40610 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4See Securities Exchange Act Release No. 80295 

(March 22, 2017), 82 FR 15564 (March 29, 2017) 

(Securities Transaction Settlement Cycle) (File No. 

S7–22–16) (stating that, as amended, SEA Rule 

15c6–1(a) will prohibit broker-dealers from 

effecting or entering into a contract for the purchase 

or sale of a security (other than an exempted 

security, government security, municipal security, 

commercial paper, bankers’ acceptances or 

commercial bills) that provides for payment of 

funds and delivery of securities later than the 

second business day after the date of the contract, 

unless otherwise expressly agreed to by the parties 

at the time of the transaction). 

5See supra note 4. 

6See Securities Exchange Act Release No. 79648 

(December 21, 2016), 81 FR 95705 (December 28, 

2016) (Notice of Filing of File No. SR–FINRA– 

2016–047). 

7See Securities Exchange Act Release No. 80004 

(February 9, 2017), 82 FR 10835 (February 15, 2017) 

(Order Approving File No. SR–FINRA–2016–047) 

and Securities Exchange Act Release No. 80004A 

(March 6, 2017), 82 FR 13517 (March 13, 2017) 

(Correction to Order Approving File No. SR– 

FINRA–2016–047). 

(collectively, ‘‘funds’’) deemed to have 

registered an indefinite amount of 

securities to file, not later than 90 days 

after the end of any fiscal year in which 

it has publicly offered such securities, 

Form 24F–2 (17 CFR 274.24) with the 

Commission. Form 24F–2 is the annual 

notice of securities sold by funds that 

accompanies the payment of registration 

fees with respect to the securities sold 

during the fiscal year. 

The Commission estimates that 7,284 

funds file Form 24F–2 on the required 

annual basis. The average annual 

burden per respondent for Form 24F–2 

is estimated to be two hours. The total 

annual burden for all respondents to 

Form 24F–2 is estimated to be 14,568 

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 of the 

costs of Commission rules. 

Compliance with the collection of 

information required by Form 24F–2 is 

mandatory. The Form 24F–2 filing that 

must be made to the Commission is 

available to the public. 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 Commission requests written 

comments on: (a) Whether the collection 

of information is necessary for the 

proper performance of the functions of 

the Commission, including whether the 

information has practical utility; (b) the 

accuracy of the Commission’s estimate 

of the burdens 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 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Remi 

Pavlik-Simon, 100 F Street NE., 

Washington, DC 20549; or send an email 

to: PRA_Mailbox@sec.gov. 

Dated: August 22, 2017. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18074 Filed 8–24–17; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81448; File No. SR–FINRA– 

2017–026] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Clarify Application of 

FINRA Rule 11140 (Transactions in 

Securities ‘‘Ex-Dividend,’’ ‘‘Ex-rights’’ 

or ‘‘Ex-Warrants’’) in Connection With 

the Implementation of the Shortened 

Settlement Cycle (T+2) on September 

5, 2017 

August 21, 2017. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘SEA’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on August 17, 2017, Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I and II below, which Items 

have been prepared by FINRA. FINRA 

has designated the proposed rule change 

as constituting a ‘‘non-controversial’’ 

rule change under paragraph (f)(6) of 

Rule 19b–4 under the Act,3 which 

renders the proposal effective upon 

receipt of this filing by the Commission. 

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 

FINRA is proposing to address the 

application of FINRA Rule 11140 

(Transactions in Securities ‘‘ExDividend,’’ ‘‘Ex-Rights’’ or ‘‘ExWarrants’’) as it relates to establishing 

ex-dividend dates in connection with 

the implementation of the T+2 

settlement cycle on September 5, 2017. 

No change to the text of FINRA Rule 

11140(b)(1) is required by this proposal. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA 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. FINRA 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

On March 22, 2017, the SEC adopted 

amendments to SEA Rule 15c6–1(a) to 

shorten the standard settlement cycle 

for U.S. secondary market transactions 

in equities, corporate and municipal 

bonds, unit investment trusts and 

financial instruments composed of these 

products, from three business days after 

the trade date (‘‘T+3’’) to two business 

days after the trade date (‘‘T+2’’).4 The 

industry-wide initiative is designed to 

reduce a number of risks, including 

credit risk, market risk, and liquidity 

risk and, as a result, reduce systemic 

risk for U.S. market participants.5 The 

compliance date for the rule 

amendments is September 5, 2017. 

In support of this initiative, FINRA 

proposed changes to its rules pertaining 

to securities settlement by, among other 

things, amending the definition of 

‘‘regular way’’ settlement as occurring 

on T+2.6 On February 9, 2017, the SEC 

approved FINRA’s amendments to the 

applicable rules, including Rule 

11140(b), that establish or reference T+3 

to conform to T+2, and these 

amendments will become effective on 

September 5, 2017.7

During the transition period the 

industry and self-regulatory 

organizations (‘‘SROs’’), including The 

Depository Trust Company (‘‘DTC’’) 

which processes corporate action 

events, have raised concern that the 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices 40611 

8See, e.g., Nasdaq Issuer Alert 2017–001, Changes 

to Ex-dividend Procedures Effective September 5, 

2017 to Accommodate T+2 Settlement, http://

nasdaq.cchwallstreet.com/nasdaq/pdf/nasdaqissalerts/2017/2017-001.pdf; NYSE, NYSE MKT, 

NYSE ARCA: Changes Related to the Shortened 

Settlement Cycle (T+2) (July 11, 2017), https://

www.nyse.com/trader-update/ 

history#110000069618. 

9See generally Notice to Members 00–54 (August 

2000). 

10The record date is the date fixed by an issuer 

for the purpose of determining the holder of the 

security who is eligible to receive the dividend, 

interest or principal payment, or any other 

distribution relating to the security. See generally 

Notice to Members 00–54 (August 2000). 

11The payable date is the date that the dividend 

is sent to the record owner of the security. See 

generally Notice to Members 00–54 (August 2000). 

12See Regulatory Notice 17–19 (SEC Approves 

Amendments to FINRA Rules to Conform to the 

Shortened Standard Settlement Cycle for Most 

Broker-Dealer Transactions From Three Business 

Days (T+3) to Two Business Days After the Trade 

Date (T+2)) (May 2017). 

13See, e.g., Nasdaq Issuer Alert 2017–001, 

Changes to Ex-dividend Procedures Effective 

September 5, 2017 to Accommodate T+2 

Settlement, http://nasdaq.cchwallstreet.com/ 

nasdaq/pdf/nasdaq-issalerts/2017/2017-001.pdf; 

NYSE, NYSE MKT, NYSE ARCA: Changes Related 

to the Shortened Settlement Cycle (T+2) (July 11, 

2017), http://www.ust2.com/pdfs/NYSE-T2- 

Announcements.pdf. 

14The last day of the T+3 settlement cycle. 

15The first day of the T+2 settlement cycle. 

16Monday, September 4, 2017 is Labor Day, a 

Federal holiday. 

17See supra note 16. 

18The date on which previous trades settling on 

a T+3 settlement cycle and current trades on the 

T+2 settlement cycle will be processed. 

19 15 U.S.C. 78o–3(b)(6). 

20As a result of the September 5, 2017 transition 

date for regular-way settlement from T+3 to T+2, 

September 7, 2017 will be a ‘‘double’’ settlement 

date for trades that occur on September 1, 2017 

(under T+3 and reflecting the Labor Day holiday on 

Continued 

September 5, 2017 industry-wide 

transition date from T+3 to T+2 will 

result in September 7, 2017 being a 

‘‘double’’ settlement date for trades that 

occur on September 1, 2017 (under T+3 

and reflecting the Labor Day holiday on 

September 4, 2017) and trades that 

occur on September 5, 2017 (under 

T+2), which generally will result in 

investors who trade on either date being 

deemed a record holder of September 7, 

2017.8 In order to avoid confusion about 

the proper settlement date and to 

coordinate with other SROs, FINRA is 

proposing not to establish September 5, 

2017 as an ex-dividend date for 

applicable securities. 

Proposal 

FINRA is proposing to address the 

application of Rule 11140(b) as it relates 

to the ex-dividend date in connection 

with the implementation of the T+2 

settlement cycle on September 5, 2017. 

As amended to address T+2, the 

timeframes in Rule 11140 to establish an 

ex-dividend date were generally 

reduced by one business day. 

The ex-dividend date (or ex-date) is 

the date on or after which a security is 

traded without a specific dividend or 

distribution.9 Rule 11140(b) provides for 

the determination of normal exdividend and ex-warrant dates for 

certain types of dividends and 

distributions. As amended to address 

T+2, Rule 11140(b)(1) provides that 

with respect to cash dividends or 

distributions, or stock dividends, and 

the issuance or distribution of warrants, 

which are less than 25% of the value of 

the subject security (i.e., ‘‘regular’’ 

distributions), if the definitive 

information is received sufficiently in 

advance of the record date, the date 

designated as the ‘‘ex-dividend date’’ is 

the first business day preceding the 

record date if the record date falls on a 

business day, or the second business 

day preceding the record date if the 

record date falls on a day designated by 

FINRA’s Uniform Practice Code 

(‘‘UPC’’) Committee as a non-delivery 

date.10 Rule 11140(b)(2), which did not 

require amendment in connection with 

T+2, establishes the ex-dividend date as 

the first business day following the 

payable date with respect to cash 

dividends or distributions, stock 

dividends and/or splits, and the 

distribution of warrants, which are 25% 

or greater of the value of the subject 

security (i.e., ‘‘large’’ distributions).11

Consistent with the compliance date 

of the amendments to SEA Rule 15c6– 

1(a), the industry and FINRA have 

adopted Tuesday, September 5, 2017 as 

the transition date to the T+2 settlement 

cycle.12 To mitigate the potential 

confusion that may result concerning 

proper settlement during the transition 

period, FINRA, in coordination with 

other SROs, supports the proposal that 

Tuesday, September 5, 2017 should not 

be designated as an ex-dividend date.13

Accordingly, FINRA proposes to 

interpret Rule 11140(b)(1) so that the 

first record date to which the new exdividend date determination will be 

applied will be Thursday, September 7, 

2017. The ex-dividend dates for 

‘‘regular’’ distributions during the 

transition to T+2 will be as follows: 

Record date Ex-date 

Friday, September 1, 

2017 14.

Wednesday, August 

30, 2017. 

Tuesday, September 

5, 2017 15.

Thursday, August 31, 

2017. 16

Wednesday, September 6, 2017.Friday, September 1, 

2017. 17

Thursday, September 

7, 2017 18.

Wednesday, September 6, 2017. 

As described above, the ex-date for 

‘‘large’’ distributions under Rule 

11140(b)(2) is the first business day 

following the payable date. This 

provision was not amended in 

connection with T+2. In order to ensure 

that September 5, 2017 will not be 

designated as an ex-dividend date for 

‘‘large’’ distributions, FINRA will advise 

issuers to not set September 1, 2017 as 

the payable date for any ‘‘large’’ 

distribution under Rule 11140(b)(2) and 

proposes to interpret Rule 11140(b)(2) 

so that, if an issuer sets September 1, 

2017 as the payable date for a ‘‘large’’ 

distribution, the ex-dividend date will 

be September 6, 2017, not September 5, 

2017. 

FINRA has filed the proposed rule 

change for immediate effectiveness and 

has requested that the SEC waive the 

requirement that the proposed rule 

change not become operative for 30 days 

after the date of the filing, so FINRA can 

implement the proposed rule change 

immediately. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,19 which 

requires, among other things, that 

FINRA rules must be 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 regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, and, in general, to protect 

investors and the public interest. FINRA 

believes that the proposal to address the 

application of Rule 11140(b) to exclude 

September 5, 2017 as an ex-dividend 

date for ‘‘regular’’ or ‘‘large’’ 

distributions supports the collective 

effort among the industry and SROs to 

mitigate the potential confusion 

concerning proper settlement during the 

transition from the T+3 settlement cycle 

to the T+2 settlement cycle. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. As noted 

above, the SROs support that no 

securities will be subject to an ex-date 

ruling on September 5, 2017. The 

primary benefit of this proposed rule 

change is to minimize potential 

confusion about proper settlement that 

may arise during the transition to the 

T+2 settlement cycle.20 FINRA believes 


sradovich on DSK3GMQ082PROD with NOTICES
40612 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices 

September 4, 2017) and trades that occur on 

September 5, 2017 (under T+2). 

21 15 U.S.C. 78s(b)(3)(A). 

22 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires FINRA to give the Commission 

written notice of FINRA’s intent to file the proposed 

rule change, along with a brief description and text 

of 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. FINRA has satisfied this requirement. 

23 17 CFR 240.19b–4(f)(6). 

24 17 CFR 240.19b–4(f)(6)(iii). 

25For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 26 17 CFR 200.30–3(a)(12). 

that the proposed rule change would not 

impose any additional costs on the 

industry. As noted above, the proposed 

rule change does not change the text to 

Rule 11140(b). Instead, the proposed 

rule change interprets the application of 

the rule solely to refrain from 

designating September 5, 2017 as an exdividend date for ‘‘regular’’ or ‘‘large’’ 

distributions. 

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 

Because the 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, the 

proposed rule change has become 

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

of the Act 21 and Rule 19b–4(f)(6) 

thereunder.22

A proposed rule change filed under 

Rule 19b–4(f)(6) 23 normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),24 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. 

FINRA has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

upon filing. FINRA has stated that the 

purpose of the proposed rule change is 

to minimize confusion about proper 

settlement that may arise during the 

transition to the T+2 settlement cycle on 

September 5, 2017. The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest to avoid the confusion that 

could arise in connection with the 

transition to the T+2 settlement cycle on 

September 5, 2017, if normal or large 

distributions were to be ex-dividend on 

that date. Accordingly, the Commission 

hereby waives the 30-day operative 

delay requirement and designates the 

proposed rule change as operative upon 

filing.25

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. 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– 

FINRA–2017–026 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–FINRA–2017–026. 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 Web site (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 Web site 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 FINRA. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–FINRA– 

2017–026, and should be submitted on 

or before September 15, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–18000 Filed 8–24–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

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 

20549–2736. 

Extension: 

Rule 15c2–5, SEC File No. 270–195; OMB 

Control No. 3235–0198 

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 15c2–5 (17 CFR 240.15c2–5), 

under the Securities Exchange Act of 

1934 (15 U.S.C. 78 et seq.) (‘‘Exchange 

Act’’). 

Rule 15c2–5 prohibits a broker-dealer 

from arranging or extending certain 

loans to persons in connection with the 

offer or sale of securities unless, before 

any element of the transaction is entered 

into, the broker-dealer: (1) Delivers to 

the person a written statement 

containing the exact nature and extent 

of the person’s obligations under the 

loan arrangement; the risks and 

disadvantages of the loan arrangement; 

and all commissions, discounts, and 

other remuneration received and to be 

received in connection with the 


sradovich on DSK3GMQ082PROD with NOTICES