 16DEN1 Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Notices lotter on DSK11XQN23PROD with NOTICES1 depositories’’), subject to rules adopted by the Commission. Rule 17f–4 (17 CFR 270.17f–4) under the Act specifies the conditions for the use of securities depositories by funds 2 and their custodians. The Commission staff estimates that 639 respondents (including an estimated 611 active funds that may deal directly with a securities depository, an estimated 15 custodians and sub-custodians (comprising 7 custodians and 8 sub-custodians), and 13 possible securities depositories) 3 are subject to the requirements in rule 17f– 4. To the extent that Rule 17f–4(c)(4) provides that a sub-custodian can be qualified as a custodian for purposes of Rule 17f–4, sub-custodians are included as ‘‘custodians’’ in the estimates of burden hours and costs. While the rule is elective, most, if not all, funds use depository custody arrangements.4 Rule 17f–4 contains two general conditions. First, a fund’s custodian must be obligated, at a minimum, to exercise due care in accordance with reasonable commercial standards in discharging its duty as a securities intermediary to obtain and thereafter maintain financial assets. If the fund deals directly with a depository, the depository’s contract or written rules for its participants must provide that the depository will meet similar obligations. All funds that deal directly with securities depositories in reliance on rule 17f–4 should have either modified their contracts with the relevant securities depository, or negotiated a modification in the securities depository’s written rules when the rule was amended. Therefore, we estimate 2 As amended in 2003, rule 17f–4 permits any registered investment company, including a unit investment trust or a face-amount certificate company, to use a security depository. See Custody of Investment Company Assets With a Securities Depository, Investment Company Act Release No. 25934 (Feb. 13, 2003) (68 FR 8438 (Feb. 20, 2003)). The terms ‘‘fund’’ or ‘‘fund series’’ are used in this Notice to mean a registered investment company. 3 The estimates regarding the number of funds that deal directly with a securities depository, and the number of custodians and sub-custodians, are derived from Form N–CEN filings received through September 30, 2024. In addition, the Commission staff estimates the number of possible securities depositories by adding the 12 Federal Reserve Banks and one active registered clearing agency. The Commission staff recognizes that not all these entities may currently be acting as a securities depository for fund securities. 4 Based on the Commission staff’s historical experience, most, if not all funds use depository custody arrangements. For purposes of estimating the burden of the rule, we assume a fund’s custodian or sub-custodian will deal with a securities depository in those cases where a fund does not deal directly with a securities depository itself. VerDate Sep<11>2014 17:41 Dec 13, 2024 Jkt 265001 there is no ongoing burden associated with this collection of information.5 Second, the custodian must provide, promptly upon request by the fund, such reports as are available about the internal accounting controls and financial strength of the custodian. If a fund deals directly with a depository, the depository’s contract with or written rules for its participants must provide that the depository will provide similar financial reports. Custodians and depositories usually transmit financial reports to funds twice each year.6 The Commission staff estimates that 15 custodians spend approximately 3,005 hours (by support staff) annually in transmitting such reports to funds.7 In addition, approximately 611 funds deal directly with a securities depository and may request periodic reports from their depository. Commission staff estimates that depositories spend approximately 179 hours (by support staff) annually transmitting reports to the 611 funds.8 The total annual burden estimate for compliance with rule 17f–4’s reporting requirement is therefore 3,148 hours.9 If a fund deals directly with a securities depository, rule 17f–4 requires that the fund implement internal control systems reasonably designed to prevent an unauthorized officer’s instructions (by providing at least for the form, content, and means of giving, recording, and reviewing all officers’ instructions). All funds that seek to rely on rule 17f–4 should have 5 The Commission staff assumes that new funds relying on 17f–4 would choose to use a custodian instead of directly dealing with a securities depository because of the high costs associated with maintaining an account with a securities depository. Thus, new funds would not be subject to this condition. 6 Based on Form N–CEN data received as of September 30, 2024, the Commission staff estimates that there are 13,498 funds, 611 of which deal directly with a securities depository. Accordingly, the estimated 15 custodians would handle requests for reports from 12,887 funds (approximately 859 fund clients per custodian) and the depositories from the remaining 611 funds that choose to deal directly with a depository. It is our understanding based on staff conversations with industry representatives that custodians and depositories transmit these reports to clients in the normal course of their activities as a good business practice regardless of whether they are requested. Therefore, for purposes of this PRA estimate, the Commission staff assumes that custodians transmit the reports to all fund clients. 7 (12,887 fund clients × 2 reports/year) = 25,754 transmissions per year. The staff estimates that each transmission would take approximately 7 minutes for a total of approximately 3,005 hours (7 minutes × 25,754 transmissions/60 minutes/hour.) 8 611 funds who may deal directly with a securities depository × 2 reports) = 222 transmissions. The staff estimates that each transmission would take approximately 7 minutes for a total of approximately 143 hours (7 minutes × 222 transmissions). 9 3,005 hours for custodians and 143 hours for securities depositories. PO 00000 Frm 00117 Fmt 4703 Sfmt 9990 101665 already implemented these internal control systems when the rule was amended. Therefore, there is no ongoing burden associated with this collection of information requirement.10 Based on the foregoing, the Commission staff estimates that the total annual hour burden of the rule’s collection of information requirements is 3,148 hours. The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act. This estimate is not derived from a comprehensive or even representative survey or study of the costs of Commission rules. 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 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 February 14, 2025. Please direct your written comments to: Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street NE, Washington, DC 20549 or send an email to: PRA_Mailbox@ sec.gov. Dated: December 11, 2024. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–29578 Filed 12–13–24; 8:45 am] BILLING CODE 8011–01–P 10 The Commission staff assumes that new funds relying on 17f–4 would choose to use a custodian instead of directly dealing with a securities depository because of the high costs associated with maintaining an account with a securities depository. Thus new funds would not be subject to this condition. E:\FR\FM\16DEN1.SGM 16DEN1

Agencies

[Federal Register Volume 89, Number 241 (Monday, December 16, 2024)]
[Notices]
[Pages 101664-101665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29578]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-232, OMB Control No. 3235-0225]


Proposed Collection; Comment Request; Extension: Rule 17f-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. 350l-3520) (the ``Paperwork Reduction Act''), the 
Securities and Exchange Commission (the ``Commission'') is soliciting 
comments on the collection of information summarized below. The 
Commission plans to submit this existing collection of information to 
the Office of Management and Budget for extension and approval.
    Section 17(f) (15 U.S.C. 80a-17(f)) under the Investment Company 
Act of 1940 (the ``Act'') \1\ permits registered management investment 
companies and their custodians to deposit the securities they own in a 
system for the central handling of securities (``securities

[[Page 101665]]

depositories''), subject to rules adopted by the Commission.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a.
---------------------------------------------------------------------------

    Rule 17f-4 (17 CFR 270.17f-4) under the Act specifies the 
conditions for the use of securities depositories by funds \2\ and 
their custodians.
---------------------------------------------------------------------------

    \2\ As amended in 2003, rule 17f-4 permits any registered 
investment company, including a unit investment trust or a face-
amount certificate company, to use a security depository. See 
Custody of Investment Company Assets With a Securities Depository, 
Investment Company Act Release No. 25934 (Feb. 13, 2003) (68 FR 8438 
(Feb. 20, 2003)). The terms ``fund'' or ``fund series'' are used in 
this Notice to mean a registered investment company.
---------------------------------------------------------------------------

    The Commission staff estimates that 639 respondents (including an 
estimated 611 active funds that may deal directly with a securities 
depository, an estimated 15 custodians and sub-custodians (comprising 7 
custodians and 8 sub-custodians), and 13 possible securities 
depositories) \3\ are subject to the requirements in rule 17f-4. To the 
extent that Rule 17f-4(c)(4) provides that a sub-custodian can be 
qualified as a custodian for purposes of Rule 17f-4, sub-custodians are 
included as ``custodians'' in the estimates of burden hours and costs. 
While the rule is elective, most, if not all, funds use depository 
custody arrangements.\4\
---------------------------------------------------------------------------

    \3\ The estimates regarding the number of funds that deal 
directly with a securities depository, and the number of custodians 
and sub-custodians, are derived from Form N-CEN filings received 
through September 30, 2024. In addition, the Commission staff 
estimates the number of possible securities depositories by adding 
the 12 Federal Reserve Banks and one active registered clearing 
agency. The Commission staff recognizes that not all these entities 
may currently be acting as a securities depository for fund 
securities.
    \4\ Based on the Commission staff's historical experience, most, 
if not all funds use depository custody arrangements. For purposes 
of estimating the burden of the rule, we assume a fund's custodian 
or sub-custodian will deal with a securities depository in those 
cases where a fund does not deal directly with a securities 
depository itself.
---------------------------------------------------------------------------

    Rule 17f-4 contains two general conditions. First, a fund's 
custodian must be obligated, at a minimum, to exercise due care in 
accordance with reasonable commercial standards in discharging its duty 
as a securities intermediary to obtain and thereafter maintain 
financial assets. If the fund deals directly with a depository, the 
depository's contract or written rules for its participants must 
provide that the depository will meet similar obligations. All funds 
that deal directly with securities depositories in reliance on rule 
17f-4 should have either modified their contracts with the relevant 
securities depository, or negotiated a modification in the securities 
depository's written rules when the rule was amended. Therefore, we 
estimate there is no ongoing burden associated with this collection of 
information.\5\
---------------------------------------------------------------------------

    \5\ The Commission staff assumes that new funds relying on 17f-4 
would choose to use a custodian instead of directly dealing with a 
securities depository because of the high costs associated with 
maintaining an account with a securities depository. Thus, new funds 
would not be subject to this condition.
---------------------------------------------------------------------------

    Second, the custodian must provide, promptly upon request by the 
fund, such reports as are available about the internal accounting 
controls and financial strength of the custodian. If a fund deals 
directly with a depository, the depository's contract with or written 
rules for its participants must provide that the depository will 
provide similar financial reports. Custodians and depositories usually 
transmit financial reports to funds twice each year.\6\ The Commission 
staff estimates that 15 custodians spend approximately 3,005 hours (by 
support staff) annually in transmitting such reports to funds.\7\ In 
addition, approximately 611 funds deal directly with a securities 
depository and may request periodic reports from their depository. 
Commission staff estimates that depositories spend approximately 179 
hours (by support staff) annually transmitting reports to the 611 
funds.\8\ The total annual burden estimate for compliance with rule 
17f-4's reporting requirement is therefore 3,148 hours.\9\
---------------------------------------------------------------------------

    \6\ Based on Form N-CEN data received as of September 30, 2024, 
the Commission staff estimates that there are 13,498 funds, 611 of 
which deal directly with a securities depository. Accordingly, the 
estimated 15 custodians would handle requests for reports from 
12,887 funds (approximately 859 fund clients per custodian) and the 
depositories from the remaining 611 funds that choose to deal 
directly with a depository. It is our understanding based on staff 
conversations with industry representatives that custodians and 
depositories transmit these reports to clients in the normal course 
of their activities as a good business practice regardless of 
whether they are requested. Therefore, for purposes of this PRA 
estimate, the Commission staff assumes that custodians transmit the 
reports to all fund clients.
    \7\ (12,887 fund clients x 2 reports/year) = 25,754 
transmissions per year. The staff estimates that each transmission 
would take approximately 7 minutes for a total of approximately 
3,005 hours (7 minutes x 25,754 transmissions/60 minutes/hour.)
    \8\ 611 funds who may deal directly with a securities depository 
x 2 reports) = 222 transmissions. The staff estimates that each 
transmission would take approximately 7 minutes for a total of 
approximately 143 hours (7 minutes x 222 transmissions).
    \9\ 3,005 hours for custodians and 143 hours for securities 
depositories.
---------------------------------------------------------------------------

    If a fund deals directly with a securities depository, rule 17f-4 
requires that the fund implement internal control systems reasonably 
designed to prevent an unauthorized officer's instructions (by 
providing at least for the form, content, and means of giving, 
recording, and reviewing all officers' instructions). All funds that 
seek to rely on rule 17f-4 should have already implemented these 
internal control systems when the rule was amended. Therefore, there is 
no ongoing burden associated with this collection of information 
requirement.\10\
---------------------------------------------------------------------------

    \10\ The Commission staff assumes that new funds relying on 17f-
4 would choose to use a custodian instead of directly dealing with a 
securities depository because of the high costs associated with 
maintaining an account with a securities depository. Thus new funds 
would not be subject to this condition.
---------------------------------------------------------------------------

    Based on the foregoing, the Commission staff estimates that the 
total annual hour burden of the rule's collection of information 
requirements is 3,148 hours.
    The estimate of average burden hours is made solely for the 
purposes of the Paperwork Reduction Act. This estimate is not derived 
from a comprehensive or even representative survey or study of the 
costs of Commission rules.
    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 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 February 14, 2025.
    Please direct your written comments to: Austin Gerig, Director/
Chief Data Officer, Securities and Exchange Commission, c/o Tanya 
Ruttenberg, 100 F Street NE, Washington, DC 20549 or send an email to: 
[email protected].

    Dated: December 11, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29578 Filed 12-13-24; 8:45 am]
BILLING CODE 8011-01-P
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