Submission for OMB Review; Comment Request, 20401-20402 [2017-08760]
Download as PDF
<![CDATA[
Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices
Officers, and this process is not be
affected by this proposed rule change.
For the reasons noted above, the
Commission finds that the proposed
rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,21 that the
proposed rule change (SR–CBOE–2017–
017) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–08700 Filed 4–28–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–259, OMB Control No.
3235–0269]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street, NE.,Washington, DC
20549–2736.
srobinson on DSK5SPTVN1PROD with NOTICES
Extension:
Rule 17f–5.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) requests for extension of the
previously approved collections of
information discussed below.
Rule 17f–5 (17 CFR 270.17f–5) under
the Investment Company Act of 1940
[15 U.S.C. 80a] (the ‘‘Act’’) governs the
custody of the assets of registered
management investment companies
(‘‘funds’’) with custodians outside the
United States. Under rule 17f–5, a fund
or its foreign custody manager (as
delegated by the fund’s board) may
maintain the fund’s foreign assets in the
care of an eligible fund custodian under
certain conditions. If the fund’s board
delegates to a foreign custody manager
authority to place foreign assets, the
fund’s board must find that it is
reasonable to rely on each delegate the
board selects to act as the fund’s foreign
custody manager. The delegate must
agree to provide written reports that
notify the board when the fund’s assets
are placed with a foreign custodian and
21 15
22 17
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:35 Apr 28, 2017
when any material change occurs in the
fund’s custody arrangements. The
delegate must agree to exercise
reasonable care, prudence, and
diligence, or to adhere to a higher
standard of care. When the foreign
custody manager selects an eligible
foreign custodian, it must determine
that the fund’s assets will be subject to
reasonable care if maintained with that
custodian, and that the written contract
that governs each custody arrangement
will provide reasonable care for fund
assets. The contract must contain
certain specified provisions or others
that provide at least equivalent care.
The foreign custody manager must
establish a system to monitor the
performance of the contract and the
appropriateness of continuing to
maintain assets with the eligible foreign
custodian.
The collection of information
requirements in rule 17f–5 are intended
to provide protection for fund assets
maintained with a foreign bank
custodian whose use is not authorized
by statutory provisions that govern fund
custody arrangements,1 and that is not
subject to regulation and examination
by U.S. regulators. The requirement that
the fund board determine that it is
reasonable to rely on each delegate is
intended to ensure that the board
carefully considers each delegate’s
qualifications to perform its
responsibilities. The requirement that
the delegate provide written reports to
the board is intended to ensure that the
delegate notifies the board of important
developments concerning custody
arrangements so that the board may
exercise effective oversight. The
requirement that the delegate agree to
exercise reasonable care is intended to
provide assurances to the fund that the
delegate will properly perform its
duties.
The requirements that the foreign
custody manager determine that fund
assets will be subject to reasonable care
with the eligible foreign custodian and
under the custody contract, and that
each contract contain specified
provisions or equivalent provisions, are
intended to ensure that the delegate has
evaluated the level of care provided by
the custodian, that it weighs the
adequacy of contractual provisions, and
that fund assets are protected by
minimal contractual safeguards. The
requirement that the foreign custody
manager establish a monitoring system
is intended to ensure that the manager
periodically reviews each custody
arrangement and takes appropriate
1 See
Jkt 241001
PO 00000
section 17(f) of the Act. 15 U.S.C. 80a–17(f).
Frm 00089
Fmt 4703
Sfmt 4703
20401
action if developing custody risks may
threaten fund assets.2
Commission staff estimates that each
year, approximately 97 registrants 3
could be required to make an average of
one response per registrant under rule
17f–5, requiring approximately 2.5
hours of board of director time per
response, to make the necessary
findings concerning foreign custody
managers. The total annual burden
associated with these requirements of
the rule is up to approximately 243
hours (97 registrants × 2.5 hours per
registrant). The staff further estimates
that during each year, approximately 15
global custodians 4 are required to make
an average of 4 responses per custodian
concerning the use of foreign custodians
other than depositories. The staff
estimates that each response will take
approximately 270 hours, requiring
approximately 1080 total hours
annually per custodian (270 hours × 4
responses per custodian). The total
annual burden associated with these
requirements of the rule is
approximately 16,200 hours (15 global
custodians × 1080 hours per custodian).
Therefore, the total annual burden of all
collection of information requirements
of rule 17f–5 is estimated to be up to
16,443 hours (243 + 16,200). The total
annual cost of burden hours is estimated
to be $4,522,392 ((243 hours × $4,144/
hour for board of director’s time) +
(16,200 hours × $217/hour for a trust
administrator’s time)).5 Compliance
with the collection of information
requirements of the rule is necessary to
obtain the benefit of relying on the
rule’s permission for funds to maintain
their assets in foreign custodians.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
2 The staff believes that subcustodian monitoring
does not involve ‘‘collection of information’’ within
the meaning of the Paperwork Reduction Act of
1995 (44 U.S.C. 3501–3520) (‘‘Paperwork Reduction
Act’’).
3 This figure is an estimate of the number of new
funds each year, based on data reported by funds
for 2014, 2015, and 2016. In practice, not all funds
will use foreign custody managers. The actual figure
therefore may be smaller.
4 This estimate is based on staff research.
5 Based on fund industry representations, the staff
estimated in 2014 that the average cost of board of
director time, for the board as a whole, was $4,000
per hour. Adjusting for inflation, the staff estimates
that the current average cost of board of director
time is approximately $4,144 per hour. The $217/
hour figure for a trust administrator is from
SIFMA’s Management & Professional Earnings in
the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead.
E:\FR\FM\01MYN1.SGM
01MYN1
20402
Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices
the costs of Commission rules and
forms.
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
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.
Dated: April 25, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–08760 Filed 4–28–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–312, OMB Control No.
3235–0354]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE., Washington, DC
20549–2736.
srobinson on DSK5SPTVN1PROD with NOTICES
Extension:
Rule 19b–1.
1 17
CFR 270.19b–1(c)(1).
notice requirement in rule 19b–1(c)(2)
supplements the notice requirement of section 19(a)
[15 U.S.C. 80a–19(a)], which requires any
distribution in the nature of a dividend payment to
be accompanied by a notice disclosing the source
of the distribution.
3 Rule 19b–1(e) also requires that the application
comply with rule 0–2 [17 CFR 270.02] under the
Act, which sets forth the general requirements for
papers and applications filed with the Commission
pursuant to the Act and rules thereunder.
4 This estimate is based on the average number of
applications filed with the Commission pursuant to
rule 19b–1(e) in the prior three-year period.
5 The estimate for assistant general counsels is
from SIFMA’s Management & Professional Earnings
in the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour workyear and inflation (as of January 2016) and
multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead. The estimate for
administrative assistants is from SIFMA’s Office
Salaries in the Securities Industry 2013, modified
by Commission staff to account for an 1800-hour
work-year and inflation (as of January 2016) and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead. The staff
previously estimated in 2009 that the average cost
of board of director time was $4,000 per hour for
the board as a whole, based on information received
from funds and their counsel. Adjusting for
inflation, the staff estimates that the current average
2 The
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information discussed below.
Section 19(b) of the Investment
Company Act of 1940 (the ‘‘Act’’) (15
U.S.C. 80a–19(b)) authorizes the
Commission to regulate registered
investment company (‘‘fund’’)
distributions of long-term capital gains
made more frequently than once every
twelve months. Accordingly, rule 19b–
1 under the Act (17 CFR 270.19b–1)
regulates the frequency of fund
distributions of capital gains. Rule 19b–
1(c) states that the rule does not apply
to a unit investment trust (‘‘UIT’’) if it
is engaged exclusively in the business of
investing in certain eligible securities
VerDate Sep<11>2014
(generally, fixed-income securities),
provided that: (i) The capital gains
distribution falls within one of five
categories specified in the rule 1 and (ii)
the distribution is accompanied by a
report to the unitholder that clearly
describes the distribution as a capital
gains distribution (the ‘‘notice
requirement’’).2 Rule 19b–1(e) permits a
fund to apply to the Commission for
permission to distribute long-term
capital gains that would otherwise be
prohibited by the rule if the fund did
not foresee the circumstances that
created the need for the distribution.
The application must set forth the
pertinent facts and explain the
circumstances that justify the
distribution.3 An application that meets
those requirements is deemed to be
granted unless the Commission denies
the request within 15 days after the
Commission receives the application.
Commission staff estimates that five
funds will file an application under rule
19b–1(e) each year.4 The staff
understands that if a fund files an
application it generally uses outside
counsel to prepare the application. The
cost burden of using outside counsel is
discussed below. The staff estimates
that, on average, a fund’s investment
adviser would spend approximately 4
hours to review an application,
including 3.5 hours by an assistant
general counsel at a cost of $433 per
hour and 0.5 hours by an administrative
assistant at a cost of $74 per hour, and
the fund’s board of directors would
spend an additional 1 hour at a cost of
$4,465 per hour, for a total of 5 hours.5
20:35 Apr 28, 2017
Jkt 241001
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
Thus, the staff estimates that the annual
hour burden of the collection of
information imposed by rule 19b–1(e)
would be approximately five hours per
fund, at a cost of $6017.50.6 Because the
staff estimates that, each year, five funds
will file an application pursuant to rule
19b–1(e), the total burden for the
information collection is 40 hours at a
cost of $30,087.50.7
Commission staff estimates that there
is no hour burden associated with
complying with the collection of
information component of rule 19b–1(c).
As noted above, Commission staff
understands that funds that file an
application under rule 19b–1(e)
generally use outside counsel to prepare
the application.8 The staff estimates
that, on average, outside counsel spends
10 hours preparing a rule 19b–1(e)
application, including eight hours by an
associate and two hours by a partner.
Outside counsel billing arrangements
and rates vary based on numerous
factors, but the staff has estimated the
average cost of outside counsel as $400
per hour, based on information received
from funds, intermediaries, and their
counsel. The staff therefore estimates
that the average cost of outside counsel
preparation of the rule 19b–1(e)
exemptive application is $4,000.9
Because the staff estimates that, each
year, five funds will file an application
pursuant to rule 19b–1(e), the total
annual cost burden imposed by the
exemptive application requirements of
rule 19b–1(e) is estimated to be
$20,000.10
The Commission staff estimates that
there are approximately 2,579 UITs 11
that may rely on rule 19b–1(c) to make
capital gains distributions. The staff
estimates that, on average, these UITs
rely on rule 19b–1(c) once a year to
make a capital gains distribution.12 In
cost of board of director time is approximately
$4,465.
6 This estimate is based on the following
calculations: $1515.50 (3.5 hours × $433 =
$1515.50) plus $37 (0.5 hours × $74 = $37) plus
$4465 equals $6017.50 (cost of one application).
7 This estimate is based on the following
calculation: $6017.50 (cost of one application)
multiplied by 5 applications = $30,087.50 total cost.
8 This understanding is based on conversations
with representatives from the fund industry.
9 This estimate is based on the following
calculation: 10 hours multiplied by $400 per hour
equals $4,000.
10 This estimate is based on the following
calculation: $4,000 multiplied by five (funds)
equals $20,000.
11 See 2016 Investment Company Fact Book,
Investment Company Institute, available at https://
www.ici.org/pdf/2016_factbook.pdf.
12 The number of times UITs rely on the rule to
make capital gains distributions depends on a wide
range of factors and, thus, can vary greatly across
years and UITs. UITs may distribute capital gains
biannually, annually, quarterly, or at other
E:\FR\FM\01MYN1.SGM
01MYN1
]]>Agencies
[Federal Register Volume 82, Number 82 (Monday, May 1, 2017)]
[Notices]
[Pages 20401-20402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08760]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-259, OMB Control No. 3235-0269]
Submission for OMB Review; 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 17f-5.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') requests for extension of the previously approved
collections of information discussed below.
Rule 17f-5 (17 CFR 270.17f-5) under the Investment Company Act of
1940 [15 U.S.C. 80a] (the ``Act'') governs the custody of the assets of
registered management investment companies (``funds'') with custodians
outside the United States. Under rule 17f-5, a fund or its foreign
custody manager (as delegated by the fund's board) may maintain the
fund's foreign assets in the care of an eligible fund custodian under
certain conditions. If the fund's board delegates to a foreign custody
manager authority to place foreign assets, the fund's board must find
that it is reasonable to rely on each delegate the board selects to act
as the fund's foreign custody manager. The delegate must agree to
provide written reports that notify the board when the fund's assets
are placed with a foreign custodian and when any material change occurs
in the fund's custody arrangements. The delegate must agree to exercise
reasonable care, prudence, and diligence, or to adhere to a higher
standard of care. When the foreign custody manager selects an eligible
foreign custodian, it must determine that the fund's assets will be
subject to reasonable care if maintained with that custodian, and that
the written contract that governs each custody arrangement will provide
reasonable care for fund assets. The contract must contain certain
specified provisions or others that provide at least equivalent care.
The foreign custody manager must establish a system to monitor the
performance of the contract and the appropriateness of continuing to
maintain assets with the eligible foreign custodian.
The collection of information requirements in rule 17f-5 are
intended to provide protection for fund assets maintained with a
foreign bank custodian whose use is not authorized by statutory
provisions that govern fund custody arrangements,\1\ and that is not
subject to regulation and examination by U.S. regulators. The
requirement that the fund board determine that it is reasonable to rely
on each delegate is intended to ensure that the board carefully
considers each delegate's qualifications to perform its
responsibilities. The requirement that the delegate provide written
reports to the board is intended to ensure that the delegate notifies
the board of important developments concerning custody arrangements so
that the board may exercise effective oversight. The requirement that
the delegate agree to exercise reasonable care is intended to provide
assurances to the fund that the delegate will properly perform its
duties.
---------------------------------------------------------------------------
\1\ See section 17(f) of the Act. 15 U.S.C. 80a-17(f).
---------------------------------------------------------------------------
The requirements that the foreign custody manager determine that
fund assets will be subject to reasonable care with the eligible
foreign custodian and under the custody contract, and that each
contract contain specified provisions or equivalent provisions, are
intended to ensure that the delegate has evaluated the level of care
provided by the custodian, that it weighs the adequacy of contractual
provisions, and that fund assets are protected by minimal contractual
safeguards. The requirement that the foreign custody manager establish
a monitoring system is intended to ensure that the manager periodically
reviews each custody arrangement and takes appropriate action if
developing custody risks may threaten fund assets.\2\
---------------------------------------------------------------------------
\2\ The staff believes that subcustodian monitoring does not
involve ``collection of information'' within the meaning of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (``Paperwork
Reduction Act'').
---------------------------------------------------------------------------
Commission staff estimates that each year, approximately 97
registrants \3\ could be required to make an average of one response
per registrant under rule 17f-5, requiring approximately 2.5 hours of
board of director time per response, to make the necessary findings
concerning foreign custody managers. The total annual burden associated
with these requirements of the rule is up to approximately 243 hours
(97 registrants x 2.5 hours per registrant). The staff further
estimates that during each year, approximately 15 global custodians \4\
are required to make an average of 4 responses per custodian concerning
the use of foreign custodians other than depositories. The staff
estimates that each response will take approximately 270 hours,
requiring approximately 1080 total hours annually per custodian (270
hours x 4 responses per custodian). The total annual burden associated
with these requirements of the rule is approximately 16,200 hours (15
global custodians x 1080 hours per custodian). Therefore, the total
annual burden of all collection of information requirements of rule
17f-5 is estimated to be up to 16,443 hours (243 + 16,200). The total
annual cost of burden hours is estimated to be $4,522,392 ((243 hours x
$4,144/hour for board of director's time) + (16,200 hours x $217/hour
for a trust administrator's time)).\5\ Compliance with the collection
of information requirements of the rule is necessary to obtain the
benefit of relying on the rule's permission for funds to maintain their
assets in foreign custodians.
---------------------------------------------------------------------------
\3\ This figure is an estimate of the number of new funds each
year, based on data reported by funds for 2014, 2015, and 2016. In
practice, not all funds will use foreign custody managers. The
actual figure therefore may be smaller.
\4\ This estimate is based on staff research.
\5\ Based on fund industry representations, the staff estimated
in 2014 that the average cost of board of director time, for the
board as a whole, was $4,000 per hour. Adjusting for inflation, the
staff estimates that the current average cost of board of director
time is approximately $4,144 per hour. The $217/hour figure for a
trust administrator is from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead.
---------------------------------------------------------------------------
The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act. The estimate is not derived
from a comprehensive or even a representative survey or study of
[[Page 20402]]
the costs of Commission rules and forms.
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 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.
Dated: April 25, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08760 Filed 4-28-17; 8:45 am]
BILLING CODE 8011-01-P
