Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 37875 

9 15 U.S.C. 78f(b)(8). 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. In this case, the Commission waives 

the five-day pre-filing requirement. 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(4)(ii). 

rulebook will benefit Members by 

increasing transparency around the 

operation of the Exchange. Furthermore, 

the proposed definitions being included 

in the rulebook will more clearly and 

accurately reflect the information 

included on the protocols, and will be 

harmonized with language to be 

included in the rules of its affiliated 

exchanges to the extent that the 

protocols operate in the same manner. 

The protocols described in this filing 

provide a range of important features to 

Members, including the ability to 

submit quotes and orders, and perform 

other functions necessary to manage 

trading on the Exchange. The Exchange 

believes codifying the quote and order 

entry protocols will increase 

transparency to the Members that use 

these protocols to connect to the 

Exchange. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,9 the Exchange does not believe 

that the proposed rule change will 

impose any burden on intermarket or 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. As explained 

above, the Exchange is codifying the 

quote and order entry protocols that 

Members use to connect to the 

Exchange’s trading system. The 

Exchange does not believe that 

codifying these protocols in the 

rulebook will have any competitive 

impact. FIX, OTTO, and SQF were 

established in SR–MRX–2017–13, and 

are already available to Members, who 

use these protocols to connect and 

manage their trading activity on the 

Exchange. Adding rule language that 

describes these Exchange offerings will 

increase transparency around the 

operation of the Exchange without 

having any impact on intermarket or 

intramarket competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 10 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.11

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the 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– 

MRX–2018–25 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–MRX–2018–25. 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 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–MRX–2018–25 and should 

be submitted on or before August 23, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16526 Filed 8–1–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83724; File No. SR–OCC– 

2018–010] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

the Definition of Flexibly Structured 

Options 

July 27, 2018. 

Pursuant to 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 July 16, 

2018, The Options Clearing Corporation 

(‘‘OCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by OCC. OCC filed 

the proposed rule change pursuant to 

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

19b–4(f)(4)(ii) 4 thereunder so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 


daltland on DSKBBV9HB2PROD with NOTICES
37876 Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 

5OCC’s By-Laws and Rules can be found on 

OCC’s public website: http://optionsclearing.com/ 

about/publications/bylaws.jsp. 6OCC By-Laws, Article I., Section 1.V.(1), which 

defines ‘‘variable terms’’ in respect of a series of 

option contracts other than OTC options to mean 

‘‘the name of the underlying interest, the exercise 

price (or, in respect of a series of delayed start 

options that does not yet have a set exercise price, 

the exercise price setting formula and exercise price 

setting date), the index value determinant and the 

index multiplier (in the case of a flexibly structured 

index option), the cap interval (in the case of a 

capped option) and the expiration date of such 

option contract.’’ 

7OCC By-Laws, Article I. Non-flexibly structured 

weekly options are called ‘‘short term options’’ in 

OCC’s By-Laws and Rules. Under Article I of OCC 

By-Laws, the term ‘‘quarterly option’’ means ‘‘an 

option of a series of stock options or index options 

that expires on the last business day of a calendar 

quarter,’’ and the term ‘‘short term option’’ means 

‘‘an option of a series of options that expires one 

week after it is opened for trading.’’ 

8OCC By-Laws, Article I., Section 1.F.(8). 

9See Securities Exchange Act Release No. 83205 

(May 9, 2018), 83 FR 22550 (May 15, 2018) (SR– 

CBOE–2018–008) (Order Approving a Proposed 

Rule Change Relating to Flexibly Structured 

Options) (‘‘Cboe Options has proposed to amend 

the rule to make all FLEX Options fungible with 

Non-FLEX Options that have identical terms.’’) 

10This also includes weekly expirations and End 

of Month (‘‘EOM’’) expirations. Cboe Options stated 

in its proposal that flexibly structured options with 

these expirations were not originally intended to be 

fungible. See Securities Exchange Release Act No. 

82622 (February 2, 2018), 83 FR 5668 (February 8, 

2018) (SR–CBOE–2018–008) (Notice of Filing of a 

Proposed Rule Change Relating to Flexibly 

Structured Options). 

11See Securities Exchange Act Release No. 82622 

(February 2, 2018), 83 FR 5668 (February 8, 2018) 

(SR–CBOE–2018–008) (Notice of Filing of a 

Proposed Rule Change Relating to Flexibly 

Structured Options). 

12OCC By-Laws, Article I., Section 1.F.(8). 

13See Securities Exchange Act Release No. 59675 

(April 1, 2009), 74 FR 15794 (April 7, 2009) (SR– 

OCC–2009–05); Securities Exchange Act Release 

No. 59417 (February 18, 2009), 74 FR 8591 

(February 25, 2009) (order approving SR–CBOE– 

2008–115). 

14See Securities Exchange Act Release No. 59060 

(December 5, 2008), 73 FR 76075 (December 15, 

2008) (SR–CBOE–2008–115) (‘‘subject to certain 

aggregation requirements for cash settled options, 

the current FLEX Rules do permit the expiration of 

FLEX Options on the same day that Non-FLEX 

quarterly index options (‘‘QIX’’) and Non-FLEX 

Weeklys Options expire.’’). 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

OCC proposes to amend the definition 

of the term ‘‘flexibly structured option’’ 

as provided in Article I, Section 1.F.(8) 

of OCC’s By-Laws to conform the 

definition to a recent rule change by 

Cboe Exchange, Inc. (‘‘Cboe Options’’ or 

‘‘CBOE’’). The proposed changes to 

OCC’s By-Laws can be found in Exhibit 

5 to the filing. All terms with initial 

capitalization that are not otherwise 

defined herein have the same meaning 

as set forth in the By-Laws and Rules.5

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, 

OCC 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. OCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(1) Purpose 

Flexibly structured options are 

options that give investors the ability to 

customize basic option features 

including size, expiration date, exercise 

style, and certain exercise prices. OCC 

currently defines a ‘‘flexibly structured 

option’’ as an option having variable 

terms that are negotiated between the 

parties to a confirmed trade pursuant to 

Exchange Rules and that do not 

correspond to the variable terms 6 of any 

series of non-flexibly structured options 

previously opened for trading on the 

Exchange (other than a series of 

quarterly options or short term 

options).7 In addition, OCC’s By-Laws 

currently provide that once a series of 

non-flexibly structured options (other 

than a series of quarterly options or 

short term options) is opened for trading 

on an options exchange, any existing 

flexibly structured option contracts that 

have identical variable terms shall be 

fully fungible with options in such 

series, and shall cease to be flexibly 

structured options.8 In other words, 

with the exception of quarterly options 

and short term options series, once an 

exchange opens a non-flexibly 

structured option series having identical 

terms to a flexibly structured option, the 

flexibly structured option would 

become fungible with the non-flexibly 

structured option series. 

Pursuant to a recent rule change, Cboe 

Options has made all flexibly structured 

options fungible with subsequentlyintroduced non-flexibly structured 

options series having identical variable 

terms.9 This includes non-flexibly 

structured quarterly options and short 

term options series.10 As a result, for 

instance, under Cboe Options’ rules, a 

flexibly structured option that has the 

same terms as a subsequentlyintroduced quarterly or short term 

option series would now be fungible 

with that non-flexibly structured 

quarterly or short term option series. 

Cboe Options has requested that OCC 

amend its By-Laws to allow Cboe 

Options’ rule change to become 

effective. Cboe Options noted in its rule 

change that the change ‘‘will have the 

effect of more FLEX Options becoming 

fungible with Non-Flex Options, which 

will potentially increase the liquidity 

available to traders of FLEX Options.’’ 11

To clear and settle flexibly structured 

options traded on Cboe Options in a 

manner that is consistent with Cboe 

Options’ rules, OCC proposes to amend 

its definition of ‘‘flexibly structured 

option’’ in Article I of its By-Laws by 

deleting ‘‘(other than a series of 

quarterly options or short term 

options)’’ in the two instances in which 

it appears in the definition.12 OCC 

added this text to its definition of a 

flexibly structured option in 2009 to 

ensure consistency with Cboe Options 

rules, which were amended at that time 

to, among other things, allow for 

flexibly structured options to become 

fungible with subsequently introduced 

non-flexibly structured options series 

that have the same terms (other than a 

series of quarterly options or short term 

options).13 Consistent with Cboe 

Options’ rule change at that time, OCC 

amended its definition of flexibly 

structured options in 2009 to provide 

that a flexibly structured option cannot 

have the same terms as any series of 

non-flexibly structured options 

previously opened for trading on the 

exchange other than a series of quarterly 

options or short term options.14 OCC 

intended the 2009 amended definition 

to clarify that a flexibly structured 

option could share the same terms as a 

non-flexibly structured quarterly or 

short term option series and still be 

considered a flexibly structured option. 

Consistent with Cboe Options’ most 

recent rule change, OCC proposes to 

eliminate from the language of its 

definition of a flexibly structured option 

the first instance of ‘‘(other than a series 

of quarterly options or short term 

options)’’ to provide that a flexibly 

structured option cannot share the same 

terms as a non-flexibly structured 

option series that has been previously 

opened for trading on the exchange, 

including a currently-trading quarterly 

options or short term options series. 

Consistent with Cboe Options’ rules, 

OCC believes that this change would 

amend the definition in a manner to 

make it clear that flexibly structured 

options cannot share the same terms as 

non-flexibly structured option series 


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Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 37877 

15See supra note 9. 

16 15 U.S.C. 78q–1(b)(3)(F). 

17 15 U.S.C. 78q–1(b)(3)(F). 

18See supra note 10. 

19See Securities Exchange Act Release No. 59417 

(February 18, 2009), 74 FR 8591 (February 25, 2009) 

(order approving SR–CBOE–2008–115). See also 

supra note 9. 

20See Securities Exchange Act Release No. 59417 

(February 18, 2009), 74 FR 8591 (February 25, 2009) 

(order approving SR–CBOE–2008–115). 

21 15 U.S.C. 78q–1(b)(3)(I). 

22 15 U.S.C. 78q–1(b)(3)(I). 

that have been previously opened for 

trading on the exchange. 

The second instance of ‘‘(other than a 

series of quarterly options or short term 

options)’’ in the flexibly structured 

option definition was adopted in 2009 

to provide, consistent with Cboe 

Options rules then in effect and as an 

exception to general fungibility, that a 

quarterly options or short term options 

series with the same terms as a flexibly 

structured option would not become 

fungible with that flexibly structured 

option. As noted above, Cboe Options 

has recently adopted a rule change to 

eliminate this restriction and allow all 

flexibly structured options to become 

fungible with non-flexibly structured 

options series having identical variable 

terms that are later opened for trading 

on the exchange.15 Accordingly, OCC 

proposes to eliminate the second 

instance of this text from the language 

of the definition of a flexibly structured 

option in OCC’s By-Laws to make it 

consistent with Cboe Options’ rules. As 

amended, OCC’s definition of a flexibly 

structured option would provide that 

once a series of non-flexibly structured 

options is opened for trading on an 

exchange, any existing flexibly 

structured option contracts that have 

identical variable terms shall be fully 

fungible with options in such series, 

and shall cease to be flexibly structured 

options. OCC believes that this change 

would allow OCC clear and settle 

flexibly structured options traded on 

Cboe Options in a manner that is 

consistent with Cboe Options’ rules and 

would have the effect of making more 

flexibly structured options fungible with 

identical non-flexibly structured options 

series. 

(2) Statutory Basis 

Section 17A(b)(3)(F) of the Securities 

Exchange Act of 1934, as amended 

(‘‘Act’’) 16 requires, among other things, 

that the rules of a clearing agency be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities and derivatives transactions, 

to foster cooperation and coordination 

with persons engaged in clearance and 

settlement, and, in general, to protect 

investors and the public interest. OCC 

believes that the proposed rule change 

is consistent with Section 17A(b)(3)(F) 

of Act 17 because it is designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions in flexibly structured 

options. The proposed rule change 

accomplishes this by maintaining 

consistency between OCC’s By-Laws 

and Rules and Cboe Options’ rules as 

applied to the clearance and settlement 

of flexibly structured options. OCC 

further believes that the proposed rule 

change accomplishes this by providing 

that all flexibly structured options are 

subject to the same requirements. The 

proposed rule change would make all 

flexibly structured options fungible with 

subsequently introduced non-flexibly 

structured options with identical terms, 

thereby increasing operational 

efficiency by eliminating the need for 

OCC to monitor and treat a certain 

group of flexibly structured options (i.e., 

ones with the same terms as quarterly 

options and short term options series) 

differently than other flexibly structured 

options. In addition, Cboe Options has 

noted that its rule change will 

potentially increase the liquidity 

available to traders of flexibly structured 

options.18 Moreover, the Commission 

has previously noted that it would be 

concerned if flexibly structured options 

were to act as a surrogate for trading in 

standardized options (i.e., non-flexibly 

structured exchange-traded options) and 

that allowing for flexibly structured 

options to become fungible with 

standardized options would help 

alleviate this concern.19 In this respect, 

the Commission noted the following 

when it initially approved Cboe 

Options’ rules to provide for fungibility 

between flexibly structured options and 

standardized options series with the 

same terms: 

However, the rules, as proposed by the 

CBOE, help to ensure that FLEX market 

participants cannot avoid the protections 

provided to retail investors in the 

standardized options market simply by 

trading FLEX Options. In this regard, once a 

series is open for trading, new FLEX Options 

are not permitted in that series. In addition, 

once a Non-FLEX Options series is open, all 

outstanding FLEX Options in the same series 

become fungible with the standardized 

market, are traded pursuant to standardized 

market trading rules, and are aggregated for 

position and exercise limit purposes. These 

rules help to alleviate these surrogate 

concerns and should help to ensure that 

FLEX Options market continues to operate as 

intended.20

The proposed rule change would help 

to further address this concern by 

allowing all flexibly structured options 

to become fungible with non-flexibly 

structured options series with the same 

terms that are later opened for trading 

on the exchange. 

In addition, the proposed rule change 

is not inconsistent with the existing ByLaws and Rules of OCC, including any 

rules proposed to be amended. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

Section 17A(b)(3)(I) of the Act 21

requires that the rules of a clearing 

agency not impose any burden on 

competition not necessary or 

appropriate in furtherance of the Act. 

OCC does not believe that the proposed 

rule change would impact or impose 

any burden on competition.22 The 

proposed rule change would not affect 

the competitive dynamics between 

clearing members, but rather would 

solely affect the treatment of flexibly 

structured options with the same terms 

as quarterly options and short term 

options series. In this respect, it would 

facilitate consistent treatment of such 

flexibly structured options with all 

other flexibly structured options, 

providing that all flexibly structured 

options will become fungible with 

subsequently-introduced standardized 

options with the same terms. The 

proposed rule change also would not 

inhibit access to OCC’s services or 

disadvantage or favor any particular 

user in relationship to another. The 

proposed rule change would treat 

equally all holders of flexibly structured 

options with the same terms as 

subsequently introduced quarterly 

options and short term options series, 

providing that such flexibly structured 

options held by them would become 

fungible with such standardized options 

series. For the foregoing reasons, OCC 

believes the proposed rule change is in 

the public interest, would be consistent 

with the requirements of the Act 

applicable to clearing agencies, and 

would not impact or impose a burden 

on competition. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants or Others 

Written comments on the proposed 

rule change were not and are not 

intended to be solicited with respect to 

the proposed rule change and none have 

been received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 


daltland on DSKBBV9HB2PROD with NOTICES
37878 Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f)(4)(ii). 

25Notwithstanding the foregoing, implementation 

of this rule change will be delayed until this rule 

change is deemed certified under CFTC Regulation 

§ 40.6. 26 17 CFR 200.30–3(a)(12). 

of the Act 23 and Rule 19b–4(f)(4)(ii) 24

thereunder because it effects a change in 

an existing service that (i) does not 

adversely affect the safeguarding of 

securities or funds in the custody or 

control of the clearing agency or for 

which it is responsible and (ii) does not 

significantly affect the respective rights 

or obligations of the clearing agency or 

persons using the service. 

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.25

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– 

OCC–2018–010 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2018–010. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of OCC and on OCC’s website at 

https://www.theocc.com/components/ 

docs/legal/rules_and_bylaws/sr_occ_18_

010.pdf. 

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–OCC–2018–010 and should 

be submitted on or before August 23, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16532 Filed 8–1–18; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Data Collection Available for Public 

Comments 

ACTION: 60-Day notice and request for 

comments. 

SUMMARY: The Small Business 

Administration (SBA) intends to request 

approval, from the Office of 

Management and Budget (OMB) for the 

collection of information described 

below. The Paperwork Reduction Act 

(PRA) of 1995, requires federal agencies 

to publish a notice in the Federal 

Register concerning each proposed 

collection of information before 

submission to OMB, and to allow 60 

days for public comment in response to 

the notice. This notice complies with 

that requirement. 

DATES: Submit comments on or before 

October 1, 2018. 

ADDRESSES: Send all comments to Susan 

Suckfiel, Supervisory Financial Analyst, 

Office of Capital Access, Small Business 

Administration, 409 3rd Street, 8th 

Floor, Washington, DC 20416. 

FOR FURTHER INFORMATION CONTACT: 

Susan Suckfiel, Supervisory Financial 

Analyst, 202–205–6443, susan.suckfiel@

sba.gov or Curtis B. Rich, Management 

Analyst, 202–205–7030, curtis.rich@

sba.gov; 

SUPPLEMENTARY INFORMATION: SBA Form 

1050, Settlement Sheet is used in SBA’s 

7(a) Loan Program to collect information 

from lenders and borrowers regarding 

the disbursement of loan proceeds. SBA 

relies on this information during the 

guaranty purchase review process as a 

component in determining whether to 

honor a loan guaranty. The currently 

approved form primarily requires the 

lender and borrower to certify to 

whether they complied with a series of 

loan requirements. The current form 

also requires submission of 

documentation (e.g., joint payee or 

cancelled checks, invoices or paid 

receipts, and wire transfer records) in 

support of the certification. SBA has 

determined that this current information 

collection lacks enough specificity to 

yield the information regarding use of 

proceeds that would enable the agency 

to effectively monitor compliance with 

loan disbursement procedures. As a 

result, SBA is proposing to change both 

the content and format of the Form 

1050. 

The form will be divided into several 

sections to clearly identify the 

information to be submitted. The 

revised form will continue to collect the 

same basic identifying information such 

as loan amount, loan number and 

lender’s name. In addition, the form will 

continue to require certifications from 

both the lender and borrower regarding 

compliance with the disbursement 

requirements and accuracy of 

information submitted. However, 

generally the enumerated statements 

will be reduced or combined and 

replaced with requests for specific 

information. the revised form will 

include a listing of all of the uses of loan 

proceeds. For each applicable use, 

information regarding the names of the 

payees, the amount disbursed, and the 

authorized amount remaining will be 

collected. The revised form will also 

include a section to document the 

borrower’s equity injection of cash, 

assets, and any seller contribution (on 

full standby for the life of the loan). 

These changes will allow the lender 

to more clearly document all of the 

sources and uses of funds at the time of 

loan closing. This additional 

information will better allow both 

lenders and SBA staff to ensure that the 

necessary information is collected at the 

time of loan origination 

(a) Solicitation of Public Comments 

SBA is requesting comments on (i) 

Whether the collection of information is 

necessary for the agency to properly 


daltland on DSKBBV9HB2PROD with NOTICES