Submission for OMB Review; Comment Request; Extension: Rule 17a-10, 50361-50362 [2022-17528]

Download as PDF Federal Register / Vol. 87, No. 157 / Tuesday, August 16, 2022 / Notices analysis, and conditions, please refer to Applicants’ first amended and restated application, dated July 20, 2022, which may be obtained via the Commission’s website by searching for the file number at the top of this document, or for an Applicant using the Company name search field, on the SEC’s EDGAR system. The SEC’s EDGAR system may be searched at, https://www.sec.gov/ edgar/searchedgar/legacy/ companysearch.html. You may also call the SEC’s Public Reference Room at (202) 551–8090. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17524 Filed 8–15–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–482, OMB Control No. 3235–0540] lotter on DSK11XQN23PROD with NOTICES1 Submission for OMB Review; Comment Request; Extension: Rule 17a–25 Upon Written Request Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (‘‘PRA’’), 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 17a–25 (17 CFR 204.17a–25) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Paragraph (a)(1) of Rule 17a–25 requires registered broker-dealers to electronically submit securities transaction information, including identifiers for prime brokerage arrangements, average price accounts, and depository institutions, in a standardized format when requested by the Commission staff. In addition, Paragraph (c) of Rule 17a–25 requires broker-dealers to submit, and keep current, contact person information for electronic blue sheets (‘‘EBS’’) requests. The Commission uses the information for enforcement inquiries or investigations and trading reconstructions, as well as for inspections and examinations. VerDate Sep<11>2014 18:35 Aug 15, 2022 Jkt 256001 The Commission estimates that it sends approximately 13,558 electronic blue sheet requests per year to clearing broker-dealers that in turn submit an average 223,057 responses.1 It is estimated that each broker-dealer that responds electronically will take 8 minutes, and each broker-dealer that responds manually will take 11⁄2 hours to prepare and submit the securities trading data requested by the Commission. The annual aggregate hour burden for electronic and manual response firms is estimated to be 29,924 (223,057 × 8 ÷ 60 = 29,741 hours) + (122 × 1.5 = 183 hours), respectively.2 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 by September 15, 2022 to (i) MBX.OMB.OIRA.SEC_desk_officer@ omb.eop.gov and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: August 10, 2022. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17527 Filed 8–15–22; 8:45 am] BILLING CODE 8011–01–P 1 A single EBS request has a unique number assigned to each request (e.g., ’’0900001’’). However, the number of broker-dealer responses generated from one EBS request can range from one to several thousand. EBS requests are sent directly to clearing firms, as the clearing firm is the repository for trading data for securities transactions information provided by the clearing firm and the correspondent firms. Clearing brokers respond for themselves and other firms they clear for. There were 446,113 responses during the 24month period, for an average of 223,057 annual responses. 2 Few respondents submit manual EBS responses. The small percentage of respondents that submit manual responses do so by hand, via email, spreadsheet, disk, or other electronic media. Thus, the number of manual submissions (approximately 122 per year) has minimal effect on the total annual burden hours. PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 50361 SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–507, OMB Control No. 3235–0563] Submission for OMB Review; Comment Request; Extension: Rule 17a–10 Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (‘‘PRA’’) 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 discussed below. Section 17(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) (the ‘‘Act’’), generally prohibits affiliated persons of a registered investment company (‘‘fund’’) from borrowing money or other property from, or selling or buying securities or other property to or from, the fund or any company that the fund controls.1 Section 2(a)(3) of the Act defines ‘‘affiliated person’’ of a fund to include its investment advisers.2 Rule 17a–10 (17 CFR 270.17a–10) permits (i) a subadviser 3 of a fund to enter into transactions with funds the subadviser does not advise but that are affiliated persons of a fund that it does advise (e.g., other funds in the fund complex), and (ii) a subadviser (and its affiliated persons) to enter into transactions and arrangements with funds the subadviser does advise, but only with respect to discrete portions of the subadvised fund for which the subadviser does not provide investment advice. To qualify for the exemptions in rule 17a–10, the subadvisory relationship must be the sole reason why section 17(a) prohibits the transaction. In addition, the advisory contracts of the subadviser entering into the transaction, and any subadviser that is advising the purchasing portion of the fund, must prohibit the subadvisers from consulting with each other concerning securities transactions of the fund, and limit their responsibility to providing advice with respect to discrete portions of the fund’s portfolio.4 This requirement regarding 1 15 U.S.C. 80a–17(a). U.S.C. 80a–2(a)(3)(E). 3 As defined in rule 17a–10(b)(2). 17 CFR 270.17a–10(b)(2). 4 17 CFR 270.17a–10(a)(2). 2 15 E:\FR\FM\16AUN1.SGM 16AUN1 50362 Federal Register / Vol. 87, No. 157 / Tuesday, August 16, 2022 / Notices the prohibitions and limitations in advisory contracts of subadvisors relying on the rule constitutes a collection of information under the PRA.5 The staff assumes that all existing funds with subadvisory contracts amended those contracts to comply with the adoption of rule 17a–10 in 2003, which conditioned certain exemptions upon these contractual alterations, and therefore there is no continuing burden for those funds.6 However, the staff assumes that all newly formed subadvised funds, and funds that enter into new contracts with subadvisers, will incur the one-time burden by amending their contracts to add the terms required by the rule. Based on an analysis of fund filings, the staff estimates that approximately 314 funds enter into new subadvisory agreements each year.7 Based on discussions with industry representatives, the staff estimates that it will require approximately 3 attorney hours to draft and execute additional clauses in new subadvisory contracts in order for funds and subadvisers to be able to rely on the exemptions in rule 17a–10. Because these additional clauses are identical to the clauses that a fund would need to insert in their subadvisory contracts to rely on rules 10f–3 (17 CFR 270.10f–3), 12d3–1 (17 CFR 270.12d3–1), and 17e–1 (17 CFR 270.17e–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 among all four rules. Therefore, we estimate that the burden allocated to rule 17a–10 for this contract change would be 0.75 hours.8 Assuming that all 314 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 166 burden hours annually, with an U.S.C. 3501. of Investment Companies With Portfolio and Subadviser Affiliates, Investment Company Act Release No. 25888 (Jan. 14, 2003) [68 FR 3153, (Jan. 22, 2003)]. We assume that funds formed after 2003 that intended to rely on rule 17a– 10 would have included the required provision as a standard element in their initial subadvisory contracts. 7 Based on data from form N–CEN filings, as of March 2022, there are 12,468 registered funds (open-end funds, closed-end funds, and exchangetraded funds), 4,870 funds of which have subadvisory relationships (approximately 39%). Based on Form N–1A and Form N–2 filings, there were 806 new registered funds in 2020. 806 new funds × 39% = 314 funds. 8 This estimate is based on the following calculation: 3 hours ÷ 4 rules = 0.75 hours. associated cost of approximately $107,380.9 The estimate of average burden hours is made solely for the purposes of the PRA. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Complying with this collection of information requirement is necessary to obtain the benefit of relying on rule 17a–10. 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 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 by September 15, 2022 to (i) MBX.OMB.OIRA.SEC_desk_officer@ omb.eop.gov and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: August 10, 2022. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17528 Filed 8–15–22; 8:45 am] BILLING CODE 8011–01–P 5 44 lotter on DSK11XQN23PROD with NOTICES1 6 Transactions VerDate Sep<11>2014 18:35 Aug 15, 2022 Jkt 256001 9 These estimates are based on the following calculations: (0.75 hours × 314 portfolios = 236 burden hours); ($455 per hour × 236 hours = $107,380 total cost). The Commission’s estimates concerning the wage rates for attorney time are based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association. The estimated wage figure is based on published rates for in-house attorneys, modified to account for a 1,800-hour work-year and inflation, and multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead, yielding an effective hourly rate of $415. See Securities Industry and Financial Markets Association, Report on Management & Professional Earnings in the Securities Industry 2013. PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95463; File No. SR–IEX– 2022–05] Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add a New Order Type That Pegs to the ContraSide Primary Quote, With the Option of Using a Passive Offset Amount August 10, 2022. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b-4 thereunder,2 notice is hereby given that on August 8, 2022, the Investors Exchange LLC (‘‘IEX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. 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 the Substance of the Proposed Rule Change Pursuant to the provisions of Section 19(b)(1) under the Act,3 and Rule 19b– 4 thereunder,4 IEX is filing with the Commission a proposed rule change to add a new order type (a ‘‘Market Peg’’ order) that pegs to the contra-side primary quote, with the option of using a passive offset amount.5 The Exchange has designated this rule change as ‘‘noncontroversial’’ under Section 19(b)(3)(A) of the Act 6 and provided the Commission with the notice required by Rule 19b–4(f)(6) thereunder.7 The text of the proposed rule change is available at the Exchange’s website at www.iextrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(1). 4 17 CFR 240.19b–4. 5 The contra-side primary quote is the national best offer for a buy order or the national best bid for a sell order, as set forth in Rule 600(b) of Regulation NMS under the Act, determined as set forth in IEX Rule 11.410(b). See IEX Rule 1.160(u). 6 15 U.S.C. 78s(b)(3)(A). 7 17 CFR 240.19b–4. 2 17 E:\FR\FM\16AUN1.SGM 16AUN1

Agencies

[Federal Register Volume 87, Number 157 (Tuesday, August 16, 2022)]
[Notices]
[Pages 50361-50362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17528]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-507, OMB Control No. 3235-0563]


Submission for OMB Review; Comment Request; Extension: Rule 17a-
10

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) (``PRA'') 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 discussed below.
    Section 17(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
1 et seq.) (the ``Act''), generally prohibits affiliated persons of a 
registered investment company (``fund'') from borrowing money or other 
property from, or selling or buying securities or other property to or 
from, the fund or any company that the fund controls.\1\ Section 
2(a)(3) of the Act defines ``affiliated person'' of a fund to include 
its investment advisers.\2\ Rule 17a-10 (17 CFR 270.17a-10) permits (i) 
a subadviser \3\ of a fund to enter into transactions with funds the 
subadviser does not advise but that are affiliated persons of a fund 
that it does advise (e.g., other funds in the fund complex), and (ii) a 
subadviser (and its affiliated persons) to enter into transactions and 
arrangements with funds the subadviser does advise, but only with 
respect to discrete portions of the subadvised fund for which the 
subadviser does not provide investment advice.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a-17(a).
    \2\ 15 U.S.C. 80a-2(a)(3)(E).
    \3\ As defined in rule 17a-10(b)(2). 17 CFR 270.17a-10(b)(2).
---------------------------------------------------------------------------

    To qualify for the exemptions in rule 17a-10, the subadvisory 
relationship must be the sole reason why section 17(a) prohibits the 
transaction. In addition, the advisory contracts of the subadviser 
entering into the transaction, and any subadviser that is advising the 
purchasing portion of the fund, must prohibit the subadvisers from 
consulting with each other concerning securities transactions of the 
fund, and limit their responsibility to providing advice with respect 
to discrete portions of the fund's portfolio.\4\ This requirement 
regarding

[[Page 50362]]

the prohibitions and limitations in advisory contracts of subadvisors 
relying on the rule constitutes a collection of information under the 
PRA.\5\
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    \4\ 17 CFR 270.17a-10(a)(2).
    \5\ 44 U.S.C. 3501.
---------------------------------------------------------------------------

    The staff assumes that all existing funds with subadvisory 
contracts amended those contracts to comply with the adoption of rule 
17a-10 in 2003, which conditioned certain exemptions upon these 
contractual alterations, and therefore there is no continuing burden 
for those funds.\6\ However, the staff assumes that all newly formed 
subadvised funds, and funds that enter into new contracts with 
subadvisers, will incur the one-time burden by amending their contracts 
to add the terms required by the rule.
---------------------------------------------------------------------------

    \6\ Transactions of Investment Companies With Portfolio and 
Subadviser Affiliates, Investment Company Act Release No. 25888 
(Jan. 14, 2003) [68 FR 3153, (Jan. 22, 2003)]. We assume that funds 
formed after 2003 that intended to rely on rule 17a-10 would have 
included the required provision as a standard element in their 
initial subadvisory contracts.
---------------------------------------------------------------------------

    Based on an analysis of fund filings, the staff estimates that 
approximately 314 funds enter into new subadvisory agreements each 
year.\7\ Based on discussions with industry representatives, the staff 
estimates that it will require approximately 3 attorney hours to draft 
and execute additional clauses in new subadvisory contracts in order 
for funds and subadvisers to be able to rely on the exemptions in rule 
17a-10. Because these additional clauses are identical to the clauses 
that a fund would need to insert in their subadvisory contracts to rely 
on rules 10f-3 (17 CFR 270.10f-3), 12d3-1 (17 CFR 270.12d3-1), and 17e-
1 (17 CFR 270.17e-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 among all four rules. Therefore, we estimate that 
the burden allocated to rule 17a-10 for this contract change would be 
0.75 hours.\8\ Assuming that all 314 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 166 burden hours annually, with an 
associated cost of approximately $107,380.\9\
---------------------------------------------------------------------------

    \7\ Based on data from form N-CEN filings, as of March 2022, 
there are 12,468 registered funds (open-end funds, closed-end funds, 
and exchange-traded funds), 4,870 funds of which have subadvisory 
relationships (approximately 39%). Based on Form N-1A and Form N-2 
filings, there were 806 new registered funds in 2020. 806 new funds 
x 39% = 314 funds.
    \8\ This estimate is based on the following calculation: 3 hours 
/ 4 rules = 0.75 hours.
    \9\ These estimates are based on the following calculations: 
(0.75 hours x 314 portfolios = 236 burden hours); ($455 per hour x 
236 hours = $107,380 total cost). The Commission's estimates 
concerning the wage rates for attorney time are based on salary 
information for the securities industry compiled by the Securities 
Industry and Financial Markets Association. The estimated wage 
figure is based on published rates for in-house attorneys, modified 
to account for a 1,800-hour work-year and inflation, and multiplied 
by 5.35 to account for bonuses, firm size, employee benefits, and 
overhead, yielding an effective hourly rate of $415. See Securities 
Industry and Financial Markets Association, Report on Management & 
Professional Earnings in the Securities Industry 2013.
---------------------------------------------------------------------------

    The estimate of average burden hours is made solely for the 
purposes of the PRA. The estimate is not derived from a comprehensive 
or even a representative survey or study of the costs of Commission 
rules. Complying with this collection of information requirement is 
necessary to obtain the benefit of relying on rule 17a-10. 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 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 
by September 15, 2022 to (i) [email protected] 
and (ii) David Bottom, Director/Chief Information Officer, Securities 
and Exchange Commission, c/o John Pezzullo, 100 F Street NE, 
Washington, DC 20549, or by sending an email to: [email protected].

    Dated: August 10, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17528 Filed 8-15-22; 8:45 am]
BILLING CODE 8011-01-P
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