Submission for OMB Review; Comment Request, 52584-52585 [2013-20572]

Download as PDF 52584 Federal Register / Vol. 78, No. 164 / Friday, August 23, 2013 / Notices SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. tkelley on DSK3SPTVN1PROD with NOTICES Extension: Rule 7d–2; SEC File No. 270–464, OMB Control No. 3235–0527. 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 and approval of the collection of information discussed below. In Canada, as in the United States, individuals can invest a portion of their earnings in tax-deferred retirement savings accounts (‘‘Canadian retirement accounts’’). These accounts, which operate in a manner similar to individual retirement accounts in the United States, encourage retirement savings by permitting savings on a taxdeferred basis. Individuals who establish Canadian retirement accounts while living and working in Canada and who later move to the United States (‘‘Canadian-U.S. Participants’’ or ‘‘participants’’) often continue to hold their retirement assets in their Canadian retirement accounts rather than prematurely withdrawing (or ‘‘cashing out’’) those assets, which would result in immediate taxation in Canada. Once in the United States, however, these participants historically have been unable to manage their Canadian retirement account investments. Most investment companies (‘‘funds’’) that are ‘‘qualified companies’’ for Canadian retirement accounts are not registered under the U.S. securities laws. Securities of those unregistered funds, therefore, generally cannot be publicly offered and sold in the United States without violating the registration requirement of the Investment Company Act of 1940 (‘‘Investment Company Act’’).1 As a result of this registration requirement, Canadian-U.S. Participants previously were not able to purchase or exchange securities for their Canadian retirement accounts as needed to meet 1 15 U.S.C. 80a. In addition, the offering and selling of securities that are not registered pursuant to the Securities Act of 1933 (‘‘Securities Act’’) is generally prohibited by U.S. securities laws. 15 U.S.C. 77. VerDate Mar<15>2010 17:28 Aug 22, 2013 Jkt 229001 their changing investment goals or income needs. The Commission issued a rulemaking in 2000 that enabled Canadian-U.S. Participants to manage the assets in their Canadian retirement accounts by providing relief from the U.S. registration requirements for offers of securities of foreign issuers to CanadianU.S. Participants and sales to Canadian retirement accounts.2 Rule 7d–2 under the Investment Company Act 3 permits foreign funds to offer securities to Canadian-U.S. Participants and sell securities to Canadian retirement accounts without registering as investment companies under the Investment Company Act. Rule 7d–2 contains a ‘‘collection of information’’ requirement within the meaning of the Paperwork Reduction Act of 1995.4 Rule 7d–2 requires written offering materials for securities offered or sold in reliance on that rule to disclose prominently that those securities and the fund issuing those securities are not registered with the Commission, and that those securities and the fund issuing those securities are exempt from registration under U.S. securities laws. Rule 7d–2 does not require any documents to be filed with the Commission. Rule 7d–2 requires written offering documents for securities offered or sold in reliance on the rule to disclose prominently that the securities are not registered with the Commission and may not be offered or sold in the United States unless registered or exempt from registration under the U.S. securities laws, and also to disclose prominently that the fund that issued the securities is not registered with the Commission. The burden under the rule associated with adding this disclosure to written offering documents is minimal and is non-recurring. The foreign issuer, underwriter, or broker-dealer can redraft an existing prospectus or other written offering material to add this disclosure statement, or may draft a sticker or supplement containing this disclosure to be added to existing offering materials. In either case, based on discussions with representatives of the Canadian fund industry, the staff estimates that it would take an average 2 See Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Accounts, Release Nos. 33–7860, 34–42905, IC–24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking also included new rule 237 under the Securities Act, permitting securities of foreign issuers to be offered to Canadian-U.S. Participants and sold to Canadian retirement accounts without being registered under the Securities Act. 17 CFR 230.237. 3 17 CFR 270.7d–2. 4 44 U.S.C. 3501–3502. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 of 10 minutes per document to draft the requisite disclosure statement. The staff estimates that there are 2866 publicly offered Canadian funds that potentially would rely on the rule to offer securities to participants and sell securities to their Canadian retirement accounts without registering under the Investment Company Act.5 The staff estimates that all of these funds have previously relied upon the rule and have already made the one-time change to their offering documents required to rely on the rule. The staff estimates that 143 (5 percent) additional Canadian funds may newly rely on the rule each year to offer securities to Canadian-U.S. Participants and sell securities to their Canadian retirement accounts, thus incurring the paperwork burden required under the rule. The staff estimates that each of those funds, on average, distributes 3 different written offering documents concerning those securities, for a total of 429 offering documents. The staff therefore estimates that 143 respondents would make 429 responses by adding the new disclosure statement to 429 written offering documents. The staff therefore estimates that the annual burden associated with the rule 7d–2 disclosure requirement would be 71.5 hours (429 offering documents × 10 minutes per document). The total annual cost of these burden hours is estimated to be $27,099 (71.5 hours × $379 per hour of attorney time).6 These burden hour estimates are based upon the Commission staff’s experience and discussions with the fund industry. The estimates of average burden hours 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. 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 5 Investment Company Institute, 2013 Investment Company Fact Book (2013) at 202, tbl. 61. 6 The Commission’s estimate concerning the wage rate for attorney time is based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association (‘‘SIFMA’’). The $379 per hour figure for an attorney is from SIFMA’s Management & Professional Earnings in the Securities Industry 2012, 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. E:\FR\FM\23AUN1.SGM 23AUN1 Federal Register / Vol. 78, No. 164 / Friday, August 23, 2013 / Notices 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, Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated:August 19, 2013. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–20572 Filed 8–22–13; 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. tkelley on DSK3SPTVN1PROD with NOTICES Extension: Rule 237; SEC File No. 270–465, OMB Control No. 3235–0528. 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 and approval of the collection of information discussed below. In Canada, as in the United States, individuals can invest a portion of their earnings in tax-deferred retirement savings accounts (‘‘Canadian retirement accounts’’). These accounts, which operate in a manner similar to individual retirement accounts in the United States, encourage retirement savings by permitting savings on a taxdeferred basis. Individuals who establish Canadian retirement accounts while living and working in Canada and who later move to the United States (‘‘Canadian-U.S. Participants’’ or ‘‘participants’’) often continue to hold their retirement assets in their Canadian retirement accounts rather than VerDate Mar<15>2010 17:28 Aug 22, 2013 Jkt 229001 prematurely withdrawing (or ‘‘cashing out’’) those assets, which would result in immediate taxation in Canada. Once in the United States, however, these participants historically have been unable to manage their Canadian retirement account investments. Most securities that are ‘‘qualified investments’’ for Canadian retirement accounts are not registered under the U.S. securities laws. Those securities, therefore, generally cannot be publicly offered and sold in the United States without violating the registration requirement of the Securities Act of 1933 (‘‘Securities Act’’).1 As a result of this registration requirement, CanadianU.S. Participants previously were not able to purchase or exchange securities for their Canadian retirement accounts as needed to meet their changing investment goals or income needs. The Commission issued a rulemaking in 2000 that enabled Canadian-U.S. Participants to manage the assets in their Canadian retirement accounts by providing relief from the U.S. registration requirements for offers of securities of foreign issuers to CanadianU.S. Participants and sales to Canadian retirement accounts.2 Rule 237 under the Securities Act 3 permits securities of foreign issuers, including securities of foreign funds, to be offered to CanadianU.S. Participants and sold to their Canadian retirement accounts without being registered under the Securities Act. Rule 237 requires written offering documents for securities offered and sold in reliance on the rule to disclose prominently that the securities are not registered with the Commission and are exempt from registration under the U.S. securities laws. The burden under the rule associated with adding this disclosure to written offering documents is minimal and is non-recurring. The foreign issuer, underwriter, or brokerdealer can redraft an existing prospectus or other written offering material to add this disclosure statement, or may draft a sticker or supplement containing this disclosure to be added to existing 1 15 U.S.C. 77. In addition, the offering and selling of securities of investment companies (‘‘funds’’) that are not registered pursuant to the Investment Company Act of 1940 (‘‘Investment Company Act’’) is generally prohibited by U.S. securities laws. 15 U.S.C. 80a. 2 See Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Accounts, Release Nos. 33–7860, 34–42905, IC–24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking also included new rule 7d-2 under the Investment Company Act, permitting foreign funds to offer securities to Canadian-U.S. Participants and sell securities to Canadian retirement accounts without registering as investment companies under the Investment Company Act. 17 CFR 270.7d-2. 3 17 CFR 230.237. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 52585 offering materials. In either case, based on discussions with representatives of the Canadian fund industry, the staff estimates that it would take an average of 10 minutes per document to draft the requisite disclosure statement. The Commission understands that there are approximately 4101 Canadian issuers other than funds that may rely on rule 237 to make an initial public offering of their securities to CanadianU.S. Participants.4 The staff estimates that in any given year approximately 41 (or 1 percent) of those issuers are likely to rely on rule 237 to make a public offering of their securities to participants, and that each of those 41 issuers, on average, distributes 3 different written offering documents concerning those securities, for a total of 123 offering documents. The staff therefore estimates that during each year that rule 237 is in effect, approximately 41 respondents 5 would be required to make 123 responses by adding the new disclosure statements to approximately 123 written offering documents. Thus, the staff estimates that the total annual burden associated with the rule 237 disclosure requirement would be approximately 20.5 hours (123 offering documents × 10 minutes per document). The total annual cost of burden hours is estimated to be $7769.50 (20.5 hours × $379 per hour of attorney time).6 In addition, issuers from foreign countries other than Canada could rely on rule 237 to offer securities to Canadian-U.S. Participants and sell securities to their accounts without 4 This estimate is based on the following calculation: 3970 equity issuers + 131 bond issuers = 4101 total issuers. See World Federation of Exchanges, Number of Listed Issuers, available at https://www.world-exchanges.org/statistics/annualquery-tool (providing number of equity issuers listed on Canada’s Toronto Stock Exchange in 2012). After 2009, the World Federation of Exchanges ceased reporting the number of fixedincome issuers on Canada’s Toronto Stock Exchange. The number of fixed-income issuers in 2012 is based on the ratio of the number of fixedincome issuers listed on Canada’s Toronto Stock Exchange in 2009 (111) relative to the number of bonds listed on that exchange in that year (178) multiplied against the number of bonds listed on that exchange in 2012 (210): (111/178) × 210 = 131. 5 This estimate of respondents only includes foreign issuers. The number of respondents would be greater if foreign underwriters or broker-dealers draft stickers or supplements to add the required disclosure to existing offering documents. 6 The Commission’s estimate concerning the wage rate for attorney time is based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association (‘‘SIFMA’’). The $379 per hour figure for an attorney is from SIFMA’s Management & Professional Earnings in the Securities Industry 2012, 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. E:\FR\FM\23AUN1.SGM 23AUN1

Agencies

[Federal Register Volume 78, Number 164 (Friday, August 23, 2013)]
[Notices]
[Pages 52584-52585]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20572]



[[Page 52584]]

-----------------------------------------------------------------------

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-2; SEC File No. 270-464, OMB Control No. 3235-0527.

    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 and approval of the 
collection of information discussed below.
    In Canada, as in the United States, individuals can invest a 
portion of their earnings in tax-deferred retirement savings accounts 
(``Canadian retirement accounts''). These accounts, which operate in a 
manner similar to individual retirement accounts in the United States, 
encourage retirement savings by permitting savings on a tax-deferred 
basis. Individuals who establish Canadian retirement accounts while 
living and working in Canada and who later move to the United States 
(``Canadian-U.S. Participants'' or ``participants'') often continue to 
hold their retirement assets in their Canadian retirement accounts 
rather than prematurely withdrawing (or ``cashing out'') those assets, 
which would result in immediate taxation in Canada.
    Once in the United States, however, these participants historically 
have been unable to manage their Canadian retirement account 
investments. Most investment companies (``funds'') that are ``qualified 
companies'' for Canadian retirement accounts are not registered under 
the U.S. securities laws. Securities of those unregistered funds, 
therefore, generally cannot be publicly offered and sold in the United 
States without violating the registration requirement of the Investment 
Company Act of 1940 (``Investment Company Act'').\1\ As a result of 
this registration requirement, Canadian-U.S. Participants previously 
were not able to purchase or exchange securities for their Canadian 
retirement accounts as needed to meet their changing investment goals 
or income needs.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a. In addition, the offering and selling of 
securities that are not registered pursuant to the Securities Act of 
1933 (``Securities Act'') is generally prohibited by U.S. securities 
laws. 15 U.S.C. 77.
---------------------------------------------------------------------------

    The Commission issued a rulemaking in 2000 that enabled Canadian-
U.S. Participants to manage the assets in their Canadian retirement 
accounts by providing relief from the U.S. registration requirements 
for offers of securities of foreign issuers to Canadian-U.S. 
Participants and sales to Canadian retirement accounts.\2\ Rule 7d-2 
under the Investment Company Act \3\ permits foreign funds to offer 
securities to Canadian-U.S. Participants and sell securities to 
Canadian retirement accounts without registering as investment 
companies under the Investment Company Act.
---------------------------------------------------------------------------

    \2\ See Offer and Sale of Securities to Canadian Tax-Deferred 
Retirement Savings Accounts, Release Nos. 33-7860, 34-42905, IC-
24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking 
also included new rule 237 under the Securities Act, permitting 
securities of foreign issuers to be offered to Canadian-U.S. 
Participants and sold to Canadian retirement accounts without being 
registered under the Securities Act. 17 CFR 230.237.
    \3\ 17 CFR 270.7d-2.
---------------------------------------------------------------------------

    Rule 7d-2 contains a ``collection of information'' requirement 
within the meaning of the Paperwork Reduction Act of 1995.\4\ Rule 7d-2 
requires written offering materials for securities offered or sold in 
reliance on that rule to disclose prominently that those securities and 
the fund issuing those securities are not registered with the 
Commission, and that those securities and the fund issuing those 
securities are exempt from registration under U.S. securities laws. 
Rule 7d-2 does not require any documents to be filed with the 
Commission.
---------------------------------------------------------------------------

    \4\ 44 U.S.C. 3501-3502.
---------------------------------------------------------------------------

    Rule 7d-2 requires written offering documents for securities 
offered or sold in reliance on the rule to disclose prominently that 
the securities are not registered with the Commission and may not be 
offered or sold in the United States unless registered or exempt from 
registration under the U.S. securities laws, and also to disclose 
prominently that the fund that issued the securities is not registered 
with the Commission. The burden under the rule associated with adding 
this disclosure to written offering documents is minimal and is non-
recurring. The foreign issuer, underwriter, or broker-dealer can 
redraft an existing prospectus or other written offering material to 
add this disclosure statement, or may draft a sticker or supplement 
containing this disclosure to be added to existing offering materials. 
In either case, based on discussions with representatives of the 
Canadian fund industry, the staff estimates that it would take an 
average of 10 minutes per document to draft the requisite disclosure 
statement.
    The staff estimates that there are 2866 publicly offered Canadian 
funds that potentially would rely on the rule to offer securities to 
participants and sell securities to their Canadian retirement accounts 
without registering under the Investment Company Act.\5\ The staff 
estimates that all of these funds have previously relied upon the rule 
and have already made the one-time change to their offering documents 
required to rely on the rule. The staff estimates that 143 (5 percent) 
additional Canadian funds may newly rely on the rule each year to offer 
securities to Canadian-U.S. Participants and sell securities to their 
Canadian retirement accounts, thus incurring the paperwork burden 
required under the rule. The staff estimates that each of those funds, 
on average, distributes 3 different written offering documents 
concerning those securities, for a total of 429 offering documents. The 
staff therefore estimates that 143 respondents would make 429 responses 
by adding the new disclosure statement to 429 written offering 
documents. The staff therefore estimates that the annual burden 
associated with the rule 7d-2 disclosure requirement would be 71.5 
hours (429 offering documents x 10 minutes per document). The total 
annual cost of these burden hours is estimated to be $27,099 (71.5 
hours x $379 per hour of attorney time).\6\
---------------------------------------------------------------------------

    \5\ Investment Company Institute, 2013 Investment Company Fact 
Book (2013) at 202, tbl. 61.
    \6\ The Commission's estimate concerning the wage rate for 
attorney time is based on salary information for the securities 
industry compiled by the Securities Industry and Financial Markets 
Association (``SIFMA''). The $379 per hour figure for an attorney is 
from SIFMA's Management & Professional Earnings in the Securities 
Industry 2012, 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.
---------------------------------------------------------------------------

    These burden hour estimates are based upon the Commission staff's 
experience and discussions with the fund industry. The estimates of 
average burden hours 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. 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

[[Page 52585]]

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, Chief Information Officer, 
Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street 
NE., Washington, DC 20549 or send an email to: PRA_Mailbox@sec.gov. 
Comments must be submitted to OMB within 30 days of this notice.

     Dated:August 19, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-20572 Filed 8-22-13; 8:45 am]
BILLING CODE 8011-01-P
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