Submission for OMB Review; Comment Request, 6362-6364 [2013-01935]
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6362
Federal Register / Vol. 78, No. 20 / Wednesday, January 30, 2013 / Notices
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reviewing and documenting their
safeguard policies and procedures. We
expect that virtually all of the newly
registered covered entities that do not
have an affiliate are likely to be small
entities and are likely to have smaller
and less complex operations, with a
correspondingly smaller set of safeguard
policies and procedures to document,
compared to other larger existing
institutions with multiple affiliates. We
estimate that it will take a typical newly
registered unaffiliated institution
approximately 60 hours to review,
identify, and document their safeguard
policies and procedures, for a total of
27,000 hours for all newly registered
unaffiliated entities.
Therefore, we estimate that the total
annual hourly burden associated with
the safeguards rule is 42,750 hours. We
also estimate that all covered
institutions will be respondents each
year, for a total of 20,556 respondents.
These estimates of average burden
hours are made solely for the purposes
of the Paperwork Reduction Act. 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 safeguard rule does not
require the reporting of any information
or the filing of any documents with the
Commission. The collection of
information required by the safeguard
rule is mandatory.
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: January 24, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–01936 Filed 1–29–13; 8:45 am]
BILLING CODE 8011–01–P
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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 N–8F; OMB Control No. 3235–0157,
SEC File No. 270–136.
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.
Form N–8F (17 CFR 274.218) is the
form prescribed for use by registered
investment companies in certain
circumstances to request orders of the
Commission declaring that the
registration of that investment company
cease to be in effect. The form requests
information about: (i) The investment
company’s identity, (ii) the investment
company’s distributions, (iii) the
investment company’s assets and
liabilities, (iv) the events leading to the
request to deregister, and (v) the
conclusion of the investment company’s
business. The information is needed by
the Commission to determine whether
an order of deregistration is appropriate.
The Form takes approximately 5.5
hours on average to complete. It is
estimated that approximately 142
investment companies file Form N–8F
annually, so the total annual burden for
the form is estimated to be
approximately 781 hours. 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.
The collection of information on Form
N–8F is not mandatory. The information
provided on Form N–8F is not 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.
Written comments are requested on:
(i) Whether the collections of
information are necessary for the proper
performance of the functions of the
Commission, including whether the
information has practical utility; (ii) the
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accuracy of the Commission’s estimate
of the burdens of the collection of
information; (iii) ways to enhance the
quality, utility, and clarity of the
information collected; and (iv) 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: January 24, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–01938 Filed 1–29–13; 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 17j–1; OMB Control No. 3235–0224,
SEC File No. 270–239.
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.
Conflicts of interest between investment
company personnel (such as portfolio
managers) and their funds can arise when
these persons buy and sell securities for their
own accounts (‘‘personal investment
activities’’). These conflicts arise because
fund personnel have the opportunity to profit
from information about fund transactions,
often to the detriment of fund investors.
Beginning in the early 1960s, Congress and
the Securities and Exchange Commission
(‘‘Commission’’) sought to devise a regulatory
scheme to effectively address these potential
conflicts. These efforts culminated in the
addition of section 17(j) to the Investment
Company Act of 1940 (the ‘‘Investment
Company Act’’) (15 U.S.C. 80a–17(j)) in 1970
and the adoption by the Commission of rule
17j–1 (17 CFR 270.17j–1) in 1980.1 The
1 Prevention of Certain Unlawful Activities with
Respect to Registered Investment Companies,
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Commission proposed amendments to rule
17j–1 in 1995 in response to
recommendations made in the first detailed
study of fund policies concerning personal
investment activities by the Commission’s
Division of Investment Management since
rule 17j–1 was adopted. Amendments to rule
17j–1, which were adopted in 1999,
enhanced fund oversight of personal
investment activities and the board’s role in
carrying out that oversight.2 Additional
amendments to rule 17j–1 were made in
2004, conforming rule 17j–1 to rule 204A–1
under the Investment Advisers Act of 1940
(15 U.S.C. 80b), avoiding duplicative
reporting, and modifying certain definitions
and time restrictions.3
Section 17(j) makes it unlawful for persons
affiliated with a registered investment
company (‘‘fund’’) or with the fund’s
investment adviser or principal underwriter
(each a ‘‘17j–1 organization’’), in connection
with the purchase or sale of securities held
or to be acquired by the investment company,
to engage in any fraudulent, deceptive, or
manipulative act or practice in contravention
of the Commission’s rules and regulations.
Section 17(j) also authorizes the Commission
to promulgate rules requiring 17j–1
organizations to adopt codes of ethics.
In order to implement section 17(j), rule
17j–1 imposes certain requirements on 17j–
1 organizations and ‘‘Access Persons’’ 4 of
those organizations. The rule prohibits
fraudulent, deceptive or manipulative acts by
persons affiliated with a 17j–1 organization
in connection with their personal securities
transactions in securities held or to be
acquired by the fund. The rule requires each
17j–1 organization, unless it is a money
market fund or a fund that does not invest
in Covered Securities,5 to: (i) Adopt a written
Investment Company Act Release No. 11421 (Oct.
31, 1980) (45 FR 73915 (Nov. 7, 1980)).
2 Personal Investment Activities of Investment
Company Personnel, Investment Company Act
Release No. 23958 (Aug. 20, 1999) (64 FR 46821
(Aug. 27, 1999)).
3 Investment Adviser Codes of Ethics, Investment
Advisers Act Release No. 2256 (Jul. 2, 2004) (69 FR
41696 (Jul. 9, 2004)).
4 Rule 17j–1(a)(1) defines an ‘‘access person’’ as
‘‘Any Advisory Person of a Fund or of a Fund’s
investment adviser. If an investment adviser’s
primary business is advising Funds or other
advisory clients, all of the investment adviser’s
directors, officers, and general partners are
presumed to be Access Persons of any Fund advised
by the investment adviser. All of a Fund’s directors,
officers, and general partners are presumed to be
Access Persons of the Fund.’’ The definition of
Access Person also includes ‘‘Any director, officer
or general partner of a principal underwriter who,
in the ordinary course of business, makes,
participates in or obtains information regarding, the
purchase or sale of Covered Securities by the Fund
for which the principal underwriter acts, or whose
functions or duties in the ordinary course of
business relate to the making of any
recommendation to the Fund regarding the
purchase or sale of Covered Securities.’’ Rule 17j–
1(a)(1).
5 A ‘‘Covered Security’’ is any security that falls
within the definition in section 2(a)(36) of the Act,
except for direct obligations of the U.S.
Government, bankers’ acceptances, bank certificates
of deposit, commercial paper and high quality
short-term debt instruments, including repurchase
agreements, and shares issued by open-end funds.
Rule 17j–1(a)(4).
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codes of ethics, (ii) submit the code and any
material changes to the code, along with a
certification that it has adopted procedures
reasonably necessary to prevent Access
Persons from violating the code of ethics, to
the fund board for approval, (iii) use
reasonable diligence and institute procedures
reasonably necessary to prevent violations of
the code, (iv) submit a written report to the
fund describing any issues arising under the
code and procedures and certifying that the
17j–1 entity has adopted procedures
reasonably necessary to prevent Access
Persons from violating the code, (v) identify
Access Persons and notify them of their
reporting obligations, and (vi) maintain and
make available to the Commission for review
certain records related to the code of ethics
and transaction reporting by Access Persons.
The rule requires each Access Person of a
fund (other than a money market fund or a
fund that does not invest in Covered
Securities) and of an investment adviser or
principal underwriter of the fund, who is not
subject to an exception,6 to file: (i) Within 10
days of becoming an Access Person, a dated
initial holdings report that sets forth certain
information with respect to the Access
Person’s securities and accounts; (ii) dated
quarterly transaction reports within 30 days
of the end of each calendar quarter providing
certain information with respect to any
securities transactions during the quarter and
any account established by the Access Person
in which any securities were held during the
quarter; and (iii) dated annual holding
reports providing information with respect to
each Covered Security the Access Person
beneficially owns and accounts in which
securities are held for his or her benefit. In
addition, rule 17j–1 requires investment
personnel of a fund or its investment adviser,
before acquiring beneficial ownership in
securities through an initial public offering
(IPO) or in a private placement, to obtain
6 Rule 17j–1(d)(2) contains the following
exceptions: (i) An Access Person need not file a
report for transactions effected for, and securities
held in, any account over which the Access Person
does not have control; (ii) an independent director
of the fund, who would otherwise be required to
report solely by reason of being a fund director and
who does not have information with respect to the
fund’s transactions in a particular security, does not
have to file an initial holdings report or a quarterly
transaction report,; (iii) an Access Person of a
principal underwriter of the fund does not have to
file reports if the principal underwriter is not
affiliated with the fund (unless the fund is a unit
investment trust) or any investment adviser of the
fund and the principal underwriter of the fund does
not have any officer, director, or general partner
who serves in one of those capacities for the fund
or any investment adviser of the fund; (iv) an
Access Person to an investment adviser need not
make quarterly reports if the report would duplicate
information provided under the reporting
provisions of the Investment Adviser’s Act of 1940;
(v) an Access Person need not make quarterly
transaction reports if the information provided in
the report would duplicate information received by
the 17j–1 organization in the form of broker trade
confirmations or account statements or information
otherwise in the records of the 17j–1 organization;
and (vi) an Access Person need not make quarterly
transaction reports with respect to transactions
effected pursuant to an Automatic Investment Plan.
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6363
approval from the fund or the fund’s
investment adviser.
The requirements that the management of
a rule 17j–1 organization provide the fund’s
board with new and amended codes of ethics
and an annual issues and certification report
are intended to enhance board oversight of
personal investment policies applicable to
the fund and the personal investment
activities of Access Persons. The
requirements that Access Persons provide
initial holdings reports, quarterly transaction
reports, and annual holdings reports and
request approval for purchases of securities
through IPOs and private placements are
intended to help fund compliance personnel
and the Commission’s examinations staff
monitor potential conflicts of interest and
detect potentially abusive activities. The
requirement that each rule 17j–1 organization
maintain certain records is intended to assist
the organization and the Commission’s
examinations staff in determining if there
have been violations of rule 17j–1.
We estimate that annually there are
approximately 75,496 respondents under rule
17j–1, of which 5,496 are rule 17j–1
organizations and 70,000 are Access Persons.
In the aggregate, these respondents make
approximately 107,780 responses annually.
We estimate that the total annual burden of
complying with the information collection
requirements in rule 17j–1 is approximately
387,599 hours. This hour burden represents
time spent by Access Persons that must file
initial and annual holdings reports and
quarterly transaction reports, investment
personnel that must obtain approval before
acquiring beneficial ownership in any
securities through an IPO or private
placement, and the responsibilities of Rule
17j–1 organizations arising from information
collection requirements under rule 17j–1.
These include notifying Access Persons of
their reporting obligations, preparing an
annual rule 17j–1 report and certification for
the board, documenting their approval or
rejection of IPO and private placement
requests, maintaining annual rule 17j–1
records, maintaining electronic reporting and
recordkeeping systems, amending their codes
of ethics as necessary, and, for new fund
complexes, adopting a code of ethics.
We estimate that there is an annual cost
burden of approximately $5,000 per fund
complex, for a total of $4,160,000, associated
with complying with the information
collection requirements in rule 17j–1. This
represents the costs of purchasing and
maintaining computers and software to assist
funds in carrying out rule 17j–1
recordkeeping.
These burden hour and cost estimates are
based upon the Commission staff’s
experience and discussions with the fund
industry. The estimates of average burden
hours and costs 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 the costs of Commission
rules.
Compliance with the collection of
information requirements of the rule is
mandatory and is necessary to comply with
the requirements of the rule in general. An
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Federal Register / Vol. 78, No. 20 / Wednesday, January 30, 2013 / Notices
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. Rule 17j–1
requires that records be maintained for at
least five years in an easily accessible place.7
Please direct general comments regarding
the above information to the following
persons: (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, 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: January 24, 2013.
Kevin M. O’Neill,
Deputy Secretary.
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.
Regulation E (17 CFR 230.601 to
230.610a) exempts from registration
under the Securities Act of 1933 (15
U.S.C. 77a et seq.) (‘‘Securities Act’’)
securities issued by a small business
investment company (‘‘SBIC’’) which is
registered under the Investment
Company Act of 1940 (15 U.S.C. 80a–1
et seq.) (‘‘Investment Company Act’’) or
a closed-end investment company that
has elected to be regulated as a business
development company (‘‘BDC’’) under
the Investment Company Act, so long as
the aggregate offering price of all
securities of the issuer that may be sold
within a 12-month period does not
exceed $5,000,000 and certain other
conditions are met. Rule 607 under
Regulation E (17 CFR 230.607) entitled,
‘‘Sales material to be filed,’’ requires
sales material used in connection with
securities offerings under Regulation E
to be filed with the Commission at least
five days (excluding weekends and
holidays) prior to its use.1 Commission
staff reviews sales material filed under
rule 607 for materially misleading
statements and omissions. The
requirements of rule 607 are designed to
protect investors from the use of false or
misleading sales material in connection
with Regulation E offerings.
Respondents to this collection of
information include SBICs and BDCs
making an offering of securities under
Regulation E. Each respondent’s
reporting burden under rule 607 relates
to the burden associated with filing its
sales material electronically. The
burden of filing electronically, however,
is negligible and there have been no
filings made under this rule, so this
collection of information does not
impose any burden on the industry.
However, we are requesting one annual
response and an annual burden of one
hour for administrative purposes. The
estimate of average burden hours is
made solely for purposes of the
Paperwork Reduction Act and is not
derived from a quantitative,
comprehensive, or even representative
survey or study of the burdens
associated with Commission rules and
forms.
The requirements of this collection of
information are mandatory. 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 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
7 If information collected pursuant to the rule is
reviewed by the Commission’s examination staff, it
will be accorded the same level of confidentiality
accorded to other responses provided to the
Commission in the context of its examination and
oversight program. See section 31(c) of the
Investment Company Act (15 U.S.C. 80a–30(c)).
1 Sales material includes advertisements, articles
or other communications to be published in
newspapers, magazines, or other periodicals; radio
and television scripts; and letters, circulars or other
written communications proposed to be sent given
or otherwise communicated to more than ten
persons.
[FR Doc. 2013–01935 Filed 1–29–13; 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.
mstockstill on DSK4VPTVN1PROD with
Extension:
Rule 607, OMB Control No. 3235–0634,
SEC File No. 270–561.
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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: January 24, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–01937 Filed 1–29–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Rule 17a–8; OMB Control No. 3235–0235,
SEC File No. 270–225.
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.
Rule 17a–8 (17 CFR 270.17a–8) under
the Investment Company Act of 1940
(the ‘‘Act’’) (15 U.S.C. 80a) is entitled
‘‘Mergers of affiliated companies.’’ Rule
17a–8 exempts certain mergers and
similar business combinations
(‘‘mergers’’) of affiliated registered
investment companies (‘‘funds’’) from
prohibitions under section 17(a) of the
Act (15 U.S.C. 80a–17(a)) on purchases
and sales between a fund and its
affiliates. The rule requires fund
directors to consider certain issues and
to record their findings in board
minutes. The rule requires the directors
of any fund merging with an
unregistered entity to approve
procedures for the valuation of assets
received from that entity. These
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]]>Agencies
[Federal Register Volume 78, Number 20 (Wednesday, January 30, 2013)]
[Notices]
[Pages 6362-6364]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-01935]
-----------------------------------------------------------------------
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 17j-1; OMB Control No. 3235-0224, SEC File No. 270-239.
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.
Conflicts of interest between investment company personnel (such
as portfolio managers) and their funds can arise when these persons
buy and sell securities for their own accounts (``personal
investment activities''). These conflicts arise because fund
personnel have the opportunity to profit from information about fund
transactions, often to the detriment of fund investors. Beginning in
the early 1960s, Congress and the Securities and Exchange Commission
(``Commission'') sought to devise a regulatory scheme to effectively
address these potential conflicts. These efforts culminated in the
addition of section 17(j) to the Investment Company Act of 1940 (the
``Investment Company Act'') (15 U.S.C. 80a-17(j)) in 1970 and the
adoption by the Commission of rule 17j-1 (17 CFR 270.17j-1) in
1980.\1\ The
[[Page 6363]]
Commission proposed amendments to rule 17j-1 in 1995 in response to
recommendations made in the first detailed study of fund policies
concerning personal investment activities by the Commission's
Division of Investment Management since rule 17j-1 was adopted.
Amendments to rule 17j-1, which were adopted in 1999, enhanced fund
oversight of personal investment activities and the board's role in
carrying out that oversight.\2\ Additional amendments to rule 17j-1
were made in 2004, conforming rule 17j-1 to rule 204A-1 under the
Investment Advisers Act of 1940 (15 U.S.C. 80b), avoiding
duplicative reporting, and modifying certain definitions and time
restrictions.\3\
---------------------------------------------------------------------------
\1\ Prevention of Certain Unlawful Activities with Respect to
Registered Investment Companies, Investment Company Act Release No.
11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)).
\2\ Personal Investment Activities of Investment Company
Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999)
(64 FR 46821 (Aug. 27, 1999)).
\3\ Investment Adviser Codes of Ethics, Investment Advisers Act
Release No. 2256 (Jul. 2, 2004) (69 FR 41696 (Jul. 9, 2004)).
---------------------------------------------------------------------------
Section 17(j) makes it unlawful for persons affiliated with a
registered investment company (``fund'') or with the fund's
investment adviser or principal underwriter (each a ``17j-1
organization''), in connection with the purchase or sale of
securities held or to be acquired by the investment company, to
engage in any fraudulent, deceptive, or manipulative act or practice
in contravention of the Commission's rules and regulations. Section
17(j) also authorizes the Commission to promulgate rules requiring
17j-1 organizations to adopt codes of ethics.
In order to implement section 17(j), rule 17j-1 imposes certain
requirements on 17j-1 organizations and ``Access Persons'' \4\ of
those organizations. The rule prohibits fraudulent, deceptive or
manipulative acts by persons affiliated with a 17j-1 organization in
connection with their personal securities transactions in securities
held or to be acquired by the fund. The rule requires each 17j-1
organization, unless it is a money market fund or a fund that does
not invest in Covered Securities,\5\ to: (i) Adopt a written codes
of ethics, (ii) submit the code and any material changes to the
code, along with a certification that it has adopted procedures
reasonably necessary to prevent Access Persons from violating the
code of ethics, to the fund board for approval, (iii) use reasonable
diligence and institute procedures reasonably necessary to prevent
violations of the code, (iv) submit a written report to the fund
describing any issues arising under the code and procedures and
certifying that the 17j-1 entity has adopted procedures reasonably
necessary to prevent Access Persons from violating the code, (v)
identify Access Persons and notify them of their reporting
obligations, and (vi) maintain and make available to the Commission
for review certain records related to the code of ethics and
transaction reporting by Access Persons.
---------------------------------------------------------------------------
\4\ Rule 17j-1(a)(1) defines an ``access person'' as ``Any
Advisory Person of a Fund or of a Fund's investment adviser. If an
investment adviser's primary business is advising Funds or other
advisory clients, all of the investment adviser's directors,
officers, and general partners are presumed to be Access Persons of
any Fund advised by the investment adviser. All of a Fund's
directors, officers, and general partners are presumed to be Access
Persons of the Fund.'' The definition of Access Person also includes
``Any director, officer or general partner of a principal
underwriter who, in the ordinary course of business, makes,
participates in or obtains information regarding, the purchase or
sale of Covered Securities by the Fund for which the principal
underwriter acts, or whose functions or duties in the ordinary
course of business relate to the making of any recommendation to the
Fund regarding the purchase or sale of Covered Securities.'' Rule
17j-1(a)(1).
\5\ A ``Covered Security'' is any security that falls within the
definition in section 2(a)(36) of the Act, except for direct
obligations of the U.S. Government, bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-
term debt instruments, including repurchase agreements, and shares
issued by open-end funds. Rule 17j-1(a)(4).
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The rule requires each Access Person of a fund (other than a
money market fund or a fund that does not invest in Covered
Securities) and of an investment adviser or principal underwriter of
the fund, who is not subject to an exception,\6\ to file: (i) Within
10 days of becoming an Access Person, a dated initial holdings
report that sets forth certain information with respect to the
Access Person's securities and accounts; (ii) dated quarterly
transaction reports within 30 days of the end of each calendar
quarter providing certain information with respect to any securities
transactions during the quarter and any account established by the
Access Person in which any securities were held during the quarter;
and (iii) dated annual holding reports providing information with
respect to each Covered Security the Access Person beneficially owns
and accounts in which securities are held for his or her benefit. In
addition, rule 17j-1 requires investment personnel of a fund or its
investment adviser, before acquiring beneficial ownership in
securities through an initial public offering (IPO) or in a private
placement, to obtain approval from the fund or the fund's investment
adviser.
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\6\ Rule 17j-1(d)(2) contains the following exceptions: (i) An
Access Person need not file a report for transactions effected for,
and securities held in, any account over which the Access Person
does not have control; (ii) an independent director of the fund, who
would otherwise be required to report solely by reason of being a
fund director and who does not have information with respect to the
fund's transactions in a particular security, does not have to file
an initial holdings report or a quarterly transaction report,; (iii)
an Access Person of a principal underwriter of the fund does not
have to file reports if the principal underwriter is not affiliated
with the fund (unless the fund is a unit investment trust) or any
investment adviser of the fund and the principal underwriter of the
fund does not have any officer, director, or general partner who
serves in one of those capacities for the fund or any investment
adviser of the fund; (iv) an Access Person to an investment adviser
need not make quarterly reports if the report would duplicate
information provided under the reporting provisions of the
Investment Adviser's Act of 1940; (v) an Access Person need not make
quarterly transaction reports if the information provided in the
report would duplicate information received by the 17j-1
organization in the form of broker trade confirmations or account
statements or information otherwise in the records of the 17j-1
organization; and (vi) an Access Person need not make quarterly
transaction reports with respect to transactions effected pursuant
to an Automatic Investment Plan.
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The requirements that the management of a rule 17j-1
organization provide the fund's board with new and amended codes of
ethics and an annual issues and certification report are intended to
enhance board oversight of personal investment policies applicable
to the fund and the personal investment activities of Access
Persons. The requirements that Access Persons provide initial
holdings reports, quarterly transaction reports, and annual holdings
reports and request approval for purchases of securities through
IPOs and private placements are intended to help fund compliance
personnel and the Commission's examinations staff monitor potential
conflicts of interest and detect potentially abusive activities. The
requirement that each rule 17j-1 organization maintain certain
records is intended to assist the organization and the Commission's
examinations staff in determining if there have been violations of
rule 17j-1.
We estimate that annually there are approximately 75,496
respondents under rule 17j-1, of which 5,496 are rule 17j-1
organizations and 70,000 are Access Persons. In the aggregate, these
respondents make approximately 107,780 responses annually. We
estimate that the total annual burden of complying with the
information collection requirements in rule 17j-1 is approximately
387,599 hours. This hour burden represents time spent by Access
Persons that must file initial and annual holdings reports and
quarterly transaction reports, investment personnel that must obtain
approval before acquiring beneficial ownership in any securities
through an IPO or private placement, and the responsibilities of
Rule 17j-1 organizations arising from information collection
requirements under rule 17j-1. These include notifying Access
Persons of their reporting obligations, preparing an annual rule
17j-1 report and certification for the board, documenting their
approval or rejection of IPO and private placement requests,
maintaining annual rule 17j-1 records, maintaining electronic
reporting and recordkeeping systems, amending their codes of ethics
as necessary, and, for new fund complexes, adopting a code of
ethics.
We estimate that there is an annual cost burden of approximately
$5,000 per fund complex, for a total of $4,160,000, associated with
complying with the information collection requirements in rule 17j-
1. This represents the costs of purchasing and maintaining computers
and software to assist funds in carrying out rule 17j-1
recordkeeping.
These burden hour and cost estimates are based upon the
Commission staff's experience and discussions with the fund
industry. The estimates of average burden hours and costs 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 the costs of Commission rules.
Compliance with the collection of information requirements of
the rule is mandatory and is necessary to comply with the
requirements of the rule in general. An
[[Page 6364]]
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. Rule 17j-1 requires that records be
maintained for at least five years in an easily accessible place.\7\
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\7\ If information collected pursuant to the rule is reviewed by
the Commission's examination staff, it will be accorded the same
level of confidentiality accorded to other responses provided to the
Commission in the context of its examination and oversight program.
See section 31(c) of the Investment Company Act (15 U.S.C. 80a-
30(c)).
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Please direct general comments regarding the above information
to the following persons: (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, 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: January 24, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-01935 Filed 1-29-13; 8:45 am]
BILLING CODE 8011-01-P
