Proposed Collection; Comment Request, 33225-33227 [2014-13460]
Download as PDF
<![CDATA[
Federal Register / Vol. 79, No. 111 / Tuesday, June 10, 2014 / Notices
emcdonald on DSK67QTVN1PROD with NOTICES
the fund board, including a majority of
the independent directors, must
determine that the plan is in the best
interests of each class and the fund as
a whole.
The requirement that the fund prepare
and directors approve a written rule
18f–3 plan is intended to ensure that the
fund compiles information relevant to
the fairness of the separate arrangement
and expense allocation for each class,
and that directors review and approve
the information. Without a blueprint
that highlights material differences
among classes, directors might not
perceive potential conflicts of interests
when they determine whether the plan
is in the best interests of each class and
the fund. In addition, the plan may be
useful to Commission staff in reviewing
the fund’s compliance with the rule.
Based on an analysis of fund filings,
the Commission estimates that there are
approximately 5,831 multiple class
funds offered by 969 registrants. The
Commission estimates that each of the
969 registrants will make an average of
0.5 responses annually to prepare and
approve a written 18f–3 plan.1 The
Commission estimates each response
will take 6 hours, requiring a total of 3
hours per registrant per year.2 Thus the
total annual hour burden associated
with these requirements of the rule is
approximately 2,907 hours.3
Estimates of average burden hours are
made solely for the purposes of the
Paperwork Reduction Act and are not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules and forms.
The collection of information under rule
18f–3 is mandatory. The information
provided under rule 18f–3 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 OMB control number.
Written comments are invited on: (a)
Whether the collections of information
are necessary for the proper
performance of the functions of the
Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burdens of the collections of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
1 The Commission estimates that each registrant
prepares and approves a rule 18f–3 plan every two
years when issuing a new fund or new class or
amending a plan (or that 484.5 of all 969 registrants
prepare and approve a plan each year).
2 0.5 responses per registrant × 6 hours per
response = 3 hours per registrant.
3 3 hours per registrant per year × 969 registrants
= 2,907 hours per year.
VerDate Mar<15>2010
16:55 Jun 09, 2014
Jkt 232001
minimize the burdens of the collections
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,
100 F Street NE., Washington, DC
20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: June 4, 2014.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13463 Filed 6–9–14; 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:
Form 24F–2; SEC File No. 270–399, OMB
Control No. 3235–0456.
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 (‘‘OMB’’) for
extension and approval.
Rule 24f–2 (17 CFR 270.24f–2) under
the Investment Company Act of 1940
(15 U.S.C. 80a) requires any open-end
management companies (‘‘mutual
funds’’), unit investment trusts (‘‘UITs’’)
or face-amount certificate companies
(collectively, ‘‘funds’’) deemed to have
registered an indefinite amount of
securities to file, not later than 90 days
after the end of any fiscal year in which
it has publicly offered such securities,
Form 24F–2 (17 CFR 274.24) with the
Commission. Form 24F–2 is the annual
notice of securities sold by funds that
accompanies the payment of registration
fees with respect to the securities sold
during the fiscal year.
The Commission estimates that 6946
funds file Form 24F–2 on the required
annual basis. The average annual
burden per respondent for Form 24F–2
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
33225
is estimated to be two hours. The total
annual burden for all respondents to
Form 24F–2 is estimated to be 13,892
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 of the
costs of Commission rules.
Compliance with the collection of
information required by Form 24F–2 is
mandatory. The Form 24F–2 filing that
must be made to the Commission is
available to the public. 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 Commission requests written
comments on: (a) Whether the collection
of information is necessary for the
proper performance of the functions of
the Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burdens 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,
100 F Street NE., Washington, DC
20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: June 4, 2014.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13467 Filed 6–9–14; 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 0–1;
SEC File No. 270–472, OMB Control No.
3235–0531.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
E:\FR\FM\10JNN1.SGM
10JNN1
33226
Federal Register / Vol. 79, No. 111 / Tuesday, June 10, 2014 / Notices
(44 U.S.C. 350l et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) plans to submit to the
Office of Management and Budget a
request for extension of the previous
approved collection of information
discussed below.
The Investment Company Act of 1940
(the ‘‘Act’’) 1 establishes a
comprehensive framework for regulating
the organization and operation of
investment companies (‘‘funds’’). A
principal objective of the Act is to
protect fund investors by addressing the
conflicts of interest that exist between
funds and their investment advisers and
other affiliated persons. The Act places
significant responsibility on the fund
board of directors in overseeing the
operations of the fund and policing the
relevant conflicts of interest.2
In one of its first releases, the
Commission exercised its rulemaking
authority pursuant to sections 38(a) and
40(b) of the Act by adopting rule 0–1 (17
CFR 270.0–1).3 Rule 0–1, as
subsequently amended on numerous
occasions, provides definitions for the
terms used by the Commission in the
rules and regulations it has adopted
pursuant to the Act. The rule also
contains a number of rules of
construction for terms that are defined
either in the Act itself or elsewhere in
the Commission’s rules and regulations.
Finally, rule 0–1 defines terms that
serve as conditions to the availability of
certain of the Commission’s exemptive
rules. More specifically, the term
‘‘independent legal counsel,’’ as defined
in rule 0–1, sets out conditions that
funds must meet in order to rely on any
of ten exemptive rules (‘‘exemptive
rules’’) under the Act.4
The Commission amended rule 0–1 to
include the definition of the term
‘‘independent legal counsel’’ in 2001.5
This amendment was designed to
enhance the effectiveness of fund boards
of directors and to better enable
investors to assess the independence of
those directors. The Commission also
amended the exemptive rules to require
1 15
U.S.C. 80a.
example, fund directors must approve
investment advisory and distribution contracts. See
15 U.S.C. 80a–15(a), (b), and (c).
3 Investment Company Act Release No. 4 (Oct. 29,
1940) (5 FR 4316 (Oct. 31, 1940)). Note that rule 0–
1 was originally adopted as rule N–1.
4 The relevant exemptive rules are: rule 10f–3 (17
CFR 270.10f–3), rule 12b–1 (17 CFR 270.12b–1),
rule 15a–4(b)(2) (17 CFR 270.15a–4(b)(2)), rule 17a–
7 (17 CFR 270.17a–7), rule 17a–8 (17 CFR 270.17a–
8), rule 17d–1(d)(7) (17 CFR 270.17d–1(d)(7)), rule
17e–1(c) (17 CFR 270.17e–1(c)), rule 17g–1 (17 CFR
270.17g–1), rule 18f–3 (17 CFR 270.18f–3), and rule
23c–3 (17 CFR 270.23c–3).
5 See Role of Independent Directors of Investment
Companies, Investment Company Act Release No.
24816 (Jan. 2, 2001) (66 FR 3735 (Jan. 16, 2001)).
emcdonald on DSK67QTVN1PROD with NOTICES
2 For
VerDate Mar<15>2010
16:55 Jun 09, 2014
Jkt 232001
that any person who serves as legal
counsel to the independent directors of
any fund that relies on any of the
exemptive rules must be an
‘‘independent legal counsel.’’ This
requirement was added because
independent directors can better
perform the responsibilities assigned to
them under the Act and the rules if they
have the assistance of truly independent
legal counsel.
If the board’s counsel has represented
the fund’s investment adviser, principal
underwriter, administrator (collectively,
‘‘management organizations’’) or their
‘‘control persons’’ 6 during the past two
years, rule 0–1 requires that the board’s
independent directors make a
determination about the adequacy of the
counsel’s independence. A majority of
the board’s independent directors are
required to reasonably determine, in the
exercise of their judgment, that the
counsel’s prior or current representation
of the management organizations or
their control persons was sufficiently
limited to conclude that it is unlikely to
adversely affect the counsel’s
professional judgment and legal
representation. Rule 0–1 also requires
that a record for the basis of this
determination is made in the minutes of
the directors’ meeting. In addition, the
independent directors must have
obtained an undertaking from the
counsel to provide them with the
information necessary to make their
determination and to update promptly
that information when the person begins
to represent a management organization
or control person, or when he or she
materially increases his or her
representation. Generally, the
independent directors must re-evaluate
their determination no less frequently
than annually.
Any fund that relies on one of the
exemptive rules must comply with the
requirements in the definition of
‘‘independent legal counsel’’ under rule
0–1. We assume that approximately
3751 funds rely on at least one of the
exemptive rules annually.7 We further
assume that the independent directors
of approximately one-third (1250) of
those funds would need to make the
required determination in order for their
counsel to meet the definition of
6 A ‘‘control person’’ is any person—other than a
fund—directly or indirectly controlling, controlled
by, or under common control, with any of the
fund’s management organizations. See 17 CFR
270.01(a)(6)(iv)(B).
7 Based on statistics compiled by Commission
staff, we estimate that there are approximately 4168
funds that could rely on one or more of the
exemptive rules. Of those funds, we assume that
approximately 90 percent (3751) actually rely on at
least one exemptive rules annually.
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
independent legal counsel.8 We
estimate that each of these 1250 funds
would be required to spend, on average,
0.75 hours annually to comply with the
recordkeeping requirement associated
with this determination, for a total
annual burden of approximately 938
hours. Based on this estimate, the total
annual cost for all funds’ compliance
with this rule is approximately
$196,907. To calculate this total annual
cost, the Commission staff assumed that
approximately two-thirds of the total
annual hour burden (625 hours) would
be incurred by a compliance manager
with an average hourly wage rate of
$283 per hour,9 and one-third of the
annual hour burden (313 hours) would
be incurred by compliance clerk with an
average hourly wage rate of $64 per
hour.10
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.
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 has
practical utility; (b) the accuracy of the
Commission’s estimate of the burdens of
the collection 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
8 We assume that the independent directors of the
remaining two-thirds of those funds will choose not
to have counsel, or will rely on counsel who has
not recently represented the fund’s management
organizations or control persons. In both
circumstances, it would not be necessary for the
fund’s independent directors to make a
determination about their counsel’s independence.
9 The estimated hourly wages used in this PRA
analysis were derived from reports prepared by the
Securities Industry and Financial Markets
Association. See Securities Industry and Financial
Markets Association, Report on Management and
Professional Earnings in the Securities Industry—
2013 (2013), modified to account for an 1800-hour
work year and multiplied by 5.35 to account for
bonuses, firm size, employee benefits and overhead;
and Securities Industry and Financial Markets
Association, Office Salaries in the Securities
Industry—2013 (2013), modified to account for an
1800-hour work year and multiplied by 2.93 to
account for bonuses, firm size, employee benefits
and overhead.
10 (625 × $283/hour) + (313 × $64/hour) =
$196,907.
E:\FR\FM\10JNN1.SGM
10JNN1
Federal Register / Vol. 79, No. 111 / Tuesday, June 10, 2014 / Notices
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,
100 F Street NE., Washington, DC
20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: June 4, 2014.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13460 Filed 6–9–14; 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.
emcdonald on DSK67QTVN1PROD with NOTICES
Extension:
Rule 10b–17;
SEC File No. 270–427, OMB Control No.
3235–0476.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 10b–17 (17 CFR
240.10b–17), 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 10b–17 requires any issuer of a
class of securities publicly traded by the
use of any means or instrumentality of
interstate commerce or of the mails or
of any facility of any national securities
exchange to give notice of the following
specific distributions relating to such
class of securities: (1) A dividend or
other distribution in cash or in kind
other than interest payments on debt
securities; (2) a stock split or reverse
stock split; or (3) a rights or other
subscription offering.
There are approximately 6,668
respondents per year. These
respondents make approximately 22,354
responses per year. Each response takes
approximately 10 minutes to complete.
Thus, the total compliance burden per
year is 3,726 burden hours. The total
internal labor cost of compliance for the
respondents, associated with producing
VerDate Mar<15>2010
16:55 Jun 09, 2014
Jkt 232001
and filing the reports, is approximately
$254,038.68.
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 shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be 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.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
subject to the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington,
DC 20549, or send an email to:
PRA_Mailbox@sec.gov.
Dated: June 4, 2014.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13462 Filed 6–9–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31071; 812–13951]
ValMark Advisers, Inc. and Northern
Lights Variable Trust; Notice of
Application
June 4, 2014.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 6(c) of the
Investment Company Act of 1940
(‘‘Act’’) for an exemption from section
15(a) of the Act and rule 18f–2 under
the Act.
AGENCY:
Summary of Application: Applicants
request an order that would permit them
to enter into and materially amend
subadvisory agreements without
shareholder approval.
Applicants: ValMark Advisers, Inc.
(‘‘ValMark Advisers’’ or the ‘‘Adviser’’)
and Northern Lights Variable Trust (the
‘‘Trust’’).
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
33227
Filing Dates: The application was
filed on August 30, 2011, and amended
on December 8, 2011, March 30, 2012,
and May 9, 2014.
Hearing or Notification of Hearing: An
order granting the application 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 June 30, 2014 and
should be accompanied by proof of
service on the 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: Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
Applicants: c/o James Ash, Gemini
Fund Services, LLC, 450 Wireless
Boulevard, Hauppauge, New York
11788.
FOR FURTHER INFORMATION CONTACT:
Deepak T. Pai, Senior Counsel, at (202)
551–6876, or Mary Kay Frech, Branch
Chief, at (202) 551–6821 (Division of
Investment Management, Chief
Counsel’s 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 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, a Delaware statutory
trust, is registered under the Act as an
open-end management investment
company and is comprised of multiple
series, including the TOPS Protected
Balanced ETF Portfolio, TOPS Protected
Moderate Growth ETF Portfolio, and
TOPS Protected Growth ETF Portfolio
(collectively, the ‘‘Protected
Portfolios’’). Each series has its own
investment objectives, policies and
restrictions.1
1 Applicants also request relief with respect to
any existing or future series of the Trust and any
other existing or future registered open-end
management investment company or series thereof
that: (a) Is advised by the Adviser or any entity
controlling, controlled by, or under common
control with the Adviser or its successors (included
E:\FR\FM\10JNN1.SGM
Continued
10JNN1
]]>Agencies
[Federal Register Volume 79, Number 111 (Tuesday, June 10, 2014)]
[Notices]
[Pages 33225-33227]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13460]
-----------------------------------------------------------------------
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 0-1;
SEC File No. 270-472, OMB Control No. 3235-0531.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995
[[Page 33226]]
(44 U.S.C. 350l et seq.), the Securities and Exchange Commission
(``Commission'') plans to submit to the Office of Management and Budget
a request for extension of the previous approved collection of
information discussed below.
The Investment Company Act of 1940 (the ``Act'') \1\ establishes a
comprehensive framework for regulating the organization and operation
of investment companies (``funds''). A principal objective of the Act
is to protect fund investors by addressing the conflicts of interest
that exist between funds and their investment advisers and other
affiliated persons. The Act places significant responsibility on the
fund board of directors in overseeing the operations of the fund and
policing the relevant conflicts of interest.\2\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a.
\2\ For example, fund directors must approve investment advisory
and distribution contracts. See 15 U.S.C. 80a-15(a), (b), and (c).
---------------------------------------------------------------------------
In one of its first releases, the Commission exercised its
rulemaking authority pursuant to sections 38(a) and 40(b) of the Act by
adopting rule 0-1 (17 CFR 270.0-1).\3\ Rule 0-1, as subsequently
amended on numerous occasions, provides definitions for the terms used
by the Commission in the rules and regulations it has adopted pursuant
to the Act. The rule also contains a number of rules of construction
for terms that are defined either in the Act itself or elsewhere in the
Commission's rules and regulations. Finally, rule 0-1 defines terms
that serve as conditions to the availability of certain of the
Commission's exemptive rules. More specifically, the term ``independent
legal counsel,'' as defined in rule 0-1, sets out conditions that funds
must meet in order to rely on any of ten exemptive rules (``exemptive
rules'') under the Act.\4\
---------------------------------------------------------------------------
\3\ Investment Company Act Release No. 4 (Oct. 29, 1940) (5 FR
4316 (Oct. 31, 1940)). Note that rule 0-1 was originally adopted as
rule N-1.
\4\ The relevant exemptive rules are: rule 10f-3 (17 CFR
270.10f-3), rule 12b-1 (17 CFR 270.12b-1), rule 15a-4(b)(2) (17 CFR
270.15a-4(b)(2)), rule 17a-7 (17 CFR 270.17a-7), rule 17a-8 (17 CFR
270.17a-8), rule 17d-1(d)(7) (17 CFR 270.17d-1(d)(7)), rule 17e-1(c)
(17 CFR 270.17e-1(c)), rule 17g-1 (17 CFR 270.17g-1), rule 18f-3 (17
CFR 270.18f-3), and rule 23c-3 (17 CFR 270.23c-3).
---------------------------------------------------------------------------
The Commission amended rule 0-1 to include the definition of the
term ``independent legal counsel'' in 2001.\5\ This amendment was
designed to enhance the effectiveness of fund boards of directors and
to better enable investors to assess the independence of those
directors. The Commission also amended the exemptive rules to require
that any person who serves as legal counsel to the independent
directors of any fund that relies on any of the exemptive rules must be
an ``independent legal counsel.'' This requirement was added because
independent directors can better perform the responsibilities assigned
to them under the Act and the rules if they have the assistance of
truly independent legal counsel.
---------------------------------------------------------------------------
\5\ See Role of Independent Directors of Investment Companies,
Investment Company Act Release No. 24816 (Jan. 2, 2001) (66 FR 3735
(Jan. 16, 2001)).
---------------------------------------------------------------------------
If the board's counsel has represented the fund's investment
adviser, principal underwriter, administrator (collectively,
``management organizations'') or their ``control persons'' \6\ during
the past two years, rule 0-1 requires that the board's independent
directors make a determination about the adequacy of the counsel's
independence. A majority of the board's independent directors are
required to reasonably determine, in the exercise of their judgment,
that the counsel's prior or current representation of the management
organizations or their control persons was sufficiently limited to
conclude that it is unlikely to adversely affect the counsel's
professional judgment and legal representation. Rule 0-1 also requires
that a record for the basis of this determination is made in the
minutes of the directors' meeting. In addition, the independent
directors must have obtained an undertaking from the counsel to provide
them with the information necessary to make their determination and to
update promptly that information when the person begins to represent a
management organization or control person, or when he or she materially
increases his or her representation. Generally, the independent
directors must re-evaluate their determination no less frequently than
annually.
---------------------------------------------------------------------------
\6\ A ``control person'' is any person--other than a fund--
directly or indirectly controlling, controlled by, or under common
control, with any of the fund's management organizations. See 17 CFR
270.01(a)(6)(iv)(B).
---------------------------------------------------------------------------
Any fund that relies on one of the exemptive rules must comply with
the requirements in the definition of ``independent legal counsel''
under rule 0-1. We assume that approximately 3751 funds rely on at
least one of the exemptive rules annually.\7\ We further assume that
the independent directors of approximately one-third (1250) of those
funds would need to make the required determination in order for their
counsel to meet the definition of independent legal counsel.\8\ We
estimate that each of these 1250 funds would be required to spend, on
average, 0.75 hours annually to comply with the recordkeeping
requirement associated with this determination, for a total annual
burden of approximately 938 hours. Based on this estimate, the total
annual cost for all funds' compliance with this rule is approximately
$196,907. To calculate this total annual cost, the Commission staff
assumed that approximately two-thirds of the total annual hour burden
(625 hours) would be incurred by a compliance manager with an average
hourly wage rate of $283 per hour,\9\ and one-third of the annual hour
burden (313 hours) would be incurred by compliance clerk with an
average hourly wage rate of $64 per hour.\10\
---------------------------------------------------------------------------
\7\ Based on statistics compiled by Commission staff, we
estimate that there are approximately 4168 funds that could rely on
one or more of the exemptive rules. Of those funds, we assume that
approximately 90 percent (3751) actually rely on at least one
exemptive rules annually.
\8\ We assume that the independent directors of the remaining
two-thirds of those funds will choose not to have counsel, or will
rely on counsel who has not recently represented the fund's
management organizations or control persons. In both circumstances,
it would not be necessary for the fund's independent directors to
make a determination about their counsel's independence.
\9\ The estimated hourly wages used in this PRA analysis were
derived from reports prepared by the Securities Industry and
Financial Markets Association. See Securities Industry and Financial
Markets Association, Report on Management and Professional Earnings
in the Securities Industry--2013 (2013), modified to account for an
1800-hour work year and multiplied by 5.35 to account for bonuses,
firm size, employee benefits and overhead; and Securities Industry
and Financial Markets Association, Office Salaries in the Securities
Industry--2013 (2013), modified to account for an 1800-hour work
year and multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.
\10\ (625 x $283/hour) + (313 x $64/hour) = $196,907.
---------------------------------------------------------------------------
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.
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 has practical
utility; (b) the accuracy of the Commission's estimate of the burdens
of the collection 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
[[Page 33227]]
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, 100 F Street NE., Washington, DC 20549; or send an email
to: PRA_Mailbox@sec.gov.
Dated: June 4, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13460 Filed 6-9-14; 8:45 am]
BILLING CODE 8011-01-P
