Proposed Collection; Comment Request; Extension: Rule 17d-1, 2142-2144 [2023-00427]

Download as PDF 2142 Federal Register / Vol. 88, No. 8 / Thursday, January 12, 2023 / Notices believe that the proposed change implicates competition at all. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments on the proposed rule change were neither solicited nor received. khammond on DSKJM1Z7X2PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under section 19(b)(3)(A) 15 of the Act and Rule 19b– 4(f)(6) 16 thereunder. Because the proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b– 4(f)(6) thereunder. In addition, the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing.17 A proposed rule change filed under Rule 19b–4(f)(6) 18 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),19 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay to permit the Exchange to harmonize its rules with FINRA, as described herein, upon effectiveness of the proposed rule filing. IEX has indicated that extending the relief provided in SR–IEX–2022–12 would provide assurances to its member firms that they can plan their 2023 inspection program and conduct remote inspections for any inspections to be conducted through the earlier of the effective date of the FINRA Pilot Program, if approved, or December 31, 2023. Importantly, extending the relief immediately upon filing and without a 30-day operative delay would allow IEX’s member firms to continue U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 17 17 CFR 240.19b–4(f)(6)(iii). 18 17 CFR 240.19b–4(f)(6). 19 17 CFR 240.19b–4(f)(6)(iii). 16 17 17:36 Jan 11, 2023 IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Jkt 259001 Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the 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 will also be available for inspection and copying at IEX’s principal office and on its internet website at www.iextrading.com. 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–IEX–2022–14 and should be submitted on or before February 2, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–00424 Filed 1–11–23; 8:45 am] Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– IEX–2022–14 on the subject line. BILLING CODE 8011–01–P Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–IEX–2022–14. This file number should be included in the subject line if email is used. To help the Proposed Collection; Comment Request; Extension: Rule 17d–1 20 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule change’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 21 15 U.S.C. 78s(b)(2)(B). 15 15 VerDate Sep<11>2014 performing their supervisory obligations, while addressing the ongoing impacts of the COVID–19 pandemic. Moreover, like SR–IEX– 2022–12, the proposed extension would provide only temporary relief during the period in which IEX’s member firms’ operations remain impacted by COVID– 19. Thus, the amended rules will revert back to their original state at the conclusion of the temporary relief period and, if applicable, any extension thereof. For these reasons, the Commission believes that waiver of the 30-day operative delay for this proposed rule change is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.20 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 21 of the Act to determine whether the proposed rule change should be approved or disapproved. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–505, OMB Control No. 3235–0562] 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.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the collections of information 22 17 E:\FR\FM\12JAN1.SGM CFR 200.30–3(a)(12). 12JAN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 88, No. 8 / Thursday, January 12, 2023 / Notices summarized below. The Commission plans to submit these existing collections of information to the Office of Management and Budget for extension and approval. Section 17(d) (15 U.S.C. 80a–17(d)) of the Investment Company Act of 1940 (15 U.S.C. 80a et seq.) (the ‘‘Act’’) prohibits first- and second-tier affiliates of a fund, the fund’s principal underwriters, and affiliated persons of the fund’s principal underwriters, acting as principal, to effect any transaction in which the fund or a company controlled by the fund is a joint or a joint and several participant in contravention of the Commission’s rules. Rule 17d–1 (17 CFR 270.17d–1) prohibits an affiliated person of or principal underwriter for any fund (a ‘‘first-tier affiliate’’), or any affiliated person of such person or underwriter (a ‘‘second-tier affiliate’’), acting as principal, from participating in or effecting any transaction in connection with a joint enterprise or other joint arrangement in which the fund is a participant, unless prior to entering into the enterprise or arrangement ‘‘an application regarding [the transaction] has been filed with the Commission and has been granted by an order.’’ In reviewing the proposed affiliated transaction, the rule provides that the Commission will consider whether the proposal is (i) consistent with the provisions, policies, and purposes of the Act, and (ii) on a basis different from or less advantageous than that of other participants in determining whether to grant an exemptive application for a proposed joint enterprise, joint arrangement, or profitsharing plan. Rule 17d–1 also contains a number of exceptions to the requirement that a fund must obtain Commission approval prior to entering into joint transactions or arrangements with affiliates. For example, funds do not have to obtain Commission approval for certain employee compensation plans, certain tax-deferred employee benefit plans, certain transactions involving small business investment companies, the receipt of securities or cash by certain affiliates pursuant to a plan of reorganization, certain arrangements regarding liability insurance policies and transactions with ‘‘portfolio affiliates’’ (companies that are affiliated with the fund solely as a result of the fund (or an affiliated fund) controlling them or owning more than five percent of their voting securities) so long as certain other affiliated persons of the fund (e.g., the fund’s adviser, persons controlling the fund, and persons under common control with the fund) are not parties to the transaction and do not VerDate Sep<11>2014 17:36 Jan 11, 2023 Jkt 259001 have a ‘‘financial interest’’ in a party to the transaction. The rule excludes from the definition of ‘‘financial interest’’ any interest that the fund’s board of directors (including a majority of the directors who are not interested persons of the fund) finds to be not material, as long as the board records the basis for its finding in their meeting minutes. Thus, the rule contains two filing and recordkeeping requirements that constitute collections of information. First, rule 17d–1 requires funds that wish to engage in a joint transaction or arrangement with affiliates to meet the procedural requirements for obtaining exemptive relief from the rule’s prohibition on joint transactions or arrangements involving first- or secondtier affiliates. Second, rule 17d–1 permits a portfolio affiliate to enter into a joint transaction or arrangement with the fund if a prohibited participant has a financial interest that the fund’s board determines is not material and records the basis for this finding in their meeting minutes. These requirements of rule 17d–1 are designed to prevent fund insiders from managing funds for their own benefit, rather than for the benefit of the funds’ shareholders. Based on an analysis of past filings, Commission staff estimates that 43 funds file applications under section 17(d) and rule 17d–1 per year. The staff understands that funds that file an application generally obtain assistance from outside counsel to prepare the application. The cost burden of using outside counsel is discussed below. The Commission staff estimates that each applicant will spend an average of 75 hours to comply with the Commission’s applications process. The Commission staff therefore estimates the annual burden hours per year for all funds under rule 17d–1’s application process to be 3,225 hours at a cost of $1,428,675.1 The Commission, therefore, requests authorization to reduce the inventory of total burden hours per year for all funds under rule 17d–1 from the current authorized burden of 3,542 hours to 3,225 hours. The reduction is due to a decrease in the 1 This estimate is based on the following calculation: 75 hours per applicant × $433 wage rate = $33,225. $33,225 × 43 exemption requests per year = $1,428,675. This blended rate is based on the following: $580 (hourly rate for a chief compliance officer); $510 (hourly rate for an assistant general counsel); and $238 (hourly rate for a paralegal). The Commission’s estimates of the relevant wage rates are based on the salary information for the securities industry compiled by Securities Industry and Financial Markets Association’s Office Salaries in the Securities Industry 2013, as modified by Commission staff (‘‘SIFMA Wage Report’’). The estimated figures are modified by firm size, employee benefits, overhead, and adjusted to account for the effects of inflation. PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 2143 Commission’s estimate of the number of internal annual burden hours per application for exemptions under rule 17d–1. As noted above, the Commission staff understands that funds that file an application under rule 17d–1 generally use outside counsel to assist in preparing the application. The staff estimates that, on average, funds spend an additional $53,100 for outside legal services in connection with seeking Commission approval of affiliated joint transactions. Thus, the staff estimates that the total annual cost burden imposed by the exemptive application requirements of rule 17d–1 is $2,283,300.2 We estimate that funds currently do not rely on the exemption from the term ‘‘financial interest’’ with respect to any interest that the fund’s board of directors (including a majority of the directors who are not interested persons of the fund) finds to be not material. Accordingly, we estimate that annually there will be no transactions under rule 17d–1 that will result in this aspect of the collection of information. Based on these calculations, the total annual hour burden is estimated to be 3,225 hours and the total annual cost burden is estimated to be $2,283,300. The estimate of average burden hours is 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 the costs of Commission rules. Complying with these collections of information requirement is necessary to obtain the benefit of relying on rule 17d–1. 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. Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’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 2 This estimated burden is based on the estimated wage rate of $531/hour, for 100 hours, for outside legal services. The Commission’s estimates of the relevant wage rates for external time costs, such as outside legal services, take into account staff experience, a variety of sources including general information websites, and adjustments for inflation. The estimate is based on the following calculation: $53,100 × 43 exemption requests per year = $2,283,300. E:\FR\FM\12JAN1.SGM 12JAN1 2144 Federal Register / Vol. 88, No. 8 / Thursday, January 12, 2023 / Notices 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 by March 13, 2023. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to: PRA_ Mailbox@sec.gov . Dated: January 6, 2023. Sherry R. Haywood, Assistant Secretary. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2023–00427 Filed 1–11–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96607; File No. SR–FINRA– 2022–033] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend the Codes of Arbitration Procedure To Make Various Clarifying and Technical Changes to the Codes, Including in Response to Recommendations in the Report of Independent Counsel Lowenstein Sandler LLP khammond on DSKJM1Z7X2PROD with NOTICES for Industry Disputes (‘‘Industry Code’’) (together, ‘‘Codes’’) to make changes to provisions relating to the arbitrator list selection process in response to recommendations in the report of independent counsel Lowenstein Sandler LLP. The proposed rule change also makes clarifying and technical changes to requirements in the Codes for holding prehearing conferences and hearing sessions, initiating and responding to claims, motion practice, claim and case dismissals, and providing a hearing record. The text of the proposed rule change is available on FINRA’s website at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose January 6, 2023. Background and Discussion Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 23, 2022, 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. FINRA is proposing to amend the Codes to provide greater transparency and consistency regarding the arbitrator list selection process, and to clarify the application of certain procedures and include expressly these procedures in various rules in the Codes. The proposed rule change would enhance the transparency of the arbitration forum administered by FINRA Dispute Resolution Services (‘‘DRS’’).3 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend the Code of Arbitration Procedure for Customer Disputes (‘‘Customer Code’’) and the Code of Arbitration Procedure 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 17:36 Jan 11, 2023 Jkt 259001 I. List Selection Process Amendments In June 2022, FINRA published the report from Lowenstein Sandler LLP relating to an independent review and analysis of the DRS arbitrator list selection process (‘‘Report’’).4 The 3 FINRA notes that the proposed rule change would impact all members, including members that are funding portals or have elected to be treated as capital acquisition brokers (‘‘CABs’’), given that the funding portal and CAB rule sets incorporate the impacted FINRA rules by reference. 4 See FINRA, The Report of the Independent Review of FINRA’s Dispute Resolution Services— PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 Report made several recommendations to provide greater transparency and consistency in the arbitrator list selection process, some of which require amendments to the Codes. In response to the recommendations in the Report, FINRA is proposing to amend the Codes to implement the Report’s recommendations, as described below.5 1. Conflicts of Interest The Codes provide that a list selection algorithm will randomly generate the ranking lists of arbitrators from the DRS roster of arbitrators,6 and exclude arbitrators from the lists based upon current conflicts of interest identified within the list selection algorithm.7 In addition, once the lists are generated, DRS conducts a manual review for other conflicts not identified within the list selection algorithm. This manual review is described on FINRA’s website and in rule filings with the SEC, but not in the Codes.8 The Report recommended that, ‘‘to improve transparency, FINRA should amend Rule 12400 to specifically state that prior to sending the arbitrator list to the parties, NM [DRS’s Neutral Management Arbitrator Selection Process, https://www.finra.org/ sites/default/files/2022-06/report-independentreview-drs-arbitrator-selection-process.pdf. In February 2022, the Audit Committee of FINRA’s Board of Governors engaged independent counsel Lowenstein Sandler LLP to provide a review and analysis in connection with a Fulton County (Georgia) Superior Court decision vacating an arbitration award in favor of Wells Fargo Clearing Services, LLC. See Order Granting Mot. to Vacate Arb. Award and Den. Cross Mot. to Confirm Arb. Award at 37, Leggett v. Wells Fargo Clearing Servs., LLC, No. 2019–CV–328949 (Ga. Super. Ct., January 25, 2022). Since publication of the Report, the Fulton County (Georgia) Superior Court’s decision was reversed by the Court of Appeals of Georgia. See Wells Fargo Clearing Servs. v. Leggett, No. A22A1149, 2022 Ga. App. (Ct. App. August 2, 2022). 5 Separately, FINRA addressed a recommendation from the Report by making technical, nonsubstantive changes to the Codes to remove references to the Neutral List Selection System from those rules describing arbitrator list selection and instead refer to a ‘‘list selection algorithm.’’ See Securities Exchange Act Release No. 95871 (September 22, 2022), 87 FR 58854 (September 28, 2022) (Notice of Filing and Immediate Effectiveness of File No. SR–FINRA–2022–026). 6 See FINRA Rules 12400, 12402, 12403, 13400 and 13406. 7 See FINRA Rules 12402(b), 12403(a)(3), 13403(a)(4) and 13403(b)(4). 8 See FINRA, How Parties Select Arbitrators, https://www.finra.org/arbitration-mediation/ arbitrator-selection. See also Securities Exchange Act Release No. 40261 (July 24, 1998), 63 FR 40761, 40769 (July 30, 1998) (Notice of Filing of SR– NASD–98–48) (stating that DRS will perform a manual review for conflicts of interests between parties and potential arbitrators); Securities Exchange Act Release No. 40555 (October 21, 1998), 63 FR 56670, 56675 (October 22, 1998) (Order Approving File No. SR–NASD–98–48) (describing the manual review for conflicts of interests between parties and potential arbitrators). E:\FR\FM\12JAN1.SGM 12JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 88, Number 8 (Thursday, January 12, 2023)]
[Notices]
[Pages 2142-2144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-00427]


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

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-505, OMB Control No. 3235-0562]


Proposed Collection; Comment Request; Extension: Rule 17d-1

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.), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collections 
of information

[[Page 2143]]

summarized below. The Commission plans to submit these existing 
collections of information to the Office of Management and Budget for 
extension and approval.
    Section 17(d) (15 U.S.C. 80a-17(d)) of the Investment Company Act 
of 1940 (15 U.S.C. 80a et seq.) (the ``Act'') prohibits first- and 
second-tier affiliates of a fund, the fund's principal underwriters, 
and affiliated persons of the fund's principal underwriters, acting as 
principal, to effect any transaction in which the fund or a company 
controlled by the fund is a joint or a joint and several participant in 
contravention of the Commission's rules. Rule 17d-1 (17 CFR 270.17d-1) 
prohibits an affiliated person of or principal underwriter for any fund 
(a ``first-tier affiliate''), or any affiliated person of such person 
or underwriter (a ``second-tier affiliate''), acting as principal, from 
participating in or effecting any transaction in connection with a 
joint enterprise or other joint arrangement in which the fund is a 
participant, unless prior to entering into the enterprise or 
arrangement ``an application regarding [the transaction] has been filed 
with the Commission and has been granted by an order.'' In reviewing 
the proposed affiliated transaction, the rule provides that the 
Commission will consider whether the proposal is (i) consistent with 
the provisions, policies, and purposes of the Act, and (ii) on a basis 
different from or less advantageous than that of other participants in 
determining whether to grant an exemptive application for a proposed 
joint enterprise, joint arrangement, or profit-sharing plan.
    Rule 17d-1 also contains a number of exceptions to the requirement 
that a fund must obtain Commission approval prior to entering into 
joint transactions or arrangements with affiliates. For example, funds 
do not have to obtain Commission approval for certain employee 
compensation plans, certain tax-deferred employee benefit plans, 
certain transactions involving small business investment companies, the 
receipt of securities or cash by certain affiliates pursuant to a plan 
of reorganization, certain arrangements regarding liability insurance 
policies and transactions with ``portfolio affiliates'' (companies that 
are affiliated with the fund solely as a result of the fund (or an 
affiliated fund) controlling them or owning more than five percent of 
their voting securities) so long as certain other affiliated persons of 
the fund (e.g., the fund's adviser, persons controlling the fund, and 
persons under common control with the fund) are not parties to the 
transaction and do not have a ``financial interest'' in a party to the 
transaction. The rule excludes from the definition of ``financial 
interest'' any interest that the fund's board of directors (including a 
majority of the directors who are not interested persons of the fund) 
finds to be not material, as long as the board records the basis for 
its finding in their meeting minutes.
    Thus, the rule contains two filing and recordkeeping requirements 
that constitute collections of information. First, rule 17d-1 requires 
funds that wish to engage in a joint transaction or arrangement with 
affiliates to meet the procedural requirements for obtaining exemptive 
relief from the rule's prohibition on joint transactions or 
arrangements involving first- or second-tier affiliates. Second, rule 
17d-1 permits a portfolio affiliate to enter into a joint transaction 
or arrangement with the fund if a prohibited participant has a 
financial interest that the fund's board determines is not material and 
records the basis for this finding in their meeting minutes. These 
requirements of rule 17d-1 are designed to prevent fund insiders from 
managing funds for their own benefit, rather than for the benefit of 
the funds' shareholders.
    Based on an analysis of past filings, Commission staff estimates 
that 43 funds file applications under section 17(d) and rule 17d-1 per 
year. The staff understands that funds that file an application 
generally obtain assistance from outside counsel to prepare the 
application. The cost burden of using outside counsel is discussed 
below. The Commission staff estimates that each applicant will spend an 
average of 75 hours to comply with the Commission's applications 
process. The Commission staff therefore estimates the annual burden 
hours per year for all funds under rule 17d-1's application process to 
be 3,225 hours at a cost of $1,428,675.\1\ The Commission, therefore, 
requests authorization to reduce the inventory of total burden hours 
per year for all funds under rule 17d-1 from the current authorized 
burden of 3,542 hours to 3,225 hours. The reduction is due to a 
decrease in the Commission's estimate of the number of internal annual 
burden hours per application for exemptions under rule 17d-1.
---------------------------------------------------------------------------

    \1\ This estimate is based on the following calculation: 75 
hours per applicant x $433 wage rate = $33,225. $33,225 x 43 
exemption requests per year = $1,428,675. This blended rate is based 
on the following: $580 (hourly rate for a chief compliance officer); 
$510 (hourly rate for an assistant general counsel); and $238 
(hourly rate for a paralegal). The Commission's estimates of the 
relevant wage rates are based on the salary information for the 
securities industry compiled by Securities Industry and Financial 
Markets Association's Office Salaries in the Securities Industry 
2013, as modified by Commission staff (``SIFMA Wage Report''). The 
estimated figures are modified by firm size, employee benefits, 
overhead, and adjusted to account for the effects of inflation.
---------------------------------------------------------------------------

    As noted above, the Commission staff understands that funds that 
file an application under rule 17d-1 generally use outside counsel to 
assist in preparing the application. The staff estimates that, on 
average, funds spend an additional $53,100 for outside legal services 
in connection with seeking Commission approval of affiliated joint 
transactions. Thus, the staff estimates that the total annual cost 
burden imposed by the exemptive application requirements of rule 17d-1 
is $2,283,300.\2\
---------------------------------------------------------------------------

    \2\ This estimated burden is based on the estimated wage rate of 
$531/hour, for 100 hours, for outside legal services. The 
Commission's estimates of the relevant wage rates for external time 
costs, such as outside legal services, take into account staff 
experience, a variety of sources including general information 
websites, and adjustments for inflation. The estimate is based on 
the following calculation: $53,100 x 43 exemption requests per year 
= $2,283,300.
---------------------------------------------------------------------------

    We estimate that funds currently do not rely on the exemption from 
the term ``financial interest'' with respect to any interest that the 
fund's board of directors (including a majority of the directors who 
are not interested persons of the fund) finds to be not material. 
Accordingly, we estimate that annually there will be no transactions 
under rule 17d-1 that will result in this aspect of the collection of 
information.
    Based on these calculations, the total annual hour burden is 
estimated to be 3,225 hours and the total annual cost burden is 
estimated to be $2,283,300.
    The estimate of average burden hours is 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 the 
costs of Commission rules. Complying with these collections of 
information requirement is necessary to obtain the benefit of relying 
on rule 17d-1. 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.
    Written comments are invited on: (a) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission'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

[[Page 2144]]

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 by 
March 13, 2023.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o John 
Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to: 
[email protected] .

    Dated: January 6, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-00427 Filed 1-11-23; 8:45 am]
BILLING CODE 8011-01-P

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