79252 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Notices 

1The written records are required to set forth a 

description of the security purchased or sold, the 

identity of the person on the other side of the 

transaction, and the information or materials upon 

which the board of directors’ determination that the 

transaction was in compliance with the procedures 

was made. 

2Unless stated otherwise, these estimates are 

based on conversations with the examination and 

inspections staff of the Commission and fund 

representatives. 

3Based on our reviews and conversations with 

fund representatives, we understand that funds 

rarely, if ever, need to make changes to these 

policies and procedures once adopted, and 

therefore we do not estimate a paperwork burden 

for such updates. 

4This estimate is based on the following 

calculations: (4 hours × 90 new funds = 360 hours). 

5This estimate is based on the following 

calculation: (729 + 23 = 752). 

6Commission staff believes that rule 17a–7 does 

not impose any costs associated with record 

preservation in addition to the costs that funds 

already incur to comply with the record 

preservation requirements of rule 31a–2 under the 

Act. Rule 31a–2 requires companies to preserve 

certain records for specified periods of time. 

7The staff estimates that funds that rely on rule 

17a–7 annually enter into an average of 8 rule 

17a–7 transactions each year. The staff estimates 

that the compliance attorneys of the companies 

spend approximately 15 minutes per transaction on 

this recordkeeping, and the board of directors 

spends a total of 1 hour annually in determining 

that all transactions made that year were done in 

compliance with the company’s policies and 

procedures. 

8This estimate is based on the following 

calculation: (3 hours × 752 companies = 2,256 

hours). 

9This estimate is based on the following 

calculation: (360 hours + 2,256 hours = 2,616 total 

hours). 

10This estimate is based on the following 

calculations: 752 funds that engage in rule 17a–7 

transactions × 8 transactions per year = 6,016. 

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

2 17 CFR 240.19b–4. 

solely because of a common investment 

adviser, director, or officer. Rule 17a–7 

requires funds to keep various records 

in connection with purchase or sale 

transactions effected in reliance on the 

rule. The rule requires the fund’s board 

of directors to establish procedures 

reasonably designed to ensure that the 

rule’s conditions have been satisfied. 

The board is also required to determine, 

at least on a quarterly basis, that all 

affiliated transactions effected during 

the preceding quarter in reliance on the 

rule were made in compliance with 

these established procedures. If a fund 

enters into a purchase or sale 

transaction with an affiliated person, the 

rule requires the fund to compile and 

maintain written records of the 

transaction.1 The Commission’s 

examination staff uses these records to 

evaluate for compliance with the rule. 

While most funds do not commonly 

engage in transactions covered by rule 

17a–7, the Commission staff estimates 

that nearly all funds have adopted 

procedures for complying with the 

rule.2 Of the approximately 2,915 

currently active funds, the staff 

estimates that virtually all have already 

adopted procedures for compliance with 

rule 17a–7. This is a one-time burden, 

and the staff therefore does not estimate 

an ongoing burden related to the 

policies and procedures requirement of 

the rule for funds.3 The staff estimates 

that there are approximately 90 new 

funds that register each year, and that 

each of these funds adopts the relevant 

policies and procedures. The staff 

estimates that it takes approximately 4 

hours to develop and adopt these 

policies and procedures. Therefore, the 

total annual burden related to 

developing and adopting these policies 

and procedures would be approximately 

360 hours.4

Of the 2,915 existing funds, the staff 

assumes that approximately 25%, (or 

729) enter into transactions affected by 

rule 17a–7 each year (either by the fund 

directly or through one of the fund’s 

series), and that the same percentage 

(25%, or 23 funds) of the estimated 90 

funds that newly register each year will 

also enter into these transactions, for a 

total of 752 5 companies that are affected 

by the recordkeeping requirements of 

rule 17a–7. These funds must keep 

records of each of these transactions, 

and the board of directors must 

quarterly determine that all relevant 

transactions were made in compliance 

with the company’s policies and 

procedures. The rule generally imposes 

a minimal burden of collecting and 

storing records already generated for 

other purposes.6 The staff estimates that 

the burden related to making these 

records and for the board to review all 

transactions would be 3 hours annually 

for each respondent, (2 hours spent by 

compliance attorneys and 1 hour spent 

by the board of directors) 7 or 2,256 total 

hours each year.8

Based on these estimates, the staff 

estimates the combined total annual 

burden hours associated with rule 

17a–7 is 2,616 hours.9 The staff also 

estimates that there are approximately 

752 respondents and 6,016 total 

responses.10

The estimates of burden hours are 

made solely for the purposes of the 

Paperwork Reduction Act, and are not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules. The 

collection of information required by 

rule 17a–7 is necessary to obtain the 

benefits of the rule. Responses will not 

be kept confidential. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid control number. 

The public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to (i) www.reginfo.gov/public/do/ 

PRAMain and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o Cynthia Roscoe, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: December 4, 2020. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27027 Filed 12–8–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90563; File No. SR– 

PEARL–2020–30] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing of a 

Proposed Rule Change To Amend the 

Exchange’s By-Laws in Connection 

With an Equity Rights Program 

December 3, 2020. 

Pursuant to the provisions of Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on November 24, 2020, MIAX PEARL, 

LLC (‘‘MIAX PEARL’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the Exchange’s By-Laws. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal 

office, and at the Commission’s Public 

Reference Room. 


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Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Notices 79253 

3See Securities Exchange Act Release No. 89730 

(September 1, 2020), 85 FR 55530 (September 8, 

2020) (SR–PEARL–2020–10) (‘‘ERP Notice’’). This 

filing is also based on a past filing by the 

Exchange’s affiliate, Miami International Securities 

Exchange, LLC (‘‘MIAX’’). See Securities Exchange 

Act Release Nos. 71541 (February 12, 2014), 79 FR 

9572 (February 19, 2014) (SR–MIAX–2013–58) 

(Notice of Filing of Amendment No. 1 and Order 

Granting Accelerated Approval of a Proposed Rule 

Change, as Modified by Amendment No. 1 Thereto, 

To Amend the Exchange’s ByLaws); and 77876 

(May 20, 2016), 81 FR 33283 (May 25, 2016) (SR– 

MIAX–2016–08) (collectively, the ‘‘MIAX Approval 

Orders’’). 

4See Securities Exchange Act Release Nos. 88132 

(February 6, 2020), 85 FR 8053 (February 12, 2020) 

(SR–PEARL–2020–03) (Notice of Filing of a 

Proposed Rule Change to Adopt Rules Governing 

the Trading of Equity Securities); and 89563 

(August 14, 2020), 85 FR 51510 (August 20, 2020) 

(Order Approving Proposed Rule Change to Adopt 

Rules Governing the Trading of Equity Securities). 

5The term ‘‘Member’’ means an individual or 

organization that is registered with the Exchange 

pursuant to Chapter II of the Exchange’s Rules for 

purposes of trading on the Exchange as an 

‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 

Members are deemed ‘‘members’’ under the 

Exchange Act. See Exchange Rule 100. 

6The ERP Exchange fees under the Program 

consist of: (a) Transaction fees as set forth in 

Section (1)a of the MIAX PEARL Options Fee 

Schedule; (b) membership fees as set forth in 

Section 3 of the MIAX PEARL Options Fee 

Schedule; (c) system connectivity fees as set forth 

in Section 5 of the MIAX PEARL Options Fee 

Schedule; (d) market data fees as set forth in 

Section 6 of the MIAX PEARL Options Fee 

Schedule; (a) transaction fees as set forth under 

Section (1)a of the MIAX PEARL Equities Fee 

Schedule; (b) system connectivity fees as set forth 

under Section (2) of the MIAX PEARL Equities Fee 

Schedule; and (c) market data fees as set forth under 

Section (3) of the MIAX PEARL Equities Fee 

Schedule (collectively, the ‘‘ERP Exchange Fees’’). 

The Exchange notes that proprietary real-time 

market data will be provided free of charge for a 

period of time. 

7At this time, an ERP Member that is represented 

by a Member Representative Director may also have 

an Observer. But, an ERP Member that is 

represented by an ERP Director may not also have 

an Observer. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

certain sections of its By-Laws to: (i) 

Correspond with an Equity Rights 

Program (‘‘ERP’’) recently established by 

the Exchange; 3 and (ii) make nonsubstantive changes to the current ByLaws. 

On August 14, 2020, the Commission 

approved a proposed rule change to 

adopt rules governing the trading of 

equity securities on the Exchange (the 

platform for the trading of equity 

securities is referred to herein as ‘‘MIAX 

PEARL Equities’’).4 This filing 

corresponds with the recently 

implemented ERP pursuant to which 

units representing the right to acquire 

equity in the Exchange’s parent holding 

company, Miami International 

Holdings, Inc., were issued to 

participating Members 5 in exchange for 

the prepayment of certain ERP Exchange 

Fees 6 for trading equity securities on 

MIAX PEARL Equities and the 

achievement of certain liquidity volume 

thresholds on MIAX PEARL Equities 

over a 42-month period. This filing 

amends the By-Laws to the extent 

necessary to incorporate rights to 

participating Members in an ERP to 

appoint representation to the MIAX 

PEARL Board. 

Article I, Definitions 

The Exchange proposes to amend the 

By-Laws to provide definitions for key 

terms used to incorporate provisions 

related to the ERP. Specifically, the 

Exchange proposes the following 

definitions: 

• ‘‘ERP Agreement’’ means the 

agreement between the Exchange’s 

parent holding company, Miami 

International Holdings, Inc., and ERP 

Members dated September 11, 2020 

pursuant to which Units were issued. 

• ‘‘ERP Director’’ means a MIAX 

PEARL Equities Industry Director who 

has been nominated by an ERP Member 

and appointed to the Board of Directors. 

• ‘‘ERP Member’’ means an Exchange 

Member who acquired Units pursuant to 

an ERP Agreement sufficient to acquire 

an ERP Director or an Observer position. 

• ‘‘Measurement Period’’ means the 

time period over which Units are 

vested. 

• ‘‘MIAX PEARL Equities’’ means the 

market of the Exchange on which equity 

securities are traded. 

• ‘‘Observer’’ has the meaning set 

forth in Article II, Section 2.2 of the ByLaws. 

• ‘‘Performance Criteria’’ means the 

trades on MIAX PEARL Equities in an 

amount equal to a percentage of the 

average daily volume for National 

Market System securities on MIAX 

PEARL Equities as reported by the 

Consolidated Tape Association (CTA) 

and Unlisted Traded Privileges (UTP) 

Plans, or any successor plans, for a 

specified Measurement Period in an 

amount such that the ERP Member earns 

Units during such specified 

Measurement Period and as more fully 

set forth in the ERP Agreement. 

• ‘‘Unit’’ means the securities issued 

pursuant to the ERP Agreement. 

The Exchange also proposes to delete 

the definition of the term ‘‘Exchange 

Contract’’ from the By-Laws because it 

is no longer used. The term ‘‘Exchange 

Contract’’ is currently defined as ‘‘a 

contract that is then listed for trading by 

the Exchange or that is contemplated by 

the then current business plan of the 

Company to be listed for trading by the 

Exchange within ninety (90) days 

following such date.’’ 

The Exchange proposes to renumber 

the existing definitions accordingly to 

accommodate the proposed additions 

and deletions. 

Article II, Section 2.2, Composition of 

the Board 

The Exchange proposed to amend the 

title of Article II, Section 2.2 to include 

reference to Observer Rights. The 

Exchange also proposes to amend 

Article II, Section 2.2(b)(i) to provide 

that ERP Directors will be included in 

the number of Industry Directors for 

purposes of calculating the composition 

of the Board. In addition, the Exchange 

proposes to amend Article II, Section 

2.2 (b)(ii) to specify that Member 

Representative Directors will not 

include ERP Directors for purposes of 

calculating the Board composition. 

In addition, the Exchange proposes to 

amend Article II, Section 2.2(e) to 

replace the existing text with text that 

provides that an ERP Member has a 

right to nominate one (1) ERP Director 

or appoint an Observer to the Board of 

Directors. If at any time such ERP 

Member is otherwise able to nominate 

an ERP Director, but is unable to fill 

such position as a result of such ERP 

Member already having a representative 

on the Board, such ERP Member will 

have the right to nominate such Director 

in accordance with amended Article II, 

Section 2.2(e) upon the resignation or 

removal of such Director already serving 

on the Board.7 The nominee shall be 

appointed at the first annual meeting of 

the Company following the effective 

date of the By-Law amendment. 

The Exchange proposes to adopt 

paragraph (f) under Article II, Section 

2.2. to provide that if an ERP Director 

position needs to be added pursuant to 

amended Article II, Section 2.2(e), such 

ERP Director shall be nominated by the 


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79254 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Notices 

8See ERP Notice, supra note 3. 

applicable ERP Member and elected by 

the LLC Member and additional Director 

positions shall be added and filled at 

the same time as the election of the new 

ERP Director, as required to comply 

with the requirements set forth in 

Article II, Section 2.2(a) and (b). 

The Exchange also proposes to adopt 

paragraph (g) under Article II, Section 

2.2 to provide that, per amended Article 

II, Section 2.2(e), a person may be 

invited to attend meetings of the Board 

in a nonvoting Observer capacity as 

follows. Proposed Article II, Section 

2.2(g)(i) would provide that any ERP 

Member that is not otherwise 

represented on the Board shall have the 

right to appoint one individual as an 

Observer. If the ERP Member is 

otherwise able to nominate an ERP 

Director, an Observer appointment 

would be in lieu of such ERP Director 

nomination. Proposed Article II, Section 

2.2(g)(ii) would provide that the ERP 

Member’s right to appoint an Observer 

pursuant to proposed Section 2.2(g) 

shall be perpetual, subject to the 

provisions of Section 2.3 discussed 

below. An Observer may not be subject 

to a statutory disqualification. 

Lastly, proposed Article II, Section 

2.2(g)(iii) would provide that Observers 

will have the right to attend all meetings 

of the Board of Directors in a nonvoting 

observer capacity and, in this respect, 

the Company shall give such 

representative copies of all notices, 

minutes, consents, and other materials 

that it provides to its directors at the 

same time and in the same manner as 

provided to such Directors; provided, 

however, that such representative shall 

agree to hold in confidence and trust 

and to act in a fiduciary manner with 

respect to all information so provided; 

and provided further, that the Company 

reserves the right to withhold any 

information and to exclude such 

representative from any meeting or 

portion thereof if access to such 

information or attendance at such 

meeting could adversely affect the 

attorney-client privilege between the 

Company and its counsel or result in 

disclosure of trade secrets or a conflict 

of interest. 

The Exchange believes these changes 

are reasonably designed to ensure that 

the Board of Directors maintains the 

appropriate composition after the ERP 

and that Directors and Observers are 

qualified to represent ERP Members on 

the Board. The changes will also help to 

ensure that Directors, ERP Directors, 

and Observers, are qualified and held to 

the same restrictions against statutory 

disqualification. The Exchange notes 

that no substantive changes are being 

proposed to the Board’s composition; 

the Board size will increase, but the 

current composition will remain. 

Lastly, the Exchange proposes to 

amend the title of Article II, Section 2.2 

to refer to Observer Rights and reflect 

the above-proposed changes. 

Article II, Section 2.3, Terms of Office 

The Exchange proposes to amend 

Article II, Section 2.3(b) to specify that 

it does not apply to ERP Directors. The 

Exchange also proposes to adopt 

paragraph (c) under Article II, Section 

2.3 to provide that in the event that an 

ERP Member (either by itself or its 

affiliates) who has the right to nominate 

an ERP Director and which fails to meet 

its Performance Criteria under the ERP 

Agreement for three consecutive 

Measurement Periods such that it only 

meets the required performance criteria 

of an ERP Member that may appoint an 

Observer, then the individual 

designated by the non-performing ERP 

Member shall immediately cease to be 

an ERP Director of the Company and 

such ERP Member shall cease to have 

the right to nominate an ERP Director. 

Such non-performing ERP Member shall 

continue to maintain Observer rights as 

set forth in the By-Laws. 

Notwithstanding the foregoing, in the 

event that the non-performing ERP 

Member satisfies the Performance 

Criteria for a subsequent Measurement 

Period, then such ERP Member may 

reappoint an ERP Director at the 

immediately following annual meeting 

of the Company. The Exchange believes 

that it is fair and reasonable to treat nonperforming ERP Member’s that can 

nominate an ERP Director differently 

than non-performing ERP Member’s that 

can only appoint Observers. ERP 

Members that can nominate ERP 

Directors have assumed greater 

performance obligations under the ERP 

Agreement, and thus even at the nonperforming level are entitled to more 

protections to their representation on 

the Board than non-performing ERP 

Members that can only appoint 

Observers. 

The Exchange also proposes to adopt 

paragraph (d) under Article II, Section 

2.3 to provide that an individual ERP 

Director or Observer position shall be 

immediately terminated following the 

transfer of common stock or warrants of 

the LLC Member acquired pursuant to 

the ERP Agreement by an ERP Member 

which, after giving effect to such 

transfer, results in such ERP Member 

holding less than 25% of the aggregate 

number of shares of common stock of 

the LLC Member issued or issuable 

pursuant to the Units acquired pursuant 

to the ERP Agreement collectively. 

The Exchange believes these changes 

regarding Terms of Office are reasonably 

designed to account for the removal of 

Directors or Observers of nonperforming ERP Members and Members 

that no longer have a controlling interest 

in the shares that provided them the 

right to such appointments. 

Article II, Section 2.4, Nomination and 

Election 

The Exchange proposes to amend 

Article II, Section 2.4(a) to provide that 

the Nominating Committee shall 

nominate to ERP Director positions only 

those persons whose names have been 

approved and submitted by the 

applicable ERP Members having the 

right to nominate such person. As 

mentioned above, the LLC Member is 

then obligated to vote for the nominated 

ERP Director. The nominee shall be 

appointed at the first annual meeting of 

the Company following September 11, 

2020, which was the closing date of the 

ERP established by the Exchange.8

Article II, Section 2.8, Vacancies 

The Exchange proposes to adopt 

paragraph (c) under Article II, Section 

2.8 to provide that if an ERP Director 

position becomes vacant that the 

applicable ERP Member will retain the 

ability to nominate a person to fill the 

vacant ERP Director position. To 

eliminate any potential confusion 

between the treatment of true vacancies 

and the non-performance provisions in 

proposed Article II, Section 2.3(c), the 

Exchange proposes to specify that 

proposed Article II, Section 2.8(c) will 

not apply for a vacancy resulting from 

an ERP Director position becoming 

vacant due to a non-performing ERP 

Member. In the situation of nonperformance of an ERP Member, the 

provisions of proposed Article II, 

Section 2.3(c) would apply. 

Article II, Section 2.9, Removal and 

Resignation 

The Exchange proposes to amend 

Article II, Section 2.9 to provide that 

ERP Directors may only be removed for 

cause, which shall include, without 

limitation, such Director being subject 

to a statutory disqualification. 

Article X, Sections 10.3 and 10.4 

The Exchange proposes to amend 

Article X, Section 10.3 to provide that 

Observers will be subject to the same 

participation rights on the Board during 

meetings pertaining to the selfregulatory function of the Company as 

other members of the Board. In addition, 

Article X, Section 10.4 would be 


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9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78f(b)(3). 

amended to provide that Observers will 

be subject to the same requirements to 

maintain the confidentiality of all books 

and records of the Company reflecting 

confidential information pertaining to 

the self-regulatory function of the 

Company. 

Miscellaneous Non-Substantive Changes 

In addition to the changes set forth 

above, the Exchange proposes to make 

the following non-substantive changes 

to the current By-Laws. The Exchange 

proposes to delete dated references to 

time periods and events that have 

expired since the proposal of the new 

By-Laws. Specifically, the Exchange 

proposes to delete provisions in Article 

II, Section 2.5, and Article III, Section 

3.1(b), regarding Interim Directors and 

Interim Member Representative 

Directors since these appointments have 

already occurred. Consistent with this 

change, the Exchange proposes to 

remove references to Article II, Section 

2.5 and Interim Directors and Interim 

Member Representative Directors from 

current Article I(x) (proposed to be 

renumbered as Article I(aa)) and Article 

II, Section 2.2(b)(i). 

2. Statutory Basis 

The Exchange believes that its 

proposed rule change is consistent with 

Section 6(b) of the Act 9 in general, and 

furthers the objectives of Sections 

6(b)(1) and 6(b)(5) of the Act 10 in 

particular, in that it enables the 

Exchange to be so organized as to have 

the capacity to carry out the purposes of 

the Act and to comply, and to enforce 

compliance by its Members and persons 

associated with its Members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange; and that it is 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 facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. In addition, the 

proposed change is consistent with 

Section 6(b)(3) of the Act,11 in that it 

enables the Exchange to assure a fair 

representation of its members in the 

selection of its directors and 

administration of its affairs and provide 

that one or more directors shall be 

representative of issuers and investors 

and not be associated with a member of 

the exchange, broker, or dealer. 

Specifically, the proposed 

amendments to the By-Laws are 

reasonably designed to incorporate 

provisions related to the ERP in a 

manner that ensures that the Exchange 

will remain so organized as to have the 

capacity to carry out the purposes of the 

Act and to comply, and to enforce 

compliance by its Members and persons 

associated with its Members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. The changes will also 

help to ensure that Directors, ERP 

Directors, Observers, and committee 

members are qualified and held to the 

same restrictions against statutory 

disqualification. The proposed ERP 

Directors will be subject to the same 

restrictions as current Directors 

including evaluating proposals with the 

Company’s self-regulatory status in 

mind, restricting participation in 

activities where there is a conflict of 

interest, and requirement to maintain 

the confidentiality of information 

related to the Company’s self-regulatory 

function. The proposed Observers will 

be subject to the same restrictions as 

current Directors regarding maintaining 

the confidentiality of information 

related to the Company’s self-regulatory 

function. However, Observers will not 

be subject to the same restrictions as 

current Directors regarding evaluating 

proposals with the Company’s selfregulatory status in mind and restricting 

participation in activities where there is 

a conflict of interest. The Exchange 

believes that treating Observers 

differently than Directors in these 

circumstances is reasonable because 

Observers will not be affirmatively 

voting on any such proposals in their 

non-voting observer capacity. 

In addition, the Exchange’s proposed 

amendments address other nonsubstantive revisions to reflect changes 

since the Commission granted the 

Exchange’s registration as a national 

securities exchange. 

The proposal will continue to assure 

a fair representation of its Members in 

that ERP Directors will not affect the 

current Member Representation Director 

calculation or process in any way. The 

Exchange notes that no substantive 

changes are being proposed to the 

Board’s composition; the Board size will 

increase, but the current composition 

will remain. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed changes to the Exchange ByLaws are designed to enable the 

Exchange to be so organized as to have 

the capacity to carry out the purposes of 

the Act and to comply, and to enforce 

compliance by its Members and persons 

associated with its Members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. As such, this is not a 

competitive filing and thus should not 

impose any burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission shall: (a) By order 

approve or disapprove such proposed 

rule change, or (b) institute proceedings 

to determine whether the proposed rule 

change should be disapproved. 

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– 

PEARL–2020–30 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 

Number SR–PEARL–2020–30. 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 


jbell on DSKJLSW7X2PROD with NOTICES
79256 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Notices 

12 17 CFR 200.30–3(a)(12). 

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 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–PEARL–2020–30, and 

should be submitted on or before 

December 30, 2020. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–26995 Filed 12–8–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–173, OMB Control No. 

3235–0178] 

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 

20549–02736 

Extension: 

Rule 31a–1 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 31a–1 (17 CFR 270.31a–1) under 

the Investment Company Act of 1940 

(the ‘‘Act’’) (15 U.S.C. 80a) is entitled 

‘‘Records to be maintained by registered 

investment companies, certain majorityowned subsidiaries thereof, and other 

persons having transactions with 

registered investment companies.’’ Rule 

31a–1 requires registered investment 

companies (‘‘funds’’), and every 

underwriter, broker, dealer, or 

investment adviser that is a majorityowned subsidiary of a fund, to maintain 

and keep current accounts, books, and 

other documents which constitute the 

record forming the basis for financial 

statements required to be filed pursuant 

to section 31 of the Act (15 U.S.C. 80a– 

30) and of the auditor’s certificates 

relating thereto. The rule lists specific 

records to be maintained by funds. The 

rule also requires certain underwriters, 

brokers, dealers, depositors, and 

investment advisers to maintain the 

records that they are required to 

maintain under federal securities laws. 

The Commission periodically inspects 

the operations of funds to insure their 

compliance with the provisions of the 

Act and the rules thereunder. The books 

and records required to be maintained 

by rule 31a–1 constitute a major focus 

of the Commission’s inspection 

program. 

There are approximately 3,964 

investment companies registered with 

the Commission, all of which are 

required to comply with rule 31a–1. For 

purposes of determining the burden 

imposed by rule 31a–1, the Commission 

staff estimates that each fund is divided 

into approximately four series, on 

average, and that each series is required 

to comply with the recordkeeping 

requirements of rule 31a–1. Based on 

conversations with fund representatives, 

it is estimated that rule 31a–1 imposes 

an average burden of approximately 

1,750 hours annually per series for a 

total of 7,000 annual hours per fund. 

The estimated total annual burden for 

all 3,964 funds subject to the rule 

therefore is approximately 27,748,000 

hours. Based on conversations with 

fund representatives, however, the 

Commission staff estimates that even 

absent the requirements of rule 31a–1, 

90 percent of the records created 

pursuant to the rule are the type that 

generally would be created as a matter 

of normal business practice and to 

prepare financial statements. Thus, the 

Commission staff estimates that the total 

annual burden associated with rule 31a– 

1 is 2,774,800 hours. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study. The 

collection of information required by 

rule 31a–1 is mandatory. Responses will 

not be kept confidential. The records 

required by rule 31a–1 are required to 

be preserved pursuant to rule 31a–2 

under the Investment Company Act (17 

CFR 270.31a–2). Rule 31a–2 requires 

that certain of these records be 

preserved permanently, and that others 

be preserved six years from the end of 

the fiscal year in which any transaction 

occurred. In both cases, the records 

should be kept in an easily accessible 

place for the first two years. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a currently valid OMB control 

number. 

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 background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to (i) www.reginfo.gov/public/do/ 

PRAMain and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o Cynthia Roscoe, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: December 4, 2020. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27029 Filed 12–8–20; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

[Docket No. 2120–0671] 

Agency Information Collection 

Activities: Request for Renewal of a 

Previously Approved Information 

Collection(s): Safety Management 

Systems for Part 121 Certificate 

Holders 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice and request for 

comments. 


jbell on DSKJLSW7X2PROD with NOTICES