Proposed Collection; Comment Request, 8298-8302 [2012-3340]
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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 6c–7 (17 CFR 270.6c–7) under
the Investment Company Act of 1940
(15 U.S.C. 80a–1 et seq.) (‘‘1940 Act’’)
provides exemption from certain
provisions of Sections 22(e) and 27 of
the 1940 Act for registered separate
accounts offering variable annuity
contracts to certain employees of Texas
institutions of higher education
participating in the Texas Optional
Retirement Program. There are
approximately 50 registrants governed
by Rule 6c–7. The burden of compliance
with Rule 6c–7, in connection with the
registrants obtaining from a purchaser,
prior to or at the time of purchase, a
signed document acknowledging the
restrictions on redeemability imposed
by Texas law, is estimated to be
approximately 3 minutes of professional
time per response for each of
approximately 2400 purchasers
annually (at an estimated $67 per
hour),1 for a total annual burden of 120
hours (at a total annual cost of $8,040).
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules or forms. The
Commission does not include in the
estimate of average burden hours the
time preparing registration statements
and sales literature disclosure regarding
the restrictions on redeemability
imposed by Texas law. The estimate of
burden hours for completing the
relevant registration statements are
reported on the separate PRA
submissions for those statements. (See
the separate PRA submissions for Form
N–3 (17 CFR 274.11b) and Form N–4 (17
CFR 274.11c.)
The Commission requests written
comments 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
1 $67/hour figure for a Compliance Clerk is from
SIFMA’s Office Salaries in the Securities Industry
2010, modified by Commission staff to account for
an 1800-hour work year and multiplied by 2.93 to
account for bonuses, firm size, employee benefits
and overhead.
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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, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Remi
Pavlik-Simon, 6432 General Green Way,
Alexandria, VA 22312; or send an email
to: PRA_Mailbox@sec.gov.
Dated: February 8, 2012.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–3335 Filed 2–13–12; 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 11a–2; SEC File No. 270–267; OMB
Control No. 3235–0272.
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 (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.
Rule 11a–2 (17 CFR 270.11a–2) under
the Investment Company Act of 1940
(15 U.S.C. 80a–1 et seq.) permits certain
registered insurance company separate
accounts, subject to certain conditions,
to make exchange offers without prior
approval by the Commission of the
terms of those offers. Rule 11a–2
requires disclosure, in certain
registration statements filed pursuant to
the Securities Act of 1933 (15 U.S.C. 77a
et seq.) of any administrative fee or sales
load imposed in connection with an
exchange offer.
There are currently 693 registrants
governed by Rule 11a–2. The
Commission includes the estimated
burden of complying with the
information collection required by Rule
11a–2 in the total number of burden
hours estimated for completing the
relevant registration statements and
reports the burden of Rule 11a–2 in the
separate PRA submissions for those
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registration statements (see the separate
PRA submissions for Form N–3 (3235–
0316), Form N–4 (3235–0318) and Form
N–6 (3235–0503). The Commission is
requesting a burden of one hour for Rule
11a–2 for administrative purposes.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules or forms.
With regard to Rule 11a–2, the
Commission includes the estimate of
burden hours in the total number of
burden hours estimated for completing
the relevant registration statements and
reported on the separate PRA
submissions for those statements (see
the separate PRA submissions for Form
N–3, Form N–4 and Form N–6). The
information collection requirements
imposed by Rule 11a–2 are mandatory.
Responses to the collection of
information will not be kept
confidential.
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 has
practical utility; (b) the accuracy of the
Commission’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, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Remi
Pavlik-Simon, 6432 General Green Way,
Alexandria, VA 22312; or send an email
to: PRA_Mailbox@sec.gov.
February 8, 2012.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–3336 Filed 2–13–12; 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
E:\FR\FM\14FEN1.SGM
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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices
Education and Advocacy,
Washington, DC 20549–0213.
mstockstill on DSK4VPTVN1PROD with NOTICES
Extension:
Rule 12d1–1; SEC File No. 270–526; OMB
Control No. 3235–0584.
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 (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.
An investment company (‘‘fund’’) is
generally limited in the amount of
securities the fund (‘‘acquiring fund’’)
can acquire from another fund
(‘‘acquired fund’’). Section 12(d) of the
Investment Company Act of 1940 (the
‘‘Investment Company Act’’ or ‘‘Act’’) 1
provides that a registered fund (and
companies it controls) cannot:
• Acquire more than three percent of
another fund’s securities;
• Invest more than five percent of its
own assets in another fund; or
• Invest more than ten percent of its
own assets in other funds in the
aggregate.2
In addition, a registered open-end
fund, its principal underwriter, and any
registered broker or dealer cannot sell
that fund’s shares to another fund if, as
a result:
• The acquiring fund (and any
companies it controls) owns more than
three percent of the acquired fund’s
stock; or
• All acquiring funds (and companies
they control) in the aggregate own more
than ten percent of the acquired fund’s
stock.3
Rule 12d1–1 under the Act provides
an exemption from these limitations for
‘‘cash sweep’’ arrangements in which a
fund invests all or a portion of its
available cash in a money market fund
rather than directly in short-term
instruments.4 An acquiring fund relying
on the exemption may not pay a sales
load, distribution fee, or service fee on
acquired fund shares, or if it does, the
acquiring fund’s investment adviser
must waive a sufficient amount of its
advisory fee to offset the cost of the
loads or distribution fees.5 The acquired
fund may be a fund in the same fund
1 See
15 U.S.C. 80a.
15 U.S.C. 80a–12(d)(1)(A). If an acquiring
fund is not registered, these limitations apply only
with respect to the acquiring fund’s acquisition of
registered funds.
3 See 15 U.S.C. 80a–12(d)(1)(B).
4 See 17 CFR 270.12d1–1.
5 See rule 12d1–1(b)(1).
2 See
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complex or in a different fund complex.
In addition to providing an exemption
from section 12(d)(1) of the Act, the rule
provides exemptions from section 17(a)
of the Act and rule 17d–1 thereunder,
which restrict a fund’s ability to enter
into transactions and joint arrangements
with affiliated persons.6 These
provisions would otherwise prohibit an
acquiring fund from investing in a
money market fund in the same fund
complex,7 and prohibit a fund that
acquires five percent or more of the
securities of a money market fund in
another fund complex from making any
additional investments in the money
market fund.8
The rule also permits a registered
fund to rely on the exemption to invest
in an unregistered money market fund
that limits its investments to those in
which a registered money market fund
may invest under rule 2a–7 under the
Act, and undertakes to comply with all
the other provisions of rule 2a–7.9 In
addition, the acquiring fund must
reasonably believe that the unregistered
money market fund (i) operates in
compliance with rule 2a–7, (ii) complies
with sections 17(a), (d), (e), 18, and
22(e) of the Act 10 as if it were a
registered open-end fund, (iii) has
adopted procedures designed to ensure
that it complies with these statutory
provisions, (iv) maintains the records
required by rules 31a–1(b)(1), 31a–
1(b)(2)(ii), 31a–1(b)(2)(iv), and 31a–
1(b)(9); 11 and (v) preserves
permanently, the first two years in an
easily accessible place, all books and
6 See 15 U.S.C. 80a–17(a), 15 U.S.C. 80a–17(d); 17
CFR 270.17d–1.
7 An affiliated person of a fund includes any
person directly or indirectly controlling, controlled
by, or under common control with such other
person. See 15 U.S.C. 80a–2(a)(3) (definition of
‘‘affiliated person’’). Most funds today are organized
by an investment adviser that advises or provides
administrative services to other funds in the same
complex. Funds in a fund complex are generally
under common control of an investment adviser or
other person exercising a controlling influence over
the management or policies of the funds. See 15
U.S.C. 80a–2(a)(9) (definition of ‘‘control’’). Not all
advisers control funds they advise. The
determination of whether a fund is under the
control of its adviser, officers, or directors depends
on all the relevant facts and circumstances. See
Investment Company Mergers, Investment
Company Act Release No. 25259 (Nov. 8, 2001) [66
FR 57602 (Nov. 15, 2001)], at n. 11. To the extent
that an acquiring fund in a fund complex is under
common control with a money market fund in the
same complex, the funds would rely on the rule’s
exemptions from section 17(a) and rule 17d–1.
8 See 15 U.S.C. 80a–2(a)(3)(A), (B).
9 See 17 CFR 270.2a–7.
10 See 15 U.S.C. 80a–17(a), 15 U.S.C. 80a–17(d),
15 U.S.C. 80a–17(e), 15 U.S.C. 80a–18, 15 U.S.C.
80a–22(e).
11 See 17 CFR 270.31a–1(b)(1), 17 CFR 270.31a–
1(b)(2)(ii), 17 CFR 270.31a–1(b)(2)(iv), 17 CFR
270.31a–1(b)(9).
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records required to be made under these
rules.
Rule 2a–7 contains certain collection
of information requirements. An
unregistered money market fund that
complies with rule 2a–7 would be
subject to these collection of
information requirements. In addition,
the recordkeeping requirements under
rule 31a–1 with which the acquiring
fund reasonably believes the
unregistered money market fund
complies are collections of information
for the unregistered money market fund.
The adoption of procedures by
unregistered money market funds to
ensure that they comply with sections
17(a), (d), (e), 18, and 22(e) of the Act
also constitute collections of
information. By allowing funds to invest
in registered and unregistered money
market funds, rule 12d1–1 is intended
to provide funds greater options for cash
management. In order for a registered
fund to rely on the exemption to invest
in an unregistered money market fund,
the unregistered money market fund
must comply with certain collection of
information requirements for registered
money market funds. These
requirements are intended to ensure that
the unregistered money market fund has
established procedures for collecting the
information necessary to make adequate
credit reviews of securities in its
portfolio, as well as other recordkeeping
requirements that will assist the
acquiring fund in overseeing the
unregistered money market fund (and
Commission staff in its examination of
the unregistered money market fund’s
adviser).
The number of unregistered money
market funds that would be affected by
the proposal is an estimate based on the
number of Commission exemptive
applications that the Commission
received in the past that sought relief for
registered funds to purchase shares in
an unregistered money market fund in
excess of the section 12(d)(1) limits. The
hour burden estimates for the condition
that an unregistered money market fund
comply with rule 2a–7 are based on the
burden hours included in the
Commission’s 2009 and 2010 PRA
submissions regarding rule 2a–7 (‘‘rule
2a–7 submissions’’).12 The estimated
average burden hours in this collection
of information are made solely for
12 Securities and Exchange Commission, Request
for OMB Approval of Extension for Approved
Collection for Rule 2a–7 under the Investment
Company Act of 1940 (OMB Control No. 3235–
0268) (approved October 13, 2009); Securities and
Exchange Commission, Request for OMB Approval
of Revision for Approved Collection for Rule 2a–7
under the Investment Company Act of 1940 (OMB
Control No. 3235–0268) (approved April 18, 2010).
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purposes of the Paperwork Reduction
Act and are not derived from a
quantitative, comprehensive or even
representative survey or study of the
burdens associated with Commission
rules and forms.
In the rule 2a–7 submissions,
Commission staff made the following
estimates with respect to aggregate
annual hour and cost burdens for
collections of information for each
existing registered money market fund:
Documentation of credit risk analyses, and
determinations regarding adjustable rate
securities, asset backed securities, and
securities subject to a demand feature or
guarantee:
81 responses
410 hours of professional time
Cost: $79,130
Public Web site posting of monthly
portfolio information:
12 responses
4.4 burden hours of professional time
Cost: $12,584
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The staff estimates that registered
funds currently invest in 30
unregistered money market funds in
excess of the statutory limits under rule
12d1–1.13 Each of these unregistered
money market funds engages in the
collections of information described
above. Accordingly, the staff estimates
that unregistered money market funds
complying with the collections of
information described above engage in a
total of 2790 annual responses under
rule 12d1–1,14 the aggregate annual
burden hours associated with these
responses is 12,432,15 and the aggregate
annual cost to funds is $2.75 million.16
13 This estimate is based on the number of
applications seeking exemptions to invest in
unregistered money market funds filed with the
Commission in 2005 (40), adjusted by the
percentage change in registered money market
funds from 2005 to November 2011 (870 to 641,
according to the Investment Company Institute).
This estimate may be understated because
applicants generally did not identify the name or
number of unregistered money market funds in
which registered funds intended to invest, and each
application also applies to unregistered money
market funds to be organized in the future. Because
the Commission adopted rule 12d1–1 in June 2006,
2005 is the last full year in which the Commission
received applications seeking an exemption to
invest in unregistered money market funds.
14 The estimate is based on the following
calculations: (30 funds × 81 responses for
documentation of credit analyses and other
determinations) = 2340 responses. (30 funds × 12
responses for public Web site posting) = 360
responses. 2340 responses + 360 responses = 2790
responses.
15 This estimate is based on the following
calculations: (30 funds × 410 hours for
documentation of credit analyses and other
determinations) = 12,300 hours. (30 funds × 4.4
hours for public Web site posting) = 132 hours.
12,300 hours + 132 hours = 12,432 hours.
16 This estimate is based on the following
calculations: (30 funds × $79,130) = $2,373,900. (30
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In the rule 2a–7 submissions,
Commission staff further estimated the
aggregate annual hour and cost burdens
for collections of information for fund
complexes with registered money
market funds as follows:
Review and revise procedures concerning
stress testing:
1 response
7 burden hours of professional and director
time
Cost: $5650
Draft, compile, and provide stress testing
reports to board of directors:
10 responses
27 burden hours of director, professional,
and support staff time
Cost: $69,990
Maintain records of stress testing reports to
board of directors:
10 responses
0.2 burden hours of support staff time
Cost: $103
Maintain records of creditworthiness
evaluations of repurchase counterparties:
1 response
2 burden hours of support staff time
Cost: $124
Reporting of rule 17a–9 transactions:17
1 response
1 burden hour of legal time
Cost: $305
In the rule 2a–7 submissions,
Commission staff estimated that there
are 163 fund complexes with 719
registered money market funds subject
to rule 2a–7. The staff estimates that
there are 30 fund complexes with
unregistered money market funds
invested in by mutual funds in excess
of the statutory limits under rule
12d1–1.18 Each of these fund complexes
engages in the collections of information
described above. Accordingly, the staff
estimates that these fund complexes
complying with the collections of
information described above engage in a
total of 690 annual responses under rule
12d1–1,19 the aggregate annual burden
hours associated with these responses is
funds × $12,584) = $377,520. $2,373,900 + $377,520
= $2,751,420.
17 See 17 CFR 270.17a–9.
18 Given the fact that exemptive applications are
generally filed on behalf of fund complexes rather
than individual funds, the staff estimates that each
of the exemptive applications upon which its
estimates of the number of unregistered money
market funds is based represents a separate fund
complex. See supra note 13.
19 The estimate is based on the following
calculations: (30 fund complexes × 1 response for
revision of procedures concerning stress testing) =
30 responses. (30 fund complexes × 10 responses
to provide stress testing reports) = 300 responses.
(30 fund complexes × 10 responses to maintain
stress testing reports) = 300 responses. (30 fund
complexes × 1 response to maintain records of
creditworthiness) = 30 responses. (30 fund
complexes × 1 response for reporting of rule 17a–
9 transactions) = 30 responses. 30 responses + 300
responses + 300 responses + 30 responses + 30
responses = 690 responses.
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1116,20 and the aggregate annual cost to
funds is $2,285,160.21
In the rule 2a–7 submissions, the staff
further estimated the aggregate annual
burdens for registered money market
funds that amend their board
procedures as follows:
Amendment of procedures designed to
stabilize the fund’s net asset value:
1 response
2.4 burden hours of director time
Cost: $2340
Consistent with the estimate in the
rule 2a–7 submissions, Commission
staff estimates that approximately 1⁄4, or
8, unregistered money market funds
review and amend their board
procedures each year. Accordingly, the
staff estimates that unregistered money
market funds complying with this
collection of information requirement
engage in a total of 8 annual responses
under rule 12d1–1,22 the aggregate
annual burden hours associated with
these responses is 19,23 and the
aggregate annual cost to funds to
comply with this collection of
information is $18,720.24
In the rule 2a–7 submissions,
Commission staff further estimated the
aggregate annual burdens for registered
money market funds that experience an
event of default or insolvency as
follows:
Written record of board determinations and
actions related to failure of a security to meet
certain eligibility standards or an event of
default of default or insolvency:
2 responses
1 burden hour of legal time
Cost: $270
Notice to Commission of an event of
default or insolvency:
20 This estimate is based on the following
calculations: (30 fund complexes × 7 hours for
revision of procedures concerning stress testing) =
210 hours. (30 fund complexes × 27 hours to
provide stress testing reports) = 810 hours. (30 fund
complexes × 0.2 hours to maintain stress testing
reports) = 6 hours. (30 fund complexes × 2 hours
to maintain records of creditworthiness) = 60 hours.
(30 fund complexes × 1 hour for reporting of rule
17a–9 transactions) = 30 hours. 210 hours + 810
hours + 6 hours + 60 hours + 30 hours = 1116
hours.
21 This estimate is based on the following
calculations: (30 fund complexes × $5650 for
revision of procedures concerning stress testing) =
$169,500. (30 fund complexes × $69,990 to provide
stress testing reports) = $2,099,700. (30 fund
complexes × $103 to maintain stress testing reports)
= $3090. (30 fund complexes × $124 to maintain
records of creditworthiness) = $3720. (30 fund
complexes × $305 for reporting of rule 17a–9
transactions) = $9150. $169,500 + $2,099,700 +
$3090 + $3720 + $9150 = $2,285,160.
22 The estimate is based on the following
calculation: (8 funds × 1 response for board review
and amendment of procedures) = 8 responses.
23 This estimate is based on the following
calculation: (8 funds × 2.4 hours for review and
amendment of procedures) = 19.2 hours.
24 This estimate is based on the following
calculation: (8 funds × $2340) = $18,720.
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1 response
1.5 burden hours of legal time
Cost: $405
Consistent with the estimate in the
rule 2a–7 submissions, Commission
staff estimates that approximately 2
percent, or 1, unregistered money
market fund experiences an event of
default or insolvency each year.
Accordingly, the staff estimates that one
unregistered money market fund will
comply with these collection of
information requirements and engage in
3 annual responses under rule 12d1–1,25
the aggregate annual burden hours
associated with these responses is 2.5,26
and the aggregate annual cost to funds
is $675.27
In the rule 2a–7 submissions,
Commission staff further estimated the
aggregate annual burdens for newly
registered money market funds as
follows:
Establishment of written procedures
designed to stabilize the fund’s net asset
value and guidelines for delegating board
authority for determinations under the rule:
1 response
15.5 hours of director, legal, and support
staff time
Cost: $5610
Adopt procedures concerning stress
testing:
1 response per fund complex
8.33 burden hours of professional and
director time per fund complex
Cost: $6017 per fund complex
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Commission staff estimates that the
proportion of unregistered money
market funds that intend to newly
undertake the collection of information
burdens of rule 2a–7 will be similar to
the proportion of money market funds
that are newly registered. Because of the
recent decrease in registered money
market funds and the lack of newly
registered money market funds, the staff
believes that there will be no
unregistered money market funds that
will undertake the collections of
information required for newly
registered money market funds.28 As a
result, the staff estimates that there will
be no burdens associated with these
collection of information requirements.
Accordingly, the estimated total
number of annual responses under rule
12d1–1 for the collections of
information described in the rule 2a–7
25 The estimate is based on the following
calculations: (1 fund × 2 responses) + (1 fund × 1
response) = 3 responses.
26 This estimate is based on the following
calculations: (1 fund × 1 hour) + (1 fund × 1.5
hours) = 2.5 hours.
27 This estimate is based on the following
calculations: (1 fund × $270) + (1 fund × $405) =
$675.
28 See supra note 13.
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submissions is 3491, the aggregate
annual burden hours associated with
these responses is 13,570, and the
aggregate cost to funds is $5.1 million.29
Rules 31a–1(b)(1), 31a–1(b)(2)(ii),
31a–1(b)(2)(iv), and 31a–1(b)(9) require
registered funds to keep certain records,
which include journals and general and
auxiliary ledgers, including ledgers for
each portfolio security and each
shareholder of record of the fund. Most
of the records required to be maintained
by the rule are the type that generally
would be maintained as a matter of good
business practice and to prepare the
unregistered money market fund’s
financial statements. Accordingly,
Commission staff estimates that the
requirements under rules 31a–1(b)(1),
31a–1(b)(2)(ii), 31a–1(b)(2)(iv), and 31a–
1(b)(9) would not impose any additional
burden because the costs of maintaining
these records would be incurred by
unregistered money market funds in any
case to keep books and records that are
necessary to prepare financial
statements for shareholders, to prepare
the fund’s annual income tax returns,
and as a normal business custom.
Rule 12d1–1 also requires
unregistered money market funds in
which registered funds invest to adopt
procedures designed to ensure that the
unregistered money market funds
comply with sections 17(a), (d), (e), and
22(e) of the Act. This is a one-time
collection of information requirement
that applies to unregistered money
market funds that intend to comply with
the requirements of rule 12d1–1. As
discussed above, Commission staff
estimates that because of the recent
decrease in registered money market
funds and the lack of newly registered
money market funds there will be no
unregistered money market funds that
will undertake the collections of
information required for newly
registered money market funds.30 For
similar reasons, the Commission staff
estimates that there will be no registered
money market funds that will adopt
procedures designed to ensure that the
unregistered money market funds
comply with sections 17(a), (d), (e), and
22(e) of the Act. The staff concludes that
there will be no burdens associated with
these collection of information
requirements.
Commission staff further estimates
that unregistered money market funds
will incur costs to preserve records, as
required under rule 2a–7. These costs
29 These estimates are based upon the following
calculations: 2790 + 690 + 8+ 3 = 3491 annual
responses; 12,432 + 1116 + 19 + 2.5 = 13,569.5
burden hours; and $2,751,420 + $2,285,160 +
$18,720 + 675 = $5,055,975.
30 See supra text accompanying note 28.
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
8301
will vary significantly for individual
funds, depending on the amount of
assets under fund management and
whether the fund preserves its records
in a storage facility in hard copy or has
developed and maintains a computer
system to create and preserve
compliance records. In the rule 2a–7
submissions, Commission staff
estimated that the amount an individual
money market fund may spend ranges
from $100 per year to $300,000. We
have no reason to believe the range is
different for unregistered money market
funds. The Commission does not have
specific information on the amount of
assets managed by unregistered money
market funds or the proportion of those
assets held in small, medium-sized, or
large unregistered money market funds.
Accordingly, Commission staff
estimates that unregistered money
market funds in which registered funds
invest in reliance on rule 12d1–1 are
similar to registered money market
funds in terms of amount and
distribution of assets under
management.31 Based on a cost of
$0.0051295 per dollar of assets under
management for small funds,
$0.0005041 per dollar of assets under
management for medium-sized funds
and $0.0000009 per dollar of assets
under management for large funds, the
staff estimates compliance with rule 2–
7 for these unregistered money market
funds totals $3.9 million annually.32
Consistent with estimates made in the
rule 2a–7 submissions, Commission
staff estimates that unregistered money
market funds also incur capital costs to
create computer programs for
maintaining and preserving compliance
records for rule 2a–7 of $0.0000132 per
dollar of assets under management.
Based on the assets under management
figures described above, staff estimates
31 In the rule 2a–7 submissions, the staff
estimated that 757 registered money market funds
have $3.8 trillion in assets under management, or
$5 billion in assets under management per
registered money market fund. The staff further
estimated that 0.2% of those assets are held in small
money market funds (funds with less than $50
million in assets under management), 3% are held
in medium-sized money market funds (funds with
$50 million to $1 billion in assets under
management), and the remaining assets are held in
large money market funds (funds with more than
$1 billion in assets under management).
32 This estimate is based on the following
calculations: 30 unregistered money market funds
× $5 billion = $150 billion. ($150 billion × 0.2% ×
$0.0051295) = $1.5 million for small funds. ($150
billion × 3% x 0.0005041) = $2.3 million for
medium-sized funds. ($150 billion × 96.8% ×
0.0000009) = $0.1 million for large funds. $1.5
million + $2.3 million + $0.1 million = $3.9 million.
The estimate of cost per dollar of assets is the same
as that used in the rule 2a–7 submissions. See supra
note 12.
E:\FR\FM\14FEN1.SGM
14FEN1
8302
Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices
annual capital costs for all unregistered
money market funds of $1.98 million.33
Commission staff further estimates
that, even absent the requirements of
rule 2a–7, money market funds would
spend at least half of the amounts
described above for record preservation
($2.0 million) and for capital costs
($0.99 million). Commission staff
concludes that the aggregate annual
costs of compliance with the rule are
$2.0 million for record preservation and
$0.99 million for capital costs.
The collections of information
required for unregistered money market
funds by rule 12d1–1 are necessary in
order for acquiring funds to be able to
obtain the benefits described above.
Notices to the Commission 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 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, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Remi
Pavlik-Simon, 6432 General Green Way,
Alexandria, VA 22312; or send an email
to: PRA_Mailbox@sec.gov.
February 8, 2012.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–3340 Filed 2–13–12; 8:45 am]
BILLING CODE 8011–01–P
mstockstill on DSK4VPTVN1PROD with NOTICES
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:
Form 13F, SEC File No. 270–22, OMB
Control No. 3235–0006.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), 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 13(f) 1 of the Securities
Exchange Act of 1934 2 (the ‘‘Exchange
Act’’) empowers the Commission to: (1)
Adopt rules that create a reporting and
disclosure system to collect specific
information; and (2) disseminate such
information to the public. Rule 13f–1 3
under the Exchange Act requires
institutional investment managers that
exercise investment discretion over
accounts that have in the aggregate a fair
market value of at least $100,000,000 of
certain U.S. exchange-traded equity
securities, as set forth in rule 13f–1(c),
to file quarterly reports with the
Commission on Form 13F.4
The information collection
requirements apply to institutional
investment managers that meet the $100
million reporting threshold. Section
13(f)(6) of the Exchange Act defines an
‘‘institutional investment manager’’ as
any person, other than a natural person,
investing in or buying and selling
securities for its own account, and any
person exercising investment discretion
with respect to the account of any other
person. Rule 13f–1(b) under the
Exchange Act defines ‘‘investment
discretion’’ for purposes of Form 13F
reporting.
The reporting system required by
Section 13(f) of the Exchange Act is
intended, among other things, to create
in the Commission a central repository
of historical and current data about the
investment activities of institutional
investment managers, and to improve
the body of factual data available to
regulators and the public.
The Commission staff estimates that
4,286 respondents make approximately
17,144 responses under the rule each
year. The staff estimates that on average,
Form 13F filers spend 98.8 hours/year
to prepare and submit the report. In
addition, the staff estimates that 171
1 15
33 This
estimate is based on the following
calculation: $150 billion × 0.0000132 = $1.98
million.
VerDate Mar<15>2010
21:57 Feb 13, 2012
Jkt 226001
U.S.C. 78m(f).
U.S.C. 78a et seq.
3 17 CFR 240.13f–1.
4 17 CFR 249.325.
Frm 00090
Fmt 4703
Dated: February 8, 2012.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–3339 Filed 2–13–12; 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 35d–1; SEC File No. 270–491; OMB
Control No. 3235–0548.
2 15
PO 00000
respondents file approximately 684
amendments each year. The staff
estimates that on average, Form 13F
filers spend 4 hours/year to prepare and
submit amendments to Form 13F. The
total annual burden of the rule’s
requirements for all respondents
therefore is estimated to be 424,141
hours ((4,286 filers × 98.8 hours) + (171
filers × 4 hours)).
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. 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
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 Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way,
Alexandria, VA 22312; or send an email
to: PRA_Mailbox@sec.gov.
Sfmt 4703
E:\FR\FM\14FEN1.SGM
14FEN1
]]>Agencies
[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Notices]
[Pages 8298-8302]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3340]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor
[[Page 8299]]
Education and Advocacy, Washington, DC 20549-0213.
Extension:
Rule 12d1-1; SEC File No. 270-526; OMB Control No. 3235-0584.
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 (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.
An investment company (``fund'') is generally limited in the amount
of securities the fund (``acquiring fund'') can acquire from another
fund (``acquired fund''). Section 12(d) of the Investment Company Act
of 1940 (the ``Investment Company Act'' or ``Act'') \1\ provides that a
registered fund (and companies it controls) cannot:
---------------------------------------------------------------------------
\1\ See 15 U.S.C. 80a.
---------------------------------------------------------------------------
Acquire more than three percent of another fund's
securities;
Invest more than five percent of its own assets in another
fund; or
Invest more than ten percent of its own assets in other
funds in the aggregate.\2\
---------------------------------------------------------------------------
\2\ See 15 U.S.C. 80a-12(d)(1)(A). If an acquiring fund is not
registered, these limitations apply only with respect to the
acquiring fund's acquisition of registered funds.
---------------------------------------------------------------------------
In addition, a registered open-end fund, its principal underwriter,
and any registered broker or dealer cannot sell that fund's shares to
another fund if, as a result:
The acquiring fund (and any companies it controls) owns
more than three percent of the acquired fund's stock; or
All acquiring funds (and companies they control) in the
aggregate own more than ten percent of the acquired fund's stock.\3\
---------------------------------------------------------------------------
\3\ See 15 U.S.C. 80a-12(d)(1)(B).
---------------------------------------------------------------------------
Rule 12d1-1 under the Act provides an exemption from these
limitations for ``cash sweep'' arrangements in which a fund invests all
or a portion of its available cash in a money market fund rather than
directly in short-term instruments.\4\ An acquiring fund relying on the
exemption may not pay a sales load, distribution fee, or service fee on
acquired fund shares, or if it does, the acquiring fund's investment
adviser must waive a sufficient amount of its advisory fee to offset
the cost of the loads or distribution fees.\5\ The acquired fund may be
a fund in the same fund complex or in a different fund complex. In
addition to providing an exemption from section 12(d)(1) of the Act,
the rule provides exemptions from section 17(a) of the Act and rule
17d-1 thereunder, which restrict a fund's ability to enter into
transactions and joint arrangements with affiliated persons.\6\ These
provisions would otherwise prohibit an acquiring fund from investing in
a money market fund in the same fund complex,\7\ and prohibit a fund
that acquires five percent or more of the securities of a money market
fund in another fund complex from making any additional investments in
the money market fund.\8\
---------------------------------------------------------------------------
\4\ See 17 CFR 270.12d1-1.
\5\ See rule 12d1-1(b)(1).
\6\ See 15 U.S.C. 80a-17(a), 15 U.S.C. 80a-17(d); 17 CFR
270.17d-1.
\7\ An affiliated person of a fund includes any person directly
or indirectly controlling, controlled by, or under common control
with such other person. See 15 U.S.C. 80a-2(a)(3) (definition of
``affiliated person''). Most funds today are organized by an
investment adviser that advises or provides administrative services
to other funds in the same complex. Funds in a fund complex are
generally under common control of an investment adviser or other
person exercising a controlling influence over the management or
policies of the funds. See 15 U.S.C. 80a-2(a)(9) (definition of
``control''). Not all advisers control funds they advise. The
determination of whether a fund is under the control of its adviser,
officers, or directors depends on all the relevant facts and
circumstances. See Investment Company Mergers, Investment Company
Act Release No. 25259 (Nov. 8, 2001) [66 FR 57602 (Nov. 15, 2001)],
at n. 11. To the extent that an acquiring fund in a fund complex is
under common control with a money market fund in the same complex,
the funds would rely on the rule's exemptions from section 17(a) and
rule 17d-1.
\8\ See 15 U.S.C. 80a-2(a)(3)(A), (B).
---------------------------------------------------------------------------
The rule also permits a registered fund to rely on the exemption to
invest in an unregistered money market fund that limits its investments
to those in which a registered money market fund may invest under rule
2a-7 under the Act, and undertakes to comply with all the other
provisions of rule 2a-7.\9\ In addition, the acquiring fund must
reasonably believe that the unregistered money market fund (i) operates
in compliance with rule 2a-7, (ii) complies with sections 17(a), (d),
(e), 18, and 22(e) of the Act \10\ as if it were a registered open-end
fund, (iii) has adopted procedures designed to ensure that it complies
with these statutory provisions, (iv) maintains the records required by
rules 31a-1(b)(1), 31a-1(b)(2)(ii), 31a-1(b)(2)(iv), and 31a-1(b)(9);
\11\ and (v) preserves permanently, the first two years in an easily
accessible place, all books and records required to be made under these
rules.
---------------------------------------------------------------------------
\9\ See 17 CFR 270.2a-7.
\10\ See 15 U.S.C. 80a-17(a), 15 U.S.C. 80a-17(d), 15 U.S.C.
80a-17(e), 15 U.S.C. 80a-18, 15 U.S.C. 80a-22(e).
\11\ See 17 CFR 270.31a-1(b)(1), 17 CFR 270.31a-1(b)(2)(ii), 17
CFR 270.31a-1(b)(2)(iv), 17 CFR 270.31a-1(b)(9).
---------------------------------------------------------------------------
Rule 2a-7 contains certain collection of information requirements.
An unregistered money market fund that complies with rule 2a-7 would be
subject to these collection of information requirements. In addition,
the recordkeeping requirements under rule 31a-1 with which the
acquiring fund reasonably believes the unregistered money market fund
complies are collections of information for the unregistered money
market fund. The adoption of procedures by unregistered money market
funds to ensure that they comply with sections 17(a), (d), (e), 18, and
22(e) of the Act also constitute collections of information. By
allowing funds to invest in registered and unregistered money market
funds, rule 12d1-1 is intended to provide funds greater options for
cash management. In order for a registered fund to rely on the
exemption to invest in an unregistered money market fund, the
unregistered money market fund must comply with certain collection of
information requirements for registered money market funds. These
requirements are intended to ensure that the unregistered money market
fund has established procedures for collecting the information
necessary to make adequate credit reviews of securities in its
portfolio, as well as other recordkeeping requirements that will assist
the acquiring fund in overseeing the unregistered money market fund
(and Commission staff in its examination of the unregistered money
market fund's adviser).
The number of unregistered money market funds that would be
affected by the proposal is an estimate based on the number of
Commission exemptive applications that the Commission received in the
past that sought relief for registered funds to purchase shares in an
unregistered money market fund in excess of the section 12(d)(1)
limits. The hour burden estimates for the condition that an
unregistered money market fund comply with rule 2a-7 are based on the
burden hours included in the Commission's 2009 and 2010 PRA submissions
regarding rule 2a-7 (``rule 2a-7 submissions'').\12\ The estimated
average burden hours in this collection of information are made solely
for
[[Page 8300]]
purposes of the Paperwork Reduction Act and are not derived from a
quantitative, comprehensive or even representative survey or study of
the burdens associated with Commission rules and forms.
---------------------------------------------------------------------------
\12\ Securities and Exchange Commission, Request for OMB
Approval of Extension for Approved Collection for Rule 2a-7 under
the Investment Company Act of 1940 (OMB Control No. 3235-0268)
(approved October 13, 2009); Securities and Exchange Commission,
Request for OMB Approval of Revision for Approved Collection for
Rule 2a-7 under the Investment Company Act of 1940 (OMB Control No.
3235-0268) (approved April 18, 2010).
---------------------------------------------------------------------------
In the rule 2a-7 submissions, Commission staff made the following
estimates with respect to aggregate annual hour and cost burdens for
collections of information for each existing registered money market
fund:
Documentation of credit risk analyses, and determinations
regarding adjustable rate securities, asset backed securities, and
securities subject to a demand feature or guarantee:
81 responses
410 hours of professional time
Cost: $79,130
Public Web site posting of monthly portfolio information:
12 responses
4.4 burden hours of professional time
Cost: $12,584
The staff estimates that registered funds currently invest in 30
unregistered money market funds in excess of the statutory limits under
rule 12d1-1.\13\ Each of these unregistered money market funds engages
in the collections of information described above. Accordingly, the
staff estimates that unregistered money market funds complying with the
collections of information described above engage in a total of 2790
annual responses under rule 12d1-1,\14\ the aggregate annual burden
hours associated with these responses is 12,432,\15\ and the aggregate
annual cost to funds is $2.75 million.\16\
---------------------------------------------------------------------------
\13\ This estimate is based on the number of applications
seeking exemptions to invest in unregistered money market funds
filed with the Commission in 2005 (40), adjusted by the percentage
change in registered money market funds from 2005 to November 2011
(870 to 641, according to the Investment Company Institute). This
estimate may be understated because applicants generally did not
identify the name or number of unregistered money market funds in
which registered funds intended to invest, and each application also
applies to unregistered money market funds to be organized in the
future. Because the Commission adopted rule 12d1-1 in June 2006,
2005 is the last full year in which the Commission received
applications seeking an exemption to invest in unregistered money
market funds.
\14\ The estimate is based on the following calculations: (30
funds x 81 responses for documentation of credit analyses and other
determinations) = 2340 responses. (30 funds x 12 responses for
public Web site posting) = 360 responses. 2340 responses + 360
responses = 2790 responses.
\15\ This estimate is based on the following calculations: (30
funds x 410 hours for documentation of credit analyses and other
determinations) = 12,300 hours. (30 funds x 4.4 hours for public Web
site posting) = 132 hours. 12,300 hours + 132 hours = 12,432 hours.
\16\ This estimate is based on the following calculations: (30
funds x $79,130) = $2,373,900. (30 funds x $12,584) = $377,520.
$2,373,900 + $377,520 = $2,751,420.
---------------------------------------------------------------------------
In the rule 2a-7 submissions, Commission staff further estimated
the aggregate annual hour and cost burdens for collections of
information for fund complexes with registered money market funds as
follows:
Review and revise procedures concerning stress testing:
1 response
7 burden hours of professional and director time
Cost: $5650
Draft, compile, and provide stress testing reports to board of
directors:
10 responses
27 burden hours of director, professional, and support staff
time
Cost: $69,990
Maintain records of stress testing reports to board of
directors:
10 responses
0.2 burden hours of support staff time
Cost: $103
Maintain records of creditworthiness evaluations of repurchase
counterparties:
1 response
2 burden hours of support staff time
Cost: $124
Reporting of rule 17a-9 transactions:\17\
---------------------------------------------------------------------------
\17\ See 17 CFR 270.17a-9.
---------------------------------------------------------------------------
1 response
1 burden hour of legal time
Cost: $305
In the rule 2a-7 submissions, Commission staff estimated that there
are 163 fund complexes with 719 registered money market funds subject
to rule 2a-7. The staff estimates that there are 30 fund complexes with
unregistered money market funds invested in by mutual funds in excess
of the statutory limits under rule 12d1-1.\18\ Each of these fund
complexes engages in the collections of information described above.
Accordingly, the staff estimates that these fund complexes complying
with the collections of information described above engage in a total
of 690 annual responses under rule 12d1-1,\19\ the aggregate annual
burden hours associated with these responses is 1116,\20\ and the
aggregate annual cost to funds is $2,285,160.\21\
---------------------------------------------------------------------------
\18\ Given the fact that exemptive applications are generally
filed on behalf of fund complexes rather than individual funds, the
staff estimates that each of the exemptive applications upon which
its estimates of the number of unregistered money market funds is
based represents a separate fund complex. See supra note 13.
\19\ The estimate is based on the following calculations: (30
fund complexes x 1 response for revision of procedures concerning
stress testing) = 30 responses. (30 fund complexes x 10 responses to
provide stress testing reports) = 300 responses. (30 fund complexes
x 10 responses to maintain stress testing reports) = 300 responses.
(30 fund complexes x 1 response to maintain records of
creditworthiness) = 30 responses. (30 fund complexes x 1 response
for reporting of rule 17a-9 transactions) = 30 responses. 30
responses + 300 responses + 300 responses + 30 responses + 30
responses = 690 responses.
\20\ This estimate is based on the following calculations: (30
fund complexes x 7 hours for revision of procedures concerning
stress testing) = 210 hours. (30 fund complexes x 27 hours to
provide stress testing reports) = 810 hours. (30 fund complexes x
0.2 hours to maintain stress testing reports) = 6 hours. (30 fund
complexes x 2 hours to maintain records of creditworthiness) = 60
hours. (30 fund complexes x 1 hour for reporting of rule 17a-9
transactions) = 30 hours. 210 hours + 810 hours + 6 hours + 60 hours
+ 30 hours = 1116 hours.
\21\ This estimate is based on the following calculations: (30
fund complexes x $5650 for revision of procedures concerning stress
testing) = $169,500. (30 fund complexes x $69,990 to provide stress
testing reports) = $2,099,700. (30 fund complexes x $103 to maintain
stress testing reports) = $3090. (30 fund complexes x $124 to
maintain records of creditworthiness) = $3720. (30 fund complexes x
$305 for reporting of rule 17a-9 transactions) = $9150. $169,500 +
$2,099,700 + $3090 + $3720 + $9150 = $2,285,160.
---------------------------------------------------------------------------
In the rule 2a-7 submissions, the staff further estimated the
aggregate annual burdens for registered money market funds that amend
their board procedures as follows:
Amendment of procedures designed to stabilize the fund's net
asset value:
1 response
2.4 burden hours of director time
Cost: $2340
Consistent with the estimate in the rule 2a-7 submissions,
Commission staff estimates that approximately \1/4\, or 8, unregistered
money market funds review and amend their board procedures each year.
Accordingly, the staff estimates that unregistered money market funds
complying with this collection of information requirement engage in a
total of 8 annual responses under rule 12d1-1,\22\ the aggregate annual
burden hours associated with these responses is 19,\23\ and the
aggregate annual cost to funds to comply with this collection of
information is $18,720.\24\
---------------------------------------------------------------------------
\22\ The estimate is based on the following calculation: (8
funds x 1 response for board review and amendment of procedures) = 8
responses.
\23\ This estimate is based on the following calculation: (8
funds x 2.4 hours for review and amendment of procedures) = 19.2
hours.
\24\ This estimate is based on the following calculation: (8
funds x $2340) = $18,720.
---------------------------------------------------------------------------
In the rule 2a-7 submissions, Commission staff further estimated
the aggregate annual burdens for registered money market funds that
experience an event of default or insolvency as follows:
Written record of board determinations and actions related to
failure of a security to meet certain eligibility standards or an
event of default of default or insolvency:
2 responses
1 burden hour of legal time
Cost: $270
Notice to Commission of an event of default or insolvency:
[[Page 8301]]
1 response
1.5 burden hours of legal time
Cost: $405
Consistent with the estimate in the rule 2a-7 submissions,
Commission staff estimates that approximately 2 percent, or 1,
unregistered money market fund experiences an event of default or
insolvency each year. Accordingly, the staff estimates that one
unregistered money market fund will comply with these collection of
information requirements and engage in 3 annual responses under rule
12d1-1,\25\ the aggregate annual burden hours associated with these
responses is 2.5,\26\ and the aggregate annual cost to funds is
$675.\27\
---------------------------------------------------------------------------
\25\ The estimate is based on the following calculations: (1
fund x 2 responses) + (1 fund x 1 response) = 3 responses.
\26\ This estimate is based on the following calculations: (1
fund x 1 hour) + (1 fund x 1.5 hours) = 2.5 hours.
\27\ This estimate is based on the following calculations: (1
fund x $270) + (1 fund x $405) = $675.
---------------------------------------------------------------------------
In the rule 2a-7 submissions, Commission staff further estimated
the aggregate annual burdens for newly registered money market funds as
follows:
Establishment of written procedures designed to stabilize the
fund's net asset value and guidelines for delegating board authority
for determinations under the rule:
1 response
15.5 hours of director, legal, and support staff time
Cost: $5610
Adopt procedures concerning stress testing:
1 response per fund complex
8.33 burden hours of professional and director time per fund
complex
Cost: $6017 per fund complex
Commission staff estimates that the proportion of unregistered
money market funds that intend to newly undertake the collection of
information burdens of rule 2a-7 will be similar to the proportion of
money market funds that are newly registered. Because of the recent
decrease in registered money market funds and the lack of newly
registered money market funds, the staff believes that there will be no
unregistered money market funds that will undertake the collections of
information required for newly registered money market funds.\28\ As a
result, the staff estimates that there will be no burdens associated
with these collection of information requirements.
---------------------------------------------------------------------------
\28\ See supra note 13.
---------------------------------------------------------------------------
Accordingly, the estimated total number of annual responses under
rule 12d1-1 for the collections of information described in the rule
2a-7 submissions is 3491, the aggregate annual burden hours associated
with these responses is 13,570, and the aggregate cost to funds is $5.1
million.\29\
---------------------------------------------------------------------------
\29\ These estimates are based upon the following calculations:
2790 + 690 + 8+ 3 = 3491 annual responses; 12,432 + 1116 + 19 + 2.5
= 13,569.5 burden hours; and $2,751,420 + $2,285,160 + $18,720 + 675
= $5,055,975.
---------------------------------------------------------------------------
Rules 31a-1(b)(1), 31a-1(b)(2)(ii), 31a-1(b)(2)(iv), and 31a-
1(b)(9) require registered funds to keep certain records, which include
journals and general and auxiliary ledgers, including ledgers for each
portfolio security and each shareholder of record of the fund. Most of
the records required to be maintained by the rule are the type that
generally would be maintained as a matter of good business practice and
to prepare the unregistered money market fund's financial statements.
Accordingly, Commission staff estimates that the requirements under
rules 31a-1(b)(1), 31a-1(b)(2)(ii), 31a-1(b)(2)(iv), and 31a-1(b)(9)
would not impose any additional burden because the costs of maintaining
these records would be incurred by unregistered money market funds in
any case to keep books and records that are necessary to prepare
financial statements for shareholders, to prepare the fund's annual
income tax returns, and as a normal business custom.
Rule 12d1-1 also requires unregistered money market funds in which
registered funds invest to adopt procedures designed to ensure that the
unregistered money market funds comply with sections 17(a), (d), (e),
and 22(e) of the Act. This is a one-time collection of information
requirement that applies to unregistered money market funds that intend
to comply with the requirements of rule 12d1-1. As discussed above,
Commission staff estimates that because of the recent decrease in
registered money market funds and the lack of newly registered money
market funds there will be no unregistered money market funds that will
undertake the collections of information required for newly registered
money market funds.\30\ For similar reasons, the Commission staff
estimates that there will be no registered money market funds that will
adopt procedures designed to ensure that the unregistered money market
funds comply with sections 17(a), (d), (e), and 22(e) of the Act. The
staff concludes that there will be no burdens associated with these
collection of information requirements.
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\30\ See supra text accompanying note 28.
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Commission staff further estimates that unregistered money market
funds will incur costs to preserve records, as required under rule 2a-
7. These costs will vary significantly for individual funds, depending
on the amount of assets under fund management and whether the fund
preserves its records in a storage facility in hard copy or has
developed and maintains a computer system to create and preserve
compliance records. In the rule 2a-7 submissions, Commission staff
estimated that the amount an individual money market fund may spend
ranges from $100 per year to $300,000. We have no reason to believe the
range is different for unregistered money market funds. The Commission
does not have specific information on the amount of assets managed by
unregistered money market funds or the proportion of those assets held
in small, medium-sized, or large unregistered money market funds.
Accordingly, Commission staff estimates that unregistered money market
funds in which registered funds invest in reliance on rule 12d1-1 are
similar to registered money market funds in terms of amount and
distribution of assets under management.\31\ Based on a cost of
$0.0051295 per dollar of assets under management for small funds,
$0.0005041 per dollar of assets under management for medium-sized funds
and $0.0000009 per dollar of assets under management for large funds,
the staff estimates compliance with rule 2-7 for these unregistered
money market funds totals $3.9 million annually.\32\
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\31\ In the rule 2a-7 submissions, the staff estimated that 757
registered money market funds have $3.8 trillion in assets under
management, or $5 billion in assets under management per registered
money market fund. The staff further estimated that 0.2% of those
assets are held in small money market funds (funds with less than
$50 million in assets under management), 3% are held in medium-sized
money market funds (funds with $50 million to $1 billion in assets
under management), and the remaining assets are held in large money
market funds (funds with more than $1 billion in assets under
management).
\32\ This estimate is based on the following calculations: 30
unregistered money market funds x $5 billion = $150 billion. ($150
billion x 0.2% x $0.0051295) = $1.5 million for small funds. ($150
billion x 3% x 0.0005041) = $2.3 million for medium-sized funds.
($150 billion x 96.8% x 0.0000009) = $0.1 million for large funds.
$1.5 million + $2.3 million + $0.1 million = $3.9 million. The
estimate of cost per dollar of assets is the same as that used in
the rule 2a-7 submissions. See supra note 12.
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Consistent with estimates made in the rule 2a-7 submissions,
Commission staff estimates that unregistered money market funds also
incur capital costs to create computer programs for maintaining and
preserving compliance records for rule 2a-7 of $0.0000132 per dollar of
assets under management. Based on the assets under management figures
described above, staff estimates
[[Page 8302]]
annual capital costs for all unregistered money market funds of $1.98
million.\33\
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\33\ This estimate is based on the following calculation: $150
billion x 0.0000132 = $1.98 million.
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Commission staff further estimates that, even absent the
requirements of rule 2a-7, money market funds would spend at least half
of the amounts described above for record preservation ($2.0 million)
and for capital costs ($0.99 million). Commission staff concludes that
the aggregate annual costs of compliance with the rule are $2.0 million
for record preservation and $0.99 million for capital costs.
The collections of information required for unregistered money
market funds by rule 12d1-1 are necessary in order for acquiring funds
to be able to obtain the benefits described above. Notices to the
Commission 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 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, Director/Chief
Information Officer, Securities and Exchange Commission, C/O Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an
email to: PRA_Mailbox@sec.gov.
February 8, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3340 Filed 2-13-12; 8:45 am]
BILLING CODE 8011-01-P
