Submission for OMB Review; Comment Request; Extension: Rule 482, 42402-42404 [2023-13952]
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Federal Register / Vol. 88, No. 125 / Friday, June 30, 2023 / Notices
uspsngdveis.com/. Interested parties
may mail or deliver written comments,
containing the name and address of the
commenter, to: Mr. Davon Collins,
Environmental Counsel, United States
Postal Service, 475 L’Enfant Plaza SW,
Office 6606, Washington, DC 20260–
6201, or at NEPA@usps.gov. Note that
comments sent by mail may be subject
to delay due to Federal security
screening. Faxed comments are not
accepted. All submitted comments and
attachments are part of the public record
and subject to disclosure. Do not
enclose any material in your comments
that you consider confidential or
inappropriate for public disclosure.
References
1. U.S. Postal Service, Notice of Availability
of Record of Decision, Next Generation
Delivery Vehicles Acquisitions (87 FR
14588; Mar. 15, 2022).
2. U.S. Postal Service, Notice of Intent to
Prepare a Supplement to the Next
Generation Delivery Vehicles
Acquisitions Final Environmental
Impact Statement (87 FR 35581; June 10,
2022).
3. U.S. Postal Service, Notice to Postpone
Public Hearing and Extend Public
Comment Period for Supplement to the
Next Generation Delivery Vehicles
Acquisitions Final Environmental
Impact Statement (87 FR 43561; July 21,
2022).
Sarah Sullivan,
Attorney, Ethics & Legal Compliance.
[FR Doc. 2023–13941 Filed 6–29–23; 8:45 am]
BILLING CODE P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–508, OMB Control No.
3235–0565]
Submission for OMB Review;
Comment Request; Extension: Rule
482
ddrumheller on DSK120RN23PROD with NOTICES1
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.) (‘‘Paperwork
Reduction Act’’), 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.
Like most issuers of securities, when
an investment company (‘‘fund’’) 1 offers
1 ‘‘Investment
company’’ refers to both
investment companies registered under the
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Jkt 259001
its shares to the public, its promotional
efforts become subject to the advertising
restrictions of the Securities Act of 1933
(15 U.S.C. 77) (the ‘‘Securities Act’’). In
recognition of the particular problems
faced by funds that continually offer
securities and wish to advertise their
securities, the Commission has
previously adopted advertising safe
harbor rules. The most important of
these is rule 482 (17 CFR 230.482) under
the Securities Act, which, under certain
circumstances, permits funds to
advertise investment performance data,
as well as other information. Rule 482
advertisements are deemed to be
‘‘prospectuses’’ under Section 10(b) of
the Securities Act (15 U.S.C. 77j(b)).
Rule 482 contains certain
requirements regarding the disclosure
that funds are required to provide in
qualifying advertisements. These
requirements are intended to encourage
the provision to investors of information
that is balanced and informative,
particularly in the area of investment
performance. For example, a fund is
required to include disclosure advising
investors to consider the fund’s
investment objectives, risks, charges and
expenses, and other information
described in the fund’s prospectus, and
highlighting the availability of the
fund’s prospectus. In addition, rule 482
advertisements that include
performance data of open-end funds or
insurance company separate accounts
offering variable annuity contracts are
required to include certain standardized
performance information, information
about any sales loads or other
nonrecurring fees, and a legend warning
that past performance does not
guarantee future results. Such funds
including performance information in
rule 482 advertisements are also
required to make available to investors
month-end performance figures via
website disclosure or by a toll-free
telephone number, and to disclose the
availability of the month-end
performance data in the advertisement.
The rule also sets forth requirements
regarding the prominence of certain
disclosures, requirements regarding
advertisements that make tax
representations, requirements regarding
advertisements used prior to the
effectiveness of the fund’s registration
statement, requirements regarding the
timeliness of performance data. In
addition, rule 482(b) describes the
information that is required to be
included in an advertisement, including
a cautionary statement under rule
Investment Company Act of 1940 (‘‘Investment
Company Act’’) (15 U.S.C. 80a–1 et seq.) and
business development companies.
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Fmt 4703
Sfmt 4703
482(b)(4) disclosing the particular risks
associated with investing in a money
market fund.
On October 26, 2022, the Commission
adopted rule and form amendments that
modernize the requirements for annual
and semi-annual shareholder reports
provided by open-end management
investment companies.2 The
Commission also adopted amendments
to the advertising rules for registered
investment companies and business
development companies to promote
more transparent and balanced
statements about investment costs. The
advertising rule amendments require
that investment company
advertisements providing fee and
expense figures include: (1) the
maximum amount of any sales load or
any other nonrecurring fee; and (2) the
total annual expenses without any fee
waiver or expense reimbursement
arrangement. Under the amendments to
rule 482, investment company fee and
expense presentations in advertisements
must include timely and prominent
information about a fund’s maximum
sales load (or any other nonrecurring
fee) and gross total annual expenses,
based on the methods of computation
that the company’s Investment
Company Act or Securities Act
registration statement form prescribes
for a prospectus.
Rule 482 advertisements must be filed
with the Commission or, in the
alternative, with the Financial Industry
Regulatory Authority (‘‘FINRA’’).3 This
information collection differs from
many other federal information
collections that are primarily for the use
and benefit of the collecting agency.
Rule 482 contains requirements that
are intended to encourage the provision
to investors of information that is
balanced and informative, particularly
in the area of investment performance.
The Commission is concerned that in
the absence of such provisions fund
investors may be misled by deceptive
rule 482 advertisements and may rely
on less-than-adequate information when
determining in which funds they should
invest money. As a result, the
2 Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds; Fee Information in
Investment Company Advertisements, Investment
Company Act Release No. 34731 (Oct. 26, 2022), 87
FR 72758 (Nov. 25, 2022) (the ‘‘Adopting Release’’).
3 See note to rule 482(h) under the Securities Act,
which states that ‘‘these advertisements, unless
filed with [FINRA], are required to be filed in
accordance with the requirements of § 230.497.’’
See also rule 24b–3 under the Investment Company
Act (17 CFR 270.24b–3), which provides that any
sales material, including rule 482 advertisements,
shall be deemed filed with the Commission for
purposes of Section 24(b) of the Investment
Company Act upon filing with FINRA.
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Federal Register / Vol. 88, No. 125 / Friday, June 30, 2023 / Notices
Commission believes it is beneficial for
funds to provide investors with
balanced information in fund
advertisements in order to allow
investors to make better-informed
decisions.
The table below summarizes our
estimates associated with the
amendments to rule 482 that the
Adopting Release addresses:
RULE 482 PRA ESTIMATES
Internal
initial hour
burdens
Internal annual
burden 1
Wage rate 2
Internal time costs
FINAL ESTIMATES FOR RULE 482
New general requirements re: fee and expense figure disclosure.
9 hours
6 hours 3 ..................
× 36,492 4 responses
Number of responses to rule 482 that include
fee/expense figure disclosure.
$381 .........................................
(blended rate for compliance
attorney and senior programmer).
$2,286.
× 36,492 responses.
Total burden of new requirements for fee
and expense disclosure.
........................
218,952 hours .........
..................................................
$83,420,712.
New requirements for disclosure of fee waivers/expense reimbursement arrangements.
6 hours
4 hours 5 ..................
$381 .........................................
(blended rate for compliance
attorney and senior programmer).
$1,524.
× 36,492 responses
Number of responses to rule 482 that disclose
fee waivers/expense reimbursement arrangements.
× 36,492 responses.
Total burden of annual requirements for
disclosure of fee waivers/expense reimbursement arrangements.
........................
145,968 hours .........
..................................................
$55,613,808.
Total annual burden ...................................
........................
364,920 hours .........
..................................................
$139,034,520.
TOTAL FINAL ESTIMATED BURDENS INCLUDING AMENDMENTS
Current burden estimates .................................
Revised burden estimate ..................................
........................
........................
212,927 hours .........
577,847 hours .........
..................................................
..................................................
$74,098,735.
$213,133,255.
ddrumheller on DSK120RN23PROD with NOTICES1
Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. These PRA estimates assume that the same types of professionals would be involved in preparing advertisements (reflecting the proposed
and final amendments to rule 482) that we believe otherwise would be involved in preparing a fund’s advertisements. The Commission’s estimates of the relevant wage rates are based on salary information for the securities industry compiled by the Securities Industry and Financial
Markets Association’s Office Salaries in the Securities Industry 2013. The estimated figures are modified by firm size, employee benefits, overhead, and adjusted to account for the effects of inflation. See Securities Industry and Financial Markets Association, Report on Management &
Professional Earnings in the Securities Industry 2013.
3. This estimate assumed that, after the initial 9 hours that an entity would spend on the proposed fee and expense disclosure, which we annualize over a 3-year period, the entity would incur 3 additional burden hours associated with ongoing compliance with these requirements per
year. The estimate of 6 hours is based on the following calculation: ((9 initial hours/3) + 3 hours of additional ongoing burden hours) = 6 hours.
4. The Commission estimates that there was a total of 41,953 responses to rule 482 that either were filed with FINRA or with the Commission
in 2021. Of those, the Commission estimates that 1,124 were responses from closed-end funds and BDCs, and that 2,816 were responses from
variable insurance contracts. The number of responses filed with the SEC is based on the average number of responses filed with the Commission from 2019–2021. The Commission assumes that, moving forward, closed-end funds and BDCs will choose to use free writing prospectuses
under rule 433, and also that variable insurance contracts will not be subject to the amendments to rule 482. Therefore, we exclude closed-end
funds, BDCs, and variable insurance contracts from the total responses to rule 482 for purposes of this estimate. For purposes of estimating the
burden of the final rules amendments, we estimate that 38,013 responses to rule 482 are filed annually. We estimate that approximately 96% of
these rule 482 responses provide fee and expense figures in qualifying advertisements and would, therefore, be required to comply with the final
rule amendments regarding such information (for example, ensuring that the fee and expense figures are presented in accordance with the
prominence and timeliness requirements in the amendments to rule 482).
5. This estimate assumed that, after the initial 6 hours that an entity would spend on the proposed fee waiver and expense reimbursement requirements, which we annualized over a 3-year period, the entity would incur 2 additional burden hours associated with ongoing compliance with
these requirements per year. The estimate of 4 hours is based on the following calculation ((6 initial hours/3) + 2 hours of additional ongoing burden hours) = 4 hours.
The table above summarizes our PRA
initial and ongoing annual burden
estimates associated with rule 482, as
amended. In the aggregate, we estimate
the total annual burden to comply with
amended rule 482 to be 577,847 hours,
at an average time cost of $213,133,255.
The information provided under rule
482 will not be kept confidential. The
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19:33 Jun 29, 2023
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provision of information under rule 482
is necessary to obtain the benefits of the
safe harbor offered by the rule.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules and forms.
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Fmt 4703
Sfmt 4703
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
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Federal Register / Vol. 88, No. 125 / Friday, June 30, 2023 / Notices
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 July 31, 2023 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: June 27, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023–13952 Filed 6–29–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97798; File No. SR–FINRA–
2023–009]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend FINRA’s
Trading Activity Fee
June 26, 2023.
ddrumheller on DSK120RN23PROD with NOTICES1
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 23,
2023, 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
1(b) of Schedule A to the FINRA ByLaws to exempt from the Trading
Activity Fee (‘‘TAF’’) any transaction by
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
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19:33 Jun 29, 2023
Jkt 259001
a proprietary trading firm that occurs on
an exchange of which the proprietary
trading firm is a member.
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.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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
As a general matter, the most
significant sources of FINRA’s funding
are three core regulatory fees: the Gross
Income Assessment; the TAF; and the
Personnel Assessment.5 These
regulatory fees are used to substantially
fund FINRA’s regulatory activities,
including examinations, financial
monitoring, and FINRA’s policymaking,
rulemaking, and enforcement activities.6
As discussed in FINRA’s prior
Regulatory Notices, FINRA is proposing
an exemption from one of FINRA’s
regulatory fees—the TAF—for
transactions by ‘‘proprietary trading
firms,’’ which FINRA understands
would include firms currently operating
in compliance with existing SEA Rule
15b9–1 and that would be required to
become FINRA members in light of the
SEC’s proposed amendments to SEA
Rule 15b9–1, as further discussed
below.7 In this regard, FINRA proposes
to define ‘‘proprietary trading firm’’ as
a member that (i) trades exclusively its
5 See
FINRA By-Laws, Schedule A, Section 1.
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).
7 FINRA believes that proprietary trading firms
currently operating in compliance with existing
SEA Rule 15b9–1 that would join FINRA due to the
SEC’s proposed amendments to SEA Rule 15b9–1
would meet the proposed definition of ‘‘proprietary
trading firm’’ and would qualify for the proposed
exemption (assuming no changes to their business
models that would alter their eligibility), as well as
current FINRA members that meet the proposed
definition. See also infra notes 37 and 39.
6 See
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Frm 00119
Fmt 4703
Sfmt 4703
own capital; (ii) does not have
‘‘customers,’’ which shall include any
person, other than a broker or dealer,
with whom the member engages, or
within the past six months has engaged,
in securities activities; and (iii)
conducts all trading through the firm’s
accounts by traders that are owners of,
employees of, or contractors to the firm,
or employees of an affiliate of the firm.
Under the Exchange Act, a registered
broker-dealer must become a member of
a national securities association
(currently, FINRA is the sole national
securities association) unless the brokerdealer effects transactions in securities
solely on a national securities exchange
of which it is a member.8 SEA Rule
15b9–1 provides an exemption to the
requirement that a broker-dealer become
a member of a national securities
association if the broker-dealer (i) is a
member of a national securities
exchange, (ii) carries no customer
accounts, and (iii) has annual gross
income derived from purchases and
sales of securities otherwise than on a
national securities exchange of which it
is a member in an amount no greater
than $1,000 (the $1,000 limitation is
known as the ‘‘de minimis allowance’’).9
The $1,000 gross income limitation does
not apply to income derived from
transactions for the dealer’s own
account with or through another
registered broker or dealer. Thus, for
example, income derived from over-thecounter trades through an alternative
trading system does not count toward
the $1,000 threshold. On July 29, 2022,
the SEC proposed amendments to SEA
Rule 15b9–1 to narrow the exemption
from association membership.10
As discussed in the Proposing
Release, the securities markets have
evolved dramatically since the adoption
of SEA Rule 15b9–1 and, today, the de
minimis allowance is relied upon by
proprietary trading firms that, in some
cases, engage in substantial crossexchange and off-exchange trading
activity, yet they are not subject to
FINRA oversight.11 The SEC therefore
proposed to eliminate the de minimis
allowance and instead provide that a
broker-dealer may effect transactions
otherwise than on a national securities
exchange of which it is a member in
8 15
U.S.C. 78o(b)(8).
CFR 240.15b9–1.
10 See Securities Exchange Act Release No. 95388
(July 29, 2022), 87 FR 49930 (August 12, 2022)
(‘‘Proposing Release’’). The SEC previously
proposed to amend SEA Rule 15b9–1 in 2015. See
Securities Exchange Act Release No. 74581 (March
25, 2015), 80 FR 18036 (April 2, 2015) (File No. S7–
05–15) (‘‘2015 Proposal’’).
11 See Proposing Release, supra note 10, 87 FR
49930, 49931.
9 17
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]]>Agencies
[Federal Register Volume 88, Number 125 (Friday, June 30, 2023)]
[Notices]
[Pages 42402-42404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13952]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-508, OMB Control No. 3235-0565]
Submission for OMB Review; Comment Request; Extension: Rule 482
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.) (``Paperwork Reduction Act''), 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.
Like most issuers of securities, when an investment company
(``fund'') \1\ offers its shares to the public, its promotional efforts
become subject to the advertising restrictions of the Securities Act of
1933 (15 U.S.C. 77) (the ``Securities Act''). In recognition of the
particular problems faced by funds that continually offer securities
and wish to advertise their securities, the Commission has previously
adopted advertising safe harbor rules. The most important of these is
rule 482 (17 CFR 230.482) under the Securities Act, which, under
certain circumstances, permits funds to advertise investment
performance data, as well as other information. Rule 482 advertisements
are deemed to be ``prospectuses'' under Section 10(b) of the Securities
Act (15 U.S.C. 77j(b)).
---------------------------------------------------------------------------
\1\ ``Investment company'' refers to both investment companies
registered under the Investment Company Act of 1940 (``Investment
Company Act'') (15 U.S.C. 80a-1 et seq.) and business development
companies.
---------------------------------------------------------------------------
Rule 482 contains certain requirements regarding the disclosure
that funds are required to provide in qualifying advertisements. These
requirements are intended to encourage the provision to investors of
information that is balanced and informative, particularly in the area
of investment performance. For example, a fund is required to include
disclosure advising investors to consider the fund's investment
objectives, risks, charges and expenses, and other information
described in the fund's prospectus, and highlighting the availability
of the fund's prospectus. In addition, rule 482 advertisements that
include performance data of open-end funds or insurance company
separate accounts offering variable annuity contracts are required to
include certain standardized performance information, information about
any sales loads or other nonrecurring fees, and a legend warning that
past performance does not guarantee future results. Such funds
including performance information in rule 482 advertisements are also
required to make available to investors month-end performance figures
via website disclosure or by a toll-free telephone number, and to
disclose the availability of the month-end performance data in the
advertisement. The rule also sets forth requirements regarding the
prominence of certain disclosures, requirements regarding
advertisements that make tax representations, requirements regarding
advertisements used prior to the effectiveness of the fund's
registration statement, requirements regarding the timeliness of
performance data. In addition, rule 482(b) describes the information
that is required to be included in an advertisement, including a
cautionary statement under rule 482(b)(4) disclosing the particular
risks associated with investing in a money market fund.
On October 26, 2022, the Commission adopted rule and form
amendments that modernize the requirements for annual and semi-annual
shareholder reports provided by open-end management investment
companies.\2\ The Commission also adopted amendments to the advertising
rules for registered investment companies and business development
companies to promote more transparent and balanced statements about
investment costs. The advertising rule amendments require that
investment company advertisements providing fee and expense figures
include: (1) the maximum amount of any sales load or any other
nonrecurring fee; and (2) the total annual expenses without any fee
waiver or expense reimbursement arrangement. Under the amendments to
rule 482, investment company fee and expense presentations in
advertisements must include timely and prominent information about a
fund's maximum sales load (or any other nonrecurring fee) and gross
total annual expenses, based on the methods of computation that the
company's Investment Company Act or Securities Act registration
statement form prescribes for a prospectus.
---------------------------------------------------------------------------
\2\ Tailored Shareholder Reports for Mutual Funds and Exchange-
Traded Funds; Fee Information in Investment Company Advertisements,
Investment Company Act Release No. 34731 (Oct. 26, 2022), 87 FR
72758 (Nov. 25, 2022) (the ``Adopting Release'').
---------------------------------------------------------------------------
Rule 482 advertisements must be filed with the Commission or, in
the alternative, with the Financial Industry Regulatory Authority
(``FINRA'').\3\ This information collection differs from many other
federal information collections that are primarily for the use and
benefit of the collecting agency.
---------------------------------------------------------------------------
\3\ See note to rule 482(h) under the Securities Act, which
states that ``these advertisements, unless filed with [FINRA], are
required to be filed in accordance with the requirements of Sec.
230.497.'' See also rule 24b-3 under the Investment Company Act (17
CFR 270.24b-3), which provides that any sales material, including
rule 482 advertisements, shall be deemed filed with the Commission
for purposes of Section 24(b) of the Investment Company Act upon
filing with FINRA.
---------------------------------------------------------------------------
Rule 482 contains requirements that are intended to encourage the
provision to investors of information that is balanced and informative,
particularly in the area of investment performance. The Commission is
concerned that in the absence of such provisions fund investors may be
misled by deceptive rule 482 advertisements and may rely on less-than-
adequate information when determining in which funds they should invest
money. As a result, the
[[Page 42403]]
Commission believes it is beneficial for funds to provide investors
with balanced information in fund advertisements in order to allow
investors to make better-informed decisions.
The table below summarizes our estimates associated with the
amendments to rule 482 that the Adopting Release addresses:
Rule 482 PRA Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Internal
initial hour Internal annual burden \1\ Wage rate \2\ Internal time costs
burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
FINAL ESTIMATES FOR RULE 482
--------------------------------------------------------------------------------------------------------------------------------------------------------
New general requirements re: fee and 9 hours 6 hours \3\...................... $381....................... $2,286.
expense figure disclosure. (blended rate for
compliance attorney and
senior programmer).
Number of responses to rule 482 that x 36,492 \4\ responses........... x 36,492 responses.
include fee/expense figure disclosure.
-----------------------------------------------------------------------------------------------------------------
Total burden of new requirements .............. 218,952 hours.................... ........................... $83,420,712.
for fee and expense disclosure.
--------------------------------------------------------------------------------------------------------------------------------------------------------
New requirements for disclosure of fee 6 hours 4 hours \5\...................... $381....................... $1,524.
waivers/expense reimbursement (blended rate for
arrangements. compliance attorney and
senior programmer).
Number of responses to rule 482 that x 36,492 responses............... x 36,492 responses.
disclose fee waivers/expense
reimbursement arrangements.
-----------------------------------------------------------------------------------------------------------------
Total burden of annual .............. 145,968 hours.................... ........................... $55,613,808.
requirements for disclosure of
fee waivers/expense reimbursement
arrangements.
-----------------------------------------------------------------------------------------------------------------
Total annual burden............... .............. 364,920 hours.................... ........................... $139,034,520.
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL FINAL ESTIMATED BURDENS INCLUDING AMENDMENTS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current burden estimates.............. .............. 212,927 hours.................... ........................... $74,098,735.
Revised burden estimate............... .............. 577,847 hours.................... ........................... $213,133,255.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. These PRA estimates assume that the same types of professionals would be involved in preparing advertisements (reflecting the proposed and final
amendments to rule 482) that we believe otherwise would be involved in preparing a fund's advertisements. The Commission's estimates of the relevant
wage rates are based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association's Office
Salaries in the Securities Industry 2013. The estimated figures are modified by firm size, employee benefits, overhead, and adjusted to account for
the effects of inflation. See Securities Industry and Financial Markets Association, Report on Management & Professional Earnings in the Securities
Industry 2013.
3. This estimate assumed that, after the initial 9 hours that an entity would spend on the proposed fee and expense disclosure, which we annualize over
a 3-year period, the entity would incur 3 additional burden hours associated with ongoing compliance with these requirements per year. The estimate of
6 hours is based on the following calculation: ((9 initial hours/3) + 3 hours of additional ongoing burden hours) = 6 hours.
4. The Commission estimates that there was a total of 41,953 responses to rule 482 that either were filed with FINRA or with the Commission in 2021. Of
those, the Commission estimates that 1,124 were responses from closed-end funds and BDCs, and that 2,816 were responses from variable insurance
contracts. The number of responses filed with the SEC is based on the average number of responses filed with the Commission from 2019-2021. The
Commission assumes that, moving forward, closed-end funds and BDCs will choose to use free writing prospectuses under rule 433, and also that variable
insurance contracts will not be subject to the amendments to rule 482. Therefore, we exclude closed-end funds, BDCs, and variable insurance contracts
from the total responses to rule 482 for purposes of this estimate. For purposes of estimating the burden of the final rules amendments, we estimate
that 38,013 responses to rule 482 are filed annually. We estimate that approximately 96% of these rule 482 responses provide fee and expense figures
in qualifying advertisements and would, therefore, be required to comply with the final rule amendments regarding such information (for example,
ensuring that the fee and expense figures are presented in accordance with the prominence and timeliness requirements in the amendments to rule 482).
5. This estimate assumed that, after the initial 6 hours that an entity would spend on the proposed fee waiver and expense reimbursement requirements,
which we annualized over a 3-year period, the entity would incur 2 additional burden hours associated with ongoing compliance with these requirements
per year. The estimate of 4 hours is based on the following calculation ((6 initial hours/3) + 2 hours of additional ongoing burden hours) = 4 hours.
The table above summarizes our PRA initial and ongoing annual
burden estimates associated with rule 482, as amended. In the
aggregate, we estimate the total annual burden to comply with amended
rule 482 to be 577,847 hours, at an average time cost of $213,133,255.
The information provided under rule 482 will not be kept
confidential. The provision of information under rule 482 is necessary
to obtain the benefits of the safe harbor offered by the rule.
The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act and is not derived from a
comprehensive or even a representative survey or study of the costs of
Commission rules and forms. 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
[[Page 42404]]
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 July 31,
2023 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: June 27, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023-13952 Filed 6-29-23; 8:45 am]
BILLING CODE 8011-01-P
