Submission for OMB Review; Comment Request, 80448-80449 [E8-31093]

Download as PDF 80448 Federal Register / Vol. 73, No. 251 / Wednesday, December 31, 2008 / Notices pwalker on PROD1PC71 with NOTICES (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collections of information for the following rule: Rule 12d2–1 (17 CFR 240.12d2–1). On February 12, 1935, the Commission adopted Rule 12d2–1,1 under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (‘‘Act’’), which sets forth the conditions and procedures under which a security may be suspended from trading under Section 12(d) of the Act.2 Rule 12d2–1 provides the procedures by which a national securities exchange may suspend from trading a security that is listed and registered on the exchange. Under Rule 12d2–1, an exchange is permitted to suspend from trading a listed security in accordance with its rules, and must promptly notify the Commission of any such suspension, along with the effective date and the reasons for the suspension. Any such suspension may be continued until such time as the Commission may determine that the suspension is designed to evade the provisions of Section 12(d) of the Act and Rule 12d2–2 thereunder.3 During the continuance of such suspension under Rule 12d2–1, the exchange is required to notify the Commission promptly of any change in the reasons for the suspension. Upon the restoration to trading of any security suspended under Rule 12d2–1, the exchange must notify the Commission promptly of the effective date of such restoration. The trading suspension notices serve a number of purposes. First, they inform the Commission that an exchange has suspended from trading a listed security or reintroduced trading in a previously suspended security. They also provide the Commission with information necessary for it to determine that the suspension has been accomplished in accordance with the rules of the exchange, and to verify that the exchange has not evaded the requirements of Section 12(d) of the Act and Rule 12d2–2 thereunder by improperly employing a trading suspension. Without Rule 12d2–1, the Commission would be unable to fully 1 See Securities Exchange Act Release No. 98 (February 12, 1935). 2 See Securities Exchange Act Release No. 7011 (February 5, 1963), 28 FR 1506 (February 16, 1963). 3 Rule 12d2–2 prescribes the circumstances under which a security may be delisted from an exchange and withdrawn from registration under Section 12(b) of the Act, and provides the procedures for taking such action. VerDate Aug<31>2005 17:41 Dec 30, 2008 Jkt 217001 implement these statutory responsibilities. There are ten national securities exchanges that are subject to Rule 12d2– 1. The burden of complying with Rule 12d2–1 is not evenly distributed among the exchanges, however, since there are many more securities listed on the New York Stock Exchange, Inc., the NASDAQ Stock Exchange, and the American Stock Exchange LLC than on the other exchanges.4 However, for purposes of this filing, the Commission staff has assumed that the number of responses is evenly divided among the exchanges. There are approximately 1,500 responses under Rule 12d2–1 for the purpose of suspension of trading from the national securities exchanges each year, the resultant aggregate annual reporting hour burden would be, assuming on average one-half reporting hour per response, 750 annual burden hours for all exchanges. The related costs associated with these burden hours are $41,625.00. The collection of information obligations imposed by Rule 12d2–1 are mandatory. The response will be available to the public and 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. 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 e-mail to: Shagufta_Ahmed@omb.eop.gov); and (ii) Charles Boucher Director/Chief Information Officer, 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. Comments must be submitted within 30 days of this notice. Dated: December 22, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–31092 Filed 12–30–08; 8:45 am] SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; 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’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information described below. 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. BILLING CODE 8011–01–P 4 In fact, some exchanges do not file any trading suspension reports in a given year. PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 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. E:\FR\FM\31DEN1.SGM 31DEN1 Federal Register / Vol. 73, No. 251 / Wednesday, December 31, 2008 / Notices 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 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 pwalker on PROD1PC71 with NOTICES 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). 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. VerDate Aug<31>2005 17:41 Dec 30, 2008 Jkt 217001 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. Please direct general comments regarding the above information to the following persons: (i) Desk Officer for the Securities and Exchange Commission, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or e-mail to: Shagufta_Ahmed@omb.eop.gov ); and (ii) Charles Boucher 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. Comments must be submitted to OMB within 30 days of this notice. Dated: December 22, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–31093 Filed 12–30–08; 8:45 am] BILLING CODE 8011–01–P 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). PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 80449 SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon written request, copies available from: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. Extension: Rule 0–1; SEC File No. 270–472; OMB Control No. 3235–0531. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l et seq.), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget request for extension of the previous approved collection of information discussed below. The Investment Company Act of 1940 (the ‘‘Act’’) 1 establishes a comprehensive framework for regulating the organization and operation of investment companies (‘‘funds’’). A principal objective of the Act is to protect fund investors by addressing the conflicts of interest that exist between funds and their investment advisers and other affiliated persons. The Act places significant responsibility on the fund board of directors in overseeing the operations of the fund and policing the relevant conflicts of interest.2 In one of its first releases, the Commission exercised its rulemaking authority pursuant to sections 38(a) and 40(b) of the Act by adopting rule 0–1 (17 CFR 270.0–1).3 Rule 0–1, as subsequently amended on numerous occasions, provides definitions for the terms used by the Commission in the rules and regulations it has adopted pursuant to the Act. The rule also contains a number of rules of construction for terms that are defined either in the Act itself or elsewhere in the Commission’s rules and regulations. Finally, rule 0–1 defines terms that serve as conditions to the availability of certain of the Commission’s exemptive rules. More specifically, the term ‘‘independent legal counsel,’’ as defined in rule 0–1, sets out conditions that funds must meet in order to rely on any of ten exemptive rules (‘‘exemptive rules’’) under the Act.4 1 15 U.S.C. 80a. example, fund directors must approve investment advisory and distribution contracts. See 15 U.S.C. 80a–15(a), (b), and (c). 3 Investment Company Act Release No. 4 (Oct. 29, 1940) (5 FR 4316 (Oct. 31, 1940)). Note that rule 0– 1 was originally adopted as rule N–1. 4 The relevant exemptive rules are: rule 10f–3 (17 CFR 270.10f–3), rule 12b–1 (17 CFR 270.12b–1), 2 For E:\FR\FM\31DEN1.SGM Continued 31DEN1

Agencies

[Federal Register Volume 73, Number 251 (Wednesday, December 31, 2008)]
[Notices]
[Pages 80448-80449]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-31093]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; 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'') has submitted to the Office of Management 
and Budget a request for extension of the previously approved 
collection of information described below.
    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.

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[[Page 80449]]

    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\
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    \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.
    Please direct general comments regarding the above information to 
the following persons: (i) Desk Officer for the Securities and Exchange 
Commission, Office of Management and Budget, Room 10102, New Executive 
Office Building, Washington, DC 20503 or e-mail to: Shagufta_
Ahmed@omb.eop.gov ); and (ii) Charles Boucher 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. 
Comments must be submitted to OMB within 30 days of this notice.

    Dated: December 22, 2008.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-31093 Filed 12-30-08; 8:45 am]
BILLING CODE 8011-01-P