Proposed Collection; Comment Request, 21789-21790 [2015-08992]

Download as PDF Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 15 of the Act and subparagraph (f)(2) of Rule 19b–4 16 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 17 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: mstockstill on DSK4VPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2015–30 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2015–30. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/rules/ sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 17 15 U.S.C. 78s(b)(2)(B). Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2015–30, and should be submitted on or before May 11, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Brent J. Fields, Secretary. [FR Doc. 2015–08943 Filed 4–17–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–188, OMB Control No. 3235–0212] Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549–2736. Extension: Rule 12b–1. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (the ‘‘Commission’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. Rule 12b–1 under the Investment Company Act of 1940 (17 CFR 270.12b– 1) permits a registered open-end investment company (‘‘fund’’ or ‘‘mutual fund’’) to bear expenses associated with the distribution of its shares, provided that the mutual fund complies with certain requirements, including, among other things, that it 16 17 VerDate Sep<11>2014 17:56 Apr 17, 2015 18 17 Jkt 235001 PO 00000 CFR 200.30–3(a)(12). Frm 00086 Fmt 4703 Sfmt 4703 21789 adopt a written plan (‘‘rule 12b–1 plan’’) and that it has in writing any agreements relating to the rule 12b–1 plan. The rule in part requires that (i) The adoption or material amendment of a rule 12b–1 plan be approved by the mutual fund’s directors, including its independent directors, and, in certain circumstances, its shareholders; (ii) the board review quarterly reports of amounts spent under the rule 12b–1 plan; and (iii) the board, including the independent directors, consider continuation of the rule 12b–1 plan and any related agreements at least annually. Rule 12b–1 also requires mutual funds relying on the rule to preserve for six years, the first two years in an easily accessible place, copies of the rule 12b– 1 plan and any related agreements and reports, as well as minutes of board meetings that describe the factors considered and the basis for adopting or continuing a rule 12b–1 plan. Rule 12b–1 also prohibits funds from paying for distribution of fund shares with brokerage commissions on their portfolio transactions. The rule requires funds that use broker-dealers that sell their shares to also execute their portfolio securities transactions, to implement policies and procedures reasonably designed to prevent: (i) the persons responsible for selecting brokerdealers to effect transactions in fund portfolio securities from taking into account broker-dealers’ promotional or sales efforts when making those decisions; and (ii) a fund, its adviser or principal underwriter, from entering into any agreement under which the fund directs brokerage transactions or revenue generated by those transactions to a broker-dealer to pay for distribution of the fund’s (or any other fund’s) shares. The board and shareholder approval requirements of rule 12b–1 are designed to ensure that fund shareholders and directors receive adequate information to evaluate and approve a rule 12b–1 plan and, thus, are necessary for investor protection. The requirement of quarterly reporting to the board is designed to ensure that the rule 12b–1 plan continues to benefit the fund and its shareholders. The recordkeeping requirements of the rule are necessary to enable Commission staff to oversee compliance with the rule. The requirement that funds or their advisers implement, and fund boards approve, policies and procedures in order to prevent persons charged with allocating fund brokerage from taking distribution efforts into account is designed to ensure that funds’ selection of brokers to effect portfolio securities transactions is E:\FR\FM\20APN1.SGM 20APN1 21790 Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES not influenced by considerations about the sale of fund shares. Based on information filed with the Commission by funds, Commission staff estimates that there are approximately 7837 mutual fund portfolios that have at least one share class subject to a rule 12b–1 plan.1 However, many of these portfolios are part of an affiliated group of funds, or mutual fund family, that is overseen by a common board of directors. Although the board must review and approve the rule 12b–1 plan for each fund separately, we have allocated the costs and hourly burden related to rule 12b–1 based on the number of fund families that have at least one fund that charges rule 12b–1 fees, rather than on the total number of mutual fund portfolios that individually have a rule 12b–1 plan.2 Based on information filed with the Commission, the staff estimates that there are approximately 330 fund families with common boards of directors that have at least one fund with a rule 12b–1 plan. Based on previous conversations with fund representatives, Commission staff estimates that for each of the 330 mutual fund families with a portfolio that has a rule 12b–1 plan, the average annual burden of complying with the rule is 425 hours. This estimate takes into account the time needed to prepare quarterly reports to the board of directors, the board’s consideration of those reports, and the board’s initial or annual consideration of whether to continue the plan.3 We therefore estimate that the total hourly burden per year for all funds to comply with current information collection requirements under rule 12b–1, is 140,250 hours (330 fund families × 425 hours per fund family = 140,250 hours). If a currently operating fund seeks to (i) adopt a new rule 12b–1 plan or (ii) materially increase the amount it spends for distribution under its rule 12b–1 1 This estimate is based on information from the Commission’s NSAR database. 2 This allocation is based on previous conversations with fund representatives on how fund boards comply with the requirements of rule 12b–1. Despite this allocation of hourly burdens and costs, the number of annual responses each year will continue to depend on the number of fund portfolios with rule 12b–1 plans rather than the number of fund families with rule 12b–1 plans. The staff estimates that the number of annual responses per fund portfolio will be four per year (quarterly, with the annual reviews taking place at one of the quarterly intervals). Thus, we estimate that funds will make 31,348 responses (7837 fund portfolios × 4 responses per fund portfolio = 31,348 responses) each year. 3 We do not estimate any costs or time burden related to the recordkeeping requirements in rule 12b–1, as funds are either required to maintain these records pursuant to other rules or would keep these records in any case as a matter of business practice. VerDate Sep<11>2014 17:56 Apr 17, 2015 Jkt 235001 plan, rule 12b–1 requires that the fund obtain shareholder approval. As a consequence, the fund will incur the cost of a proxy.4 Based on previous conversations with fund representatives, Commission staff estimates that approximately three funds per year prepare a proxy in connection with the adoption or material amendment of a rule 12b–1 plan. Funds typically hire outside legal counsel and proxy solicitation firms to prepare, print, and mail such proxies. The staff further estimates that the cost of each fund’s proxy is $34,372. Thus the total annual cost burden of rule 12b–1 to the fund industry is $103,116 (3 funds requiring a proxy × $34,372 per proxy). 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 and forms. The collections of information required by Rule 12b–1 are necessary to obtain the benefits of the rule. Notices to the Commission will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid control number. Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (b) the accuracy of the Commission’s estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to Pamela Dyson, Director/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. 4 In general, a fund adopts a rule 12b–1 plan before it begins operations. Therefore, the fund is not required to obtain the approval of its public shareholders because the fund’s shares have not yet been offered to the public. PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 Dated: April 15, 2015. Brent J. Fields, Secretary. [FR Doc. 2015–08992 Filed 4–17–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74724; File No. SR–BX– 2015–017] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX BX, Inc. Relating to Member Application April 14, 2015. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 8, 2015, NASDAQ OMX BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change BX proposes to amend Rule 1013 titled ‘‘New Member Application’’ to include an expedited application process for firms that are already approved members of NASDAQ OMX PHLX LLC (‘‘PHLX’’). The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxbx.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of 1 15 2 17 E:\FR\FM\20APN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 20APN1

Agencies

[Federal Register Volume 80, Number 75 (Monday, April 20, 2015)]
[Notices]
[Pages 21789-21790]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08992]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-188, OMB Control No. 3235-0212]


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:
    Rule 12b-1.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (the ``Commission'') is soliciting comments on the 
collection of information summarized below. The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget for extension and approval.
    Rule 12b-1 under the Investment Company Act of 1940 (17 CFR 
270.12b-1) permits a registered open-end investment company (``fund'' 
or ``mutual fund'') to bear expenses associated with the distribution 
of its shares, provided that the mutual fund complies with certain 
requirements, including, among other things, that it adopt a written 
plan (``rule 12b-1 plan'') and that it has in writing any agreements 
relating to the rule 12b-1 plan. The rule in part requires that (i) The 
adoption or material amendment of a rule 12b-1 plan be approved by the 
mutual fund's directors, including its independent directors, and, in 
certain circumstances, its shareholders; (ii) the board review 
quarterly reports of amounts spent under the rule 12b-1 plan; and (iii) 
the board, including the independent directors, consider continuation 
of the rule 12b-1 plan and any related agreements at least annually. 
Rule 12b-1 also requires mutual funds relying on the rule to preserve 
for six years, the first two years in an easily accessible place, 
copies of the rule 12b-1 plan and any related agreements and reports, 
as well as minutes of board meetings that describe the factors 
considered and the basis for adopting or continuing a rule 12b-1 plan.
    Rule 12b-1 also prohibits funds from paying for distribution of 
fund shares with brokerage commissions on their portfolio transactions. 
The rule requires funds that use broker-dealers that sell their shares 
to also execute their portfolio securities transactions, to implement 
policies and procedures reasonably designed to prevent: (i) the persons 
responsible for selecting broker-dealers to effect transactions in fund 
portfolio securities from taking into account broker-dealers' 
promotional or sales efforts when making those decisions; and (ii) a 
fund, its adviser or principal underwriter, from entering into any 
agreement under which the fund directs brokerage transactions or 
revenue generated by those transactions to a broker-dealer to pay for 
distribution of the fund's (or any other fund's) shares.
    The board and shareholder approval requirements of rule 12b-1 are 
designed to ensure that fund shareholders and directors receive 
adequate information to evaluate and approve a rule 12b-1 plan and, 
thus, are necessary for investor protection. The requirement of 
quarterly reporting to the board is designed to ensure that the rule 
12b-1 plan continues to benefit the fund and its shareholders. The 
recordkeeping requirements of the rule are necessary to enable 
Commission staff to oversee compliance with the rule. The requirement 
that funds or their advisers implement, and fund boards approve, 
policies and procedures in order to prevent persons charged with 
allocating fund brokerage from taking distribution efforts into account 
is designed to ensure that funds' selection of brokers to effect 
portfolio securities transactions is

[[Page 21790]]

not influenced by considerations about the sale of fund shares.
    Based on information filed with the Commission by funds, Commission 
staff estimates that there are approximately 7837 mutual fund 
portfolios that have at least one share class subject to a rule 12b-1 
plan.\1\ However, many of these portfolios are part of an affiliated 
group of funds, or mutual fund family, that is overseen by a common 
board of directors. Although the board must review and approve the rule 
12b-1 plan for each fund separately, we have allocated the costs and 
hourly burden related to rule 12b-1 based on the number of fund 
families that have at least one fund that charges rule 12b-1 fees, 
rather than on the total number of mutual fund portfolios that 
individually have a rule 12b-1 plan.\2\ Based on information filed with 
the Commission, the staff estimates that there are approximately 330 
fund families with common boards of directors that have at least one 
fund with a rule 12b-1 plan.
---------------------------------------------------------------------------

    \1\ This estimate is based on information from the Commission's 
NSAR database.
    \2\ This allocation is based on previous conversations with fund 
representatives on how fund boards comply with the requirements of 
rule 12b-1. Despite this allocation of hourly burdens and costs, the 
number of annual responses each year will continue to depend on the 
number of fund portfolios with rule 12b-1 plans rather than the 
number of fund families with rule 12b-1 plans. The staff estimates 
that the number of annual responses per fund portfolio will be four 
per year (quarterly, with the annual reviews taking place at one of 
the quarterly intervals). Thus, we estimate that funds will make 
31,348 responses (7837 fund portfolios x 4 responses per fund 
portfolio = 31,348 responses) each year.
---------------------------------------------------------------------------

    Based on previous conversations with fund representatives, 
Commission staff estimates that for each of the 330 mutual fund 
families with a portfolio that has a rule 12b-1 plan, the average 
annual burden of complying with the rule is 425 hours. This estimate 
takes into account the time needed to prepare quarterly reports to the 
board of directors, the board's consideration of those reports, and the 
board's initial or annual consideration of whether to continue the 
plan.\3\ We therefore estimate that the total hourly burden per year 
for all funds to comply with current information collection 
requirements under rule 12b-1, is 140,250 hours (330 fund families x 
425 hours per fund family = 140,250 hours).
---------------------------------------------------------------------------

    \3\ We do not estimate any costs or time burden related to the 
recordkeeping requirements in rule 12b-1, as funds are either 
required to maintain these records pursuant to other rules or would 
keep these records in any case as a matter of business practice.
---------------------------------------------------------------------------

    If a currently operating fund seeks to (i) adopt a new rule 12b-1 
plan or (ii) materially increase the amount it spends for distribution 
under its rule 12b-1 plan, rule 12b-1 requires that the fund obtain 
shareholder approval. As a consequence, the fund will incur the cost of 
a proxy.\4\ Based on previous conversations with fund representatives, 
Commission staff estimates that approximately three funds per year 
prepare a proxy in connection with the adoption or material amendment 
of a rule 12b-1 plan. Funds typically hire outside legal counsel and 
proxy solicitation firms to prepare, print, and mail such proxies. The 
staff further estimates that the cost of each fund's proxy is $34,372. 
Thus the total annual cost burden of rule 12b-1 to the fund industry is 
$103,116 (3 funds requiring a proxy x $34,372 per proxy).
---------------------------------------------------------------------------

    \4\ In general, a fund adopts a rule 12b-1 plan before it begins 
operations. Therefore, the fund is not required to obtain the 
approval of its public shareholders because the fund's shares have 
not yet been offered to the public.
---------------------------------------------------------------------------

    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 and forms.
    The collections of information required by Rule 12b-1 are necessary 
to obtain the benefits of the rule. Notices to the Commission will not 
be kept confidential. An agency may not conduct or sponsor, and a 
person is not required to respond to a collection of information unless 
it displays a currently valid control number.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information will 
have practical utility; (b) the accuracy of the Commission's estimate 
of the burden of the collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information collected; and (d) 
ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology. Consideration will 
be given to comments and suggestions submitted in writing within 60 
days of this publication.
    Please direct your written comments to Pamela Dyson, Director/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: April 15, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015-08992 Filed 4-17-15; 8:45 am]
 BILLING CODE 8011-01-P
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