Submission for OMB Review; Comment Request, 51690-51692 [2019-21079]
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51690
Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. 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–Phlx–2019–35 and should
be submitted on or before October 21,
2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–21092 Filed 9–27–19; 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
khammond on DSKJM1Z7X2PROD with NOTICES
Extension:
Rule 7d–1, OMB Control No. 3235–0311,
SEC File No. 270–176
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.
Section 7(d) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
7(d)) (the ‘‘Act’’ or ‘‘Investment
Company Act’’) requires an investment
company (‘‘fund’’) organized outside the
United States (‘‘foreign fund’’) to obtain
an order from the Commission allowing
the fund to register under the Act before
15 17
CFR 200.30–3(a)(12).
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making a public offering of its securities
through the United States mail or any
means of interstate commerce. The
Commission may issue an order only if
it finds that it is both legally and
practically feasible effectively to enforce
the provisions of the Act against the
foreign fund, and that the registration of
the fund is consistent with the public
interest and protection of investors.
Rule 7d–1 (17 CFR 270.7d–1) under
the Act, which was adopted in 1954,
specifies the conditions under which a
Canadian management investment
company (‘‘Canadian fund’’) may
request an order from the Commission
permitting it to register under the Act.
Although rule 7d–1 by its terms applies
only to Canadian funds, other foreign
funds generally have agreed to comply
with the requirements of rule 7d–1 as a
prerequisite to receiving an order
permitting the foreign fund’s
registration under the Act.
The rule requires a Canadian fund
proposing to register under the Act to
file an application with the Commission
that contains various undertakings and
agreements of the fund. The
requirement for the Canadian fund to
file an application is a collection of
information under the Paperwork
Reduction Act. Certain of the
undertakings and agreements, in turn,
impose the following additional
information collection requirements:
(1) The fund must file with the
Commission agreements between the
fund and its directors, officers, and
service providers requiring them to
comply with the fund’s charter and
bylaws, the Act, and certain other
obligations relating to the undertakings
and agreements in the application;
(2) The fund and each of its directors,
officers, and investment advisers that is
not a U.S. resident, must file with the
Commission an irrevocable designation
of the fund’s custodian in the United
States as agent for service of process;
(3) The fund’s charter and bylaws
must provide that (a) the fund will
comply with certain provisions of the
Act applicable to all funds, (b) the fund
will maintain originals or copies of its
books and records in the United States,
and (c) the fund’s contracts with its
custodian, investment adviser, and
principal underwriter, will contain
certain terms, including a requirement
that the adviser maintain originals or
copies of pertinent records in the United
States;
(4) The fund’s contracts with service
providers will require that the provider
perform the contract in accordance with
the Act, the Securities Act of 1933 (15
U.S.C. 77a), and the Securities Exchange
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Act of 1934 (15 U.S.C. 78a), as
applicable; and
(5) The fund must file, and
periodically revise, a list of persons
affiliated with the fund or its adviser or
underwriter.
As noted above, under section 7(d) of
the Act the Commission may issue an
order permitting a foreign fund’s
registration only if the Commission
finds that ‘‘by reason of special
circumstances or arrangements, it is
both legally and practically feasible
effectively to enforce the provisions of
the (Act).’’ The information collection
requirements are necessary to assure
that the substantive provisions of the
Act may be enforced as a matter of
contract right in the United States or
Canada by the fund’s shareholders or by
the Commission.
Rule 7d–1 also contains certain
information collection requirements that
are associated with other provisions of
the Act. These requirements are
applicable to all registered funds and
are outside the scope of this request.
The Commission believes that one
foreign fund is registered under rule 7d–
1 and currently active. Apart from
requirements under the Act applicable
to all registered funds, rule 7d–1
imposes ongoing burdens to maintain
records in the United States, and to
update, as necessary, certain fund
agreements, designations of the fund’s
custodian as service agent, and the
fund’s list of affiliated persons. The
Commission staff estimates that each
year under the rule, the active registrant
and its directors, officers, and service
providers engage in the following
collections of information and
associated burden hours:
• For the fund and its investment
adviser to maintain records in the
United States: 1 0 hours: 0 minutes of
compliance clerk time.
• For the fund to update its list of
affiliated persons: 2 hours: 2 hours of
support staff time.
• For new officers, directors, and
service providers to enter into and file
agreements requiring them to comply
with the fund’s charter and bylaws, the
1 The rule requires an applicant and its
investment adviser to maintain records in the
United States (which, without the requirement,
might be maintained in Canada or another foreign
jurisdiction), which facilitates routine inspections
and any special investigations of the fund by
Commission staff. The registrant and its investment
adviser, however, already maintain the registrant’s
records in the United States and in no other
jurisdiction. Therefore, maintenance of the
registrant’s records in the United States does not
impose an additional burden beyond that imposed
by other provisions of the Act. Those provisions are
applicable to all registered funds and the
compliance burden of those provisions is outside
the scope of this request.
E:\FR\FM\30SEN1.SGM
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Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices
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Act, and certain other obligations: 0.5
hours: 7.5 minutes of director time; 2.5
minutes of officer time; 20 minutes of
support staff time.
• For new officers, directors, and
investment advisers who are not
residents of the United States to file
irrevocable designation of the fund’s
custodian as agent for process of service:
0.25 hours: 5 minutes of director time;
10 minutes of support staff time.
Based on the estimates above, the
Commission estimates that the total
annual burden of the rule’s paperwork
requirements is 2.75 hours.2 We
estimate that directors perform 0.21
hours of these burden hours at a total
cost of $930.20,3 officers perform 0.04 of
these burden hours at a total cost of
$22.08,4 and support staff perform 2.5 of
these burden hours at a total cost of
$175.5 Thus, the Commission estimates
the aggregate annual cost of these
burden hours associated with rule 7d–
1 is $1,127.28.6
If a fund were to file an application
under rule 7d–1 to register under the
Act, the Commission estimates that the
rule would impose initial information
collection burdens (for filing an
application, preparing the specified
charter, bylaw, and contract provisions,
designations of agents for service of
process, and an initial list of affiliated
persons, and establishing a means of
keeping records in the United States) of
approximately 90 hours for the fund and
its associated persons. The Commission
2 This estimate is based on the following
calculation: (0 + 2 + 0.5 + 0.25) = 2.75 hours.
3 The director estimates are based on the
following calculations: (7.5 minutes + 5 minutes)/
60 minutes per hour = 0.2083 hours; and 0.2083
hours × $4465 per hour = $930.20. The per hour
cost estimate is based on estimated hourly
compensation for each board member of $558.125
and an average board size of 8 members. The $4465
per hour estimate for a fund board of directors
includes a CPI inflation adjustment from the 2009
estimate.
4 The officer estimates are based on the following
calculations: 2.5 minutes/60 minutes per hour =
0.0416 hours; 0.0416 hours × $530 per hour =
$22.08. The per hour cost estimate, as well as other
internal time cost estimates for management and
professional earnings, is based on the figure for
chief compliance officers found in SIFMA’s
Management & Professional Earnings in the
Securities Industry 2013, modified by Commission
staff to account for an 1800-hour work-year and
multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead.
5 The support staff estimates are based on the
following calculations: 2 hours + 20 minutes + 10
minutes = 2.5 hours; and 2.5 hours × $70 per hour
= $175. The per hour cost estimate, as well as other
internal time cost estimates for office salaries, is
based on the figure for compliance clerks found in
SIFMA’s Office Salaries in the Securities Industry
2013, modified by Commission staff to account for
an 1800-hour work-year and multiplied by 2.93 to
account for bonuses, firm size, employee benefits
and overhead.
6 This estimate is based on the following
calculation: $1,127.28 = $930.20 + $22.08 + $175.
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is not including these hours in its
calculation of the annual burden
because no fund has applied to register
under the Act pursuant to rule 7d–1 in
the last three years.
As noted above, after registration, a
Canadian fund may file a supplemental
application seeking special relief
designed for the fund’s particular
circumstances. Rule 7d–1 does not
mandate these applications. For
purposes of this PRA we are assuming
one registrant has filed a substantive
supplemental application within the
past three years. The Commission staff
estimates that the rule would impose an
additional information collection
burden of 5 hours on a fund to comply
with the Commission’s application
process at a cost of $6,136.50.7 The staff
understands that funds also obtain
assistance from outside counsel to
comply with the Commission’s
application process and the cost burden
of using outside counsel is discussed in
Item 13 below.
Therefore, the Commission staff
estimates the aggregate annual burden
hours of the collection of information
associated with rule 7d–1 is 13.25
hours, at a cost of $9,518.34.8 Amortized
over three years we estimate an annual
cost burden of $3,172.78 based on an
hourly annual burden of 4.42 hours.9
These estimates of average burden hours
are made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
Commission rules.
If a Canadian or other foreign fund in
the future applied to register under the
Act under rule 7d–1, the fund initially
might have capital and start-up costs
(not including hourly burdens) of an
estimated $20,000 to comply with the
7 The staff estimates that, on average, the fund’s
investment adviser spends approximately 4 hours
to review an application, including 3.5 hours by an
assistant general counsel at a cost of $466 per hour,
0.5 hours by an administrative assistant, at a cost
of $81 per hour, and the fund’s board of directors
spends an additional 1 hour at a cost of $4,465 per
hour for a total of 5 hours, at a total cost of
$6,136.50. This estimate is based on the following
calculation: (3.5 hours × $466 per hour) + (0.5 hours
× $81 per hour) + (1 hour × $4465 per hour) =
$6,136.50.
8 These estimates are based on the following
calculations: 2.75 hours year 1 + 5 hours year 1 +
2.75 hours year 2 + 2.75 hours year 3 = 13.25 hours;
$1,127.28 year 1+ $6,136.50 year 1 + $1,127.28 year
2 + $1,127.28 year 3 = $9,518.34. As discussed
above, the ongoing compliance burdens for an
active fund require updates each year, whereas we
estimate to receive one supplemental application
each three year period.
9 The estimates are based on the following
calculations: 4.42 hours = 13.25 cumulative burden
hours/3 years. Likewise, the amortized cost burden
is based on the following calculations: $9,518.34
cumulative 3-year cost burden/3 years = $3,172.78
average annual cost burden.
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51691
rule’s initial information collection
requirements. These costs include legal
and processing-related fees for
preparing the required documentation
(such as the application, charter, bylaw,
and contract provisions, designations
for service of process, and the list of
affiliated persons). Other related costs
would include fees for establishing
arrangements with a custodian or other
agent for maintaining records in the
United States, copying and
transportation costs for records, and the
costs of purchasing or leasing computer
equipment, software, or other record
storage equipment for records
maintained in electronic or
photographic form.
The Commission expects that a
foreign fund and its sponsors would
incur these costs immediately, and that
the annualized cost of the expenditures
would be $20,000 in the first year. Some
expenditures might involve capital
improvements, such as computer
equipment, having expected useful lives
for which annualized figures beyond the
first year would be meaningful. These
annualized figures are not provided,
however, because, in most cases, the
expenses would be incurred
immediately rather than on an annual
basis. The Commission is not including
these costs in its calculation of the
annualized capital/start-up costs
because no fund has applied under rule
7d–1 to register under the Act pursuant
to rule 7d–1 in the last three years.
As indicated above, a Canadian fund
may file a supplemental application
seeking special relief designed for the
fund’s particular circumstances. Rule
7d–1 does not mandate these
applications. The active registrant filed
a substantive application in the past
three years. The staff understands that
funds generally use outside counsel to
prepare the application. The staff
estimates that outside counsel spends
10 hours preparing the application,
including 8 hours by an associate and 2
hours by a partner. Outside counsel
billing arrangements vary based on
numerous factors, but the staff has
estimated the average cost of outside
counsel at $400 per hour, based on
information received from funds,
intermediaries and their counsel. The
Commission therefore estimates that the
fund would obtain assistance from
outside counsel at a cost of $4,000.10
These estimates of average costs are
made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
10 This estimate is based on the following
calculation: 10 hours × $400 per hour = $4,000.
E:\FR\FM\30SEN1.SGM
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51692
Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices
even a representative survey or study of
the costs of Commission rules.
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 OMB
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: Shagufta_
Ahmed@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: September 24, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–21079 Filed 9–27–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–91, OMB Control No.
3235–0088]
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.
khammond on DSKJM1Z7X2PROD with NOTICES
Extension:
Rule 15Ba2–5
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 existing collection of
information provided for in Rule
15Ba2–5 (17 CFR 240.15Ba2–5), under
the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) (‘‘Exchange Act’’).
On July 7, 1976, effective July 16,
1976 (see 41 FR 28948, July 14, 1976),
the Commission adopted Rule 15Ba2–5
under the Exchange Act to permit a
duly-appointed fiduciary to assume
immediate responsibility for the
operation of a municipal securities
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dealer’s business. Without the rule, the
fiduciary would not be able to assume
operation until it registered as a
municipal securities dealer. Under the
rule, the registration of a municipal
securities dealer is deemed to be the
registration of any executor,
administrator, guardian, conservator,
assignee for the benefit of creditors,
receiver, trustee in insolvency or
bankruptcy, or other fiduciary,
appointed or qualified by order,
judgment, or decree of a court of
competent jurisdiction to continue the
business of such municipal securities
dealer, provided that such fiduciary
files with the Commission, within 30
days after entering upon the
performance of his duties, a statement
setting forth as to such fiduciary
substantially the same information
required by Form MSD or Form BD. The
statement is necessary to ensure that the
Commission and the public have
adequate information about the
fiduciary.
There is approximately 1 respondent
per year that requires an aggregate total
of 4 hours to comply with this rule. This
respondent makes an estimated 1
annual response. Each response takes
approximately 4 hours to complete.
Thus, the total compliance burden per
year is 4 burden hours. The approximate
internal compliance cost per hour is
$20, resulting in a total internal cost of
compliance for the respondent of
approximately $80 (i.e., 4 hours × $20).
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 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 by sending an email to:
PRA_Mailbox@sec.gov. Comments must
be submitted to OMB within 30 days of
this notice.
Dated: September 24, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–21086 Filed 9–27–19; 8:45 am]
BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–198, OMB Control No.
3235–0279]
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 17a–4
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 extension of the
previously approved collection of
information provided for in Rule 17a–4
(17 CFR 240.17a–4), under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.).
Rule 17a–4 requires approximately
3,764 active, registered exchange
members, brokers, and dealers (‘‘brokerdealers’’) to preserve for prescribed
periods of time certain records required
to be made by Rule 17a–3 and other
Commission rules, and other kinds of
records which firms make or receive in
the ordinary course of business. Rule
17a–4 also permits broker-dealers to
employ, under certain conditions,
electronic storage media to maintain
these required records. The records
required to be maintained under Rule
17a–4 are used by examiners and other
representatives of the Commission to
determine whether broker-dealers are in
compliance with, and to enforce their
compliance with, the Commission’s
rules.
There are approximately 3,764 active,
registered broker-dealers. The staff
estimates that the average amount of
time necessary to preserve the books
and records as required by Rule 17a–4
is 254 hours per broker-dealer per year.
In addition, paragraph (b)(11) of Rule
17a–4 requires any broker-dealer that
sponsors an internal broker-dealer
system to maintain certain records
relating to such system for at least three
years. The Commission estimates that
paragraph (b)(11) of Rule 17a–4 imposes
an annual burden of 3 hours per year to
maintain the requisite records. The
Commission estimates that there are
approximately 200 internal brokerdealer systems, resulting in an annual
recordkeeping burden of 600 hours.
Therefore, the Commission estimates
that compliance with Rule 17a–4
E:\FR\FM\30SEN1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 189 (Monday, September 30, 2019)]
[Notices]
[Pages 51690-51692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21079]
-----------------------------------------------------------------------
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 7d-1, OMB Control No. 3235-0311, SEC File No. 270-176
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.
Section 7(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-
7(d)) (the ``Act'' or ``Investment Company Act'') requires an
investment company (``fund'') organized outside the United States
(``foreign fund'') to obtain an order from the Commission allowing the
fund to register under the Act before making a public offering of its
securities through the United States mail or any means of interstate
commerce. The Commission may issue an order only if it finds that it is
both legally and practically feasible effectively to enforce the
provisions of the Act against the foreign fund, and that the
registration of the fund is consistent with the public interest and
protection of investors.
Rule 7d-1 (17 CFR 270.7d-1) under the Act, which was adopted in
1954, specifies the conditions under which a Canadian management
investment company (``Canadian fund'') may request an order from the
Commission permitting it to register under the Act. Although rule 7d-1
by its terms applies only to Canadian funds, other foreign funds
generally have agreed to comply with the requirements of rule 7d-1 as a
prerequisite to receiving an order permitting the foreign fund's
registration under the Act.
The rule requires a Canadian fund proposing to register under the
Act to file an application with the Commission that contains various
undertakings and agreements of the fund. The requirement for the
Canadian fund to file an application is a collection of information
under the Paperwork Reduction Act. Certain of the undertakings and
agreements, in turn, impose the following additional information
collection requirements:
(1) The fund must file with the Commission agreements between the
fund and its directors, officers, and service providers requiring them
to comply with the fund's charter and bylaws, the Act, and certain
other obligations relating to the undertakings and agreements in the
application;
(2) The fund and each of its directors, officers, and investment
advisers that is not a U.S. resident, must file with the Commission an
irrevocable designation of the fund's custodian in the United States as
agent for service of process;
(3) The fund's charter and bylaws must provide that (a) the fund
will comply with certain provisions of the Act applicable to all funds,
(b) the fund will maintain originals or copies of its books and records
in the United States, and (c) the fund's contracts with its custodian,
investment adviser, and principal underwriter, will contain certain
terms, including a requirement that the adviser maintain originals or
copies of pertinent records in the United States;
(4) The fund's contracts with service providers will require that
the provider perform the contract in accordance with the Act, the
Securities Act of 1933 (15 U.S.C. 77a), and the Securities Exchange Act
of 1934 (15 U.S.C. 78a), as applicable; and
(5) The fund must file, and periodically revise, a list of persons
affiliated with the fund or its adviser or underwriter.
As noted above, under section 7(d) of the Act the Commission may
issue an order permitting a foreign fund's registration only if the
Commission finds that ``by reason of special circumstances or
arrangements, it is both legally and practically feasible effectively
to enforce the provisions of the (Act).'' The information collection
requirements are necessary to assure that the substantive provisions of
the Act may be enforced as a matter of contract right in the United
States or Canada by the fund's shareholders or by the Commission.
Rule 7d-1 also contains certain information collection requirements
that are associated with other provisions of the Act. These
requirements are applicable to all registered funds and are outside the
scope of this request.
The Commission believes that one foreign fund is registered under
rule 7d-1 and currently active. Apart from requirements under the Act
applicable to all registered funds, rule 7d-1 imposes ongoing burdens
to maintain records in the United States, and to update, as necessary,
certain fund agreements, designations of the fund's custodian as
service agent, and the fund's list of affiliated persons. The
Commission staff estimates that each year under the rule, the active
registrant and its directors, officers, and service providers engage in
the following collections of information and associated burden hours:
For the fund and its investment adviser to maintain
records in the United States: \1\ 0 hours: 0 minutes of compliance
clerk time.
---------------------------------------------------------------------------
\1\ The rule requires an applicant and its investment adviser to
maintain records in the United States (which, without the
requirement, might be maintained in Canada or another foreign
jurisdiction), which facilitates routine inspections and any special
investigations of the fund by Commission staff. The registrant and
its investment adviser, however, already maintain the registrant's
records in the United States and in no other jurisdiction.
Therefore, maintenance of the registrant's records in the United
States does not impose an additional burden beyond that imposed by
other provisions of the Act. Those provisions are applicable to all
registered funds and the compliance burden of those provisions is
outside the scope of this request.
---------------------------------------------------------------------------
For the fund to update its list of affiliated persons: 2
hours: 2 hours of support staff time.
For new officers, directors, and service providers to
enter into and file agreements requiring them to comply with the fund's
charter and bylaws, the
[[Page 51691]]
Act, and certain other obligations: 0.5 hours: 7.5 minutes of director
time; 2.5 minutes of officer time; 20 minutes of support staff time.
For new officers, directors, and investment advisers who
are not residents of the United States to file irrevocable designation
of the fund's custodian as agent for process of service: 0.25 hours: 5
minutes of director time; 10 minutes of support staff time.
Based on the estimates above, the Commission estimates that the
total annual burden of the rule's paperwork requirements is 2.75
hours.\2\ We estimate that directors perform 0.21 hours of these burden
hours at a total cost of $930.20,\3\ officers perform 0.04 of these
burden hours at a total cost of $22.08,\4\ and support staff perform
2.5 of these burden hours at a total cost of $175.\5\ Thus, the
Commission estimates the aggregate annual cost of these burden hours
associated with rule 7d-1 is $1,127.28.\6\
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\2\ This estimate is based on the following calculation: (0 + 2
+ 0.5 + 0.25) = 2.75 hours.
\3\ The director estimates are based on the following
calculations: (7.5 minutes + 5 minutes)/60 minutes per hour = 0.2083
hours; and 0.2083 hours x $4465 per hour = $930.20. The per hour
cost estimate is based on estimated hourly compensation for each
board member of $558.125 and an average board size of 8 members. The
$4465 per hour estimate for a fund board of directors includes a CPI
inflation adjustment from the 2009 estimate.
\4\ The officer estimates are based on the following
calculations: 2.5 minutes/60 minutes per hour = 0.0416 hours; 0.0416
hours x $530 per hour = $22.08. The per hour cost estimate, as well
as other internal time cost estimates for management and
professional earnings, is based on the figure for chief compliance
officers found in SIFMA's Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account
for an 1800-hour work-year and multiplied by 5.35 to account for
bonuses, firm size, employee benefits and overhead.
\5\ The support staff estimates are based on the following
calculations: 2 hours + 20 minutes + 10 minutes = 2.5 hours; and 2.5
hours x $70 per hour = $175. The per hour cost estimate, as well as
other internal time cost estimates for office salaries, is based on
the figure for compliance clerks found in SIFMA's Office Salaries in
the Securities Industry 2013, modified by Commission staff to
account for an 1800-hour work-year and multiplied by 2.93 to account
for bonuses, firm size, employee benefits and overhead.
\6\ This estimate is based on the following calculation:
$1,127.28 = $930.20 + $22.08 + $175.
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If a fund were to file an application under rule 7d-1 to register
under the Act, the Commission estimates that the rule would impose
initial information collection burdens (for filing an application,
preparing the specified charter, bylaw, and contract provisions,
designations of agents for service of process, and an initial list of
affiliated persons, and establishing a means of keeping records in the
United States) of approximately 90 hours for the fund and its
associated persons. The Commission is not including these hours in its
calculation of the annual burden because no fund has applied to
register under the Act pursuant to rule 7d-1 in the last three years.
As noted above, after registration, a Canadian fund may file a
supplemental application seeking special relief designed for the fund's
particular circumstances. Rule 7d-1 does not mandate these
applications. For purposes of this PRA we are assuming one registrant
has filed a substantive supplemental application within the past three
years. The Commission staff estimates that the rule would impose an
additional information collection burden of 5 hours on a fund to comply
with the Commission's application process at a cost of $6,136.50.\7\
The staff understands that funds also obtain assistance from outside
counsel to comply with the Commission's application process and the
cost burden of using outside counsel is discussed in Item 13 below.
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\7\ The staff estimates that, on average, the fund's investment
adviser spends approximately 4 hours to review an application,
including 3.5 hours by an assistant general counsel at a cost of
$466 per hour, 0.5 hours by an administrative assistant, at a cost
of $81 per hour, and the fund's board of directors spends an
additional 1 hour at a cost of $4,465 per hour for a total of 5
hours, at a total cost of $6,136.50. This estimate is based on the
following calculation: (3.5 hours x $466 per hour) + (0.5 hours x
$81 per hour) + (1 hour x $4465 per hour) = $6,136.50.
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Therefore, the Commission staff estimates the aggregate annual
burden hours of the collection of information associated with rule 7d-1
is 13.25 hours, at a cost of $9,518.34.\8\ Amortized over three years
we estimate an annual cost burden of $3,172.78 based on an hourly
annual burden of 4.42 hours.\9\ These estimates of average burden hours
are made solely for the purposes of the Paperwork Reduction Act. The
estimate is not derived from a comprehensive or even a representative
survey or study of Commission rules.
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\8\ These estimates are based on the following calculations:
2.75 hours year 1 + 5 hours year 1 + 2.75 hours year 2 + 2.75 hours
year 3 = 13.25 hours; $1,127.28 year 1+ $6,136.50 year 1 + $1,127.28
year 2 + $1,127.28 year 3 = $9,518.34. As discussed above, the
ongoing compliance burdens for an active fund require updates each
year, whereas we estimate to receive one supplemental application
each three year period.
\9\ The estimates are based on the following calculations: 4.42
hours = 13.25 cumulative burden hours/3 years. Likewise, the
amortized cost burden is based on the following calculations:
$9,518.34 cumulative 3-year cost burden/3 years = $3,172.78 average
annual cost burden.
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If a Canadian or other foreign fund in the future applied to
register under the Act under rule 7d-1, the fund initially might have
capital and start-up costs (not including hourly burdens) of an
estimated $20,000 to comply with the rule's initial information
collection requirements. These costs include legal and processing-
related fees for preparing the required documentation (such as the
application, charter, bylaw, and contract provisions, designations for
service of process, and the list of affiliated persons). Other related
costs would include fees for establishing arrangements with a custodian
or other agent for maintaining records in the United States, copying
and transportation costs for records, and the costs of purchasing or
leasing computer equipment, software, or other record storage equipment
for records maintained in electronic or photographic form.
The Commission expects that a foreign fund and its sponsors would
incur these costs immediately, and that the annualized cost of the
expenditures would be $20,000 in the first year. Some expenditures
might involve capital improvements, such as computer equipment, having
expected useful lives for which annualized figures beyond the first
year would be meaningful. These annualized figures are not provided,
however, because, in most cases, the expenses would be incurred
immediately rather than on an annual basis. The Commission is not
including these costs in its calculation of the annualized capital/
start-up costs because no fund has applied under rule 7d-1 to register
under the Act pursuant to rule 7d-1 in the last three years.
As indicated above, a Canadian fund may file a supplemental
application seeking special relief designed for the fund's particular
circumstances. Rule 7d-1 does not mandate these applications. The
active registrant filed a substantive application in the past three
years. The staff understands that funds generally use outside counsel
to prepare the application. The staff estimates that outside counsel
spends 10 hours preparing the application, including 8 hours by an
associate and 2 hours by a partner. Outside counsel billing
arrangements vary based on numerous factors, but the staff has
estimated the average cost of outside counsel at $400 per hour, based
on information received from funds, intermediaries and their counsel.
The Commission therefore estimates that the fund would obtain
assistance from outside counsel at a cost of $4,000.\10\
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\10\ This estimate is based on the following calculation: 10
hours x $400 per hour = $4,000.
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These estimates of average costs are made solely for the purposes
of the Paperwork Reduction Act. The estimate is not derived from a
comprehensive or
[[Page 51692]]
even a representative survey or study of the costs of Commission rules.
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 OMB 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:
[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: September 24, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-21079 Filed 9-27-19; 8:45 am]
BILLING CODE 8011-01-P
