47274 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

3The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants 

are not seeking relief from section 17(a) for, and the 

requested relief will not apply to, transactions 

where a Fund could be deemed an Affiliated 

Person, or a Second-Tier Affiliate, of a Fund of 

Funds because an Adviser or an entity controlling, 

controlled by or under common control with an 

Adviser provides investment advisory services to 

that Fund of Funds. 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

in sections 12(d)(1)(A) and (B) of the 

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit persons that are Affiliated 

Persons, or Second-Tier Affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

investment positions currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.3

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21811 Filed 10–10–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81801; File No. SR–FINRA– 

2017–030] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to the Review 

Charges for Communications Filed 

With or Submitted to FINRA 

October 3, 2017. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 26, 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, II, and III below, which Items 

have been prepared by FINRA. FINRA 

has designated the proposed rule change 

as ‘‘establishing or changing a due, fee 

or other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder,4 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 amend Section 

13 of Schedule A to the FINRA By-Laws 

(‘‘Section 13’’) governing the review 

charges for communications filed with 

or submitted to FINRA’s Advertising 

Regulation Department (the 

‘‘Department’’) to account for upcoming 

technological changes that will allow 

Web sites to be filed in native format. 

Below is the text of the proposed rule 

change. Proposed new language is in 

italics; proposed deletions are in 

brackets. 

* * * * * 

Schedule A to the By-Laws of the 

Corporation 

* * * * * 

Section 13—Review Charge for 

Communications Filed or Submitted 

There shall be a review charge for 

each and every communication, 

whether in printed, video or other form, 

filed with or submitted to FINRA, 

except for items that are filed or 

submitted in response to a written 

request from FINRA’s Advertising 

Regulation Department (‘‘the 

Department’’) issued pursuant to the 

spot check procedures set forth in 

FINRA rules, as follows: (1) For printed 

or Web site material reviewed, $125.00, 

plus $10.00 for each printed page or 

Web page reviewed in excess of 10 

pages; and (2) for video or audio media, 

$125.00, plus $10.00 per minute for 

each minute of tape reviewed in excess 

of 10 minutes. 

Where a member requests expedited 

review of material submitted to the 

Department there shall be a review 

charge of $600.00 per item plus $50.00 

for each printed page or Web page 

reviewed in excess of 10 pages. 

Expedited review shall be completed 

within three business days, not 

including the date the item is received 

by the Department, unless a shorter or 

longer period is agreed to by the 

Department. The Department may, in its 

sole discretion, refuse requests for 

expedited review. 

* * * * * 

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 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 47275 

5See Retrospective Rule Review Report, 

Communications with the Public (December 2014), 

http://www.finra.org/sites/default/files/ 

p602011.pdf. 

6FINRA Firm Gateway is an online compliance 

tool that provides consolidated access to FINRA 

applications and allows members to submit 

required filings electronically to meet their 

compliance and regulatory obligations. 

7The upgrades to the AREF System would not 

impact the way in which mobile applications are 

currently submitted in video format. 

8See FINRA Rule 2210(c)(1). 

9See FINRA Rule 2210(c)(3). 10 15 U.S.C. 78o–3(b)(5). 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

In April 2014, FINRA launched a 

retrospective review of its 

communications with the public rules 

to assess their effectiveness and 

efficiency. In December 2014, FINRA 

published a report on the assessment 

phase of the review.5 The report 

concluded that, while the rules have 

largely been effective in meeting their 

intended investor protection objectives, 

the rules and FINRA’s administration of 

them could benefit from some updating 

to better align the investor protection 

benefits and the economic impacts. 

To this end, the report recommended 

a combination of rule proposals, 

guidance and administrative measures, 

including systems upgrades, to enhance 

the effectiveness and efficiency of the 

rules with no reduction in investor 

protection. Pursuant to these 

recommendations, efforts have been 

underway to upgrade FINRA’s 

Advertising Regulation Electronic Files 

(‘‘AREF’’) System, a web-based 

application accessed through the FINRA 

Firm Gateway that enables member 

firms to electronically submit 

communications with the public for 

review by FINRA’s Advertising 

Regulation Department 

(‘‘Department’’).6 Currently, the AREF 

System accepts such submissions in a 

variety of file formats for print (e.g., 

.doc, .rtf, .txt), video (e.g., .mov, .mp4, 

.wmv), audio (e.g., .aif, .mp3, .wav) or 

other form (e.g., .pdf), but not for Web 

site or Web page communications in 

their native format (e.g., .html). 

Consequently, firms submitting Web site 

or Web page communications through 

the AREF System must convert them 

from native format to a format such as 

Portable Document Format (.pdf). This 

conversion process can be burdensome, 

sometimes resulting in voluminous .pdf 

pages. The impending upgrades to the 

AREF System will make the submission 

of Web site or Web page 

communications more efficient by 

including the capability to accept such 

communications in their native format.7

Each web address, a Uniform Resource 

Locator or URL, would be packaged 

within a compressed file format and 

submitted through the AREF System, 

then reviewed by the Department in an 

offline state. FINRA anticipates this 

upgraded AREF System capability to be 

operational by the fourth quarter of 

2017. 

Proposed Rule Change 

FINRA Rule 2210 (Communications 

with the Public) requires members to 

file with the Department specified retail 

communications either 10 business days 

prior to use or within 10 business days 

of first use, as applicable. For example, 

new members, for a period of one year 

beginning on the date their FINRA 

membership becomes effective, 

generally must file with the Department 

at least 10 business days prior to first 

use, any retail communication that is 

published or used in any electronic or 

other public media, including any 

generally accessible Web site.8 As 

another example, all members generally 

must file within 10 business days of first 

use any retail communication, including 

a Web site communication that 

promotes or recommends a specific 

registered investment company or 

family of registered investment 

companies.9 The Department evaluates 

these and other communications subject 

to filing requirements or filed 

voluntarily by firms for compliance 

with applicable rules of FINRA, the 

SEC, the Municipal Securities 

Rulemaking Board and the Securities 

Investors Protection Corporation. 

Pursuant to the content standards of 

Rule 2210, the Department helps to 

ensure that all member firms’ 

communications are based on principles 

of fair dealing and good faith, are fair 

and balanced, and provide a sound basis 

for evaluating the facts in regard to any 

particular security or type of security, 

industry or service. Among other things, 

FINRA rules prohibit member 

communications from including false, 

exaggerated, unwarranted, or misleading 

statements or claims. 

Currently, Section 13 imposes a 

review charge for each communication 

filed with or submitted to FINRA 

(except for items that are filed or 

submitted in response to a written 

request from the Department issued 

pursuant to the spot check procedures 

set forth in Rules 2210(c)(6) and 

2220(c)(3)). The rates charged are based 

on the number of pages for printed 

material or the length of video or audio 

media. In addition, there are surcharges 

for expedited review. The proposed rule 

change would establish charges for 

submission of Web sites and Web pages 

in native format, in anticipation of the 

upgraded AREF System capabilities. It 

would establish rates of $125, plus $10 

for each Web page reviewed in excess of 

10 pages. The charges for expedited 

reviews would be $600 per item plus 

$50 for each Web page reviewed in 

excess of 10 pages. For the purposes of 

the charging schedule, each distinct 

URL would be treated as a Web page. 

The proposed rates mirror the current 

rates for printed material, which would 

remain unchanged. Thus, the proposed 

rule change maintains parity in 

charging, irrespective of the form of 

filing or submission. FINRA notes that 

firms will not be obligated to file or 

submit Web site communications in 

native format. They may continue to 

convert those communications to a 

printed format and submit them at the 

unchanged printed page rate if they find 

that method more efficient or 

economical. 

FINRA has filed the proposed rule 

change for immediate effectiveness. 

FINRA will announce the 

implementation date of the proposed 

rule change in a Regulatory Notice. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(5) of the Act,10 which 

requires, among other things, that 

FINRA rules provide for the equitable 

allocation of reasonable dues, fees and 

other charges among members and 

issuers and other persons using any 

facility or system that FINRA operates 

or controls. FINRA believes that the 

proposed rule change is consistent with 

Section 15A(b)(5) of the Act in that it 

will establish a reasonable fee in 

conjunction with a technology upgrade 

that will permit more efficient filing and 

submission of electronic 

communications. Submission of 

communications in native format will 

be voluntary, and the proposed fee is 

consistent with current charges for 

communications submitted in other 

formats. Moreover, the proposed fee is 

equitably allocated among all members 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
47276 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(2). 13 17 CFR 200.30–3(a)(12). 

that file or submit communications to 

the Department for review. 

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. The 

proposed rule change would not impose 

any additional reporting requirements 

or costs on firms. Members will not be 

obligated to submit communications in 

native format and therefore may choose 

to continue to file or submit 

communications as they do today, with 

the same attendant charges. 

To the extent that the conversion of 

Web site or Web page communications 

from native format to another format 

were viewed as burdensome among 

market participants, those participants 

will have the option to submit such 

communications in native format, 

which would permit members to 

mitigate any direct or indirect costs 

associated with such conversion. 

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 

The foregoing rule change has become 

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

of the Act 11 and paragraph (f)(2) of Rule 

19b–4 thereunder.12 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–2017–030 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–2017–030. 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– 

2017–030, and should be submitted on 

or before November 1, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–21846 Filed 10–10–17; 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: 

Rule 18f–3, SEC File No. 270–385, OMB 

Control No. 3235–0441 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (‘‘Paperwork 

Reduction Act’’), 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. 

Rule 18f–3 (17 CFR 270.18f–3) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) exempts from 

section 18(f)(1) a fund that issues 

multiple classes of shares representing 

interests in the same portfolio of 

securities (a ‘‘multiple class fund’’) if 

the fund satisfies the conditions of the 

rule. In general, each class must differ 

in its arrangement for shareholder 

services or distribution or both, and 

must pay the related expenses of that 

different arrangement. The rule includes 

one requirement for the collection of 

information. A multiple class fund must 

prepare, and fund directors must 

approve, a written plan setting forth the 

separate arrangement and expense 

allocation of each class, and any related 

conversion features or exchange 

privileges (‘‘rule 18f–3 plan’’). Approval 

of the plan must occur before the fund 

issues any shares of multiple classes 

and whenever the fund materially 

amends the plan. In approving the plan, 

the fund board, including a majority of 

the independent directors, must 

determine that the plan is in the best 

interests of each class and the fund as 

a whole. 

The requirement that the fund prepare 

and directors approve a written rule 

18f–3 plan is intended to ensure that the 

fund compiles information relevant to 

the fairness of the separate arrangement 

and expense allocation for each class, 

and that directors review and approve 

the information. Without a blueprint 

that highlights material differences 

among classes, directors might not 

perceive potential conflicts of interests 

when they determine whether the plan 

is in the best interests of each class and 


asabaliauskas on DSKBBXCHB2PROD with NOTICES