67772 Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The MSRB is also proposing the question bank 

for the Series 54 examination, but based upon 

instructions from the Commission staff, the MSRB 

is not filing the question bank for Commission 

review. See letter to Diane G. Klinke, General 

Counsel, MSRB, from Belinda Blaine, Associate 

Director, Division of Market Regulation, SEC, dated 

July 24, 2000, attached as Exhibit 3b. The question 

bank is available for Commission review. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(6). 

6 15 U.S.C. 78o–4(b)(2)(A). 

7 15 U.S.C. 78o–4(b)(2)(A)(iii). 

8 15 U.S.C. 78o–4(b)(2)(L)(iii). 

9See Exchange Act Release No. 84630 (November 

20, 2018), 83 FR 60927 (November 27, 2018) (File 

No. SR–MSRB–2018–07). 

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 website 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 the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. 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 SR–CboeBZX–2018–090 and 

should be submitted on or before 

January 22, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28397 Filed 12–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84926; File No. SR–MSRB– 

2018–10] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of the Content Outline 

for the Municipal Advisor Principal 

Qualification Examination and Its 

Associated Selection Specifications 

for the Examination 

December 21, 2018. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on December 20, 2018 the 

Municipal Securities Rulemaking Board 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the MSRB. 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 Substance of 

the Proposed Rule Change 

The MSRB filed with the Commission 

the content outline for the Municipal 

Advisor Principal Qualification 

Examination (‘‘Series 54 examination’’) 

and its associated selection 

specifications for the examination 

(‘‘selection specifications’’) 

(collectively, the ‘‘proposed rule 

change’’).3 The MSRB is not proposing 

any textual changes to its rules. The 

proposed rule change has been filed for 

immediate effectiveness pursuant to 

Section 19(b)(3)(A) of the Act 4 and Rule 

19b–4(f)(6) thereunder.5

The text of the proposed rule change 

is available on the MSRB’s website at 

www.msrb.org/Rules-andInterpretations/SEC-Filings/2018- 

Filings.aspx, at the MSRB’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 

MSRB 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 MSRB 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 

Section 15B of the Act authorizes the 

MSRB to prescribe ‘‘standards of 

training, experience, competence, and 

such other qualifications as the Board 

finds necessary or appropriate in the 

public interest or for the protection of 

investors and municipal entities or 

obligated persons’’ 6 and requires 

persons in any such class to pass tests 

prescribed by the Board.7 Section 

15B(b)(2)(L)(iii) of the Act further 

requires the MSRB to establish 

professional standards for municipal 

advisors.8 A professional qualification 

examination is intended to determine 

whether an individual meets the 

MSRB’s required qualification 

standards. The MSRB believes that 

professional qualification examinations, 

such as the Municipal Advisor 

Representative Qualification 

Examination (‘‘Series 50 examination’’) 

and the Series 54 examination, are 

means for determining the competency 

of individuals in particular qualification 

classifications. 

On November 20, 2018, the 

Commission approved amendments 9 to 

MSRB Rule G–3, on professional 

qualification requirements, to require, 

among other things, that municipal 

advisor principals—those who engage in 

the management, direction or 

supervision of the municipal advisory 

activities of the municipal advisor and 

its associated persons (‘‘principal-level 

activity’’)—pass the Series 54 

examination, in addition to the Series 

50 examination, to become 

appropriately qualified as a municipal 

advisor principal. The Series 50 

examination is designed to establish 

that persons associated with a 

municipal advisor who engage in 

municipal advisory activities and 

persons who engage in principal-level 

activity demonstrate a baseline 

knowledge of the municipal market, 

municipal advisory activities, as well as 

the regulatory requirements. Conversely, 

the Series 54 examination is designed to 

establish that persons who engage in 

principal-level activity demonstrate a 

specified level of knowledge of the 

application of federal securities laws, 

including MSRB rules to the municipal 

advisory activities of a municipal 

advisor and that of its associated 

persons. 

The MSRB believes the establishment 

of qualification requirements for 

municipal advisor principals would 

assist in ensuring that such persons 

have a specified level of competency 

necessary with respect to the 

supervision of the municipal advisory 

activities of the municipal advisor that 

is appropriate in the public interest and 

for the protection of investors, and 

municipal entities and obligated 

persons. 

The MSRB has, in consultation with 

the MSRB’s Professional Qualification 

Advisory Committee (PQAC), and in 


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10See American Educational Research 

Association, American Psychological Association, & 

National Council on Measurement in Education, 

The Standards for Educational and Psychological 

Testing (2d ed. 2014). 

11See Series 54 examination content outline 

attached hereto as Exhibit 3a. 

12A job study is an assessment of the essential 

skills and functions that are required to complete 

a particular job. 

13While the topic areas represented on the Series 

54 examination content outline may have 

redundancies with topic areas appearing on the 

Series 50 examination content outline, the Series 54 

examination is designed to test the specific 

application of federal securities laws to the 

municipal advisory activities of the municipal 

advisor, whereas the Series 50 examination is 

meant to test the baseline competency of 

individuals engaged in municipal advisory 

activities and is not designed to specifically or 

extensively test the application of federal securities 

laws and MSRB rules. 

14For the most up-to-date information on the 

pilot of the Series 54 examination visit the 

Municipal Advisor Principal Qualification 

Examination web page on the MSRB’s website. 

15Pursuant to Rule G–3(g), an individual would 

be permitted to take the examination again after a 

period of 30 days has elapsed from the date of the 

individual’s last attempt. 

16 17 CFR 240.24b–2. 

17 15 U.S.C. 78o–4(b)(2)(A). 

18 15 U.S.C. 78o–4(b)(2)(A)(i). 

19 15 U.S.C. 78o–4(b)(2)(A)(iii). 

accordance with The Standards for 

Educational and Psychological 

Testing 10 developed the Series 54 

examination to ensure that a person 

seeking to qualify as a municipal 

advisor principal satisfies a specified 

level of competency and knowledge by 

measuring a candidate’s ability to apply 

the applicable federal securities laws, 

including MSRB rules to the municipal 

advisory activities of a municipal 

advisor. 

The Series 54 examination content 

outline has been developed to serve as 

a guide to the subject matters tested on 

the examination and prescribes the 

specified knowledge required in each 

functional area that is specific to the 

role and responsibilities of associated 

persons.11 From October 17, 2017 

through November 7, 2017, the MSRB 

conducted a job study 12 of municipal 

advisor principals to identify the subject 

matters to be represented on the content 

outline and to be covered on the Series 

54 examination. The job study was sent 

to over 500 municipal advisors, 

representing municipal advisors with at 

least one person qualified with the 

Series 50 examination. The job study, 

coupled with consultation with the 

MSRB’s psychometrician, provided the 

empirical basis for the representation of 

topic areas on the Series 54 examination 

content outline.13 The Series 54 

examination content outline comprises 

three sections of the examination as 

follows: (1) Understanding the 

Municipal Advisor Regulatory 

Framework (25 questions); (2) 

Supervising Municipal Advisory 

Activities (35 questions); and (3) 

Supervising Municipal Advisor Firm 

Operations (40 questions). Additionally, 

to familiarize individuals with the 

format of the Series 54 examination, the 

content outline includes sample 

questions that are similar to the type of 

questions that may be found on the 

Series 54 examination. The Series 54 

examination content outline is attached 

as Exhibit 3a and will be made available 

on the MSRB’s website. 

The MSRB will announce the 

effective date of the permanent Series 54 

examination at a later date in an MSRB 

Notice published on the MSRB’s 

website. In advance of the permanent 

Series 54 examination, however, the 

MSRB will conduct a pilot of the Series 

54 examination, the results of which 

will be used to determine the passing 

score for the permanent Series 54 

examination. The pilot of the Series 54 

examination will consist of 100 unique 

computer-generated questions drawn 

from a large collection of test questions 

available for the Series 54 examination. 

The random selection of Series 54 

examination questions is subject to 

restrictions designed to ensure that the 

content covered by the Series 54 

examination and the overall difficulty of 

the Series 54 examination is similar for 

all individuals. Individuals will receive 

10 additional questions that are 

randomly distributed throughout the 

Series 54 examination and do not count 

for scoring purposes; these 10 questions 

serve to pretest questions to be used in 

future administration of the Series 54 

examination. Individuals will be 

allowed 180 minutes to complete the 

Series 54 examination and will be 

provided with a brief tutorial on the 

administration of the computerized 

exam before the Series 54 examination 

begins. 

The pilot of the Series 54 examination 

will be from February 2019 through 

June 2019 (the ‘‘pilot period’’) with 

municipal advisor principals having a 

full 120 calendar days from opening an 

exam enrollment window to take the 

exam. Individuals will only be afforded 

one opportunity to take the pilot of the 

Series 54 examination during the pilot 

period. The MSRB will announce, in an 

MSRB Notice, the time period for, and 

the process of opening an enrollment to 

take the Series 54 examination.14 The 

MSRB will notify individuals who take 

the pilot of the Series 54 examination of 

their results by email in the Fall of 2019. 

Those municipal advisor principals who 

take and pass the pilot of the Series 54 

examination during the pilot period will 

be considered qualified as a municipal 

advisor principal when the MSRB 

permanently establishes the Series 54 

examination in the Fall of 2019 and will 

not be required to take the permanent 

Series 54 examination. An individual 

who fails to pass the pilot of the Series 

54 examination will, consistent with 

MSRB Rule G–3(g), still be permitted 

three attempts to pass the permanent 

Series 54 examination before having to 

wait a period of 6 months to take the 

permanent Series 54 examination 

again.15 More specifically, a failure of 

the pilot of the Series 54 examination 

will not count as one of the three 

attempts an individual has to 

successfully pass the examination prior 

to having to wait 6 months from the date 

the candidate last failed the 

examination. 

The MSRB will announce the launch 

of the permanent examination in an 

MSRB Notice published on the MSRB’s 

website. The selection specifications for 

the Series 50 examination, which the 

MSRB has submitted under separate 

cover with a request for confidential 

treatment to the Commission, pursuant 

to Rule 24b–2 under the Act,16 describe 

additional confidential information 

regarding the Series 54 examination. As 

noted above, the MSRB has designated 

the proposed rule change to provide the 

Series 54 examination content outline 

for immediate effectiveness. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(A) of the Act,17 which 

authorizes the MSRB to prescribe 

‘‘standards of training, experience, 

competence, and such other 

qualifications as the Board finds 

necessary or appropriate in the public 

interest or for the protection of investors 

and municipal entities or obligated 

persons’’ and Sections 15B(b)(2)(A)(i) 18

and 15B(b)(2)(A)(iii) 19 of the Act, which 

provides that the Board may 

appropriately classify associated 

persons of municipal advisors and 

require such persons in any such class 

to pass tests prescribed by the Board. 

The MSRB believes that the proposed 

rule change is consistent with the 

provisions of Section 15B(b)(2)(A) of the 

Act in that the content outline details 

the functional tasks, key concepts and 

rules to be tested on the examination to 

ensure individuals are sufficiently 

prepared to take and pass the 

examination in order to demonstrate the 

specified level of competence that 

would be appropriate and in furtherance 

of the public interest. Also, consistent 


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20 15 U.S.C. 78o–4(b)(2)(C). 

21 15 U.S.C. 78o–4(b)(2)(L)(iv). 

22 15 U.S.C. 78o–4(b)(2)(C). 23 15 U.S.C. 78o–4(b)(2)(L)(iv). 24Policy on the Use of Economic Analysis in 

MSRB Rulemaking is available at http://msrb.org/ 

Rules-and-Interpretations/Economic-AnalysisPolicy.aspx. In evaluating whether there was a 

burden on competition, the Board was guided by its 

principles that required the Board to consider costs 

and benefits of a rule change, its impact on capital 

formation and the main reasonable alternative 

regulatory approaches. 

25The MSRB recognizes that municipal advisors 

will incur programmatic costs associated with 

municipal advisor principals having to take and 

pass the Series 54 examination. The MSRB 

estimates the total costs incurred for taking the 

examination should be no more than $715 per each 

municipal advisor principal. See supra note 9. 

26See supra note 10. 

27 15 U.S.C. 78s(b)(3)(A). 

28 17 CFR 240.19b–4(f)(6). 

29 Id. 

30 17 CFR 240.19b–4(f)(6)(iii). 

31 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory organization to give the Commission 

written notice of its intent to file a proposed rule 

change, along with a brief description and text of 

such proposed rule change, at least five business 

days prior to the date of filing, or such shorter time 

as designated by the Commission. The MSRB 

satisfied this requirement on December 12, 2018. 

32See SR–MSRB–2018–10. 

33 17 CFR 240.19b–4(f)(6)(iii). 

34See SR–MSRB–2018–10. 

with the purpose of Section 15B(b)(2)(A) 

of the Act, providing individuals with a 

guide to the subject matter covered on 

the Series 54 examination will aid 

individuals in their preparation for the 

examination and facilitates standards of 

competence being attained to carry out 

a municipal advisor principal’s role of 

supervision of the municipal advisory 

activities of the municipal advisor and 

that of its associated persons, which is 

in furtherance of the public interest. 

More generally, the MSRB’s professional 

qualification examinations are designed 

to measure knowledge of the business 

activities and regulatory requirements 

under federal securities laws, including 

MSRB rules, applicable to a particular 

qualification classification, which is 

also in furtherance of the Act. 

The MSRB also believes the proposed 

rule change is in accordance with 

Section 15B(b)(2)(C) of the Act,20 which 

requires, among other things, that MSRB 

rules ‘‘be designed to prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade, . . . and, in general, to protect 

investors, municipal entities, obligated 

persons, and the public interest . . .’’ 

The MSRB notes the proposed rule 

change is consistent with this provision 

of the Act, to foster the prevention of 

fraudulent practices, because by 

ensuring municipal advisor principals 

demonstrate competence in the 

application of federal securities laws 

and MSRB rules to a firm’s municipal 

advisory activities, such individuals are 

likely better equipped to mitigate 

problems associated with advice 

provided by municipal advisor 

representatives. 

Lastly, Section 15B(b)(2)(L)(iv) of the 

Act 21 provides that MSRB rules may 

‘‘not impose a regulatory burden on 

small municipal advisors that is not 

necessary or appropriate in the public 

interest and for the protection of 

investors, municipal entities, and 

obligated persons, provided that there is 

robust protection of investors against 

fraud.’’ The MSRB believes, although 

the proposed rule change would affect 

all municipal advisors, including small 

municipal advisors, the proposed rule 

change is a necessary and appropriate 

regulatory burden in furtherance of the 

Act because establishing a specified 

level of competence for those 

functioning in a principal capacity 

promotes compliance with the rules and 

regulations governing the conduct of 

municipal advisors. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Section 15B(b)(2)(C) of the Act 22

requires that MSRB rules not be 

designed to impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purpose of the Act. In addition, Section 

15B(b)(2)(L)(iv) of the Act 23 provides 

that MSRB rules may ‘‘not impose a 

regulatory burden on small municipal 

advisors that is not necessary or 

appropriate in the public interest and 

for the protection of investors, 

municipal entities, and obligated 

persons, provided that there is robust 

protection of investors against fraud.’’ In 

determining whether these standards 

have been met, the MSRB has been 

guided by the Board’s adopted policy to 

more formally integrate economic 

analysis into the rulemaking process.24

The MSRB does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of these provisions and their purposes 

under the Act. Relative to the economic 

baseline, which includes the 

requirement that municipal advisor 

professionals demonstrate by passing an 

examination that they meet professional 

standards deemed necessary or 

appropriate in the public interest or for 

the protection of investors, municipal 

entities and obligated persons, the 

MSRB believes that the economic 

impact of the proposed rule change is de 

minimis and no greater than what is 

necessary or appropriate in the 

furtherance of the purposes of the Act.25

In addition, based on the wellestablished and nationally-accepted 

process 26 used by the MSRB to develop 

the Series 54 examination content 

outline, the MSRB has no reason to 

believe that the Series 54 examination 

content outline will pose any greater 

burden on individuals associated with 

smaller municipal advisors than those 

associated with larger municipal 

advisors or that the burden could be 

materially reduced while still achieving 

the purposes of the Act of robust 

protection of investors against fraud. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Board did not solicit comment on 

the proposed change. Therefore, there 

are no comments on the proposed rule 

change received from members, 

participants or others. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A) 27 of 

the Act and Rule 19b–4(f)(6) 28

thereunder, the MSRB has designated 

the proposed rule change as one that 

effects a change that: (i) Does not 

significantly affect the protection of 

investors or the public interest; (ii) does 

not impose any significant burden on 

competition; and (iii) by its terms, does 

not become operative for 30 days after 

the date of the filing, or such shorter 

time as the Commission may designate. 

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative until 30 days after the 

date of filing.29 However, Rule 19b– 

4(f)(6)(iii) 30 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest.31 The 

MSRB has requested that the 

Commission designate the proposed 

rule change operative upon filing,32 as 

specified in Rule 19b–4(f)(6)(iii),33

which would make the proposed rule 

change operative on December 20, 2018. 

The MSRB has stated that an earlier 

operative date would provide 

individuals acting in a principal 

capacity for a municipal advisor with an 

earlier opportunity to begin preparation 

for the qualification requirement.34

The Commission hereby grants the 

MSRB’s request and believes that 

designating the proposed rule change 

operative upon filing is consistent with 

the protection of investors and the 


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35For the purposes only of accelerating the 

operative date of this proposal, the Commission has 

considered the proposed rule change’s impact on 

efficiency, competition, and capital formation. See 

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

36See SR–MSRB–2018–10. 

37 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

public interest.35 According to the 

MSRB, the Series 54 examination 

content outline is designed to ensure 

that individuals are sufficiently 

qualified to supervise municipal 

advisory activities.36 The Commission 

believes that designating the proposed 

rule change operative upon filing is 

consistent with the protection of 

investors and the public interest 

because it will allow individuals to 

prepare for the Series 54 examination 

without delay. In addition, the proposed 

rule change is not proposing any textual 

changes to MSRB rules. Therefore, the 

Commission hereby designates the 

proposed rule change operative upon 

filing. 

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 necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change 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 rule-comments@

sec.gov. Please include File Number SR– 

MSRB–2018–10 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–MSRB–2018–10. 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 website (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 website 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 the 

filing also will be available for 

inspection and copying at the principal 

office of the MSRB. 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 SR–MSRB–2018–10 and should 

be submitted on or before January 22, 

2019. 

For the Commission, pursuant to delegated 

authority.37

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28398 Filed 12–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84935; File No. SR–NYSE– 

2018–64] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Chapter 9 of the NYSE Listed Company 

Manual Relating to Fees for Business 

Development Companies 

December 21, 2018. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

20, 2018, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Chapter 9 of the NYSE Listed Company 

Manual (the ‘‘Manual’’) to provide that 

business development companies will 

be subject to the same fee schedule as 

domestic operating companies and no 

longer treated as closed-end funds for 

fee purposes. The proposed rule change 

is available on the Exchange’s website at 

www.nyse.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 

self-regulatory organization 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 those 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Section 902.04 of the Manual sets 

forth listing fees applicable to all listed 

closed-end funds. Along with all other 

closed-end funds, these fees are applied 

to any closed-end fund that elects to be 

taxed as a business development 

company (‘‘BDC’’) and is listed under 

Section 102.04B of the Manual. 

The purpose and operation of a 

business development company is very 

different from that of a non-BDC closedend fund. A non-BDC closed-end fund 

is a vehicle for the passive investment 

in securities and the role of its 

management is limited to choosing 

when to buy and sell securities in the 

fund’s portfolio. By contrast, a condition 

to obtaining and retaining business 

development company status is that the 

business development company must 

make available management assistance 

to the companies in which it has made 

investments. As such, in the Exchange’s 

opinion, the purpose and operation of a 

business development company is 

therefore more analogous to that of an 


khammond on DSK30JT082PROD with NOTICES