Submission for OMB Review; Comment Request, 67452-67454 [2015-27802]

Download as PDF 67452 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices protection of investors and the public interest as it will allow FICC to incorporate changes required under Reg. SCI prior to the November 3, 2015 compliance date. Therefore, the Commission designates the proposed rule change to be operative upon filing.21 At any time within 60 days of the filing of the 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. 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: asabaliauskas on DSK5VPTVN1PROD 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– FICC–2015–004 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FICC–2015–004. 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 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., 21 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 18:55 Oct 30, 2015 Jkt 238001 Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of FICC and on DTCC’s Web site (https://dtcc.com/legal/sec-rulefilings.aspx). 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–FICC–2015–004 and should be submitted on or before November 23, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–27797 Filed 10–30–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–239, OMB Control No. 3235–0224; Extension: Rule 17j 1] 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 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. Conflicts of interest between investment company personnel (such as portfolio managers) and their funds can arise when these persons buy and sell securities for their own accounts (‘‘personal investment activities’’). These conflicts arise because fund personnel have the opportunity to profit from information about fund transactions, often to the detriment of fund investors. Beginning in the early 1960s, Congress and the Securities and Exchange Commission (‘‘Commission’’) sought to devise a regulatory scheme to effectively address these potential conflicts. These efforts culminated in the addition of section 17(j) to the 22 17 PO 00000 CFR 200.30–3(a)(12). Frm 00071 Fmt 4703 Sfmt 4703 Investment Company Act of 1940 (the ‘‘Investment Company Act’’) (15 U.S.C. 80a–17(j)) in 1970 and the adoption by the Commission of rule 17j–1 (17 CFR 270.17j–1) in 1980.1 The Commission proposed amendments to rule 17j–1 in 1995 in response to recommendations made in the first detailed study of fund policies concerning personal investment activities by the Commission’s Division of Investment Management since rule 17j–1 was adopted. Amendments to rule 17j–1, which were adopted in 1999, enhanced fund oversight of personal investment activities and the board’s role in carrying out that oversight.2 Additional amendments to rule 17j–1 were made in 2004, conforming rule 17j–1 to rule 204A–1 under the Investment Advisers Act of 1940 (15 U.S.C. 80b), avoiding duplicative reporting, and modifying certain definitions and time restrictions.3 Section 17(j) makes it unlawful for persons affiliated with a registered investment company (‘‘fund’’) or with the fund’s investment adviser or principal underwriter (each a ‘‘17j–1 organization’’), in connection with the purchase or sale of securities held or to be acquired by the investment company, to engage in any fraudulent, deceptive, or manipulative act or practice in contravention of the Commission’s rules and regulations. Section 17(j) also authorizes the Commission to promulgate rules requiring 17j–1 organizations to adopt codes of ethics. In order to implement section 17(j), rule 17j–1 imposes certain requirements on 17j–1 organizations and ‘‘Access Persons’’ 4 of those organizations. The 1 Prevention of Certain Unlawful Activities with Respect to Registered Investment Companies, Investment Company Act Release No. 11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)). 2 Personal Investment Activities of Investment Company Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999) (64 FR 46821 (Aug. 27, 1999)). 3 Investment Adviser Codes of Ethics, Investment Advisers Act Release No. 2256 (Jul. 2, 2004) (69 FR 41696 (Jul. 9, 2004)). 4 Rule 17j–1(a)(1) defines an ‘‘access person’’ as ‘‘Any Advisory Person of a Fund or of a Fund’s investment adviser. If an investment adviser’s primary business is advising Funds or other advisory clients, all of the investment adviser’s directors, officers, and general partners are presumed to be Access Persons of any Fund advised by the investment adviser. All of a Fund’s directors, officers, and general partners are presumed to be Access Persons of the Fund.’’ The definition of Access Person also includes ‘‘Any director, officer or general partner of a principal underwriter who, in the ordinary course of business, makes, participates in or obtains information regarding, the purchase or sale of Covered Securities by the Fund for which the principal underwriter acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of Covered Securities.’’ Rule 17j– 1(a)(1). E:\FR\FM\02NON1.SGM 02NON1 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices asabaliauskas on DSK5VPTVN1PROD with NOTICES rule prohibits fraudulent, deceptive or manipulative acts by persons affiliated with a 17j–1 organization in connection with their personal securities transactions in securities held or to be acquired by the fund. The rule requires each 17j–1 organization, unless it is a money market fund or a fund that does not invest in Covered Securities,5 to: (i) Adopt a written codes of ethics, (ii) submit the code and any material changes to the code, along with a certification that it has adopted procedures reasonably necessary to prevent Access Persons from violating the code of ethics, to the fund board for approval, (iii) use reasonable diligence and institute procedures reasonably necessary to prevent violations of the code, (iv) submit a written report to the fund describing any issues arising under the code and procedures and certifying that the 17j–1 entity has adopted procedures reasonably necessary to prevent Access Persons form violating the code, (v) identify Access Persons and notify them of their reporting obligations, and (vi) maintain and make available to the Commission for review certain records related to the code of ethics and transaction reporting by Access Persons. The rule requires each Access Person of a fund (other than a money market fund or a fund that does not invest in Covered Securities) and of an investment adviser or principal underwriter of the fund, who is not subject to an exception,6 to file: (i) 5 A ‘‘Covered Security’’ is any security that falls within the definition in section 2(a)(36) of the Act, except for direct obligations of the U.S. Government, bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements, and shares issued by open-end funds. Rule 17j–1(a)(4). 6 Rule 17j–1(d)(2) contains the following exceptions: (i) An Access Person need not file a report for transactions effected for, and securities held in, any account over which the Access Person does not have control; (ii) an independent director of the fund, who would otherwise be required to report solely by reason of being a fund director and who does not have information with respect to the fund’s transactions in a particular security, does not have to file an initial holdings report or a quarterly transaction report,; (iii) an Access Person of a principal underwriter of the fund does not have to file reports if the principal underwriter is not affiliated with the fund (unless the fund is a unit investment trust) or any investment adviser of the fund and the principal underwriter of the fund does not have any officer, director, or general partner who serves in one of those capacities for the fund or any investment adviser of the fund; (iv) an Access Person to an investment adviser need not make quarterly reports if the report would duplicate information provided under the reporting provisions of the Investment Adviser’s Act of 1940; (v) an Access Person need not make quarterly transaction reports if the information provided in the report would duplicate information received by the 17j–1 organization in the form of broker trade VerDate Sep<11>2014 18:55 Oct 30, 2015 Jkt 238001 Within 10 days of becoming an Access Person, a dated initial holdings report that sets forth certain information with respect to the Access Person’s securities and accounts; (ii) dated quarterly transaction reports within 30 days of the end of each calendar quarter providing certain information with respect to any securities transactions during the quarter and any account established by the Access Person in which any securities were held during the quarter; and (iii) dated annual holding reports providing information with respect to each Covered Security the Access Person beneficially owns and accounts in which securities are held for his or her benefit. In addition, rule 17j–1 requires investment personnel of a fund or its investment adviser, before acquiring beneficial ownership in securities through an initial public offering (IPO) or in a private placement, to obtain approval from the fund or the fund’s investment adviser. The requirements that the management of a rule 17j–1 organization provide the fund’s board with new and amended codes of ethics and an annual issues and certification report are intended to enhance board oversight of personal investment policies applicable to the fund and the personal investment activities of Access Persons. The requirements that Access Persons provide initial holdings reports, quarterly transaction reports, and annual holdings reports and request approval for purchases of securities through IPOs and private placements are intended to help fund compliance personnel and the Commission’s examinations staff monitor potential conflicts of interest and detect potentially abusive activities. The requirement that each rule 17j–1 organization maintain certain records is intended to assist the organization and the Commission’s examinations staff in determining if there have been violations of rule 17j–1. We estimate that annually there are approximately 75,497 respondents under rule 17j–1, of which 5,497 are rule 17j–1 organizations and 70,000 are Access Persons. In the aggregate, these respondents make approximately 108,305 responses annually. We estimate that the total annual burden of complying with the information collection requirements in rule 17j–1 is approximately 401,407 hours. This hour burden represents time spent by Access Persons that must file initial and annual confirmations or account statements or information otherwise in the records of the 17j–1 organization; and (vi) an Access Person need not make quarterly transaction reports with respect to transactions effected pursuant to an Automatic Investment Plan. PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 67453 holdings reports and quarterly transaction reports, investment personnel that must obtain approval before acquiring beneficial ownership in any securities through an IPO or private placement, and the responsibilities of Rule 17j–1 organizations arising from information collection requirements under rule 17j–1. These include notifying Access Persons of their reporting obligations, preparing an annual rule 17j–1 report and certification for the board, documenting their approval or rejection of IPO and private placement requests, maintaining annual rule 17j–1 records, maintaining electronic reporting and recordkeeping systems, amending their codes of ethics as necessary, and, for new fund complexes, adopting a code of ethics. We estimate that there is an annual cost burden of approximately $5,000 per fund complex, for a total of $4,335,000, associated with complying with the information collection requirements in rule 17j–1. This represents the costs of purchasing and maintaining computers and software to assist funds in carrying out rule 17j–1 recordkeeping. These burden hour and cost estimates are based upon the Commission staff’s experience and discussions with the fund industry. The estimates of average burden hours and costs 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. 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. Rule 17j–1 requires that records be maintained for at least five years in an easily accessible place.7 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) Pamela 7 If information collected pursuant to the rule is reviewed by the Commission’s examination staff, it will be accorded the same level of confidentiality accorded to other responses provided to the Commission in the context of its examination and oversight program. See section 31(c) of the Investment Company Act (15 U.S.C. 80a–30(c)). E:\FR\FM\02NON1.SGM 02NON1 67454 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices 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. Comments must be submitted to OMB within 30 days of this notice. on the proposed rule change. The text of those 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 the most significant parts of such statements. Dated: October 27, 2015. Robert W. Errett, Deputy Secretary. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [FR Doc. 2015–27802 Filed 10–30–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76276; File No. SR– NYSEMKT–2015–80] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Deleting Rule 410B Equities Governing Reporting Requirements for Off-Exchange Transactions October 27, 2015. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 16, 2015, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. asabaliauskas on DSK5VPTVN1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to delete Rule 410B—Equities governing reporting requirements for off-Exchange transactions. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 1. Purpose The Exchange proposes to delete Rule 410B—Equities (‘‘Rule 410B’’), which sets forth certain regulatory reporting requirements for member or member organizations effecting off-Exchange transactions in Exchange listed securities that are not reported to the Consolidated Tape, and to make conforming amendments to Rule 476A to delete a reference to Rule 410B. Background Rule 410B Currently, Rule 410B requires members or member organizations to report to the Exchange transactions in NYSE-listed securities effected for the account of a member or member organization, or for the account of a customer of a member or member organization, that are not reported to the Consolidated Tape. Reports prepared pursuant to the Rule must contain the following information: • Time and date of the transaction; • stock symbol of the listed security; • number of shares; • price; • marketplace where the transaction was executed; • an indication whether the transaction was a buy (B), sell (S) or cross (C); • an indication whether the transaction was executed as principal or agent; and • the name of the contra-side brokerdealer to the trade.4 Rule 410B was adopted by the Exchange’s affiliate the New York Stock Exchange LLC (‘‘NYSE’’) in 1992. At the time, transactions in NYSE-listed stocks effected outside of business hours or in foreign markets were not reported to the Consolidated Tape and, with the exception of program trading information, were not reported to the Exchange. The Exchange (then the New York Stock Exchange, Inc.) believed that ‘‘all transactions in NYSE-listed stocks that are not reported to the Consolidated Tape should be reported to the Exchange in order to provide an 2 15 VerDate Sep<11>2014 18:55 Oct 30, 2015 4 See Jkt 238001 PO 00000 Rule 410B. Frm 00073 Fmt 4703 Sfmt 4703 accurate record of overall trading activity in NYSE-listed stocks.’’ 5 The Rule 410B reporting requirement would thus ‘‘augment and enhance’’ the NYSE’s ability to ‘‘surveil for and investigate, among other matters, insider trading, frontrunning and manipulative activities’’ and ‘‘provide a more complete audit trail and depiction of member trading in each NYSE-listed stock, which should facilitate surveillance by the Exchange in NYSElisted stocks.’’ 6 Despite the significant changes to the marketplace and the regulatory landscape in the ensuing decades, the Exchange adopted Rule 410B without amendment in 2008.7 Changes to Regulatory Landscape On July 30, 2007, the NASD, NYSE, and NYSE Regulation, Inc. (‘‘NYSE Regulation’’) consolidated their member firm regulation operations to create the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), and entered into a plan to allocate to FINRA regulatory responsibility for common rules and common members (‘‘17d-2 Agreement’’).8 The Exchange was added as a party to the 17d-2 Agreement in 2009.9 In 2008, the Exchange, NASD, NYSE, and NYSE Regulation also entered into a plan to allocate to FINRA regulatory responsibility over common FINRA members for surveillance, investigation, and enforcement of insider trading with respect to NYSE– MKT listed stocks, among others, irrespective of where the relevant trading occurred (the ‘‘Insider Trading Plan’’).10 On June 14, 2010, FINRA was retained to perform the residual market surveillance and enforcement functions that had, up to that point, been performed by NYSE Regulation.11 In 5 See Securities Exchange Act Release No. 31358 (October 26, 1992), 57 FR 1294 (January 6, 1992) (SR–NYSE–91–45) (‘‘Rule 410B Approval Order’’). 6 See id., 57 FR at 1294. 7 See Securities Exchange Act Release No. 58265 (July 30, 2008), 73 FR 46075, 46078 (August 7, 2008) (SR–Amex–2008–63). 8 See Securities Exchange Act Release No. 56148 (July 26, 2007), 72 FR 42146 (August 1, 2007) (File No. 4–544) (Notice of Filing and Order Approving and Declaring Effective a Plan for the Allocation of Regulatory Responsibilities). In 2007, the NASD, NYSE, the Exchange and NYSE Regulation also entered into a Regulatory Services Agreement (‘‘RSA’’), whereby FINRA was retained to perform certain regulatory services for non-common rules. 9 See Securities Exchange Act Release No. 60409 (July 30, 2009), 74 FR 39353 (August 6, 2009) (File No. 4–587). 10 See Securities Exchange Act Release No. 54646 (September 12, 2008), 73 FR 54646 (September 22, 2008) (File No. 4–566). See also Securities Exchange Act Release No. 58806 (October 17, 2008), 73 FR 63216 (October 23, 2008) (File No. 4–566). 11 See note 8, supra; Securities Exchange Act Release No. 62355 (June 22, 2010), 75 FR 36729 E:\FR\FM\02NON1.SGM 02NON1

Agencies

[Federal Register Volume 80, Number 211 (Monday, November 2, 2015)]
[Notices]
[Pages 67452-67454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27802]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-239, OMB Control No. 3235-0224; Extension: Rule 17j 
1]


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

    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.
    Conflicts of interest between investment company personnel (such as 
portfolio managers) and their funds can arise when these persons buy 
and sell securities for their own accounts (``personal investment 
activities''). These conflicts arise because fund personnel have the 
opportunity to profit from information about fund transactions, often 
to the detriment of fund investors. Beginning in the early 1960s, 
Congress and the Securities and Exchange Commission (``Commission'') 
sought to devise a regulatory scheme to effectively address these 
potential conflicts. These efforts culminated in the addition of 
section 17(j) to the Investment Company Act of 1940 (the ``Investment 
Company Act'') (15 U.S.C. 80a-17(j)) in 1970 and the adoption by the 
Commission of rule 17j-1 (17 CFR 270.17j-1) in 1980.\1\ The Commission 
proposed amendments to rule 17j-1 in 1995 in response to 
recommendations made in the first detailed study of fund policies 
concerning personal investment activities by the Commission's Division 
of Investment Management since rule 17j-1 was adopted. Amendments to 
rule 17j-1, which were adopted in 1999, enhanced fund oversight of 
personal investment activities and the board's role in carrying out 
that oversight.\2\ Additional amendments to rule 17j-1 were made in 
2004, conforming rule 17j-1 to rule 204A-1 under the Investment 
Advisers Act of 1940 (15 U.S.C. 80b), avoiding duplicative reporting, 
and modifying certain definitions and time restrictions.\3\
    Section 17(j) makes it unlawful for persons affiliated with a 
registered investment company (``fund'') or with the fund's investment 
adviser or principal underwriter (each a ``17j-1 organization''), in 
connection with the purchase or sale of securities held or to be 
acquired by the investment company, to engage in any fraudulent, 
deceptive, or manipulative act or practice in contravention of the 
Commission's rules and regulations. Section 17(j) also authorizes the 
Commission to promulgate rules requiring 17j-1 organizations to adopt 
codes of ethics.
---------------------------------------------------------------------------

    \1\ Prevention of Certain Unlawful Activities with Respect to 
Registered Investment Companies, Investment Company Act Release No. 
11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)).
    \2\ Personal Investment Activities of Investment Company 
Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999) 
(64 FR 46821 (Aug. 27, 1999)).
    \3\ Investment Adviser Codes of Ethics, Investment Advisers Act 
Release No. 2256 (Jul. 2, 2004) (69 FR 41696 (Jul. 9, 2004)).
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    In order to implement section 17(j), rule 17j-1 imposes certain 
requirements on 17j-1 organizations and ``Access Persons'' \4\ of those 
organizations. The

[[Page 67453]]

rule prohibits fraudulent, deceptive or manipulative acts by persons 
affiliated with a 17j-1 organization in connection with their personal 
securities transactions in securities held or to be acquired by the 
fund. The rule requires each 17j-1 organization, unless it is a money 
market fund or a fund that does not invest in Covered Securities,\5\ 
to: (i) Adopt a written codes of ethics, (ii) submit the code and any 
material changes to the code, along with a certification that it has 
adopted procedures reasonably necessary to prevent Access Persons from 
violating the code of ethics, to the fund board for approval, (iii) use 
reasonable diligence and institute procedures reasonably necessary to 
prevent violations of the code, (iv) submit a written report to the 
fund describing any issues arising under the code and procedures and 
certifying that the 17j-1 entity has adopted procedures reasonably 
necessary to prevent Access Persons form violating the code, (v) 
identify Access Persons and notify them of their reporting obligations, 
and (vi) maintain and make available to the Commission for review 
certain records related to the code of ethics and transaction reporting 
by Access Persons.
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    \4\ Rule 17j-1(a)(1) defines an ``access person'' as ``Any 
Advisory Person of a Fund or of a Fund's investment adviser. If an 
investment adviser's primary business is advising Funds or other 
advisory clients, all of the investment adviser's directors, 
officers, and general partners are presumed to be Access Persons of 
any Fund advised by the investment adviser. All of a Fund's 
directors, officers, and general partners are presumed to be Access 
Persons of the Fund.'' The definition of Access Person also includes 
``Any director, officer or general partner of a principal 
underwriter who, in the ordinary course of business, makes, 
participates in or obtains information regarding, the purchase or 
sale of Covered Securities by the Fund for which the principal 
underwriter acts, or whose functions or duties in the ordinary 
course of business relate to the making of any recommendation to the 
Fund regarding the purchase or sale of Covered Securities.'' Rule 
17j-1(a)(1).
    \5\ A ``Covered Security'' is any security that falls within the 
definition in section 2(a)(36) of the Act, except for direct 
obligations of the U.S. Government, bankers' acceptances, bank 
certificates of deposit, commercial paper and high quality short-
term debt instruments, including repurchase agreements, and shares 
issued by open-end funds. Rule 17j-1(a)(4).
---------------------------------------------------------------------------

    The rule requires each Access Person of a fund (other than a money 
market fund or a fund that does not invest in Covered Securities) and 
of an investment adviser or principal underwriter of the fund, who is 
not subject to an exception,\6\ to file: (i) Within 10 days of becoming 
an Access Person, a dated initial holdings report that sets forth 
certain information with respect to the Access Person's securities and 
accounts; (ii) dated quarterly transaction reports within 30 days of 
the end of each calendar quarter providing certain information with 
respect to any securities transactions during the quarter and any 
account established by the Access Person in which any securities were 
held during the quarter; and (iii) dated annual holding reports 
providing information with respect to each Covered Security the Access 
Person beneficially owns and accounts in which securities are held for 
his or her benefit. In addition, rule 17j-1 requires investment 
personnel of a fund or its investment adviser, before acquiring 
beneficial ownership in securities through an initial public offering 
(IPO) or in a private placement, to obtain approval from the fund or 
the fund's investment adviser.
---------------------------------------------------------------------------

    \6\ Rule 17j-1(d)(2) contains the following exceptions: (i) An 
Access Person need not file a report for transactions effected for, 
and securities held in, any account over which the Access Person 
does not have control; (ii) an independent director of the fund, who 
would otherwise be required to report solely by reason of being a 
fund director and who does not have information with respect to the 
fund's transactions in a particular security, does not have to file 
an initial holdings report or a quarterly transaction report,; (iii) 
an Access Person of a principal underwriter of the fund does not 
have to file reports if the principal underwriter is not affiliated 
with the fund (unless the fund is a unit investment trust) or any 
investment adviser of the fund and the principal underwriter of the 
fund does not have any officer, director, or general partner who 
serves in one of those capacities for the fund or any investment 
adviser of the fund; (iv) an Access Person to an investment adviser 
need not make quarterly reports if the report would duplicate 
information provided under the reporting provisions of the 
Investment Adviser's Act of 1940; (v) an Access Person need not make 
quarterly transaction reports if the information provided in the 
report would duplicate information received by the 17j-1 
organization in the form of broker trade confirmations or account 
statements or information otherwise in the records of the 17j-1 
organization; and (vi) an Access Person need not make quarterly 
transaction reports with respect to transactions effected pursuant 
to an Automatic Investment Plan.
---------------------------------------------------------------------------

    The requirements that the management of a rule 17j-1 organization 
provide the fund's board with new and amended codes of ethics and an 
annual issues and certification report are intended to enhance board 
oversight of personal investment policies applicable to the fund and 
the personal investment activities of Access Persons. The requirements 
that Access Persons provide initial holdings reports, quarterly 
transaction reports, and annual holdings reports and request approval 
for purchases of securities through IPOs and private placements are 
intended to help fund compliance personnel and the Commission's 
examinations staff monitor potential conflicts of interest and detect 
potentially abusive activities. The requirement that each rule 17j-1 
organization maintain certain records is intended to assist the 
organization and the Commission's examinations staff in determining if 
there have been violations of rule 17j-1.
    We estimate that annually there are approximately 75,497 
respondents under rule 17j-1, of which 5,497 are rule 17j-1 
organizations and 70,000 are Access Persons. In the aggregate, these 
respondents make approximately 108,305 responses annually. We estimate 
that the total annual burden of complying with the information 
collection requirements in rule 17j-1 is approximately 401,407 hours. 
This hour burden represents time spent by Access Persons that must file 
initial and annual holdings reports and quarterly transaction reports, 
investment personnel that must obtain approval before acquiring 
beneficial ownership in any securities through an IPO or private 
placement, and the responsibilities of Rule 17j-1 organizations arising 
from information collection requirements under rule 17j-1. These 
include notifying Access Persons of their reporting obligations, 
preparing an annual rule 17j-1 report and certification for the board, 
documenting their approval or rejection of IPO and private placement 
requests, maintaining annual rule 17j-1 records, maintaining electronic 
reporting and recordkeeping systems, amending their codes of ethics as 
necessary, and, for new fund complexes, adopting a code of ethics.
    We estimate that there is an annual cost burden of approximately 
$5,000 per fund complex, for a total of $4,335,000, associated with 
complying with the information collection requirements in rule 17j-1. 
This represents the costs of purchasing and maintaining computers and 
software to assist funds in carrying out rule 17j-1 recordkeeping.
    These burden hour and cost estimates are based upon the Commission 
staff's experience and discussions with the fund industry. The 
estimates of average burden hours and costs 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. 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. Rule 17j-1 requires that 
records be maintained for at least five years in an easily accessible 
place.\7\
---------------------------------------------------------------------------

    \7\ If information collected pursuant to the rule is reviewed by 
the Commission's examination staff, it will be accorded the same 
level of confidentiality accorded to other responses provided to the 
Commission in the context of its examination and oversight program. 
See section 31(c) of the Investment Company Act (15 U.S.C. 80a-
30(c)).
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    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) Pamela

[[Page 67454]]

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. Comments must be 
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submitted to OMB within 30 days of this notice.

    Dated: October 27, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-27802 Filed 10-30-15; 8:45 am]
 BILLING CODE 8011-01-P
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