Submission for OMB Review; Comment Request; Extension: Rule 12d1-1, 72445-72454 [2024-19960]

Download as PDF Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices Fund VIII, and on May 6, 2024, made a final distribution to its shareholders based on net asset value. Expenses of $607,659 incurred in connection with the reorganization were paid by the applicant. Filing Date: The application was filed on August 5, 2024. Applicant’s Address: 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187. Hatteras Lower Middle Market Buyouts Fund [File No. 811–23827] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind. Filing Date: The application was filed on July 30, 2024. Applicant’s Address: 8510 Colonnade Center Drive, Suite 150, Raleigh, North Carolina 27615. Tailwind Endowment Alternatives Fund [File No. 811–23804] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind. Filing Date: The application was filed on July 30, 2024. Applicant’s Address: 8510 Colonnade Center Drive, Suite 150, Raleigh, North Carolina 27615. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–19978 Filed 9–4–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION khammond on DSKJM1Z7X2PROD with NOTICES [SEC File No. 270–526, OMB Control No. 3235–0584] Submission for OMB Review; Comment Request; Extension: Rule 12d1–1 1 See 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 VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. An investment company (‘‘fund’’) is generally limited in the amount of securities the fund (‘‘acquiring fund’’) can acquire from another fund (‘‘acquired fund’’). Section 12(d) of the Investment Company Act of 1940 (the ‘‘Investment Company Act’’ or ‘‘Act’’) 1 provides that a registered fund (and companies it controls) cannot: • acquire more than three percent of another fund’s securities; • invest more than five percent of its own assets in another fund; or • invest more than ten percent of its own assets in other funds in the aggregate.2 In addition, a registered open-end fund, its principal underwriter, and any registered broker or dealer cannot sell that fund’s shares to another fund if, as a result: • the acquiring fund (and any companies it controls) owns more than three percent of the acquired fund’s stock; or • all acquiring funds (and companies they control) in the aggregate own more than ten percent of the acquired fund’s stock.3 Rule 12d1–1 under the Act provides an exemption from these limitations for ‘‘cash sweep’’ arrangements in which a fund invests all or a portion of its available cash in a money market fund rather than directly in short-term instruments.4 An acquiring fund relying on the exemption may not pay a sales load, distribution fee, or service fee on acquired fund shares, or if it does, the acquiring fund’s investment adviser must waive a sufficient amount of its advisory fee to offset the cost of the loads or distribution fees.5 The acquired fund may be a fund in the same fund complex or in a different fund complex. In addition to providing an exemption from section 12(d)(1) of the Act, the rule provides exemptions from section 17(a) of the Act and rule 17d–1 thereunder, which restrict a fund’s ability to enter into transactions and joint arrangements with affiliated persons.6 These 15 U.S.C. 80a. 15 U.S.C. 80a–12(d)(1)(A). If an acquiring fund is not registered, these limitations apply only with respect to the acquiring fund’s acquisition of registered funds. 3 See 15 U.S.C. 80a–12(d)(1)(B). 4 See 17 CFR 270.12d1–1. 5 See rule 12d1–1(b)(1). 6 See 15 U.S.C. 80a–17(a), 15 U.S.C. 80a–17(d); 17 CFR 270.17d–1. 2 See PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 72445 provisions would otherwise prohibit an acquiring fund from investing in a money market fund in the same fund complex,7 and prohibit a fund that acquires five percent or more of the securities of a money market fund in another fund complex from making any additional investments in the money market fund.8 The rule also permits a registered fund to rely on the exemption to invest in an unregistered money market fund that limits its investments to those in which a registered money market fund may invest under rule 2a–7 under the Act, and undertakes to comply with all the other provisions of rule 2a–7.9 In addition, the acquiring fund must reasonably believe that the unregistered money market fund (i) operates in compliance with rule 2a–7, (ii) complies with sections 17(a), (d), (e), 18, and 22(e) of the Act 10 as if it were a registered open-end fund, (iii) has adopted procedures designed to ensure that it complies with these statutory provisions, (iv) maintains the records required by rules 31a–1(b)(1), 31a– 1(b)(2)(ii), 31a–1(b)(2)(iv), and 31a– 1(b)(9); 11 and (v) preserves permanently, the first two years in an easily accessible place, all books and records required to be made under these rules. Rule 2a–7 contains certain collection of information requirements. An unregistered money market fund that complies with rule 2a–7 would be subject to these collection of information requirements. In addition, the recordkeeping requirements under rule 31a–1 with which the acquiring 7 An affiliated person of a fund includes any person directly or indirectly controlling, controlled by, or under common control with such other person; see 15 U.S.C. 80a–2(a)(3) (definition of ‘‘affiliated person’’); most funds today are organized by an investment adviser that advises or provides administrative services to other funds in the same complex; funds in a fund complex are generally under common control of an investment adviser or other person exercising a controlling influence over the management or policies of the funds; see 15 U.S.C. 80a–2(a)(9) (definition of ‘‘control’’); not all advisers control funds they advise; the determination of whether a fund is under the control of its adviser, officers, or directors depends on all the relevant facts and circumstances; see Investment Company Mergers, Investment Company Act Release No. 25259 (Nov. 8, 2001) [66 FR 57602 (Nov. 15, 2001)], at n.11; to the extent that an acquiring fund in a fund complex is under common control with a money market fund in the same complex, the funds would rely on the rule’s exemptions from section 17(a) and rule 17d–1. 8 See 15 U.S.C. 80a–2(a)(3)(A), (B). 9 See 17 CFR 270.2a–7. 10 See 15 U.S.C. 80a–17(a), 15 U.S.C. 80a–17(d), 15 U.S.C. 80a–17(e), 15 U.S.C. 80a–18, 15 U.S.C. 80a–22(e). 11 See 17 CFR 270.31a–1(b)(1), 17 CFR 270.31a– 1(b)(2)(ii), 17 CFR 270.31a–1(b)(2) (iv), 17 CFR 270.31a–1(b)(9). E:\FR\FM\05SEN1.SGM 05SEN1 72446 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices fund reasonably believes the unregistered money market fund complies are collections of information for the unregistered money market fund. The adoption of procedures by unregistered money market funds to ensure that they comply with sections 17(a), (d), (e), 18, and 22(e) of the Act also constitute collections of information. By allowing funds to invest in registered and unregistered money market funds, rule 12d1–1 is intended to provide funds greater options for cash management. In order for a registered fund to rely on the exemption to invest in an unregistered money market fund, the unregistered money market fund must comply with certain collection of information requirements for registered money market funds. These requirements are intended to ensure that the unregistered money market fund has established procedures for collecting the information necessary to make adequate credit reviews of securities in its portfolio, as well as other recordkeeping requirements that will assist the acquiring fund in overseeing the unregistered money market fund (and Commission staff in its examination of the unregistered money market fund’s adviser). The number of unregistered money market funds that are affected by rule 12d1–1 is an estimate based on the number of private liquidity funds reported on Form PF as of the third calendar quarter 2023.12 We use the estimated burdens for registered money market funds to extrapolate the information collection burdens for unregistered money market funds under rule 12d1–1.13 The estimated average burden hours in this collection of information are made solely for purposes of the Paperwork Reduction Act and are not derived from a quantitative, comprehensive or even representative survey or study of the burdens associated with Commission rules and forms. Based on the estimated burden of information collection for rule 2a–7 and Form PF filings, the estimated burden of information collection for rule 12d1–1 is set forth in Table 2 below. BILLING CODE 8011–01–P 85 responses annually per 33 liquidity funds 15 khammond on DSKJM1Z7X2PROD with NOTICES Total 2,805 estimated responses per liquidity fund annuall 12 See the U.S. Securities and Exchange Commission’s Division of Investment Management—Analytics Office Private Funds Statistics, Third Calendar Quarter (March 31, 2024) available at https://www.sec.gov/files/investment/ 2023q3-private-funds-statistics-20240331accessible.pdf. VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 680 burden hours of professional (business analyst or portfolio manager) time per liquidity fund x 33 liquidity funds [$276 per hour (intermediate business analyst) + $396 per hour (senior portfolio manager) = $672] + 2 = $336 median weighted average per hour 680 X 33 = 22,440 estimated burden hours $336 x 22,440 hours = $7,539,840 estimated cost burden 13 See Securities and Exchange Commission, Request for OMB Approval of Extension for Approved Collection for Rule 2a–7 under the Investment Company Act of 1940 (OMB Control No. 3235–0268) (approved May 28, 2019, August 3, 2022) (the ‘‘2022 rule 2a–7 PRA extension’’), available at https://www.reginfo.gov/public/do/ PO 00000 Frm 00083 Fmt 4703 Sfmt 4725 PRAViewICR?ref_nbr=202109-3235-024; the 2022 rule 2a–7 PRA extension is the most recent rule 2a– 7 submission that includes certain estimates with respect to aggregate annual hour and cost burdens for collections of information for registered money market funds. E:\FR\FM\05SEN1.SGM 05SEN1 EN05SE24.002</GPH> Rule 12dl-1 information collection burden estimates for unregistered money market funds Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices 72447 E.~ti~u1ted Burel~~ II~uis ·•.· ·. Esi@~t~<J>lnt~inal<Jt>S~ . Bnrden:t4 ·• weekly liquid assets, net sha.rebolder flow, daily current NAV, financial support received by the fund, the imposition and removal of liquidity fees, and. the. suspension and resumption of fund redem tions Disclosure of Portfolio Holdings Information Disclosure of Portfolio Holdings Information Disclosure of Portfolio Holdings Information 12 months x 33 liquidity funds = 396 responses per year [12 hours (one hour per monthly filing) to update the website to include the disclosure of portfolio holdings information x 33 liquidity funds= 396 hours per year] + [24 hours of webmaster time for an estimated 1 new liquidity fund 16 each year to initially develop a webpage and provide monthly disclosure for the initial year= 24 one-time burden hours] 396 hours (for 33 liquidity funds) x $299 (per hour for a webmaster) = $118,404 (for recurring internal burden labor costs) + 24 hours for 1 new liquidity fund x $299 (per hour for a webmaster) = $7,176 $125,580 total aggregate annual one-time and recurring labor burdens for disclosure of portfolio holdings VerDate Sep<11>2014 22:19 Sep 04, 2024 Disclosure of Daily and Weekly Liquid Assets and Net Shareholder Flow Disclosure of Daily and Weekly Liquid Assets and Net Shareholder Flow Disclosure of Daily and Weekly Liquid Assets and Net Shareholder Flow 252 business days x 33 liquidity funds= 8,316 res onses er ear [36 hours ongoing annual burden x 33 liquidity funds = 1,188 hours er ear [31.5 hours x $371 (blended rate for a senior s stems anal st $342 Jkt 262001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4725 E:\FR\FM\05SEN1.SGM 05SEN1 EN05SE24.003</GPH> khammond on DSKJM1Z7X2PROD with NOTICES = 420 aggregate annual one-time and recurring burden hours for the disclosure of portfolio holdings 72448 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices + [70 hours for each new liquidity fund x 1 new fund = 70 one-time hours] = t,258 aggregate annual recurring and one-time burden hours for disclosure of daily and weekly liquid assets and shareholder flow and senior programmer ($399) = $11,687 (per liquidity fund)] + [4.5 hours x $406 (blended rate for compliance manager ($372) and a compliance attorney ($440)) = $1,827] $13,514 (per fund to update the depiction of daily and weekly liquid assets and the liquidity fund's net inflow or outflow on the liquidity fund's website each business day during that year) x 33 liquidity funds $472,632 aggregate annual recurring and onetime cost burdens for disclosure of daily and weekly liquid assets and shareholder flow Disclosure o Dail VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 PO 00000 Frm 00085 Disclosure of Dailv Fmt 4703 Sfmt 4725 E:\FR\FM\05SEN1.SGM Disclosure o Dail' 05SEN1 EN05SE24.004</GPH> khammond on DSKJM1Z7X2PROD with NOTICES $445,962 recurring aggregate annual cost burdens for the disclosure of daily and weekly liquid assets and weekly liquid assets and the fund's net inflow or outflow on the liquidity fund's website each business day during the year + [(20 hours x $406 (blended rate for compliance manager ($372) and a compliance attorney ($440)) = $8,120 + (50 hours x $371 (blended rate for a senior systems analyst ($342) and senior programmer ($399)) = $18,550] = $26,670 (internal labor cost burden for each new fund)] Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices CurrentNAV CurrentNAV CurrentNAV 252 business days x 33 liquidity funds = 8,316 responses per year [32 hours (sr. systems analyst/sr. programmer) x 33 liquidity funds= 1,056 hours per yearl + [70 one-time burden hours for each new liquidity fund x 1 new liquidity fund = 70 one-time burden hours] 32 hours x $371 (blended rate for a senior systems analyst ($342) and senior programmer ($399) = $11,872 (annual ongoing internal labor cost burden per fund) x 33 funds = $391,776 ongoing annual cost burdens + [(20 hours x $406 (blended rate for compliance manager ($372) and a compliance attorney ($440)) = $8, I 20 + (50 hours x $371 (blended rate for a senior systems analyst ($342) and senior programmer ($399) = $18,550)] = $26,670 (internal labor cost burden for each new fund)] x 1 new fund= $26,670 (total one-time cost burden) 1,126 aggregate annual recurring and one-time burden hours for disclosure of daily current NA V 72449 khammond on DSKJM1Z7X2PROD with NOTICES TOTAL VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 Disclosure ofFinancial Support Received by the Fund, and Imposition and Removal ofliquidity Fees, and the Suspension and Resumption of Fund Redemptions Disclosure ofFinancial Support Received by the Fund, and Imposition and Removal ofliquidity Fees, and the Suspension and Resumption of Fund Redemptions Disclosure ofFinancial Support Received by the Fund, and Imposition and Removal of liquidity Fees, and the Suspension and Resumption of Fund Redemptions Not applicable Not applicable Not applicable Total Estimated Burden Hours Relating to Website Disclosure Total Estimated Burden Hours Relating to Website Disclosure Total Estimated Burden Hours Relating to Website Disclosure 396 + 8,316 + 8,316 = 16,928 estimated res onses 420 + 1,258 + 1,126 = 2,804 estimated burden hours $125,580 + $472,632 + $418,446 = $1,016,658 estimated cost burden PO 00000 Frm 00086 Fmt 4703 Sfmt 4725 E:\FR\FM\05SEN1.SGM 05SEN1 EN05SE24.005</GPH> $418,446 aggregate annual recurring and onetime cost burdens 72450 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices deleg '9ihie( rule 2aamendment of ptotedures an. uideUru~S11 I response annually for each of 8 funds 18 TOTAL 8 estimated responses 1 hour (board time)+ 4 hours (compliance and professional legal time) = 5 hours [I hour x $5,672 ( board time)= $5,672] + [4 x $406 (blended rate for compliance manager ($372) and a compliance attorney ($440)) = $1,624] = $7,296 (cost per fund) 5 hours x 8 res onses = 40 estimated burden hours $7,296 x 8 res onses = $58,368 estimated cost burden 1 hour of board time + 5 hours of senior portfolio manager time + 3 hours of risk management specialist time + 3 hours of professional legal time = 12 hours 1 hour x $5,672 (board time)= $5,672 Revi~w1revise, 1til ,ppr11ve w~itten J)J"OCtldll. •• afunp's. I response annually for each of33 fund complexes 19 5 x $396 (Sr. portfolio manager)= $1,980 3 x $240 (risk management specialist)= $720 3 x $500 (attorney)= $1,500 $5,672 + $1,980 + $720 + $1,500 = $9,872 per liquidity fund complex VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4725 E:\FR\FM\05SEN1.SGM $9,872 x 33 res onses = 05SEN1 EN05SE24.006</GPH> khammond on DSKJM1Z7X2PROD with NOTICES 12 hours x 33 res onses = Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices 5 responses annually for each of33 fund complexes 5 hours senior portfolio manager time + 2 hours compliance manager time + 2 hours professional legal time + 1 hour 2aralegal time 10 hours per response 72451 5 x $396 (sr. portfolio manager)= $1,980 2 x $372 (compliance manager)= $744 2 x $500 (attorney)= $1,000 1 x $262 (paralegal) = $262 $1,980 + $744 + $1,000 + $262 = $3,986 per response TOTAL 5 responses x 33 fund com !exes= 165 estimated responses $3,986 x 165 res onses = $657,690 estimated cost burden 3 hours board time + 8 hours professional legal time + 7 hours risk management specialist time + 4 hours senior risk management time = 22 hours 3 hours x $5,672 (board time)= $17,016 8 hours x $500 (attorney) = $4,000 7 hours x $240 (risk management specialist)= $1,680 4 hours x $430 (sr. risk management specialist)= $1,720 VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4725 E:\FR\FM\05SEN1.SGM 05SEN1 EN05SE24.007</GPH> khammond on DSKJM1Z7X2PROD with NOTICES 1 response annually for 1 new liquidity fund 10 hours x 165 res onse = 1,650 estimated burden hours 72452 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices $17,016 + $4,000 + $1,680 + $1,720 = $24,416 (per response) TOTAL 1 estimated response 1 response annually for 1 new liquidity fund 22 hours x I res onse = 22 estimated burden hours $24,416 x 1 res onse = $24,416 estimated cost burden 0.5 hours board time+ 7.2 hours professional legal time+ 7.8 hours paralegal time = 15.5 hours 0.5 hours x $5,672 (board time)= $2,836 7.2 hours x $500 (attorney)= $3,600 7.8 hours x $262 (paralegal) = $2,044 $2,836 + $3,600 + $2,044 = $8,480 (per response) TOTAL 1 estimated response 2 liquidity funds per year 15.5 hours x I res onse 15.5 estimated burden hours $8,480 x 1 res onse = $8,480 estimated cost burden 4 hours attorney + 2 hours of board time + 1 hours of fund's_compliance attorney = 7 hours per liquidity fund 4 hours x $500 (attorney) = $2,000 2 hours x $5,672 ( board time)= $11,344 1 x $440 (compliance attorney)= $440 TOTAL VerDate Sep<11>2014 22:19 Sep 04, 2024 2 estimated responses Jkt 262001 PO 00000 Frm 00089 Fmt 4703 7 hours x 2 funds = 14 estimated hours burden Sfmt 4725 E:\FR\FM\05SEN1.SGM $13,784 x 2 liquidity funds= $27,568 estimated costs burden 05SEN1 EN05SE24.008</GPH> khammond on DSKJM1Z7X2PROD with NOTICES $2,000 + $11,344 + $440 = $13,784 per liquidity fund Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices 2 responses annually for 2 liquidity funds 25 .5 hours (professional legal time) .5 hours x $500 (attorney) = $250 Total 4 estimated responses .5 hours x 4 res onses 2 estimated burden hours $250 x 4 estimated res onses = $1,000 estimated cost burden TOTAL ESTIMATED BURDEN OF INFORMATION COLLECTION FOR RULE 12dl-1 19,947 estimated responses annually 27,384 estimated burden hours annually $9,659, 796estimated cost burden annually 14 The cost burdens shown in this chart for professional personnel are based on SIFMA’s Management & Professional Earnings in the Securities Industry 2013, modified for 2024 by the Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead and the cost burdens for clerical personnel are based on SIFMA’s Office Salaries in the Securities Industry 2013, modified for 2024 by Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 2.93 to account for bonuses, firm size, employee benefits and overhead; however, SIFMA data does not include a board of directors; for board time, Commission staff currently uses a cost of $5672 per hour, which was last adjusted for inflation in December 2024; this estimate assumes an average of nine board members per year. 15 The number of liquidity funds is based on the following: 68 × the percentage of liquidity funds that are at least partially in compliance with the risk-limiting provisions of rule 2a–7, or 100¥52) = 48%; the result (rounded up to a whole number) is 33 liquidity funds (68 * 0.48 = 33); the number of liquidity funds and percentage of funds that are at VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 least partially compliant with the risk-limiting provisions of rule 2a–7 is based on the U.S. Securities and Exchange Commission’s Division of Investment Management—Analytics Office Private Funds Statistics, Third Calendar Quarter 2023 (March 31, 2024) available at https://www.sec.gov/ files/investment/2023q3-private-funds-statistics20240331-accessible.pdf. 16 The number of new unregistered money market funds is estimated from 2021–2023 historical Form PF filings by liquidity fund advisers; see Securities and Exchange Commission’s Division of Investment Management—Analytics Office Private Funds Statistics, Third Calendar Quarter 2023 (March 31, 2024) available at https://www.sec.gov/files/ investment/2023q3-private-funds-statistics20240331-accessible.pdf. 17 We recognize that in many cases the adviser to an unregistered money market fund typically performs the function of the fund’s board; Money Market Fund Reform; Amendments to Form PF Investment Company Act Rel. No. 31166 (Jul. 23, 2014), 79 FR 47735, 47809 (Aug. 14, 2014). 18 For purposes of this PRA extension, we assumed that on average 25% (33 funds × .25 = approximately 8 funds) of liquidity funds would review and update their procedures on annual basis. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 Commission staff estimates that in addition to the internal costs described 19 This number has been derived from the number of advisers to liquidity funds; see U.S. Securities and Exchange Commission, Division of Investment Management, Analytics Office, Private Fund Statistics, Third Quarter 2023 (March 31, 2024), Table 2. 20 See supra note 25. 21 There are no liquidity funds of this type; liquidity funds only are offered to qualified investors. 22 See supra note 25. 23 Id. 24 Id. 25 In the context of registered money market funds, we have previously estimated an average of approximately 2 occurrences for 20 funds each year; however, this number may vary significantly in any particular year; for purposes of this PRA extension, we assumed there would be same proportion of unregistered money market funds experiencing events of default or solvency each year. (20/320 registered money market funds = approximately 5%. 5% × 33 liquidity funds = approximately 2 liquidity funds). E:\FR\FM\05SEN1.SGM 05SEN1 EN05SE24.009</GPH> khammond on DSKJM1Z7X2PROD with NOTICES BILLING CODE 8011–01–C 72453 72454 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES in the table above, unregistered money market funds also will incur external costs to preserve records, as required under rule 2a–7. These costs will vary significantly for individual funds, depending on the amount of assets under fund management and whether the fund preserves its records in a storage facility in hard copy or has developed and maintains a computer system to create and preserve compliance records. In the 2022 rule 2a–7 PRA extension, Commission staff estimated that the amount an individual money market fund may spend ranges from $100 per year to $300,000. We have no reason to believe the range is different for unregistered money market funds. Based on Form PF data as of the third calendar quarter 2023, liquidity funds have $361 billion in gross asset value.26 The Commission does not have specific information about the proportion of assets held in small, medium-sized, or large unregistered money market funds. Because liquidity funds are often used as cash management vehicles, the staff estimates that each private liquidity fund is a ‘‘large’’ fund (i.e., more than $1 billion in assets under management). Based on a cost of $0.0000009 per dollar of assets under management (for large funds),27 the staff estimates compliance with the record storage requirements of rule 2a– 7 for these unregistered money market funds costs approximately $324,900 annually.28 Consistent with estimates made in the rule 2a–7 submission, Commission staff estimates that unregistered money market funds also incur capital costs to create computer programs for maintaining and preserving compliance records for rule 2a–7 of $0.0000132 per dollar of assets under management. Based on the assets under management figures described above, staff estimates annual capital costs for all unregistered money market funds of $4.76 million.29 Commission staff further estimates that, even absent the requirements of rule 2a–7, money market funds would spend at least half of the amounts 26 See U.S Securities and Exchange Commission, Division of Investment Management, Analytics Office, Private Fund Statistics, Fourth Quarter 2019 (Oct. 2, 2020), Table 3. 27 The recordkeeping cost estimates are $0.0051295 per dollar of assets under management for small funds, and $0.0005041 per dollar of assets under management for medium-sized funds; the cost estimates are the same as those used in the most recently approved rule 2a–7 submission. 28 This estimate is based on the following calculation: ($294 billion × $0.0000009) = $264,600 for large funds. 29 This estimate is based on the following calculation: ($294 billion × 0.0000132) = $3.88 million. VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 described above for record preservation ($162,450) and for capital costs ($2.38 million). Commission staff concludes that the aggregate annual costs of compliance with the rule are $162,450 for record preservation and $2.38 million for capital costs, or a total of $2.54 million. The collections of information required for unregistered money market funds by rule 12d1–1 are necessary in order for acquiring funds to able to obtain the benefits described above. Notices to the Commission 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 OMB number. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice by October 7, 2024 to (i) MBX.OMB.OIRA.SEC_desk_officer@ omb.eop.gov and (ii) Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Oluwaseun Ajayi, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: August 30, 2024. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–19960 Filed 9–4–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 35310; File No. 812–15523] CION Grosvenor Infrastructure Fund, et al. August 30, 2024. Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). ACTION: Notice. AGENCY: Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d–1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to permit certain PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 business development companies and closed-end management investment companies to co-invest in portfolio companies with each other and with certain affiliated investment entities. APPLICANTS: CION Grosvenor Infrastructure Fund, CION Grosvenor Infrastructure Master Fund, LLC, CION Grosvenor Management, LLC, Grosvenor Capital Management, L.P., GCM Customized Fund Investment Group, L.P., GCM—Asga Infra Investment Holdings, L.P., GCM Blue Sails Infrastructure Offshore Opportunities Master Fund, L.P., GCM Grosvenor Cedar Infrastructure Investment Fund 2021 (Master), L.P., Alpha Z Infrastructure VI (Master), L.P., Electrical Workers Infrastructure Fund, L.P., GCM Grosvenor J Infrastructure Investment Fund 2024 (EURO) (Master), L.P., GCM Grosvenor J Infrastructure Investment Fund 2024 (USD) (Master), L.P., GCM Grosvenor J Infrastructure Investment Fund 2023 (EURO) (Master), L.P., GCM Grosvenor J Infrastructure Investment Fund 2023 (USD) (Master), L.P., 2021 Infrastructure Compartment (Master), a Sub-Fund of Vertuo (Master) S.C.Sp SICAV–RAIF, GCM Grosvenor— NPS Infrastructure Asia, L.P., GCM Grosvenor—NPS Infrastructure III, L.P (2022–1 Investment Series), GCM Grosvenor KB Infra Investments, L.P., GCM U.S. Partnership Opportunities, L.P., GCM Grosvenor Pacific, L.P. (2020–1 Investment Series), LTV Infrastructure (GCM) (Master), L.P. (2022–1 Investment Series), GCM Grosvenor Infrastructure Investment Program, L.P. (2022–1 Investment Series), Texas Emerging Managers Private Markets Program, L.P., GCM WPP Global Infrastructure, L.P., GCM Grosvenor Multi-Asset Class Master Fund III, L.P., GCM Grosvenor Infrastructure Opportunities Fund, SCSp, GCM Grosvenor—Osool Investments, L.P., GCM Grosvenor Nest Sammelstiftung II, L.P. (2023–1 Investment Series), GCM Grosvenor Customized Infrastructure Strategies III, L.P, and GCM Grosvenor Infrastructure Advantage Fund II, L.P. FILING DATES: The application was filed on November 17, 2023, and amended on April 17, 2024 and July 25, 2024. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC’s Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request by email, if an email address is listed for the relevant Applicant below, or personally or by mail, if a physical E:\FR\FM\05SEN1.SGM 05SEN1

Agencies

[Federal Register Volume 89, Number 172 (Thursday, September 5, 2024)]
[Notices]
[Pages 72445-72454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19960]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-526, OMB Control No. 3235-0584]


Submission for OMB Review; Comment Request; Extension: Rule 12d1-
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 (the ``Commission'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    An investment company (``fund'') is generally limited in the amount 
of securities the fund (``acquiring fund'') can acquire from another 
fund (``acquired fund''). Section 12(d) of the Investment Company Act 
of 1940 (the ``Investment Company Act'' or ``Act'') \1\ provides that a 
registered fund (and companies it controls) cannot:
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    \1\ See 15 U.S.C. 80a.
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     acquire more than three percent of another fund's 
securities;
     invest more than five percent of its own assets in another 
fund; or
     invest more than ten percent of its own assets in other 
funds in the aggregate.\2\
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    \2\ See 15 U.S.C. 80a-12(d)(1)(A). If an acquiring fund is not 
registered, these limitations apply only with respect to the 
acquiring fund's acquisition of registered funds.
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    In addition, a registered open-end fund, its principal underwriter, 
and any registered broker or dealer cannot sell that fund's shares to 
another fund if, as a result:
     the acquiring fund (and any companies it controls) owns 
more than three percent of the acquired fund's stock; or
     all acquiring funds (and companies they control) in the 
aggregate own more than ten percent of the acquired fund's stock.\3\
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    \3\ See 15 U.S.C. 80a-12(d)(1)(B).
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    Rule 12d1-1 under the Act provides an exemption from these 
limitations for ``cash sweep'' arrangements in which a fund invests all 
or a portion of its available cash in a money market fund rather than 
directly in short-term instruments.\4\ An acquiring fund relying on the 
exemption may not pay a sales load, distribution fee, or service fee on 
acquired fund shares, or if it does, the acquiring fund's investment 
adviser must waive a sufficient amount of its advisory fee to offset 
the cost of the loads or distribution fees.\5\ The acquired fund may be 
a fund in the same fund complex or in a different fund complex. In 
addition to providing an exemption from section 12(d)(1) of the Act, 
the rule provides exemptions from section 17(a) of the Act and rule 
17d-1 thereunder, which restrict a fund's ability to enter into 
transactions and joint arrangements with affiliated persons.\6\ These 
provisions would otherwise prohibit an acquiring fund from investing in 
a money market fund in the same fund complex,\7\ and prohibit a fund 
that acquires five percent or more of the securities of a money market 
fund in another fund complex from making any additional investments in 
the money market fund.\8\
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    \4\ See 17 CFR 270.12d1-1.
    \5\ See rule 12d1-1(b)(1).
    \6\ See 15 U.S.C. 80a-17(a), 15 U.S.C. 80a-17(d); 17 CFR 
270.17d-1.
    \7\ An affiliated person of a fund includes any person directly 
or indirectly controlling, controlled by, or under common control 
with such other person; see 15 U.S.C. 80a-2(a)(3) (definition of 
``affiliated person''); most funds today are organized by an 
investment adviser that advises or provides administrative services 
to other funds in the same complex; funds in a fund complex are 
generally under common control of an investment adviser or other 
person exercising a controlling influence over the management or 
policies of the funds; see 15 U.S.C. 80a-2(a)(9) (definition of 
``control''); not all advisers control funds they advise; the 
determination of whether a fund is under the control of its adviser, 
officers, or directors depends on all the relevant facts and 
circumstances; see Investment Company Mergers, Investment Company 
Act Release No. 25259 (Nov. 8, 2001) [66 FR 57602 (Nov. 15, 2001)], 
at n.11; to the extent that an acquiring fund in a fund complex is 
under common control with a money market fund in the same complex, 
the funds would rely on the rule's exemptions from section 17(a) and 
rule 17d-1.
    \8\ See 15 U.S.C. 80a-2(a)(3)(A), (B).
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    The rule also permits a registered fund to rely on the exemption to 
invest in an unregistered money market fund that limits its investments 
to those in which a registered money market fund may invest under rule 
2a-7 under the Act, and undertakes to comply with all the other 
provisions of rule 2a-7.\9\ In addition, the acquiring fund must 
reasonably believe that the unregistered money market fund (i) operates 
in compliance with rule 2a-7, (ii) complies with sections 17(a), (d), 
(e), 18, and 22(e) of the Act \10\ as if it were a registered open-end 
fund, (iii) has adopted procedures designed to ensure that it complies 
with these statutory provisions, (iv) maintains the records required by 
rules 31a-1(b)(1), 31a-1(b)(2)(ii), 31a-1(b)(2)(iv), and 31a-1(b)(9); 
\11\ and (v) preserves permanently, the first two years in an easily 
accessible place, all books and records required to be made under these 
rules.
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    \9\ See 17 CFR 270.2a-7.
    \10\ See 15 U.S.C. 80a-17(a), 15 U.S.C. 80a-17(d), 15 U.S.C. 
80a-17(e), 15 U.S.C. 80a-18, 15 U.S.C. 80a-22(e).
    \11\ See 17 CFR 270.31a-1(b)(1), 17 CFR 270.31a-1(b)(2)(ii), 17 
CFR 270.31a-1(b)(2) (iv), 17 CFR 270.31a-1(b)(9).
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    Rule 2a-7 contains certain collection of information requirements. 
An unregistered money market fund that complies with rule 2a-7 would be 
subject to these collection of information requirements. In addition, 
the recordkeeping requirements under rule 31a-1 with which the 
acquiring

[[Page 72446]]

fund reasonably believes the unregistered money market fund complies 
are collections of information for the unregistered money market fund. 
The adoption of procedures by unregistered money market funds to ensure 
that they comply with sections 17(a), (d), (e), 18, and 22(e) of the 
Act also constitute collections of information. By allowing funds to 
invest in registered and unregistered money market funds, rule 12d1-1 
is intended to provide funds greater options for cash management. In 
order for a registered fund to rely on the exemption to invest in an 
unregistered money market fund, the unregistered money market fund must 
comply with certain collection of information requirements for 
registered money market funds. These requirements are intended to 
ensure that the unregistered money market fund has established 
procedures for collecting the information necessary to make adequate 
credit reviews of securities in its portfolio, as well as other 
recordkeeping requirements that will assist the acquiring fund in 
overseeing the unregistered money market fund (and Commission staff in 
its examination of the unregistered money market fund's adviser).
    The number of unregistered money market funds that are affected by 
rule 12d1-1 is an estimate based on the number of private liquidity 
funds reported on Form PF as of the third calendar quarter 2023.\12\ We 
use the estimated burdens for registered money market funds to 
extrapolate the information collection burdens for unregistered money 
market funds under rule 12d1-1.\13\ The estimated average burden hours 
in this collection of information are made solely for purposes of the 
Paperwork Reduction Act and are not derived from a quantitative, 
comprehensive or even representative survey or study of the burdens 
associated with Commission rules and forms. Based on the estimated 
burden of information collection for rule 2a-7 and Form PF filings, the 
estimated burden of information collection for rule 12d1-1 is set forth 
in Table 2 below.
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    \12\ See the U.S. Securities and Exchange Commission's Division 
of Investment Management--Analytics Office Private Funds Statistics, 
Third Calendar Quarter (March 31, 2024) available at https://www.sec.gov/files/investment/2023q3-private-funds-statistics-20240331-accessible.pdf.
    \13\ See Securities and Exchange Commission, Request for OMB 
Approval of Extension for Approved Collection for Rule 2a-7 under 
the Investment Company Act of 1940 (OMB Control No. 3235-0268) 
(approved May 28, 2019, August 3, 2022) (the ``2022 rule 2a-7 PRA 
extension''), available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202109-3235-024; the 2022 rule 2a-7 PRA extension 
is the most recent rule 2a-7 submission that includes certain 
estimates with respect to aggregate annual hour and cost burdens for 
collections of information for registered money market funds.
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BILLING CODE 8011-01-C
     
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    \14\ The cost burdens shown in this chart for professional 
personnel are based on SIFMA's Management & Professional Earnings in 
the Securities Industry 2013, modified for 2024 by the Commission 
staff to account for an 1800-hour work-year and inflation, and 
multiplied by 5.35 to account for bonuses, firm size, employee 
benefits and overhead and the cost burdens for clerical personnel 
are based on SIFMA's Office Salaries in the Securities Industry 
2013, modified for 2024 by Commission staff to account for an 1800-
hour work-year and inflation, and multiplied by 2.93 to account for 
bonuses, firm size, employee benefits and overhead; however, SIFMA 
data does not include a board of directors; for board time, 
Commission staff currently uses a cost of $5672 per hour, which was 
last adjusted for inflation in December 2024; this estimate assumes 
an average of nine board members per year.
    \15\ The number of liquidity funds is based on the following: 68 
x the percentage of liquidity funds that are at least partially in 
compliance with the risk-limiting provisions of rule 2a-7, or 100-
52) = 48%; the result (rounded up to a whole number) is 33 liquidity 
funds (68 * 0.48 = 33); the number of liquidity funds and percentage 
of funds that are at least partially compliant with the risk-
limiting provisions of rule 2a-7 is based on the U.S. Securities and 
Exchange Commission's Division of Investment Management--Analytics 
Office Private Funds Statistics, Third Calendar Quarter 2023 (March 
31, 2024) available at https://www.sec.gov/files/investment/2023q3-private-funds-statistics-20240331-accessible.pdf.
    \16\ The number of new unregistered money market funds is 
estimated from 2021-2023 historical Form PF filings by liquidity 
fund advisers; see Securities and Exchange Commission's Division of 
Investment Management--Analytics Office Private Funds Statistics, 
Third Calendar Quarter 2023 (March 31, 2024) available at https://www.sec.gov/files/investment/2023q3-private-funds-statistics-20240331-accessible.pdf.
    \17\ We recognize that in many cases the adviser to an 
unregistered money market fund typically performs the function of 
the fund's board; Money Market Fund Reform; Amendments to Form PF 
Investment Company Act Rel. No. 31166 (Jul. 23, 2014), 79 FR 47735, 
47809 (Aug. 14, 2014).
    \18\ For purposes of this PRA extension, we assumed that on 
average 25% (33 funds x .25 = approximately 8 funds) of liquidity 
funds would review and update their procedures on annual basis.
    \19\ This number has been derived from the number of advisers to 
liquidity funds; see U.S. Securities and Exchange Commission, 
Division of Investment Management, Analytics Office, Private Fund 
Statistics, Third Quarter 2023 (March 31, 2024), Table 2.
    \20\ See supra note 25.
    \21\ There are no liquidity funds of this type; liquidity funds 
only are offered to qualified investors.
    \22\ See supra note 25.
    \23\ Id.
    \24\ Id.
    \25\ In the context of registered money market funds, we have 
previously estimated an average of approximately 2 occurrences for 
20 funds each year; however, this number may vary significantly in 
any particular year; for purposes of this PRA extension, we assumed 
there would be same proportion of unregistered money market funds 
experiencing events of default or solvency each year. (20/320 
registered money market funds = approximately 5%. 5% x 33 liquidity 
funds = approximately 2 liquidity funds).
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    Commission staff estimates that in addition to the internal costs 
described

[[Page 72454]]

in the table above, unregistered money market funds also will incur 
external costs to preserve records, as required under rule 2a-7. These 
costs will vary significantly for individual funds, depending on the 
amount of assets under fund management and whether the fund preserves 
its records in a storage facility in hard copy or has developed and 
maintains a computer system to create and preserve compliance records. 
In the 2022 rule 2a-7 PRA extension, Commission staff estimated that 
the amount an individual money market fund may spend ranges from $100 
per year to $300,000. We have no reason to believe the range is 
different for unregistered money market funds. Based on Form PF data as 
of the third calendar quarter 2023, liquidity funds have $361 billion 
in gross asset value.\26\ The Commission does not have specific 
information about the proportion of assets held in small, medium-sized, 
or large unregistered money market funds. Because liquidity funds are 
often used as cash management vehicles, the staff estimates that each 
private liquidity fund is a ``large'' fund (i.e., more than $1 billion 
in assets under management). Based on a cost of $0.0000009 per dollar 
of assets under management (for large funds),\27\ the staff estimates 
compliance with the record storage requirements of rule 2a-7 for these 
unregistered money market funds costs approximately $324,900 
annually.\28\
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    \26\ See U.S Securities and Exchange Commission, Division of 
Investment Management, Analytics Office, Private Fund Statistics, 
Fourth Quarter 2019 (Oct. 2, 2020), Table 3.
    \27\ The recordkeeping cost estimates are $0.0051295 per dollar 
of assets under management for small funds, and $0.0005041 per 
dollar of assets under management for medium-sized funds; the cost 
estimates are the same as those used in the most recently approved 
rule 2a-7 submission.
    \28\ This estimate is based on the following calculation: ($294 
billion x $0.0000009) = $264,600 for large funds.
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    Consistent with estimates made in the rule 2a-7 submission, 
Commission staff estimates that unregistered money market funds also 
incur capital costs to create computer programs for maintaining and 
preserving compliance records for rule 2a-7 of $0.0000132 per dollar of 
assets under management. Based on the assets under management figures 
described above, staff estimates annual capital costs for all 
unregistered money market funds of $4.76 million.\29\
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    \29\ This estimate is based on the following calculation: ($294 
billion x 0.0000132) = $3.88 million.
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    Commission staff further estimates that, even absent the 
requirements of rule 2a-7, money market funds would spend at least half 
of the amounts described above for record preservation ($162,450) and 
for capital costs ($2.38 million). Commission staff concludes that the 
aggregate annual costs of compliance with the rule are $162,450 for 
record preservation and $2.38 million for capital costs, or a total of 
$2.54 million.
    The collections of information required for unregistered money 
market funds by rule 12d1-1 are necessary in order for acquiring funds 
to able to obtain the benefits described above. Notices to the 
Commission 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 OMB number.
    The public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
by October 7, 2024 to (i) [email protected] and 
(ii) Austin Gerig, Director/Chief Data Officer, Securities and Exchange 
Commission, c/o Oluwaseun Ajayi, 100 F Street NE, Washington, DC 20549, 
or by sending an email to: [email protected].

    Dated: August 30, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-19960 Filed 9-4-24; 8:45 am]
BILLING CODE 8011-01-P
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