105152 Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Notices 

56 17 CFR 200.30–3(a)(12), (59). 

1The Commission’s Division of Economic and 

Risk Analysis (‘‘DERA’’) estimates that there were 

approximately 3,429 registered broker-dealers as of 

quarter four of 2023, based on FOCUS filings data. 

2 DERA estimates that there were approximately 

8,378 average daily fail to deliver positions during 

2023. Across 3,429 registered broker-dealers, the 

number of securities per registered broker-dealer 

per trading day is approximately 2.44 (8,378 ÷ 

3,429) equity securities. 

3Because failure to comply with the close-out 

requirements of Rule 204(a) is a violation of the 

rule, the Commission believes that a broker or 

dealer would make the notification to a participant 

that it is subject to the borrowing requirements of 

Rule 204(b) at most once per day. 

4See Amendments to Regulation SHO, Exchange 

Act Release No. 60388 (July 27, 2009), 74 FR 38265 

(July 31, 2009) (‘‘Rule 204 Adopting Release’’) (July 

27, 2009) (making permanent the amendments to 

Regulation SHO contained in Interim Final 

Temporary Rule 204T and incorporating by 

reference the time estimates from the Rule 204T 

Adopting Release for compliance with the 

notification, demonstration, and certification 

requirements of Rule 204). 

5 DERA estimates that during 2023 approximately 

46.6% of trade volume was long. DERA estimates 

that there were approximately 8,378 average daily 

fail to deliver positions during 2023. Across 129 

broker-dealer participants of the NSCC, the number 

of securities per participant per day is 

approximately 65 (8,378 ÷ 129) equity securities. 

46.64% of 65 equity securities per trading day 

equals approximately 30 securities per day. 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MEMX–2024–47 and should be 

submitted on or before January 16, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.56

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–30779 Filed 12–23–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–586, OMB Control No. 

3235–0647] 

Submission for OMB Review; 

Comment Request; Extension: Rule 

204 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 204 (17 CFR 242.204), under the 

Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.). 

Rule 204(a) provides that a participant 

of a registered clearing agency must 

deliver securities to a registered clearing 

agency for clearance and settlement on 

a long or short sale in any equity 

security by settlement date, or if a 

participant of a registered clearing 

agency has a fail to deliver position at 

a registered clearing agency in any 

equity security for a long or short sale 

transaction in the equity security, the 

participant shall, by no later than the 

beginning of regular trading hours on 

the applicable close-out date, 

immediately close out its fail to deliver 

positions by borrowing or purchasing 

securities of like kind and quantity. For 

a short sale transaction, the participant 

must close out a fail to deliver by no 

later than the beginning of regular 

trading hours on the settlement day 

following the settlement date. If a 

participant has a fail to deliver that the 

participant can demonstrate on its books 

and records resulted from a long sale, or 

that is attributable to bona-fide market 

making activities, the participant must 

close out the fail to deliver by no later 

than the beginning of regular trading 

hours on the third consecutive 

settlement day following the settlement 

date. Rule 204 is intended to help 

further the Commission’s goal of 

reducing fails to deliver by maintaining 

the reductions in fails to deliver 

achieved by the adoption of temporary 

Rule 204T, as well as other actions 

taken by the Commission. In addition, 

Rule 204 is intended to help further the 

Commission’s goal of addressing 

potentially abusive ‘‘naked’’ short 

selling in all equity securities. 

The information collected under Rule 

204 will continue to be retained and/or 

provided to other entities pursuant to 

the specific rule provisions and will be 

available to the Commission and selfregulatory organization (‘‘SRO’’) 

examiners upon request. The 

information collected will continue to 

aid the Commission and SROs in 

monitoring compliance with these 

requirements. In addition, the 

information collected will aid those 

subject to Rule 204 in complying with 

its requirements. These collections of 

information are mandatory. 

Several provisions under Rule 204 

will impose a ‘‘collection of 

information’’ within the meaning of the 

Paperwork Reduction Act. 

Allocation Notification Requirement: 

As of quarter four of 2023, there were 

3,429 registered broker-dealers.1 Each of 

these broker-dealers could clear trades 

through a participant of a registered 

clearing agency and, therefore, become 

subject to the notification requirements 

of Rule 204(d). If a participant allocates 

a fail to deliver position to a broker or 

dealer pursuant to Rule 204(d), the 

broker or dealer that has been allocated 

the fail to deliver position in an equity 

security must determine whether such 

fail to deliver position was closed out in 

accordance with Rule 204(a). If such 

broker or dealer does not comply with 

the provisions of Rule 204(a), such 

broker or dealer must immediately 

notify the participant that it has become 

subject to the requirements of Rule 

204(b). The Commission estimates that 

a broker or dealer could have to make 

such determination and notification 

with respect to approximately 2.44 

equity securities per day.2 The 

Commission estimates a total of 

2,108,424 potential notifications in 

accordance with Rule 204(d) across all 

registered broker-dealers that could be 

allocated responsibility to close out a 

fail to deliver position per year (3,429 

registered broker-dealers notifying 

participants once per day 3 on 2.44 

equity securities, multiplied by 252 

trading days in 2023). The total 

estimated annual burden hours per year 

will be approximately 337,348 burden 

hours (2,108,424 multiplied by 0.16 

hours/notification 4). 

Demonstration Requirement for Fails 

to Deliver on Long Sales: As of 

December 29, 2023, there were 129 

participants of NSCC that were 

registered as broker-dealers. If a 

participant of a registered clearing 

agency has a fail to deliver position in 

an equity security at a registered 

clearing agency and determined that 

such fail to deliver position resulted 

from a long sale, the Commission 

estimates that a participant of a 

registered clearing agency will have to 

make such a determination with respect 

to approximately 30 securities per day.5

The Commission estimates a total of 

975,240 potential demonstrations in 

accordance with Rule 204(a)(1) across 

all broker-dealer participants per year 

(129 participants checking for 

compliance once per day on 30 

securities, multiplied by 252 trading 

days in 2023). The total approximate 

estimated annual burden hours per year 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Notices 105153 

6See supra note 4. 

7See supra note 5. 

8See supra note 4. 

9See supra note 2. 

10See supra note 4. 

11See supra note 2. 

12See supra note 4. 

will be approximately 156,038 burden 

hours (975,240 multiplied by 0.16 

hours/demonstration 6). 

Pre-Borrow Notification Requirement: 

As of December 29, 2023, there were 

129 participants of NSCC that were 

registered as broker-dealers. If a 

participant of a registered clearing 

agency has a fail to deliver position in 

an equity security, the participant must 

determine whether the fail to deliver 

position was closed out in accordance 

with Rule 204(a). The Commission 

estimates that a participant of a 

registered clearing agency will have to 

make such determination with respect 

to approximately 65 equity securities 

per day.7 The Commission estimates a 

total of 2,113,020 potential notifications 

in accordance with Rule 204(c) across 

all participants per year (129 brokerdealer participants notifying brokerdealers once per day on 65 securities, 

multiplied by 252 trading days in 2023). 

The total estimated annual burden 

hours per year will be approximately 

338,083 burden hours (2,113,020 

multiplied by 0.16 hours/notification 8). 

Certification Requirement: As of 

quarter four 2023, there were 3,429 

registered broker-dealers. Each of these 

broker-dealers may clear trades through 

a participant of a registered clearing 

agency. If the broker-dealer determines 

that it has not incurred a fail to deliver 

position on settlement date for a long or 

short sale in an equity security for 

which the participant has a fail to 

deliver position at a registered clearing 

agency or has purchased or borrowed 

securities in accordance with the prefail credit provision of Rule 204(e), the 

Commission estimates that a brokerdealer could have to make such 

determination with respect to 

approximately 2.44 securities per day.9

The Commission estimates that each 

such registered broker-dealer could have 

to certify to a participant that the 

broker-dealer has not incurred a fail to 

deliver position on settlement date for a 

long or short sale in an equity security 

for which the participant has a fail to 

deliver position at a registered clearing 

agency or, alternatively, that the brokerdealer is in compliance with the 

requirements set forth in the pre-fail 

credit provision of Rule 204(e), 

2,108,424 times per year (3,429 

registered broker-dealers certifying once 

per day on 2.44 securities, multiplied by 

252 trading days in 2023). The total 

approximate estimated annual burden 

hours per year will be approximately 

337,348 burden hours (2,108,424 

multiplied by 0.16 hours/ 

certification 10). 

Pre-Fail Credit Demonstration 

Requirement: As of quarter four 2023, 

there were 3,429 registered brokerdealers. If a broker-dealer purchased or 

borrowed securities in accordance with 

the conditions specified in Rule 204(e) 

and determined that it had a net long 

position or net flat position on the 

settlement day for which the brokerdealer is claiming pre-fail credit, the 

Commission estimates that a brokerdealer could have to make such 

determination with respect to 

approximately 2.44 securities per day.11

The Commission estimates that the total 

number of times per year that such 

registered broker-dealers could have to 

demonstrate on their respective books 

and records that the broker-dealer has a 

net long position or net flat position on 

the settlement day for which the brokerdealer is claiming pre-fail credit is 

2,108,424 times per year (3,429 

registered broker-dealers checking for 

compliance once per day on 2.44 equity 

securities, multiplied by 252 trading 

days in 2023). The total approximate 

estimated annual burden hours per year 

will be 337,348 burden hours (2,108,424 

multiplied by 0.16 hours/ 

demonstration 12). 

The total aggregate annual burden for 

the collection of information undertaken 

pursuant to all five provisions is thus 

1,506,165 hours per year (337,348 + 

156,038 + 338,083 + 337,348 + 337,348). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view and comment 

on this information collection request 

at: https://www.reginfo.gov/public/do/ 

PRAViewICR?ref_nbr=202410-3235-002 

or send an email comment to 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov within 30 days of the day 

after publication of this notice by 

January 27, 2025. 

Dated: December 19, 2024. 

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–30770 Filed 12–23–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–637, OMB Control No. 

3235–0687] 

Proposed Collection; Comment 

Request; Extension: Rule 239 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Rule 239 (17 CFR 230.239) provides 

exemptions under the Securities Act of 

1933 (15 U.S.C. 77a et seq.), the 

Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.) and the Trust 

Indenture Act of 1939 (U.S.C. 77aaa et 

seq.) for security-based swaps issued by 

certain clearing agencies satisfying 

certain conditions. The purpose of the 

information required by Rule 239 is to 

make certain information about 

security-based swaps that may be 

cleared by the registered or the exempt 

clearing agencies available to eligible 

contract participants and other market 

participants. We estimate that each 

registered or exempt clearing agency 

issuing security-based swaps in its 

function as a central counterparty will 

spend approximately 2 hours each time 

it provides or update the information in 

its agreements relating to security-based 

swaps or on its website. We estimate 

that each registered or exempt clearing 

agency will provide or update the 

information approximately 20 times per 

year. In addition, we estimate that 75% 

of the 2 hours per response (1.5 hours) 

is prepared internally by the clearing 

agency for a total annual reporting 

burden of 180 hours (1.5 hours per 

response × 20 times × 6 respondents). 

Written comments are invited on: (a) 

whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden imposed by the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 


ddrumheller on DSK120RN23PROD with NOTICES1