Submission for OMB Review; Comment Request, 42565-42566 [2017-19071]
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Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
shareholders following the discovery of
the inaccuracy.
The purpose of rule 19a–1 is to afford
fund shareholders adequate disclosure
of the sources from which distribution
payments are made. The rule is
intended to prevent shareholders from
confusing income dividends with
distributions made from capital sources.
Absent rule 19a–1, shareholders might
receive a false impression of fund gains.
Based on a review of filings made
with the Commission, the staff estimates
that approximately 11,818 series of
registered investment companies that
are management companies may be
subject to rule 19a–1 each year,3 and
that each portfolio on average mails two
statements per year to meet the
requirements of the rule.4 The staff
further estimates that the time needed to
make the determinations required by the
rule and to prepare the statement
required under the rule is
approximately 1 hour per statement.
The total annual burden for all
portfolios therefore is estimated to be
approximately 23,636 burden hours.5
The staff estimates that approximately
one-third of the total annual burden
(7,879 hours) would be incurred by a
paralegal with an average hourly wage
rate of approximately $205 per hour,6
and approximately two-thirds of the
annual burden (15,757 hours) would be
incurred by a compliance clerk with an
average hourly wage rate of $66 per
hour.7 The staff therefore estimates that
the aggregate annual cost of complying
with the paperwork requirements of the
rule is approximately $2,655,157 ((7,879
3 This estimate is based on statistics compiled by
Commission staff as of April 30, 2017. The number
of management investment company portfolios that
make distributions for which compliance with rule
19a–1 is required depends on a wide range of
factors and can vary greatly across years. Therefore,
the calculation of estimated burden hours is based
on the total number of management investment
company portfolios, each of which may be subject
to rule 19a–1.
4 A few portfolios make monthly distributions
from sources other than net income, so the rule
requires them to send out a statement 12 times a
year. Other portfolios never make such
distributions.
5 This estimate is based on the following
calculation: 11,818 management investment
company portfolios × 2 statements per year × 1 hour
per statement = 23,636 burden hours.
6 Hourly rates are derived from the Securities
Industry and Financial Markets Association
(‘‘SIFMA’’), Management and Professional Earnings
in the Securities Industry 2013, modified to account
for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
7 Hourly rates are derived from SIFMA’s Office
Salaries in the Securities Industry 2013, modified
to account for an 1,800-hour work-year and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.
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17:18 Sep 07, 2017
Jkt 241001
hours × $205 = $1,615,195) + (15,757
hours × $66 = $1,039,962)).
To comply with state law, many
investment companies already must
distinguish the different sources from
which a shareholder distribution is paid
and disclose that information to
shareholders. Thus, many investment
companies would be required to
distinguish the sources of shareholder
dividends whether or not the
Commission required them to do so
under rule 19a–1.
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 rule 19a–1 is mandatory for
management companies that make
statements to shareholders pursuant to
section 19(a) of the Act. 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 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
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 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: September 5, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–19070 Filed 9–7–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
PO 00000
Frm 00026
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42565
Commission, Office of FOIA Services,
100 F Street NE., Washington, DC
20549–2736.
Extension:
Rule 17Ad–3(b),
SEC File No. 270–424, OMB Control No.
3235–0473.
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’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 17Ad–3(b) (17 CFR 240.17Ad–
3(b)), under the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).
Rule 17Ad–3(b) requires registered
transfer agents to send a copy of the
written notice required under Rules
17Ad–2(c), (d), and (h) to the chief
executive officer of each issuer for
which the transfer agent acts when it
has failed to turnaround at least 75% of
all routine items in accordance with the
requirements of Rule 17Ad–2(a), or to
process at least 75% of all items in
accordance with the requirements of
Rule 17Ad–2(b), for two consecutive
months. The issuer may use the
information contained in the notices: (1)
As an early warning of the transfer
agent’s non-compliance with the
Commission’s minimum performance
standards regarding registered transfer
agents; and (2) to become aware of
certain problems and poor performances
with respect to the transfer agents that
are servicing the issuer’s issues. If the
issuer does not receive notice of a
registered transfer agent’s failure to
comply with the Commission’s
minimum performance standards then
the issuer will be unable to take
remedial action to correct the problem
or to find another registered transfer
agent. Pursuant to Rule 17Ad–3(b), a
transfer agent that has already filed a
Notice of Non-Compliance with the
Commission pursuant to Rule 17Ad–2
will only be required to send a copy of
that notice to issuers for which it acts
when that transfer agent fails to
turnaround 75% of all routine items or
to process 75% of all items.
The Commission estimates that only
one transfer agent will meet the
requirements of Rule 17Ad–3(b) each
year. If a transfer agent fails to meet
those turnaround and processing
performance requirements under 17Ad–
3(b), it would simply send a copy of the
notice to its issuer-clients that had
already been produced for the
Commission pursuant to Rule 17Ad–
2(c) or (d). The Commission estimates
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Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices
the requirement will take each
respondent approximately four hours to
complete. The Commission staff
estimates that compliance staff work at
registered transfer agents to comply
with the third party disclosure
requirement will result in an internal
cost of compliance, at an estimated
hourly wage of $283, of $1,128 per year
per transfer agent (4 hours × $283 per
hour = $1,128 per year). Therefore, the
aggregate annual internal cost of
compliance for the approximately one
registered transfer agent each year to
comply with Rule 17Ad–3(b) is also
$1,128. There are no external labor costs
associated with sending the notice to
issuers.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view 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 by sending an email to: PRA_
Mailbox@sec.gov. Comments must be
submitted to OMB within 30 days of
this notice.
Dated: September 5, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–19071 Filed 9–7–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
sradovich on DSK3GMQ082PROD with NOTICES
Proposed Collection; Comment
Request
1 15
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
(44 U.S.C. 350l et seq.), the Securities
and Exchange Commission
17:18 Sep 07, 2017
Jkt 241001
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)).
2 For
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE., Washington, DC
20549–2736.
VerDate Sep<11>2014
(‘‘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
that any person who serves as legal
counsel to the independent directors of
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Sfmt 4703
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
3,108 funds rely on at least one of the
exemptive rules annually.7 We further
assume that the independent directors
of approximately one-third (1,036) 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 3,453
funds that could rely on one or more of the
exemptive rules (this figure reflects the three-year
average of open-end and closed-end funds (3,349)
and business development companies (104)). Of
those funds, we assume that approximately 90
percent (3,108) actually rely on at least one
exemptive rules annually.
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]]>Agencies
[Federal Register Volume 82, Number 173 (Friday, September 8, 2017)]
[Notices]
[Pages 42565-42566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19071]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
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 17Ad-3(b),
SEC File No. 270-424, OMB Control No. 3235-0473.
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'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rule
17Ad-3(b) (17 CFR 240.17Ad-3(b)), under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
Rule 17Ad-3(b) requires registered transfer agents to send a copy
of the written notice required under Rules 17Ad-2(c), (d), and (h) to
the chief executive officer of each issuer for which the transfer agent
acts when it has failed to turnaround at least 75% of all routine items
in accordance with the requirements of Rule 17Ad-2(a), or to process at
least 75% of all items in accordance with the requirements of Rule
17Ad-2(b), for two consecutive months. The issuer may use the
information contained in the notices: (1) As an early warning of the
transfer agent's non-compliance with the Commission's minimum
performance standards regarding registered transfer agents; and (2) to
become aware of certain problems and poor performances with respect to
the transfer agents that are servicing the issuer's issues. If the
issuer does not receive notice of a registered transfer agent's failure
to comply with the Commission's minimum performance standards then the
issuer will be unable to take remedial action to correct the problem or
to find another registered transfer agent. Pursuant to Rule 17Ad-3(b),
a transfer agent that has already filed a Notice of Non-Compliance with
the Commission pursuant to Rule 17Ad-2 will only be required to send a
copy of that notice to issuers for which it acts when that transfer
agent fails to turnaround 75% of all routine items or to process 75% of
all items.
The Commission estimates that only one transfer agent will meet the
requirements of Rule 17Ad-3(b) each year. If a transfer agent fails to
meet those turnaround and processing performance requirements under
17Ad-3(b), it would simply send a copy of the notice to its issuer-
clients that had already been produced for the Commission pursuant to
Rule 17Ad-2(c) or (d). The Commission estimates
[[Page 42566]]
the requirement will take each respondent approximately four hours to
complete. The Commission staff estimates that compliance staff work at
registered transfer agents to comply with the third party disclosure
requirement will result in an internal cost of compliance, at an
estimated hourly wage of $283, of $1,128 per year per transfer agent (4
hours x $283 per hour = $1,128 per year). Therefore, the aggregate
annual internal cost of compliance for the approximately one registered
transfer agent each year to comply with Rule 17Ad-3(b) is also $1,128.
There are no external labor costs associated with sending the notice to
issuers.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
The public may view 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 by sending an
email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within
30 days of this notice.
Dated: September 5, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19071 Filed 9-7-17; 8:45 am]
BILLING CODE 8011-01-P
