30 day notice

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Notices
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
plan also will be available for inspection
and copying at the principal offices of
MIAX, MIAX PEARL, MIAX EMERALD,
and FINRA. All comments received will
be posted without change. Persons
submitting comments are cautioned that
we do not redact or edit personal
identifying information from comment
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number 4–678 and
should be submitted on or before
February 19, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–00725 Filed 1–31–19; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–258, OMB Control No.
3235–0268]

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 2a–7

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 2a–7 (17 CFR 270.2a–7) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (the ‘‘Act’’) governs
money market funds. Money market
funds are open-end management
investment companies that differ from
other open-end management investment
companies in that they seek to maintain
a stable price per share, usually $1.00.
The rule exempts money market funds
from the valuation requirements of the
Act, and, subject to certain risk-limiting
conditions, permits money market funds
to use the ‘‘amortized cost method’’ of
asset valuation or the ‘‘penny-rounding
method’’ of share pricing.
15 17

CFR 200.30–3(a)(34).

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Rule 2a–7 also imposes certain
recordkeeping and reporting obligations
on money market funds. The board of
directors of a money market fund, in
supervising the fund’s operations, must
establish written procedures designed to
stabilize the fund’s net asset value
(‘‘NAV’’); establish written procedures
to test periodically the ability of the
fund to maintain a stable NAV based on
certain hypothetical events (‘‘stress
testing’’); review, revise, and approve
written procedures to stress test a fund’s
portfolio; and create a report to the fund
board documenting the results of stress
testing. The board must also adopt
guidelines and procedures relating to
certain responsibilities it delegates to
the fund’s investment adviser. These
procedures and guidelines typically
address various aspects of the fund’s
operations. The fund must maintain and
preserve for six years a written copy of
both these procedures and guidelines.
The fund also must maintain and
preserve for six years a written record of
the board’s considerations and actions
taken in connection with the discharge
of its responsibilities, to be included in
the board’s minutes, including
determinations to impose any liquidity
fees or temporary suspension of
redemptions. In addition, the fund must
maintain and preserve for three years
written records of certain credit risk
analyses, evaluations with respect to
securities subject to demand features or
guarantees, evaluations with respect to
asset-backed securities not subject to
guarantees, and determinations with
respect to adjustable rate securities and
asset-backed securities. If the board
takes action with respect to defaulted
securities, events of insolvency, or
deviations in share price, the fund must
file with the Commission an exhibit to
Form N–CR describing the nature and
circumstances of the action. If any
portfolio security fails to meet certain
eligibility standards under the rule, the
fund also must identify those securities
in an exhibit to Form N–CR. After
certain events of default or insolvency
relating to a portfolio security, the fund
must notify the Commission of the event
and the actions the fund intends to take
in response to the situation.
A fund must also post certain periodic
information on the its website including
disclosure of portfolio holdings,
disclosure of daily and weekly liquid
assets and net shareholder flow,
disclosure of daily current NAV, and
disclosures of financial support received
by the fund, the imposition and removal
of liquidity fees, and the suspension and
resumption of fund redemptions. Lastly,
for funds that elect to be retail funds,

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they must create written policies and
procedures reasonably designed to limit
all beneficial owners of the fund to
natural persons.
The recordkeeping requirements in
rule 2a–7 are designed to enable
Commission staff in its examinations of
money market funds to determine
compliance with the rule, as well as to
ensure that money market funds have
established procedures for collecting the
information necessary to make adequate
credit reviews of securities in their
portfolios. The reporting requirements
of rule 2a–7 are intended to assist
Commission staff in overseeing money
market funds and reduce the likelihood
that a fund is unable to maintain a
stable NAV.
Commission staff estimates that there
are 433 money market funds (91 fund
complexes), all of which are subject to
rule 2a–7. Commission staff further
estimates that there will be
approximately 10 new money market
funds established each year.
Commission staff estimates that rule 2a–
7 contains the following collection of
information requirements:
• Record of credit risk analyses, and
determinations regarding adjustable rate
securities, asset-backed securities, assetbacked securities not subject to
guarantees, securities subject to a
demand feature or guarantee, and
counterparties to repurchase
agreements. Commission staff estimates
a total annual hour burden for 433 funds
to be 294,440 hours.
• Establishment of written procedures
designed to stabilize NAV and
guidelines and procedures for board
delegation of authority. Commission
staff estimates a total annual hour
burden for 10 new money market funds
to be 155 hours.
• Board review of procedures and
guidelines of any investment adviser or
officers to whom the fund’s board has
delegated responsibility under rule 2a–
7 and amendment of such procedures
and guidelines. Commission staff
estimates a total annual hour burden for
108 funds to be 540 hours.
• Records of the board’s
determination for imposing any
liquidity fees or temporary suspension
of redemptions. Commission staff
estimates a total annual hour burden for
2 funds to be 14 hours.
• Establishment of written procedures
to test periodically the ability of the
fund to maintain a stable NAV per share
based on certain hypothetical events
(‘‘stress testing’’). Commission staff
estimates a total annual hour burden for
10 new money market funds to be 220
hours.

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Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Notices

• Review, revise, and approve written
procedures to stress test a fund’s
portfolio. Commission staff estimates a
total annual hour burden for 91 fund
complexes to be 1,092 hours.
• Reports to fund boards on the
results of stress testing. Commission
staff estimates a total annual hour
burden for 91 fund complexes to be
4,550 hours.
• Website disclosures of portfolio
holdings, of daily and weekly liquid
assets and net shareholder flow, of daily
current NAV, and disclosures of
financial support received by the fund,
the imposition and removal of liquidity
fees and the suspension and resumption
of fund redemptions. Commission staff
estimates a total annual hour burden for
433 funds to be 36,291 hours.
• For funds electing retail fund status,
written policies and procedures limiting
all beneficial owners of the fund to
natural persons. Commission staff
estimates a total annual hour burden for
2 funds to be 26 hours.
Thus, the Commission estimates the
total annual burden of the rule’s
information collection requirements is
337,328 hours.1
The estimated total annual burden is
being decreased from 632,725 hours to
337,328 hours. This net decrease of
295,397 hours 2 is attributable to a
combination of factors, including a
decrease in the number of money
market funds and fund complexes, and
updated information from money
market funds regarding hourly burdens,
including revised staff estimates of the
burden hours required to comply with
rule 2a–7 as a result of new information
received from surveyed fund
representatives.
Commission staff estimates that in
addition to the burden hours described
above, money market funds will incur
costs to preserve records, as required
under rule 2a–7.3 These costs will vary
significantly for individual funds,
1 This estimate is based on the following
calculation: 294,440 hours + 155 hours + 540 hours
+ 14 hours + 220 hours + 1,092 hours + 4,550 hours
+ 36,291 hours + 26 hours = 337,328 hours.
2 This estimate is based on the following
calculation: 632,725 hours¥337,328 hours =
295,397 hours.
3 A significant portion of the recordkeeping
burden involves organizing information that the
funds already collect when initially purchasing
securities. In addition, when a money market fund
analyzes a security, the analysis need not be
presented in any particular format. Money market
funds therefore have a choice of methods for
maintaining these records that vary in technical
sophistication and formality (e.g. handwritten
notes, computer disks, etc.). Accordingly, the cost
of preparing these documents may vary
significantly among individual funds. The burden
hours associated with filing reports to the
Commission as an exhibit to Form N–CR are
included in the PRA burden estimate for that form.

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depending on the amount of assets
under fund management and whether
the fund preserves its records in a
storage facility in hard copy or has
developed and maintains a computer
system to create and preserve
compliance records.4 Commission staff
estimates that the amount an individual
fund may spend ranges from $100 per
year to $300,000. Based on a cost of
$0.0051295 per dollar of assets under
management for small funds,
$0.0005041 per dollar assets under
management for medium funds, and
$0.0000009 per dollar of assets under
management for large funds, the staff
estimates compliance with the record
storage requirements of rule 2a–7 costs
the fund industry approximately $35.31
million per year.5
Based on responses from individuals
in the money market fund industry, the
staff estimates that some of the largest
fund complexes have created computer
programs for maintaining and
preserving compliance records for rule
2a–7. Based on a cost of $0.0000132 per
dollar of assets under management for
large funds, the staff estimates that total
annualized capital/startup costs range
from $0 for small funds to $40.9 million
for all large funds.6 Commission staff
further estimates that, even absent the
requirements of rule 2a–7, money
market funds would spend at least half
of the amount for capital costs ($20.45
million) 7 and for record preservation
($17.65 million) 8 to establish and
4 The vast majority of assets under management
in individual money market funds range from
approximately $50 million to approximately $144.7
billion. We further note that the assets under
management figures were calculated based on net
assets at the fund level and not the sum of the
market values of the underlying funds.
5 The staff estimated the annual cost of preserving
the required books and records by identifying the
annual costs incurred by several funds and then
relating this total cost to the average net assets of
these funds during the year. With a total of $403.6
million under management in small funds, $60.4
billion under management in medium funds and
$3.1 trillion under management in large funds, the
costs of preservation were estimated as follows:
((0.0051295 × $403.6 million) + (0.0005041 × $60.4
billion) + (0.0000009 × $3.1 trillion) = $35.31
million. For purposes of this PRA submission,
Commission staff used the following categories for
fund sizes: (i) Small-money market funds with $50
million or less in assets under management; (ii)
medium-money market funds with more than $50
million up to and including $1 billion in assets
under management; and (iii) large-money market
funds with more than $1 billion in assets under
management.
6 This estimate is based on the following
calculation: $0.0000132 × $3.1 trillion in assets
under management for large funds = $40.9 million.
7 This estimate is based on the following
calculation: $40.9 million in capital costs/2 =
$20.45 million.
8 This estimate is based on the following
calculation: $35.31 million in record preservation
costs/2 = $17.65 million.

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maintain these records and the systems
for preserving them as a part of sound
business practices to ensure
diversification and minimal credit risk
in a portfolio for a fund that seeks to
maintain a stable price per share. As a
result, the estimated total annual cost is
being decreased from $92.9 million to
$38.11 million.9 This net decrease of
$54.79 million 10 is attributable to a
reduction in the number of money
market mutual funds, updated
information from money market funds
regarding assets under management, as
well as deducting the $38.1 million 11 in
capital and preservation costs a money
market fund would incur absent the
requirements of rule 2a–7.
These estimates of burden hours and
costs are made solely for the purposes
of the Paperwork Reduction Act. The
estimates are not derived from a
comprehensive or even a representative
survey or study of Commission rules.
The collection of information under
Rule 2a–7 is mandatory. The
information provided by the rule is 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 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:
Lindsay.M.Abate@omb.eop.gov; and (ii)
Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov. Comments must be
submitted to OMB within 30 days of
this notice.
9 This estimate is based on the following
calculation: $35.31 million in record preservation
costs + $40.9 million in capital costs¥$17.65
million in record preservation costs absent rule
2a–7 requirements¥$20.45 million in capital costs
absent rule 2a–7 requirements = $38.11 million.
10 This estimate is based on the following
calculation: $92.9 million¥$38.11 million = $54.79
million.
11 This estimate is based on the following
calculation if rule 2a–7 compliance was not
required for a money market fund: $20.45 million
in capital costs + $17.65 million in record
preservation = $38.1 million.

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Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Notices
Dated: January 29, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–00626 Filed 1–31–19; 8:45 am]
BILLING CODE 8011–01–P

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:
Rules 15Fb1–1 through 15Fb6–2 and
Forms SBSE, SBSE–A, SBSE–BD, SBSE–
C and SBSE–W.
SEC File No. 270–642, OMB Control No.
3235–0696.

Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information discussed below. The Code
of Federal Regulation citations
associated with this collection of
information are 17 CFR 240.15Fb1–1
through 240.15Fb6–2, and 17 CFR
249.1600, 249.1600a, 249.1600b,
249.1600c and 249.1601.
The Commission adopted Rules
15Fb1–1 through 15Fb6–2 and Forms
SBSE, SBSE–A, SBSE–BD, SBSE–C and
SBSE–W on August 5, 2015 to create a
process to register SBS Entities. Forms
SBSE, SBSE–A, and SBSE–BD and
SBSE–C were designed to elicit certain
information from applicants. The
Commission uses the information
disclosed by applicants through the SBS
Entity registration rules and forms to: (1)
Determine whether an applicant meets
the standards for registration set forth in
the provisions of the Exchange Act; and
(2) develop an information resource
regarding SBS Entities where members
of the public may obtain relevant, up-todate information about SBS Entities,
and where the Commission may obtain
information for examination and
enforcement purposes. Without the
information provided through these SBS
Entity registration rules and forms, the
Commission could not effectively
determine whether the applicant meets
the standards for registration or
implement policy objectives of the
Exchange Act.
The information collected pursuant to
Rule 15Fb3–2 and Form SBSE–W allows

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the Commission to determine whether it
is appropriate to allow an SBS Entity to
withdraw from registration and to
facilitate that withdrawal. Without this
information, the Commission would be
unable to effectively determine whether
it was appropriate to allow an SBS
Entity to withdraw. In addition, it
would be more difficult for the
Commission to properly regulate SBS
Entities if it were unable to quickly
identify those that have withdrawn from
the security-based swap business.
In 2017 there were approximately 55
entities that may need to register as SBS
Entities. The Commission estimates that
these Entities likely would incur a total
burden of 9,825 hours per year to
comply with Rules 15Fb1–1 through
15Fb6–2 and Forms SBSE, SBSE–A,
SBSE–BD, SBSE–C and SBSE–W.
In addition, Rules 15Fb1–1 through
15Fb6–2 and Forms SBSE, SBSE–A,
SBSE–BD, SBSE–C and SBSE–W may
impose certain costs on non-resident
persons that apply to be registered with
the Commission as SBS Entities,
including an initial and ongoing costs
associated with obtaining an opinion of
counsel indicating that it can, as a
matter of law, provide the Commission
with access to its books and records and
submit to Commission examinations,
and an ongoing cost associated with
establishing and maintaining a
relationship with a U.S. agent for
service of process.
The staff estimates, based on internet
research,1 that it would cost each
nonresident SBS Entity approximately
$176 annually to appoint and maintain
a relationship with a U.S. agent for
service of process. Consequently, the
total cost for all nonresident SBS
Entities to appoint and maintain
relationships with U.S. agents for
service of process is approximately
$3,872 per year.
Non-resident SBS Entities also would
incur outside legal costs associated with
obtaining an opinion of counsel. The
staff estimates that each of the estimated
1 See, e.g., http://www.incorp.com/registeredagent-resident-agent-services.aspx (as of September
21, 2018, $99 per state per year), https://
ct.wolterskluwer.com/registered-agentservices?mm_campaign=Enter_Campaign_Code_
Here&keyword=registered%20agent&utm_
source=Google&utm_medium=CPC&utm_
campaign=RegisteredAgent&jadid=
695631&23457&jap=1t3&jk=registered%20
agent&jkId=gc:a8a8ae4cd4a6542cf014a97541
e8d183e:t1_p:k_registered%20agent:pl_
&jp=&js=1&jsid=35672&jt=1 (as of September 21,
2018, $279 per year), and https://www.ailcorp.com/
services/registered-agent (as of September 21, 2018,
$149 per year). The staff sought websites that
provided pricing information and a comprehensive
description of their registered agent services. We
calculated our estimate by averaging the costs
provided on these three websites—($99 + $279 +
$149) ÷ 3 = $176.

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22 non-resident persons that likely will
apply to register as SBS Entities with
the Commission would incur, on
average, approximately $25,000 in
outside legal costs to obtain the opinion
of counsel necessary to register, and that
the total annualized cost for all
nonresident SBS Entities to obtain this
opinion of counsel would be
approximately $183,333. Nonresident
SBS Entities would also need to obtain
a revised opinion of counsel after any
changes in the legal or regulatory
framework that would impact the SBS
Entity’s ability to provide, or manner in
which it provides, the Commission with
prompt access to its books and records
or that impacts the Commission’s ability
to inspect and examine the SBS Entity.
We do not believe this would occur
frequently, and therefore estimate that
one non-resident entity may need to
recertify annually. Thus, the total
ongoing cost associated with obtaining a
revised opinion of counsel regarding the
new regulatory regime would be
approximately $25,000 annually.
Consequently, the total annualized cost
burden associated with Rules 15Fb1–1
through 15Fb6–2 and Forms SBSE,
SBSE–A, SBSE–BD, SBSE–C and SBSE–
W would be approximately $212,205
per year.
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.
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: Abate,
Lindsay M. EOP/OMB
Lindsay.M.Abate@omb.eop.gov; and (ii)
Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov. Comments must
be submitted to OMB within 30 days of
this notice.
Dated: January 29, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–00628 Filed 1–31–19; 8:45 am]
BILLING CODE 8011–01–P

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