[Federal Register Volume 81, Number 6 (Monday, January 11, 2016)]
[Notices]
[Pages 1252-1255]
[FR Doc No: 2016-250]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76832; File No. SR-BATS-2015-119]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 11.22, Data Products, To Describe IPO Auction Viewer

January 5, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 23, 2015, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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
Exchange has designated this proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6)(iii) thereunder,\4\ which renders it effective upon
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange filed a proposal to amend Rule 11.22 to describe a new
market data product known as IPO Auction Viewer. The proposed rule
change is based on Nasdaq Stock Market LLC's (``Nasdaq'') Rule
7015(j).\5\
---------------------------------------------------------------------------

    \5\ See also Securities Exchange Act Release No. 75863
(September 9, 2015), 80 FR 55406 (September 15, 2015) (SR-Nasdaq-
2015-082) (Order Approving Proposed Rule Change to Introduce an
Additional Data Element to the IPO Indicator Service).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.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 parts of such
statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 11.22 describing a new market
data product known as IPO Auction Viewer, which would be provided free
of charge. IPO Auction Viewer would be a data feed that is available to
designated associated persons of a Member \6\ that is acting as the
Stabilizing Agent for an IPO Security. ``IPO Security'' would be
defined under proposed paragraph (l)(2)(A) to Exchange Rule 11.22 as
``a BATS listed security in an initial public offering for which the
initial pricing procedures described in Rule 11.23(d) are available.''
\7\ The proposed rule change also adds to Rule 11.22(l) definitions of
``IPO Auction'', ``Stabilizing'', and ``Stabilizing Agent''. ``IPO
Auction'' would be defined under proposed paragraph (l)(2)(B) as ``the
initial pricing procedures described in Rule 11.23(d).''
``Stabilizing'' would be defined under proposed paragraph (l)(2)(C) as
``Stabilizing as defined in Rule 100 of Regulation M of the Securities
Exchange Act of 1934, including engaging in syndicate covering
transactions.'' Lastly, ``Stabilizing Agent'' would be defined under
proposed paragraph (l)(2)(D) as ``a Member that will engage in
Stabilizing with respect to an IPO Security on the day of its initial
public offering.''
---------------------------------------------------------------------------

    \6\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
    \7\ Exchange Rule 11.23(d) sets forth the Exchange's procedures
for conducting an auction for a BATS listed security in an initial
public offering.
---------------------------------------------------------------------------

    IPO Auction Viewer would assist Members who are acting as a
Stabilizing Agent in monitoring the orders they have entered for
execution in the auction process for an IPO Security. The auction
process under Exchange Rule 11.23(d) is designed to provide an orderly,
single priced opening of securities subject to an intra-day halt,
including securities that are the subject of an IPO. Prior to the
execution of the auction process for an IPO Security (``IPO Auction''),
Members enter orders eligible for participation in the IPO Auction, and
the Exchange disseminates certain information regarding buying and
selling interest and indicative execution price information. The
quotation only period with respect to an IPO Auction currently
commences fifteen (15) minutes plus a short random period prior to the
IPO Auction (``Quote-Only Period'').\8\ Coinciding with the beginning
of the Quote-Only Period for a security and updated every five seconds
thereafter, the Reference Price,\9\ Indicative Price,\10\ Auction Only
Price,\11\ and the lesser of Reference Buy Shares \12\ and Reference
Sell Shares \13\ associated with the IPO Auction will be
disseminated.\14\ The IPO Auction executes and regular market trading
commences in the IPO Security at the conclusion of the IPO Auction.\15\
The representative of the underwriting syndicate that serves as lead
underwriter also serves as the Stabilizing Agent for the IPO Security.
---------------------------------------------------------------------------

    \8\ See Exchange Rule 11.23(a)(17).
    \9\ See Exchange Rule 11.23(a)(19).
    \10\ See Exchange Rule 11.23(a)(10).
    \11\ See Exchange Rule 11.23(a)(2).
    \12\ See Exchange Rule 11.23(a)(18).
    \13\ See Exchange Rule 11.23(a)(21).
    \14\ See Exchange Rule 11.23(d)(1) and (2).
    \15\ See Exchange Rule 11.23(d)(3).
---------------------------------------------------------------------------

    As discussed above, the Stabilizing Agent has responsibility for
monitoring the submission of buying and selling interest into the IPO
Auction and informing the Exchange when the IPO Security is ready to
initiate trading. Thus, the Stabilizing Agent stands ready

during the course of the day to commit its capital in support of the
IPO Security, buying from investors that wish to sell the IPO Security
to realize short-term gains (or to minimize short-term losses). The
Stabilizing Agent thereby serves to dampen volatility in the IPO
Security and promote the maintenance of a fair and orderly market.
Because the function performed by the Stabilizing Agent is unique on
the day of the IPO, the Exchange has concluded that providing
additional information about pre-opening interest in the stock to the
Stabilizing Agent will help it to optimize the opening of the stock and
manage its own risk, thereby assisting it in promoting a fair and
orderly market for the IPO Security. Accordingly, the Exchange is
proposing to introduce the IPO Auction Viewer, a specialized data
product that will be made available solely to the Stabilizing Agent.
    Access to the IPO Auction Viewer will be limited through a secure
entitlement process to designated individuals employed by the
Stabilizing Agent. On the day of an IPO, beginning with the start of
the Quote-Only Period described in Exchange Rule 11.23(d)(1)(A) and
ending upon the completion of the IPO Auction for an IPO Security, the
IPO Auction Viewer will display aggregated buying and selling interest
information for the IPO Security, reflecting all orders on the BATS
Book, and consisting of the aggregate size of all orders at each
permissible price level. The aggregated information provided through
this data element would include all Eligible Auction Orders \16\ and
size. Information provided through the IPO Auction Viewer will be
updated every five seconds, along with updates to the Reference Price,
Indicative Price, Auction Only Price, and the lesser of Reference Buy
Shares and Reference Sell Shares.\17\ Access to IPO Auction Viewer
shall terminate immediately upon the completion of the IPO Auction for
the IPO Security.
---------------------------------------------------------------------------

    \16\ See Exchange Rule 11.23(a)(8).
    \17\ See Exchange Rule 11.23(d)(1)(A).
---------------------------------------------------------------------------

    The IPO Auction Viewer will provide no information other than that
described above, unless the Exchange submits a proposed rule change to
add additional data to it. In particular, the IPO Auction Viewer will
not provide any information regarding Eligible Auction Orders other
than in the aggregated format described above, and will not provide any
information regarding the identity of Members posting orders. The
Exchange believes that providing this information to the Stabilizing
Agent will provide the Stabilizing Agent with insights into the scope
of demand for, and supply of, the IPO Security, in a manner that will
allow it to make more informed decisions about the appropriate time to
initiate the opening of the IPO Security through the IPO Auction. In
addition, the information will allow the Stabilizing Agent to respond
in a more informed way to questions from its customers and other
participants regarding expectations that an Order to buy or sell with a
stated price and size may be executable in the IPO Auction. Finally,
the information will assist the Stabilizing Agent in making decisions
about the appropriate level of capital to commit to support the IPO
Security once trading commences.
    Once the IPO Auction executes, the IPO Auction Viewer will cease to
be available, both with respect to the state of the BATS Book during
the continuous market and with respect to retrospective information
about the state of the BATS Book leading up to the IPO Auction. Thus,
the Stabilizing Agent will not be provided with any information not
available to other market participants once continuous market trading
in the IPO Security commences.
    Since the aggregated information provided through the IPO Auction
Viewer is unique and directly available only to the Stabilizing Agent,
the Exchange believes that it is appropriate to adopt safeguards in
order to ensure that the aggregated information is not misused.\18\
Accordingly, the Exchange's proposed rule will require the Stabilizing
Agent receiving the IPO Auction Viewer to maintain and enforce written
policies and procedures reasonably designed to achieve the following
purposes:
---------------------------------------------------------------------------

    \18\ The Exchange notes that the usage of the information
provided through the IPO Auction Viewer must be consistent with
Regulation M, including Commission Guidance Regarding Prohibited
Conduct in Connection with IPO Allocations (Securities Exchange Act
Rel. No. 33-8565) (April 7, 2005).
---------------------------------------------------------------------------

     Restrict electronic access \19\ to aggregated information
only to associated persons of the Stabilizing Agent who need to know
the information in connection with establishing the opening price of an
IPO Security and Stabilizing the IPO Security;
---------------------------------------------------------------------------

    \19\ As discussed below, electronic access to the IPO Auction
Viewer will be available on a displayed basis only.
---------------------------------------------------------------------------

     Except as may be required for purposes of maintaining
books and records for regulatory purposes, prevent the retention of
aggregated information following the completion of the IPO Auction for
the IPO Security; and
     Prevent persons with access to aggregated information from
engaging in transactions in the IPO Security other than transactions in
the IPO Auction; transactions on behalf of a customer; or Stabilizing.
Thus, for example, the Stabilizing Agent or its affiliates would not be
permitted to use the information to engage in proprietary trading other
than in support of bona fide Stabilizing activity.
    However, for the avoidance of doubt regarding appropriate uses of
the aggregated information, the proposed rule will also provide that
nothing contained in the rule shall be construed to prohibit the Member
acting as the Stabilizing Agent from (i) engaging in Stabilizing
consistent with that role, or (ii) using the information provided from
the IPO Auction Viewer to respond to inquiries from any person,
including, without limitation, other Members, customers, or associated
persons of the Stabilizing Agent, regarding the expectations of the
Member acting as the Stabilizing Agent with regard to the possibility
of executing stated quantities of an IPO Security at stated prices in
the IPO Auction.
    The aggregated information provided through the IPO Auction Viewer
will be available solely for display on the screen of a computer for
which an entitlement has been provided by the Exchange. Under no
circumstances may a Member redirect aggregated information to another
computer or reconfigure it for use in a non-displayed format,
including, without limitation, in any trading algorithm. If a Member
becomes aware of any violation of the restrictions contained in the
proposed rule, it must report the violation promptly to the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\20\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\21\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and to protect investors and the public
interest, and that it is not designed to permit unfair discrimination
among customers, brokers, or dealers.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f.
    \21\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change will promote
the goals of the Act by assisting the

Stabilizing Agent for an IPO Security in promoting a fair and orderly
market. Specifically, by providing unique, aggregated information
concerning all orders on the BATS Book prior to the commencement of an
IPO Auction, the IPO Auction Viewer will give the Stabilizing Agent
information that will assist it in achieving a range of goals. Further,
by being able to share aggregated information with other Members and
customers, the Stabilizing Agent will enable greater participation in
the IPO Auction because it will be able to provide more certain
information about the ability of investors to execute orders at
particular sizes and prices. Moreover, being able to compare
information about potential interest in participating in the IPO
Auction with more detailed information about the state of the BATS Book
will enable the Stabilizing Agent to determine with more certainty the
appropriate time to allow the IPO Auction to execute. Finally, having
greater knowledge about the range of trading interest in the BATS Book
prior to the execution of the IPO Auction will enable the Stabilizing
Agent to make more informed decisions about the extent of capital it
may need to commit after the commencement of trading in order to
stabilize the price of the IPO Security and thereby dampen volatility
that might undermine investor confidence.
    The Exchange further believes that the restrictions it proposes to
impose on the use of the IPO Auction Viewer will protect against
possible misuse of the provided information. Notably, the information
will be provided only prior to the completion of the IPO Auction and
may not be retained thereafter, except to the extent necessary for
record-retention purposes. The information will be disseminated in a
display format only and may not be redirected or reconfigured for non-
display usage (such as usage by a trading algorithm). Moreover,
electronic access to the information will be available only to certain
designated individuals with a role in conducting Stabilizing
activities, and persons with access may not engage in transactions
other than Stabilizing or transactions in the IPO Auction or on behalf
of a customer. The Exchange further believes that the safeguards it
proposes around the use of such aggregated information by its Members
will provide added assurance to Members and the investing public that
the IPO Auction Viewer will not be misused.
    In addition, the Exchange notes that although the IPO Auction
Viewer will be available only to Stabilizing Agents, this limitation is
consistent with the protection of investors because the Stabilizing
Agent plays a unique role on the day of an IPO because it must decide
when the IPO Security should commence trading and must commit capital
in support of the IPO Security once trading begins. Because the IPO
Auction Viewer will assist the Stabilizing Agent in performing these
functions, which are performed by no other broker, the Exchange
believes that it is reasonable to limit access to the IPO Auction
Viewer to the Stabilizing Agent. Moreover, because the IPO Auction
Viewer will cease to be available once regular trading in the IPO
Security commences and the information provided therein will quickly
become stale, the Exchange does not believe that access to the
information will provide the Stabilizing Agent with any unfair
advantage.
    The Exchange believes that the proposal to add certain defined
terms to Rule 11.22(l) is consistent with the Act because the
definitions are intended to promote a clear understanding of the rule
text by delineating the products addressed by the rule and the scope of
activities to which they pertain. The Exchange further believes that
the proposal to make the IPO Auction Viewer available to eligible
recipients at no charge is consistent with Section 6(b)(4) of the Act
\22\ because it will not result in any increase in the costs incurred
by a Stabilizing Agent to receive the additional information. The
Exchange further believes that the proposal is consistent with an
equitable allocation of fees and not unfairly discriminatory because
additional information is being provided to a limited group of
potential users in order to assist in the promotion of fair and orderly
markets during an IPO. Accordingly, the absence of an additional fee is
designed to encourage eligible Members to accept the information in
order to ensure that the goals of the proposal are advanced to the
greatest extent possible.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    Lastly, the Exchange notes that the proposed IPO Auction Viewer is
based on Nasdaq's IPO Book Viewer, which was recently approved by the
Commission.\23\ However, the Exchange notes that while the proposed IPO
Auction Viewer would be identical to Nasdaq's IPO Book Viewer in many
respects, the products would differ in the following two ways. First,
Nasdaq's IPO Book Viewer provides the total number of orders while the
proposed IPO Auction Viewer would not but instead would only provide
the number of shares. Second, the proposed IPO Action Viewer would
group the aggregate size of all orders at each permissible price
increment, while Nasdaq limits the grouping to price increments of
$0.05, $0.10, or $0.25, depending on the election of the User. All
other aspects of IPO Auction Viewer under Exchange Rule 11.22(l) would
be identical to Nasdaq Rule 7015(j).
---------------------------------------------------------------------------

    \23\ See supra note 5.
---------------------------------------------------------------------------

    The Exchange views these differences as immaterial because the
Exchange does not believe that either distinction would provide an
inappropriate level of detail but rather that these differences are
simply the result of different designs. Notwithstanding these
differences, the Exchange believes the proposed IPO Auction Viewer
would provide the Stabilizing Agent the necessary information to: (i)
Enable greater participation in the IPO Auction because it will be able
to provide more certain information about the ability of investors to
execute orders at particular sizes and prices; (ii) compare potential
interest in participating in the IPO Auction, enabling it to determine
with more certainty the appropriate time to allow the IPO Auction to
execute; and (iii) make more informed decisions about the extent of
capital it may need to commit after the commencement of trading in
order to stabilize the price of the IPO Security and thereby dampen
volatility.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
by being able to share aggregated information with other Members and
customers, the Stabilizing Agent will enable greater participation in
the IPO Auction because it will be able to provide more certain
information about the ability of investors to execute orders at
particular sizes and prices, thus increasing competition. In addition,
given that the proposal will result in a Stabilizing Agent's usage of
the information being subject to greater restrictions, the Exchange
does not believe that there can be any reasonable objection to the
proposal on competitive grounds.

(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (A)
Significantly affect the protection of investors or the public
interest; (B) impose any significant burden on competition; and (C) by
its terms, 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) of the Act \24\ and
paragraph (f)(6) of Rule 19b-4 thereunder,\25\ the Exchange has
designated this rule filing as non-controversial. The Exchange has
given the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of 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.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    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: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) 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 proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File No. SR-BATS-2015-119 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 No. SR-BATS-2015-119. 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 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 such filing will also 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 No. SR-BATS-2015-119 and should be
submitted on or before February 1, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
---------------------------------------------------------------------------

    \26\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-250 Filed 1-8-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 199 (Tuesday, October 17, 2023)]
[Notices]
[Pages 71615-71616]
[FR Doc No: 2023-22815]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-208, OMB Control No. 3235-0213]

Proposed Collection; Comment Request; Extension: Rule 17g-1

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3520), 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 17g-1 (17 CFR 270.17g-1) under the Investment Company Act of
1940 (the ``Act'') (15 U.S.C. 80a-17(g)) governs the fidelity bonding
of officers and employees of registered management investment companies
(``funds'') and their advisers. Rule 17g-1 requires, in part, the
following:

Independent Directors' Approval

    The form and amount of the fidelity bond must be approved by a
majority of the fund's independent directors at least once annually,
and the amount of any premium paid by the fund for any ``joint insured
bond,'' covering multiple funds or certain affiliates, must be approved
by a majority of the fund's independent directors.

Terms and Provisions of the Bond

    The amount of the bond may not be less than the minimum amounts of
coverage set forth in a schedule based on the fund's gross assets. The
bond must provide that it shall not be cancelled, terminated, or
modified except upon 60-days written notice to the affected party and
to the Commission. In the case of a joint insured bond, 60-days written
notice must also be given to each fund covered by the bond. A joint
insured bond must provide that the fidelity insurance company will
provide all funds covered by the bond with a copy of the agreement, a
copy of any claim on the bond, and notification of the terms of the
settlement of any claim prior to execution of that settlement. Finally,
a fund that is insured by a joint bond must enter into an agreement
with all other parties insured by the joint bond regarding recovery
under the bond.

Filings With the Commission

    Upon the execution of a fidelity bond or any amendment thereto, a
fund must file with the Commission within 10 days: (i) a copy of the
executed bond or any amendment to the bond, (ii) the independent
directors' resolution approving the bond, and (iii) a statement as to
the period for which premiums have been paid on the bond. In the case
of a joint insured bond, a fund must also file: (i) a statement showing
the amount the fund would have been required to maintain under the rule
if it were insured under a single insured bond; and (ii) the agreement
between the fund and all other insured parties regarding recovery under
the bond. A fund must also notify the Commission in writing within five
days of any claim or settlement on a claim under the fidelity bond.

Notices to Directors

    A fund must notify by registered mail each member of its board of
directors of: (i) any cancellation, termination, or modification of the
fidelity bond at least 45 days prior to the effective date; and (ii)
the filing or settlement of any claim under the fidelity bond when
notification is filed with the Commission.
    Rule 17g-1's independent directors' annual review requirements,
fidelity bond content requirements, joint bond agreement requirement,
and the required notices to directors are designed to ensure the safety
of fund assets against losses due to the conduct of persons who may
obtain access to those assets. These requirements also seek to
facilitate oversight of a fund's fidelity bond. The rule's required
filings with the Commission are designed to assist the Commission in
monitoring funds' compliance with the fidelity bond requirements.
    Based on conversations with representatives in the fund industry,
the Commission staff estimates that for each of the estimated 2,543
active funds (respondents),\1\ the average annual paperwork burden
associated with rule 17g-1's requirements is two hours, one hour each
for a compliance attorney and the board of directors as a whole. The
time spent by a compliance attorney includes time spent filing reports
with the Commission for fidelity losses (if any) as well as paperwork
associated with any notices to directors, and managing any updates to
the bond and the joint agreement (if one exists). The time spent by the
board of directors as a whole includes any time spent initially
establishing the bond, as well as time spent on annual updates and
approvals. The Commission staff therefore estimates the total ongoing
paperwork burden hours per year for all funds required by rule 17g-1 to
be 5,086 hours (2,543 funds x 2 hours = 5,086 hours). Commission staff
continues to estimate that the filing and reporting requirements of
rule 17g-1 do not entail any external cost burdens.
---------------------------------------------------------------------------

    \1\ Based on a review of fund filings for the three-year period
from January 1, 2020 to December 31, 2022, Commission staff
calculates there are 2,186 funds (registered open- and closed-end
funds, and business development companies) that must comply with the
collections of information under rule 17g-1, and which collectively
submit an estimated 2,543 filings on Form 17G annually.
---------------------------------------------------------------------------

    These estimates of average burden hours are made solely for the
purposes of the Paperwork Reduction Act. These estimates are not
derived from a comprehensive or even a representative survey or study
of Commission rules. The collection of information required by rule
17g-1 is mandatory and 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.
    Written comments are invited on: (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimate of the burden of the collection of information; (c) ways to
enhance the quality, utility, and clarity of the information collected;
and (d) ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted by December 18, 2023.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
    Please direct your written comments to: David Bottom, Acting
Director/Chief Information Officer, Securities and

Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC
20549 or send an email to: [email protected].

    Dated: October 11, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-22815 Filed 10-16-23; 8:45 am]
BILLING CODE 8011-01-P