Submission for OMB Review; Comment Request, 37603-37605 [2013-14799]
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Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Notices
et seq.) (‘‘Securities Act’’) of securities
of any unit investment trust (‘‘UIT’’)
registered under the Investment
Company Act of 1940 (15 U.S.C. 80a–1
et seq.) (‘‘Investment Company Act’’) on
Form N–8B–2.1 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.
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.
Section 10(a)(3) of the Securities Act
(15 U.S.C. 77j(a)(3)) provides that when
a prospectus is used more than nine
months after the effective date of the
registration statement, the information
therein shall be as of a date not more
than sixteen months prior to such use.
As a result, most UITs update their
registration statements under the
Securities Act on an annual basis in
order that their sponsors may continue
to maintain a secondary market in the
units. UITs that are registered under the
Investment Company Act on Form N–
8B–2 file post-effective amendments to
their registration statements on Form S–
6 in order to update their prospectuses.
The purpose of Form S–6 is to meet
the filing and disclosure requirements of
the Securities Act and to enable filers to
provide investors with information
necessary to evaluate an investment in
the security. This information collection
differs significantly from many other
federal information collections, which
are primarily for the use and benefit of
the collecting agency. The information
required to be filed with the
Commission permits verification of
compliance with securities law
requirements and assures the public
availability and dissemination of the
information.
The Commission estimates that there
are approximately 1,287 initial
registration statements filed on Form S–
6 annually and approximately 1,268
annual post-effective amendments to
previously effective registration
statements filed on Form S–6. The
Commission estimates that the hour
burden for preparing and filing an
initial registration statement on Form S–
6 is 45 hours and for preparing and
1 Form N–8B–2 is the form used by UITs other
than separate accounts that are currently issuing
securities, including UITs that are issuers of
periodic payment plan certificates and UITs of
which a management investment company is the
sponsor or depositor to register under the
Investment Company Act pursuant to Section 8
thereof.
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filing a post-effective amendment to a
previously effective registration
statement filed on Form S–6 is 40 hours.
Therefore, the total burden of preparing
and filing Form S–6 for all affected UITs
is 108,635 hours.
The information collection
requirements imposed by Form S–6 are
mandatory. Responses to the collection
of information will not be kept
confidential. An agency may not
conduct or sponsor, and a person is not
required to respond to a collection of
information unless it displays a
currently valid control number.
The public may view the background
documentation for this information
collection at the following Web site,
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to:
Shagufta_Ahmed@omb.eop.gov; and (ii)
Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way,
Alexandria, VA 22312 or send an email
to: PRA_Mailbox@sec.gov. Comments
must be submitted to OMB within 30
days of this notice.
Dated: June 17, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–14794 Filed 6–20–13; 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 7d–1, OMB Control No. 3235–0311,
SEC File No. 270–176.
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’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Section 7(d) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
7(d)) (the ‘‘Act’’ or ‘‘Investment
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37603
Company Act’’) requires an investment
company (‘‘fund’’) organized outside the
United States (‘‘foreign fund’’) to obtain
an order from the Commission allowing
the fund to register under the Act before
making a public offering of its securities
through the United States mail or any
means of interstate commerce. The
Commission may issue an order only if
it finds that it is both legally and
practically feasible effectively to enforce
the provisions of the Act against the
foreign fund, and that the registration of
the fund is consistent with the public
interest and protection of investors.
Rule 7d–1 (17 CFR 270.7d–1) under
the Act, which was adopted in 1954,
specifies the conditions under which a
Canadian management investment
company (‘‘Canadian fund’’) may
request an order from the Commission
permitting it to register under the Act.
Although rule 7d–1 by its terms applies
only to Canadian funds, other foreign
funds generally have agreed to comply
with the requirements of rule 7d–1 as a
prerequisite to receiving an order
permitting the foreign fund’s
registration under the Act.
The rule requires a Canadian fund
proposing to register under the Act to
file an application with the Commission
that contains various undertakings and
agreements of the fund. The
requirement for the Canadian fund to
file an application is a collection of
information under the Paperwork
Reduction Act. Certain of the
undertakings and agreements, in turn,
impose the following additional
information collection requirements:
(1) The fund must file with the
Commission agreements between the
fund and its directors, officers, and
service providers requiring them to
comply with the fund’s charter and
bylaws, the Act, and certain other
obligations relating to the undertakings
and agreements in the application;
(2) the fund and each of its directors,
officers, and investment advisers that is
not a U.S. resident, must file with the
Commission an irrevocable designation
of the fund’s custodian in the United
States as agent for service of process;
(3) the fund’s charter and bylaws must
provide that (a) the fund will comply
with certain provisions of the Act
applicable to all funds, (b) the fund will
maintain originals or copies of its books
and records in the United States, and (c)
the fund’s contracts with its custodian,
investment adviser, and principal
underwriter, will contain certain terms,
including a requirement that the adviser
maintain originals or copies of pertinent
records in the United States;
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37604
Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Notices
TKELLEY on DSK3SPTVN1PROD with NOTICES
(4) the fund’s contracts with service
providers will require that the provider
perform the contract in accordance with
the Act, the Securities Act of 1933 (15
U.S.C. 77a), and the Securities Exchange
Act of 1934 (15 U.S.C. 78a), as
applicable; and
(5) the fund must file, and
periodically revise, a list of persons
affiliated with the fund or its adviser or
underwriter.
As noted above, under section 7(d) of
the Act the Commission may issue an
order permitting a foreign fund’s
registration only if the Commission
finds that ‘‘by reason of special
circumstances or arrangements, it is
both legally and practically feasible
effectively to enforce the provisions of
the (Act).’’ The information collection
requirements are necessary to assure
that the substantive provisions of the
Act may be enforced as a matter of
contract right in the United States or
Canada by the fund’s shareholders or by
the Commission.
Rule 7d–1 also contains certain
information collection requirements that
are associated with other provisions of
the Act. These requirements are
applicable to all registered funds and
are outside the scope of this request.
The Commission believes that one
foreign fund is registered under rule 7d–
1 and currently active. Apart from
requirements under the Act applicable
to all registered funds, rule 7d–1
imposes ongoing burdens to maintain
records in the United States, and to
update, as necessary, certain fund
agreements, designations of the fund’s
custodian as service agent, and the
fund’s list of affiliated persons. The
Commission staff estimates that each
year under the rule, the active registrant
and its directors, officers, and service
providers engage in the following
collections of information and
associated burden hours:
• For the fund and its investment
adviser to maintain records in the
United States: 1
0 hours: 0 minutes of compliance
clerk time.
1 The rule requires an applicant and its
investment adviser to maintain records in the
United States (which, without the requirement,
might be maintained in Canada or another foreign
jurisdiction), which facilitates routine inspections
and any special investigations of the fund by
Commission staff. The registrant and its investment
adviser, however, already maintain the registrant’s
records in the United States and in no other
jurisdiction. Therefore, maintenance of the
registrant’s records in the United States does not
impose an additional burden beyond that imposed
by other provisions of the Act. Those provisions are
applicable to all registered funds and the
compliance burden of those provisions is outside
the scope of this request.
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• For the fund to update its list of
affiliated persons:
2 hours: 2 hours of support staff time.
• For new officers, directors, and
service providers to enter into and file
agreements requiring them to comply
with the fund’s charter and bylaws, the
Act, and certain other obligations:
0.5 hours: 7.5 minutes of director
time;
2.5 minutes of officer time;
20 minutes of support staff time.
• For new officers, directors, and
investment advisers who are not
residents of the United States to file
irrevocable designation of the fund’s
custodian as agent for process of service:
0.25 hours: 5 minutes of director time;
10 minutes of support staff time.
Based on the estimates above, the
Commission estimates that the total
annual burden of the rule’s paperwork
requirements is 2.75 hours.2 We
estimate that directors perform 0.21
hours of these burden hours at a total
cost of $945,3 officers perform 0.04 of
these burden hours at a total cost of
$17.32,4 and support staff perform 2.5 of
these burden hours at a total cost of
$150.5 Thus, the Commission estimates
the aggregate annual cost of these
burden hours associated with rule 7d-1
is $1112.32.6
If a fund were to file an application
under rule 7d–1 to register under the
Act, the Commission estimates that the
rule would impose initial information
collection burdens (for filing an
application, preparing the specified
charter, bylaw, and contract provisions,
2 This estimate is based on the following
calculation: (0 + 2 + 0.5 + 0.25) = 2.75 hours.
3 The director estimates are based on the
following calculations: (7.5 minutes + 5 minutes) /
60 minutes per hour = 0.21 hours; and 0.21 hours
× $4500 per hour = $945. The per hour cost estimate
is based on estimated hourly compensation for each
board member of $500 and an average board size
of 9 members.
4 The officer estimates are based on the following
calculations: 2.5 minutes / 60 minutes per hour =
0.04 hours; 0.04 hours × $433 per hour = $17.32.
This per hour cost estimate, as well as other
internal cost estimates for management and
professional earnings, is based on the figure for
chief compliance officers found in SIFMA’s
Management & Professional Earnings in the
Securities Industry 2011, modified by Commission
staff to account for an 1800-hour work-year and
multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead.
5 The support staff estimates are based on the
following calculations: 2 hours + 20 minutes + 10
minutes = 2.5 hours; and 2.5 hours × $60 per hour
= $150. The per hour cost estimate, as well as other
internal cost estimates for office salaries, is based
on the figure for compliance clerks found in
SIFMA’s Management & Professional Earnings in
the Securities Industry 2011, modified by
Commission staff to account for an 1800-hour workyear and multiplied by 2.93 to account for bonuses,
firm size, employee benefits and overhead.
6 This estimate is based on the following
calculation: $1112.32 = $945 + $17.32 + $150.
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designations of agents for service of
process, and an initial list of affiliated
persons, and establishing a means of
keeping records in the United States) of
approximately 90 hours for the fund and
its associated persons. The Commission
is not including these hours in its
calculation of the annual burden
because no fund has applied to register
under the Act pursuant to rule 7d–1 in
the last three years.
After registration, a Canadian fund
may file a supplemental application
seeking special relief designed for the
fund’s particular circumstances. Rule
7d–1 does not mandate these
applications. The active registrant filed
a substantive supplemental application
in 2011. The Commission staff estimates
that the rule would impose an
additional information collection
burden of 5 hours on a fund to comply
with the Commission’s application
process at a cost of $5,957.7 The staff
understands that funds also obtain
assistance from outside counsel to
comply with the Commission’s
application process and the cost burden
of using outside counsel is set forth
below.
Therefore, the Commission estimates
the aggregate annual burden hours of
the collection of information associated
with rule 7d–1 is 7.75 hours, at a cost
of $7,069.32.8 These estimates of
average burden hours are made solely
for the purposes of the Paperwork
Reduction Act. The estimate is not
derived from a comprehensive or even
a representative survey or study of
Commission rules.
If a Canadian or other foreign fund in
the future applied to register under the
Act under rule 7d–1, the fund initially
might have capital and start-up costs
(not including hourly burdens) of an
estimated $17,280 to comply with the
rule’s initial information collection
requirements. These costs include legal
and processing-related fees for
preparing the required documentation
(such as the application, charter, bylaw,
and contract provisions, designations
for service of process, and the list of
affiliated persons). Other related costs
would include fees for establishing
7 The staff estimates that, on average, the fund’s
investment adviser spends approximately 4 hours
to review an application, including 3.5 hours by an
assistant general counsel at a cost of $407 per hour,
0.5 hours by an administrative assistant, at a cost
of $65 per hour, and the fund’s board of directors
spends an additional 1 hour at a cost of $4,500 per
hour for a total of 5 hours, for a total cost of $5,957.
This estimate is based on the following calculation:
(3.5 hours × $407 per hour) + (0.5 hours × $65 per
hour) + (1 hour × $4,500 per hour) = $5,957.
8 These estimates are based on the following
calculations: 2.75 hours + 5 hours = 7.75 hours;
$1,112.32 + $5,957 = $7,069.32.
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Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Notices
arrangements with a custodian or other
agent for maintaining records in the
United States, copying and
transportation costs for records, and the
costs of purchasing or leasing computer
equipment, software, or other record
storage equipment for records
maintained in electronic or
photographic form.
The Commission expects that a
foreign fund and its sponsors would
incur these costs immediately, and that
the annualized cost of the expenditures
would be $17,280 in the first year. Some
expenditures might involve capital
improvements, such as computer
equipment, having expected useful lives
for which annualized figures beyond the
first year would be meaningful. These
annualized figures are not provided,
however, because, in most cases, the
expenses would be incurred
immediately rather than on an annual
basis. The Commission is not including
these costs in its calculation of the
annualized capital/start-up costs
because no fund has applied under rule
7d–1 to register under the Act pursuant
to rule 7d–1 in the last three years.
As indicated above, a Canadian fund
may file a supplemental application
seeking special relief designed for the
fund’s particular circumstances. Rule
7d–1 does not mandate these
applications. The active registrant filed
a substantive application in the past
three years. The staff understands that
funds generally use outside counsel to
prepare the application. The staff
estimates that outside counsel spends
10 hours preparing the application,
including 8 hours by an associate and 2
hours by a partner. Outside counsel
billing arrangements vary based on
numerous factors, but the staff has
estimated the average cost of outside
counsel at $400 per hour, based on
information received from funds,
intermediaries and their counsel. The
Commission therefore estimates that the
fund would obtain assistance from
outside counsel at a cost of $4000.9
These estimates of average costs are
made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a 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 OMB
control number.
The public may view the background
documentation for this information
collection at the following Web site,
9 This estimate is based on the following
calculation: 10 hours × $400 per hour = $4,000.
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Jkt 229001
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: June 17, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–14799 Filed 6–20–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
30559; File No. 812–14046]
Sigma Investment Advisors, LLC, et
al.; Notice of Application
June 14, 2013.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
2(a)(32), 5(a)(1), 22(d), and 22(e) of the
Act and rule 22c–1 under the Act, under
sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and
17(a)(2) of the Act, and under section
12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and 12(d)(1)(B) of
the Act.
AGENCY:
Applicants
request an order that would permit (a)
Series of certain open-end management
investment companies to issue shares
(‘‘Shares’’) redeemable in large
aggregations only (‘‘Creation Units’’); (b)
secondary market transactions in Shares
to occur at negotiated market prices
rather than at net asset value (‘‘NAV’’);
(c) certain series to pay redemption
proceeds, under certain circumstances,
more than seven days after the tender of
Shares for redemption; (d) certain
affiliated persons of the series to deposit
securities into, and receive securities
from, the series in connection with the
purchase and redemption of Creation
Units; and (e) certain registered
management investment companies and
unit investment trusts outside of the
SUMMARY OF APPLICATION:
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37605
same group of investment companies as
the series to acquire Shares.
APPLICANTS: Sigma Shares ExchangeTraded Fund Trust (‘‘Trust’’), Sigma
Investment Advisors, LLC (‘‘Initial
Adviser’’), and S-Network Global
Indexes, LLC (an Affiliated Index
Provider (defined below)).
DATES: Filing Dates: The application was
filed on June 13, 2012 and amended on
November 7, 2012, February 19, 2013,
May 15, 2013 and June 13, 2013.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on July 9, 2013, and should
be accompanied by proof of service on
applicants, in the form of an affidavit,
or for lawyers, a certificate of service.
Hearing requests should state the nature
of the writer’s interest, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Elizabeth M. Murphy,
Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090;
Applicants, 267 Fifth Avenue New
York, NY 10016.
FOR FURTHER INFORMATION CONTACT:
David J. Marcinkus, Attorney-Advisor at
(202) 551–6882, or David P. Bartels,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Exemptive Applications Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Applicants’ Representations
1. The Trust is a Delaware statutory
trust that intends to register under the
Act as an open-end management
investment company with multiple
series.
2. The Initial Adviser is registered as
an investment adviser under the
Investment Advisers Act of 1940 (the
‘‘Advisers Act’’) and will be the
investment adviser to the Funds. Any
other Adviser (defined below) will also
be registered as an investment adviser
under the Advisers Act. The Adviser
may enter into sub-advisory agreements
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]]>Agencies
[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]
[Notices]
[Pages 37603-37605]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14799]
-----------------------------------------------------------------------
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 7d-1, OMB Control No. 3235-0311, SEC File No. 270-176.
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'') has submitted to the Office of
Management and Budget a request for extension of the previously
approved collection of information discussed below.
Section 7(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-
7(d)) (the ``Act'' or ``Investment Company Act'') requires an
investment company (``fund'') organized outside the United States
(``foreign fund'') to obtain an order from the Commission allowing the
fund to register under the Act before making a public offering of its
securities through the United States mail or any means of interstate
commerce. The Commission may issue an order only if it finds that it is
both legally and practically feasible effectively to enforce the
provisions of the Act against the foreign fund, and that the
registration of the fund is consistent with the public interest and
protection of investors.
Rule 7d-1 (17 CFR 270.7d-1) under the Act, which was adopted in
1954, specifies the conditions under which a Canadian management
investment company (``Canadian fund'') may request an order from the
Commission permitting it to register under the Act. Although rule 7d-1
by its terms applies only to Canadian funds, other foreign funds
generally have agreed to comply with the requirements of rule 7d-1 as a
prerequisite to receiving an order permitting the foreign fund's
registration under the Act.
The rule requires a Canadian fund proposing to register under the
Act to file an application with the Commission that contains various
undertakings and agreements of the fund. The requirement for the
Canadian fund to file an application is a collection of information
under the Paperwork Reduction Act. Certain of the undertakings and
agreements, in turn, impose the following additional information
collection requirements:
(1) The fund must file with the Commission agreements between the
fund and its directors, officers, and service providers requiring them
to comply with the fund's charter and bylaws, the Act, and certain
other obligations relating to the undertakings and agreements in the
application;
(2) the fund and each of its directors, officers, and investment
advisers that is not a U.S. resident, must file with the Commission an
irrevocable designation of the fund's custodian in the United States as
agent for service of process;
(3) the fund's charter and bylaws must provide that (a) the fund
will comply with certain provisions of the Act applicable to all funds,
(b) the fund will maintain originals or copies of its books and records
in the United States, and (c) the fund's contracts with its custodian,
investment adviser, and principal underwriter, will contain certain
terms, including a requirement that the adviser maintain originals or
copies of pertinent records in the United States;
[[Page 37604]]
(4) the fund's contracts with service providers will require that
the provider perform the contract in accordance with the Act, the
Securities Act of 1933 (15 U.S.C. 77a), and the Securities Exchange Act
of 1934 (15 U.S.C. 78a), as applicable; and
(5) the fund must file, and periodically revise, a list of persons
affiliated with the fund or its adviser or underwriter.
As noted above, under section 7(d) of the Act the Commission may
issue an order permitting a foreign fund's registration only if the
Commission finds that ``by reason of special circumstances or
arrangements, it is both legally and practically feasible effectively
to enforce the provisions of the (Act).'' The information collection
requirements are necessary to assure that the substantive provisions of
the Act may be enforced as a matter of contract right in the United
States or Canada by the fund's shareholders or by the Commission.
Rule 7d-1 also contains certain information collection requirements
that are associated with other provisions of the Act. These
requirements are applicable to all registered funds and are outside the
scope of this request.
The Commission believes that one foreign fund is registered under
rule 7d-1 and currently active. Apart from requirements under the Act
applicable to all registered funds, rule 7d-1 imposes ongoing burdens
to maintain records in the United States, and to update, as necessary,
certain fund agreements, designations of the fund's custodian as
service agent, and the fund's list of affiliated persons. The
Commission staff estimates that each year under the rule, the active
registrant and its directors, officers, and service providers engage in
the following collections of information and associated burden hours:
For the fund and its investment adviser to maintain
records in the United States: \1\
---------------------------------------------------------------------------
\1\ The rule requires an applicant and its investment adviser to
maintain records in the United States (which, without the
requirement, might be maintained in Canada or another foreign
jurisdiction), which facilitates routine inspections and any special
investigations of the fund by Commission staff. The registrant and
its investment adviser, however, already maintain the registrant's
records in the United States and in no other jurisdiction.
Therefore, maintenance of the registrant's records in the United
States does not impose an additional burden beyond that imposed by
other provisions of the Act. Those provisions are applicable to all
registered funds and the compliance burden of those provisions is
outside the scope of this request.
---------------------------------------------------------------------------
0 hours: 0 minutes of compliance clerk time.
For the fund to update its list of affiliated persons:
2 hours: 2 hours of support staff time.
For new officers, directors, and service providers to
enter into and file agreements requiring them to comply with the fund's
charter and bylaws, the Act, and certain other obligations:
0.5 hours: 7.5 minutes of director time;
2.5 minutes of officer time;
20 minutes of support staff time.
For new officers, directors, and investment advisers who
are not residents of the United States to file irrevocable designation
of the fund's custodian as agent for process of service:
0.25 hours: 5 minutes of director time;
10 minutes of support staff time.
Based on the estimates above, the Commission estimates that the
total annual burden of the rule's paperwork requirements is 2.75
hours.\2\ We estimate that directors perform 0.21 hours of these burden
hours at a total cost of $945,\3\ officers perform 0.04 of these burden
hours at a total cost of $17.32,\4\ and support staff perform 2.5 of
these burden hours at a total cost of $150.\5\ Thus, the Commission
estimates the aggregate annual cost of these burden hours associated
with rule 7d-1 is $1112.32.\6\
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\2\ This estimate is based on the following calculation: (0 + 2
+ 0.5 + 0.25) = 2.75 hours.
\3\ The director estimates are based on the following
calculations: (7.5 minutes + 5 minutes) / 60 minutes per hour = 0.21
hours; and 0.21 hours x $4500 per hour = $945. The per hour cost
estimate is based on estimated hourly compensation for each board
member of $500 and an average board size of 9 members.
\4\ The officer estimates are based on the following
calculations: 2.5 minutes / 60 minutes per hour = 0.04 hours; 0.04
hours x $433 per hour = $17.32. This per hour cost estimate, as well
as other internal cost estimates for management and professional
earnings, is based on the figure for chief compliance officers found
in SIFMA's Management & Professional Earnings in the Securities
Industry 2011, modified by Commission staff to account for an 1800-
hour work-year and multiplied by 5.35 to account for bonuses, firm
size, employee benefits and overhead.
\5\ The support staff estimates are based on the following
calculations: 2 hours + 20 minutes + 10 minutes = 2.5 hours; and 2.5
hours x $60 per hour = $150. The per hour cost estimate, as well as
other internal cost estimates for office salaries, is based on the
figure for compliance clerks found in SIFMA's Management &
Professional Earnings in the Securities Industry 2011, modified by
Commission staff to account for an 1800-hour work-year and
multiplied by 2.93 to account for bonuses, firm size, employee
benefits and overhead.
\6\ This estimate is based on the following calculation:
$1112.32 = $945 + $17.32 + $150.
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If a fund were to file an application under rule 7d-1 to register
under the Act, the Commission estimates that the rule would impose
initial information collection burdens (for filing an application,
preparing the specified charter, bylaw, and contract provisions,
designations of agents for service of process, and an initial list of
affiliated persons, and establishing a means of keeping records in the
United States) of approximately 90 hours for the fund and its
associated persons. The Commission is not including these hours in its
calculation of the annual burden because no fund has applied to
register under the Act pursuant to rule 7d-1 in the last three years.
After registration, a Canadian fund may file a supplemental
application seeking special relief designed for the fund's particular
circumstances. Rule 7d-1 does not mandate these applications. The
active registrant filed a substantive supplemental application in 2011.
The Commission staff estimates that the rule would impose an additional
information collection burden of 5 hours on a fund to comply with the
Commission's application process at a cost of $5,957.\7\ The staff
understands that funds also obtain assistance from outside counsel to
comply with the Commission's application process and the cost burden of
using outside counsel is set forth below.
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\7\ The staff estimates that, on average, the fund's investment
adviser spends approximately 4 hours to review an application,
including 3.5 hours by an assistant general counsel at a cost of
$407 per hour, 0.5 hours by an administrative assistant, at a cost
of $65 per hour, and the fund's board of directors spends an
additional 1 hour at a cost of $4,500 per hour for a total of 5
hours, for a total cost of $5,957. This estimate is based on the
following calculation: (3.5 hours x $407 per hour) + (0.5 hours x
$65 per hour) + (1 hour x $4,500 per hour) = $5,957.
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Therefore, the Commission estimates the aggregate annual burden
hours of the collection of information associated with rule 7d-1 is
7.75 hours, at a cost of $7,069.32.\8\ These estimates of average
burden hours are made solely for the purposes of the Paperwork
Reduction Act. The estimate is not derived from a comprehensive or even
a representative survey or study of Commission rules.
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\8\ These estimates are based on the following calculations:
2.75 hours + 5 hours = 7.75 hours; $1,112.32 + $5,957 = $7,069.32.
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If a Canadian or other foreign fund in the future applied to
register under the Act under rule 7d-1, the fund initially might have
capital and start-up costs (not including hourly burdens) of an
estimated $17,280 to comply with the rule's initial information
collection requirements. These costs include legal and processing-
related fees for preparing the required documentation (such as the
application, charter, bylaw, and contract provisions, designations for
service of process, and the list of affiliated persons). Other related
costs would include fees for establishing
[[Page 37605]]
arrangements with a custodian or other agent for maintaining records in
the United States, copying and transportation costs for records, and
the costs of purchasing or leasing computer equipment, software, or
other record storage equipment for records maintained in electronic or
photographic form.
The Commission expects that a foreign fund and its sponsors would
incur these costs immediately, and that the annualized cost of the
expenditures would be $17,280 in the first year. Some expenditures
might involve capital improvements, such as computer equipment, having
expected useful lives for which annualized figures beyond the first
year would be meaningful. These annualized figures are not provided,
however, because, in most cases, the expenses would be incurred
immediately rather than on an annual basis. The Commission is not
including these costs in its calculation of the annualized capital/
start-up costs because no fund has applied under rule 7d-1 to register
under the Act pursuant to rule 7d-1 in the last three years.
As indicated above, a Canadian fund may file a supplemental
application seeking special relief designed for the fund's particular
circumstances. Rule 7d-1 does not mandate these applications. The
active registrant filed a substantive application in the past three
years. The staff understands that funds generally use outside counsel
to prepare the application. The staff estimates that outside counsel
spends 10 hours preparing the application, including 8 hours by an
associate and 2 hours by a partner. Outside counsel billing
arrangements vary based on numerous factors, but the staff has
estimated the average cost of outside counsel at $400 per hour, based
on information received from funds, intermediaries and their counsel.
The Commission therefore estimates that the fund would obtain
assistance from outside counsel at a cost of $4000.\9\
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\9\ This estimate is based on the following calculation: 10
hours x $400 per hour = $4,000.
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These estimates of average costs are made solely for the purposes
of the Paperwork Reduction Act. The estimate is not derived from a
comprehensive or even a 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 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: June 17, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14799 Filed 6-20-13; 8:45 am]
BILLING CODE 8011-01-P
