Submission for OMB Review; Comment Request, 51584-51585 [2012-20824]
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51584
Federal Register / Vol. 77, No. 165 / Friday, August 24, 2012 / Notices
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective Date: August 24, 2012.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on August 17,
2012, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add First-Class
Package Service Contract 15 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2012–45, CP2012–53.
SUMMARY:
Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[FR Doc. 2012–20800 Filed 8–23–12; 8:45 am]
BILLING CODE 7710–12–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.
erowe on DSK2VPTVN1PROD with
Extension:
Rule 10f–3; SEC File No. 270–237; OMB
Control No. 3235–0226.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension and approval of
the collections of information discussed
below.
Section 10(f) of the Investment
Company Act of 1940 (15 U.S.C. 80a)
(the ‘‘Act’’) prohibits a registered
investment company (‘‘fund’’) from
purchasing any security during an
underwriting or selling syndicate if the
fund has certain relationships with a
principal underwriter for the security.
Congress enacted this provision in 1940
to protect funds and their shareholders
by preventing underwriters from
‘‘dumping’’ unmarketable securities on
affiliated funds.
Rule 10f–3 (17 CFR 270.10f–3)
permits a fund to engage in a securities
transaction that otherwise would violate
section 10(f) if, among other things: (i)
VerDate Mar<15>2010
15:22 Aug 23, 2012
Jkt 226001
Each transaction effected under the rule
is reported on Form N–SAR; (ii) the
fund’s directors have approved
procedures for purchases made in
reliance on the rule, regularly review
fund purchases to determine whether
they comply with these procedures, and
approve necessary changes to the
procedures; and (iii) a written record of
each transaction effected under the rule
is maintained for six years, the first two
of which in an easily accessible place.
The written record must state: (i) From
whom the securities were acquired; (ii)
the identity of the underwriting
syndicate’s members; (iii) the terms of
the transactions; and (iv) the
information or materials on which the
fund’s board of directors has determined
that the purchases were made in
compliance with procedures established
by the board.
The rule also conditionally allows
managed portions of fund portfolios to
purchase securities offered in otherwise
off-limits primary offerings. To qualify
for this exemption, rule 10f–3 requires
that the subadviser that is advising the
purchaser be contractually prohibited
from providing investment advice to
any other portion of the fund’s portfolio
and consulting with any other of the
fund’s advisers that is a principal
underwriter or affiliated person of a
principal underwriter concerning the
fund’s securities transactions.
These requirements provide a
mechanism for fund boards to oversee
compliance with the rule. The required
recordkeeping facilitates the
Commission staff’s review of rule 10f–
3 transactions during routine fund
inspections and, when necessary, in
connection with enforcement actions.
The staff estimates that approximately
300 funds engage in a total of
approximately 3,700 rule 10f–3
transactions each year.1 Rule 10f–3
requires that the purchasing fund create
a written record of each transaction that
includes, among other things, from
whom the securities were purchased
and the terms of the transaction. The
staff estimates 2 that it takes an average
fund approximately 30 minutes per
transaction and approximately 1,850
hours 3 in the aggregate to comply with
this portion of the rule.
The funds also must maintain and
preserve these transactional records in
accordance with the rule’s
1 These estimates are based on staff extrapolations
from filings with the Commission.
2 Unless stated otherwise, the information
collection burden estimates are based on
conversations between the staff and representatives
of funds.
3 This estimate is based on the following
calculation: (0.5 hours × 3,700 = 1,850 hours).
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
recordkeeping requirement, and the staff
estimates that it takes a fund
approximately 20 minutes per
transaction and that annually, in the
aggregate, funds spend approximately
1,233 hours 4 to comply with this
portion of the rule.
In addition, fund boards must, no less
than quarterly, examine each of these
transactions to ensure that they comply
with the fund’s policies and procedures.
The information or materials upon
which the board relied to come to this
determination also must be maintained
and the staff estimates that it takes a
fund 1 hour per quarter and, in the
aggregate, approximately 1,200 hours 5
annually to comply with this rule
requirement.
The staff estimates that reviewing and
revising as needed written procedures
for rule 10f–3 transactions takes, on
average for each fund, two hours of a
compliance attorney’s time per year.6
Thus, annually, in the aggregate, the
staff estimates that funds spend a total
of approximately 600 hours 7 on
monitoring and revising rule 10f–3
procedures. Based on an analysis of
fund filings, the staff estimates that
approximately 775 fund portfolios enter
into subadvisory agreements each year.8
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
10f–3. Because these additional clauses
are identical to the clauses that a fund
would need to insert in their
subadvisory contracts to rely on rules
12d3–1, 17a–10, 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 to all four rules. Therefore, we
estimate that the burden allocated to
rule 10f–3 for this contract change
would be 0.75 hours.9 Assuming that all
775 funds that enter into new
subadvisory contracts each year make
4 This estimate is based on the following
calculations: (20 minutes × 3,700 transactions =
74,000 minutes; 74,000 minutes/60 = 1,233 hours).
5 This estimate is based on the following
calculation: (1 hour per quarter × 4 quarters × 300
funds = 1,200 hours).
6 These averages take into account the fact that in
most years, fund attorneys and boards spend little
or no time modifying procedures and in other years,
they spend significant time doing so.
7 This estimate is based on the following
calculation: (300 funds × 2 hours = 600 hours).
8 Based on information in Commission filings, we
estimate that 44.4 percent of funds are advised by
subadvisers.
9 This estimate is based on the following
calculation (3 hours ÷ 4 rules = .75 hours).
E:\FR\FM\24AUN1.SGM
24AUN1
Federal Register / Vol. 77, No. 165 / Friday, August 24, 2012 / Notices
the modification to their contract
required by the rule, we estimate that
the rule’s contract modification
requirement will result in 581 burden
hours annually.10
The staff estimates, therefore, that rule
10f–3 imposes an information collection
burden of 5,665 hours.11 This estimate
does not include the time spent filing
transaction reports on Form N–SAR,
which is encompassed in the
information collection burden estimate
for that form.
The collection of information required
by rule 10f–3 is necessary to obtain the
benefits of the rule. Responses will not
be kept confidential. An agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless it displays a
currently valid OMB 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: August 20, 2012.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012–20824 Filed 8–23–12; 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.
erowe on DSK2VPTVN1PROD with
Extension:
Rule 12b–1; SEC File No. 270–188; OMB
Control No. 3235–0212.
10 These estimates are based on the following
calculations: (0.75 hours × 775 portfolios = 581
burden hours).
11 This estimate is based on the following
calculation: (1,850 hours + 1,233 hours + 1,200
hours + 600 hours + 581 hours + 201 hours = 5,665
total burden hours).
VerDate Mar<15>2010
15:22 Aug 23, 2012
Jkt 226001
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’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Rule 12b–1 under the Investment
Company Act of 1940 (17 CFR 270.12b–
1) permits a registered open-end
investment company (‘‘fund’’ or
‘‘mutual fund’’) to bear expenses
associated with the distribution of its
shares, provided that the mutual fund
complies with certain requirements,
including, among other things, that it
adopt a written plan (‘‘rule 12b–1 plan’’)
and that it has in writing any
agreements relating to the rule 12b–1
plan. The rule in part requires that (i)
The adoption or material amendment of
a rule 12b–1 plan be approved by the
mutual fund’s directors, including its
independent directors, and, in certain
circumstances, its shareholders; (ii) the
board review quarterly reports of
amounts spent under the rule 12b–1
plan; and (iii) the board, including the
independent directors, consider
continuation of the rule 12b–1 plan and
any related agreements at least annually.
Rule 12b–1 also requires mutual funds
relying on the rule to preserve for six
years, the first two years in an easily
accessible place, copies of the rule 12b–
1 plan and any related agreements and
reports, as well as minutes of board
meetings that describe the factors
considered and the basis for adopting or
continuing a rule 12b–1 plan.
Rule 12b–1 also prohibits funds from
paying for distribution of fund shares
with brokerage commissions on their
portfolio transactions. The rule requires
funds that use broker-dealers that sell
their shares to also execute their
portfolio securities transactions, to
implement policies and procedures
reasonably designed to prevent: (i) The
persons responsible for selecting brokerdealers to effect transactions in fund
portfolio securities from taking into
account broker-dealers’ promotional or
sales efforts when making those
decisions; and (ii) a fund, its adviser or
principal underwriter, from entering
into any agreement under which the
fund directs brokerage transactions or
revenue generated by those transactions
to a broker-dealer to pay for distribution
of the fund’s (or any other fund’s)
shares.
The board and shareholder approval
requirements of rule 12b–1 are designed
to ensure that fund shareholders and
directors receive adequate information
to evaluate and approve a rule 12b–1
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
51585
plan and, thus, are necessary for
investor protection. The requirement of
quarterly reporting to the board is
designed to ensure that the rule 12b–1
plan continues to benefit the fund and
its shareholders. The recordkeeping
requirements of the rule are necessary to
enable Commission staff to oversee
compliance with the rule. The
requirement that funds or their advisers
implement, and fund boards approve,
policies and procedures in order to
prevent persons charged with allocating
fund brokerage from taking distribution
efforts into account is designed to
ensure that funds’ selection of brokers to
effect portfolio securities transactions is
not influenced by considerations about
the sale of fund shares.
Based on information filed with the
Commission by funds, Commission staff
estimates that there are approximately
6,771 mutual fund portfolios that have
at least one share class subject to a rule
12b–1 plan.1 However, many of these
portfolios are part of an affiliated group
of funds, or mutual fund family, that is
overseen by a common board of
directors. Although the board must
review and approve the rule 12b–1 plan
for each fund separately, we have
allocated the costs and hourly burden
related to rule 12b–1 based on the
number of fund families that have at
least one fund that charges rule 12b–1
fees, rather than on the total number of
mutual fund portfolios that individually
have a rule 12b–1 plan.2 Based on
information filed with the Commission,
the staff estimates that there are
approximately 375 fund families with
common boards of directors that have at
least one fund with a rule 12b–1 plan.
Based on previous conversations with
fund representatives, Commission staff
estimates that for each of the 375 mutual
fund families with a portfolio that has
a rule 12b–1 plan, the average annual
burden of complying with the rule is
425 hours. This estimate takes into
account the time needed to prepare
quarterly reports to the board of
directors, the board’s consideration of
those reports, and the board’s initial or
1 This estimate is based on information from the
Commission’s NSAR database.
2 This allocation is based on previous
conversations with fund representatives on how
fund boards comply with the requirements of rule
12b–1. Despite this allocation of hourly burdens
and costs, the number of annual responses each
year will continue to depend on the number of fund
portfolios with rule 12b–1 plans rather than the
number of fund families with rule 12b–1 plans. The
staff estimates that the number of annual responses
per fund portfolio will be four per year (quarterly,
with the annual reviews taking place at one of the
quarterly intervals). Thus, we estimate that funds
will make 27,084 responses (6,771 fund portfolios
× 4 responses per fund portfolio = 27,084 responses)
each year.
E:\FR\FM\24AUN1.SGM
24AUN1
]]>Agencies
[Federal Register Volume 77, Number 165 (Friday, August 24, 2012)]
[Notices]
[Pages 51584-51585]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-20824]
=======================================================================
-----------------------------------------------------------------------
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 10f-3; SEC File No. 270-237; OMB Control No. 3235-0226.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget a request for extension and approval of the collections of
information discussed below.
Section 10(f) of the Investment Company Act of 1940 (15 U.S.C. 80a)
(the ``Act'') prohibits a registered investment company (``fund'') from
purchasing any security during an underwriting or selling syndicate if
the fund has certain relationships with a principal underwriter for the
security. Congress enacted this provision in 1940 to protect funds and
their shareholders by preventing underwriters from ``dumping''
unmarketable securities on affiliated funds.
Rule 10f-3 (17 CFR 270.10f-3) permits a fund to engage in a
securities transaction that otherwise would violate section 10(f) if,
among other things: (i) Each transaction effected under the rule is
reported on Form N-SAR; (ii) the fund's directors have approved
procedures for purchases made in reliance on the rule, regularly review
fund purchases to determine whether they comply with these procedures,
and approve necessary changes to the procedures; and (iii) a written
record of each transaction effected under the rule is maintained for
six years, the first two of which in an easily accessible place. The
written record must state: (i) From whom the securities were acquired;
(ii) the identity of the underwriting syndicate's members; (iii) the
terms of the transactions; and (iv) the information or materials on
which the fund's board of directors has determined that the purchases
were made in compliance with procedures established by the board.
The rule also conditionally allows managed portions of fund
portfolios to purchase securities offered in otherwise off-limits
primary offerings. To qualify for this exemption, rule 10f-3 requires
that the subadviser that is advising the purchaser be contractually
prohibited from providing investment advice to any other portion of the
fund's portfolio and consulting with any other of the fund's advisers
that is a principal underwriter or affiliated person of a principal
underwriter concerning the fund's securities transactions.
These requirements provide a mechanism for fund boards to oversee
compliance with the rule. The required recordkeeping facilitates the
Commission staff's review of rule 10f-3 transactions during routine
fund inspections and, when necessary, in connection with enforcement
actions.
The staff estimates that approximately 300 funds engage in a total
of approximately 3,700 rule 10f-3 transactions each year.\1\ Rule 10f-3
requires that the purchasing fund create a written record of each
transaction that includes, among other things, from whom the securities
were purchased and the terms of the transaction. The staff estimates
\2\ that it takes an average fund approximately 30 minutes per
transaction and approximately 1,850 hours \3\ in the aggregate to
comply with this portion of the rule.
---------------------------------------------------------------------------
\1\ These estimates are based on staff extrapolations from
filings with the Commission.
\2\ Unless stated otherwise, the information collection burden
estimates are based on conversations between the staff and
representatives of funds.
\3\ This estimate is based on the following calculation: (0.5
hours x 3,700 = 1,850 hours).
---------------------------------------------------------------------------
The funds also must maintain and preserve these transactional
records in accordance with the rule's recordkeeping requirement, and
the staff estimates that it takes a fund approximately 20 minutes per
transaction and that annually, in the aggregate, funds spend
approximately 1,233 hours \4\ to comply with this portion of the rule.
---------------------------------------------------------------------------
\4\ This estimate is based on the following calculations: (20
minutes x 3,700 transactions = 74,000 minutes; 74,000 minutes/60 =
1,233 hours).
---------------------------------------------------------------------------
In addition, fund boards must, no less than quarterly, examine each
of these transactions to ensure that they comply with the fund's
policies and procedures. The information or materials upon which the
board relied to come to this determination also must be maintained and
the staff estimates that it takes a fund 1 hour per quarter and, in the
aggregate, approximately 1,200 hours \5\ annually to comply with this
rule requirement.
---------------------------------------------------------------------------
\5\ This estimate is based on the following calculation: (1 hour
per quarter x 4 quarters x 300 funds = 1,200 hours).
---------------------------------------------------------------------------
The staff estimates that reviewing and revising as needed written
procedures for rule 10f-3 transactions takes, on average for each fund,
two hours of a compliance attorney's time per year.\6\ Thus, annually,
in the aggregate, the staff estimates that funds spend a total of
approximately 600 hours \7\ on monitoring and revising rule 10f-3
procedures. Based on an analysis of fund filings, the staff estimates
that approximately 775 fund portfolios enter into subadvisory
agreements each year.\8\ 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 10f-3. Because these additional clauses
are identical to the clauses that a fund would need to insert in their
subadvisory contracts to rely on rules 12d3-1, 17a-10, 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 to all
four rules. Therefore, we estimate that the burden allocated to rule
10f-3 for this contract change would be 0.75 hours.\9\ Assuming that
all 775 funds that enter into new subadvisory contracts each year make
[[Page 51585]]
the modification to their contract required by the rule, we estimate
that the rule's contract modification requirement will result in 581
burden hours annually.\10\
---------------------------------------------------------------------------
\6\ These averages take into account the fact that in most
years, fund attorneys and boards spend little or no time modifying
procedures and in other years, they spend significant time doing so.
\7\ This estimate is based on the following calculation: (300
funds x 2 hours = 600 hours).
\8\ Based on information in Commission filings, we estimate that
44.4 percent of funds are advised by subadvisers.
\9\ This estimate is based on the following calculation (3 hours
/ 4 rules = .75 hours).
\10\ These estimates are based on the following calculations:
(0.75 hours x 775 portfolios = 581 burden hours).
---------------------------------------------------------------------------
The staff estimates, therefore, that rule 10f-3 imposes an
information collection burden of 5,665 hours.\11\ This estimate does
not include the time spent filing transaction reports on Form N-SAR,
which is encompassed in the information collection burden estimate for
that form.
---------------------------------------------------------------------------
\11\ This estimate is based on the following calculation: (1,850
hours + 1,233 hours + 1,200 hours + 600 hours + 581 hours + 201
hours = 5,665 total burden hours).
---------------------------------------------------------------------------
The collection of information required by rule 10f-3 is necessary
to obtain the benefits of the rule. Responses will not be kept
confidential. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB 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: August 20, 2012.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-20824 Filed 8-23-12; 8:45 am]
BILLING CODE 8011-01-P
