7718 Federal Register / Vol. 90, No. 13 / Wednesday, January 22, 2025 / Notices 

31See Letters from Barbara Rairden, dated Oct. 

15, 2024, and Anonymous, dated Oct. 15, 2024. See 

also Letter from the American Consumer and 

Investor Institute, dated Nov. 4, 2024 (‘‘ACII 

Letter’’), at 2 (stating that recent Exchange 

proposals, including SR–NYSE–2024–48, to amend 

listing rules to address concerns regarding 

‘‘exchange-listed penny stocks and reverse stock 

splits’’ are ‘‘another incremental step towards 

protecting retail investors from the risks associated 

with such penny stocks and reverse splits’’). This 

commenter also expresses support for additional 

proposals to enhance exchange listing standards to 

further address investor protection concerns, 

particularly those involving Nasdaq and NYSE 

listed companies with low-priced securities. In 

particular, this commenter recommends that the 

Commission engage with the industry, including a 

review of suggestions that have already been made, 

and update the penny stock rules and exchange 

listing standards. See ACII Letter at 4 (citing to 

Petition for Rulemaking on Exchange Listings of 

Penny Stocks filed with the Commission by Virtu 

Financial, Inc., dated July 15, 2024; and Letter from 

Ellen Greene, Managing Director and Joseph 

Corcoran, Managing Director, Securities Industry 

and Financial Markets Association, dated Oct. 8, 

2024 (available at https://www.sec.gov/comments/ 

sr-nasdaq-2024-045/srnasdaq2024045-527615- 

1515662.pdf)). These additional recommendations 

are not before the Commission in the NYSE 

proposal being considered herein. In approving this 

proposal, the Commission is finding the proposal 

before us is consistent with the Act. 

32 15 U.S.C. 78f(b)(5). 

33 15 U.S.C. 78f(b)(7). 

34See Notice, supra note 3, at 83739 

(‘‘Furthermore, the Exchange proposes that a listed 

company would not be allowed to effectuate a 

reverse stock split, for purposes of regaining 

compliance with the Price Criteria or otherwise, if 

the effectuation of such reverse stock split results 

in the company’s security falling below the 

continued listing requirements of Section 802.01A. 

If a listed company effectuated a reverse stock split 

notwithstanding this proposed limitation, the 

Exchange would promptly commence suspension 

and delisting procedures with respect to such 

company in accordance with Section 804.00.’’). 

35 15 U.S.C. 78s(b)(2). 

36 15 U.S.C. 78s(b)(2). 

37 17 CFR 200.30–3(a)(12). 

proposal is appropriate in light of the 

need to protect investors and the public 

interest and the Exchange’s process for 

review of a delisting determination will 

continue to provide a fair procedure for 

the review of delisting determinations 

in accordance with Section 6(b)(7) of the 

Act. 

Finally, the comment letters received 

on the proposal were generally 

supportive.31

In sum, the Exchange’s proposal 

appropriately identifies securities listed 

on its market that are more likely to 

have serious recurrent issues in 

regaining and maintaining compliance 

with the Exchange’s continued listing 

standards, including the Price Criteria, 

and proposes reasonable changes to 

shorten the time that such noncompliant securities can remain trading 

on the Exchange, thereby protecting 

investors and the public interest in 

accordance with Section 6(b)(5) of the 

Act,32 while at the same time 

maintaining a fair procedure for affected 

listed companies to seek review of a 

delisting determination from the 

Committee for Review of the Board of 

Directors of the Exchange in accordance 

with Section 6(b)(7) of the Act.33 For 

these reasons, the Commission finds 

that the proposed rule change, as 

modified by Amendment No. 2, is 

consistent with the requirements of the 

Act. 

IV. Solicitation of Comments on 

Amendment No. 2 to the Proposed Rule 

Change 

Interested persons are invited to 

submit written data, views, and 

arguments concerning whether the 

proposed rule change, as modified by 

Amendment No. 2, is consistent with 

the Act. Comments may be submitted by 

any of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSE–2024–48 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–NYSE–2024–48. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

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–NYSE–2024–48, and should be 

submitted on or before February 12, 

2025. 

V. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 2 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 2, prior to 

the thirtieth day after the date of 

publication of notice of the filing of 

Amendment No. 2 in the Federal 

Register. The changes in Amendment 

No. 2 provide greater clarity to the 

proposal. The proposed additional rule 

text in Amendment No. 2 clarifies the 

delisting process applicable to a 

company that effectuates a reverse stock 

split where the effectuation of such 

reverse stock split results in the 

company’s security falling below the 

Distribution Criteria and is consistent 

with the Exchange’s statements in the 

Notice.34 Accordingly, the Commission 

finds good cause, pursuant to Section 

19(b)(2) of the Act,35 to approve the 

proposed rule change, as modified by 

Amendment No. 2, on an accelerated 

basis. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,36 that the 

proposed rule change (SR–NYSE–2024– 

48), as modified by Amendment No. 2, 

be, and it hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01415 Filed 1–21–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–508, OMB Control No. 

3235–0565] 

Proposed Collection; Comment 

Request; Revision: Rule 482 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 13 / Wednesday, January 22, 2025 / Notices 7719 

1 ‘‘Investment company’’ refers to both 

investment companies registered under the 

Investment Company Act of 1940 (‘‘Investment 

Company Act’’) (15 U.S.C. 80a–1 et seq.) and 

business development companies. 

2See note to rule 482(h) under the Securities Act, 

which states that ‘‘these advertisements, unless 

filed with [FINRA], are required to be filed in 

accordance with the requirements of § 230.497.’’ 

See also rule 24b–3 under the Investment Company 

Act (17 CFR 270.24b–3), which provides that any 

sales material, including rule 482 advertisements, 

shall be deemed filed with the Commission for 

purposes of Section 24(b) of the Investment 

Company Act upon filing with FINRA. 

3Conforming Amendments to Commission Rules 

and Forms, Investment Company Act Release No. 

35377 (Nov. 7, 2024) (the ‘‘Adopting Release’’). 

4See Money Market Fund Reforms; Form PF 

Reporting Requirements for Large Liquidity Fund 

Advisers; Technical Amendments to Form N–CSR 

and Form N–1A, Investment Company Act Release 

No. 34959 (July 12, 2023) [88 FR 51404 (Aug. 3, 

2023)]. 

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 

revision and approval. 

Like most issuers of securities, when 

an investment company (‘‘fund’’) 1 offers 

its shares to the public, its promotional 

efforts become subject to the advertising 

restrictions of the Securities Act of 1933 

(15 U.S.C. 77) (the ‘‘Securities Act’’). In 

recognition of the particular problems 

faced by funds that continually offer 

securities and wish to advertise their 

securities, the Commission has adopted 

advertising safe harbor rules. The most 

important of these is rule 482 (17 CFR 

230.482) under the Securities Act, 

which, under certain circumstances, 

permits funds to advertise investment 

performance data, as well as other 

information. Rule 482 advertisements 

are deemed to be ‘‘prospectuses’’ under 

Section 10(b) of the Securities Act (15 

U.S.C. 77j(b)). 

Rule 482 contains certain 

requirements regarding the disclosure 

that funds are required to provide in 

qualifying advertisements. These 

requirements are intended to encourage 

the provision to investors of information 

that is balanced and informative, 

particularly in the area of investment 

performance. For example, a fund is 

required to include disclosure advising 

investors to consider the fund’s 

investment objectives, risks, charges and 

expenses, and other information 

described in the fund’s prospectus, and 

highlighting the availability of the 

fund’s prospectus and, if applicable, its 

summary prospectus. In addition, rule 

482 advertisements that include 

performance data of open-end funds or 

insurance company separate accounts 

offering variable annuity contracts are 

required to include certain standardized 

performance information, information 

about any sales loads or other 

nonrecurring fees, and a legend warning 

that past performance does not 

guarantee future results. Such funds 

including performance information in 

rule 482 advertisements are also 

required to make available to investors 

month-end performance figures via 

website disclosure or by a toll-free 

telephone number, and to disclose the 

availability of the month-end 

performance data in the advertisement. 

The rule also sets forth requirements 

regarding the prominence of certain 

disclosures, requirements regarding 

advertisements that make tax 

representations, requirements regarding 

advertisements used prior to the 

effectiveness of the fund’s registration 

statement, requirements regarding the 

timeliness of performance data, and 

certain required disclosures by money 

market funds. 

Rule 482 advertisements must be filed 

with the Commission or, in the 

alternative, with the Financial Industry 

Regulatory Authority (‘‘FINRA’’).2 This 

information collection differs from 

many other federal information 

collections that are primarily for the use 

and benefit of the collecting agency. 

Rule 482 contains requirements that 

are intended to encourage the provision 

to investors of information that is 

balanced and informative, particularly 

in the area of investment performance. 

The Commission is concerned that in 

the absence of such provisions fund 

investors may be misled by deceptive 

rule 482 advertisements and may rely 

on less-than-adequate information when 

determining in which funds they should 

invest money. As a result, the 

Commission believes it is beneficial for 

funds to provide investors with 

balanced information in fund 

advertisements in order to allow 

investors to make better-informed 

decisions. 

On November 7, 2024, the 

Commission adopted amendments to 

rule 482 to correct outdated crossreferences and conform the risk 

statements that money market funds 

must include in their advertisements 

and sales literature to the risk 

statements that money market funds 

must include in their prospectuses.3

The 2023 money market fund reform 

adopting release amended the risk 

statements that money market funds 

must include in their prospectuses to 

align with the changes to money market 

fund regulations adopted in that 

release.4 However, rule 482 was not 

included in the amendments and the 

statements that rule 482 required were 

inconsistent with the recently amended 

regulatory framework for money market 

funds. Further, the risk statements that 

money market funds were required to 

include in prospectuses and 

advertisements have otherwise always 

been identical and the risk statements 

should not differ based on whether an 

investor is reviewing a prospectus or an 

advertisement. As a result, rule 482 

included outdated references to 

concepts that have been removed or 

significantly modified in underlying 

money market fund regulations (e.g., 

allowing temporary suspensions of 

redemptions). The amendments to rule 

482 correct this error, make certain 

other conforming edits to further align 

the language of the risk statements with 

the risk statements that money market 

funds must include in their 

prospectuses, and correct inaccurate 

cross references to money market fund 

rules. 

We estimate the total annual burden 

to comply with amended rule 482 to be 

577,896 hours, at an average time cost 

of $213,154,498. 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 of the costs of 

Commission rules and forms. The 

provision of information under rule 482 

is necessary to obtain the benefits of the 

safe harbor offered by the rule. The 

information provided under rule 482 

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 OMB control 

number. 

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 


lotter on DSK11XQN23PROD with NOTICES1
7720 Federal Register / Vol. 90, No. 13 / Wednesday, January 22, 2025 / Notices 

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

2 17 CFR 240.19b–4. 

3See Notice of Filing infra note 4, at 89 FR 97131. 

4See Securities Exchange Act Release No. 101780 

(Dec. 2, 2024), 89 FR 97131 (Dec. 6, 2024) (File No. 

SR–OCC–2024–016) (‘‘Notice of Filing’’). 

5Capitalized terms used but not defined herein 

have the meanings specified in OCC’s Rules and ByLaws, available at https://www.theocc.com/about/ 

publications/bylaws.jsp. 

6SDOs are option contracts with a maturity of 

less than or equal to one month to expiration. See 

Notice of Filing, 89 FR at 97132. 

7See Notice of Filing, 89 FR 97132 (citing Cboe, 

The Rise of SPX & 0DTE Options (July 27, 2023), 

available at https://go.cboe.com/l/77532/2023-07- 

27/ffc83k). 

8See Notice of Filing, 89 FR 97132 (stating that 

‘‘opportunities exist to improve model performance 

for Clearing Member portfolios dominated by 

SDOs’’). 

9OCC uses the term ‘‘day count convention’’ to 

refer to a standardized methodology for calculating 

the number of days between two dates. See Notice 

of Filing, 89 FR 97132, note 13. Both calendar and 

business day conventions are used by OCC in 

STANS and CST calculations. Id. 

10The implied volatility of an option is a measure 

of the expected future volatility of the option’s 

underlying security at expiration, which is reflected 

in the current option premium in the market. See 

Notice of Filing, 89 FR 97132, note 12. 

to comments and suggestions submitted 

by March 24, 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 15, 2025. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01417 Filed 1–21–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: Publishing in the 

Federal Register of January 21, 2025. 

PREVIOUSLY ANNOUNCED TIME AND DATE OF

THE MEETING: Thursday, January 23, 

2025, at 2 p.m. 

CHANGES IN THE MEETING: The Closed 

Meeting scheduled for Thursday, 

January 23, 2025, at 2 p.m., has been 

changed to Thursday, January 23, 2025, 

at 1 p.m. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: January 17, 2025. 

Stephanie J. Fouse, 

Assistant Secretary. 

[FR Doc. 2025–01596 Filed 1–17–25; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102203; File Nos. SR– 

OCC–2024–016] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Granting Approval of Proposed Rule 

Change by The Options Clearing 

Corporation Concerning 

Enhancements to the System for 

Theoretical Analysis and Numerical 

Simulations (‘‘STANS’’) and OCC’s 

Comprehensive Stress Testing (‘‘CST’’) 

Methodology, To Better Capture the 

Risks Associated With Short-Dated 

Options 

January 15, 2025. 

I. Introduction 

On November 22, 2024, the Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2024– 

016, pursuant to Section 19(b) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 2

thereunder, to (i) align assumptions 

across models and (ii) generate implied 

volatility shocks for options with a tenor 

of less than one month that are 

consistent with observed market 

dynamics.3 The proposed rule change 

was published for public comment in 

the Federal Register on December 6, 

2024.4 The Commission has received no 

comments regarding the proposed rule 

change. For the reasons discussed 

below, the Commission is approving the 

proposed rule change (hereinafter 

defined as ‘‘Proposed Rule Change’’). 

II. Background 

OCC is a central counterparty 

(‘‘CCP’’), which means that as part of its 

function as a clearing agency, it 

interposes itself as the buyer to every 

seller and the seller to every buyer for 

financial transactions. As the CCP for 

the listed options markets and for 

certain futures in the United States, 

OCC is exposed to the risk that one or 

more of its Clearing Members may fail 

to make a payment or to deliver 

securities. OCC addresses such risk 

exposure, in part, by requiring its 

members to provide collateral, 

including both margin collateral and 

Clearing Fund collateral. Margin is the 

collateral that CCPs collect to cover 

potential changes in a member’s 

positions over a set period of time 

during normal market conditions. OCC’s 

Clearing Fund is a mutualized pool of 

financial resources to which each 

Clearing Member is required to 

contribute to ensure that OCC maintains 

sufficient qualifying liquid resources to 

manage its liquidity risk, and to address 

the tail risk that the margin collateral 

OCC collects from each Clearing 

Member might be insufficient to cover 

OCC’s credit exposure to a defaulting 

member in extreme but plausible market 

conditions. 

OCC’s methodology for calculating 

margin collateral requirements is called 

the System for Theoretical Analysis and 

Numerical Simulations (‘‘STANS’’).5

OCC’s methodology for sizing and 

monitoring its Clearing Fund is called 

the Comprehensive Stress Testing 

(‘‘CST’’) methodology. OCC relies on 

STANS and the CST methodology to set 

collateral requirements to cover the 

financial risk posed by the positions 

OCC clears for its members. OCC states 

that the proportion of such positions 

that comprise short-dated options 

(‘‘SDOs’’) 6 has increased over the past 

several years.7 In response to this 

observation, OCC examined the risks 

posed by the increase in SDO trading 

and identified opportunities to improve 

the performance of the models 

comprising STANS and the CST 

methodology in covering the financial 

risk posed by the increase in SDO 

trading observed by OCC.8 As described 

below, OCC proposes two changes to the 

models comprising STANS and the CST 

methodology: one set of changes related 

to the day count conventions 9 and one 

set of changes related to the application 

of volatility shocks to theoretical option 

prices.10


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