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, 1550-1551 [2021-00144]
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Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Notices
[FR Doc. 2021–00153 Filed 1–7–21; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–472, OMB Control No.
3235–0531]
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
tkelley on DSKBCP9HB2PROD with NOTICES
Extension:
Rule 0–1
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) plans to submit to the
Office of Management and Budget a
request for extension of the previous
approved collection of information
discussed below.
The Investment Company Act of 1940
(the ‘‘Act’’) 1 establishes a
comprehensive framework for regulating
the organization and operation of
investment companies (‘‘funds’’). A
principal objective of the Act is to
protect fund investors by addressing the
conflicts of interest that exist between
funds and their investment advisers and
other affiliated persons. The Act places
significant responsibility on the fund
board of directors in overseeing the
operations of the fund and policing the
relevant conflicts of interest.2
In one of its first releases, the
Commission exercised its rulemaking
authority pursuant to sections 38(a) and
40(b) of the Act by adopting rule 0–1 (17
CFR 270.0–1).3 Rule 0–1, as
subsequently amended on numerous
occasions, provides definitions for the
terms used by the Commission in the
rules and regulations it has adopted
pursuant to the Act. The rule also
contains a number of rules of
construction for terms that are defined
either in the Act itself or elsewhere in
the Commission’s rules and regulations.
Finally, rule 0–1 defines terms that
serve as conditions to the availability of
certain of the Commission’s exemptive
rules. More specifically, the term
‘‘independent legal counsel,’’ as defined
in rule 0–1, sets out conditions that
1 15
U.S.C. 80a.
example, fund directors must approve
investment advisory and distribution contracts. See
15 U.S.C. 80a–15(a), (b), and (c).
3 Investment Company Act Release No. 4 (Oct. 29,
1940) (5 FR 4316 (Oct. 31, 1940)). Note that rule 0–
1 was originally adopted as rule N–1.
2 For
VerDate Sep<11>2014
21:23 Jan 07, 2021
Jkt 253001
funds must meet in order to rely on any
of ten exemptive rules (‘‘exemptive
rules’’) under the Act.4
The Commission amended rule 0–1 to
include the definition of the term
‘‘independent legal counsel’’ in 2001.5
This amendment was designed to
enhance the effectiveness of fund boards
of directors and to better enable
investors to assess the independence of
those directors. The Commission also
amended the exemptive rules to require
that any person who serves as legal
counsel to the independent directors of
any fund that relies on any of the
exemptive rules must be an
‘‘independent legal counsel.’’ This
requirement was added because
independent directors can better
perform the responsibilities assigned to
them under the Act and the rules if they
have the assistance of truly independent
legal counsel.
If the board’s counsel has represented
the fund’s investment adviser, principal
underwriter, administrator (collectively,
‘‘management organizations’’) or their
‘‘control persons’’ 6 during the past two
years, rule 0–1 requires that the board’s
independent directors make a
determination about the adequacy of the
counsel’s independence. A majority of
the board’s independent directors are
required to reasonably determine, in the
exercise of their judgment, that the
counsel’s prior or current representation
of the management organizations or
their control persons was sufficiently
limited to conclude that it is unlikely to
adversely affect the counsel’s
professional judgment and legal
representation. Rule 0–1 also requires
that a record for the basis of this
determination is made in the minutes of
the directors’ meeting. In addition, the
independent directors must have
obtained an undertaking from the
counsel to provide them with the
information necessary to make their
determination and to update promptly
that information when the person begins
to represent a management organization
or control person, or when he or she
materially increases his or her
representation. Generally, the
4 The relevant exemptive rules are: Rule 10f–3 (17
CFR 270.10f–3), rule 12b–1 (17 CFR 270.12b–1),
rule 15a–4(b)(2) (17 CFR 270.15a–4(b)(2)), rule 17a–
7 (17 CFR 270.17a–7), rule 17a–8 (17 CFR 270.17a–
-8), rule 17d–1(d)(7) (17 CFR 270.17d–1(d)(7)), rule
17e–1(c) (17 CFR 270.17e–1(c)), rule 17g–1 (17 CFR
270.17g–1), rule 18f–-3 (17 CFR 270.18f–3), and rule
23c-3 (17 CFR 270.23c–3).
5 See Role of Independent Directors of Investment
Companies, Investment Company Act Release No.
24816 (Jan. 2, 2001) (66 FR 3735 (Jan. 16, 2001)).
6 A ‘‘control person’’ is any person—other than a
fund—directly or indirectly controlling, controlled
by, or under common control, with any of the
fund’s management organizations. See 17 CFR
270.01(a)(6)(iv)(B).
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
independent directors must re-evaluate
their determination no less frequently
than annually.
Any fund that relies on one of the
exemptive rules must comply with the
requirements in the definition of
‘‘independent legal counsel’’ under rule
0–1. We assume that approximately
3035 funds rely on at least one of the
exemptive rules annually.7 We further
assume that the independent directors
of approximately one-third (1,010) of
those funds would need to make the
required determination in order for their
counsel to meet the definition of
independent legal counsel.8 We
estimate that each of these 1,010 funds
would be required to spend, on average,
0.75 hours annually to comply with the
recordkeeping requirement associated
with this determination, for a total
annual burden of approximately 758
hours. Based on this estimate, the total
annual cost for all funds’ compliance
with this rule is approximately
$175,523. To calculate this total annual
cost, the Commission staff assumed that
approximately two-thirds of the total
annual hour burden (505 hours) would
be incurred by a compliance manager
with an average hourly wage rate of
$312 per hour,9 and one-third of the
annual hour burden (253 hours) would
be incurred by compliance clerk with an
average hourly wage rate of $71 per
hour.10
These burden hour estimates are
based upon the Commission staff’s
experience and discussions with the
fund industry. The estimates of average
burden hours are made solely for the
purposes of the Paperwork Reduction
7 Based on statistics compiled by Commission
staff, we estimate that there are approximately 3373
funds that could rely on one or more of the
exemptive rules (this figure reflects the three-year
average of open-end and closed-end funds (3,329)
and business development companies (104)). Of
those funds, we assume that approximately 90
percent (3,035) actually rely on at least one
exemptive rules annually.
8 We assume that the independent directors of the
remaining two-thirds of those funds will choose not
to have counsel, or will rely on counsel who has
not recently represented the fund’s management
organizations or control persons. In both
circumstances, it would not be necessary for the
fund’s independent directors to make a
determination about their counsel’s independence.
9 The estimated hourly wages used in this PRA
analysis were derived from the Securities Industry
and Financial Markets Association’s Reports on
Management and Professional Earnings in the
Securities Industry (2013) (modified to account for
an 1800-hour work year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits
and overhead) (adjusted for inflation), and Office
Salaries in the Securities Industry (2013) (modified
to account for an 1800-hour work year and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead) (adjusted for
inflation).
10 (505 × $312/hour) + (253 × $71hour) =
$175,523.
E:\FR\FM\08JAN1.SGM
08JAN1
Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Notices
Act. These estimates are not derived
from a comprehensive or even a
representative survey or study of the
costs of Commission rules.
Written comments are invited on: (a)
Whether the collection of information is
necessary for the proper performance of
the functions of the Commission,
including whether the information has
practical utility; (b) the accuracy of the
Commission’s estimate of the burdens of
the collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burdens 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 David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Cynthia
Roscoe, 100 F Street, NE Washington,
DC 20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: January 5, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–00144 Filed 1–7–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting; Cancellation
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: 85 FR 157, January 4,
2021.
PREVIOUSLY ANNOUNCED TIME AND DATE OF
THE MEETING: Wednesday, January 6,
2021 at 2:00 p.m.
The closed
meeting scheduled for Wednesday,
January 6, 2021 at 2:00 p.m., has been
cancelled.
CHANGES IN THE MEETING:
CONTACT PERSON FOR MORE INFORMATION:
tkelley on DSKBCP9HB2PROD with NOTICES
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Dated: January 6, 2021.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2021–00319 Filed 1–6–21; 4:15 pm]
BILLING CODE 8011–01–P
VerDate Sep<11>2014
21:23 Jan 07, 2021
Jkt 253001
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–305, OMB Control No.
3235–0346]
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 34b–1
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.
Rule 34b–1 under the Investment
Company Act (17 CFR 270.34b–1)
governs sales material that accompanies
or follows the delivery of a statutory
prospectus (‘‘sales literature’’). Rule
34b–1 deems to be materially
misleading any investment company
(‘‘fund’’) sales literature required to be
filed with the Securities and Exchange
Commission (‘‘Commission’’) by Section
24(b) of the Investment Company Act
(15 U.S.C. 80a–24(b)) that includes
performance data, unless the sales
literature also includes the appropriate
uniformly computed data and the
legend disclosure required in
investment company advertisements by
rule 482 under the Securities Act of
1933 (17 CFR 230.482). Requiring the
inclusion of such standardized
performance data in sales literature is
designed to prevent misleading
performance claims by funds and to
enable investors to make meaningful
comparisons among funds.
The Commission estimates that on
average approximately 351 respondents
file 7,362 1 responses that include the
information required by rule 34b–1 each
year. The burden resulting from the
collection of information requirements
of rule 34b–1 is estimated to be 6 hours
per response. The total hourly burden
for rule 34b–1 is approximately 46,278
hours per year in the aggregate.2
1 The estimated number of responses to rule 34b–
1 is composed of 7,362 responses filed with FINRA
and 351 responses filed with the Commission in
2019.
2 7,713 responses × 6 hours per response = 46,278
hours.
PO 00000
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Fmt 4703
Sfmt 4703
1551
The collection of information under
rule 34b–1 is mandatory. The
information provided under rule 34b–1
is not kept confidential. The
Commission 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.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the
proposed performance of the functions
of the agency, including whether
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 David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: January 5, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–00145 Filed 1–7–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34161; 812–15106]
Esoterica Thematic Trust and
Esoterica Capital LLC; Notice of
Application
January 4, 2021.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of an application under section
6(c) of the Investment Company Act of
1940 (‘‘Act’’) for an exemption from
section 15(a) of the Act, as well as from
certain disclosure requirements in rule
20a–1 under the Act, Item 19(a)(3) of
Form N–1A, Items 22(c)(1)(ii),
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
Schedule 14A under the Securities
Exchange Act of 1934 (‘‘1934 Act’’), and
sections 6–07(2)(a), (b), and (c) of
E:\FR\FM\08JAN1.SGM
08JAN1
]]>Agencies
[Federal Register Volume 86, Number 5 (Friday, January 8, 2021)]
[Notices]
[Pages 1550-1551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00144]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-472, OMB Control No. 3235-0531]
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 0-1
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 350l et seq.), the Securities and Exchange
Commission (``Commission'') plans to submit to the Office of Management
and Budget a request for extension of the previous approved collection
of information discussed below.
The Investment Company Act of 1940 (the ``Act'') \1\ establishes a
comprehensive framework for regulating the organization and operation
of investment companies (``funds''). A principal objective of the Act
is to protect fund investors by addressing the conflicts of interest
that exist between funds and their investment advisers and other
affiliated persons. The Act places significant responsibility on the
fund board of directors in overseeing the operations of the fund and
policing the relevant conflicts of interest.\2\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a.
\2\ For example, fund directors must approve investment advisory
and distribution contracts. See 15 U.S.C. 80a-15(a), (b), and (c).
---------------------------------------------------------------------------
In one of its first releases, the Commission exercised its
rulemaking authority pursuant to sections 38(a) and 40(b) of the Act by
adopting rule 0-1 (17 CFR 270.0-1).\3\ Rule 0-1, as subsequently
amended on numerous occasions, provides definitions for the terms used
by the Commission in the rules and regulations it has adopted pursuant
to the Act. The rule also contains a number of rules of construction
for terms that are defined either in the Act itself or elsewhere in the
Commission's rules and regulations. Finally, rule 0-1 defines terms
that serve as conditions to the availability of certain of the
Commission's exemptive rules. More specifically, the term ``independent
legal counsel,'' as defined in rule 0-1, sets out conditions that funds
must meet in order to rely on any of ten exemptive rules (``exemptive
rules'') under the Act.\4\
---------------------------------------------------------------------------
\3\ Investment Company Act Release No. 4 (Oct. 29, 1940) (5 FR
4316 (Oct. 31, 1940)). Note that rule 0-1 was originally adopted as
rule N-1.
\4\ The relevant exemptive rules are: Rule 10f-3 (17 CFR
270.10f-3), rule 12b-1 (17 CFR 270.12b-1), rule 15a-4(b)(2) (17 CFR
270.15a-4(b)(2)), rule 17a-7 (17 CFR 270.17a-7), rule 17a-8 (17 CFR
270.17a--8), rule 17d-1(d)(7) (17 CFR 270.17d-1(d)(7)), rule 17e-
1(c) (17 CFR 270.17e-1(c)), rule 17g-1 (17 CFR 270.17g-1), rule 18f-
-3 (17 CFR 270.18f-3), and rule 23c-3 (17 CFR 270.23c-3).
---------------------------------------------------------------------------
The Commission amended rule 0-1 to include the definition of the
term ``independent legal counsel'' in 2001.\5\ This amendment was
designed to enhance the effectiveness of fund boards of directors and
to better enable investors to assess the independence of those
directors. The Commission also amended the exemptive rules to require
that any person who serves as legal counsel to the independent
directors of any fund that relies on any of the exemptive rules must be
an ``independent legal counsel.'' This requirement was added because
independent directors can better perform the responsibilities assigned
to them under the Act and the rules if they have the assistance of
truly independent legal counsel.
---------------------------------------------------------------------------
\5\ See Role of Independent Directors of Investment Companies,
Investment Company Act Release No. 24816 (Jan. 2, 2001) (66 FR 3735
(Jan. 16, 2001)).
---------------------------------------------------------------------------
If the board's counsel has represented the fund's investment
adviser, principal underwriter, administrator (collectively,
``management organizations'') or their ``control persons'' \6\ during
the past two years, rule 0-1 requires that the board's independent
directors make a determination about the adequacy of the counsel's
independence. A majority of the board's independent directors are
required to reasonably determine, in the exercise of their judgment,
that the counsel's prior or current representation of the management
organizations or their control persons was sufficiently limited to
conclude that it is unlikely to adversely affect the counsel's
professional judgment and legal representation. Rule 0-1 also requires
that a record for the basis of this determination is made in the
minutes of the directors' meeting. In addition, the independent
directors must have obtained an undertaking from the counsel to provide
them with the information necessary to make their determination and to
update promptly that information when the person begins to represent a
management organization or control person, or when he or she materially
increases his or her representation. Generally, the independent
directors must re-evaluate their determination no less frequently than
annually.
---------------------------------------------------------------------------
\6\ A ``control person'' is any person--other than a fund--
directly or indirectly controlling, controlled by, or under common
control, with any of the fund's management organizations. See 17 CFR
270.01(a)(6)(iv)(B).
---------------------------------------------------------------------------
Any fund that relies on one of the exemptive rules must comply with
the requirements in the definition of ``independent legal counsel''
under rule 0-1. We assume that approximately 3035 funds rely on at
least one of the exemptive rules annually.\7\ We further assume that
the independent directors of approximately one-third (1,010) of those
funds would need to make the required determination in order for their
counsel to meet the definition of independent legal counsel.\8\ We
estimate that each of these 1,010 funds would be required to spend, on
average, 0.75 hours annually to comply with the recordkeeping
requirement associated with this determination, for a total annual
burden of approximately 758 hours. Based on this estimate, the total
annual cost for all funds' compliance with this rule is approximately
$175,523. To calculate this total annual cost, the Commission staff
assumed that approximately two-thirds of the total annual hour burden
(505 hours) would be incurred by a compliance manager with an average
hourly wage rate of $312 per hour,\9\ and one-third of the annual hour
burden (253 hours) would be incurred by compliance clerk with an
average hourly wage rate of $71 per hour.\10\
---------------------------------------------------------------------------
\7\ Based on statistics compiled by Commission staff, we
estimate that there are approximately 3373 funds that could rely on
one or more of the exemptive rules (this figure reflects the three-
year average of open-end and closed-end funds (3,329) and business
development companies (104)). Of those funds, we assume that
approximately 90 percent (3,035) actually rely on at least one
exemptive rules annually.
\8\ We assume that the independent directors of the remaining
two-thirds of those funds will choose not to have counsel, or will
rely on counsel who has not recently represented the fund's
management organizations or control persons. In both circumstances,
it would not be necessary for the fund's independent directors to
make a determination about their counsel's independence.
\9\ The estimated hourly wages used in this PRA analysis were
derived from the Securities Industry and Financial Markets
Association's Reports on Management and Professional Earnings in the
Securities Industry (2013) (modified to account for an 1800-hour
work year and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead) (adjusted for inflation), and Office
Salaries in the Securities Industry (2013) (modified to account for
an 1800-hour work year and multiplied by 2.93 to account for
bonuses, firm size, employee benefits and overhead) (adjusted for
inflation).
\10\ (505 x $312/hour) + (253 x $71hour) = $175,523.
---------------------------------------------------------------------------
These burden hour estimates are based upon the Commission staff's
experience and discussions with the fund industry. The estimates of
average burden hours are made solely for the purposes of the Paperwork
Reduction
[[Page 1551]]
Act. These estimates are not derived from a comprehensive or even a
representative survey or study of the costs of Commission rules.
Written comments are invited on: (a) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information has practical
utility; (b) the accuracy of the Commission's estimate of the burdens
of the collection of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burdens 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 David Bottom, Director/Chief
Information Officer, Securities and Exchange Commission, C/O Cynthia
Roscoe, 100 F Street, NE Washington, DC 20549; or send an email to:
[email protected].
Dated: January 5, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-00144 Filed 1-7-21; 8:45 am]
BILLING CODE 8011-01-P
