Submission for OMB Review; Comment Request, 66883-66884 [2012-27140]
Download as PDF
<![CDATA[
Federal Register / Vol. 77, No. 216 / Wednesday, November 7, 2012 / Notices
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.
pmangrum on DSK3VPTVN1PROD with NOTICES
Extension:
Rule 2a–7; OMB Control No. 3235–0268,
SEC File No. 270–258.
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 2a–7 (17 CFR 270.2a–7) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (the ‘‘Act’’) governs
money market funds. Money market
funds are open-end management
investment companies that differ from
other open-end management investment
companies in that they seek to maintain
a stable price per share, usually $1.00.
The rule exempts money market funds
from the valuation requirements of the
Act, and, subject to certain risk-limiting
conditions, permits money market funds
to use the ‘‘amortized cost method’’ of
asset valuation or the ‘‘penny-rounding
method’’ of share pricing.
Rule 2a–7 also imposes certain
recordkeeping and reporting obligations
on money market funds. The board of
directors of a money market fund, in
supervising the fund’s operations, must
establish written procedures designed to
stabilize the fund’s net asset value
(‘‘NAV’’). The board must also adopt
guidelines and procedures relating to
certain responsibilities it delegates to
the fund’s investment adviser. These
procedures and guidelines typically
address various aspects of the fund’s
operations. The fund must maintain and
preserve for six years a written copy of
both these procedures and guidelines.
The fund also must maintain and
preserve for six years a written record of
the board’s considerations and actions
taken in connection with the discharge
of its responsibilities, to be included in
the board’s minutes. In addition, the
fund must maintain and preserve for
three years written records of certain
credit risk analyses, evaluations with
respect to securities subject to demand
features or guarantees, and
determinations with respect to
VerDate Mar<15>2010
15:43 Nov 06, 2012
Jkt 229001
adjustable rate securities and asset
backed securities. If the board takes
action with respect to defaulted
securities, events of insolvency, or
deviations in share price, the fund must
file with the Commission an exhibit to
Form N–SAR describing the nature and
circumstances of the action. If any
portfolio security fails to meet certain
eligibility standards under the rule, the
fund also must identify those securities
in an exhibit to Form N–SAR. After
certain events of default or insolvency
relating to a portfolio security, the fund
must notify the Commission of the event
and the actions the fund intends to take
in response to the situation.
The 2010 amendments to rule 2a–7
also added new collection of
information requirements. First, money
market fund boards must adopt written
procedures that provide for periodic
testing (and reporting to the board) of
the fund’s ability to maintain a stable
NAV per share based on certain
hypothetical events. Second, funds must
post monthly portfolio information on
their Web sites. Third, funds must
maintain records of creditworthiness
evaluations on counterparties to
repurchase agreements that the fund
intends to ‘‘look through’’ for purposes
of rule 2a–7’s diversification limitations.
Finally, money market funds must
promptly notify the Commission of the
purchase of any money market fund’s
portfolio security by an affiliated person
in reliance on rule 17a–9 under the Act
and explain the reasons for such
purchase.
The recordkeeping requirements in
rule 2a–7 are designed to enable
Commission staff in its examinations of
money market funds to determine
compliance with the rule, as well as to
ensure that money market funds have
established procedures for collecting the
information necessary to make adequate
credit reviews of securities in their
portfolios. The reporting requirements
of rule 2a–7 are intended to assist
Commission staff in overseeing money
market funds and reduce the likelihood
that a fund is unable to maintain a
stable NAV.
Commission staff estimates that there
are 664 money market funds (136 fund
complexes), all of which are subject to
rule 2a–7. Commission staff further
estimates that there will be
approximately 10 new money market
funds established each year.
Commission staff estimates that rule 2a–
7 contains the following collection of
information requirements:
• Record of credit risk analyses, and
determinations regarding adjustable rate
securities, asset backed securities,
securities subject to a demand feature or
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
66883
guarantee, and counterparties to
repurchase agreements. Commission
staff estimates a total annual hour
burden for 664 funds to be 451,520
hours.
• Establishment of written procedures
designed to stabilize NAV and
guidelines and procedures for board
delegation of authority. Commission
staff estimates a total annual hour
burden for 10 new money market funds
to be 155 hours.
• Board review of procedures and
guidelines of any investment adviser or
officers to whom the fund’s board has
delegated responsibility under rule 2a–
7 and amendment of such procedures
and guidelines. Commission staff
estimates a total annual hour burden for
166 funds to be 830 hours.
• Written record of board
determinations and actions related to
failure of a security to meet certain
eligibility standards or an event of
default or insolvency and notice to the
Commission of an event of default or
insolvency. Commission staff estimates
a total annual hour burden for 20 funds
to be 30 hours.
• Establishment of written procedures
to test periodically the ability of the
fund to maintain a stable NAV per share
based on certain hypothetical events
(‘‘stress testing’’). Commission staff
estimates a total annual hour burden for
10 new money market funds to be 220
hours.
• Review, revise, and approve written
procedures to stress test a fund’s
portfolio. Commission staff estimates a
total annual hour burden for 136 fund
complexes to be 1,632 hours.
• Reports to fund boards on the
results of stress testing. Commission
staff estimates a total annual hour
burden for 136 fund complexes to be
6,800 hours.
• Monthly posting of money market
fund portfolio information on a fund’s
Web site. Commission staff estimates a
total annual hour burden for 664 funds
and 10 new money market funds to be
56,016 hours.
• Notice to the Commission of the
purchase of a money market fund’s
portfolio security by certain affiliated
persons in reliance on rule 17a–9.
Commission staff estimates a total
annual hour burden for 25 fund
complexes to be 25 hours.
Thus, the Commission estimates the
total annual burden of the rule’s
information collection requirements is
517,228 hours.1
1 This estimate is based on the following
calculation: 451,520 hours + 155 hours + 830 hours
+ 30 hours + 220 hours + 1,632 hours + 6,800 hours
+ 56,016 hours + 25 hours = 517,228 hours.
E:\FR\FM\07NON1.SGM
07NON1
pmangrum on DSK3VPTVN1PROD with NOTICES
66884
Federal Register / Vol. 77, No. 216 / Wednesday, November 7, 2012 / Notices
The estimated total annual burden is
being increased from 395,779 hours to
517,228 hours. This net increase is
attributable to a combination of factors,
including a decrease in the number of
money market funds and fund
complexes, and updated information
from money market funds regarding
hourly burdens, including revised staff
estimates of the burden hours required
to comply with rule 2a–7 as a result of
new information received from
surveyed fund representatives.
These estimates of burden hours are
made solely for the purposes of the
Paperwork Reduction Act. The
estimates are not derived from a
comprehensive or even a representative
survey or study of Commission rules.
Commission staff estimates that in
addition to the costs described above,
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.
Commission staff estimates that the
amount an individual fund may spend
ranges from $100 per year to $300,000.
Based on a cost of $0.0051295 per dollar
of assets under management for small
funds, $0.0005041 per dollar assets
under management for medium funds,
and $0.0000009 per dollar of assets
under management for large funds, the
staff estimates compliance with the
record storage requirements of rule 2a–
7 costs the fund industry approximately
$57.3 million per year. Based on
responses from individuals in the
money market fund industry, the staff
estimates that some of the largest fund
complexes have created computer
programs for maintaining and
preserving compliance records for rule
2a–7. Based on a cost of $0.0000132 per
dollar of assets under management for
large funds, the staff estimates that total
annualized capital/startup costs range
from $0 for small funds to $35.6 million
for all large funds. Commission staff
further estimates that, even absent the
requirements of rule 2a–7, money
market funds would spend at least half
of the amount for capital costs ($17.8
million) and for record preservation
($28.65 million) to establish and
maintain these records and the systems
for preserving them as a part of sound
business practices to ensure
diversification and minimal credit risk
in a portfolio for a fund that seeks to
maintain a stable price per share.
VerDate Mar<15>2010
15:43 Nov 06, 2012
Jkt 229001
The collections of information
required by rule 2a–7 are necessary 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, 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: October 29, 2012.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–27140 Filed 11–6–12; 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:
Form N–3; SEC File No. 270–281, OMB
Control No. 3235–0316.
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.
The title for the collection of
information is ‘‘Form N–3 (17 CFR
239.17a and 274.11b) under the
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
Securities Act of 1933 (15 U.S.C. 77)
and under the Investment Company Act
of 1940 (15 U.S.C. 80a), Registration
Statement of Separate Accounts
Organized as Management Investment
Companies.’’ Form N–3 is the form used
by separate accounts offering variable
annuity contracts which are organized
as management investment companies
to register under the Investment
Company Act of 1940 (‘‘Investment
Company Act’’) and/or to register their
securities under the Securities Act of
1933 (‘‘Securities Act’’). Form N–3 is
also the form used to file a registration
statement under the Securities Act (and
any amendments thereto) for variable
annuity contracts funded by separate
accounts which would be required to be
registered under the Investment
Company Act as management
investment companies except for the
exclusion provided by Section 3(c)(11)
of the Investment Company Act (15
U.S.C. 80a–3(c)(11)). Section 5 of the
Securities Act (15 U.S.C. 77e) requires
the filing of a registration statement
prior to the offer of securities to the
public and that the statement be
effective before any securities are sold,
and Section 8 of the Investment
Company Act (15 U.S.C. 80a–8) requires
a separate account to register as an
investment company.
Form N–3 also permits separate
accounts offering variable annuity
contracts which are organized as
investment companies to provide
investors with a prospectus and a
statement of additional information
covering essential information about the
separate account when it makes an
initial or additional offering of its
securities. Section 5(b) of the Securities
Act requires that investors be provided
with a prospectus containing the
information required in a registration
statement prior to the sale or at the time
of confirmation or delivery of the
securities. The form also may be used by
the Commission in its regulatory review,
inspection, and policy-making roles.
Commission staff estimates that there
are zero initial registration statements
and 7 post-effective amendments to
initial registration statements filed on
Form N–3 annually and that the average
number of portfolios referenced in each
post-effective amendment is 2. The
Commission further estimates that the
hour burden for preparing and filing a
post-effective amendment on Form N–3
is 155.2 hours per portfolio. The total
annual hour burden for preparing and
filing post-effective amendments is
2172.8 hours (7 post-effective
amendments × 2 portfolios × 155.2
hours per portfolio). The estimated
annual hour burden for preparing and
E:\FR\FM\07NON1.SGM
07NON1
]]>Agencies
[Federal Register Volume 77, Number 216 (Wednesday, November 7, 2012)]
[Notices]
[Pages 66883-66884]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27140]
[[Page 66883]]
-----------------------------------------------------------------------
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 2a-7; OMB Control No. 3235-0268, SEC File No. 270-258.
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 2a-7 (17 CFR 270.2a-7) under the Investment Company Act of
1940 (15 U.S.C. 80a) (the ``Act'') governs money market funds. Money
market funds are open-end management investment companies that differ
from other open-end management investment companies in that they seek
to maintain a stable price per share, usually $1.00. The rule exempts
money market funds from the valuation requirements of the Act, and,
subject to certain risk-limiting conditions, permits money market funds
to use the ``amortized cost method'' of asset valuation or the ``penny-
rounding method'' of share pricing.
Rule 2a-7 also imposes certain recordkeeping and reporting
obligations on money market funds. The board of directors of a money
market fund, in supervising the fund's operations, must establish
written procedures designed to stabilize the fund's net asset value
(``NAV''). The board must also adopt guidelines and procedures relating
to certain responsibilities it delegates to the fund's investment
adviser. These procedures and guidelines typically address various
aspects of the fund's operations. The fund must maintain and preserve
for six years a written copy of both these procedures and guidelines.
The fund also must maintain and preserve for six years a written record
of the board's considerations and actions taken in connection with the
discharge of its responsibilities, to be included in the board's
minutes. In addition, the fund must maintain and preserve for three
years written records of certain credit risk analyses, evaluations with
respect to securities subject to demand features or guarantees, and
determinations with respect to adjustable rate securities and asset
backed securities. If the board takes action with respect to defaulted
securities, events of insolvency, or deviations in share price, the
fund must file with the Commission an exhibit to Form N-SAR describing
the nature and circumstances of the action. If any portfolio security
fails to meet certain eligibility standards under the rule, the fund
also must identify those securities in an exhibit to Form N-SAR. After
certain events of default or insolvency relating to a portfolio
security, the fund must notify the Commission of the event and the
actions the fund intends to take in response to the situation.
The 2010 amendments to rule 2a-7 also added new collection of
information requirements. First, money market fund boards must adopt
written procedures that provide for periodic testing (and reporting to
the board) of the fund's ability to maintain a stable NAV per share
based on certain hypothetical events. Second, funds must post monthly
portfolio information on their Web sites. Third, funds must maintain
records of creditworthiness evaluations on counterparties to repurchase
agreements that the fund intends to ``look through'' for purposes of
rule 2a-7's diversification limitations. Finally, money market funds
must promptly notify the Commission of the purchase of any money market
fund's portfolio security by an affiliated person in reliance on rule
17a-9 under the Act and explain the reasons for such purchase.
The recordkeeping requirements in rule 2a-7 are designed to enable
Commission staff in its examinations of money market funds to determine
compliance with the rule, as well as to ensure that money market funds
have established procedures for collecting the information necessary to
make adequate credit reviews of securities in their portfolios. The
reporting requirements of rule 2a-7 are intended to assist Commission
staff in overseeing money market funds and reduce the likelihood that a
fund is unable to maintain a stable NAV.
Commission staff estimates that there are 664 money market funds
(136 fund complexes), all of which are subject to rule 2a-7. Commission
staff further estimates that there will be approximately 10 new money
market funds established each year. Commission staff estimates that
rule 2a-7 contains the following collection of information
requirements:
Record of credit risk analyses, and determinations
regarding adjustable rate securities, asset backed securities,
securities subject to a demand feature or guarantee, and counterparties
to repurchase agreements. Commission staff estimates a total annual
hour burden for 664 funds to be 451,520 hours.
Establishment of written procedures designed to stabilize
NAV and guidelines and procedures for board delegation of authority.
Commission staff estimates a total annual hour burden for 10 new money
market funds to be 155 hours.
Board review of procedures and guidelines of any
investment adviser or officers to whom the fund's board has delegated
responsibility under rule 2a-7 and amendment of such procedures and
guidelines. Commission staff estimates a total annual hour burden for
166 funds to be 830 hours.
Written record of board determinations and actions related
to failure of a security to meet certain eligibility standards or an
event of default or insolvency and notice to the Commission of an event
of default or insolvency. Commission staff estimates a total annual
hour burden for 20 funds to be 30 hours.
Establishment of written procedures to test periodically
the ability of the fund to maintain a stable NAV per share based on
certain hypothetical events (``stress testing''). Commission staff
estimates a total annual hour burden for 10 new money market funds to
be 220 hours.
Review, revise, and approve written procedures to stress
test a fund's portfolio. Commission staff estimates a total annual hour
burden for 136 fund complexes to be 1,632 hours.
Reports to fund boards on the results of stress testing.
Commission staff estimates a total annual hour burden for 136 fund
complexes to be 6,800 hours.
Monthly posting of money market fund portfolio information
on a fund's Web site. Commission staff estimates a total annual hour
burden for 664 funds and 10 new money market funds to be 56,016 hours.
Notice to the Commission of the purchase of a money market
fund's portfolio security by certain affiliated persons in reliance on
rule 17a-9. Commission staff estimates a total annual hour burden for
25 fund complexes to be 25 hours.
Thus, the Commission estimates the total annual burden of the rule's
information collection requirements is 517,228 hours.\1\
---------------------------------------------------------------------------
\1\ This estimate is based on the following calculation: 451,520
hours + 155 hours + 830 hours + 30 hours + 220 hours + 1,632 hours +
6,800 hours + 56,016 hours + 25 hours = 517,228 hours.
[[Page 66884]]
---------------------------------------------------------------------------
The estimated total annual burden is being increased from 395,779
hours to 517,228 hours. This net increase is attributable to a
combination of factors, including a decrease in the number of money
market funds and fund complexes, and updated information from money
market funds regarding hourly burdens, including revised staff
estimates of the burden hours required to comply with rule 2a-7 as a
result of new information received from surveyed fund representatives.
These estimates of burden hours are made solely for the purposes of
the Paperwork Reduction Act. The estimates are not derived from a
comprehensive or even a representative survey or study of Commission
rules.
Commission staff estimates that in addition to the costs described
above, 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. Commission staff estimates
that the amount an individual fund may spend ranges from $100 per year
to $300,000. Based on a cost of $0.0051295 per dollar of assets under
management for small funds, $0.0005041 per dollar assets under
management for medium funds, and $0.0000009 per dollar of assets under
management for large funds, the staff estimates compliance with the
record storage requirements of rule 2a-7 costs the fund industry
approximately $57.3 million per year. Based on responses from
individuals in the money market fund industry, the staff estimates that
some of the largest fund complexes have created computer programs for
maintaining and preserving compliance records for rule 2a-7. Based on a
cost of $0.0000132 per dollar of assets under management for large
funds, the staff estimates that total annualized capital/startup costs
range from $0 for small funds to $35.6 million for all large funds.
Commission staff further estimates that, even absent the requirements
of rule 2a-7, money market funds would spend at least half of the
amount for capital costs ($17.8 million) and for record preservation
($28.65 million) to establish and maintain these records and the
systems for preserving them as a part of sound business practices to
ensure diversification and minimal credit risk in a portfolio for a
fund that seeks to maintain a stable price per share.
The collections of information required by rule 2a-7 are necessary
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, 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: October 29, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27140 Filed 11-6-12; 8:45 am]
BILLING CODE 8011-01-P
