Proposed Collection; Comment Request, 81681-81682 [2010-32518]
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Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices
for which the subadviser does not
provide investment advice.
To qualify for the exemptions in rule
17a–10, the subadvisory relationship
must be the sole reason why section
17(a) prohibits the transaction. In
addition, the advisory contracts of the
subadviser entering into the transaction,
and any subadviser that is advising the
purchasing portion of the fund, must
prohibit the subadvisers from consulting
with each other concerning securities
transactions of the fund, and limit their
responsibility to providing advice with
respect to discrete portions of the fund’s
portfolio.3 Section 17(a) of the
Investment Company Act of 1940 (the
‘‘Act’’), generally prohibits affiliated
persons of a registered investment
company (‘‘fund’’) from borrowing
money or other property from, or selling
or buying securities or other property to
or from, the fund or any company that
the fund controls. Section 2(a)(3) of the
Act defines ‘‘affiliated person’’ of a fund
to include its investment advisers. Rule
17a–10 permits (i) a subadviser of a
fund to enter into transactions with
funds the subadviser does not advise
but that are affiliated persons of a fund
that it does advise (e.g., other funds in
the fund complex), and (ii) a subadviser
(and its affiliated persons) to enter into
transactions and arrangements with
funds the subadviser does advise, but
only with respect to discrete portions of
the subadvised fund for which the
subadviser does not provide investment
advice.
To qualify for the exemptions in rule
17a–10, the subadvisory relationship
must be the sole reason why section
17(a) prohibits the transaction. In
addition, the advisory contracts of the
subadviser entering into the transaction,
and any subadviser that is advising the
purchasing portion of the fund, must
prohibit the subadvisers from consulting
with each other concerning securities
transactions of the fund, and limit their
responsibility to providing advice with
respect to discrete portions of the fund’s
portfolio. This requirement regarding
the prohibitions and limitations in
advisory contracts of subadvisors
relying on the rule constitutes a
collection of information under the
Paperwork Reduction Act of 1995
(‘‘PRA’’).4
The staff assumes that all funds
existing in 2003 amended their advisory
contracts following the amendments to
rule 17a–10 that year that conditioned
certain exemptions upon these
contractual alterations, and therefore
there is no continuing burden for those
3 17
4 44
CFR 270.17a–10(a)(2).
U.S.C. 3501.
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22:37 Dec 27, 2010
Jkt 223001
funds.5 Staff also assumes that funds
that came into existence after 2003
included the contractual requirements
in rule 17a–10 in their subadvisory
agreements and therefore there is no
continuing burden for those funds.
Based on an analysis of fund filings,
the staff estimates that approximately
252 fund portfolios enter into new
subadvisory agreements each year.6
Based on discussions with industry
representatives, the staff estimates that
it will require approximately 3 attorney
hours to draft and execute additional
clauses in new subadvisory contracts in
order for funds and subadvisers to be
able to rely on the exemptions in rule
17a–10. Because these additional
clauses are identical to 7 the clauses that
a fund would need to insert in their
subadvisory contracts to rely on rules
10f–3, 12d3–1, and 17e–1, and because
we believe that funds that use one such
rule generally use all of these rules, we
apportion this 3 hour time burden
equally among all four rules. Therefore,
we estimate that the burden allocated to
rule 17a–10 for this contract change
would be 0.75 hours.8 Assuming that all
252 funds that enter into new
subadvisory contracts each year include
in their contract the provisions required
by the rule, we estimate that the rule’s
contract requirement will result in 189
burden hours annually, with an
associated cost of approximately
$59,724.9
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
the costs of Commission rules.
Complying with this collection of
information requirement is necessary to
obtain the benefit of relying on rule
17a–10. Responses will not be kept
5 We assume that funds formed after 2003 that
intended to rely on rule 17a–10 would have
included the required provision as a standard
element in their initial subadvisory contracts.
6 Based on information in Commission filings, we
estimate that 42.5 percent of funds are advised by
subadvisers.
7 17 CFR 270.17a–10(a)(2).
8 This estimate is based on the following
calculation: 3 hours ÷ 4 rules = 0.75 hours.
9 These estimates are based on the following
calculations: 0.75 hours × 252 portfolios = 189
burden hours; $316 per hour × 189 hours = $59,724
total cost. The Commission staff’s estimates
concerning the wage rates for attorney time are
based on salary information for the securities
industry compiled by the Securities Industry and
Financial Markets Association. The $316 per hour
figure for an attorney is from the Securities Industry
and Financial Markets Association’s Management &
Professional Earnings in the Securities Industry
2009, modified by Commission staff to account for
an 1800-hour work-year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead.
PO 00000
Frm 00122
Fmt 4703
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81681
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 proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information 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 Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
VA 22312; or send an e-mail to:
PRA_Mailbox@sec.gov.
December 20, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–32521 Filed 12–27–10; 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.
Extension: Rule 17a–6, SEC File No. 270–
506, OMB Control No. 3235–0564.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501), the Securities and
Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit these existing
collections of information to the Office
of Management and Budget (‘‘OMB’’) for
extension and approval.
Section 17(a) of the Investment
Company Act of 1940 (the ‘‘Act’’)
generally prohibits affiliated persons of
a registered investment company
(‘‘fund’’) from borrowing money or other
property from, or selling or buying
E:\FR\FM\28DEN1.SGM
28DEN1
emcdonald on DSK2BSOYB1PROD with NOTICES
81682
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices
securities or other property to or from,
the fund or any company that the fund
controls.1 Rule 17a–6 (17 CFR 270.17a–
6) permits a fund and a ‘‘portfolio
affiliate’’ (a company that is an affiliated
person of the fund because the fund
controls the company, or holds five
percent or more of the company’s
outstanding voting securities) to engage
in principal transactions that would
otherwise be prohibited under section
17(a) of the Act under certain
conditions. A fund may not rely on the
exemption in the rule to enter into a
principal transaction with a portfolio
affiliate if certain prohibited
participants (e.g., directors, officers,
employees, or investment advisers of
the fund) have a financial interest in a
party to the transaction. Rule 17a–6
specifies certain interests that are not
‘‘financial interests,’’ including any
interest that the fund’s board of
directors (including a majority of the
directors who are not interested persons
of the fund) finds to be not material. A
board making this finding is required to
record the basis for the finding in its
meeting minutes. This recordkeeping
requirement is a collection of
information under the Paperwork
Reduction Act of 1995 (‘‘PRA’’).2
The rule is designed to permit
transactions between funds and their
portfolio affiliates in circumstances in
which it is unlikely that the affiliate
would be in a position to take advantage
of the fund. In determining whether a
financial interest is ‘‘material,’’ the board
of the fund should consider whether the
nature and extent of the interest in the
transaction is sufficiently small that a
reasonable person would not believe
that the interest affected the
determination of whether to enter into
the transaction or arrangement or the
terms of the transaction or arrangement.
The information collection requirements
in rule 17a–6 are intended to ensure that
Commission staff can review, in the
course of its compliance and
examination functions, the basis for a
board of director’s finding that the
financial interest of an otherwise
prohibited participant in a party to a
transaction with a portfolio affiliate is
not material.
Based on staff discussions with fund
representatives, we estimate that funds
currently do not rely on the exemption
from the term ‘‘financial interest’’ with
respect to any interest that the fund’s
board of directors (including a majority
of the directors who are not interested
persons of the fund) finds to be not
material. Accordingly, we estimate that
1 15
2 44
U.S.C. 80a–17(a).
U.S.C. 3501.
VerDate Mar<15>2010
22:37 Dec 27, 2010
annually there will be no principal
transactions under rule 17a–6 that will
result in a collection of information.
The Commission requests
authorization to maintain an inventory
of one burden hour to ease future
renewals of rule 17a–6’s collection of
information analysis should funds rely
on this exemption to the term ‘‘financial
interest’’ as defined in rule 17a–6.
The estimate of burden hours is made
solely for the purposes of the Paperwork
Reduction Act. The estimate is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. Complying
with this collection of information
requirement is necessary to obtain the
benefit of relying on rule 17a–6. 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 proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information 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 Thomas Bayer/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
VA 22312; or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: December 20, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–32518 Filed 12–27–10; 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.
Extension: Rule 27d–2; SEC File No. 270–
Jkt 223001
PO 00000
Frm 00123
Fmt 4703
Sfmt 4703
500; OMB Control No. 3235–0566.
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 (the
‘‘Commission’’) is soliciting comments
on the collections of information under
the Investment Company Act of 1940
(15 U.S.C. 80a) (‘‘Act’’) summarized
below. The Commission plans to submit
these collections of information to the
Office of Management and Budget for
approval.
Rule 27d–2 (17 CFR 270.27d–2) is
entitled ‘‘Insurance Company
Undertaking in Lieu of Segregated Trust
Account.’’ Rule 27d–1 (17 CFR 270.27d–
1) under the Act requires the depositor
or principal underwriter for an issuer of
periodic payment plans to deposit funds
into a segregated trust account to
provide assurance of its ability to fulfill
its refund obligations under sections
27(d) and 27(f) of the Act.1 Rule 27d–
2 provides an exemption from rule 27d–
1 under the Act for depositors or
principal underwriters for the issuers of
periodic payments plans. In order to
comply with the rule: (i) The depositor
or principal underwriter must secure
from an insurance company a written
guarantee of the refund requirements;
(ii) the insurance company must satisfy
certain financial criteria; and (iii) the
depositor or principal underwriter must
file as an exhibit to the issuer’s
registration statement, a copy of the
written undertaking, an annual
statement that the insurance company
has met the requisite financial criteria
on a monthly basis, and an annual
audited balance sheet.
Rule 27d–2, which was explicitly
authorized by statute, provides
assurance that depositors and principal
underwriters of issuers have access to
sufficient cash to meet the demands of
certificate holders who reconsider their
decisions to invest in a periodic
payment plan. The information
collection requirement in rule 27d–2
enables the Commission to monitor
compliance with insurance company
undertaking requirements.
1 The rule sets forth minimum reserve amounts
and guidelines for the management and
disbursement of the assets in the account. Rule
27d–1(j) directs depositors and principal
underwriters annually to make an accounting of
their segregated trust accounts on Form N–27D–1,
which is filed with the Commission. The form
requires depositors and principal underwriters to
report deposits to a segregated trust account,
including those made pursuant to paragraphs (c)
and (e) of the rule. Withdrawals pursuant to
paragraph (f) of the rule also must be reported. In
addition, the form solicits information regarding the
minimum amount required to be maintained under
paragraphs (d) and (e) of rule 27d–1.
E:\FR\FM\28DEN1.SGM
28DEN1
]]>Agencies
[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Notices]
[Pages 81681-81682]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32518]
-----------------------------------------------------------------------
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-6, SEC File No. 270-506, OMB Control No. 3235-
0564.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501), the Securities and Exchange Commission
(the ``Commission'') is soliciting comments on the collections of
information summarized below. The Commission plans to submit these
existing collections of information to the Office of Management and
Budget (``OMB'') for extension and approval.
Section 17(a) of the Investment Company Act of 1940 (the ``Act'')
generally prohibits affiliated persons of a registered investment
company (``fund'') from borrowing money or other property from, or
selling or buying
[[Page 81682]]
securities or other property to or from, the fund or any company that
the fund controls.\1\ Rule 17a-6 (17 CFR 270.17a-6) permits a fund and
a ``portfolio affiliate'' (a company that is an affiliated person of
the fund because the fund controls the company, or holds five percent
or more of the company's outstanding voting securities) to engage in
principal transactions that would otherwise be prohibited under section
17(a) of the Act under certain conditions. A fund may not rely on the
exemption in the rule to enter into a principal transaction with a
portfolio affiliate if certain prohibited participants (e.g.,
directors, officers, employees, or investment advisers of the fund)
have a financial interest in a party to the transaction. Rule 17a-6
specifies certain interests that are not ``financial interests,''
including any interest that the fund's board of directors (including a
majority of the directors who are not interested persons of the fund)
finds to be not material. A board making this finding is required to
record the basis for the finding in its meeting minutes. This
recordkeeping requirement is a collection of information under the
Paperwork Reduction Act of 1995 (``PRA'').\2\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a-17(a).
\2\ 44 U.S.C. 3501.
---------------------------------------------------------------------------
The rule is designed to permit transactions between funds and their
portfolio affiliates in circumstances in which it is unlikely that the
affiliate would be in a position to take advantage of the fund. In
determining whether a financial interest is ``material,'' the board of
the fund should consider whether the nature and extent of the interest
in the transaction is sufficiently small that a reasonable person would
not believe that the interest affected the determination of whether to
enter into the transaction or arrangement or the terms of the
transaction or arrangement. The information collection requirements in
rule 17a-6 are intended to ensure that Commission staff can review, in
the course of its compliance and examination functions, the basis for a
board of director's finding that the financial interest of an otherwise
prohibited participant in a party to a transaction with a portfolio
affiliate is not material.
Based on staff discussions with fund representatives, we estimate
that funds currently do not rely on the exemption from the term
``financial interest'' with respect to any interest that the fund's
board of directors (including a majority of the directors who are not
interested persons of the fund) finds to be not material. Accordingly,
we estimate that annually there will be no principal transactions under
rule 17a-6 that will result in a collection of information.
The Commission requests authorization to maintain an inventory of
one burden hour to ease future renewals of rule 17a-6's collection of
information analysis should funds rely on this exemption to the term
``financial interest'' as defined in rule 17a-6.
The estimate of burden hours is made solely for the purposes of the
Paperwork Reduction Act. The estimate is not derived from a
comprehensive or even a representative survey or study of the costs of
Commission rules. Complying with this collection of information
requirement is necessary to obtain the benefit of relying on rule 17a-
6. 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 proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information 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 Thomas Bayer/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an
e-mail to: PRA_Mailbox@sec.gov.
Dated: December 20, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32518 Filed 12-27-10; 8:45 am]
BILLING CODE 8011-01-P
