Proposed Collection; Comment Request
| Citation | 85 FR 55529 |
| Record Number | 2020-19724 |
| Published date | 08 September 2020 |
| Section | Notices |
| Court | Securities And Exchange Commission |
55529
Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices
93
See, e.g., supra note 7.
94
See supra note 29.
95
15 U.S.C. 78s(b)(2).
96
17 CFR 200.30–3(a)(12).
similar to the process in place on Phlx,
with conforming changes to reflect
particularlities to the BX market.
93
In
making this change, the Exchange
delineates detailed steps of the opening
process. By providing more clearly each
sequence of the opening process, the
Commission notes that the proposed
rule helps market participants
understand how the new opening
process will operate. To that extent, the
new opening process may promote
transparency, reduce the potential for
investor confusion, and assist market
participants in deciding whether to
participate in BX’s opening process.
Further, if they do participate in the
new opening process, the proposed rule
may help provide market participants
with the confidence and certainty as to
how their orders or quotes will be
processed.
Further, the Commission believes that
the proposed rule change is designed to
promote just and equitable principles of
trade by seeking to ensure that option
series open in a fair and orderly manner.
For example, the Commission notes that
the proposed rule change is designed to
mitigate the effects of the underlying
security’s volatility as the overlying
option series undergoes the opening
process. Specifically, the proposed rule
provides for a range of no less than 100
milliseconds and no more than 5
seconds in order to ensure that the
Exchange has the ability to adjust the
period for which the underlying must be
open on the primary market before the
opening process commences.
94
Moreover, the Commission notes that
the proposed rule provides an orderly
process for handling eligible interests
during the opening process, while
seeking to avoid opening executions at
suboptimal prices. For instance, the
proposed rule ensures that the Opening
Process will stop and an option series
will not open if the ABBO becomes
crossed, which can be indicative of
price uncertainty with respect to an
option series. Likewise, the Exchange
will not open an option series with a
trade unless any of the following
conditions occur: (1) The Potential
Opening Price is at or within the Pre-
Market BBO and the ABBO, which is
also a Valid Width NBBO; (2) the
Potential Opening Price is at or within
the non-zero bid ABBO, which is also a
Valid Width NBBO, if the Pre-Market
BBO is crossed; or (3) where there is no
ABBO, the Potential Opening Price is at
or within the Pre-Market BBO, which is
also a Valid Width NBBO. While the
proposed opening process attempts to
maximize the number of contracts
executed on the Exchange during such
process, including by seeking additional
liquidity, if necessary, the Commission
notes that the proposed opening process
takes into consideration away market
interests and ensures that better away
prices are not traded through.
For these reasons, the Commission
believes that the proposed rule change
is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,
95
that the proposed rule change (SR–BX–
2020–016), be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.
96
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–19718 Filed 9–4–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–522; OMB Control No.
3235–0586]
Proposed Collection; 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
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 38a–1 (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 4,093 funds
subject to Rule 38a–1. Among these
funds, 101 were newly registered in the
past year. These 101 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
burden hours associated with the
adoption and documentation
requirement is 10,605 hours.
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55530
Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices
1
15 U.S.C. 78s(b)(1).
2
17 CFR 240.19b–4.
3
The term ‘‘Member’’ means an individual or
organization that is registered with the Exchange
pursuant to Chapter II of the Exchange’s Rules for
purposes of trading on the Exchange as an
‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’
Members are deemed ‘‘members’’ under the
Exchange Act. See Exchange Rule 100.
4
The ERP Exchange fees under the Existing
Program consist of: (a) Transaction fees as set forth
in Section 1)a of the MIAX PEARL Options Fee
Schedule; (b) membership fees as set forth in
Section 3 of the MIAX PEARL Options Fee
Schedule; (c) system connectivity fees as set forth
in Section 5 of the MIAX PEARL Options Fee
Schedule; and (d) market data fees as set forth in
Section 6 of the MIAX PEARL Options Fee
Schedule (collectively, the ‘‘ERP Exchange Fees’’).
5
See Securities Exchange Act Release No. 83012
(April 9, 2018), 83 FR 16163 (April 13, 2018)
(Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Implement an Equity
Rights Program) (‘‘Initial ERP Filing’’).
6
See Securities Exchange Act Release Nos. 88132
(February 6, 2020), 85 FR 8053 (February 12, 2020)
(SR–PEARL–2020–03) (Notice of Filing of a
Proposed Rule Change to Adopt Rules Governing
the Trading of Equity Securities); and 89563
(August 14, 2020), 85 FR 51510 (August 20, 2020)
(Order Approving Proposed Rule Change to Adopt
Rules Governing the Trading of Equity Securities).
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 200,557 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 aggregate annual burden hours
associated with the recordkeeping
requirement is 24,558 hours.
In total, the staff estimates that the
aggregate annual information collection
burden of Rule 38a–1 is 235,720 hours.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is based on communications with
industry representatives, and is not
derived from a comprehensive or even
a representative survey or study.
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 OMB control
number.
Written comments are invited on: (i)
Whether the collection of information is
necessary for the proper performance of
the functions of the Commission,
including whether the information has
practical utility; (ii) the accuracy of the
Commission’s estimate of the burden(s)
of the collection of information; (iii)
ways to enhance the quality, utility, and
clarity of the information collected; and
(iv) 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 in
writing within 60 days of this
publication.
Please direct your written comments
to David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: September 1, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–19724 Filed 9–4–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89730; File No. SR–
PEARL–2020–10]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Implement a Second
Equity Rights Program
September 1, 2020.
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 August
20, 2020, MIAX PEARL, LLC (‘‘MIAX
PEARL’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III 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.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange is filing a proposal to
implement an equity rights program
related to fees charged for the trading of
both options and equity securities on
the Exchange.
The text of the proposed rule change
is available on the Exchange’s website at
http://www.miaxoptions.com/rule-
filings/pearl at MIAX PEARL’s principal
office, 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
On April 6, 2018, the Exchange filed
for immediate effectiveness a proposed
rule change with the Commission to
implement an equity rights program
(‘‘Existing Program’’) pursuant to which
units representing the right to acquire
equity in the Exchange’s parent holding
company, Miami International
Holdings, Inc. (‘‘MIH’’) were issued to a
participating Member
3
in exchange for
payment of an initial purchase price or
the prepayment of certain ERP Exchange
Fees
4
and the achievement of certain
liquidity volume thresholds on the
Exchange over a 32-month period.
5
On
August 14, 2020, the Commission
approved a proposed rule change to
adopt rules governing the trading of
equity securities on the Exchange (the
platform for the trading of equity
securities is referred to herein as ‘‘MIAX
PEARL Equities’’).
6
The Exchange now
proposes to implement a second equity
rights program under which ERP
Exchange fees would be expanded to
include fees incurred on and after
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