Submission for OMB Review; Comment Request, 55024-55025 [2021-21585]

Download as PDF lotter on DSK11XQN23PROD with NOTICES1 55024 Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices unmarketable securities on affiliated funds. Rule 10f–3 (17 CFR 270.10f–3) under the Act permits a fund to engage in a securities transaction that otherwise would violate Section 10(f) if, among other things: (i) The fund’s directors have approved procedures for purchases made in reliance on the rule, regularly review fund purchases to determine whether they comply with these procedures, and approve necessary changes to the procedures; and (ii) a written record of each transaction effected under the rule is maintained for six years, the first two of which in an easily accessible place. The written record must state: (i) From whom the securities were acquired; (ii) the identity of the underwriting syndicate’s members; (iii) the terms of the transactions; and (iv) the information or materials on which the fund’s board of directors has determined that the purchases were made in compliance with procedures established by the board. Rule 10f–3 also conditionally allows managed portions of fund portfolios to purchase securities offered in otherwise off-limits primary offerings. To qualify for this exemption, Rule 10f–3 requires that the subadviser that is advising the purchaser be contractually prohibited from providing investment advice to any other portion of the fund’s portfolio and consulting with any other of the fund’s advisers that is a principal underwriter or affiliated person of a principal underwriter concerning the fund’s securities transactions. These requirements provide a mechanism for fund boards to oversee compliance with the rule. The required recordkeeping facilitates the Commission staff’s review of Rule 10f– 3 transactions during routine fund inspections and, when necessary, in connection with enforcement actions. The staff estimates that approximately 953 funds engage in at least one Rule 10f–3 transaction each year, for a total of 953 such transactions.1 Rule 10f–3 requires that the purchasing fund create a written record of each transaction that includes, among other things, from whom the securities were purchased and the terms of the transaction. The staff estimates that it takes an average fund approximately 30 minutes per transaction and, in the aggregate, approximately 477 hours 2 for funds to comply with this portion of the rule. 1 These estimates are based on data from Form N–CEN filings with the Commission. 2 This estimate is based on the following calculation: (0.5 hours × 953 = 477 hours). VerDate Sep<11>2014 18:56 Oct 04, 2021 Jkt 256001 The funds also must maintain and preserve these transactional records in accordance with the rule’s recordkeeping requirement, and the staff estimates that it takes a fund approximately 20 minutes per transaction and, in the aggregate, approximately 318 hours 3 annually for the funds to comply with this portion of the rule. In addition, fund boards must, no less than quarterly, examine each of these transactions to ensure that they comply with the fund’s policies and procedures. The information or materials upon which the board relied to come to this determination also must be maintained and the staff estimates that it takes a fund 1 hour per quarter and, in the aggregate, approximately 3,812 hours 4 annually for the funds to comply with this rule requirement. The staff estimates that reviewing and revising as needed written procedures for Rule 10f–3 transactions takes, on average for each fund, two hours of a compliance attorney’s time per year.5 Thus, annually, in the aggregate, the staff estimates that funds spend a total of approximately 1,906 hours 6 on monitoring and revising Rule 10f–3 procedures. Based on an analysis of Form N–CEN filings, the staff estimates that approximately 146 new funds enter into subadvisory agreements each year.7 The staff estimates that it will require approximately 0.75 hours to draft and execute additional clauses in subadvisory contracts in order for new funds and subadvisers to be able to rely on the exemptions in Rule 10f–3.8 Assuming that all 146 funds that enter into new subadvisory contracts each year make the modification to their contract required by the rule, we estimate that the rule’s contract modification requirement will result in 110 burden hours annually for new funds.9 The staff estimates, therefore, that Rule 10f–3 imposes an information collection burden of 6,623 hours.10 The collection of information required by Rule 10f–3 is necessary to obtain the benefits of the rule. Responses will not be kept confidential. 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 background documentation for this information collection at the following website: www.reginfo.gov. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to (i) www.reginfo.gov/public/do/ PRAMain and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: September 29, 2021. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–21590 Filed 10–4–21; 8:45 am] BILLING CODE 8011–01–P 3 This estimate is based on the following calculations: (20 minutes × 953 transactions = 19,060 minutes; 19,060 minutes/60 = 318 hours). 4 This estimate is based on the following calculation: (1 hour per quarter × 4 quarters × 953 funds = 3,812 hours). 5 These averages take into account the fact that in most years, fund attorneys and boards spend little or no time modifying procedures and in other years, they spend significant time doing so. 6 This estimate is based on the following calculation: (953 funds × 2 hours = 1,906 hours). 7 Based on information in Form N–CEN filings, we estimate that approximately 139 new open-end funds and 7 new closed-end funds, or a total of 146 new funds enter into new subadvisory agreements each year (139 + 7 = 146 new funds). We understand that existing funds may also enter into new subadvisory agreements, but in many cases would benefit from having previously drafted Rule 10f–3 clauses in prior or existing subadvisory contracts. 8 Because such clauses are identical to the clauses that a fund would need to insert in their subadvisory contracts to rely on Rules 12d3–1, 17a– 10, and 17e–1, and because we believe that funds that use one such rule generally use all of these rules, we apportion this 3 hour time burden equally to all four rules. Therefore, we estimate that the burden allocated to Rule 10f–3 for this contract change would be 0.75 hours (3 hours ÷ 4 rules = 0.75 hours). PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–562, OMB Control No. 3235–0624] 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: Regulation R, Rule 701 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 9 These estimates are based on the following calculations: (0.75 hours × 146 portfolios = 110 burden hours). 10 This estimate is based on the following calculation: (477 hours + 318 hours + 3,812 hours + 1,906 hours + 110 hours = 6,623 total burden hours). E:\FR\FM\05OCN1.SGM 05OCN1 55025 Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices lotter on DSK11XQN23PROD with NOTICES1 (‘‘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 Regulation R, Rule 701 (17 CFR 247.701) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Regulation R, Rule 701 requires a broker or dealer (as part of a written agreement between the bank and the broker or dealer) to notify the bank if the broker or dealer makes certain determinations regarding the financial status of the customer, a bank employee’s statutory disqualification status, and compliance with suitability or sophistication standards. The Commission estimates there are 3,560 registered brokers or dealers that would, on average, notify 1,000 banks approximately two times annually about a determination regarding a customer’s high net worth or institutional status or suitability or sophistication standing as well as a bank employee’s statutory disqualification status. Based on these estimates, the Commission anticipates that Regulation R, Rule 701 would result in brokers or dealers making approximately 2,000 notifications to banks per year. The Commission further estimates (based on the level of difficulty and complexity of the applicable activities) that a broker or dealer would spend approximately 15 minutes per notice to a bank. Therefore, the estimated total annual third party disclosure burden for the requirements in Regulation R, Rule 701 is 500 1 hours for brokers or dealers. The retention period for the recordkeeping requirement under Rule 17Ad–2(c), (d), and (h) is not less than two years following the date the notice is submitted. The recordkeeping requirement under this rule is mandatory to assist the Commission in monitoring transfer agents who fail to meet the minimum performance standards set by the Commission rule. This rule does not involve the collection of confidential information. Please note that a transfer agent is not required to file under the rule unless it does not meet the minimum performance standards for turnaround, processing or forwarding items received for transfer during a month. 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. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to (i) www.reginfo.gov/public/do/ PRAMain and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: September 29, 2021. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–21585 Filed 10–4–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93206; File No. SR–FINRA– 2021–025] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish an Administration and Delivery Fee for the Municipal Advisor Principal Examination (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 27, 2021, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as ‘‘establishing or changing a due, fee or other charge’’ under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 4(f)(2) thereunder,4 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend Section 4(c) of Schedule A to the FINRA ByLaws to establish an administration and delivery fee for the new Municipal Advisor Principal Examination (‘‘Series 54 examination’’). Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in brackets. * * * * * Schedule A to the By-Laws of the Corporation * * * * * Section 4—Fees 5 (a) through (b) No Change. (c) The following fees shall be assessed to each individual who takes an examination as described below. These fees are in addition to the registration fee described in paragraph (b) and any other fees that the owner of an examination that FINRA administers may assess. September 30, 2021. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 Examination No. Examination name N/A ......................... Series 4 .................. Series 6 .................. Series 7 .................. Series 9 .................. Series 10 ................ Securities Industry Essentials (SIE) Examination .................................................................................... Registered Options Principal Examination ............................................................................................... Investment Company Products and Variable Contracts Representative Examination ............................ General Securities Representative Examination ...................................................................................... General Securities Sales Supervisor Examination—Options Module ...................................................... General Securities Sales Supervisor Examination—General Module ..................................................... 1 1,000 banks × 2 notices = 2,000 notices; (2,000 notices × 15 minutes) = 30,000 minutes/60 minutes = 500 hours. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Sep<11>2014 19:52 Oct 04, 2021 Jkt 256001 3 15 Examination fee U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 5 Amendments to some Examination Fees in Section 4 of Schedule A to the FINRA By-Laws were approved in SR–FINRA–2020–032 and 4 17 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 $60 105 40 245 80 125 become effective on January 1, 2022. See Securities Exchange Act Release No. 90176 (October 14, 2020), 85 FR 66592 (October 20, 2020) (Notice of Filing and Immediate Effectiveness of File No. SR– FINRA–2020–032). E:\FR\FM\05OCN1.SGM 05OCN1

Agencies

[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Notices]
[Pages 55024-55025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21585]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-562, OMB Control No. 3235-0624]


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:
    Regulation R, Rule 701

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995

[[Page 55025]]

(``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 
Regulation R, Rule 701 (17 CFR 247.701) under the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.).
    Regulation R, Rule 701 requires a broker or dealer (as part of a 
written agreement between the bank and the broker or dealer) to notify 
the bank if the broker or dealer makes certain determinations regarding 
the financial status of the customer, a bank employee's statutory 
disqualification status, and compliance with suitability or 
sophistication standards.
    The Commission estimates there are 3,560 registered brokers or 
dealers that would, on average, notify 1,000 banks approximately two 
times annually about a determination regarding a customer's high net 
worth or institutional status or suitability or sophistication standing 
as well as a bank employee's statutory disqualification status. Based 
on these estimates, the Commission anticipates that Regulation R, Rule 
701 would result in brokers or dealers making approximately 2,000 
notifications to banks per year. The Commission further estimates 
(based on the level of difficulty and complexity of the applicable 
activities) that a broker or dealer would spend approximately 15 
minutes per notice to a bank. Therefore, the estimated total annual 
third party disclosure burden for the requirements in Regulation R, 
Rule 701 is 500 \1\ hours for brokers or dealers.
---------------------------------------------------------------------------

    \1\ 1,000 banks x 2 notices = 2,000 notices; (2,000 notices x 15 
minutes) = 30,000 minutes/60 minutes = 500 hours.
---------------------------------------------------------------------------

    The retention period for the recordkeeping requirement under Rule 
17Ad-2(c), (d), and (h) is not less than two years following the date 
the notice is submitted. The recordkeeping requirement under this rule 
is mandatory to assist the Commission in monitoring transfer agents who 
fail to meet the minimum performance standards set by the Commission 
rule. This rule does not involve the collection of confidential 
information. Please note that a transfer agent is not required to file 
under the rule unless it does not meet the minimum performance 
standards for turnaround, processing or forwarding items received for 
transfer during a month.
    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. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function.
    Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by 
sending an email to: [email protected].

    Dated: September 29, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21585 Filed 10-4-21; 8:45 am]
BILLING CODE 8011-01-P
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