Federal Register / Vol. 83, No. 242 / Tuesday, December 18, 2018 / Notices 64907 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3MSRB Form G–45 is an electronic form on 

which submissions of the information required by 

Rule G–45 are made to the MSRB. 

4Securities Exchange Act Release No. 84496 

(October 29, 2018) (the ‘‘Notice of Filing’’), 83 FR 

55214 (November 2, 2018). 

5See Notice of Filing. 

6Section 529 of the Internal Revenue Code of 

1986, as amended (the ‘‘Code’’) established savings 

plans (‘‘529 savings plans’’) to encourage saving for 

future education costs. 26 U.S.C. 529(b)(1)(A)(ii). 

7ABLE programs are programs designed to 

implement Section 529A to the Code. 26 U.S.C. 

529A. Section 529A of the Code permits a state, or 

an agency or instrumentality thereof, to establish 

and maintain a tax-advantaged savings program to 

help support individuals with disabilities in 

maintaining health, independence, and quality of 

life. See Notice of Filing. 

8See Notice of Filing. 

9 Id. 

10 Id. 

11 Id. 

12 Id. 

13 Id. 

14 Id. 

eligible for the Exemption, a brokerdealer must (1) provide an initial 

written notification to the customer of 

its ability to request delivery of 

immediate confirmations consistent 

with the written notification 

requirements of Exchange Act Rule 10b– 

10(a), and (2) not receive any such 

request to receive immediate confirms 

from the customer. 

As of March 31, 2018, the 

Commission estimates there are 

approximately 162 broker-dealers that 

clear customer transactions or carry 

customer funds and securities who 

would be responsible for providing 

customer confirmations. The 

Commission estimates that the cost of 

the ongoing notification requirements 

would be minimal, approximately 5% of 

the initial burden which was previously 

estimated to be 36 hours per brokerdealer, or approximately 1.8 hours per 

broker-dealer per year to provide 

ongoing notifications or a total burden 

of 292 hours annually for the 162 

carrying broker-dealers. 

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 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 by sending an email to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: December 12, 2018. 

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27267 Filed 12–17–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84809; File No. SR–MSRB– 

2018–08] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Order Granting Approval of a 

Proposed Rule Change Concerning 

Certain Data Elements on Form G–45 

Under MSRB Rule G–45, on Reporting 

of Information on Municipal Fund 

Securities 

December 12, 2018. 

I. Introduction 

On October 15, 2018, the Municipal 

Securities Rulemaking Board (the 

‘‘MSRB’’ or ‘‘Board’’) filed with the 

Securities and Exchange Commission 

(the ‘‘SEC’’ or ‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend Form G–45 under 

MSRB Rule G–45, on reporting of 

information on municipal fund 

securities,3 to clarify a data element 

concerning the program management 

fee, to add a data element concerning 

the investment option closing date, and 

to delete data elements concerning 

annualized three-year performance 

information (the ‘‘proposed rule 

change’’). The proposed rule change was 

published for comment in the Federal 

Register on November 2, 2018.4 In the 

Notice of Filing, the MSRB requested 

that the proposed rule change become 

effective on June 30, 2019.5

The Commission did not receive any 

comment letters on the proposed rule 

change. 

II. Description of Proposed Rule Change 

In the Notice of Filing, the MSRB 

stated that the purpose of the proposed 

rule change is to refine and enhance 

certain of the investment option data 

that the MSRB collects under Rule G– 

45 from underwriters to 529 savings 

plans 6 and ABLE programs.7

Specifically, the MSRB stated that it 

proposes to amend Form G–45 to (i) 

clarify a data element concerning the 

program management fee, (ii) add a data 

element concerning the investment 

option closing date, and (iii) delete data 

elements concerning annualized threeyear performance information.8 The 

MSRB also stated that the proposed rule 

change would provide information that 

would enhance the MSRB’s and other 

regulators’ ability to effectively and 

efficiently analyze 529 savings plans 

and ABLE programs to assess the impact 

of each 529 savings plan and ABLE 

program on the market, to evaluate 

trends and differences, and to gain an 

understanding of the aggregate risk 

taken by investors.9

The MSRB stated that throughout the 

seven reporting periods during which 

the MSRB has analyzed data submitted 

on Form G–45, the MSRB has observed 

anomalies in the data submitted under 

Investment Option information.10 The 

MSRB stated that those anomalies 

related to the program management fee 

and to investment options that closed 

during the reporting period. Form G–45 

requires that an underwriter report the 

program management fee (expressed as 

an annual percentage of 529 savings 

plan or ABLE program assets) assessed 

by the 529 savings plan or ABLE 

program.11 The MSRB noted that the 

program management fee typically is a 

separately identifiable percentage that is 

shown in the fee table for the 529 

savings plan or ABLE program, but for 

some 529 savings plans and ABLE 

programs, this is not the case.12 The 

MSRB stated that instead for those 529 

savings plans or ABLE programs, the 

program management fee is assessed by 

the underlying mutual fund in which 

the investment option invests and this 

is typically done through a 529 or ABLE 

share class of the mutual fund.13 The 

MSRB further noted that underwriters 

for those 529 savings plans or ABLE 

programs generally report the program 

management fee as zero on Form G–45, 

and then may add explanatory 

information in the notes section of the 

form about the fee.14 The MSRB stated 

that such explanatory information, 

however, may or may not actually 

disclose the program management fee in 

a format that is typically used for 


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64908 Federal Register / Vol. 83, No. 242 / Tuesday, December 18, 2018 / Notices 

15 Id. 16 Id. 17 Id. 18 Id. 19 Id. 20 Id. 21 Id. 22 Id. 23 Id. 

24 Id. 

25 Id. 

26 Id. 

27 Id. 

28 Id. 

29 Id. 

30 15 U.S.C. 78o–4(b)(2)(C). 31 15 U.S.C. 78o–4(b)(2)(C). 

comparison—i.e., as an annual 

percentage of 529 savings plan or ABLE 

program assets.15 The MSRB stated that 

the proposed rule change would clarify 

that the underwriter must report the 

program management fee as an annual 

percentage of assets (e.g., x.xx%) no 

matter whether the program 

management fee is assessed by the 

underlying mutual fund or by the 529 

savings plan or ABLE program itself.16

The MSRB stated that the underwriter 

would not be able to report the program 

management fee as zero and then 

explain in a note that it is assessed by 

the underlying mutual fund.17 Thus, the 

MSRB stated, the proposed rule change 

would allow the MSRB, as well as other 

regulators, to analyze data in a uniform 

format that would facilitate (i) 

comparison among 529 savings plans 

and ABLE programs, (ii) the evaluation 

of trends and differences, and (iii) the 

identification of potential risks to 

investors that may affect those 529 

savings plans and ABLE programs.18

In the Notice of Filing, the MSRB 

noted that an investment option offered 

in a 529 savings plan may close to new 

investors, but allow current account 

owners who have allocated account 

value to an investment option to 

continue to invest in that ‘‘closed’’ 

investment option.19 Alternatively, the 

MSRB stated, the 529 savings plan may 

close an investment option 

completely.20 In either case, the MSRB 

stated that the investment option data 

submitted for that investment option on 

Form G–45 can be contrary to what the 

MSRB would have expected for the 

investment option when compared to 

prior reporting periods, and the MSRB 

may not be able to easily determine why 

such variance occurred.21 The MSRB 

stated that, to address this issue, the 

proposed rule change would add 

‘‘check-the-box’’ items to Form G–45 

that would alert the MSRB about 

whether an investment option has 

closed to new investors, but allows 

current account owners to contribute 

funds, or whether the investment option 

has closed to all investors.22

The MSRB sought public comment 

about providing additional data 

concerning the investment options 

offered in 529 savings plans and ABLE 

programs.23 In response, the MSRB 

received the suggestion that the MSRB 

no longer require that an underwriter 

submit three-year annualized 

performance information for an 

investment option on Form G–45.24

Form G–45 requires that underwriters 

annually report (i) total returns, 

including sales charges, (ii) total 

returns, excluding sales charges, and 

(iii) benchmark return percent for 

specified periods, including annualized 

or annual three-year percent. The MSRB 

noted that at the time the MSRB 

approved Form G–45, the College 

Savings Plans Network’s (‘‘CSPN’’) 

voluntary disclosure principles that 

provide recommendations to the state 

entities that establish and maintain 529 

savings plans (the ‘‘disclosure 

principles’’) and which commenters 

stated were the industry norm in other 

rulemakings, recommended that such 

disclosure be made.25 However, the 

MSRB noted, since that time, CSPN has 

updated the disclosure principles, and 

CSPN no longer recommends that a 529 

savings plan include three-year 

performance information.26 Further, the 

MSRB noted that three-year annualized 

performance information is not required 

by the SEC for mutual funds.27

The MSRB has determined that Form 

G–45, even without the three-year 

performance data, would continue to 

provide the MSRB with sufficient 

performance information to assist the 

MSRB with its analysis of 529 savings 

plans and ABLE programs.28 Therefore, 

the MSRB stated that because it believes 

that it will have sufficient performance 

information, it is no longer an 

appropriate regulatory burden and 

should be eliminated to avoid 

unnecessary costs.29

III. Discussion and Commission 

Findings 

The Commission has carefully 

considered the proposed rule change. 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to the MSRB. 

In particular, the proposed rule 

change is consistent with Section 

15B(b)(2)(C) of the Act.30 Section 

15B(b)(2)(C) of the Act states that the 

MSRB’s rules shall be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in municipal securities and municipal 

financial products, to remove 

impediments to and perfect the 

mechanism of a free and open market in 

municipal securities and municipal 

financial products, and, in general, to 

protect investors, municipal entities, 

obligated persons, and the public 

interest.31 The Commission believes the 

proposed rule change is consistent with 

Section 15B(b)(2)(C) and necessary and 

appropriate to help the MSRB receive 

complete and reliable information about 

529 savings plans and ABLE programs. 

The MSRB can use the data elements 

collected on Form G–45 to monitor 

these municipal fund securities and 

detect potential investor harm. The 

Commission believes that, for that data 

set to be complete and reliable, such 

data should include accurate data about 

the fees and expenses associated with 

an investment in a 529 savings plan or 

an ABLE program, including the 

program management fee, as provided 

in the proposed rule change. The 

Commission also believes that such data 

should include accurate information 

about the investment options available 

to existing and potential investors, as 

provided in the proposed rule change. 

The Commission believes the proposed 

rule change would help the MSRB to 

gather relevant data required to ensure 

the MSRB’s regulatory scheme is 

sufficient and/or to determine whether 

additional rulemaking is necessary to 

protect investors and the public interest. 

Further, the Commission believes that 

the deletion in the proposed rule change 

of the requirement that 529 savings 

plans and ABLE programs provide 

three-year annualized performance 

information would better align Rule 

G–45 reporting requirements with 

industry reporting standards, and 

therefore would foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in municipal 

securities and municipal financial 

products. 

The Commission believes that the 

proposed rule change would improve 

the MSRB’s ability to analyze the market 

for 529 savings plans and ABLE 

programs as well as improve the 

MSRB’s ability to evaluate trends and 

differences among 529 savings plans 

and ABLE programs. Further, the 

Commission believes that the MSRB, as 

well as other financial regulators 


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Federal Register / Vol. 83, No. 242 / Tuesday, December 18, 2018 / Notices 64909 

32 15 U.S.C. 78c(f). 

33 15 U.S.C. 78s(b)(2). 34 17 CFR 200.30–3(a)(12). 

charged with enforcing the MSRB’s 

rules, can use the information submitted 

on MSRB Form G–45 to enhance their 

understanding of, and ability to 

monitor, 529 savings plans and ABLE 

programs. 

In approving the proposed rule 

change, the Commission also has 

considered the impact of the proposed 

rule change on efficiency, competition, 

and capital formation.32 The 

Commission does not believe that the 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The clarification 

regarding the collection of the program 

management fee information should 

reduce instances of the MSRB needing 

to have underwriters resubmit corrected 

information that is currently required to 

be submitted under Rule G–45. The 

Commission believes the deletion of the 

Rule G–45 requirement to report threeyear annualized performance data for 

each investment option and any related 

benchmarks will better align Rule G–45 

reporting requirements with industry 

reporting standards and will likely 

reduce Rule G–45 reporting burdens. 

Additionally, with regard to the 

proposed requirement to report 

investment option closing date 

information, the Commission 

understands that this information is 

readily available to underwriters and 

the cost of submission of such 

information would be minor. The 

Commission believes that the additional 

information required to be submitted by 

the proposed rule change would be 

submitted on an equal and nondiscriminatory basis, and the 

requirement would apply equally to all 

dealers that serve as underwriters to 529 

savings plans and/or ABLE programs. 

Furthermore, the Commission believes 

that the potential burdens created by the 

proposed rule change are likely to be 

outweighed by the benefits. 

For the reasons noted above, 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 Act,33 that the 

proposed rule change (SR–MSRB–2018– 

08) be, and hereby is, approved. 

For the Commission, pursuant to delegated 

authority.34

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27281 Filed 12–17–18; 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: 

Rule 17Ad–11, SEC File No. 270–261, 

OMB Control No. 3235–0274 

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 approval of 

extension of the previously approved 

collection of information provided for in 

Rule 17Ad–11 (17 CFR 240.17Ad–11), 

under the Securities Exchange Act of 

1934 (15 U.S.C. 78a et seq.). 

Rule 17Ad–11 requires every 

registered recordkeeping transfer agent 

to report to issuers and its appropriate 

regulatory agency in the event that the 

aggregate market value of an aged record 

difference exceeds certain thresholds. A 

record difference occurs when an 

issuer’s records do not agree with those 

of securityholders as indicated, for 

instance, on certificates presented to the 

transfer agent for purchase, redemption 

or transfer. An aged record difference is 

a record difference that has existed for 

more than 30 calendar days. In addition, 

the rule requires every recordkeeping 

transfer agent to report to its appropriate 

regulatory agency in the event of a 

failure to post certificate detail to the 

master securityholder file within five 

business days of the time required by 

Rule 17Ad–10 (17 CFR 240.17Ad–10). 

Also, a transfer agent must maintain a 

copy of any report required under Rule 

17Ad–11 for a period of not less than 

three years following the date of the 

report, the first year in an easily 

accessible place. 

Because the information required by 

Rule 17Ad–11 is already available to 

transfer agents, any collection burden 

for small transfer agents is minimal. 

Based on a review of the number of Rule 

17Ad–11 reports the Commission, the 

Comptroller of the Currency, the Board 

of Governors of the Federal Reserve 

System, and the Federal Deposit 

Insurance Corporation received since 

2012, the Commission staff estimates 

that 8 respondents will file a total of 

approximately 10 reports annually. The 

Commission staff estimates that, on 

average, each report can be completed 

in 30 minutes. Therefore, the total 

annual hourly burden to the entire 

transfer agent industry is approximately 

five hours (30 minutes × 10 reports). 

Assuming an average hourly rate of $25 

for a transfer agent staff employee, the 

average total internal cost of the report 

is $12.50. The total annual internal cost 

of compliance for the approximate 8 

respondents is approximately $125.00 

(10 reports × $12.50). 

The retention period for the 

recordkeeping requirement under Rule 

17Ad–11 is three years following the 

date of a report prepared pursuant to the 

rule. The recordkeeping requirement 

under Rule 17Ad–11 is mandatory to 

assist the Commission and other 

regulatory agencies with monitoring 

transfer agents and ensuring compliance 

with the rule. This rule does not involve 

the collection of confidential 

information. 

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 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 by sending an email to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: December 12, 2018. 

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27266 Filed 12–17–18; 8:45 am] 

BILLING CODE 8011–01–P 


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