Proposed Collection; Comment Request, 63215-63216 [E8-25245]
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Federal Register / Vol. 73, No. 206 / Thursday, October 23, 2008 / Notices
Commission, c/o Shirley Martinson,
6432 General Green Way, Alexandria,
VA 22312; or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: October 16, 2008.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8–25244 Filed 10–22–08; 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 Investor
Education and Advocacy,
Washington, DC 20549–0213.
dwashington3 on PRODPC61 with NOTICES
Extension:
Rule 17a–7; SEC File No. 270–238; OMB
Control No. 3235–0214.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit the existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 17a–7 (17 CFR 270.17a–7) (the
‘‘rule’’) under the Investment Company
Act of 1940 (15 U.S.C. 80a–1 et seq.)
(the ‘‘Act’’) is entitled ‘‘Exemption of
certain purchase or sale transactions
between an investment company and
certain affiliated persons thereof.’’ It
provides an exemption from section
17(a) of the Act for purchases and sales
of securities between registered
investment companies (‘‘funds’’), that
are affiliated persons (‘‘first-tier
affiliates’’) or affiliated persons of
affiliated persons (‘‘second-tier
affiliates’’), or between a fund and a
first- or second-tier affiliate other than
another fund, when the affiliation arises
solely because of a common investment
adviser, director, or officer. Rule 17a–7
requires funds to keep various records
in connection with purchase or sale
transactions effected in reliance on the
rule. The rule requires the fund’s board
of directors to establish procedures
reasonably designed to ensure that the
rule’s conditions have been satisfied.
The board is also required to determine,
at least on a quarterly basis, that all
affiliated transactions effected during
the preceding quarter in reliance on the
rule were made in compliance with
these established procedures. If a fund
VerDate Aug<31>2005
14:58 Oct 22, 2008
Jkt 217001
enters into a purchase or sale
transaction with an affiliated person, the
rule requires the fund to compile and
maintain written records of the
transaction.1 The Commission’s
examination staff uses these records to
evaluate for compliance with the rule.
While most funds do not commonly
engage in transactions covered by rule
17a–7, the Commission staff estimates
that nearly all funds have adopted
procedures for complying with the
rule.2 Of the approximately 3891
currently active funds, the staff
estimates that virtually all have already
adopted procedures for compliance with
rule 17a–7. This is a one-time burden,
and the staff therefore does not estimate
an ongoing burden related to the
policies and procedures requirement of
the rule for funds.3 The staff estimates
that there are approximately 150 new
funds that register each year, and that
each of these funds adopts the relevant
polices and procedures. The staff
estimates that it takes approximately 4
hours to develop and adopt these
policies and procedures, as follows; 3
hours spent by a compliance attorney,
and 1 hour collectively spent by the
board of directors. Therefore, the total
annual burden related to developing
and adopting these policies and
procedures would be approximately 600
hours.4
Of the 3891 existing funds, the staff
assumes that approximately 25% (or
973), enter into transactions affected by
rule 17a–7 each year (either by the fund
directly or through one of the fund’s
series), and that the same percentage
(25%, or 38 funds) of the estimated 150
funds that newly register each year will
also enter into these transactions, for a
total of 1011 5 companies that are
affected by the recordkeeping
requirements of rule 17a–7. These funds
must keep records of each of these
transactions, and the board of directors
must quarterly determine that all
1 The written records are required to set forth a
description of the security purchased or sold, the
identity of the person on the other side of the
transaction, and the information or materials upon
which the board of directors’ determination that the
transaction was in compliance with the procedures
was made.
2 Unless stated otherwise, these estimates are
based on conversations with the examination and
inspections staff of the Commission and fund
representatives.
3 Based on our reviews and conversations with
fund representatives, we understand that funds
rarely, if ever, need to make changes to these
policies and procedures once adopted, and
therefore we do not estimate a paperwork burden
for such updates.
4 This estimate is based on the following
calculations: (4 hours × 150 = 600 hours).
5 This estimate is based on the following
calculation: (973 + 38 = 1011).
PO 00000
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Fmt 4703
Sfmt 4703
63215
relevant transactions were made in
compliance with the company’s policies
and procedures. The rule generally
imposes a minimal burden of collecting
and storing records already generated
for other purposes.6 The staff estimates
that the burden related to making these
records and for the board to review all
transactions would be 3 hours annually
for each respondent, (2 hours spent by
compliance attorneys and 1 hour spent
by the board of directors) 7 or 3033 total
hours each year.8
Based on these estimates, the staff
estimates the combined total annual
burden hours associated with rule 17a–
7 is 3633 hours.9 The staff also estimates
that there are approximately 1161
respondents and 8238 total responses.10
The estimates of burden hours are
made solely for the purposes of the
Paperwork Reduction Act, and are not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. The
collection of information required by
rule 17a–7 is necessary to obtain the
benefits of the rule. 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.
Written comments are invited on: (a)
Whether the collections of information
are 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 collections of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
6 Commission staff believes that rule 17a–7 does
not impose any costs associated with record
preservation in addition to the costs that funds
already incur to comply with the record
preservation requirements of rule 31a–2 under the
Act. Rule 31a–2 requires companies to preserve
certain records for specified periods of time.
7 The staff estimates that funds that rely on rule
17a–7 annually enter into an average of 8 rule 17a–
7 transactions each year. The staff estimates that the
compliance attorneys of the companies spend
approximately 15 minutes per transaction on this
recordkeeping, and the board of directors spends a
total of 1 hour annually in determining that all
transactions made that year were done in
compliance with the company’s policies and
procedures.
8 This estimate is based on the following
calculation: (3 hours × 1011 companies = 3033
hours).
9 This estimate is based on the following
calculations: (600 hours + 3033 hours = 3633 total
hours).
10 This estimate is based on the following
calculations: (150 newly registered funds + 1011
funds that engage in rule 17a–7 transactions =
1161); (1011 funds that engage in rule 17a–7
transactions × 8 times per year = 8088); (8088 + 150
= 8238 responses).
E:\FR\FM\23OCN1.SGM
23OCN1
63216
Federal Register / Vol. 73, No. 206 / Thursday, October 23, 2008 / Notices
minimize the burdens of the collections
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 Lewis W. Walker, Acting Director/
CIO, Securities and Exchange
Commission, C/O Shirley Martinson,
6432 General Green Way, Alexandria,
VA 22312; or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: October 16, 2008.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8–25245 Filed 10–22–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58806; File No. 4–566]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Notice of Filing and Order
Approving and Declaring Effective an
Amendment to the Plan for the
Allocation of Regulatory
Responsibilities Among the American
Stock Exchange LLC, BATS Exchange,
Inc., Boston Stock Exchange, Inc.,
Chicago Board Options Exchange,
Inc., Chicago Stock Exchange, Inc.,
Financial Industry Regulatory
Authority, Inc., International Securities
Exchange, LLC, The NASDAQ Stock
Market LLC, National Stock Exchange,
Inc., New York Stock Exchange, LLC,
NYSE Arca Inc., NYSE Regulation, Inc.,
and Philadelphia Stock Exchange, Inc.
Relating to the Surveillance,
Investigation, and Enforcement of
Insider Trading Rules
dwashington3 on PRODPC61 with NOTICES
October 17, 2008.
Notice is hereby given that the
Securities and Exchange Commission
(‘‘Commission’’) has issued an Order,
pursuant to Section 17(d) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 approving and declaring
effective an amendment to the plan for
allocating regulatory responsibility
(‘‘Plan’’) filed pursuant to Rule 17d–2 of
the Act,2 by the American Stock
Exchange LLC (‘‘Amex’’), BATS
Exchange, Inc. (‘‘BATS’’), Boston Stock
Exchange, Inc. (‘‘BSE’’), Chicago Board
Options Exchange, Inc. (‘‘CBOE’’),
Chicago Stock Exchange, Inc. (‘‘CHX’’),
Financial Industry Regulatory
1 15
2 17
U.S.C. 78q(d).
CFR 240.17d–2.
VerDate Aug<31>2005
14:58 Oct 22, 2008
Jkt 217001
Authority, Inc. (‘‘FINRA’’), International
Securities Exchange, LLC (‘‘ISE’’), The
NASDAQ Stock Market, LLC
(‘‘NASDAQ’’), National Stock Exchange,
Inc. (‘‘NSX’’), New York Stock Exchange
LLC (‘‘NYSE’’), NYSE Arca Inc. (‘‘NYSE
Arca’’), NYSE Regulation, Inc. (acting
under authority delegated to it by
NYSE) (‘‘NYSE Regulation’’), and
Philadelphia Stock Exchange, Inc.
(‘‘Phlx’’) (collectively, ‘‘Participating
Organizations’’ or ‘‘Parties’’) concerning
the surveillance, investigation, and
enforcement of insider trading rules.
I. Introduction
Section 19(g)(1) of the Act,3 among
other things, requires every selfregulatory organization (‘‘SRO’’)
registered as either a national securities
exchange or national securities
association to examine for, and enforce
compliance by, its members and persons
associated with its members with the
Act, the rules and regulations
thereunder, and the SRO’s own rules,
unless the SRO is relieved of this
responsibility pursuant to Section
17(d) 4 or Section 19(g)(2) 5 of the Act.
Without this relief, the statutory
obligation of each individual SRO could
result in a pattern of multiple
examinations of broker-dealers that
maintain memberships in more than one
SRO (‘‘common members’’). Such
regulatory duplication would add
unnecessary expenses for common
members and their SROs.
Section 17(d)(1) of the Act 6 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.7 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.8
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
3 15
U.S.C. 78s(g)(1).
U.S.C. 78q(d).
5 15 U.S.C. 78s(g)(2).
6 15 U.S.C. 78q(d)(1).
7 See Securities Act Amendments of 1975, Report
of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session 32 (1975).
8 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
4 15
PO 00000
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Fmt 4703
Sfmt 4703
the Act, or by Commission or SRO
rules. 9 When an SRO has been named
as a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2 under the Act.10
Rule 17d–2 permits SROs to propose
joint plans for the allocation of
regulatory responsibilities with respect
to their common members. Under
paragraph (c) of Rule 17d–2, the
Commission may declare such a plan
effective if, after providing for notice
and comment, it determines that the
plan is necessary or appropriate in the
public interest and for the protection of
investors, to foster cooperation and
coordination among the SROs, to
remove impediments to, and foster the
development of, a national market
system and a national clearance and
settlement system, and is in conformity
with the factors set forth in Section
17(d) of the Act. Commission approval
of a plan filed pursuant to Rule 17d–2
relieves an SRO of those regulatory
responsibilities allocated by the plan to
another SRO.
II. The Plan
On September 12, 2008, the
Commission declared effective the
Participating Organizations’ Plan for
allocating regulatory responsibilities
pursuant to Rule 17d–2.11 The Plan is
designed to eliminate regulatory
duplication by allocating regulatory
responsibility over Common NYSE
Members 12 or Common FINRA
Members,13 as applicable, (collectively,
9 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
10 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
11 See Securities Exchange Act Release No. 58536
(September 12, 2008), 73 FR 54646 (September 22,
2008) (File No. 4–566).
12 Common NYSE Members include members of
the NYSE and at least one of the Participating
Organizations.
13 Common FINRA Members are members of
FINRA and at least one of the Participating
Organizations.
E:\FR\FM\23OCN1.SGM
23OCN1
]]>Agencies
[Federal Register Volume 73, Number 206 (Thursday, October 23, 2008)]
[Notices]
[Pages 63215-63216]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25245]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Extension:
Rule 17a-7; SEC File No. 270-238; OMB Control No. 3235-0214.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collections
of information summarized below. The Commission plans to submit the
existing collection of information to the Office of Management and
Budget for extension and approval.
Rule 17a-7 (17 CFR 270.17a-7) (the ``rule'') under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) (the ``Act'') is entitled
``Exemption of certain purchase or sale transactions between an
investment company and certain affiliated persons thereof.'' It
provides an exemption from section 17(a) of the Act for purchases and
sales of securities between registered investment companies
(``funds''), that are affiliated persons (``first-tier affiliates'') or
affiliated persons of affiliated persons (``second-tier affiliates''),
or between a fund and a first- or second-tier affiliate other than
another fund, when the affiliation arises solely because of a common
investment adviser, director, or officer. Rule 17a-7 requires funds to
keep various records in connection with purchase or sale transactions
effected in reliance on the rule. The rule requires the fund's board of
directors to establish procedures reasonably designed to ensure that
the rule's conditions have been satisfied. The board is also required
to determine, at least on a quarterly basis, that all affiliated
transactions effected during the preceding quarter in reliance on the
rule were made in compliance with these established procedures. If a
fund enters into a purchase or sale transaction with an affiliated
person, the rule requires the fund to compile and maintain written
records of the transaction.\1\ The Commission's examination staff uses
these records to evaluate for compliance with the rule.
---------------------------------------------------------------------------
\1\ The written records are required to set forth a description
of the security purchased or sold, the identity of the person on the
other side of the transaction, and the information or materials upon
which the board of directors' determination that the transaction was
in compliance with the procedures was made.
---------------------------------------------------------------------------
While most funds do not commonly engage in transactions covered by
rule 17a-7, the Commission staff estimates that nearly all funds have
adopted procedures for complying with the rule.\2\ Of the approximately
3891 currently active funds, the staff estimates that virtually all
have already adopted procedures for compliance with rule 17a-7. This is
a one-time burden, and the staff therefore does not estimate an ongoing
burden related to the policies and procedures requirement of the rule
for funds.\3\ The staff estimates that there are approximately 150 new
funds that register each year, and that each of these funds adopts the
relevant polices and procedures. The staff estimates that it takes
approximately 4 hours to develop and adopt these policies and
procedures, as follows; 3 hours spent by a compliance attorney, and 1
hour collectively spent by the board of directors. Therefore, the total
annual burden related to developing and adopting these policies and
procedures would be approximately 600 hours.\4\
---------------------------------------------------------------------------
\2\ Unless stated otherwise, these estimates are based on
conversations with the examination and inspections staff of the
Commission and fund representatives.
\3\ Based on our reviews and conversations with fund
representatives, we understand that funds rarely, if ever, need to
make changes to these policies and procedures once adopted, and
therefore we do not estimate a paperwork burden for such updates.
\4\ This estimate is based on the following calculations: (4
hours x 150 = 600 hours).
---------------------------------------------------------------------------
Of the 3891 existing funds, the staff assumes that approximately
25% (or 973), enter into transactions affected by rule 17a-7 each year
(either by the fund directly or through one of the fund's series), and
that the same percentage (25%, or 38 funds) of the estimated 150 funds
that newly register each year will also enter into these transactions,
for a total of 1011 \5\ companies that are affected by the
recordkeeping requirements of rule 17a-7. These funds must keep records
of each of these transactions, and the board of directors must
quarterly determine that all relevant transactions were made in
compliance with the company's policies and procedures. The rule
generally imposes a minimal burden of collecting and storing records
already generated for other purposes.\6\ The staff estimates that the
burden related to making these records and for the board to review all
transactions would be 3 hours annually for each respondent, (2 hours
spent by compliance attorneys and 1 hour spent by the board of
directors) \7\ or 3033 total hours each year.\8\
---------------------------------------------------------------------------
\5\ This estimate is based on the following calculation: (973 +
38 = 1011).
\6\ Commission staff believes that rule 17a-7 does not impose
any costs associated with record preservation in addition to the
costs that funds already incur to comply with the record
preservation requirements of rule 31a-2 under the Act. Rule 31a-2
requires companies to preserve certain records for specified periods
of time.
\7\ The staff estimates that funds that rely on rule 17a-7
annually enter into an average of 8 rule 17a-7 transactions each
year. The staff estimates that the compliance attorneys of the
companies spend approximately 15 minutes per transaction on this
recordkeeping, and the board of directors spends a total of 1 hour
annually in determining that all transactions made that year were
done in compliance with the company's policies and procedures.
\8\ This estimate is based on the following calculation: (3
hours x 1011 companies = 3033 hours).
---------------------------------------------------------------------------
Based on these estimates, the staff estimates the combined total
annual burden hours associated with rule 17a-7 is 3633 hours.\9\ The
staff also estimates that there are approximately 1161 respondents and
8238 total responses.\10\
---------------------------------------------------------------------------
\9\ This estimate is based on the following calculations: (600
hours + 3033 hours = 3633 total hours).
\10\ This estimate is based on the following calculations: (150
newly registered funds + 1011 funds that engage in rule 17a-7
transactions = 1161); (1011 funds that engage in rule 17a-7
transactions x 8 times per year = 8088); (8088 + 150 = 8238
responses).
---------------------------------------------------------------------------
The estimates of burden hours are made solely for the purposes of
the Paperwork Reduction Act, and are not derived from a comprehensive
or even a representative survey or study of the costs of Commission
rules. The collection of information required by rule 17a-7 is
necessary to obtain the benefits of the rule. 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.
Written comments are invited on: (a) Whether the collections of
information are 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 collections of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
[[Page 63216]]
minimize the burdens of the collections 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 Lewis W. Walker, Acting
Director/CIO, Securities and Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-
mail to: PRA_Mailbox@sec.gov.
Dated: October 16, 2008.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-25245 Filed 10-22-08; 8:45 am]
BILLING CODE 8011-01-P
