Submission for OMB Review; Comment Request, 23518-23519 [2012-9414]

Download as PDF 23518 Federal Register / Vol. 77, No. 76 / Thursday, April 19, 2012 / Notices 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 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 30 See supra text accompanying note 28. 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% × 0.0005041) = $2.3 million for mstockstill on DSK4VPTVN1PROD with NOTICES 31 In VerDate Mar<15>2010 17:10 Apr 18, 2012 Jkt 226001 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 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. The public may view the background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_Ahmed@omb.eop.gov; and (ii) 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. Comments must be submitted to OMB within 30 days of this notice. April 13, 2012. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–9413 Filed 4–18–12; 8:45 am] BILLING CODE 8011–01–P 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. 33 This estimate is based on the following calculation: $150 billion × 0.0000132 = $1.98 million. PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. Extension: Rule 17g–1; SEC File No. 270–208; OMB Control No. 3235–0213. 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’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Rule 17g–1 (17 CFR 270.17g–1) under the Investment Company Act of 1940 (the ‘‘Act’’) (15 U.S.C. 80a–17(g)) governs the fidelity bonding of officers and employees of registered management investment companies (‘‘funds’’) and their advisers. Rule 17g– 1 requires, in part, the following: Independent Directors’ Approval The form and amount of the fidelity bond must be approved by a majority of the fund’s independent directors at least once annually, and the amount of any premium paid by the fund for any ‘‘joint insured bond,’’ covering multiple funds or certain affiliates, must be approved by a majority of the fund’s independent directors. Terms and Provisions of the Bond The amount of the bond may not be less than the minimum amounts of coverage set forth in a schedule based on the fund’s gross assets; the bond must provide that it shall not be cancelled, terminated, or modified except upon 60-days written notice to the affected party and to the Commission; in the case of a joint insured bond, 60-days written notice must also be given to each fund covered by the bond; a joint insured bond must provide that the fidelity insurance company will provide all funds covered by the bond with a copy of the agreement, a copy of any claim on the bond, and notification of the terms of the settlement of any claim prior to execution of that settlement; and a fund that is insured by a joint bond must enter into an agreement with all other parties insured by the joint bond regarding recovery under the bond. E:\FR\FM\19APN1.SGM 19APN1 Federal Register / Vol. 77, No. 76 / Thursday, April 19, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Filings With the Commission Upon the execution of a fidelity bond or any amendment thereto, a fund must file with the Commission within 10 days a copy of the executed bond or any amendment to the bond, the independent directors’ resolution approving the bond, and a statement as to the period for which premiums have been paid on the bond. In the case of a joint insured bond, a fund must also file (i) a statement showing the amount the fund would have been required to maintain under the rule if it were insured under a single insured bond and (ii) the agreement between the fund and all other insured parties regarding recovery under the bond. A fund must also notify the Commission in writing within five days of any claim or settlement on a claim under the fidelity bond. Notices to Directors A fund must notify by registered mail each member of its board of directors of (i) any cancellation, termination, or modification of the fidelity bond at least 45 days prior to the effective date, and (ii) the filing or settlement of any claim under the fidelity bond when notification is filed with the Commission. Rule 17g–1’s independent directors’ annual review requirements, fidelity bond content requirements, joint bond agreement requirement and the required notices to directors are designed to ensure the safety of fund assets against losses due to the conduct of persons who may obtain access to those assets. These requirements also facilitate oversight of a fund’s fidelity bond. The rule’s required filings with the Commission are designed to assist the Commission in monitoring funds’ compliance with the fidelity bond requirements. Based on conversations with representatives in the fund industry, the Commission staff estimates that for each of the estimated 3479 active funds,1 the average annual paperwork burden associated with rule 17g–1’s requirements is two hours, one hour each for a compliance attorney and the board of directors as a whole. The time spent by compliance attorney includes time spent filing reports with the Commission for any fidelity losses (if any) as well as paperwork associated with any notices to directors, and managing any updates to the bond and 1 Based on statistics compiled by Commission staff, we estimate that there are approximately 3479 funds that must comply with the collections of information under rule 17g–1 and have made a filing within the last 12 months. VerDate Mar<15>2010 17:10 Apr 18, 2012 Jkt 226001 the joint agreement (if one exists). The time spent by the board of directors as a whole includes any time spent initially establishing the bond, as well as time spent on annual updates and approvals. The Commission staff therefore estimates the total ongoing paperwork burden hours per year for all funds required by rule 17g–1 to be 6958 hours (3479 funds × 2 hours = 6958 hours). These 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 Commission rules. The collection of information required by Rule 17g–1 is mandatory and will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_Ahmed@omb.eop.gov; and (ii) 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. Comments must be submitted to OMB within 30 days of this notice. Dated: April 13, 2012. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–9414 Filed 4–18–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. Extension: Rule 35d–1; SEC File No. 270–491; OMB Control No. 3235–0548. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 23519 and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for extension of the previously approved collection of information discussed below. Rule 35d–1 (17 CFR 270.35d–1) under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) defines as ‘‘materially deceptive and misleading’’ for purposes of Section 35(d), among other things, a name suggesting that a registered investment company or series thereof (a ‘‘fund’’) focuses its investments in a particular type of investment or investments, in investments in a particular industry or group of industries, or in investments in a particular country or geographic region, unless, among other things, the fund adopts a certain investment policy. Rule 35d–1 further requires either that the investment policy is fundamental or that the fund has adopted a policy to provide its shareholders with at least 60 days prior notice of any change in the investment policy (‘‘notice to shareholders’’). The rule’s notice to shareholders provision is intended to ensure that when shareholders purchase shares in a fund based, at least in part, on its name, and with the expectation that it will follow the investment policy suggested by that name, they will have sufficient time to decide whether to redeem their shares in the event that the fund decides to pursue a different investment policy. The Commission estimates that there are approximately 8,800 open-end and closed-end funds that have names that are covered by the rule. The Commission estimates that of these 8,800 funds, approximately 29 will provide prior notice to shareholders pursuant to a policy adopted in accordance with this rule per year. The Commission estimates that the annual burden associated with the notice to shareholders requirement of the rule is 20 hours per response, for an annual total of 580 hours per year. Estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act and are not derived from a comprehensive or even representative survey or study of the costs of Commission rules and forms. The collection of information under rule 35d–1 is mandatory. The information provided under rule 35d–1 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 OMB control number. The public may view the background documentation for this information collection at the following Web site: E:\FR\FM\19APN1.SGM 19APN1

Agencies

[Federal Register Volume 77, Number 76 (Thursday, April 19, 2012)]
[Notices]
[Pages 23518-23519]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9414]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

Extension:
    Rule 17g-1; SEC File No. 270-208; OMB Control No. 3235-0213.

    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'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    Rule 17g-1 (17 CFR 270.17g-1) under the Investment Company Act of 
1940 (the ``Act'') (15 U.S.C. 80a-17(g)) governs the fidelity bonding 
of officers and employees of registered management investment companies 
(``funds'') and their advisers. Rule 17g-1 requires, in part, the 
following:

Independent Directors' Approval

    The form and amount of the fidelity bond must be approved by a 
majority of the fund's independent directors at least once annually, 
and the amount of any premium paid by the fund for any ``joint insured 
bond,'' covering multiple funds or certain affiliates, must be approved 
by a majority of the fund's independent directors.

Terms and Provisions of the Bond

    The amount of the bond may not be less than the minimum amounts of 
coverage set forth in a schedule based on the fund's gross assets; the 
bond must provide that it shall not be cancelled, terminated, or 
modified except upon 60-days written notice to the affected party and 
to the Commission; in the case of a joint insured bond, 60-days written 
notice must also be given to each fund covered by the bond; a joint 
insured bond must provide that the fidelity insurance company will 
provide all funds covered by the bond with a copy of the agreement, a 
copy of any claim on the bond, and notification of the terms of the 
settlement of any claim prior to execution of that settlement; and a 
fund that is insured by a joint bond must enter into an agreement with 
all other parties insured by the joint bond regarding recovery under 
the bond.

[[Page 23519]]

Filings With the Commission

    Upon the execution of a fidelity bond or any amendment thereto, a 
fund must file with the Commission within 10 days a copy of the 
executed bond or any amendment to the bond, the independent directors' 
resolution approving the bond, and a statement as to the period for 
which premiums have been paid on the bond. In the case of a joint 
insured bond, a fund must also file (i) a statement showing the amount 
the fund would have been required to maintain under the rule if it were 
insured under a single insured bond and (ii) the agreement between the 
fund and all other insured parties regarding recovery under the bond. A 
fund must also notify the Commission in writing within five days of any 
claim or settlement on a claim under the fidelity bond.

Notices to Directors

    A fund must notify by registered mail each member of its board of 
directors of (i) any cancellation, termination, or modification of the 
fidelity bond at least 45 days prior to the effective date, and (ii) 
the filing or settlement of any claim under the fidelity bond when 
notification is filed with the Commission.
    Rule 17g-1's independent directors' annual review requirements, 
fidelity bond content requirements, joint bond agreement requirement 
and the required notices to directors are designed to ensure the safety 
of fund assets against losses due to the conduct of persons who may 
obtain access to those assets. These requirements also facilitate 
oversight of a fund's fidelity bond. The rule's required filings with 
the Commission are designed to assist the Commission in monitoring 
funds' compliance with the fidelity bond requirements.
    Based on conversations with representatives in the fund industry, 
the Commission staff estimates that for each of the estimated 3479 
active funds,\1\ the average annual paperwork burden associated with 
rule 17g-1's requirements is two hours, one hour each for a compliance 
attorney and the board of directors as a whole. The time spent by 
compliance attorney includes time spent filing reports with the 
Commission for any fidelity losses (if any) as well as paperwork 
associated with any notices to directors, and managing any updates to 
the bond and the joint agreement (if one exists). The time spent by the 
board of directors as a whole includes any time spent initially 
establishing the bond, as well as time spent on annual updates and 
approvals. The Commission staff therefore estimates the total ongoing 
paperwork burden hours per year for all funds required by rule 17g-1 to 
be 6958 hours (3479 funds x 2 hours = 6958 hours).
---------------------------------------------------------------------------

    \1\ Based on statistics compiled by Commission staff, we 
estimate that there are approximately 3479 funds that must comply 
with the collections of information under rule 17g-1 and have made a 
filing within the last 12 months.
---------------------------------------------------------------------------

    These 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 Commission rules. The collection of information required by Rule 
17g-1 is mandatory and will not be kept confidential. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid control 
number.
    The public may view the background documentation for this 
information collection at the following Web site, www.reginfo.gov. 
Comments should be directed to: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503, or by sending an email to: Shagufta_Ahmed@omb.eop.gov; and (ii) 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. Comments must be submitted to OMB within 30 days of 
this notice.

    Dated: April 13, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9414 Filed 4-18-12; 8:45 am]
BILLING CODE 8011-01-P
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