82 FR 20405 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Implementation of Simultaneous Complex Order Auctions
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 82 (May 1, 2017)
Federal Register Volume 82, Issue 82 (May 1, 2017)
| Page Range | 20405-20408 | |
| FR Document | 2017-08702 |
[Federal Register Volume 82, Number 82 (Monday, May 1, 2017)] [Notices] [Pages 20405-20408] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-08702] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80525; File No. SR-ISE-2017-33] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Implementation of Simultaneous Complex Order Auctions April 25, 2017. 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 April 17, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to delay implementation of simultaneous complex order auctions in the same complex strategy in connection with a system migration to Nasdaq INET technology. The text of the proposed rule change is available on the Exchange's Web site at www.ise.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 Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose ISE offers various complex order auctions that are designed to provide members an opportunity to trade and to potentially receive price improvement for complex orders that are entered on the Exchange, including an ``Exposure'' auction pursuant to Rule 722(b)(3)(iii), a Complex Price Improvement Mechanism (``PIM'') pursuant to Supplementary Material .09 to Rule 723, a Complex Facilitation Mechanism pursuant to Supplementary Material .08 to Rule 716, and Complex Solicited Order Mechanism also pursuant to Supplementary Material .08 to Rule 716. The purpose of the proposed rule change is to delay implementation of simultaneous complex order auctions in the same complex strategy in connection with a system migration to Nasdaq INET technology.\3\ No other changes to the complex order auction mechanisms are being proposed, and these auctions will continue to function as they do today, with the exception [[Page 20406]] that after the migration to the INET platform a member will not be permitted to initiate a complex order auction in a particular complex strategy if another complex order auction is already ongoing in that complex strategy. With this proposed change, the Exchange will handle multiple complex order auctions in the same complex strategy in a manner that is consistent with implementation on other options exchanges,\4\ and will reintroduce simultaneous complex order auctions in the same complex strategy at a later date within one year of this filing. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 80432 (April 11, 2017 (SR-ISE-2017-03) (Order Approving Proposed Rule Change, as Modified by Amendment No. 1, to Amend Various Rules in Connection with a System Migration to Nasdaq INET Technology). INET is the proprietary core technology utilized across Nasdaq's global markets and utilized on The NASDAQ Options Market LLC (``NOM''), NASDAQ PHLX LLC (``Phlx''), NASDAQ BX, Inc. (``BX''), and introduced recently on Nasdaq GEMX, LLC (``GEMX''). The migration of ISE to the INET architecture would result in higher performance, scalability, and more robust architecture. \4\ See infra notes 6-8 and accompanying text. --------------------------------------------------------------------------- Today, only one PIM may be ongoing at any given time in a series or complex strategy, and PIMs are not permitted to queue or overlap in any manner; \5\ however, there are no similar restrictions for non-PIM auctions, and any such auctions may be processed concurrently, including in parallel with a PIM auction. For example, while the trading system would prohibit a member from entering a PIM auction when another PIM auction is already ongoing in a complex strategy, if there was an Exposure auction already running a member would be able to start a PIM, Facilitation, Solicitation, or even another Exposure auction in that strategy. This allows maximum ability of members to express their trading intent on the Exchange by permitting multiple complex order auctions in the same complex strategy to be ongoing at any particular time. --------------------------------------------------------------------------- \5\ See Supplementary Material .04 to Rule 723. --------------------------------------------------------------------------- Nevertheless, other options exchanges do not offer the same functionality for simultaneous complex order auctions in a complex strategy provided by the Exchange. The Exchange's affiliate, Nasdaq Phlx, LLC (``Phlx''), for example, does not allow the initiation of a Complex Order Live Auction (``COLA'') when there is already a Price Improvement XL (``PIXL'') auction already ongoing in the strategy.\6\ Similarly, MIAX can limit the frequency of Complex Auctions by establishing a minimum time period between such auctions,\7\ and permits only one Complex Auction per strategy to be in progress at any particular time.\8\ --------------------------------------------------------------------------- \6\ See Phlx Rule 1098(e)(2). Phlx would also similarly not allow a PIXL auction to be initiated if there is a COLA already ongoing in the complex strategy. \7\ See MIAX Rule 518(d)(2). \8\ See Securities Exchange Act Release Nos. 78620 (August 18, 2016), 81 FR 58769, 58799 (August 25, 2016) (Notice); 79072 (October 7, 2016), 81 FR 71131 (October 14, 2016)) (Approval) (SR-MIAX-2016- 26). --------------------------------------------------------------------------- In order to give the Exchange additional time to develop and test this functionality, the Exchange proposes to delay the implementation of simultaneous complex order auctions in the same complex strategy in connection with the migration of the trading system to the INET platform. With the proposed change, only one complex order auction may be ongoing at any given time in a complex strategy, and such auctions will not queue or overlap in any manner. For PIM, Facilitation, or Solicitation auctions, the Exchange will reject a complex order auction of the same or different auction type in a complex strategy that is initiated while another complex order auction is ongoing in that complex strategy.\9\ In the case where a complex order auction has already been initiated in a complex strategy, an Exposure auction for an order for that strategy will not be initiated and the order will be processed as a complex order that is not marked for price improvement,\10\ instead of rejecting the complex order. If the member requested the order to be cancelled after the exposure period, then the complex order will be cancelled back to the member. Simultaneous complex order auctions in the same complex strategy will be subsequently rolled out on the INET trading system within one year of the date of filing of this proposed rule change. The Exchange is staging the re-platform of its trading system to provide maximum benefit to its members while also ensuring a successful rollout. This delay in implementing simultaneous complex order auctions in the same complex strategy will provide the Exchange additional time to test and implement this functionality on the INET platform. --------------------------------------------------------------------------- \9\ The rejection message sent to the member will contain an appropriate reason code indicating that the auction was rejected due to another ongoing complex order auction in the same complex strategy. \10\ Currently, an Exposure order auction is automatically initiated when a member submits an eligible complex order that is marked for price improvement. See Rule 722(b)(3)(iii). Pursuant to Rule 722(b)(3)(iii), complex orders may be marked for price improvement, and if so marked, the complex order may be exposed on the complex order book for a period of up to one-second before being automatically executed. Members can also request that their complex orders be cancelled after the exposure period. --------------------------------------------------------------------------- The Exchange believes that implementing simultaneous complex order auctions in the same complex strategy at a later date will not have a significant impact on members as it is rare for multiple complex order auctions in a complex strategy to be ongoing at a particular time. This is particularly the case today due to the recent decrease in the Exchange's auction timers to 100 milliseconds.\11\ The Exchange notes that simultaneous complex order auctions in a strategy only occur approximately 0.5% of the time that an auction runs on the Exchange. The Exchange therefore believes that the impact on members will be insignificant, and if a member does have auction eligible interest to execute when another complex order auction is ongoing, the member can either re-submit that order to the Exchange, after the auction has concluded, or submit it to another options market that provides similar auction functionality. In this regard, the Exchange notes that its market data feeds provide information to members about when a complex order auction is ongoing, and members can therefore use this information to make appropriate routing decisions based on applicable market conditions. --------------------------------------------------------------------------- \11\ See Securities Exchange Act Release No. 79733 (January 4, 2017), 82 FR 3055 (January 10, 2017) (SR-ISE-2016-26) (permitting the Exchange to determine auction timers for PIM, Facilitation, and Solicitation within a range of 100 milliseconds and one second). Each of these auction timers are currently set to 100 milliseconds-- i.e., the bottom of the range approved in the filing. Exposure auctions can be any duration up to one second (See Rule 722(b)(3)), and are also currently set to 100 milliseconds. --------------------------------------------------------------------------- Implementation The proposed rule change will be implemented on the Exchange's new INET trading system, which is scheduled to launch in Q2 2017.\12\ The INET migration will take place on a symbol by symbol basis \13\ as specified by the Exchange in a notice to be provided to Members.\14\ The Exchange is proposing to implement this rule change on the INET platform as the symbols migrate to that platform. As such, the proposed change will be rolled out in symbols as they migrate to the INET platform, at which point only one complex order auction will be permitted to be ongoing in a complex strategy. Members will still be able to use all of the Exchange's complex order auctions, provided that there is not another auction already ongoing in the complex strategy. The Exchange will issue an Options Trader Alert to all members notifying them that simultaneous complex order auctions will no longer be available with the symbol migration to INET. The Exchange proposes to launch the simultaneous complex order auction functionality on the INET platform within one year from the date [[Page 20407]] of filing of this rule change to be announced in an Options Trader Alert. --------------------------------------------------------------------------- \12\ See supra note 3. \13\ When a symbol is migrated to INET, all strikes and strategies will migrate with that symbol. \14\ The Exchange will issue an Options Trader Alert prior to the migration and will specify the dates that symbols will migrate to the INET platform. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\15\ In particular, the proposal is consistent with Section 6(b)(5) of the Act,\16\ because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b). \16\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed rule change is consistent with the Act as it will provide additional time for the Exchange to rebuild this technology on the INET platform. By delaying the implementation of simultaneous complex order auctions in a complex strategy, the Exchange will have additional time to test and implement this functionality. The Exchange will provide members with ample notice of the delayed implementation of this functionality in an Options Trader Alert, and will continue to provide notifications to members to ensure clarity about the availability of this functionality with the symbol migration. The Exchange will also issue an Options Trader Alert indicating when simultaneous complex order auctions in a complex strategy will become available on the INET platform. The Exchange does not anticipate that the proposed rule change will have any meaningful impact with respect to members' ability to execute complex order auctions as similar restrictions are already in place on other options exchanges.\17\ Simultaneous complex order auctions in a complex strategy are rare, and therefore the vast majority of the time members will be able to enter a complex order auction notwithstanding the temporary delay of the implementation of concurrent auctions. With respect to Exposure auctions, in the case where another complex order auction in the same strategy has already been initiated, the Exchange proposes to allow the complex order to continue to be processed without an auction in the same manner as complex orders that are not marked for price improvement. If the member has marked the complex order to be cancelled after the exposure period, however, the Exchange will cancel the order back to the member consistent with that instruction. If the member is not able to initiate a complex order auction because another complex order auction in the same strategy has been initiated, the member may either re-initiate the auction after the auction concludes or submit the order to another options market that offers similar functionality. Thus, members will be able to continue to express their trading intent regardless of the proposed delay in concurrent auction functionality. When the simultaneous complex order auction functionality is rebuilt and appropriately tested, the Exchange will then reintroduce this functionality. --------------------------------------------------------------------------- \17\ See supra notes 6-8 and accompanying text. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\18\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is designed to prevent simultaneous complex order auctions in a complex strategy in connection with the migration of the trading system to INET technology, and is not designed to have any significant competitive impact. Similar restrictions are already in place on other options exchanges.\19\ The Exchange does not believe that the proposed rule change will impose any burden on intra-market competition because all Members uniformly will not be able to initiate simultaneous auctions in the same complex order strategy. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78f(b)(8). \19\ See supra notes 6-8 and accompanying text. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) 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)(iii) of the Act \20\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\21\ --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(3)(A)(iii). \21\ 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. --------------------------------------------------------------------------- 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. 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-ISE-2017-33 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-ISE-2017-33. 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 Web site (http://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 [[Page 20408]] available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2017-33 and should be submitted on or before May 22, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-08702 Filed 4-28-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices 20405
Notice’’) pursuant to Section 806(e)(1) of Here, as the Commission has not complex strategy in connection with a
Title VIII of the Dodd-Frank Wall Street requested any additional information, system migration to Nasdaq INET
Reform and Consumer Protection Act, the date that is 60 days after FICC filed technology.
entitled the Payment, Clearing, and the Advance Notice with the The text of the proposed rule change
Settlement Supervision Act of 2010 Commission is April 30, 2017. However, is available on the Exchange’s Web site
(‘‘Clearing Supervision Act’’) 1 and Rule the Commission finds the Advance at www.ise.com, at the principal office
19b–4(n)(1)(i) under the Securities Notice complex because the material of the Exchange, and at the
Exchange Act of 1934 (‘‘Exchange aspects of the proposal are detailed, Commission’s Public Reference Room.
Act’’).2 The Advance Notice was substantial, and are interrelated with II. Self-Regulatory Organization’s
published for comment in the Federal other risk management practices at Statement of the Purpose of, and
Register on March 15, 2017.3 The FICC, and therefore finds it appropriate Statutory Basis for, the Proposed Rule
Commission received one comment on to extend the review period of the Change
the proposal contained in the Advance Advance Notice for an additional 60
Notice.4 days under Section 806(e)(1)(H) of the In its filing with the Commission, the
Clearing Supervision Act.7 Exchange included statements
Section 806(e)(1)(G) of the Clearing concerning the purpose of and basis for
Supervision Act provides that FICC may Accordingly, the Commission,
pursuant to Section 806(e)(1)(H) of the the proposed rule change and discussed
implement the changes if it has not any comments it received on the
received an objection to the proposed Clearing Supervision Act,8 extends the
review period for an additional 60 days proposed rule change. The text of these
changes within 60 days of the later of (i) statements may be examined at the
so that the Commission shall have until
the date that the Commission receives places specified in Item IV below. The
June 29, 2017 to issue an objection or
the Advance Notice or (ii) the date that Exchange has prepared summaries, set
non-objection to the Advance Notice
any additional information requested by forth in sections A, B, and C below, of
(File No. SR–FICC–2017–802).
the Commission is received,5 unless the most significant aspects of such
extended as described below. By the Commission.
Eduardo A. Aleman,
statements.
Pursuant to Section 806(e)(1)(H) of the
Clearing Supervision Act, the Assistant Secretary. A. Self-Regulatory Organization’s
Commission may extend the review [FR Doc. 2017–08698 Filed 4–28–17; 8:45 am] Statement of the Purpose of, and
period of an advance notice for an BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule
additional 60 days, if the changes Change
proposed in the advance notice raise 1. Purpose
novel or complex issues, subject to the SECURITIES AND EXCHANGE
COMMISSION ISE offers various complex order
Commission providing the clearing
auctions that are designed to provide
agency with prompt written notice of [Release No. 34–80525; File No. SR–ISE– members an opportunity to trade and to
the extension.6 2017–33]
potentially receive price improvement
1 12 U.S.C. 5465(e)(1). The Financial Stability Self-Regulatory Organizations; Nasdaq for complex orders that are entered on
Oversight Council designated FICC a systemically ISE, LLC; Notice of Filing and the Exchange, including an ‘‘Exposure’’
important financial market utility on July 18, 2012. Immediate Effectiveness of Proposed auction pursuant to Rule 722(b)(3)(iii), a
See Financial Stability Oversight Council 2012 Rule Change To Delay the Complex Price Improvement
Annual Report, Appendix A, http:// Mechanism (‘‘PIM’’) pursuant to
www.treasury.gov/initiatives/fsoc/Documents/ Implementation of Simultaneous
2012%20Annual%20Report.pdf. Therefore, FICC is Complex Order Auctions Supplementary Material .09 to Rule 723,
required to comply with the Payment, Clearing and a Complex Facilitation Mechanism
Settlement Supervision Act and file advance April 25, 2017. pursuant to Supplementary Material .08
notices with the Commission. See 12 U.S.C. Pursuant to Section 19(b)(1) of the to Rule 716, and Complex Solicited
5465(e). Securities Exchange Act of 1934
2 17 CFR 240.19b–4(n)(1)(i).
Order Mechanism also pursuant to
3 Securities Exchange Act Release No. 80191
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Supplementary Material .08 to Rule 716.
(March 9, 2017), 82 FR 13876 (March 15, 2017) (SR– notice is hereby given that on April 17, The purpose of the proposed rule
FICC–2017–802). FICC also filed a related proposed 2017, Nasdaq ISE, LLC (‘‘ISE’’ or change is to delay implementation of
rule change (SR–FICC–2017–002) with the ‘‘Exchange’’) filed with the Securities simultaneous complex order auctions in
Commission pursuant to Section 19(b)(1) of the and Exchange Commission (‘‘SEC’’ or
Exchange Act and Rule 19b–4 thereunder, seeking
the same complex strategy in
approval of changes to its rules necessary to ‘‘Commission’’) the proposed rule connection with a system migration to
implement the Advance Notice (‘‘Proposed Rule change as described in Items I and II Nasdaq INET technology.3 No other
Change’’). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b– below, which Items have been prepared changes to the complex order auction
4, respectively. The Proposed Rule Change was by the Exchange. The Commission is
published in the Federal Register on March 20,
mechanisms are being proposed, and
2017. Securities Exchange Act Release No. 80234 publishing this notice to solicit these auctions will continue to function
(March 14, 2017), 82 FR 14401 (March 20, 2017) comments on the proposed rule change as they do today, with the exception
(SR–FICC–2017–002). from interested persons.
4 See letter from Robert E. Pooler, Chief Financial 3 See Securities Exchange Act Release No. 80432
Officer, Ronin Capital LLC, dated April 10, 2017, I. Self-Regulatory Organization’s (April 11, 2017 (SR–ISE–2017–03) (Order
to Robert W. Errett, Deputy Secretary, Commission, Statement of the Terms of Substance of Approving Proposed Rule Change, as Modified by
available at https://www.sec.gov/comments/sr-ficc- the Proposed Rule Change Amendment No. 1, to Amend Various Rules in
2017-002/ficc2017002-1694243-149787.pdf. Connection with a System Migration to Nasdaq
srobinson on DSK5SPTVN1PROD with NOTICES
Because the proposals contained in the Advance The Exchange proposes to delay INET Technology). INET is the proprietary core
Notice and Proposed Rule Change raise the same implementation of simultaneous technology utilized across Nasdaq’s global markets
substantive issues, supra note 3, the Commission is and utilized on The NASDAQ Options Market LLC
considering all public comments received on the
complex order auctions in the same
(‘‘NOM’’), NASDAQ PHLX LLC (‘‘Phlx’’), NASDAQ
proposal regardless of whether the comments were BX, Inc. (‘‘BX’’), and introduced recently on Nasdaq
7 Id.
submitted to the Advance Notice or the Proposed GEMX, LLC (‘‘GEMX’’). The migration of ISE to the
Rule Change. 8 Id.
INET architecture would result in higher
5 12 U.S.C. 5465(e)(1)(G). 1 15 U.S.C. 78s(b)(1). performance, scalability, and more robust
6 12 U.S.C. 5465(e)(1)(H). 2 17 CFR 240.19b–4. architecture.
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![20408 Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices
available for Web site viewing and depository arrangements, and the fund’s provide notice of any material changes
printing in the Commission’s Public contract with its primary custodian to custody risk under the rule. The staff
Reference Room, 100 F Street NE., must state that the custodian will estimates that each response will take
Washington, DC 20549, on official monitor risks and promptly notify the 260 hours, requiring approximately
business days between the hours of fund or its adviser of material changes 1,040 hours annually per global
10:00 a.m. and 3:00 p.m. Copies of the in risks. The primary custodian and custodian.4 Thus the total annual
filing also will be available for other custodians also are required to burden associated with these
inspection and copying at the principal agree to exercise at least reasonable care, requirements is approximately 15,600
office of the Exchange. All comments prudence, and diligence. hours.5 The staff estimates that the total
received will be posted without change; The collection of information
annual hour burden associated with all
the Commission does not edit personal requirements in rule 17f–7 are intended
to provide workable standards that collection of information requirements
identifying information from
submissions. You should submit only protect funds from the risks of using of the rule is therefore 63,216 hours.6
information that you wish to make foreign securities depositories while The estimate of average burden hours
available publicly. All submissions assigning appropriate responsibilities to is made solely for the purposes of the
should refer to File Number SR–ISE– the fund’s primary custodian and Paperwork Reduction Act and is not
2017–33 and should be submitted on or investment adviser based on their derived from a comprehensive or even
before May 22, 2017. capabilities. The requirement that the a representative survey or study of the
For the Commission, by the Division of foreign securities depository meet costs of Commission rules and forms.
Trading and Markets, pursuant to delegated specified minimum standards is Compliance with the collection of
authority.22 intended to ensure that the depository is information requirements of the rule is
Eduardo A. Aleman, subject to basic safeguards deemed necessary to obtain the benefit of relying
Assistant Secretary. appropriate for all depositories. The on the rule’s permission for funds to
[FR Doc. 2017–08702 Filed 4–28–17; 8:45 am]
requirement that the fund or its adviser maintain their assets in foreign
must receive from the primary
BILLING CODE 8011–01–P custodians. The information provided
custodian (or its agent) an initial risk
under rule 17f–7 will not be kept
analysis of the depository arrangements,
and that the fund’s contract with its confidential. An agency may not
SECURITIES AND EXCHANGE conduct or sponsor, and a person is not
COMMISSION primary custodian must state that the
custodian will monitor risks and required to respond to, a collection of
Submission for OMB Review; promptly notify the fund or its adviser information unless it displays a
Comment Request of material changes in risks, is intended currently valid OMB control number.
to provide essential information about The public may view the background
Upon Written Request, Copies Available custody risks to the fund’s investment documentation for this information
From: Securities and Exchange adviser as necessary for it to approve the
Commission, Office of FOIA Services, collection at the following Web site,
continued use of the depository. The www.reginfo.gov. Comments should be
100 F Street NE., Washington, DC
requirement that the primary custodian directed to: (i) Desk Officer for the
20549–2736.
agree to exercise reasonable care is Securities and Exchange Commission,
Extension: intended to provide assurances that its
Rule 17f–7, SEC File No. 270–470, OMB
Office of Information and Regulatory
services and the information it provides Affairs, Office of Management and
Control No. 3235–0529.
will meet an appropriate standard of Budget, Room 10102, New Executive
Notice is hereby given that, pursuant care. Office Building, Washington, DC 20503,
to the Paperwork Reduction Act of 1995 The staff estimates that each of
(44 U.S.C. 3501–3521) (‘‘Paperwork or by sending an email to: Shagufta_
approximately 992 investment advisers 1
Reduction Act’’), the Securities and will make an average of 8 responses Ahmed@omb.eop.gov; and (ii) Pamela
Exchange Commission (the annually under the rule to address Dyson, Director/Chief Information
‘‘Commission’’) has submitted to the depository compliance with minimum Officer, Securities and Exchange
Office of Management and Budget requirements, any indemnification or Commission, c/o Remi Pavlik-Simon,
(‘‘OMB’’) a request for extension of the insurance arrangements, and reviews of 100 F Street NE., Washington, DC 20549
previously approved collections of risk analyses or notifications. The staff or send an email to: PRA_Mailbox@
information discussed below. estimates each response will take 6 sec.gov. Comments must be submitted to
Rule 17f–7 (17 CFR 270.17f–7) hours, requiring a total of approximately OMB within 30 days of this notice.
permits a fund under certain conditions 48 hours for each adviser.2 Thus the Dated: April 25, 2017.
to maintain its foreign assets with an total annual burden associated with
eligible securities depository, which has Eduardo A. Aleman,
these requirements of the rule is
to meet minimum standards for a Assistant Secretary.
approximately 47,616 hours.3 The staff
depository. The fund or its investment further estimates that during each year, [FR Doc. 2017–08763 Filed 4–28–17; 8:45 am]
adviser generally determines whether each of approximately 15 global BILLING CODE 8011–01–P
the depository complies with those custodians will make an average of 4
requirements based on information responses to analyze custody risks and
provided by the fund’s primary
srobinson on DSK5SPTVN1PROD with NOTICES
custodian (a bank that acts as global 1 In October 2016, Commission staff estimated
custodian). The depository custody that, as of June 2016, 992 investment advisers
arrangement also must meet certain managed or sponsored open-end registered funds
conditions. The fund or its adviser must (including exchange-traded funds) and closed-end 4 260 hours per response × 4 responses per global
registered funds.
receive from the primary custodian (or 2 8 responses per adviser × 6 hours per response custodian = 1,040 hours per global custodian.
its agent) an initial risk analysis of the 5 15 global custodians × 1,040 hours per global
= 48 hours per adviser.
3 992 advisers × 48 hours per adviser = 47,616 custodian = 15,600 hours.
22 17 CFR 200.30–3(a)(12). hours. 6 47,616 hours + 15,600 hours = 63,216 hours.
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Document Created: 2017-04-29 03:16:02
Document Modified: 2017-04-29 03:16:02
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 20405 |
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