Federal Register / Vol. 82, No. 176 / Wednesday, September 13, 2017 / Notices 43063 

23 17 CFR 240.17Ad–22(e)(6)(i) and (e)(6)(v). 

24 Id. 

25 15 U.S.C. 78q–1. 

26 In approving the Proposed Rule Change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

27 17 CFR 200.30–3(a)(12). 

maintain and enforce written policies 

and procedures reasonably designed to 

cover its credit exposures to its 

participants by establishing a risk-based 

margin system that, at a minimum 

considers, and produces margin levels 

commensurate with, the risks and 

particular attributes of each relevant 

product, portfolio, and market; and uses 

an appropriate method for measuring 

credit exposure that accounts for 

relevant product risk factors and 

portfolio effects across products.23

As described above, NSCC faces 

specific wrong-way risk where it acts as 

central counterparty to Member 

transactions in family-issued securities. 

To help address this risk, NSCC applies 

the FIS Charge in calculating the 

Member’s required margin. Specifically, 

the FIS Charge is a component of the 

margin that NSCC calculates and 

collects using a risk-based margin 

methodology that is designed to help 

maintain the coverage of NSCC’s credit 

exposures to its Members at a 

confidence level of at least 99 percent. 

The FIS Charge is tailored to consider 

both the value and type of family-issued 

securities held by the Member, as well 

as the credit risk presented by the 

Member, as calculated by NSCC. 

However, currently, the FIS Charge is 

assessed only against Members on the 

Watch List because of the additional 

credit risk presented by such Members. 

Nevertheless, all Members, not just 

Members on the Watch List, present 

specific wrong-way risk. As such, NSCC 

proposes to expand the FIS Charge to all 

Members, while maintaining the 

relation between the FIS Charge and the 

Member’s credit risk. Specifically, 

NSCC proposes to apply the FIS Charge 

to fixed-income securities that are 

family-issued securities of non-Watch 

List Members at a rate of no less than 

40 percent, and to equities that are 

family-issued securities of non-Watch 

List Members at a rate of no less than 

50 percent. Although NSCC proposes to 

apply a lesser percentage rate to nonWatch List Members than some Watch 

List Members, the proposed rate is 

designed to more accurately reflect the 

risks posed than what is reflected in a 

VaR Charge. 

Because the expanded FIS Charge also 

would be a tailored component of the 

margin that NSCC collects from nonWatch List Members to help cover 

NSCC credit exposure to such Members, 

as the charge would be based on 

different product risk factors with 

respect to equity and fixed-income 

securities, as described above, the 

Commission believes that the proposed 

changes in the Proposed Rule Change 

are consistent with Rule 17Ad– 

22(e)(6)(i) and (e)(6)(v) under the Act.24

III. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Act, in particular 

the requirements of Section 17A of the 

Act 25 and the rules and regulations 

promulgated thereunder. 

It is therefore ordered, pursuant to 

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

proposed rule change SR–NSCC–2017– 

010 be and hereby is APPROVED as of 

the date of this order or the date of a 

notice by the Commission authorizing 

NSCC to implement its related advance 

notice proposal (SR–NSCC–2017–804), 

whichever is later.26

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19379 Filed 9–12–17; 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 38a–1, OMB Control No. 3235–0586, 

SEC File No. 270–522. 

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’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule (17 CFR 270.38a–1) under the 

Investment Company Act of 1940 (15 

U.S.C. 80a) (‘‘Investment Company 

Act’’) is intended to protect investors by 

fostering better fund compliance with 

securities laws. The rule requires every 

registered investment company and 

business development company 

(‘‘fund’’) to: (i) Adopt and implement 

written policies and procedures 

reasonably designed to prevent 

violations of the federal securities laws 

by the fund, including procedures for 

oversight of compliance by each 

investment adviser, principal 

underwriter, administrator, and transfer 

agent of the fund; (ii) obtain the fund 

board of directors’ approval of those 

policies and procedures; (iii) annually 

review the adequacy of those policies 

and procedures and the policies and 

procedures of each investment adviser, 

principal underwriter, administrator, 

and transfer agent of the fund, and the 

effectiveness of their implementation; 

(iv) designate a chief compliance officer 

to administer the fund’s policies and 

procedures and prepare an annual 

report to the board that addresses 

certain specified items relating to the 

policies and procedures; and (v) 

maintain for five years the compliance 

policies and procedures and the chief 

compliance officer’s annual report to the 

board. 

The rule contains certain information 

collection requirements that are 

designed to ensure that funds establish 

and maintain comprehensive, written 

internal compliance programs. The 

information collections also assist the 

Commission’s examination staff in 

assessing the adequacy of funds’ 

compliance programs. 

While Rule 38a–1 requires each fund 

to maintain written policies and 

procedures, most funds are located 

within a fund complex. The experience 

of the Commission’s examination and 

oversight staff suggests that each fund in 

a complex is able to draw extensively 

from the fund complex’s ‘‘master’’ 

compliance program to assemble 

appropriate compliance policies and 

procedures. Many fund complexes 

already have written policies and 

procedures documenting their 

compliance programs. Further, a fund 

needing to develop or revise policies 

and procedures on one or more topics 

in order to achieve a comprehensive 

compliance program can draw on a 

number of outlines and model programs 

available from a variety of industry 

representatives, commentators, and 

organizations. 

There are approximately 4,133 funds 

subject to Rule 38a–1. Among these 

funds, 97 were newly registered in the 

past year. These 97 funds, therefore, 

were required to adopt and document 

the policies and procedures that make 

up their compliance programs. 

Commission staff estimates that the 

average annual hour burden for a fund 

to adopt and document these policies 

and procedures is 105 hours. Thus, we 

estimate that the aggregate annual 


sradovich on DSK3GMQ082PROD with NOTICES
43064 Federal Register / Vol. 82, No. 176 / Wednesday, September 13, 2017 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Fee Schedule, Section I.A., n. 6, available 

here, https://www.nyse.com/publicdocs/nyse/ 

markets/american-options/NYSE_American_

Options_Fee_Schedule.pdf. Per the Fee Schedule, a 

‘‘Customer’’ is an individual or organization that is 

not a Broker-Dealer, per Rule 900.2NY(18); and is 

not a Professional Customer; and a ‘‘Non-Customer’’ 

is anyone who is not a Customer. See id., Fee 

Schedule, Key Terms and Definitions. Thus, NonCustomers include Specialists, e-Specialists, 

Directed Order Market Makers, Firms, Broker 

Dealers, and Professional Customers. The Exchange 

notes that Firm Facilitation trades are not electronic 

and are therefore not subject to the Surcharge. 

5See MIAX Options fee schedule, available here, 

https://www.miaxoptions.com/sites/default/files/ 

fee_schedule-files/MIAX_Options_Fee_Schedule_

08072017.pdf (imposing a $0.10 on certain complex 

orders). See also The Chicago Board Options 

Exchange, Inc. (‘‘CBOE’’) fee schedule, available 

here, http://www.cboe.com/publish/feeschedule/ 

CBOEFeeSchedule.pdf, at n. 35 (same). 6See proposed Fee Schedule, Section I.A., n. 6. 

The Exchange also proposes to correct a 

typographical error referring to ‘‘a CUBE Auctions’’ 

by removing the word ‘‘a.’’ See id. 

burden hours associated with the 

adoption and documentation 

requirement is 10,185 hours. 

All funds are required to conduct an 

annual review of the adequacy of their 

existing policies and procedures and the 

policies and procedures of each 

investment adviser, principal 

underwriter, administrator, and transfer 

agent of the fund, and the effectiveness 

of their implementation. In addition, 

each fund chief compliance officer is 

required to prepare an annual report 

that addresses the operation of the 

policies and procedures of the fund and 

the policies and procedures of each 

investment adviser, principal 

underwriter, administrator, and transfer 

agent of the fund, any material changes 

made to those policies and procedures 

since the date of the last report, any 

material changes to the policies and 

procedures recommended as a result of 

the annual review, and certain 

compliance matters that occurred since 

the date of the last report. The staff 

estimates that each fund spends 49 

hours per year, on average, conducting 

the annual review and preparing the 

annual report to the board of directors. 

Thus, we estimate that the annual 

aggregate burden hours associated with 

the annual review and annual report 

requirement is 202,517 hours. 

Finally, the staff estimates that each 

fund spends 6 hours annually, on 

average, maintaining the records 

required by proposed Rule 38a–1. Thus, 

the annual aggregate burden hours 

associated with the recordkeeping 

requirement is 24,798 hours. 

In total, the staff estimates that the 

aggregate annual information collection 

burden of Rule 38a–1 is 237,500 hours. 

The estimate of burden hours is made 

solely for the purposes of the Paperwork 

Reduction Act. The estimate is not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules. Complying 

with this collection of information 

requirement is mandatory. Responses 

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 control 

number. 

The public may view the background 

documentation for this information 

collection at the following Web site, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) 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. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: September 8, 2017. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19446 Filed 9–12–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81549; File No. SR– 

NYSEAMER–2017–08] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Modify the NYSE 

American Options Fee Schedule 

September 7, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on August 

31, 2017, NYSE American LLC (the 

‘‘Exchange’’ or ‘‘NYSE American’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. 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 

The Exchange proposes to modify the 

NYSE American Options Fee Schedule. 

The proposed change is available on the 

Exchange’s Web site at www.nyse.com, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

the Fee Schedule effective September 1, 

2017. Specifically, the Exchange 

proposes to modify the surcharge that is 

applied to certain Complex Orders 

executed on the Exchange. 

Currently, the Exchange imposes a 

$0.05 per contract surcharge for any 

Electronic Non-Customer Complex 

Order that executes against a Customer 

Complex Order, regardless of whether 

the execution occurs in a Complex 

Order Auction (the ‘‘Surcharge’’).4 The 

Exchange proposes to modify the 

Surcharge to $0.10 per contract, which 

surcharge is comparable to charges 

imposed by other options exchanges.5

For clarity, the Exchange also proposes 

to make clear that the Surcharge is 

applied on a ‘‘per contract’’ basis.6

Additionally, to encourage ATP 

Holders to transact additional NonCustomer Complex Orders on the 

Exchange, the Exchange proposes to 

offer a reduced Surcharge for those ATP 

Holders that meet a certain volume 

threshold. Specifically, the Exchange 

proposes to reduce the per contract 

surcharge to $0.07 for any ATP Holder 

that transacts at least 0.20% of Total 

Industry Customer equity and ETF 

option average daily volume (or 

TCADV) of Electronic Non-Customer 

Complex Order Executions in a month. 

Finally, the Exchange proposes to add 

‘‘TCADV’’ as a defined term in the Key 


sradovich on DSK3GMQ082PROD with NOTICES