83 FR 39485 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 154 (August 9, 2018)

Page Range		39485-39486
FR Document		2018-17000

Federal Register, Volume 83 Issue 154 (Thursday, August 9, 2018)

[Federal Register Volume 83, Number 154 (Thursday, August 9, 2018)]
[Notices]
[Pages 39485-39486]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-17000]


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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 206(4)-3, SEC File No. 270-218, OMB Control No. 3235-0242

    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 (``Commission'') has submitted to the Office of Management 
and Budget a request for approval of extension of the previously 
approved collection of information discussed below.
    Rule 206(4)-3 (17 CFR 275.206(4)-3) under the Investment Advisers 
Act of 1940, which is entitled ``Cash Payments for Client 
Solicitations,'' provides restrictions on cash payments for client 
solicitations. The rule requires that an adviser pay all solicitors' 
fees pursuant to a written agreement. When an adviser will provide only 
impersonal advisory services to the prospective client, the rule 
imposes no disclosure requirements. When the solicitor is affiliated 
with the adviser and the adviser will provide individualized advisory 
services to the prospective client, the solicitor must, at the time of 
the solicitation or referral, indicate to the prospective client that 
he is affiliated with the adviser. When the solicitor is not affiliated 
with the adviser and the adviser will provide individualized advisory 
services to the prospective client, the solicitor must, at the time of 
the solicitation or referral, provide the prospective client with a 
copy of the adviser's brochure and a disclosure document containing 
information specified in rule 206(4)-3. Amendments to rule 206(4)-3, 
adopted

[[Page 39486]]

in 2010 in connection with rule 206(4)-5, specify that solicitation 
activities involving a government entity, as defined in rule 206(4)-5, 
are subject to the additional limitations of rule 206(4)-5. The 
information rule 206(4)-3 requires is necessary to inform advisory 
clients about the nature of the solicitor's financial interest in the 
recommendation so the prospective clients may consider the solicitor's 
potential bias, and to protect clients against solicitation activities 
being carried out in a manner inconsistent with the adviser's fiduciary 
duty to clients. Rule 206(4)-3 is applicable to all Commission 
registered investment advisers. The Commission believes that 
approximately 4,395 of these advisers have cash referral fee 
arrangements. The rule requires approximately 7.04 burden hours per 
year per adviser and results in a total of approximately 30,941 total 
burden hours (7.04 x 4,395) for all advisers.
    The disclosure requirements of rule 206(4)-3 do not require 
recordkeeping or record retention. The collections of information 
requirements under the rules are mandatory. Information subject to the 
disclosure requirements of rule 206(4)-3 is not submitted to the 
Commission. The disclosures pursuant to the rule are not 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 OMB control number.
    The public may view the background documentation for this 
information collection at the following website, 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 Candace 
Kenner, 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: August 3, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17000 Filed 8-8-18; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices 39485

Exchange’s proposal to define the terms Commission summarily may submit only information that you wish
‘‘in-the-money’’ and ‘‘out-of-the-money’’ temporarily suspend such rule change if to make available publicly. All
options does not unduly burden it appears to the Commission that such submissions should refer to File
competition, rather it adds greater action is: (i) Necessary or appropriate in Number SR–BX–2018–035 and should
transparency to the Rulebook. the public interest; (ii) for the protection be submitted on or before August 30,
of investors; or (iii) otherwise in 2018.
C. Self-Regulatory Organization’s furtherance of the purposes of the Act.
Statement on Comments on the For the Commission, by the Division of
If the Commission takes such action, the Trading and Markets, pursuant to delegated
Proposed Rule Change Received From Commission shall institute proceedings authority.10
Members, Participants, or Others to determine whether the proposed rule Eduardo A. Aleman,
No written comments were either should be approved or disapproved. Assistant Secretary.
solicited or received.
IV. Solicitation of Comments [FR Doc. 2018–17005 Filed 8–8–18; 8:45 am]
III. Date of Effectiveness of the Interested persons are invited to BILLING CODE 8011–01–P
Proposed Rule Change and Timing for submit written data, views, and
Commission Action arguments concerning the foregoing,
SECURITIES AND EXCHANGE
Because the foregoing proposed rule including whether the proposed rule
COMMISSION
change does not: (i) Significantly affect change is consistent with the Act.
the protection of investors or the public Comments may be submitted by any of Submission for OMB Review;
interest; (ii) impose any significant the following methods: Comment Request
burden on competition; and (iii) become Electronic Comments
operative for 30 days from the date on Upon Written Request, Copies Available
which it was filed, or such shorter time • Use the Commission’s internet From: Securities and Exchange
as the Commission may designate, it has comment form (http://www.sec.gov/ Commission, Office of FOIA Services,
become effective pursuant to Section rules/sro.shtml); or 100 F Street NE, Washington, DC
19(b)(3)(A)(iii) of the Act 5 and • Send an email to rule-comments@ 20549–2736
subparagraph (f)(6) of Rule 19b–4 sec.gov. Please include File Number SR– Extension:
thereunder.6 BX–2018–035 on the subject line. Rule 206(4)–3, SEC File No. 270–218, OMB
A proposed rule change filed under Paper Comments Control No. 3235–0242
Rule 19b–4(f)(6) 7 normally does not • Send paper comments in triplicate Notice is hereby given that, pursuant
become operative prior to 30 days after to Secretary, Securities and Exchange to the Paperwork Reduction Act of 1995
the date of the filing. However, pursuant Commission, 100 F Street NE, (44 U.S.C. 3501 et seq.), the Securities
to Rule 19b–4(f)(6)(iii),8 the Commission Washington, DC 20549–1090. and Exchange Commission
may designate a shorter time if such (‘‘Commission’’) has submitted to the
All submissions should refer to File
action is consistent with the protection Office of Management and Budget a
Number SR–BX–2018–035. This file
of investors and the public interest. The request for approval of extension of the
number should be included on the
Exchange requests that the Commission previously approved collection of
subject line if email is used. To help the
waive the 30-day operative delay so that information discussed below.
Commission process and review your Rule 206(4)–3 (17 CFR 275.206(4)–3)
the proposal may become operative
comments more efficiently, please use under the Investment Advisers Act of
immediately upon filing. The Exchange
only one method. The Commission will 1940, which is entitled ‘‘Cash Payments
represents that immediately defining the
post all comments on the Commission’s for Client Solicitations,’’ provides
terms ‘‘in-the-money’’ and ‘‘out-of-the-
internet website (http://www.sec.gov/ restrictions on cash payments for client
money’’ options within its Rulebook
rules/sro.shtml). Copies of the solicitations. The rule requires that an
would provide greater transparency to
submission, all subsequent adviser pay all solicitors’ fees pursuant
its Participants. For the same reason, the
amendments, all written statements to a written agreement. When an adviser
Commission believes that waiving the
with respect to the proposed rule will provide only impersonal advisory
30-day operative delay is consistent
change that are filed with the services to the prospective client, the
with the protection of investors and the
Commission, and all written rule imposes no disclosure
public interest. Accordingly, the
communications relating to the requirements. When the solicitor is
Commission waives the 30-day
proposed rule change between the affiliated with the adviser and the
operative delay and designates the
Commission and any person, other than adviser will provide individualized
proposed rule change operative upon
those that may be withheld from the advisory services to the prospective
filing.9
public in accordance with the client, the solicitor must, at the time of
At any time within 60 days of the
provisions of 5 U.S.C. 552, will be the solicitation or referral, indicate to
filing of the proposed rule change, the
available for website viewing and the prospective client that he is
5 15 U.S.C. 78s(b)(3)(A)(iii).
printing in the Commission’s Public affiliated with the adviser. When the
6 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– Reference Room, 100 F Street NE, solicitor is not affiliated with the
4(f)(6) requires a self-regulatory organization to give Washington, DC 20549, on official adviser and the adviser will provide
the Commission written notice of its intent to file business days between the hours of individualized advisory services to the
the proposed rule change at least five business days 10:00 a.m. and 3:00 p.m. Copies of the
prior to the date of filing of the proposed rule prospective client, the solicitor must, at
filing also will be available for
sradovich on DSK3GMQ082PROD with NOTICES

change, or such shorter time as designated by the the time of the solicitation or referral,
Commission. The Exchange has satisfied this inspection and copying at the principal provide the prospective client with a
requirement. office of the Exchange. All comments copy of the adviser’s brochure and a
7 17 CFR 240.19b–4(f)(6).
received will be posted without change. disclosure document containing
8 17 CFR 240.19b–4(f)(6)(iii).
9 For purposes only of waiving the 30-day
Persons submitting comments are information specified in rule 206(4)–3.
operative delay, the Commission has considered the
cautioned that we do not redact or edit Amendments to rule 206(4)–3, adopted
proposed rule’s impact on efficiency, competition, personal identifying information from
and capital formation. See 15 U.S.C. 78c(f). comment submissions. You should 10 17 CFR 200.30–3(a)(12).

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39486 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices

in 2010 in connection with rule 206(4)– SECURITIES AND EXCHANGE A. The Exchange’s Description of the
5, specify that solicitation activities COMMISSION Index
involving a government entity, as [Release No. 34–83775; File No. SR– The Index is designed to provide
defined in rule 206(4)–5, are subject to CboeBZX–2018–018] exposure to investment-grade
the additional limitations of rule securitized products issued in the U.S.,
206(4)–5. The information rule 206(4)– Self-Regulatory Organizations; Cboe including ABS 7 and CMBS.8
3 requires is necessary to inform BZX Exchange, Inc.; Order Instituting To qualify for inclusion in the Index,
advisory clients about the nature of the Proceedings To Determine Whether To eligible securities must be a component
solicitor’s financial interest in the Approve or Disapprove a Proposed of The ICE BofA Merrill Lynch US ABS
recommendation so the prospective Rule Change To List and Trade Shares & CMBS Index (‘‘Feeder Index’’). Such
clients may consider the solicitor’s of the Principal Morley Short Duration securities are then selected and
potential bias, and to protect clients Index ETF Under Rule 14.11(c)(4) weighted based upon the Index
against solicitation activities being methodology discussed below.
August 3, 2018.
carried out in a manner inconsistent 1. The Feeder Index’s Methodology
with the adviser’s fiduciary duty to I. Introduction
On April 23, 2018, Cboe BZX In order to be included in the Feeder
clients. Rule 206(4)–3 is applicable to
Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) Index, a security (whether ABS or
all Commission registered investment CMBS) must meet the following criteria
advisers. The Commission believes that filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant (‘‘Basic Criteria’’):
approximately 4,395 of these advisers • Be rated investment-grade (based on
have cash referral fee arrangements. The to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule an average of Moody’s, S&P Global, and
rule requires approximately 7.04 burden Fitch);
19b–4 thereunder,2 a proposed rule
hours per year per adviser and results in • have a term of at least one year
a total of approximately 30,941 total change to list and trade shares
remaining until final stated maturity;
(‘‘Shares’’) of the Principal Morley Short
burden hours (7.04 × 4,395) for all and have at least one month to the last
Duration Index ETF (‘‘Fund’’). The
advisers. expected cash flow; and
proposed rule change was published for
The disclosure requirements of rule • inverse floating rate, interest only,
comment in the Federal Register on
and principal only securities are
206(4)–3 do not require recordkeeping May 8, 2018.3 On June 20, 2018, the
excluded.
or record retention. The collections of Commission designated a longer period In addition to the Basic Criteria, an
information requirements under the within which to approve the proposed ABS must meet the following criteria:
rules are mandatory. Information subject rule change, disapprove the proposed • Must issue a fixed or floating rate
to the disclosure requirements of rule rule change, or institute proceedings to coupon;
206(4)–3 is not submitted to the determine whether to approve or • must have an original deal size for
Commission. The disclosures pursuant disapprove the proposed rule change.4 the collateral group 9 of at least $250
to the rule are not kept confidential. An The Commission has received no million;
agency may not conduct or sponsor, and comment letters on the proposed rule • must have a current outstanding
a person is not required to respond to, change. This order institutes deal size for the collateral group greater
a collection of information unless it proceedings under Section 19(b)(2)(B) of than or equal to 10% of the original deal
the Act 5 to determine whether to size; and
displays a currently valid OMB control
approve or disapprove the proposed • a minimum current outstanding
number. rule change. tranche size of $50 million for senior
The public may view the background tranches and $10 million current
documentation for this information II. Description of the Proposed Rule
Change amount outstanding for mezzanine and
collection at the following website, subordinated tranches.
www.reginfo.gov. Comments should be The Exchange proposes to list and In addition to the Basic Criteria, a
directed to: (i) Desk Officer for the trade the Shares pursuant to BZX Rule CMBS (which may include U.S. agency
Securities and Exchange Commission, 14.11(c)(4), which governs the listing CMBS) must also meet the following
Office of Information and Regulatory and trading of index fund shares based criteria:
Affairs, Office of Management and on fixed income securities indexes. The • Must issue a fixed coupon
Fund would seek to provide investment schedule;
Budget, Room 10102, New Executive
results that replicate, before expenses, • must have an original deal size for
Office Building, Washington, DC 20503,
the performance of The ICE BofA the collateral group of at least $250
or by sending an email to: Shagufta_ Merrill Lynch Low Duration U.S. ABS &
Ahmed@omb.eop.gov; and (ii) Pamela million;
CMBS Equal Par Index (‘‘Index’’).6 • must have a current outstanding
Dyson, Director/Chief Information
Officer, Securities and Exchange deal size for the collateral group that is
1 15 U.S.C.78s(b)(1). greater than or equal to 10% of the
Commission, c/o Candace Kenner, 100 F 2 17 CFR 240.19b–4.
original deal size; and
Street NE, Washington, DC 20549 or 3 See Securities Exchange Act Release No. 83152
send an email to: PRA_Mailbox@ (May 2, 2018), 83 FR 20892.
4 See Securities Exchange Act Release No. 83479, 7 ‘‘ABS’’ means fixed and floating rate debt
sec.gov. Comments must be submitted to 83 FR 29838 (June 26, 2018). The Commission securities secured by non-mortgage assets.
OMB within 30 days of this notice. designated August 6, 2018 as the date by which the 8 ‘‘CMBS’’ means fixed rate debt securities
sradovich on DSK3GMQ082PROD with NOTICES

Commission shall approve the proposed rule secured by first mortgages on commercial real
Dated: August 3, 2018. change, disapprove the proposed rule change, or estate.
Eduardo A. Aleman, institute proceedings to determine whether to 9 A collateral group describes the assets
approve or disapprove the proposed rule change. (receivables) that are held by the special purpose
Assistant Secretary. 5 15 U.S.C. 78s(b)(2)(B).
vehicle (‘‘SPV’’) issuing the ABS securities. The
[FR Doc. 2018–17000 Filed 8–8–18; 8:45 am] 6 The Index value, calculated and disseminated at collateral group provides the source of payment for
BILLING CODE 8011–01–P least once daily, as well as the components of the the SPV’s liabilities (i.e., ABS securities). Typically,
Index and their percentage weighting, will be an SPV will include assets greater than its liabilities
available from major market data vendors. as a form of credit enhancement.

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Document Created: 2018-08-09 01:10:58
Document Modified: 2018-08-09 01:10:58

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		83 FR 39485