Proposed Collection; Comment Request; Extension: Rule 19a-1, 71614-71615 [2023-22818]
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Federal Register / Vol. 88, No. 199 / Tuesday, October 17, 2023 / Notices
Date: October 10, 2023; Filing Authority:
39 U.S.C. 3642, 39 CFR 3040.130
through 3040.135, and 39 CFR 3035.105;
Public Representative: Kenneth R.
Moeller; Comments Due: October 18,
2023.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2023–22820 Filed 10–16–23; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–240, OMB Control No.
3235–0216]
lotter on DSK11XQN23PROD with NOTICES1
Proposed Collection; Comment
Request; Extension: Rule 19a–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. 3501–3520), the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Section 19(a) (15 U.S.C. 80a–19(a)) of
the Investment Company Act of 1940
(the ‘‘Act’’) (15 U.S.C. 80a) makes it
unlawful for any registered investment
company to pay any dividend or similar
distribution from any source other than
the company’s net income, unless the
payment is accompanied by a written
statement to the company’s
shareholders which adequately
discloses the sources of the payment.
Section 19(a) authorizes the
Commission to prescribe the form of
such statement by rule.
Rule 19a–1 (17 CFR 270.19a–1) under
the Act, entitled ‘‘Written Statement to
Accompany Dividend Payments by
Management Companies,’’ sets forth
specific requirements for the
information that must be included in
statements made pursuant to section
19(a) by or on behalf of management
companies.1 The rule requires that the
statement indicate what portions of
distribution payments are made from
1 Section
4(3) of the Act (15 U.S.C. 80a–4(3))
defines ‘‘management company’’ as ‘‘any
investment company other than a face amount
certificate company or a unit investment trust.’’
VerDate Sep<11>2014
17:02 Oct 16, 2023
Jkt 262001
net income, net profits from the sale of
a security or other property (‘‘capital
gains’’) and paid-in capital. When any
part of the payment is made from capital
gains, rule 19a–1 also requires that the
statement disclose certain other
information relating to the appreciation
or depreciation of portfolio securities. If
an estimated portion is subsequently
determined to be significantly
inaccurate, a correction must be made
on a statement made pursuant to section
19(a) or in the first report to
shareholders following the discovery of
the inaccuracy.
The purpose of rule 19a–1 is to afford
fund shareholders adequate disclosure
of the sources from which distribution
payments are made. The rule is
intended to prevent shareholders from
confusing income dividends with
distributions made from capital sources.
Absent rule 19a–1, shareholders might
receive a false impression of fund gains.
Based on a review of filings made
with the Commission, the staff estimates
that approximately 12,900 series of
registered investment companies that
are management companies may be
subject to rule 19a–1 each year,2 and
that each portfolio on average mails two
statements per year to meet the
requirements of the rule.3 The staff
further estimates that the time needed to
make the determinations required by the
rule and to prepare the statement
required under the rule is
approximately 1 hour per statement.
The total annual burden for all
portfolios therefore is estimated to be
approximately 25,800 burden hours.4
The staff estimates that approximately
one-third of the total annual burden
(8,600 hours) would be incurred by a
paralegal with an average hourly wage
rate of approximately $253 per hour,5
2 This estimate is as of December 2022 and is
based on the Commission staff’s review of EDGAR
filings through July 31, 2023. The number of
management investment company portfolios that
make distributions for which compliance with rule
19a–1 is required depends on a wide range of
factors and can vary greatly across years. Therefore,
the calculation of estimated burden hours below is
based on the total number of management
investment company portfolios, each of which may
be subject to rule 19a–1.
3 A few portfolios make monthly distributions
from sources other than net income, so the rule
requires them to send out a statement 12 times a
year. Other portfolios never make such
distributions.
4 This estimate is based on the following
calculation: 12,900 management investment
company portfolios × 2 statements per year × 1 hour
per statement = 25,800 burden hours.
5 Hourly rates are derived from the Securities
Industry and Financial Markets Association
(‘‘SIFMA’’), Management and Professional Earnings
in the Securities Industry 2013, modified to account
for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
PO 00000
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Fmt 4703
Sfmt 4703
and approximately two-thirds of the
annual burden (17,200 hours) would be
incurred by a compliance clerk with an
average hourly wage rate of $82 per
hour.6 The staff therefore estimates that
the aggregate annual burden, in dollars,
of the hours needed to comply with the
paperwork requirements of the rule is
approximately $3,586,200 ((8,600 hours
× $253 = $2,175,800) + (17,200 hours ×
$82 = $1,410,400)). It is estimated that
there is no cost burden of rule 19a–1
other than these estimates.
To comply with state law, many
investment companies already must
distinguish the different sources from
which a shareholder distribution is paid
and disclose that information to
shareholders. Thus, many investment
companies would be required to
distinguish the sources of shareholder
dividends whether or not the
Commission required them to do so
under rule 19a–1.
These estimates are made solely for
the purposes of the Paperwork
Reduction Act, and are not derived from
a comprehensive or even a
representative survey or study of the
costs of Commission rules. Compliance
with the collection of information
required by rule 19a–1 is mandatory for
management companies that make
statements to shareholders pursuant to
section 19(a) of the Act. 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
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 December 18, 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, Acting Director/Chief
6 Hourly rates are derived from SIFMA’s Office
Salaries in the Securities Industry 2013, modified
to account for an 1,800-hour work-year and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.
E:\FR\FM\17OCN1.SGM
17OCN1
Federal Register / Vol. 88, No. 199 / Tuesday, October 17, 2023 / Notices
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: October 11, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–22818 Filed 10–16–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–208, OMB Control No.
3235–0213]
Proposed Collection; Comment
Request; Extension: Rule 17g–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. 3501–3520), the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 17g–1 (17 CFR 270.17g–1) under
the Investment Company Act of 1940
(the ‘‘Act’’) (15 U.S.C. 80a–17(g))
governs the fidelity bonding of officers
and employees of registered
management investment companies
(‘‘funds’’) and their advisers. Rule 17g–
1 requires, in part, the following:
Independent Directors’ Approval
The form and amount of the fidelity
bond must be approved by a majority of
the fund’s independent directors at least
once annually, and the amount of any
premium paid by the fund for any ‘‘joint
insured bond,’’ covering multiple funds
or certain affiliates, must be approved
by a majority of the fund’s independent
directors.
lotter on DSK11XQN23PROD with NOTICES1
Terms and Provisions of the Bond
The amount of the bond may not be
less than the minimum amounts of
coverage set forth in a schedule based
on the fund’s gross assets. The bond
must provide that it shall not be
cancelled, terminated, or modified
except upon 60-days written notice to
the affected party and to the
Commission. In the case of a joint
insured bond, 60-days written notice
must also be given to each fund covered
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17:02 Oct 16, 2023
Jkt 262001
by the bond. A joint insured bond must
provide that the fidelity insurance
company will provide all funds covered
by the bond with a copy of the
agreement, a copy of any claim on the
bond, and notification of the terms of
the settlement of any claim prior to
execution of that settlement. Finally, a
fund that is insured by a joint bond
must enter into an agreement with all
other parties insured by the joint bond
regarding recovery under the bond.
Filings With the Commission
Upon the execution of a fidelity bond
or any amendment thereto, a fund must
file with the Commission within 10
days: (i) a copy of the executed bond or
any amendment to the bond, (ii) the
independent directors’ resolution
approving the bond, and (iii) a
statement as to the period for which
premiums have been paid on the bond.
In the case of a joint insured bond, a
fund must also file: (i) a statement
showing the amount the fund would
have been required to maintain under
the rule if it were insured under a single
insured bond; and (ii) the agreement
between the fund and all other insured
parties regarding recovery under the
bond. A fund must also notify the
Commission in writing within five days
of any claim or settlement on a claim
under the fidelity bond.
Notices to Directors
A fund must notify by registered mail
each member of its board of directors of:
(i) any cancellation, termination, or
modification of the fidelity bond at least
45 days prior to the effective date; and
(ii) the filing or settlement of any claim
under the fidelity bond when
notification is filed with the
Commission.
Rule 17g–1’s independent directors’
annual review requirements, fidelity
bond content requirements, joint bond
agreement requirement, and the
required notices to directors are
designed to ensure the safety of fund
assets against losses due to the conduct
of persons who may obtain access to
those assets. These requirements also
seek to facilitate oversight of a fund’s
fidelity bond. The rule’s required filings
with the Commission are designed to
assist the Commission in monitoring
funds’ compliance with the fidelity
bond requirements.
Based on conversations with
representatives in the fund industry, the
Commission staff estimates that for each
of the estimated 2,543 active funds
(respondents),1 the average annual
1 Based on a review of fund filings for the threeyear period from January 1, 2020 to December 31,
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Fmt 4703
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71615
paperwork burden associated with rule
17g–1’s requirements is two hours, one
hour each for a compliance attorney and
the board of directors as a whole. The
time spent by a compliance attorney
includes time spent filing reports with
the Commission for fidelity losses (if
any) as well as paperwork associated
with any notices to directors, and
managing any updates to the bond and
the joint agreement (if one exists). The
time spent by the board of directors as
a whole includes any time spent
initially establishing the bond, as well
as time spent on annual updates and
approvals. The Commission staff
therefore estimates the total ongoing
paperwork burden hours per year for all
funds required by rule 17g–1 to be 5,086
hours (2,543 funds × 2 hours = 5,086
hours). Commission staff continues to
estimate that the filing and reporting
requirements of rule 17g–1 do not entail
any external cost burdens.
These estimates of average burden
hours are made solely for the purposes
of the Paperwork Reduction Act. These
estimates are not derived from a
comprehensive or even a representative
survey or study of Commission rules.
The collection of information required
by rule 17g–1 is mandatory and 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
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 December 18, 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, Acting Director/Chief
Information Officer, Securities and
2022, Commission staff calculates there are 2,186
funds (registered open- and closed-end funds, and
business development companies) that must
comply with the collections of information under
rule 17g–1, and which collectively submit an
estimated 2,543 filings on Form 17G annually.
E:\FR\FM\17OCN1.SGM
17OCN1
]]>Agencies
[Federal Register Volume 88, Number 199 (Tuesday, October 17, 2023)]
[Notices]
[Pages 71614-71615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22818]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-240, OMB Control No. 3235-0216]
Proposed Collection; Comment Request; Extension: Rule 19a-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. 3501-3520), the Securities and Exchange
Commission (the ``Commission'') is soliciting comments on the
collection of information summarized below. The Commission plans to
submit this existing collection of information to the Office of
Management and Budget for extension and approval.
Section 19(a) (15 U.S.C. 80a-19(a)) of the Investment Company Act
of 1940 (the ``Act'') (15 U.S.C. 80a) makes it unlawful for any
registered investment company to pay any dividend or similar
distribution from any source other than the company's net income,
unless the payment is accompanied by a written statement to the
company's shareholders which adequately discloses the sources of the
payment. Section 19(a) authorizes the Commission to prescribe the form
of such statement by rule.
Rule 19a-1 (17 CFR 270.19a-1) under the Act, entitled ``Written
Statement to Accompany Dividend Payments by Management Companies,''
sets forth specific requirements for the information that must be
included in statements made pursuant to section 19(a) by or on behalf
of management companies.\1\ The rule requires that the statement
indicate what portions of distribution payments are made from net
income, net profits from the sale of a security or other property
(``capital gains'') and paid-in capital. When any part of the payment
is made from capital gains, rule 19a-1 also requires that the statement
disclose certain other information relating to the appreciation or
depreciation of portfolio securities. If an estimated portion is
subsequently determined to be significantly inaccurate, a correction
must be made on a statement made pursuant to section 19(a) or in the
first report to shareholders following the discovery of the inaccuracy.
---------------------------------------------------------------------------
\1\ Section 4(3) of the Act (15 U.S.C. 80a-4(3)) defines
``management company'' as ``any investment company other than a face
amount certificate company or a unit investment trust.''
---------------------------------------------------------------------------
The purpose of rule 19a-1 is to afford fund shareholders adequate
disclosure of the sources from which distribution payments are made.
The rule is intended to prevent shareholders from confusing income
dividends with distributions made from capital sources. Absent rule
19a-1, shareholders might receive a false impression of fund gains.
Based on a review of filings made with the Commission, the staff
estimates that approximately 12,900 series of registered investment
companies that are management companies may be subject to rule 19a-1
each year,\2\ and that each portfolio on average mails two statements
per year to meet the requirements of the rule.\3\ The staff further
estimates that the time needed to make the determinations required by
the rule and to prepare the statement required under the rule is
approximately 1 hour per statement. The total annual burden for all
portfolios therefore is estimated to be approximately 25,800 burden
hours.\4\
---------------------------------------------------------------------------
\2\ This estimate is as of December 2022 and is based on the
Commission staff's review of EDGAR filings through July 31, 2023.
The number of management investment company portfolios that make
distributions for which compliance with rule 19a-1 is required
depends on a wide range of factors and can vary greatly across
years. Therefore, the calculation of estimated burden hours below is
based on the total number of management investment company
portfolios, each of which may be subject to rule 19a-1.
\3\ A few portfolios make monthly distributions from sources
other than net income, so the rule requires them to send out a
statement 12 times a year. Other portfolios never make such
distributions.
\4\ This estimate is based on the following calculation: 12,900
management investment company portfolios x 2 statements per year x 1
hour per statement = 25,800 burden hours.
---------------------------------------------------------------------------
The staff estimates that approximately one-third of the total
annual burden (8,600 hours) would be incurred by a paralegal with an
average hourly wage rate of approximately $253 per hour,\5\ and
approximately two-thirds of the annual burden (17,200 hours) would be
incurred by a compliance clerk with an average hourly wage rate of $82
per hour.\6\ The staff therefore estimates that the aggregate annual
burden, in dollars, of the hours needed to comply with the paperwork
requirements of the rule is approximately $3,586,200 ((8,600 hours x
$253 = $2,175,800) + (17,200 hours x $82 = $1,410,400)). It is
estimated that there is no cost burden of rule 19a-1 other than these
estimates.
---------------------------------------------------------------------------
\5\ Hourly rates are derived from the Securities Industry and
Financial Markets Association (``SIFMA''), Management and
Professional Earnings in the Securities Industry 2013, modified to
account for an 1,800-hour work-year and inflation, and multiplied by
5.35 to account for bonuses, firm size, employee benefits, and
overhead.
\6\ Hourly rates are derived from SIFMA's Office Salaries in the
Securities Industry 2013, modified to account for an 1,800-hour
work-year and multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.
---------------------------------------------------------------------------
To comply with state law, many investment companies already must
distinguish the different sources from which a shareholder distribution
is paid and disclose that information to shareholders. Thus, many
investment companies would be required to distinguish the sources of
shareholder dividends whether or not the Commission required them to do
so under rule 19a-1.
These estimates are made solely for the purposes of the Paperwork
Reduction Act, and are not derived from a comprehensive or even a
representative survey or study of the costs of Commission rules.
Compliance with the collection of information required by rule 19a-1 is
mandatory for management companies that make statements to shareholders
pursuant to section 19(a) of the Act. 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 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 December 18, 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, Acting
Director/Chief
[[Page 71615]]
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: October 11, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-22818 Filed 10-16-23; 8:45 am]
BILLING CODE 8011-01-P
