Federal Register 30-Day Notice

Federal Register / Vol. 90, No. 146 / Friday, August 1, 2025 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0413]

Agency Information Collection
Activities; Submission for OMB
Review; Comment Request; Extension:
Rule 17Ad–16

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Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
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 17Ad–16 (17 CFR 240.17Ad–16)
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
Rule 17Ad–16 requires a registered
transfer agent to provide written notice
to the appropriate qualified registered
securities depository when assuming or
terminating transfer agent services on
behalf of an issuer or when changing its
name or address. The appropriate
qualified registered securities
depository must deliver such notices to
qualified registered securities
depositories, and they must then deliver
such notices to their own participants.
In addition, transfer agents that provide
such notices, and qualified registered
securities depositories that receive such
notices, shall maintain such notices for
a period of at least two years, with the
first six months in an easily accessible
place. This rule addresses the problem
of certificate transfer delays caused by
transfer requests that are directed to the
wrong transfer agent or the wrong
address.
The Commission published a 60-day
notice in the Federal Register soliciting
comments on the existing collection of
information provided for in Rule 17Ad–
16.1 The Commission received
comments regarding the existing
collection of information.2
In the 60-Day Notice, the Commission
estimated that transfer agents submit
approximately 16,412 Rule 17Ad–16
notices to appropriate qualified
1 Proposed Collection; Comment Request;
Extension: Rule 17Ad–16, 90 FR 11198 (Mar. 4,
2025) (60–Day Notice’’).
2 See letters from Dale Baker, Vice President,
American Bankers Association (May 5, 2025)
(‘‘ABA’’); Douglas Hare, Senior Vice President,
UMB Bank, N.A. (May 5, 2025) (‘‘UMB’’); and
Twyla Lehto, Executive Vice President, Zions
Bancorporation, N.A., (May 5, 2025) (Zions Bank’’).

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registered securities depositories; that
the average amount of time necessary to
create and submit each notice is
approximately 15 minutes per notice;
and that, accordingly, the estimated
total industry burden is 4,103 hours per
year (.25 hours multiplied by 16,412
notices filed annually).3
The Commission further estimated
that the internal compliance cost 4 to
prepare and send a notice is
approximately $96 (.25 hours at $385
per hour), based on hourly compliance
cost estimates for an internal
compliance manager’s time. These
internal cost estimates were derived
from the Securities Industry and
Financial Markets Association’s
Management & Professional Earnings in
the Securities Industry 2013, as adjusted
by Commission staff for inflation and
other factors.5 This yielded an industrywide internal compliance cost estimate
of $1,575,552 (16,412 notices multiplied
by $96 per notice).
One commenter stated that transfer
agents submit approximately 20% more
notices than the amount estimated by
the Commission because transfer agents
also send notices to securities
depositories other than The Depository
Trust Company (‘‘DTC’’) (approximately
19,700 instead of 16,412).6 However,
while transfer agents may send notices
to securities depositories other than
DTC, such notices are not within the
scope of the current collection of
information. As noted above, Rule
17Ad–16 requires a registered transfer
agent to provide written notice to the
appropriate qualified registered
securities depository. The appropriate
qualified registered securities
depository means the qualified
registered securities depository that the
Commission so designates by order.7 To
date, DTC is the only appropriate
qualified registered securities
depository the Commission has
designated.8 Thus, Rule 17Ad–16
3 318 Respondents × 51.61 Responses/Year × .25
Hours/Response = 4,103 Hours/Year.
4 The ‘‘internal compliance cost’’ is the
annualized cost to respondents for the hour
burdens. The annualized cost to respondents for the
hour burden is included for informational purposes
and is not submitted to OMB for approval.
5 Hourly compliance cost estimates were derived
from the Securities Industry and Financial Markets
Association’s Management & Professional Earnings
in the Securities Industry 2013, modified by
Commission staff to account for inflation and an
1,800-hour work-year, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead.
6 See ABA at 4.
7 17 CFR 240.17Ad–16(f).
8 See Self-Regulatory Organizations; The
Depository Trust Company; Notice of Filing and
Order Granting Accelerated Approval of Proposed
Rule Change Concerning Procedures Relating to

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requires a registered transfer agent to
provide written notice to DTC but does
not include in its scope written notices
to other securities depositories.
Accordingly, we are not including these
notices in the estimate for Rule 17Ad–
16.
This commenter also stated that, due
to ‘‘internal counsel salaries,
compliance infrastructure investments,
and routine post-filing expenses,’’ the
estimated internal cost of sending notice
is ‘‘closer to’’ $500 per notice. The
commenter stated that the average
internal counsel base salary for transfer
agents is approximately $200,000,
resulting in estimated compliance costs
‘‘closer to’’ $149 per notice. Moreover,
the commenter stated that transfer
agents routinely incur post-notice
expenses.9 While we recognize that
transfer agents may incur such
expenses, we believe such expenses are
outside of the scope of the information
collection in Rule 17Ad–16. The rule
concerns the notice creation, delivery,
and record requirements and does not
require or otherwise provide for a
registered transfer agent to engage in the
post-notice activities or other actions
identified by the commenter. However,
we appreciate the information provided
by the commenter regarding the costs of
compliance generally. The Commission
originally estimated that the relevant
functions would be completed by an
internal compliance manager, at $385
per hour. However, we now recognize
the estimated annualized cost of the
hour burden for Rule 17Ad–16 may be
higher than the Commission’s initial
estimate and we estimate that notices
would be prepared by an attorney, at
$517 per hour.10 Accordingly, the
Commission is increasing its estimate of
the cost per notice, from $96 per notice
to $129.25 per notice (.25 hours at $517
per hour). This yields an industry-wide
internal compliance cost estimate of
$2,121,251 (16,412 notices multiplied
by $129.25 per notice).
Commenters further requested that
the Commission issue guidance: (i) that
Rule 17Ad–16 does not apply at a
security’s issuance; (ii) that examination
sampling and testing should only be
Rule 17Ad-16 and Order Designating the Depository
Trust Company as the Approved Qualified
Registered Securities Depository, Exchange Act
Release No. 35378 (Feb. 15, 1995), 60 FR 9875 (Feb.
22, 1995).
9 See ABA at 3.
10 Hourly compliance cost estimates were derived
from the Securities Industry and Financial Markets
Association’s Management & Professional Earnings
in the Securities Industry 2013, modified by SEC
staff to account for inflation and an 1,800-hour
work-year, and multiplied by 5.35 to account for
bonuses, firm size, employee benefits, and
overhead.

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Federal Register / Vol. 90, No. 146 / Friday, August 1, 2025 / Notices

performed for a post-issuance change of
a transfer agent and 90% compliance
should be considered a ‘‘passing’’ score;
and (iii) that Rule 17Ad–16 applies only
to securities which are made eligible at
issuance with a recognized depository
or, alternatively, does not apply to
privately placed securities unless they
are made eligible at issuance with a
recognized depository.11 We appreciate
the request for guidance; however, we
are not addressing it in this PRA
submission as it relates to an
interpretation of the rule and not to the
existing collection of information
requirements.
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.
The public may view and comment
on this information collection request
at: https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202502-3235-009
or email comment to
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov within 30 days of the day
after publication of this notice, by
September 2, 2025.
Dated: July 29, 2025.
Sherry R. Haywood,
Assistant Secretary.
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103578; File No. SR–ISE–
2025–21]

Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to SQF Ports

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July 29, 2025.

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 July 22,
2025, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II,
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
11 See ABA at 2 and 4; see also UMB at 1–2 and
Zions Bank at 1–2.
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.

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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
Exchange 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. The
Exchange 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

[FR Doc. 2025–14554 Filed 7–31–25; 8:45 am]

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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s Pricing Schedule at Options
7, Section 7, C, Ports and Other
Services, to propose a limit to the
number of Specialized Quote Feed
(‘‘SQF’’) 3 Ports a Market Maker 4 may
subscribe to in a month.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/ise/rulefilings and at the
principal office of the Exchange.

1. Purpose
The Exchange proposes to amend its
Pricing Schedule at Options 7, Section
7, C, Ports and Other Services, to
propose a limit on the number of SQF
3 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an
interface that allows Market Makers to connect,
send, and receive messages related to quotes,
Immediate-or-Cancel Orders, and auction responses
to the Exchange. Features include the following: (1)
options symbol directory messages (e.g., underlying
and complex instruments); (2) System event
messages (e.g., start of trading hours messages and
start of opening); (3) trading action messages (e.g.,
halts and resumes); (4) execution messages; (5)
quote messages; (6) Immediate-or-Cancel Order
messages; (7) risk protection triggers and purge
notifications; (8) opening imbalance messages; (9)
auction notifications; and (10) auction responses.
The SQF Purge Interface only receives and notifies
of purge requests from the Market Maker. Market
Makers may only enter interest into SQF in their
assigned options series. Immediate-or-Cancel
Orders entered into SQF are not subject to the (i)
Order Price Protection, Market Order Spread
Protection, and Size Limitation Protection in
Options 3, Section 15(a)(1)(A), (1)(B), and (2)(B)
respectively, for single leg orders, or (ii) Complex
Order Price Protection as defined in Options 3,
Section 16(c)(1) for Complex Orders. See ISE
Supplementary Material .03 (c) to Options 3,
Section 7.
4 The term ‘‘Market Makers’’ refers to
‘‘Competitive Market Makers’’ and ‘‘Primary Market
Makers’’ collectively. See ISE Options 1, Section
1(a)(21).

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Ports a Market Maker may subscribe to
in a month.
Currently, an ISE Market Maker is
assessed an SQF Port Fee of $1,185 per
port, per month. Currently, the
Exchange has no limits in place on the
number of SQF Ports a Market Maker
may acquire in a month.
At this time, the Exchange proposes to
limit a Market Maker to no more than
250 SQF Ports per month.5 A Market
Maker requires only one SQF Port to
submit quotes in its assigned options
series into ISE. While a Market Maker
may elect to obtain multiple SQF Ports
to organize its business,6 only one SQF
Port is necessary for a Market Maker to
fulfill its regulatory quoting
obligations.7 The Exchange utilizes
ports as a secure method for Members
to submit quotes into the Exchange’s
match engine and for the Exchange to
send messages related to those quotes to
Members. In order to properly regulate
its Members and secure the trading
environment, the Exchange has taken
measures to ensure access is monitored
and maintained with various controls.
The Exchange believes that the
proposed limit of 250 SQF Ports per
month will permit the Exchange to
obtain greater efficiencies by placing
this overall limit on SQF Ports. The
Exchange believes a limit of 250 SQF
Ports provides it with the appropriate
bandwidth to support future growth and
new Market Makers entrants.8
The Exchange proposes to implement
the 250 SQF Ports per month limit on
August 1, 2025.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,9 in general, and furthers the
objectives of Section 6(b)(5) of the Act,10
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
5 The Exchange issued Options Technical Alert
#2025–12 to announce the limitation.
6 For example, a Market Maker may desire to
utilize multiple SQF Ports for accounting purposes,
to measure performance, for regulatory reasons or
other determinations that are specific to that
Member.
7 ISE Market Makers have various regulatory
requirements as provided for in Options 2, Section
4. Additionally, ISE Market Makers have certain
quoting requirements with respect to their assigned
options series as provided in Options 2, Section 5.
SQF Ports are the only quoting protocol available
on ISE and only Market Makers may utilize SQF
Ports.
8 The Exchange will periodically review the SQF
Port limit. If the Exchange elects to amend the limit
it will file a rule proposal with the Commission.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).

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