Federal Register / Vol. 90, No. 19 / Thursday, January 30, 2025 / Notices 8545 

1 15 U.S.C. 80a–1 et seq. 

2 15 U.S.C. 80a–10(d). 

3 15 U.S.C. 80a–12(b). 

4 17 CFR 270.12b–1. 

5 17 CFR 270.12b–1(b). 

6 17 CFR 270.12b–1(b)(2). 

7 17 CFR 270.12b–1(b)(1). 

8 17 CFR 270.12b–1(b)(4). 

9 17 CFR 270.12b–1(d). 

10 17 CFR 270.12b–1(e). 

11 17 CFR 270.12b–1(b)(3)(i). 

12 17 CFR 270.12b–1(b)(3)(ii). 

13 17 CFR 270.12b–1(b)(3)(iii). 

14 17 CFR 270.12b–1(f). 

15 17 CFR 270.12b–1(h)(1). 

16 17 CFR 270.12b–1(h)(2)(ii). 

state securities authorities and the 

SROs. Subject to the provisions of the 

Freedom of Information Act, 5 U.S.C. 

522 (‘‘FOIA’’), and the Commission’s 

rules thereunder (17 CFR 

200.80(b)(4)(iii)), the Commission does 

not generally publish or make available 

information contained in any reports, 

summaries, analyses, letters, or 

memoranda arising out of, in 

anticipation of, or in connection with an 

examination or inspection of the books 

and records of any person or any other 

investigation. 

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=202411-3235-003 

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 March 

3, 2025. 

Dated: January 27, 2025. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01965 Filed 1–29–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–188, OMB Control No. 

3235–0212] 

Proposed Collection; Comment 

Request; Extension: Rule 12b–1 

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 (the 

‘‘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 (‘‘OMB’’) for 

extension and approval. 

Section 12(b) of the Investment 

Company Act of 1940 (the ‘‘Act’’) 1

prohibits a registered open-end 

investment company (‘‘fund’’), other 

than a fund complying with Section 

10(d) of the Act,2 from acting as a 

distributor of securities that it has 

issued, except through an underwriter, 

in contravention of Commission rules.3

Rule 12b–1 under the Act permits a 

fund to bear expenses associated with 

the distribution of its shares, provided 

that the fund complies with certain 

requirements.4

Rule 12b–1 requires, among other 

things, that the fund adopt a written 

plan describing all material aspects of 

the proposed financing of distribution 

(‘‘rule 12b–1 plan’’).5 The rule 12b–1 

plan must be in writing and approved 

by the fund’s board of directors, and 

separately by the ‘‘independent’’ 

directors (as described in the rule).6 If 

the rule 12b–1 plan is being adopted 

after public offering of the fund’s voting 

securities, it must also be approved 

initially by a vote of at least a majority 

of the fund’s outstanding voting 

securities.7 Similarly, any material 

amendments to the rule 12b–1 plan 

must be approved by the fund’s 

directors, including the independent 

directors, and any material increase in 

the amount to be spent under the rule 

12b–1 plan must be approved by the 

fund’s shareholders.8 In considering the 

implementation or continuance of a rule 

12b–1 plan, the fund’s board must 

request and evaluate information 

reasonably necessary to make an 

informed decision.9 The board also 

must conclude, in the exercise of 

reasonable business judgment and in 

light of the directors’ fiduciary duties, 

that there is a reasonable likelihood that 

the rule 12b–1 plan will benefit the fund 

and its shareholders.10

The rule 12b–1 plan and, in certain 

instances, any related agreements must 

incorporate certain specified provisions, 

including that: (i) the plan or agreement 

will continue in effect for more than one 

year only if the board, including the 

independent directors, approve the 

continuance at least annually; 11 (ii) the 

fund’s board will review quarterly 

reports of the amounts spent under the 

plan; 12 and (iii) the plan may be 

terminated at any time by a majority 

vote of the independent directors or 

outstanding voting securities.13 Rule 

12b–1 also requires the fund to preserve 

for six years copies of the rule 12b–1 

plan and any related agreements and 

reports, as well as minutes of board 

meetings that describe the factors 

considered and the basis for 

implementing or continuing the rule 

12b–1 plan.14

Rule 12b–1 also prohibits funds from 

paying for distribution of fund shares 

with brokerage commissions on their 

portfolio transactions.15 The rule 

requires funds that use broker-dealers 

that sell their shares to also execute 

their portfolio securities transactions, to 

implement policies and procedures 

reasonably designed to prevent: (i) the 

persons responsible for selecting brokerdealers to effect transactions in fund 

portfolio securities from taking into 

account broker-dealers’ promotional or 

sales efforts when making those 

decisions; and (ii) a fund, its adviser, or 

its principal underwriter, from entering 

into any agreement under which the 

fund directs brokerage transactions or 

revenue generated by those transactions 

to a broker-dealer to pay for distribution 

of the fund’s (or any other fund’s) 

shares.16

The board and shareholder approval 

requirements of the rule are designed to 

ensure that fund shareholders and 

directors receive adequate information 

to evaluate and approve a rule 12b–1 

plan and, thus, are necessary for 

investor protection. The provisions that 

require the board to be provided with 

quarterly reports and termination 

authority are designed to ensure that the 

rule 12b–1 plan continues to benefit the 

fund and its shareholders. The 

recordkeeping requirements of the rule 

are necessary to enable Commission 

staff to oversee compliance with the 

rule. The requirement that funds or their 

advisers implement, and fund boards 

approve, policies and procedures in 

order to prevent persons charged with 

allocating fund brokerage from taking 

distribution efforts into account is 

designed to ensure that funds’ selection 

of brokers to effect portfolio securities 

transactions is not influenced by 

considerations about the sale of fund 

shares. 

Commission staff estimates that there 

are approximately 5,246 funds (for 

purposes of this estimate, registered 

open-end investment companies or 

series thereof) that have at least one 

share class subject to a rule 12b–1 plan 

and approximately 250 fund families 

with common boards of directors that 

have at least one fund with a 12b–1 

plan. The Commission further estimates 

that the annual hour burden for 

complying with the rule is 425 hours for 


lotter on DSK11XQN23PROD with NOTICES1
8546 Federal Register / Vol. 90, No. 19 / Thursday, January 30, 2025 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 101866 

(Dec. 10, 2024), 89 FR 101674 (Dec. 16, 2024) 

(‘‘Notice’’). 

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

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

5See Notice, supra note 3. 

6 15 U.S.C. 78s(b)(3)(C). 

7See Notice, supra note 3, at 101674. The 

Exchange also proposed a ministerial change to 

delete outdated language relating to a prior ORF 

waiver and superseded ORF rate. Id. The Exchange 

assesses the ORF on American Trading Permit 

(‘‘ATP’’) Holders for options transactions that are 

cleared by those firms through the Options Clearing 

Corporation (‘‘OCC’’) in the Customer range, 

regardless of the exchange on which the transaction 

occurs. See id. at 101675. 

8See id. at 101675. 

9 Id. 

10 Id. at 101676. 

11See Securities Exchange Act Release Nos. 

96373 (Nov. 22, 2022), 87 FR 73376 (Nov. 29, 2022) 

(SR–NYSEAMER–2022–52) and 98678 (Oct. 3, 

2023), 88 FR 69973 (Oct. 10, 2023) (SR– 

NYSEAMER–2023–48). 

12 15 U.S.C. 78s(b)(3)(C). 

13 15 U.S.C. 78s(b)(1). 

each fund family with a portfolio that 

has a rule 12b–1 plan. We therefore 

estimate that the total hourly burden per 

year for all funds to comply with 

current information collection 

requirements under rule 12b–1 is 

106,250 hours. Commission staff 

estimates that approximately three 

funds per year prepare a proxy in 

connection with the adoption or 

material amendment of a rule 12b–1 

plan. The staff further estimates that the 

cost of each fund’s proxy is $30,000. 

Thus, the total annual cost burden of 

rule 12b–1 to the fund industry is 

$90,000. 

Estimates of average burden hours 

and costs are made solely for purposes 

of the Paperwork Reduction Act and are 

not derived from a comprehensive or 

even representative survey or study of 

the costs of Commission rules and 

forms. The collections of information 

required by rule 12b–1 are necessary to 

obtain the benefits of the rule. Notices 

to the Commission will not be kept 

confidential. 

Written comments are invited on: (a) 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimate of the burden of 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 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

by March 31, 2025. 

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. 

Please direct your written comments 

to: Austin Gerig, Director/Chief Data 

Officer, Securities and Exchange 

Commission, c/o Tanya Ruttenberg, 100 

F Street NE, Washington, DC 20549 or 

send an email to: PRA_Mailbox@

sec.gov. 

Dated: January 24, 2025. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01934 Filed 1–29–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102277; File No. SR– 

NYSEAMER–2024–63] 

Self-Regulatory Organizations; NYSE 

American, LLC; Suspension of and 

Order Instituting Proceedings To 

Determine Whether To Approve or 

Disapprove a Proposed Rule Change 

To Waive the Options Regulatory Fee 

(ORF) for December 2024 

January 24, 2025. 

I. Introduction 

On November 25, 2024, NYSE 

American, LLC (the ‘‘Exchange’’ or 

‘‘NYSE American’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’), pursuant to 

Section 19(b)(1) of the Securities 

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

19b–4 thereunder,2 a proposed rule 

change (File No. SR–NYSEAMER–2024– 

63) to amend its Options Fee Schedule 

(‘‘Fee Schedule’’) regarding the Options 

Regulatory Fee (‘‘ORF’’).3 The proposed 

rule change was immediately effective 

upon filing with the Commission 

pursuant to Section 19(b)(3)(A) of the 

Act.4 The proposed rule change was 

published for comment in the Federal 

Register on December 16, 2024.5 The 

Commission has not received any 

comments on the proposal. Pursuant to 

Section 19(b)(3)(C) of the Act,6 the 

Commission is hereby: (1) temporarily 

suspending File No. SR–NYSEAMER– 

2024–63; and (2) instituting proceedings 

to determine whether to approve or 

disapprove File No. SR–NYSEAMER– 

2024–63. 

II. Description of the Proposed Rule 

Change 

The Exchange proposed to amend the 

Fee Schedule to temporarily waive the 

ORF for the period December 1, 2024 

through December 31, 2024 and resume 

assessment of the ORF at the same rate 

of $0.0038 per share on January 1, 

2025.7 Noting that it adjusts the amount 

of ORF amount periodically to ensure 

that the revenue from its ORF does not 

exceed its regulatory costs, the 

Exchange proposed to waive assessment 

of the ORF from December 1 through 

December 31, 2024 ‘‘in order to help 

ensure that the amount collected from 

the ORF, in combination with other 

regulatory fees and fines, does not 

exceed the Exchange’s total regulatory 

costs.’’ 8 According to the Exchange, the 

proposed waiver was based on its 

‘‘analysis of recent options volumes and 

regulatory costs’’ and its belief that ‘‘if 

the ORF is not adjusted, the ORF 

revenue to the Exchange year over year 

could exceed a material portion of the 

Exchange’s ORF Costs.’’ 9 The Exchange 

proposed to resume assessment of the 

ORF at the same rate on January 1, 2025, 

‘‘based on the Exchange’s estimated 

projections for its regulatory costs, 

balanced with the observed increases in 

options volumes.’’ 10 The exchange 

previously waived its ORF for selected 

months in 2022 and 2023.11

III. Suspension of the Proposed Rule 

Change 

Pursuant to Section 19(b)(3)(C) of the 

Act,12 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change pursuant to 

Section 19(b)(1) of the Act,13 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) 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. As discussed below, the 

Commission believes a temporary 

suspension of the proposed rule change 

is necessary and appropriate to allow for 

additional analysis of the proposed rule 

change’s consistency with the Act and 

the rules thereunder. 

When exchanges file their proposed 

rule changes with the Commission, 

including fee filings like the Exchange’s 

present proposal, they are required to 

provide a statement supporting the 


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