Proposed Collection; Comment Request, 23311-23313 [2010-10214]
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Federal Register / Vol. 75, No. 84 / Monday, May 3, 2010 / Notices
Commission uses the information
provided in the application filed
pursuant to Rule 19d–3 to review final
actions taken by SROs including: (1)
Disciplinary sanctions; (2) denials of
membership, participation or
association; and (3) prohibitions on or
limitations of access to SRO services.
It is estimated that approximately 15
respondents will utilize this application
procedure annually, with a total burden
of 270 hours, for all respondents to
complete all submissions. This figure is
based upon past submissions. The staff
estimates that the average number of
hours necessary to comply with the
requirements of Rule 19d–3 is 18 hours.
The average cost per hour, to complete
each submission, is approximately $101.
Therefore, the total cost of compliance
for all respondents is $27,270. (15
submissions × 18 hours × $101 per
hour).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection 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 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.
Dated: April 26, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–10213 Filed 4–30–10; 8:45 am]
BILLING CODE 8010–01–P
erowe on DSK5CLS3C1PROD with NOTICES
SECURITIES AND EXCHANGE
COMMISSION
[Rule 19d–1; SEC File No. 270–242; OMB
Control No. 3235–0206]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
VerDate Mar<15>2010
15:35 Apr 30, 2010
Jkt 220001
Education and Advocacy,
Washington, DC 20549–0213.
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
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 19d–1 (17 CFR
240.19d–1)—Notices by Self-Regulatory
Organizations of Final Disciplinary
Actions, Denials Bars, or Limitations
Respecting Membership, Association, or
Access to Services, and Summary
Suspensions. The Commission plans to
submit this existing collection of
information to the Office of
Management and Budget for extension
and approval.
Rule 19d–1 (‘‘Rule’’) under the
Securities Exchange Act of 1934 (17
U.S.C. 78a et seq.) prescribes the form
and content of notices to be filed with
the Commission by self-regulatory
organizations (‘‘SROs’’) for which the
Commission is the appropriate
regulatory agency concerning the
following final SRO actions: (1)
Disciplinary sanctions (including
summary suspensions); (2) denials of
membership, participation or
association with a member; and (3)
prohibitions or limitations on access to
SRO services.
The Rule enables the Commission to
obtain reports from the SROs containing
information regarding SRO
determinations to discipline members or
associated persons of members, deny
membership or participation or
association with a member, and similar
adjudicated findings. The Rule requires
that such actions be promptly reported
to the Commission. The Rule also
requires that the reports and notices
supply sufficient information regarding
the background, factual basis and issues
involved in the proceeding to enable the
Commission: (1) To determine whether
the matter should be called up for
review on the Commission’s own
motion; and (2) to ascertain generally
whether the SRO has adequately carried
out its responsibilities under the
Exchange Act.
It is estimated that 10 respondents
will utilize this application procedure
annually, with a total burden of 1,175
hours, based upon past submissions.
This figure is based on 10 respondents,
spending approximately 117.5 hours
each per year. Each respondent
submitted approximately 235 responses.
The staff estimates that the average
number of hours necessary to comply
with the requirements of Rule 19d–1 for
each submission is 0.5 hours. The
average cost per hour, per each
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23311
submission is approximately $101.
Therefore, the total cost of compliance
for all the respondents is $118,675. (10
respondents × 235 responses per
respondent × .5 hrs per response × $101
per hour).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection 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.
Direct your written comments to
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.
Dated: April 26, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–10215 Filed 4–30–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Rule 17f–4; SEC File No. 270–232; OMB
Control No. 3235–0225]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l–3520), 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 for extension
and approval.
Section 17(f) (15 U.S.C. 80a–17(f))
under the Investment Company Act of
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Federal Register / Vol. 75, No. 84 / Monday, May 3, 2010 / Notices
1940 (the ‘‘Act’’) 1 permits registered
management investment companies and
their custodians to deposit the securities
they own in a system for the central
handling of securities (‘‘securities
depositories’’), subject to rules adopted
by the Commission.
Rule 17f–4 (17 CFR 270.17f–4) under
the Act specifies the conditions for the
use of securities depositories by funds2
and custodians. The Commission staff
estimates that 138 respondents
(including 74 active funds, 48
custodians, and 16 possible securities
depositories)3 are subject to the
requirements in rule 17f–4. The rule is
elective, but most, if not all, funds use
depository custody arrangements.4
Rule 17f–4 contains two general
conditions. First, a fund’s custodian
must be obligated, at a minimum, to
exercise due care in accordance with
reasonable commercial standards in
discharging its duty as a securities
intermediary to obtain and thereafter
maintain financial assets.5 This
obligation does not contain a collection
of information because it does not
impose identical reporting,
recordkeeping or disclosure
requirements. Funds and custodians
may determine the specific measures
the custodian will take to comply with
this obligation.6 If the fund deals
directly with a depository, the
depository’s contract or written rules for
its participants must provide that the
depository will meet similar obligations,
which is a collection of information for
purposes of the Paperwork Reduction
Act of 1995. All funds that deal directly
1 15
U.S.C. 80a.
amended in 2003, rule 17f–4 permits any
registered investment company, including a unit
investment trust or a face-amount certificate
company, to use a security depository. See Custody
of Investment Company Assets With a Securities
Depository, Investment Company Act Release No.
25934 (Feb. 13, 2003) (68 FR 8438 (Feb. 20, 2003)).
The term ‘‘fund’’ is used in this Notice to mean a
registered investment company.
3 The Commission staff estimates that, as
permitted by the rule, 2% of all active funds deal
directly with a securities depository instead of
using an intermediary. The number of custodians is
from Lipper Inc.’s Lana Database. Securities
depositories include the 12 Federal Reserve Banks
and 4 registered depositories.
4 Based on responses to Item 18 of Form N–SAR
(17 CFR 274.101), approximately 98 percent of all
funds now use depository custody arrangements. As
of November 30, 2009, approximately 3770 funds
out of the 3844 active funds relied on rule 17f–4.
5 Rule 17f–4(a)(1). This provision incorporates
into the rule the standard of care provided by
section 504(c) of Article 8 of the Uniform
Commercial Code when the parties have not agreed
to a standard. Rule 17f–4 does not impose any
substantive obligations beyond those contained in
Article 8. Uniform Commercial Code, Revised
Article 8—Investment Securities (1994 Official Text
with Comments) (‘‘Revised Article 8’’).
6 Moreover, the rule does not impose any
requirement regarding evidence of the obligation.
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2 As
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with securities depositories in reliance
on rule 17f–4 should have either
modified their contracts with the
relevant securities depository, or
negotiated a modification in the
securities depository’s written rules
when the rule was amended. Therefore,
we estimate there is no ongoing burden
associated with this collection of
information.7
Second, the custodian must provide,
promptly upon request by the fund,
such reports as are available about the
internal accounting controls and
financial strength of the custodian.8 If a
fund deals directly with a depository,
the depository’s contract with or written
rules for its participants must provide
that the depository will provide similar
financial reports,9 which is a collection
of information for purposes of the
Paperwork Reduction Act of 1995.
Custodians and depositories usually
transmit financial reports to funds twice
each year.10 The Commission staff
estimates that 48 custodians spend
approximately 885 hours (by support
staff) annually in transmitting such
reports to funds.11 In addition,
approximately 74 funds (i.e., two
percent of all funds) deal directly with
a securities depository and may request
periodic reports from their depository.
Commission staff estimates that, for
each of the 74 funds, depositories spend
approximately 17 hours (by support
7 The Commission staff assumes that new funds
relying on 17f–4 would choose to use a custodian
instead of directly dealing with a securities
depository because of the high costs associated with
maintaining an account with a securities
depository. Thus new funds would not be subject
to this condition.
8 Rule 17f–4(a)(2).
9 Rule 17f–4(b)(1)(ii).
10 The 48 custodians would handle requests for
reports from 3770 fund clients (approximately 79
fund clients per custodian) and the depositories
from the remaining 74 funds that choose to deal
directly with a depository. It is our understanding
based on staff conversations with representatives of
custodians that custodians and depositories
transmit these reports to clients in the normal
course of their activities as a good business practice
regardless of whether they are requested. Therefore,
for purposes of this PRA estimate, the Commission
staff assumes that custodians transmit the reports to
all fund clients. If all custodians and depositories
transmit these reports to funds in the normal course
of their activities, there would be no burden
associated with this collection of information. See
5 CFR 1320.3(b)(2) (‘‘The time, effort, and financial
resources necessary to comply with a collection of
information that would be incurred by persons in
the normal course of their activities * * * will be
excluded if the agency demonstrates that the
reporting, recordkeeping, or disclosure activities
needed to comply are usual and customary.’’).
11 (48 custodians × 2 reports) = 96 reports × 79
fund clients per custodian = 7584 transmissions.
The staff estimates that each transmission would
take approximately 7 minutes for a total of 885
hours (7 minutes × 7584 transmissions). The
estimate of time to transmit reports is based on staff
conversations with representatives of custodians.
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staff) annually transmitting reports to
the funds.12 The total annual burden
estimate for compliance with rule 17f–
4’s reporting requirement is therefore
902 hours.13
If a fund deals directly with a
securities depository, rule 17f–4
requires that the fund implement
internal control systems reasonably
designed to prevent an unauthorized
officer’s instructions (by providing at
least for the form, content, and means of
giving, recording, and reviewing all
officers’ instructions).14 All funds that
seek to rely on rule 17f–4 should have
already implemented these internal
control systems when the rule was
amended. Therefore, there is no ongoing
burden associated with this collection of
information requirement.15
Based on the foregoing, the
Commission staff estimates that the total
annual hour burden of the rule’s
collection of information requirement is
902 hours.
The estimates of average burden hours
are made solely for the purposes of the
Paperwork Reduction Act. These
estimates are not derived from a
comprehensive or even a representative
survey or study of the costs of
Commission rules.
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 collection of information is
necessary for the proper performance of
the functions of the Commission,
including whether the information will
have practical utility; (b) the accuracy of
the Commission’s estimate of the
burden of the collections of information;
(c) ways to enhance the quality, utility,
and clarity of the information collected;
and (d) ways to minimize the burdens
of the collection 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
12 (16 depositories x 2 reports) = 32 reports x 4.6
fund clients per depository = 147 transmissions.
The staff estimates that each transmission would
take approximately 7 minutes for a total of
approximately 17 hours (7 minutes x 147
transmissions).
13 885 hours for custodians and 17 hours for
securities depositories.
14 Rule 17f–4(b)(2).
15 The Commission staff assumes that new funds
relying on 17f–4 would choose to use a custodian
instead of directly dealing with a securities
depository because of the high costs associated with
maintaining an account with a securities
depository. Thus new funds would not be subject
to this condition.
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Federal Register / Vol. 75, No. 84 / Monday, May 3, 2010 / Notices
writing within 60 days of this
publication.
Please direct your written comments
to 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.
Dated: April 26, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–10214 Filed 4–30–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61984; File No. SR–Phlx–
2010–60]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
OMX PHLX, Inc. Relating to QNET
Sector Index Option Fees
April 26, 2010.
erowe on DSK5CLS3C1PROD with NOTICES
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 April 16,
2010, NASDAQ OMX PHLX, Inc.
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. Phlx has
designated this proposal as one
establishing or changing a due, fee, or
other charge applicable only to a
member 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 filing with 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
The Exchange proposes to amend the
Exchange’s Fee Schedule for Sector
Index Options by assessing a $.20 per
contract transaction fee for options
overlying the NASDAQ Internet Index
(‘‘QNET’’). The Exchange also proposes
making other technical clarifications.
While changes to the Exchange’s Fee
Schedule pursuant to this proposal are
effective upon filing, the Exchange has
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
15:35 Apr 30, 2010
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
1. Purpose
The Exchange proposes to add
additional transaction fees to Category
III of its Fee Schedule, titled Sector
Index Options. The Exchange proposes
to assess a $.20 per contract transaction
fee for options overlying QNET for the
following market participants:
Customers, registered options traders
(on-floor), specialists, professionals,5
firms and broker-dealers. The Exchange
is proposing to assess the $.20 per
contract fee from trade date April 30,
2010 through trade date December 30,
2010. Thereafter, the Exchange proposes
to assess the options transaction charges
for sector index options as designated
by category of market participant on the
Fee Schedule, beginning on trade date
December 31, 2010. In other words, the
Exchange is proposing to eliminate the
$.20 per contract transaction
promotional pricing after December 30,
2010 and instead assess members the
applicable sector index options
transaction charges, by market
participant, on December 31, 2010. For
example, for transactions in QNET
sector index options, a customer would
no longer be assessed the $.20 per
5 The Exchange defines a ‘‘professional’’ as any
person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar
month for its own beneficial account(s).
15
VerDate Mar<15>2010
designated this proposal to be operative
for trades settling on or after May 3,
2010.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqtrader.com/
micro.aspx?id=PHLXfilings, on the
Commission’s Web site at https://
www.sec.gov, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
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23313
contract on trade date December 31,
2010, but instead would be assessed the
option transaction charge, which is
currently $.44 per contract.
The Exchange proposes to assess a
fixed rate across all market participants
for a specified period of time to
incentivize members to trade QNET.
The Exchange also proposes removing
certain text from the Fee Schedule that
was the result of an inadvertent error.
The Exchange is proposing to delete the
text, ‘‘Subject to certain thresholds and
per trade caps’’ from Categories III and
IV of the Fee Schedule as related to
Registered Options Traders (on-floor)
and Specialists in sector index options
fees and U.S. dollar-settled foreign
currency option fees. The Exchange
indicated in a prior proposed rule
change that the Firm Related Equity
Option and Index Option Cap would no
longer be applicable to sector index
options 6 and U.S. dollar-settled foreign
currency options 7 and the volume
threshold.8
While changes to the Exchange’s Fee
Schedule pursuant to this proposal are
effective upon filing, the Exchange has
designated this proposal to be operative
for trades settling on or after May 3,
2010.
2. Statutory Basis
The Exchange believes that its
proposal to amend its schedule of fees
is consistent with Section 6(b) of the
Act 9 in general, and furthers the
objectives of Section 6(b)(4) of the Act 10
in particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members. The
Exchange believes that the proposed
$.20 per contract sector index option
fees for QNET is equitable because all
market participants would be assessed
the same fee. The Exchange further
believes that offering the $.20 per
contract fee for a specified promotional
period and thereafter assessing the
standard sector index option transaction
fees is also equitable because it is
intended to encourage trading in QNET.
In addition, the removal of extraneous
language in the Fee Schedule should
provide clarity to members concerning
fees.
6 See Securities Exchange Act Release No. 59545
(March 9, 2009), 74 FR 11158 (March 16, 2009) (SR–
Phlx–2009–20).
7 See Securities Exchange Act Release Nos. [sic]
59243 (January 13, 2009), 74 FR 4272 (January 23,
2009) (SR–Phlx–2008–86).
8 See Securities Exchange Act Release No. 61337
(January 12, 2010), 75 FR 2905 (January 19, 2010)
(SR–Phlx–2009–104).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4).
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]]>Agencies
[Federal Register Volume 75, Number 84 (Monday, May 3, 2010)]
[Notices]
[Pages 23311-23313]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10214]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Rule 17f-4; SEC File No. 270-232; OMB Control No. 3235-0225]
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 350l-3520), 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 for extension and approval.
Section 17(f) (15 U.S.C. 80a-17(f)) under the Investment Company
Act of
[[Page 23312]]
1940 (the ``Act'') \1\ permits registered management investment
companies and their custodians to deposit the securities they own in a
system for the central handling of securities (``securities
depositories''), subject to rules adopted by the Commission.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a.
---------------------------------------------------------------------------
Rule 17f-4 (17 CFR 270.17f-4) under the Act specifies the
conditions for the use of securities depositories by funds\2\ and
custodians. The Commission staff estimates that 138 respondents
(including 74 active funds, 48 custodians, and 16 possible securities
depositories)\3\ are subject to the requirements in rule 17f-4. The
rule is elective, but most, if not all, funds use depository custody
arrangements.\4\
---------------------------------------------------------------------------
\2\ As amended in 2003, rule 17f-4 permits any registered
investment company, including a unit investment trust or a face-
amount certificate company, to use a security depository. See
Custody of Investment Company Assets With a Securities Depository,
Investment Company Act Release No. 25934 (Feb. 13, 2003) (68 FR 8438
(Feb. 20, 2003)). The term ``fund'' is used in this Notice to mean a
registered investment company.
\3\ The Commission staff estimates that, as permitted by the
rule, 2% of all active funds deal directly with a securities
depository instead of using an intermediary. The number of
custodians is from Lipper Inc.'s Lana Database. Securities
depositories include the 12 Federal Reserve Banks and 4 registered
depositories.
\4\ Based on responses to Item 18 of Form N-SAR (17 CFR
274.101), approximately 98 percent of all funds now use depository
custody arrangements. As of November 30, 2009, approximately 3770
funds out of the 3844 active funds relied on rule 17f-4.
---------------------------------------------------------------------------
Rule 17f-4 contains two general conditions. First, a fund's
custodian must be obligated, at a minimum, to exercise due care in
accordance with reasonable commercial standards in discharging its duty
as a securities intermediary to obtain and thereafter maintain
financial assets.\5\ This obligation does not contain a collection of
information because it does not impose identical reporting,
recordkeeping or disclosure requirements. Funds and custodians may
determine the specific measures the custodian will take to comply with
this obligation.\6\ If the fund deals directly with a depository, the
depository's contract or written rules for its participants must
provide that the depository will meet similar obligations, which is a
collection of information for purposes of the Paperwork Reduction Act
of 1995. All funds that deal directly with securities depositories in
reliance on rule 17f-4 should have either modified their contracts with
the relevant securities depository, or negotiated a modification in the
securities depository's written rules when the rule was amended.
Therefore, we estimate there is no ongoing burden associated with this
collection of information.\7\
---------------------------------------------------------------------------
\5\ Rule 17f-4(a)(1). This provision incorporates into the rule
the standard of care provided by section 504(c) of Article 8 of the
Uniform Commercial Code when the parties have not agreed to a
standard. Rule 17f-4 does not impose any substantive obligations
beyond those contained in Article 8. Uniform Commercial Code,
Revised Article 8--Investment Securities (1994 Official Text with
Comments) (``Revised Article 8'').
\6\ Moreover, the rule does not impose any requirement regarding
evidence of the obligation.
\7\ The Commission staff assumes that new funds relying on 17f-4
would choose to use a custodian instead of directly dealing with a
securities depository because of the high costs associated with
maintaining an account with a securities depository. Thus new funds
would not be subject to this condition.
---------------------------------------------------------------------------
Second, the custodian must provide, promptly upon request by the
fund, such reports as are available about the internal accounting
controls and financial strength of the custodian.\8\ If a fund deals
directly with a depository, the depository's contract with or written
rules for its participants must provide that the depository will
provide similar financial reports,\9\ which is a collection of
information for purposes of the Paperwork Reduction Act of 1995.
Custodians and depositories usually transmit financial reports to funds
twice each year.\10\ The Commission staff estimates that 48 custodians
spend approximately 885 hours (by support staff) annually in
transmitting such reports to funds.\11\ In addition, approximately 74
funds (i.e., two percent of all funds) deal directly with a securities
depository and may request periodic reports from their depository.
Commission staff estimates that, for each of the 74 funds, depositories
spend approximately 17 hours (by support staff) annually transmitting
reports to the funds.\12\ The total annual burden estimate for
compliance with rule 17f-4's reporting requirement is therefore 902
hours.\13\
---------------------------------------------------------------------------
\8\ Rule 17f-4(a)(2).
\9\ Rule 17f-4(b)(1)(ii).
\10\ The 48 custodians would handle requests for reports from
3770 fund clients (approximately 79 fund clients per custodian) and
the depositories from the remaining 74 funds that choose to deal
directly with a depository. It is our understanding based on staff
conversations with representatives of custodians that custodians and
depositories transmit these reports to clients in the normal course
of their activities as a good business practice regardless of
whether they are requested. Therefore, for purposes of this PRA
estimate, the Commission staff assumes that custodians transmit the
reports to all fund clients. If all custodians and depositories
transmit these reports to funds in the normal course of their
activities, there would be no burden associated with this collection
of information. See 5 CFR 1320.3(b)(2) (``The time, effort, and
financial resources necessary to comply with a collection of
information that would be incurred by persons in the normal course
of their activities * * * will be excluded if the agency
demonstrates that the reporting, recordkeeping, or disclosure
activities needed to comply are usual and customary.'').
\11\ (48 custodians x 2 reports) = 96 reports x 79 fund clients
per custodian = 7584 transmissions. The staff estimates that each
transmission would take approximately 7 minutes for a total of 885
hours (7 minutes x 7584 transmissions). The estimate of time to
transmit reports is based on staff conversations with
representatives of custodians.
\12\ (16 depositories x 2 reports) = 32 reports x 4.6 fund
clients per depository = 147 transmissions. The staff estimates that
each transmission would take approximately 7 minutes for a total of
approximately 17 hours (7 minutes x 147 transmissions).
\13\ 885 hours for custodians and 17 hours for securities
depositories.
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If a fund deals directly with a securities depository, rule 17f-4
requires that the fund implement internal control systems reasonably
designed to prevent an unauthorized officer's instructions (by
providing at least for the form, content, and means of giving,
recording, and reviewing all officers' instructions).\14\ All funds
that seek to rely on rule 17f-4 should have already implemented these
internal control systems when the rule was amended. Therefore, there is
no ongoing burden associated with this collection of information
requirement.\15\
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\14\ Rule 17f-4(b)(2).
\15\ The Commission staff assumes that new funds relying on 17f-
4 would choose to use a custodian instead of directly dealing with a
securities depository because of the high costs associated with
maintaining an account with a securities depository. Thus new funds
would not be subject to this condition.
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Based on the foregoing, the Commission staff estimates that the
total annual hour burden of the rule's collection of information
requirement is 902 hours.
The estimates of average burden hours are made solely for the
purposes of the Paperwork Reduction Act. These estimates are not
derived from a comprehensive or even a representative survey or study
of the costs of Commission rules.
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 collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (b) the accuracy of the Commission's estimate of the burden of
the collections of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burdens of the collection 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
[[Page 23313]]
writing within 60 days of this publication.
Please direct your written comments to 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.
Dated: April 26, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-10214 Filed 4-30-10; 8:45 am]
BILLING CODE 8010-01-P
