Submission for OMB Review; Comment Request, 10216-10217 [2013-03273]
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Federal Register / Vol. 78, No. 30 / Wednesday, February 13, 2013 / Notices
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for 60 days after the signature date of
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Comments and questions should be
directed to the OMB reviewer listed
below by March 15, 2013. Comments
received after this date will be
considered if it is practical to do so, but
assurance of consideration cannot be
given to comments received after this
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Chad Whiteman, Desk Officer, Office
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(3150–0008), NEOB–10202, Office of
Management and Budget, Washington,
DC 20503.
Comments can also be emailed to
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Dated at Rockville, Maryland, this 8th day
of February, 2013.
For the Nuclear Regulatory Commission.
Tremaine Donnell,
NRC Clearance Officer, Office of Information
Services.
[FR Doc. 2013–03263 Filed 2–12–13; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
mstockstill on DSK4VPTVN1PROD with NOTICES
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Rule 17f–4; OMB Control No. 3235–0225,
SEC File No. 270–232.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l–3520) (the ‘‘Paperwork
Reduction Act’’), the Securities and
Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collection of information
VerDate Mar<15>2010
17:21 Feb 12, 2013
Jkt 229001
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Section 17(f) (15 U.S.C. 80a–17(f))
under the Investment Company Act of
1940 (the ‘‘Act’’) 1 permits registered
management investment companies and
their custodians to deposit the securities
they own in a system for the central
handling of securities (‘‘securities
depositories’’), subject to rules adopted
by the Commission.
Rule 17f–4 (17 CFR 270.17f–4) under
the Act specifies the conditions for the
use of securities depositories by funds 2
and their custodians.
The Commission staff estimates that
140 respondents (including an
estimated 79 active funds that may deal
directly with a securities depository, an
estimated 42 custodians, and 19
possible securities depositories) 3 are
subject to the requirements in rule 17f–
4. The rule is elective, but most, if not
all, funds use depository custody
arrangements.4
Rule 17f–4 contains two general
conditions. First, a fund’s custodian
must be obligated, at a minimum, to
exercise due care in accordance with
reasonable commercial standards in
discharging its duty as a securities
intermediary to obtain and thereafter
maintain financial assets.5 This
obligation does not contain a collection
of information because it does not
1 15
U.S.C. 80a.
amended in 2003, rule 17f–4 permits any
registered investment company, including a unit
investment trust or a face-amount certificate
company, to use a security depository. See Custody
of Investment Company Assets With a Securities
Depository, Investment Company Act Release No.
25934 (Feb. 13, 2003) (68 FR 8438 (Feb. 20, 2003)).
The term ‘‘fund’’ is used in this Notice to mean a
registered investment company.
3 The Commission staff estimates that, as
permitted by the rule, an estimated 2% of all active
funds may deal directly with a securities depository
instead of using an intermediary. The number of
custodians is estimated based on information from
Morningstar DirectSM. The Commission staff
estimates the number of possible securities
depositories by adding the 12 Federal Reserve
Banks and 7 active registered clearing agencies. The
Commission staff recognizes that not all of these
entities may currently be acting as a securities
depository for fund securities.
4 Based on responses to Item 18 of Form N–SAR
(17 CFR 274.101), approximately 98 percent of
funds’ custodians maintain some or all fund
securities in a securities depository pursuant to rule
17f–4.
5 Rule 17f–4(a)(1). This provision incorporates
into the rule the standard of care provided by
section 504(c) of Article 8 of the Uniform
Commercial Code when the parties have not agreed
to a standard. Rule 17f–4 does not impose any
substantive obligations beyond those contained in
Article 8. Uniform Commercial Code, Revised
Article 8—Investment Securities (1994 Official Text
with Comments) (‘‘Revised Article 8’’).
2 As
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
impose identical reporting,
recordkeeping or disclosure
requirements. Funds and custodians
may determine the specific measures
the custodian will take to comply with
this obligation.6 If the fund deals
directly with a depository, the
depository’s contract or written rules for
its participants must provide that the
depository will meet similar obligations,
which is a collection of information for
purposes of the Paperwork Reduction
Act. All funds that deal directly with
securities depositories in reliance on
rule 17f–4 should have either modified
their contracts with the relevant
securities depository, or negotiated a
modification in the securities
depository’s written rules when the rule
was amended. Therefore, we estimate
there is no ongoing burden associated
with this collection of information.7
Second, the custodian must provide,
promptly upon request by the fund,
such reports as are available about the
internal accounting controls and
financial strength of the custodian.8 If a
fund deals directly with a depository,
the depository’s contract with or written
rules for its participants must provide
that the depository will provide similar
financial reports,9 which is a collection
of information for purposes of the
Paperwork Reduction Act. Custodians
and depositories usually transmit
financial reports to funds twice each
year.10 The Commission staff estimates
that 42 custodians spend approximately
787 hours (by support staff) annually in
transmitting such reports to funds.11 In
addition, approximately 79 funds (i.e.,
two percent of all funds) deal directly
with a securities depository and may
6 Moreover, the rule does not impose any
requirement regarding evidence of the obligation.
7 The Commission staff assumes that new funds
relying on 17f–4 would choose to use a custodian
instead of directly dealing with a securities
depository because of the high costs associated with
maintaining an account with a securities
depository. Thus new funds would not be subject
to this condition.
8 Rule 17f–4(a)(2).
9 Rule 17f–4(b)(1)(ii).
10 The estimated 42 custodians would handle
requests for reports from an estimated 3,371 fund
clients (approximately 80 fund clients per
custodian) and the depositories from the remaining
79 funds that choose to deal directly with a
depository. It is our understanding based on staff
conversations with industry representatives that
custodians and depositories transmit these reports
to clients in the normal course of their activities as
a good business practice regardless of whether they
are requested. Therefore, for purposes of this
Paperwork Reduction Act estimate, the Commission
staff assumes that custodians transmit the reports to
all fund clients.
11 (3,371 fund clients × 2 reports) = 6,742
transmissions. The staff estimates that each
transmission would take approximately 7 minutes
for a total of approximately 787 hours (7 minutes
× 6,742 transmissions).
E:\FR\FM\13FEN1.SGM
13FEN1
Federal Register / Vol. 78, No. 30 / Wednesday, February 13, 2013 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
request periodic reports from their
depository. Commission staff estimates
that depositories spend approximately
18 hours (by support staff) annually
transmitting reports to the 79 funds.12
The total annual burden estimate for
compliance with rule 17f–4’s reporting
requirement is therefore 805 hours.13
If a fund deals directly with a
securities depository, rule 17f–4
requires that the fund implement
internal control systems reasonably
designed to prevent an unauthorized
officer’s instructions (by providing at
least for the form, content, and means of
giving, recording, and reviewing all
officers’ instructions).14 All funds that
seek to rely on rule 17f–4 should have
already implemented these internal
control systems when the rule was
amended. Therefore, there is no ongoing
burden associated with this collection of
information requirement.15
Based on the foregoing, the
Commission staff estimates that the total
annual hour burden of the rule’s
collection of information requirement is
805 hours.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. This estimate
is not derived from a comprehensive or
even representative survey or study of
the costs of Commission rules.
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid
control number.
Written comments are invited on: (a)
Whether the collection of information is
necessary for the proper performance of
the functions of the Commission,
including whether the information will
have practical utility; (b) the accuracy of
the Commission’s estimate of the
burden of the collections of information;
(c) ways to enhance the quality, utility,
and clarity of the information collected;
and (d) ways to minimize the burdens
of the collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
12 (79 fund clients who may deal directly with a
securities depository × 2 reports) = 158
transmissions. The staff estimates that each
transmission would take approximately 7 minutes
for a total of approximately 18 hours (7 minutes ×
158 transmissions).
13 787 hours for custodians and 18 hours for
securities depositories.
14 Rule 17f–4(b)(2).
15 The Commission staff assumes that new funds
relying on 17f–4 would choose to use a custodian
instead of directly dealing with a securities
depository because of the high costs associated with
maintaining an account with a securities
depository. Thus new funds would not be subject
to this condition.
VerDate Mar<15>2010
17:21 Feb 12, 2013
Jkt 229001
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
Please direct your written comments
to Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way,
Alexandria, VA 22312; or send an email
to: PRA_Mailbox@sec.gov.
Dated: February 7, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–03273 Filed 2–12–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–489, OMB Control No.
3235–0541]
Proposed Collection; Comment
Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0123.
Extension:
Rule 606 of Regulation NMS.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 606 of Regulation
NMS (‘‘Rule 606’’) (17 CFR 242.606),
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.). The
Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 606 (formerly known as Rule
11Ac1–6) requires broker-dealers to
prepare and disseminate quarterly order
routing reports. Much of the information
needed to generate these reports already
should be collected by broker-dealers in
connection with their periodic
evaluations of their order routing
practices. Broker-dealers must conduct
such evaluations to fulfill the duty of
best execution that they owe their
customers.
The collection of information
obligations of Rule 606 apply to brokerdealers that route non-directed customer
orders in covered securities. The
Commission estimates that out of the
currently 5178 broker-dealers that are
subject to the collection of information
obligations of Rule 606, clearing brokers
bear a substantial portion of the burden
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
10217
of complying with the reporting and
recordkeeping requirements of Rule 606
on behalf of small to mid-sized
introducing firms. There currently are
approximately 527 clearing brokers. In
addition, there are approximately 2426
introducing brokers that receive funds
or securities from their customers.
Because at least some of these firms also
may have greater involvement in
determining where customer orders are
routed for execution, they have been
included, along with clearing brokers, in
estimating the total burden of Rule 606.
The Commission staff estimates that
each firm significantly involved in order
routing practices incurs an average
burden of 40 hours to prepare and
disseminate a quarterly report required
by Rule 606, or a burden of 160 hours
per year. With an estimated 2953 1
broker-dealers significantly involved in
order routing practices, the total
industry-wide burden per year to
comply with the quarterly reporting
requirement in Rule 606 is estimated to
be 472,480 hours (160 × 2953).
Rule 606 also requires broker-dealers
to respond to individual customer
requests for information on orders
handled by the broker-dealer for that
customer. Clearing brokers generally
bear the burden of responding to these
requests. The Commission staff
estimates that an average clearing broker
incurs an annual burden of 400 hours
(2000 responses × 0.2 hours/response) to
prepare, disseminate, and retain
responses to customers required by Rule
606. With an estimated 527 clearing
brokers subject to Rule 606, the total
industry-wide burden per year to
comply with the customer response
requirement in Rule 606 is estimated to
be 210,800 hours (527 × 400).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information will have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
The Commission may not conduct or
sponsor a collection of information
1 527 clearing brokers + 2426 introducing brokers
= 2953.
E:\FR\FM\13FEN1.SGM
13FEN1
]]>Agencies
[Federal Register Volume 78, Number 30 (Wednesday, February 13, 2013)]
[Notices]
[Pages 10216-10217]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-03273]
=======================================================================
-----------------------------------------------------------------------
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 17f-4; OMB Control No. 3235-0225, SEC File No. 270-232.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 350l-3520) (the ``Paperwork Reduction Act''),
the Securities and Exchange Commission (the ``Commission'') is
soliciting comments on the collection of information summarized below.
The Commission plans to submit this existing collection of information
to the Office of Management and Budget for extension and approval.
Section 17(f) (15 U.S.C. 80a-17(f)) under the Investment Company
Act of 1940 (the ``Act'') \1\ permits registered management investment
companies and their custodians to deposit the securities they own in a
system for the central handling of securities (``securities
depositories''), subject to rules adopted by the Commission.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a.
---------------------------------------------------------------------------
Rule 17f-4 (17 CFR 270.17f-4) under the Act specifies the
conditions for the use of securities depositories by funds \2\ and
their custodians.
---------------------------------------------------------------------------
\2\ As amended in 2003, rule 17f-4 permits any registered
investment company, including a unit investment trust or a face-
amount certificate company, to use a security depository. See
Custody of Investment Company Assets With a Securities Depository,
Investment Company Act Release No. 25934 (Feb. 13, 2003) (68 FR 8438
(Feb. 20, 2003)). The term ``fund'' is used in this Notice to mean a
registered investment company.
---------------------------------------------------------------------------
The Commission staff estimates that 140 respondents (including an
estimated 79 active funds that may deal directly with a securities
depository, an estimated 42 custodians, and 19 possible securities
depositories) \3\ are subject to the requirements in rule 17f-4. The
rule is elective, but most, if not all, funds use depository custody
arrangements.\4\
---------------------------------------------------------------------------
\3\ The Commission staff estimates that, as permitted by the
rule, an estimated 2% of all active funds may deal directly with a
securities depository instead of using an intermediary. The number
of custodians is estimated based on information from Morningstar
Direct\SM\. The Commission staff estimates the number of possible
securities depositories by adding the 12 Federal Reserve Banks and 7
active registered clearing agencies. The Commission staff recognizes
that not all of these entities may currently be acting as a
securities depository for fund securities.
\4\ Based on responses to Item 18 of Form N-SAR (17 CFR
274.101), approximately 98 percent of funds' custodians maintain
some or all fund securities in a securities depository pursuant to
rule 17f-4.
---------------------------------------------------------------------------
Rule 17f-4 contains two general conditions. First, a fund's
custodian must be obligated, at a minimum, to exercise due care in
accordance with reasonable commercial standards in discharging its duty
as a securities intermediary to obtain and thereafter maintain
financial assets.\5\ This obligation does not contain a collection of
information because it does not impose identical reporting,
recordkeeping or disclosure requirements. Funds and custodians may
determine the specific measures the custodian will take to comply with
this obligation.\6\ If the fund deals directly with a depository, the
depository's contract or written rules for its participants must
provide that the depository will meet similar obligations, which is a
collection of information for purposes of the Paperwork Reduction Act.
All funds that deal directly with securities depositories in reliance
on rule 17f-4 should have either modified their contracts with the
relevant securities depository, or negotiated a modification in the
securities depository's written rules when the rule was amended.
Therefore, we estimate there is no ongoing burden associated with this
collection of information.\7\
---------------------------------------------------------------------------
\5\ Rule 17f-4(a)(1). This provision incorporates into the rule
the standard of care provided by section 504(c) of Article 8 of the
Uniform Commercial Code when the parties have not agreed to a
standard. Rule 17f-4 does not impose any substantive obligations
beyond those contained in Article 8. Uniform Commercial Code,
Revised Article 8--Investment Securities (1994 Official Text with
Comments) (``Revised Article 8'').
\6\ Moreover, the rule does not impose any requirement regarding
evidence of the obligation.
\7\ The Commission staff assumes that new funds relying on 17f-4
would choose to use a custodian instead of directly dealing with a
securities depository because of the high costs associated with
maintaining an account with a securities depository. Thus new funds
would not be subject to this condition.
---------------------------------------------------------------------------
Second, the custodian must provide, promptly upon request by the
fund, such reports as are available about the internal accounting
controls and financial strength of the custodian.\8\ If a fund deals
directly with a depository, the depository's contract with or written
rules for its participants must provide that the depository will
provide similar financial reports,\9\ which is a collection of
information for purposes of the Paperwork Reduction Act. Custodians and
depositories usually transmit financial reports to funds twice each
year.\10\ The Commission staff estimates that 42 custodians spend
approximately 787 hours (by support staff) annually in transmitting
such reports to funds.\11\ In addition, approximately 79 funds (i.e.,
two percent of all funds) deal directly with a securities depository
and may
[[Page 10217]]
request periodic reports from their depository. Commission staff
estimates that depositories spend approximately 18 hours (by support
staff) annually transmitting reports to the 79 funds.\12\ The total
annual burden estimate for compliance with rule 17f-4's reporting
requirement is therefore 805 hours.\13\
---------------------------------------------------------------------------
\8\ Rule 17f-4(a)(2).
\9\ Rule 17f-4(b)(1)(ii).
\10\ The estimated 42 custodians would handle requests for
reports from an estimated 3,371 fund clients (approximately 80 fund
clients per custodian) and the depositories from the remaining 79
funds that choose to deal directly with a depository. It is our
understanding based on staff conversations with industry
representatives that custodians and depositories transmit these
reports to clients in the normal course of their activities as a
good business practice regardless of whether they are requested.
Therefore, for purposes of this Paperwork Reduction Act estimate,
the Commission staff assumes that custodians transmit the reports to
all fund clients.
\11\ (3,371 fund clients x 2 reports) = 6,742 transmissions. The
staff estimates that each transmission would take approximately 7
minutes for a total of approximately 787 hours (7 minutes x 6,742
transmissions).
\12\ (79 fund clients who may deal directly with a securities
depository x 2 reports) = 158 transmissions. The staff estimates
that each transmission would take approximately 7 minutes for a
total of approximately 18 hours (7 minutes x 158 transmissions).
\13\ 787 hours for custodians and 18 hours for securities
depositories.
---------------------------------------------------------------------------
If a fund deals directly with a securities depository, rule 17f-4
requires that the fund implement internal control systems reasonably
designed to prevent an unauthorized officer's instructions (by
providing at least for the form, content, and means of giving,
recording, and reviewing all officers' instructions).\14\ All funds
that seek to rely on rule 17f-4 should have already implemented these
internal control systems when the rule was amended. Therefore, there is
no ongoing burden associated with this collection of information
requirement.\15\
---------------------------------------------------------------------------
\14\ Rule 17f-4(b)(2).
\15\ The Commission staff assumes that new funds relying on 17f-
4 would choose to use a custodian instead of directly dealing with a
securities depository because of the high costs associated with
maintaining an account with a securities depository. Thus new funds
would not be subject to this condition.
---------------------------------------------------------------------------
Based on the foregoing, the Commission staff estimates that the
total annual hour burden of the rule's collection of information
requirement is 805 hours.
The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act. This estimate is not derived
from a comprehensive or even representative survey or study of the
costs of Commission rules.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid control number.
Written comments are invited on: (a) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (b) the accuracy of the Commission's estimate of the burden of
the collections of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burdens of the collection of information on respondents,
including through the use of automated collection techniques or other
forms of information technology. Consideration will be given to
comments and suggestions submitted in writing within 60 days of this
publication.
Please direct your written comments to Thomas Bayer, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an
email to: PRA_Mailbox@sec.gov.
Dated: February 7, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03273 Filed 2-12-13; 8:45 am]
BILLING CODE 8011-01-P
