82 FR 43063 - Submission for OMB Review; Comment Request
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 176 (September 13, 2017)
Federal Register Volume 82, Issue 176 (September 13, 2017)
| Page Range | 43063-43064 | |
| FR Document | 2017-19446 |
[Federal Register Volume 82, Number 176 (Wednesday, September 13, 2017)] [Notices] [Pages 43063-43064] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-19446] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549-2736. Extension: Rule 38a-1, OMB Control No. 3235-0586, SEC File No. 270-522. 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'') has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Rule (17 CFR 270.38a-1) under the Investment Company Act of 1940 (15 U.S.C. 80a) (``Investment Company Act'') is intended to protect investors by fostering better fund compliance with securities laws. The rule requires every registered investment company and business development company (``fund'') to: (i) Adopt and implement written policies and procedures reasonably designed to prevent violations of the federal securities laws by the fund, including procedures for oversight of compliance by each investment adviser, principal underwriter, administrator, and transfer agent of the fund; (ii) obtain the fund board of directors' approval of those policies and procedures; (iii) annually review the adequacy of those policies and procedures and the policies and procedures of each investment adviser, principal underwriter, administrator, and transfer agent of the fund, and the effectiveness of their implementation; (iv) designate a chief compliance officer to administer the fund's policies and procedures and prepare an annual report to the board that addresses certain specified items relating to the policies and procedures; and (v) maintain for five years the compliance policies and procedures and the chief compliance officer's annual report to the board. The rule contains certain information collection requirements that are designed to ensure that funds establish and maintain comprehensive, written internal compliance programs. The information collections also assist the Commission's examination staff in assessing the adequacy of funds' compliance programs. While Rule 38a-1 requires each fund to maintain written policies and procedures, most funds are located within a fund complex. The experience of the Commission's examination and oversight staff suggests that each fund in a complex is able to draw extensively from the fund complex's ``master'' compliance program to assemble appropriate compliance policies and procedures. Many fund complexes already have written policies and procedures documenting their compliance programs. Further, a fund needing to develop or revise policies and procedures on one or more topics in order to achieve a comprehensive compliance program can draw on a number of outlines and model programs available from a variety of industry representatives, commentators, and organizations. There are approximately 4,133 funds subject to Rule 38a-1. Among these funds, 97 were newly registered in the past year. These 97 funds, therefore, were required to adopt and document the policies and procedures that make up their compliance programs. Commission staff estimates that the average annual hour burden for a fund to adopt and document these policies and procedures is 105 hours. Thus, we estimate that the aggregate annual [[Page 43064]] burden hours associated with the adoption and documentation requirement is 10,185 hours. All funds are required to conduct an annual review of the adequacy of their existing policies and procedures and the policies and procedures of each investment adviser, principal underwriter, administrator, and transfer agent of the fund, and the effectiveness of their implementation. In addition, each fund chief compliance officer is required to prepare an annual report that addresses the operation of the policies and procedures of the fund and the policies and procedures of each investment adviser, principal underwriter, administrator, and transfer agent of the fund, any material changes made to those policies and procedures since the date of the last report, any material changes to the policies and procedures recommended as a result of the annual review, and certain compliance matters that occurred since the date of the last report. The staff estimates that each fund spends 49 hours per year, on average, conducting the annual review and preparing the annual report to the board of directors. Thus, we estimate that the annual aggregate burden hours associated with the annual review and annual report requirement is 202,517 hours. Finally, the staff estimates that each fund spends 6 hours annually, on average, maintaining the records required by proposed Rule 38a-1. Thus, the annual aggregate burden hours associated with the recordkeeping requirement is 24,798 hours. In total, the staff estimates that the aggregate annual information collection burden of Rule 38a-1 is 237,500 hours. The estimate of burden hours is made solely for the purposes of the Paperwork Reduction Act. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Complying with this collection of information requirement is mandatory. Responses will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: [email protected]; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email to: [email protected]. Comments must be submitted to OMB within 30 days of this notice. Dated: September 8, 2017. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-19446 Filed 9-12-17; 8:45 am] BILLING CODE 8011-01-P
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maintain and enforce written policies changes in the Proposed Rule Change written policies and procedures
and procedures reasonably designed to are consistent with Rule 17Ad– reasonably designed to prevent
cover its credit exposures to its 22(e)(6)(i) and (e)(6)(v) under the Act.24 violations of the federal securities laws
participants by establishing a risk-based by the fund, including procedures for
III. Conclusion
margin system that, at a minimum oversight of compliance by each
considers, and produces margin levels On the basis of the foregoing, the investment adviser, principal
commensurate with, the risks and Commission finds that the Proposed underwriter, administrator, and transfer
particular attributes of each relevant Rule Change is consistent with the agent of the fund; (ii) obtain the fund
product, portfolio, and market; and uses requirements of the Act, in particular board of directors’ approval of those
an appropriate method for measuring the requirements of Section 17A of the policies and procedures; (iii) annually
credit exposure that accounts for Act 25 and the rules and regulations review the adequacy of those policies
relevant product risk factors and promulgated thereunder. and procedures and the policies and
portfolio effects across products.23 It is therefore ordered, pursuant to procedures of each investment adviser,
As described above, NSCC faces Section 19(b)(2) of the Act, that principal underwriter, administrator,
specific wrong-way risk where it acts as proposed rule change SR–NSCC–2017– and transfer agent of the fund, and the
central counterparty to Member 010 be and hereby is APPROVED as of effectiveness of their implementation;
transactions in family-issued securities. the date of this order or the date of a (iv) designate a chief compliance officer
To help address this risk, NSCC applies notice by the Commission authorizing to administer the fund’s policies and
the FIS Charge in calculating the NSCC to implement its related advance procedures and prepare an annual
Member’s required margin. Specifically, notice proposal (SR–NSCC–2017–804), report to the board that addresses
the FIS Charge is a component of the whichever is later.26 certain specified items relating to the
margin that NSCC calculates and For the Commission, by the Division of policies and procedures; and (v)
collects using a risk-based margin Trading and Markets, pursuant to delegated maintain for five years the compliance
methodology that is designed to help authority.27 policies and procedures and the chief
maintain the coverage of NSCC’s credit Eduardo A. Aleman, compliance officer’s annual report to the
exposures to its Members at a Assistant Secretary. board.
confidence level of at least 99 percent. [FR Doc. 2017–19379 Filed 9–12–17; 8:45 am] The rule contains certain information
The FIS Charge is tailored to consider BILLING CODE 8011–01–P collection requirements that are
both the value and type of family-issued designed to ensure that funds establish
securities held by the Member, as well and maintain comprehensive, written
as the credit risk presented by the SECURITIES AND EXCHANGE internal compliance programs. The
Member, as calculated by NSCC. COMMISSION information collections also assist the
However, currently, the FIS Charge is Commission’s examination staff in
assessed only against Members on the Submission for OMB Review; assessing the adequacy of funds’
Watch List because of the additional Comment Request compliance programs.
credit risk presented by such Members. While Rule 38a–1 requires each fund
Upon Written Request, Copies Available
Nevertheless, all Members, not just to maintain written policies and
From: Securities and Exchange
Members on the Watch List, present procedures, most funds are located
Commission, Office of FOIA Services,
specific wrong-way risk. As such, NSCC within a fund complex. The experience
100 F Street NE., Washington, DC
proposes to expand the FIS Charge to all of the Commission’s examination and
20549–2736.
Members, while maintaining the oversight staff suggests that each fund in
relation between the FIS Charge and the Extension: a complex is able to draw extensively
Member’s credit risk. Specifically, Rule 38a–1, OMB Control No. 3235–0586, from the fund complex’s ‘‘master’’
NSCC proposes to apply the FIS Charge SEC File No. 270–522. compliance program to assemble
to fixed-income securities that are Notice is hereby given that, pursuant appropriate compliance policies and
family-issued securities of non-Watch to the Paperwork Reduction Act of 1995 procedures. Many fund complexes
List Members at a rate of no less than (44 U.S.C. 3501 et seq.), the Securities already have written policies and
40 percent, and to equities that are and Exchange Commission (the procedures documenting their
family-issued securities of non-Watch ‘‘Commission’’) has submitted to the compliance programs. Further, a fund
List Members at a rate of no less than Office of Management and Budget a needing to develop or revise policies
50 percent. Although NSCC proposes to request for extension of the previously and procedures on one or more topics
apply a lesser percentage rate to non- approved collection of information in order to achieve a comprehensive
Watch List Members than some Watch discussed below. compliance program can draw on a
List Members, the proposed rate is Rule (17 CFR 270.38a–1) under the number of outlines and model programs
designed to more accurately reflect the Investment Company Act of 1940 (15 available from a variety of industry
risks posed than what is reflected in a U.S.C. 80a) (‘‘Investment Company representatives, commentators, and
VaR Charge. Act’’) is intended to protect investors by organizations.
Because the expanded FIS Charge also fostering better fund compliance with There are approximately 4,133 funds
would be a tailored component of the securities laws. The rule requires every subject to Rule 38a–1. Among these
margin that NSCC collects from non- registered investment company and funds, 97 were newly registered in the
Watch List Members to help cover business development company past year. These 97 funds, therefore,
(‘‘fund’’) to: (i) Adopt and implement were required to adopt and document
sradovich on DSK3GMQ082PROD with NOTICES
NSCC credit exposure to such Members,
as the charge would be based on the policies and procedures that make
different product risk factors with 24 Id.
up their compliance programs.
25 15 U.S.C. 78q–1.
respect to equity and fixed-income Commission staff estimates that the
26 In approving the Proposed Rule Change, the
securities, as described above, the average annual hour burden for a fund
Commission considered the proposal’s impact on
Commission believes that the proposed efficiency, competition, and capital formation. 15 to adopt and document these policies
U.S.C. 78c(f). and procedures is 105 hours. Thus, we
23 17 CFR 240.17Ad–22(e)(6)(i) and (e)(6)(v). 27 17 CFR 200.30–3(a)(12). estimate that the aggregate annual
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![43064 Federal Register / Vol. 82, No. 176 / Wednesday, September 13, 2017 / Notices
burden hours associated with the Ahmed@omb.eop.gov; and (ii) Pamela the places specified in Item IV below.
adoption and documentation Dyson, Director/Chief Information The Exchange has prepared summaries,
requirement is 10,185 hours. Officer, Securities and Exchange set forth in sections A, B, and C below,
All funds are required to conduct an Commission, c/o Remi Pavlik-Simon, of the most significant parts of such
annual review of the adequacy of their 100 F Street NE., Washington, DC 20549 statements.
existing policies and procedures and the or send an email to: PRA_Mailbox@
policies and procedures of each A. Self-Regulatory Organization’s
sec.gov. Comments must be submitted to
investment adviser, principal Statement of the Purpose of, and the
OMB within 30 days of this notice.
underwriter, administrator, and transfer Statutory Basis for, the Proposed Rule
Dated: September 8, 2017. Change
agent of the fund, and the effectiveness
Eduardo A. Aleman,
of their implementation. In addition, 1. Purpose
Assistant Secretary.
each fund chief compliance officer is The purpose of this filing is to amend
required to prepare an annual report [FR Doc. 2017–19446 Filed 9–12–17; 8:45 am]
BILLING CODE 8011–01–P
the Fee Schedule effective September 1,
that addresses the operation of the 2017. Specifically, the Exchange
policies and procedures of the fund and proposes to modify the surcharge that is
the policies and procedures of each applied to certain Complex Orders
investment adviser, principal SECURITIES AND EXCHANGE
COMMISSION executed on the Exchange.
underwriter, administrator, and transfer Currently, the Exchange imposes a
agent of the fund, any material changes [Release No. 34–81549; File No. SR– $0.05 per contract surcharge for any
made to those policies and procedures NYSEAMER–2017–08] Electronic Non-Customer Complex
since the date of the last report, any Order that executes against a Customer
material changes to the policies and Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and Complex Order, regardless of whether
procedures recommended as a result of the execution occurs in a Complex
the annual review, and certain Immediate Effectiveness of a Proposed
Rule Change To Modify the NYSE Order Auction (the ‘‘Surcharge’’).4 The
compliance matters that occurred since Exchange proposes to modify the
the date of the last report. The staff American Options Fee Schedule
Surcharge to $0.10 per contract, which
estimates that each fund spends 49 September 7, 2017. surcharge is comparable to charges
hours per year, on average, conducting Pursuant to Section 19(b)(1) 1 of the imposed by other options exchanges.5
the annual review and preparing the Securities Exchange Act of 1934 (the For clarity, the Exchange also proposes
annual report to the board of directors. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 to make clear that the Surcharge is
Thus, we estimate that the annual notice is hereby given that, on August applied on a ‘‘per contract’’ basis.6
aggregate burden hours associated with 31, 2017, NYSE American LLC (the Additionally, to encourage ATP
the annual review and annual report ‘‘Exchange’’ or ‘‘NYSE American’’) filed Holders to transact additional Non-
requirement is 202,517 hours. with the Securities and Exchange Customer Complex Orders on the
Finally, the staff estimates that each Commission (the ‘‘Commission’’) the Exchange, the Exchange proposes to
fund spends 6 hours annually, on proposed rule change as described in offer a reduced Surcharge for those ATP
average, maintaining the records Items I, II, and III below, which Items Holders that meet a certain volume
required by proposed Rule 38a–1. Thus, have been prepared by the self- threshold. Specifically, the Exchange
the annual aggregate burden hours regulatory organization. The proposes to reduce the per contract
associated with the recordkeeping Commission is publishing this notice to surcharge to $0.07 for any ATP Holder
requirement is 24,798 hours. solicit comments on the proposed rule that transacts at least 0.20% of Total
In total, the staff estimates that the Industry Customer equity and ETF
change from interested persons.
aggregate annual information collection option average daily volume (or
burden of Rule 38a–1 is 237,500 hours. I. Self-Regulatory Organization’s TCADV) of Electronic Non-Customer
The estimate of burden hours is made Statement of the Terms of Substance of Complex Order Executions in a month.
solely for the purposes of the Paperwork the Proposed Rule Change Finally, the Exchange proposes to add
Reduction Act. The estimate is not The Exchange proposes to modify the ‘‘TCADV’’ as a defined term in the Key
derived from a comprehensive or even NYSE American Options Fee Schedule.
a representative survey or study of the The proposed change is available on the 4 See Fee Schedule, Section I.A., n. 6, available
costs of Commission rules. Complying Exchange’s Web site at www.nyse.com, here, https://www.nyse.com/publicdocs/nyse/
with this collection of information markets/american-options/NYSE_American_
at the principal office of the Exchange, Options_Fee_Schedule.pdf. Per the Fee Schedule, a
requirement is mandatory. Responses and at the Commission’s Public ‘‘Customer’’ is an individual or organization that is
will not be kept confidential. An agency Reference Room. not a Broker-Dealer, per Rule 900.2NY(18); and is
may not conduct or sponsor, and a not a Professional Customer; and a ‘‘Non-Customer’’
person is not required to respond to, a II. Self-Regulatory Organization’s is anyone who is not a Customer. See id., Fee
Schedule, Key Terms and Definitions. Thus, Non-
collection of information unless it Statement of the Purpose of, and Customers include Specialists, e-Specialists,
displays a currently valid control Statutory Basis for, the Proposed Rule Directed Order Market Makers, Firms, Broker
number. Change Dealers, and Professional Customers. The Exchange
notes that Firm Facilitation trades are not electronic
The public may view the background In its filing with the Commission, the and are therefore not subject to the Surcharge.
documentation for this information self-regulatory organization included 5 See MIAX Options fee schedule, available here,
collection at the following Web site, statements concerning the purpose of, https://www.miaxoptions.com/sites/default/files/
www.reginfo.gov. Comments should be fee_schedule-files/MIAX_Options_Fee_Schedule_
sradovich on DSK3GMQ082PROD with NOTICES
and basis for, the proposed rule change 08072017.pdf (imposing a $0.10 on certain complex
directed to: (i) Desk Officer for the and discussed any comments it received orders). See also The Chicago Board Options
Securities and Exchange Commission, on the proposed rule change. The text Exchange, Inc. (‘‘CBOE’’) fee schedule, available
Office of Information and Regulatory of those statements may be examined at here, http://www.cboe.com/publish/feeschedule/
Affairs, Office of Management and CBOEFeeSchedule.pdf, at n. 35 (same).
6 See proposed Fee Schedule, Section I.A., n. 6.
Budget, Room 10102, New Executive 1 15 U.S.C. 78s(b)(1). The Exchange also proposes to correct a
Office Building, Washington, DC 20503, 2 15 U.S.C. 78a. typographical error referring to ‘‘a CUBE Auctions’’
or by sending an email to: Shagufta_ 3 17 CFR 240.19b–4. by removing the word ‘‘a.’’ See id.
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Document Created: 2017-09-13 00:09:00
Document Modified: 2017-09-13 00:09:00
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 43063 |
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