Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices 40609 

3For example, under sections 206(1) and (2), an 

adviser may not engage in any transaction on a 

principal basis with a client that is not consistent 

with the best interests of the client or that 

subrogates the client’s interests to the adviser’s 

own. Cf. Investment Advisers Act Release No. 2106 

(Jan. 31, 2003) (adopting Rule 206(4)–6). 

4See Report of the Securities and Exchange 

Commission, Investment Trusts and Investment 

Companies, H.R. Doc. No. 279, 76th Cong., 2d Sess., 

pt. 3, at 2581, 2589 (1939); Hearings on S.3580 

Before a Subcommittee of the Commission on 

Banking and Currency, 76th Cong., 3d Sess. 209, 

212–23 (1940); Hearings on S. 3580 Before the 

Subcomm. of the Comm. on Banking and Currency, 

76th Cong., 3d Sess. 322 (1940). 

statement explaining that the client is 

consenting to principal transactions, 

followed by a cross-reference to a 

specific document provided to the client 

containing the disclosure in (a)(i)–(iii) 

above and to the specific page or pages 

on which such disclosure is located; 

provided, however, that if the Applicant 

requires time to modify its electronic 

systems to provide the specific page 

cross-reference required by clause (b), 

the Applicant may, while updating such 

electronic systems, and for no more than 

90 days from the date of the Order, 

instead provide a cross-reference to a 

specific document provided to the client 

containing the disclosure in (a)(i)–(iii) 

above and to the specific section in such 

document in which such disclosure is 

located. Transition provision: To the 

extent that the Applicant obtained fully 

informed written revocable consent 

from an advisory client for purposes of 

rule 206(3)–3T(a)(3) prior to January 1, 

2017, the Applicant may rely on this 

Order with respect to such client 

without obtaining additional 

prospective consent from such client. 

5. The Applicant, prior to the 

execution of each transaction in reliance 

on this Order, will: (a) Inform the 

advisory client, orally or in writing, of 

the capacity in which it may act with 

respect to such transaction; and (b) 

obtain consent from the advisory client, 

orally or in writing, to act as principal 

for its own account with respect to such 

transaction. 

6. The Applicant will send a written 

confirmation at or before completion of 

each such transaction that includes, in 

addition to the information required by 

rule 10b–10 under the Exchange Act, a 

conspicuous, plain English statement 

informing the advisory client that the 

Applicant: (a) Disclosed to the client 

prior to the execution of the transaction 

that the Applicant may be acting in a 

principal capacity in connection with 

the transaction and the client authorized 

the transaction; and (b) sold the security 

to, or bought the security from, the 

client for its own account. 

7. The Applicant will send to the 

client, no less frequently than annually, 

written disclosure containing a list of all 

transactions that were executed in the 

client’s account in reliance upon this 

Order, and the date and price of each 

such transaction. 

8. The Applicant is a broker-dealer 

registered under section 15 of the 

Exchange Act and each account for 

which the Applicant relies on this Order 

is a brokerage account subject to the 

Exchange Act, and the rules thereunder, 

and the rules of the self-regulatory 

organization(s) of which it is a member. 

9. Each written disclosure required as 

a condition to this Order will include a 

conspicuous, plain English statement 

that the client may revoke the written 

consent referred to in Condition 4 above 

without penalty at any time by written 

notice to the Applicant in accordance 

with reasonable procedures established 

by the Applicant, but in all cases such 

revocation must be given effect within 

5 business days of the Applicant’s 

receipt thereof. 

10. The Applicant will maintain 

records sufficient to enable verification 

of compliance with the conditions of 

this Order. Such records will include, 

without limitation: (a) Documentation 

sufficient to demonstrate compliance 

with each disclosure and consent 

requirement under this Order; (b) in 

particular, documentation sufficient to 

demonstrate that, prior to the execution 

of each transaction in reliance on this 

Order, the Applicant informed the 

advisory client of the capacity in which 

it may act with respect to the 

transaction and that it received the 

advisory client’s consent (if the 

Applicant informs the client orally of 

the capacity in which it may act with 

respect to such transaction or obtains 

oral consent, such records may, for 

example, include recordings of 

telephone conversations or 

contemporaneous written notations); 

and (c) documentation sufficient to 

enable assessment of compliance by the 

Applicant with sections 206(1) and (2) 

of the Advisers Act in connection with 

its reliance on this Order.3 In each case, 

such records will be maintained and 

preserved in an easily accessible place 

for a period of not less than five years, 

the first two years in an appropriate 

office of the Applicant, and be available 

for inspection by the staff of the 

Commission. 

11. The Applicant will adopt written 

compliance policies and procedures 

reasonably designed to ensure, and the 

Applicant’s chief compliance officer 

will monitor, the Applicant’s 

compliance with the conditions of this 

Order. The Applicant’s chief 

compliance officer will, on at least a 

quarterly basis, conduct testing 

reasonably sufficient to verify such 

compliance. Such written policies and 

procedures, monitoring and testing will 

address, without limitation: (a) 

Compliance by the Applicant with its 

disclosure and consent requirements 

under this Order; (b) the integrity and 

operation of electronic systems 

employed by the Applicant in 

connection with its reliance on this 

Order; (c) compliance by the Applicant 

with its recordkeeping obligations under 

this Order; and (d) whether there is any 

evidence of the Applicant engaging in 

‘‘dumping’’ in connection with its 

reliance on this Order.4 The Applicant’s 

chief compliance officer will document 

the frequency and results of such 

monitoring and testing, and the 

Applicant will maintain and preserve 

such documentation in an easily 

accessible place for a period of not less 

than five years, the first two years in an 

appropriate office of the Applicant, and 

be available for inspection by the staff 

of the Commission. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18090 Filed 8–24–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; 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: 

Form 24F–2; SEC File No. 270–399, OMB 

Control No. 3235–0456 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520), 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 for extension 

and approval. 

Rule 24f–2 (17 CFR 270.24f–2) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a) requires any open-end 

management companies (‘‘mutual 

funds’’), unit investment trusts (‘‘UITs’’) 

or face-amount certificate companies 


sradovich on DSK3GMQ082PROD with NOTICES
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