Proposed Collection; Comment Request, 9788-9791 [2018-04572]

Download as PDF 9788 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices structural changes were also made to the document to enhance readability. (b) Statutory Basis Section 17A(b)(3)(F) of the Act 3 requires, among other things, that the rules of a clearing agency be designed to protect investors and the public interest and to comply with the provisions of the Act and the rules and regulations thereunder. ICC believes that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to ICC, in particular, to Section 17A(b)(3)(F),4 because ICC believes that the proposed rule changes will protect investors and the public interest, as the updates more accurately reflect ICC’s operational risk program given the incorporation of the ICE, Inc. Enterprise Risk Management Department into ICC’s existing operational risk management processes. In addition, the proposed revisions are consistent with the relevant requirements of Rule 17Ad–22.5 The changes to the ICC Operational Risk Management Framework further ensure that ICC, through its operational risk program, is able to identify sources of operational risk and minimize them through the development of appropriate systems, control, and procedures. Thus, the changes are reasonably designed to meet the operational risk requirements of Rule 17Ad–22(d)(4).6 As such, the proposed changes are designed to promote the prompt and accurate clearance and settlement of securities transactions, derivatives agreements, contracts, and transactions within the meaning of Section 17A(b)(3)(F) 7 of the Act. (B) Clearing Agency’s Statement on Burden on Competition daltland on DSKBBV9HB2PROD with NOTICES ICC does not believe the proposed rule changes would have any impact, or impose any burden, on competition. The ICC Operational Risk Management Framework applies uniformly across all market participants. Therefore, ICC does not believe the proposed rule changes impose any burden on competition that is inappropriate in furtherance of the purposes of the Act. 3 15 U.S.C. 78q–1(b)(3)(F). 4 Id. 5 17 CFR 240.17Ad–22. CFR 240.17Ad–22(d)(4). 7 15 U.S.C. 78q–1(b)(3)(F). 6 17 VerDate Sep<11>2014 17:30 Mar 06, 2018 Jkt 244001 (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Received From Members, Participants or Others Written comments relating to the proposed rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC. III. Date of Effectiveness of the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments change, security-based swap submission, or advance notice that are filed with the Commission, and all written communications relating to the proposed rule change, security-based swap submission, or advance notice 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 website 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 10:00 a.m. and 3:00 p.m. Copies of such filings will also be available for inspection and copying at the principal office of ICE Clear Credit and on ICE Clear Credit’s website at https:// www.theice.com/clear-credit/regulation. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ICC–2018–003 and should be submitted on or before March 28, 2018. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, security-based swap submission, or advance notice is consistent with the Act. Comments may be submitted by any of the following methods: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Eduardo A. Aleman, Assistant Secretary. Electronic Comments SECURITIES AND EXCHANGE COMMISSION • 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– ICC–2018–003 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–ICC–2018–003. 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 website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 [FR Doc. 2018–04558 Filed 3–6–18; 8:45 am] BILLING CODE 8011–01–P 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 22c–2, SEC File No. 270–541, OMB Control No. 3235–0620. 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. 8 17 CFR 200.30–3(a)(12). E:\FR\FM\07MRN1.SGM 07MRN1 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices Rule 22c–2 (17 CFR 270.22c–2) under the Investment Company Act of 1940 (15 U.S.C. 80a) (the ‘‘Investment Company Act’’ or ‘‘Act’’) requires the board of directors (including a majority of independent directors) of most registered open-end investment companies (‘‘funds’’) to either approve a redemption fee of up to two percent or determine that imposition of a redemption fee is not necessary or appropriate for the fund. Rule 22c–2 also requires a fund to enter into written agreements with their financial intermediaries (such as broker-dealers and retirement plan administrators) under which the fund, upon request, can obtain certain shareholder identity and trading information from the intermediaries. The written agreement must also allow the fund to direct the intermediary to prohibit further purchases or exchanges by specific shareholders that the fund has identified as being engaged in transactions that violate the fund’s market timing policies. These requirements enable funds to obtain the information that they need to monitor the frequency of short-term trading in omnibus accounts and enforce their market timing policies. The rule includes three ‘‘collections of information’’ within the meaning of the Paperwork Reduction Act of 1995 (‘‘PRA’’).1 First, the rule requires boards to either approve a redemption fee of up to two percent or determine that imposition of a redemption fee is not necessary or appropriate for the fund. Second, funds must enter into information sharing agreements with all of their ‘‘financial intermediaries’’ 2 and maintain a copy of the written information sharing agreement with each intermediary in an easily accessible place for six years. Third, pursuant to the information sharing agreements, funds must have systems that enable them to request frequent trading information upon demand from their intermediaries, and to enforce any restrictions on trading required by funds under the rule. The collections of information created by rule 22c–2 are necessary for funds to effectively assess redemption fees, enforce their policies in frequent trading, and monitor short-term trading, including market timing, in omnibus accounts. These collections of information are mandatory for funds that redeem shares within seven days of purchase. The collections of information also are necessary to allow Commission staff to fulfill its examination and oversight responsibilities. Rule 22c–2(a)(1) requires the board of directors of all registered open-end management investment companies and series thereof (except for money market funds, ETFs, or funds that affirmatively permit short-term trading of its securities) to approve a redemption fee for the fund, or instead make a determination that a redemption fee is either not necessary or appropriate for the fund. Commission staff understands that the boards of all funds currently in operation have undertaken this process for the funds they currently oversee, and the rule does not require boards to review this determination periodically once it has been made. Accordingly, we expect that only boards of newly registered funds or newly created series thereof would undertake this determination. Commission staff estimates that 42 funds (excluding money market funds and ETFs) are newly formed each year and would need to make this determination.3 Based on conversations with fund representatives,4 Commission staff estimates that it takes 2 hours of the board’s time as a whole (at a rate of $4465 per hour) 5 to approve a redemption fee or make the required determination on behalf of all series of the fund. In addition, Commission staff estimates that it takes compliance personnel of the fund 8 hours (at a rate of $66 per hour) 6 to prepare trading, 3 This 1 44 U.S.C. 3501–3520. rule defines a Financial Intermediary as: (i) Any broker, dealer, bank, or other person that holds securities issued by the fund in nominee name; (ii) a unit investment trust or fund that invests in the fund in reliance on section 12(d)(i)(E) of the Act; and (iii) in the case of a participant directed employee benefit plan that owns the securities issued by the fund, a retirement plan’s administrator under section 316(A) of the Employee Retirement Security Act of 1974 (29 U.S.C. 1002(16)(A) or any person that maintains the plans’ participant records. Financial Intermediary does not include any person that the fund treats as an individual investor with respect to the fund’s policies established for the purpose of eliminating or reducing any dilution of the value of the outstanding securities issued by the fund. Rule 22c– 2(c)(1). daltland on DSKBBV9HB2PROD with NOTICES 2 The VerDate Sep<11>2014 17:30 Mar 06, 2018 Jkt 244001 estimate is based on the number of registrants filing initial Form N–1A or N–3. This estimate does not carve out money market funds, ETFs, or funds that affirmatively permit short-term trading of their securities, so this estimate corresponds to the outer limit of the number of registrants that would have to make this determination. 4 Unless otherwise stated, estimates throughout this analysis are derived from a survey of funds and conversations with fund representatives. 5 The estimate of $4465 per hour for the board’s time as a whole is based on conversations with representatives of funds and their legal counsel. 6 The $66 per hour figure for a compliance clerk 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, and multiplied by 2.93 to account for bonuses, firm size, employee benefits and overhead. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 9789 compliance, and other information regarding the fund’s operations to enable the board to make its determination, and takes internal compliance counsel of the fund 3 hours (at a rate of $345 per hour) 7 to review this information and present its recommendations to the board. Therefore, for each fund board that undertakes this determination process, Commission staff estimates it expends 13 hours 8 at a cost of $10,493.9 As a result, Commission staff estimates that the total time spent for all funds on this process is 546 hours at a cost of $440,706.10 Rule 22c–2(a)(2) also requires a fund to enter into information-sharing agreements with each of its financial intermediaries. Commission staff understands that all currently registered funds have already entered into such agreements with their intermediaries. Funds enter into new relationships with intermediaries from time to time, however, which requires them to enter into new information sharing agreements. Commission staff understands that, in general, funds enter into information-sharing agreement when they initially establish a relationship with an intermediary, which is typically executed as an addendum to the distribution agreement. The Commission staff understands that most shareholder information agreements are entered into by the fund group (a group of funds with a common investment adviser), and estimates that there are currently 850 currently active fund groups.11 Commission staff estimates that, on average, each active fund group enters into relationships with 3 new intermediaries each year. Commission staff understands that funds generally use a standard information sharing agreement, drafted by the fund or an outside entity, and modifies that agreement according to the 7 The $345 per hour figure for internal compliance counsel 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. 8 This calculation is based on the following estimates: (2 hours of board time + 3 hours of internal compliance counsel time + 8 hours of compliance clerk time = 13 hours). 9 This calculation is based on the following estimates: ($8,930 ($4,465 board time × 2 hours = $8,930) + $528 ($66 compliance time × 8 hours = $528) + $1,035 ($345 attorney time × 3 hours = $1,035) = $10,493). 10 This calculation is based on the following estimates: (13 hours × 42 funds = 546 hours); ($10,493 × 42 funds = $440,706). 11 ICI, 2017 Investment Company Fact Book at Fig 1.8 (2017) (https://www.ici.org/research/stats/ factbook). E:\FR\FM\07MRN1.SGM 07MRN1 9790 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices daltland on DSKBBV9HB2PROD with NOTICES requirements of each intermediary. Commission staff estimates that negotiating the terms and entering into an information sharing agreement takes a total of 4 hours of attorney time (at a rate of $392 per hour) 12 per intermediary (representing 2.5 hours of fund attorney time and 1.5 hours of intermediary attorney time). Accordingly, Commission staff estimates that it takes 12 hours at a cost of $4704 each year 13 to enter into new information sharing agreements, and all existing market participants incur a total of 10,200 hours at a cost of $3,998,400.14 In addition, newly created funds advised by new entrants (effectively new fund groups) must enter into information sharing agreements with all of their financial intermediaries. Commission staff estimates that there are 47 new fund groups that form each year that will have to enter into information sharing agreements with each of their intermediaries.15 Commission staff estimates that fund groups formed by new advisers typically have relationships with significantly fewer intermediaries than existing fund groups, and estimates that new fund groups will typically enter into 100 information sharing agreements with their intermediaries when they begin operations.16 As discussed previously, Commission staff estimates that it takes 4 hours of attorney time (at a rate of $392 per hour) 17 per intermediary to enter into information sharing agreements. Therefore, Commission staff estimates that each newly formed fund group will incur 400 hours of attorney time at a cost of $156,800 18 and that all 12 The $392 per hour figure for attorneys 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. 13 This estimate is based on the following calculations: (4 hours × 3 new intermediaries = 12 hours); (12 hours × $392 = $4,704). 14 This estimate is based on the following calculations: (12 hours × 850 fund groups = 10,200 hours); (10,200 hours × $392 = $3,998,400). 15 ICI, 2017 Investment Company Fact Book at Fig 1.8 (2017) (https://www.ici.org/research/stats/ factbook). 16 Commission staff understands that funds generally use a standard information sharing agreement, drafted by the fund or an outside entity, and then modifies that agreement according to the requirements of each intermediary. 17 The $392 per hour figure for an attorney 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. 18 This estimate is based on the following calculations: (4 hours × 100 intermediaries = 400 hours); (400 hours × $392 = $156,800). VerDate Sep<11>2014 17:30 Mar 06, 2018 Jkt 244001 newly formed fund groups will incur a total of 18,800 hours at a cost of $7,369,600 to enter into information sharing agreements with their intermediaries.19 Rule 22c–2(a)(3) requires funds to maintain records of all informationsharing agreements for 6 years in an easily accessible place. Commission staff understands that most shareholder information agreements are stored at the fund group level and estimates that there are currently approximately 850 fund groups.20 Commission staff understands that information-sharing agreements are generally included as addendums to distribution agreements between funds and their intermediaries, and that these agreements would be stored as required by the rule as a matter of ordinary business practice. Therefore, Commission staff estimates that maintaining records of informationsharing agreements requires 10 minutes of time spent by a general clerk (at a rate of $59 per hour) 21 per fund, each year. Accordingly, Commission staff estimates that all funds will incur 141.67 hours at a cost of $8,358.53 22 in complying with the recordkeeping requirement of rule 22c–2(a)(3). Therefore, Commission staff estimates that to comply with the information sharing agreement requirements of rule 22c–2(a)(2) and (3), it requires a total of 29,141.67 hours at a cost of $11,403,358.53.23 The Commission staff estimates that on average, each fund group requests shareholder information once a week, and gives instructions regarding the restriction of shareholder trades every day, for a total of 417 responses related to information sharing systems per fund group each year, and a total 354,450 responses for all fund groups annually.24 In addition, as described above, the staff estimates that funds make 42 responses related to board 19 This estimate is based on the following calculations: (47 fund groups × 400 hours = 18,800 hours) ($392 × 18,800 = 7,369,600). 20 ICI, 2017 Investment Company Fact Book at Fig 1.8 (2017) (https://www.ici.org/research/stats/ factbook). 21 The $59 per hour figure for a general clerk is derived from SIFMA’s Office Salaries in the Securities Industry 2013 modified to account for an 1800-hour work-year and inflation, and multiplied by 2.93 to account for bonuses, firm size, employee benefits, and overhead. 22 This estimate is based on the following calculations: (10 minutes × 850 fund groups = 8,500 minutes); (8,500 minutes/60 = 141.67 hours); (141.67 hours × $59 = $8,358.53). 23 This estimate is based on the following calculations: (10,200 hours + 18,800 hours + 141.67 hours = 29,141.67 hours); ($3,998,400 + $7,369,600 + $8,358.53 = $11,403,358.53). 24 This estimate is based on the following calculations: (52 + 365 = 417); (417 × 850 fund groups = 354,450). PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 determinations, 2,550 responses related to new intermediaries of existing fund groups, 4,700 responses related to new fund group information sharing agreements, and 850 responses related to recordkeeping, for a total of 8,142 responses related to the other requirements of rule 22c–2. Therefore, the Commission staff estimates that the total number of responses is 362,592 (354,450 + 8,142 = 362,592). The Commission staff estimates that the total hour burden for rule 22c–2 is 29,687.67 hours at a cost of $11,817,056.50.25 Responses provided to the Commission 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. Responses provided in the context of the Commission’s examination and oversight program are generally kept confidential. Complying with the information collections of rule 22c–2 is mandatory for funds that redeem their shares within 7 days of purchase. 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 agency, including whether the information will have practical utility; (b) the accuracy of the agency’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. 25 This estimate is based on the following calculations: (546 hours (board determination) + 29,141.67 hours (information sharing agreements) = 29,687.67 total hours); ($440,706 (board determination) + $11,376,350.53 (information sharing agreements) = $11,817,056.50). E:\FR\FM\07MRN1.SGM 07MRN1 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices Dated: March 1, 2018. Eduardo A. Aleman, Assistant Secretary. under FOR FURTHER INFORMATION CONTACT. In addition, any person may, upon request, inspect the request, notice and other documents germane to the request in person at the Craig Field Airport (SEM). [FR Doc. 2018–04572 Filed 3–6–18; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Opportunity for Public Comment on Surplus Property Release at the Craig Field Airport, Selma, Alabama Federal Aviation Administration, DOT. ACTION: Notice of intent to rule on land release request. Issued in Jackson, Mississippi, on February 27, 2018. Rans D. Black, Manager, Jackson Airports District Office, Southern Region. [FR Doc. 2018–04582 Filed 3–6–18; 8:45 am] BILLING CODE 4910–13–P AGENCY: The FAA is considering a request from the Craig Field Airport and Industrial Authority to waive the requirement that 13.19± acres of airport property located at the Craig Field Airport in Selma, Alabama, be used for aeronautical purposes. DATES: Comments must be received on or before April 6, 2018. ADDRESSES: Comments on this notice may be mailed or delivered in triplicate to the FAA to the following address: Jackson Airports District Office, Attn: Kevin Morgan, Program Manager, 100 West Cross Street, Suite B, Jackson, MS 39208–2307. In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Craig Field Airport and Industrial Authority, Attn: Menzo Driskell, Executive Director, P.O. Box 1421, Selma, AL 36702–1421. FOR FURTHER INFORMATION CONTACT: Kevin Morgan, Program Manager, Jackson Airports District Office, 100 West Cross Street, Suite B, Jackson, MS 39208–2307, (601) 664–9891. The land release request may be reviewed in person at this same location. SUPPLEMENTARY INFORMATION: The FAA is reviewing a request by Craig Field Airport and Industrial Authority to release 13.19± acres of airport property at the Craig Field Airport (SEM) under the provisions of Title 49, U.S.C. Section 47153(c). The property will be purchased by Timewell-Southern Division for non-aeronautical purposes. The property is within the Craig Field Industrial Park and adjacent to other non-aeronautical property on west quadrant of airport property just off highway 41. The net proceeds from the sale of this property will be used for maintenance and improvements at the Craig Field Airport. Any person may inspect the request in person at the FAA office listed above daltland on DSKBBV9HB2PROD with NOTICES SUMMARY: VerDate Sep<11>2014 17:30 Mar 06, 2018 Jkt 244001 DEPARTMENT OF VETERANS AFFAIRS Privacy Act of 1974; Matching Program Department of Veterans Affairs. Notice of modified matching program. AGENCY: ACTION: The Department of Veterans Affairs (VA) has a current 12 month computer matching agreement (CMA) re-establishment agreement with the Federal Bureau of Prisons (BOP) regarding Veterans who are in Federal prison and are also in receipt of compensation and pension benefits. The purpose of this CMA is to renew the agreement between VA, Veterans Benefits Administration (VBA) and the United States Department of Justice (DOJ), BOP. BOP will disclose information about individuals who are in federal prison. VBA will use this information as a match for recipients of Compensation and Pension benefits for adjustments of awards. DATES: Comments on this new agreement must be received no later than 30 days after date of publication in the Federal Register. If no public comment is received during the period allowed for comment or unless otherwise published in the Federal Register by VA, the new agreement will become effective a minimum of 30 days after date of publication in the Federal Register. If VA receives public comments, VA shall review the comments to determine whether any changes to the notice are necessary. This matching program will be valid for 18 months from the effective date of this notice. SUMMARY: Written comments may be submitted through www.Regulations.gov; by mail or handdelivery to Director, Regulation Policy and Management (00REG), Department of Veterans Affairs, 810 Vermont Ave. NW, Room 1064, Washington, DC 20420; or by fax to (202) 273–9026 (not ADDRESSES: PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 9791 a toll-free number). Comments should indicate that they are submitted in response to CMA between VA, VBA and Federal BOP. Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call (202) 461–4902 for an appointment. (This is not a toll-free number.) In addition, comments may be viewed online at www.Regulations.gov. FOR FURTHER INFORMATION CONTACT: Eric Robinson (VBA), 202–443–6016 (this is not a toll-free number). SUPPLEMENTARY INFORMATION: This agreement continues an arrangement for a periodic computer-matching program between VA (VBA as the matching recipient agency) and DOJ (BOP as the matching source agency). This agreement sets forth the responsibilities of VBA and BOP with respect to information disclosed pursuant to this agreement and takes into account both agencies’ responsibilities under the Privacy Act of 1974, 5 U.S.C. 552a, as amended by the Computer Matching and Privacy Protection Act of 1988, as amended, and the regulations promulgated thereunder, including computer matching portions of a revision of OMB Circular No. A–130, 65 FR 77677 dated December 12, 2000. The matching agreement expired in June 2017. VA added more data elements to include ‘‘date of conviction’’, ‘‘type of offense’’, and ‘‘date of scheduled release’’. Participating Agencies: VA (VBA as the matching recipient agency) and DOJ (BOP as the matching source agency). Authority for Conducting the Matching Program: The legal authority to conduct this match is 38 U.S.C. 1505, 5106, and 5313. Section 5106 requires any Federal department or agency to provide VA such information as VA requests for the purposes of determining eligibility for, or the amount of VA benefits, or verifying other information with respect thereto. Section 1505 provides that no VA pension benefits shall be paid to or for any person eligible for such benefits, during the period of that person’s incarceration as the result of conviction of a felony or misdemeanor, beginning on the 61st day of incarceration. Section 5313 provides that VA compensation or dependency and indemnity compensation above a specified amount shall not be paid to any person eligible for such benefit, during the period of that person’s incarceration as the result of conviction of a felony, beginning on the 61st day of incarceration. E:\FR\FM\07MRN1.SGM 07MRN1

Agencies

[Federal Register Volume 83, Number 45 (Wednesday, March 7, 2018)]
[Notices]
[Pages 9788-9791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04572]


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SECURITIES AND EXCHANGE COMMISSION


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 22c-2, SEC File No. 270-541, OMB Control No. 3235-0620.

    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.

[[Page 9789]]

    Rule 22c-2 (17 CFR 270.22c-2) under the Investment Company Act of 
1940 (15 U.S.C. 80a) (the ``Investment Company Act'' or ``Act'') 
requires the board of directors (including a majority of independent 
directors) of most registered open-end investment companies (``funds'') 
to either approve a redemption fee of up to two percent or determine 
that imposition of a redemption fee is not necessary or appropriate for 
the fund. Rule 22c-2 also requires a fund to enter into written 
agreements with their financial intermediaries (such as broker-dealers 
and retirement plan administrators) under which the fund, upon request, 
can obtain certain shareholder identity and trading information from 
the intermediaries. The written agreement must also allow the fund to 
direct the intermediary to prohibit further purchases or exchanges by 
specific shareholders that the fund has identified as being engaged in 
transactions that violate the fund's market timing policies. These 
requirements enable funds to obtain the information that they need to 
monitor the frequency of short-term trading in omnibus accounts and 
enforce their market timing policies.
    The rule includes three ``collections of information'' within the 
meaning of the Paperwork Reduction Act of 1995 (``PRA'').\1\ First, the 
rule requires boards to either approve a redemption fee of up to two 
percent or determine that imposition of a redemption fee is not 
necessary or appropriate for the fund. Second, funds must enter into 
information sharing agreements with all of their ``financial 
intermediaries'' \2\ and maintain a copy of the written information 
sharing agreement with each intermediary in an easily accessible place 
for six years. Third, pursuant to the information sharing agreements, 
funds must have systems that enable them to request frequent trading 
information upon demand from their intermediaries, and to enforce any 
restrictions on trading required by funds under the rule.
---------------------------------------------------------------------------

    \1\ 44 U.S.C. 3501-3520.
    \2\ The rule defines a Financial Intermediary as: (i) Any 
broker, dealer, bank, or other person that holds securities issued 
by the fund in nominee name; (ii) a unit investment trust or fund 
that invests in the fund in reliance on section 12(d)(i)(E) of the 
Act; and (iii) in the case of a participant directed employee 
benefit plan that owns the securities issued by the fund, a 
retirement plan's administrator under section 316(A) of the Employee 
Retirement Security Act of 1974 (29 U.S.C. 1002(16)(A) or any person 
that maintains the plans' participant records. Financial 
Intermediary does not include any person that the fund treats as an 
individual investor with respect to the fund's policies established 
for the purpose of eliminating or reducing any dilution of the value 
of the outstanding securities issued by the fund. Rule 22c-2(c)(1).
---------------------------------------------------------------------------

    The collections of information created by rule 22c-2 are necessary 
for funds to effectively assess redemption fees, enforce their policies 
in frequent trading, and monitor short-term trading, including market 
timing, in omnibus accounts. These collections of information are 
mandatory for funds that redeem shares within seven days of purchase. 
The collections of information also are necessary to allow Commission 
staff to fulfill its examination and oversight responsibilities.
    Rule 22c-2(a)(1) requires the board of directors of all registered 
open-end management investment companies and series thereof (except for 
money market funds, ETFs, or funds that affirmatively permit short-term 
trading of its securities) to approve a redemption fee for the fund, or 
instead make a determination that a redemption fee is either not 
necessary or appropriate for the fund. Commission staff understands 
that the boards of all funds currently in operation have undertaken 
this process for the funds they currently oversee, and the rule does 
not require boards to review this determination periodically once it 
has been made. Accordingly, we expect that only boards of newly 
registered funds or newly created series thereof would undertake this 
determination. Commission staff estimates that 42 funds (excluding 
money market funds and ETFs) are newly formed each year and would need 
to make this determination.\3\
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    \3\ This estimate is based on the number of registrants filing 
initial Form N-1A or N-3. This estimate does not carve out money 
market funds, ETFs, or funds that affirmatively permit short-term 
trading of their securities, so this estimate corresponds to the 
outer limit of the number of registrants that would have to make 
this determination.
---------------------------------------------------------------------------

    Based on conversations with fund representatives,\4\ Commission 
staff estimates that it takes 2 hours of the board's time as a whole 
(at a rate of $4465 per hour) \5\ to approve a redemption fee or make 
the required determination on behalf of all series of the fund. In 
addition, Commission staff estimates that it takes compliance personnel 
of the fund 8 hours (at a rate of $66 per hour) \6\ to prepare trading, 
compliance, and other information regarding the fund's operations to 
enable the board to make its determination, and takes internal 
compliance counsel of the fund 3 hours (at a rate of $345 per hour) \7\ 
to review this information and present its recommendations to the 
board. Therefore, for each fund board that undertakes this 
determination process, Commission staff estimates it expends 13 hours 
\8\ at a cost of $10,493.\9\ As a result, Commission staff estimates 
that the total time spent for all funds on this process is 546 hours at 
a cost of $440,706.\10\
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    \4\ Unless otherwise stated, estimates throughout this analysis 
are derived from a survey of funds and conversations with fund 
representatives.
    \5\ The estimate of $4465 per hour for the board's time as a 
whole is based on conversations with representatives of funds and 
their legal counsel.
    \6\ The $66 per hour figure for a compliance clerk 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, and multiplied by 2.93 to account for bonuses, firm size, 
employee benefits and overhead.
    \7\ The $345 per hour figure for internal compliance counsel 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.
    \8\ This calculation is based on the following estimates: (2 
hours of board time + 3 hours of internal compliance counsel time + 
8 hours of compliance clerk time = 13 hours).
    \9\ This calculation is based on the following estimates: 
($8,930 ($4,465 board time x 2 hours = $8,930) + $528 ($66 
compliance time x 8 hours = $528) + $1,035 ($345 attorney time x 3 
hours = $1,035) = $10,493).
    \10\ This calculation is based on the following estimates: (13 
hours x 42 funds = 546 hours); ($10,493 x 42 funds = $440,706).
---------------------------------------------------------------------------

    Rule 22c-2(a)(2) also requires a fund to enter into information-
sharing agreements with each of its financial intermediaries. 
Commission staff understands that all currently registered funds have 
already entered into such agreements with their intermediaries. Funds 
enter into new relationships with intermediaries from time to time, 
however, which requires them to enter into new information sharing 
agreements. Commission staff understands that, in general, funds enter 
into information-sharing agreement when they initially establish a 
relationship with an intermediary, which is typically executed as an 
addendum to the distribution agreement. The Commission staff 
understands that most shareholder information agreements are entered 
into by the fund group (a group of funds with a common investment 
adviser), and estimates that there are currently 850 currently active 
fund groups.\11\ Commission staff estimates that, on average, each 
active fund group enters into relationships with 3 new intermediaries 
each year. Commission staff understands that funds generally use a 
standard information sharing agreement, drafted by the fund or an 
outside entity, and modifies that agreement according to the

[[Page 9790]]

requirements of each intermediary. Commission staff estimates that 
negotiating the terms and entering into an information sharing 
agreement takes a total of 4 hours of attorney time (at a rate of $392 
per hour) \12\ per intermediary (representing 2.5 hours of fund 
attorney time and 1.5 hours of intermediary attorney time). 
Accordingly, Commission staff estimates that it takes 12 hours at a 
cost of $4704 each year \13\ to enter into new information sharing 
agreements, and all existing market participants incur a total of 
10,200 hours at a cost of $3,998,400.\14\
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    \11\ ICI, 2017 Investment Company Fact Book at Fig 1.8 (2017) 
(https://www.ici.org/research/stats/factbook).
    \12\ The $392 per hour figure for attorneys 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.
    \13\ This estimate is based on the following calculations: (4 
hours x 3 new intermediaries = 12 hours); (12 hours x $392 = 
$4,704).
    \14\ This estimate is based on the following calculations: (12 
hours x 850 fund groups = 10,200 hours); (10,200 hours x $392 = 
$3,998,400).
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    In addition, newly created funds advised by new entrants 
(effectively new fund groups) must enter into information sharing 
agreements with all of their financial intermediaries. Commission staff 
estimates that there are 47 new fund groups that form each year that 
will have to enter into information sharing agreements with each of 
their intermediaries.\15\ Commission staff estimates that fund groups 
formed by new advisers typically have relationships with significantly 
fewer intermediaries than existing fund groups, and estimates that new 
fund groups will typically enter into 100 information sharing 
agreements with their intermediaries when they begin operations.\16\ As 
discussed previously, Commission staff estimates that it takes 4 hours 
of attorney time (at a rate of $392 per hour) \17\ per intermediary to 
enter into information sharing agreements. Therefore, Commission staff 
estimates that each newly formed fund group will incur 400 hours of 
attorney time at a cost of $156,800 \18\ and that all newly formed fund 
groups will incur a total of 18,800 hours at a cost of $7,369,600 to 
enter into information sharing agreements with their 
intermediaries.\19\
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    \15\ ICI, 2017 Investment Company Fact Book at Fig 1.8 (2017) 
(https://www.ici.org/research/stats/factbook).
    \16\ Commission staff understands that funds generally use a 
standard information sharing agreement, drafted by the fund or an 
outside entity, and then modifies that agreement according to the 
requirements of each intermediary.
    \17\ The $392 per hour figure for an attorney 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.
    \18\ This estimate is based on the following calculations: (4 
hours x 100 intermediaries = 400 hours); (400 hours x $392 = 
$156,800).
    \19\ This estimate is based on the following calculations: (47 
fund groups x 400 hours = 18,800 hours) ($392 x 18,800 = 7,369,600).
---------------------------------------------------------------------------

    Rule 22c-2(a)(3) requires funds to maintain records of all 
information-sharing agreements for 6 years in an easily accessible 
place. Commission staff understands that most shareholder information 
agreements are stored at the fund group level and estimates that there 
are currently approximately 850 fund groups.\20\ Commission staff 
understands that information-sharing agreements are generally included 
as addendums to distribution agreements between funds and their 
intermediaries, and that these agreements would be stored as required 
by the rule as a matter of ordinary business practice. Therefore, 
Commission staff estimates that maintaining records of information-
sharing agreements requires 10 minutes of time spent by a general clerk 
(at a rate of $59 per hour) \21\ per fund, each year. Accordingly, 
Commission staff estimates that all funds will incur 141.67 hours at a 
cost of $8,358.53 \22\ in complying with the recordkeeping requirement 
of rule 22c-2(a)(3).
---------------------------------------------------------------------------

    \20\ ICI, 2017 Investment Company Fact Book at Fig 1.8 (2017) 
(https://www.ici.org/research/stats/factbook).
    \21\ The $59 per hour figure for a general clerk is derived from 
SIFMA's Office Salaries in the Securities Industry 2013 modified to 
account for an 1800-hour work-year and inflation, and multiplied by 
2.93 to account for bonuses, firm size, employee benefits, and 
overhead.
    \22\ This estimate is based on the following calculations: (10 
minutes x 850 fund groups = 8,500 minutes); (8,500 minutes/60 = 
141.67 hours); (141.67 hours x $59 = $8,358.53).
---------------------------------------------------------------------------

    Therefore, Commission staff estimates that to comply with the 
information sharing agreement requirements of rule 22c-2(a)(2) and (3), 
it requires a total of 29,141.67 hours at a cost of $11,403,358.53.\23\
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    \23\ This estimate is based on the following calculations: 
(10,200 hours + 18,800 hours + 141.67 hours = 29,141.67 hours); 
($3,998,400 + $7,369,600 + $8,358.53 = $11,403,358.53).
---------------------------------------------------------------------------

    The Commission staff estimates that on average, each fund group 
requests shareholder information once a week, and gives instructions 
regarding the restriction of shareholder trades every day, for a total 
of 417 responses related to information sharing systems per fund group 
each year, and a total 354,450 responses for all fund groups 
annually.\24\ In addition, as described above, the staff estimates that 
funds make 42 responses related to board determinations, 2,550 
responses related to new intermediaries of existing fund groups, 4,700 
responses related to new fund group information sharing agreements, and 
850 responses related to recordkeeping, for a total of 8,142 responses 
related to the other requirements of rule 22c-2. Therefore, the 
Commission staff estimates that the total number of responses is 
362,592 (354,450 + 8,142 = 362,592).
---------------------------------------------------------------------------

    \24\ This estimate is based on the following calculations: (52 + 
365 = 417); (417 x 850 fund groups = 354,450).
---------------------------------------------------------------------------

    The Commission staff estimates that the total hour burden for rule 
22c-2 is 29,687.67 hours at a cost of $11,817,056.50.\25\ Responses 
provided to the Commission 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. Responses 
provided in the context of the Commission's examination and oversight 
program are generally kept confidential. Complying with the information 
collections of rule 22c-2 is mandatory for funds that redeem their 
shares within 7 days of purchase. 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.
---------------------------------------------------------------------------

    \25\ This estimate is based on the following calculations: (546 
hours (board determination) + 29,141.67 hours (information sharing 
agreements) = 29,687.67 total hours); ($440,706 (board 
determination) + $11,376,350.53 (information sharing agreements) = 
$11,817,056.50).
---------------------------------------------------------------------------

    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency'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: [email protected].


[[Page 9791]]


    Dated: March 1, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-04572 Filed 3-6-18; 8:45 am]
 BILLING CODE 8011-01-P
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