Submission for OMB Review; Comment Request, 16746-16748 [2019-08040]

Download as PDF 16746 Federal Register / Vol. 84, No. 77 / Monday, April 22, 2019 / Notices Dated: April 17, 2019. Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–08039 Filed 4–19–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: U.S. Securities and Exchange Commission, Office of FOIA Services, Washington, DC 20549–2736. amozie on DSK9F9SC42PROD with NOTICES Extension: Rule 3a71–6, SEC File No. 270–656, OMB Control No. 3235–0715. 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 (‘‘SEC’’) is soliciting comments on the existing collection of information provided for Rule 3a71–6. The SEC plans to submit this existing collection of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Rule 3a71–6 provides that non-U.S. security-based swap dealers and major security-based swap participants may comply with certain Exchange Act requirements via compliance with requirements of a foreign financial regulatory system that the Commission has determined by order to be comparable to those Exchange Act requirements, taking into account the scope and objectives of the relevant foreign requirements, and the effectiveness of supervision and enforcement under the foreign regulatory regime. Requests for substituted compliance may come from parties or groups of parties that may rely on substituted compliance, or from foreign financial authorities supervising such parties or their security-based swap activities. In practice, the Commission expects that the greater portion of any such substituted compliance requests will be submitted by foreign financial authorities. For purposes of the PRA, the Commission estimates that three security-based swap dealers or major security-based swap participants will submit substituted compliance applications. The Commission staff estimates that the one-time reporting burden associated with making each substituted compliance request pursuant to Rule 3a71–6 would occur in the first year and would be approximately 80 hours of inhouse counsel time, or 240 aggregate VerDate Sep<11>2014 17:22 Apr 19, 2019 Jkt 247001 hours across the three entities. The Commission staff estimates that the total costs associated with each substituted compliance request would occur in the first year and would be appropriately $84,000 for outside counsel, or $252,000 in the aggregate across the three entities. Annualized over three years, the time burden is 26.67 hours per respondent per year for a total burden of 80 hours per year for all respondents. Annualized over three years, the cost burden is $28,000 per respondent per year for a total cost burden of $84,000 per year for all respondents. Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the SEC, including whether the information shall have practical utility; (b) the accuracy of the SEC’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be 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. 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. Please direct your written comments to: Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. Dated: April 17, 2019. Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–08036 Filed 4–19–19; 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 Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Extension: Rule 17j–1, SEC File No. 270–239, OMB Control No. 3235–0224. PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520), the Securities and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Conflicts of interest between investment company personnel (such as portfolio managers) and their funds can arise when these persons buy and sell securities for their own accounts (‘‘personal investment activities’’). These conflicts arise because fund personnel have the opportunity to profit from information about fund transactions, often to the detriment of fund investors. Beginning in the early 1960s, Congress and the Securities and Exchange Commission (‘‘Commission’’) sought to devise a regulatory scheme to effectively address these potential conflicts. These efforts culminated in the addition of section 17(j) to the Investment Company Act of 1940 (the ‘‘Investment Company Act’’) (15 U.S.C. 80a–17(j)) in 1970 and the adoption by the Commission of rule 17j–1 (17 CFR 270.17j–1) in 1980.1 The Commission proposed amendments to rule 17j–1 in 1995 in response to recommendations made in the first detailed study of fund policies concerning personal investment activities by the Commission’s Division of Investment Management since rule 17j–1 was adopted. Amendments to rule 17j–1, which were adopted in 1999, enhanced fund oversight of personal investment activities and the board’s role in carrying out that oversight.2 Additional amendments to rule 17j–1 were made in 2004, conforming rule 17j–1 to rule 204A–1 under the Investment Advisers Act of 1940 (15 U.S.C. 80b), avoiding duplicative reporting, and modifying certain definitions and time restrictions.3 Section 17(j) makes it unlawful for persons affiliated with a registered investment company (‘‘fund’’) or with the fund’s investment adviser or principal underwriter (each a ‘‘17j–1 organization’’), in connection with the purchase or sale of securities held or to be acquired by the investment company, to engage in any fraudulent, deceptive, or manipulative act or practice in 1 Prevention of Certain Unlawful Activities with Respect to Registered Investment Companies, Investment Company Act Release No. 11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)). 2 Personal Investment Activities of Investment Company Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999) (64 FR 46821 (Aug. 27, 1999)). 3 Investment Adviser Codes of Ethics, Investment Advisers Act Release No. 2256 (Jul. 2, 2004) (69 FR 41696 (Jul. 9, 2004)). E:\FR\FM\22APN1.SGM 22APN1 Federal Register / Vol. 84, No. 77 / Monday, April 22, 2019 / Notices amozie on DSK9F9SC42PROD with NOTICES contravention of the Commission’s rules and regulations. Section 17(j) also authorizes the Commission to promulgate rules requiring 17j–1 organizations to adopt codes of ethics. In order to implement section 17(j), rule 17j–1 imposes certain requirements on 17j–1 organizations and ‘‘Access Persons’’ 4 of those organizations. The rule prohibits fraudulent, deceptive or manipulative acts by persons affiliated with a 17j–1 organization in connection with their personal securities transactions in securities held or to be acquired by the fund. The rule requires each 17j–1 organization, unless it is a money market fund or a fund that does not invest in Covered Securities,5 to: (i) Adopt a written codes of ethics, (ii) submit the code and any material changes to the code, along with a certification that it has adopted procedures reasonably necessary to prevent Access Persons from violating the code of ethics, to the fund board for approval, (iii) use reasonable diligence and institute procedures reasonably necessary to prevent violations of the code, (iv) submit a written report to the fund describing any issues arising under the code and procedures and certifying that the 17j–1 entity has adopted procedures reasonably necessary to prevent Access Persons form violating the code, (v) identify Access Persons and notify them of their reporting obligations, and (vi) maintain and make available to the Commission for review certain records related to the code of ethics and transaction reporting by Access Persons. The rule requires each Access Person of a fund (other than a money market fund or a fund that does not invest in 4 Rule 17j–1(a)(1) defines an ‘‘access person’’ as ‘‘Any Advisory Person of a Fund or of a Fund’s investment adviser. If an investment adviser’s primary business is advising Funds or other advisory clients, all of the investment adviser’s directors, officers, and general partners are presumed to be Access Persons of any Fund advised by the investment adviser. All of a Fund’s directors, officers, and general partners are presumed to be Access Persons of the Fund.’’ The definition of Access Person also includes ‘‘Any director, officer or general partner of a principal underwriter who, in the ordinary course of business, makes, participates in or obtains information regarding, the purchase or sale of Covered Securities by the Fund for which the principal underwriter acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of Covered Securities.’’ Rule 17j– 1(a)(1). 5 A ‘‘Covered Security’’ is any security that falls within the definition in section 2(a)(36) of the Act, except for direct obligations of the U.S. Government, bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements, and shares issued by open-end funds. Rule 17j–1(a)(4). VerDate Sep<11>2014 17:22 Apr 19, 2019 Jkt 247001 Covered Securities) and of an investment adviser or principal underwriter of the fund, who is not subject to an exception,6 to file: (i) Within 10 days of becoming an Access Person, a dated initial holdings report that sets forth certain information with respect to the Access Person’s securities and accounts; (ii) dated quarterly transaction reports within 30 days of the end of each calendar quarter providing certain information with respect to any securities transactions during the quarter and any account established by the Access Person in which any securities were held during the quarter; and (iii) dated annual holding reports providing information with respect to each Covered Security the Access Person beneficially owns and accounts in which securities are held for his or her benefit. In addition, rule 17j–1 requires investment personnel of a fund or its investment adviser, before acquiring beneficial ownership in securities through an initial public offering (IPO) or in a private placement, to obtain approval from the fund or the fund’s investment adviser. The requirements that the management of a rule 17j–1 organization provide the fund’s board with new and amended codes of ethics and an annual issues and certification report are intended to enhance board oversight of personal investment policies applicable to the fund and the personal investment activities of Access Persons. The requirements that Access Persons provide initial holdings reports, quarterly transaction reports, and annual holdings reports and request 6 Rule 17j–1(d)(2) contains the following exceptions: (i) An Access Person need not file a report for transactions effected for, and securities held in, any account over which the Access Person does not have control; (ii) an independent director of the fund, who would otherwise be required to report solely by reason of being a fund director and who does not have information with respect to the fund’s transactions in a particular security, does not have to file an initial holdings report or a quarterly transaction report; (iii) an Access Person of a principal underwriter of the fund does not have to file reports if the principal underwriter is not affiliated with the fund (unless the fund is a unit investment trust) or any investment adviser of the fund and the principal underwriter of the fund does not have any officer, director, or general partner who serves in one of those capacities for the fund or any investment adviser of the fund; (iv) an Access Person to an investment adviser need not make quarterly reports if the report would duplicate information provided under the reporting provisions of the Investment Adviser’s Act of 1940; (v) an Access Person need not make quarterly transaction reports if the information provided in the report would duplicate information received by the 17j–1 organization in the form of broker trade confirmations or account statements or information otherwise in the records of the 17j–1 organization; and (vi) an Access Person need not make quarterly transaction reports with respect to transactions effected pursuant to an Automatic Investment Plan. PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 16747 approval for purchases of securities through IPOs and private placements are intended to help fund compliance personnel and the Commission’s examinations staff monitor potential conflicts of interest and detect potentially abusive activities. The requirement that each rule 17j–1 organization maintain certain records is intended to assist the organization and the Commission’s examinations staff in determining if there have been violations of rule 17j–1. We estimate that annually there are approximately 75,316 respondents under rule 17j–1, of which 5,316 are rule 17j–1 organizations and 70,000 are Access Persons. In the aggregate, these respondents make approximately 107,038 responses annually. We estimate that the total annual burden of complying with the information collection requirements in rule 17j–1 is approximately 368,094 hours. This hour burden represents time spent by Access Persons that must file initial and annual holdings reports and quarterly transaction reports, investment personnel that must obtain approval before acquiring beneficial ownership in any securities through an IPO or private placement, and the responsibilities of Rule 17j–1 organizations arising from information collection requirements under rule 17j–1. These include notifying Access Persons of their reporting obligations, preparing an annual rule 17j–1 report and certification for the board, documenting their approval or rejection of IPO and private placement requests, maintaining annual rule 17j–1 records, maintaining electronic reporting and recordkeeping systems, amending their codes of ethics as necessary, and, for new fund complexes, adopting a code of ethics. We estimate that there is an annual cost burden of approximately $5,000 per fund complex, for a total of $3,915,000, associated with complying with the information collection requirements in rule 17j–1. This represents the costs of purchasing and maintaining computers and software to assist funds in carrying out rule 17j–1 recordkeeping. These burden hour and cost estimates are based upon the Commission staff’s experience and discussions with the fund industry. The estimates of average burden hours and costs are made solely for the purposes of the Paperwork Reduction Act. These estimates are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Compliance with the collection of information requirements of the rule is mandatory and is necessary to comply with the requirements of the rule in E:\FR\FM\22APN1.SGM 22APN1 16748 Federal Register / Vol. 84, No. 77 / Monday, April 22, 2019 / Notices general. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. Rule 17j–1 requires that records be maintained for at least five years in an easily accessible place.7 The public may view the background documentation for this information collection at the following website, 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: Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 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 17, 2019. Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–08040 Filed 4–19–19; 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 Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. amozie on DSK9F9SC42PROD with NOTICES Extension: Form T–4, SEC File No. 270–124, OMB Control No. 3235–0107. 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 (‘‘Commission’’) has submitted to the Office of Management and Budget this request for extension of the previously approved collections of information discussed below. Form T–4 (17 CFR 269.4) is a form used by an issuer to apply for an exemption under Section 304(c) (15 U.S.C 77ddd(c)) of the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.). 7 If information collected pursuant to the rule is reviewed by the Commission’s examination staff, it will be accorded the same level of confidentiality accorded to other responses provided to the Commission in the context of its examination and oversight program. See section 31(c) of the Investment Company Act (15 U.S.C. 80a–30(c)). VerDate Sep<11>2014 17:22 Apr 19, 2019 Jkt 247001 Form T–4 is filed on occasion. The information required by Form T–4 is mandatory. This information is publicly available on EDGAR. Form T–4 takes approximately 5 hours per response to prepare and is filed by approximately 3 respondents. We estimate that 25% of the 5 hours per response (1 hour) is prepared by the filer for a total annual reporting burden of 3 hours (1 hour per response × 3 responses). 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. The public may view the background documentation for this information collection at the following website, 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: Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 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 17, 2019. Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–08041 Filed 4–19–19; 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 Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Extension: Rule 15a–6. SEC File No. 270–0329, OMB Control No. 3235–0371. 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 15a–6 (17 CFR 240.15a–6) under PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Rule 15a–6 provides conditional exemptions from the requirement to register as a broker-dealer pursuant to Section 15 of the Exchange Act (15 U.S.C. 78o) for foreign broker-dealers that engage in certain specified activities involving U.S. persons. In particular, Rule 15a–6(a)(3) provides an exemption from broker-dealer registration for foreign broker-dealers that solicit and effect transactions with or for U.S. institutional investors or major U.S. institutional investors through a registered broker-dealer, provided that the U.S. broker-dealer, among other things, obtains certain information about, and consents to service of process from, the personnel of the foreign broker-dealer involved in such transactions, and maintains certain records in connection therewith. These requirements are intended to ensure (a) that the registered brokerdealer will receive notice of the identity of, and has reviewed the background of, foreign personnel who will contact U.S. investors, (b) that the foreign brokerdealer and its personnel effectively may be served with process in the event enforcement action is necessary, and (c) that the Commission has ready access to information concerning these persons and their U.S. securities activities. Commission staff estimates that approximately 2,000 U.S. registered broker-dealers will spend an average of two hours of clerical staff time and one hour of managerial staff time per year obtaining the information required by the rule, resulting in a total aggregate burden of 6,000 hours per year for complying with the rule. Assuming an hourly cost of $63 1 for a compliance clerk and $269 2 for a compliance manager, the resultant total internal labor cost of compliance for the respondents is $818,000 per year (2,000 entities × ((2 hours/entity × $63/hour) + (1 hour per entity × $283/hour)) = $818,000). In general, the records to be maintained under Rule 15a–6 must be kept for the applicable time periods as set forth in Rule 17a–4 (17 CFR 240.17a–4) under the Exchange Act or, with respect to the consents to service 1 The hourly rate used for a compliance clerk was from SIFMA’s Office Salaries in the Securities Industry 2013, modified by Commission staff to account for an 1,800 hour work-year and multiplied by 2.93 to account for bonuses, firm size, employee benefits and overhead. 2 The hourly rate used for a compliance manager was from SIFMA’s Management & Professional Earnings in the Securities Industry 2013, modified by Commission staff to account for an 1,800 hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead. E:\FR\FM\22APN1.SGM 22APN1

Agencies

[Federal Register Volume 84, Number 77 (Monday, April 22, 2019)]
[Notices]
[Pages 16746-16748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08040]


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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 17j-1, SEC File No. 270-239, OMB Control No. 3235-0224.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (the ``Commission'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    Conflicts of interest between investment company personnel (such as 
portfolio managers) and their funds can arise when these persons buy 
and sell securities for their own accounts (``personal investment 
activities''). These conflicts arise because fund personnel have the 
opportunity to profit from information about fund transactions, often 
to the detriment of fund investors. Beginning in the early 1960s, 
Congress and the Securities and Exchange Commission (``Commission'') 
sought to devise a regulatory scheme to effectively address these 
potential conflicts. These efforts culminated in the addition of 
section 17(j) to the Investment Company Act of 1940 (the ``Investment 
Company Act'') (15 U.S.C. 80a-17(j)) in 1970 and the adoption by the 
Commission of rule 17j-1 (17 CFR 270.17j-1) in 1980.\1\ The Commission 
proposed amendments to rule 17j-1 in 1995 in response to 
recommendations made in the first detailed study of fund policies 
concerning personal investment activities by the Commission's Division 
of Investment Management since rule 17j-1 was adopted. Amendments to 
rule 17j-1, which were adopted in 1999, enhanced fund oversight of 
personal investment activities and the board's role in carrying out 
that oversight.\2\ Additional amendments to rule 17j-1 were made in 
2004, conforming rule 17j-1 to rule 204A-1 under the Investment 
Advisers Act of 1940 (15 U.S.C. 80b), avoiding duplicative reporting, 
and modifying certain definitions and time restrictions.\3\ Section 
17(j) makes it unlawful for persons affiliated with a registered 
investment company (``fund'') or with the fund's investment adviser or 
principal underwriter (each a ``17j-1 organization''), in connection 
with the purchase or sale of securities held or to be acquired by the 
investment company, to engage in any fraudulent, deceptive, or 
manipulative act or practice in

[[Page 16747]]

contravention of the Commission's rules and regulations. Section 17(j) 
also authorizes the Commission to promulgate rules requiring 17j-1 
organizations to adopt codes of ethics.
---------------------------------------------------------------------------

    \1\ Prevention of Certain Unlawful Activities with Respect to 
Registered Investment Companies, Investment Company Act Release No. 
11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)).
    \2\ Personal Investment Activities of Investment Company 
Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999) 
(64 FR 46821 (Aug. 27, 1999)).
    \3\ Investment Adviser Codes of Ethics, Investment Advisers Act 
Release No. 2256 (Jul. 2, 2004) (69 FR 41696 (Jul. 9, 2004)).
---------------------------------------------------------------------------

    In order to implement section 17(j), rule 17j-1 imposes certain 
requirements on 17j-1 organizations and ``Access Persons'' \4\ of those 
organizations. The rule prohibits fraudulent, deceptive or manipulative 
acts by persons affiliated with a 17j-1 organization in connection with 
their personal securities transactions in securities held or to be 
acquired by the fund. The rule requires each 17j-1 organization, unless 
it is a money market fund or a fund that does not invest in Covered 
Securities,\5\ to: (i) Adopt a written codes of ethics, (ii) submit the 
code and any material changes to the code, along with a certification 
that it has adopted procedures reasonably necessary to prevent Access 
Persons from violating the code of ethics, to the fund board for 
approval, (iii) use reasonable diligence and institute procedures 
reasonably necessary to prevent violations of the code, (iv) submit a 
written report to the fund describing any issues arising under the code 
and procedures and certifying that the 17j-1 entity has adopted 
procedures reasonably necessary to prevent Access Persons form 
violating the code, (v) identify Access Persons and notify them of 
their reporting obligations, and (vi) maintain and make available to 
the Commission for review certain records related to the code of ethics 
and transaction reporting by Access Persons.
---------------------------------------------------------------------------

    \4\ Rule 17j-1(a)(1) defines an ``access person'' as ``Any 
Advisory Person of a Fund or of a Fund's investment adviser. If an 
investment adviser's primary business is advising Funds or other 
advisory clients, all of the investment adviser's directors, 
officers, and general partners are presumed to be Access Persons of 
any Fund advised by the investment adviser. All of a Fund's 
directors, officers, and general partners are presumed to be Access 
Persons of the Fund.'' The definition of Access Person also includes 
``Any director, officer or general partner of a principal 
underwriter who, in the ordinary course of business, makes, 
participates in or obtains information regarding, the purchase or 
sale of Covered Securities by the Fund for which the principal 
underwriter acts, or whose functions or duties in the ordinary 
course of business relate to the making of any recommendation to the 
Fund regarding the purchase or sale of Covered Securities.'' Rule 
17j-1(a)(1).
    \5\ A ``Covered Security'' is any security that falls within the 
definition in section 2(a)(36) of the Act, except for direct 
obligations of the U.S. Government, bankers' acceptances, bank 
certificates of deposit, commercial paper and high quality short-
term debt instruments, including repurchase agreements, and shares 
issued by open-end funds. Rule 17j-1(a)(4).
---------------------------------------------------------------------------

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

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

    The requirements that the management of a rule 17j-1 organization 
provide the fund's board with new and amended codes of ethics and an 
annual issues and certification report are intended to enhance board 
oversight of personal investment policies applicable to the fund and 
the personal investment activities of Access Persons. The requirements 
that Access Persons provide initial holdings reports, quarterly 
transaction reports, and annual holdings reports and request approval 
for purchases of securities through IPOs and private placements are 
intended to help fund compliance personnel and the Commission's 
examinations staff monitor potential conflicts of interest and detect 
potentially abusive activities. The requirement that each rule 17j-1 
organization maintain certain records is intended to assist the 
organization and the Commission's examinations staff in determining if 
there have been violations of rule 17j-1.
    We estimate that annually there are approximately 75,316 
respondents under rule 17j-1, of which 5,316 are rule 17j-1 
organizations and 70,000 are Access Persons. In the aggregate, these 
respondents make approximately 107,038 responses annually. We estimate 
that the total annual burden of complying with the information 
collection requirements in rule 17j-1 is approximately 368,094 hours. 
This hour burden represents time spent by Access Persons that must file 
initial and annual holdings reports and quarterly transaction reports, 
investment personnel that must obtain approval before acquiring 
beneficial ownership in any securities through an IPO or private 
placement, and the responsibilities of Rule 17j-1 organizations arising 
from information collection requirements under rule 17j-1. These 
include notifying Access Persons of their reporting obligations, 
preparing an annual rule 17j-1 report and certification for the board, 
documenting their approval or rejection of IPO and private placement 
requests, maintaining annual rule 17j-1 records, maintaining electronic 
reporting and recordkeeping systems, amending their codes of ethics as 
necessary, and, for new fund complexes, adopting a code of ethics.
    We estimate that there is an annual cost burden of approximately 
$5,000 per fund complex, for a total of $3,915,000, associated with 
complying with the information collection requirements in rule 17j-1. 
This represents the costs of purchasing and maintaining computers and 
software to assist funds in carrying out rule 17j-1 recordkeeping.
    These burden hour and cost estimates are based upon the Commission 
staff's experience and discussions with the fund industry. The 
estimates of average burden hours and costs are made solely for the 
purposes of the Paperwork Reduction Act. These estimates are not 
derived from a comprehensive or even a representative survey or study 
of the costs of Commission rules.
    Compliance with the collection of information requirements of the 
rule is mandatory and is necessary to comply with the requirements of 
the rule in

[[Page 16748]]

general. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid control number. Rule 17j-1 requires that records be 
maintained for at least five years in an easily accessible place.\7\
---------------------------------------------------------------------------

    \7\ If information collected pursuant to the rule is reviewed by 
the Commission's examination staff, it will be accorded the same 
level of confidentiality accorded to other responses provided to the 
Commission in the context of its examination and oversight program. 
See section 31(c) of the Investment Company Act (15 U.S.C. 80a-
30(c)).
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    The public may view the background documentation for this 
information collection at the following website, 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: 
[email protected]; and (ii) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Candace Kenner, 100 F Street NE, Washington, DC 20549 or send an email 
to: [email protected]. Comments must be submitted to OMB within 30 
days of this notice.

    Dated: April 17, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-08040 Filed 4-19-19; 8:45 am]
 BILLING CODE 8011-01-P