80 FR 33318 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 112 (June 11, 2015)

Page Range		33318-33319
FR Document		2015-14245
Federal Register, Volume 80 Issue 112 (Thursday, June 11, 2015)
[Federal Register Volume 80, Number 112 (Thursday, June 11, 2015)]
[Notices]
[Pages 33318-33319]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-14245]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.
Extension:
    Rule 17f-6; OMB Control No. 3235-0447, SEC File No. 270-392.

    Notice is hereby given that, under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520), 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.
    Rule 17f-6 (17 CFR 270.17f-6) under the Investment Company Act of 
1940 (15 U.S.C. 80a) permits registered investment companies 
(``funds'') to maintain assets (i.e., margin) with futures commission 
merchants (``FCMs'') in connection with commodity transactions effected 
on both domestic and foreign exchanges. Before the rule was adopted, 
funds generally were required to maintain such assets in special 
accounts with a custodian bank.
    The rule requires a written contract that contains certain 
provisions designed to ensure important safeguards and other benefits 
relating to the custody of fund assets by FCMs. To protect fund assets, 
the contract must require that FCMs comply with the segregation or 
secured amount requirements of the Commodity Exchange Act (``CEA'') and 
the rules under that statute. The contract also must contain a 
requirement that FCMs obtain an acknowledgment from any clearing 
organization that the fund's assets are held on behalf of the FCM's 
customers according to CEA provisions.
    Because rule 17f-6 does not impose any ongoing obligations on funds 
or

[[Page 33319]]

FCMs, Commission staff estimates there are no costs related to existing 
contracts between funds and FCMs. This estimate does not include the 
time required by an FCM to comply with the rule's contract requirements 
because, to the extent that complying with the contract provisions 
could be considered ``collections of information,'' the burden hours 
for compliance are already included in other PRA submissions.\1\
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    \1\ The rule requires a contract with the FCM to contain two 
provisions requiring the FCM to comply with existing requirements 
under the CEA and rules adopted thereunder. Thus, to the extent 
these provisions could be considered collections of information, the 
hours required for compliance would be included in the collection of 
information burden hours submitted by the CFTC for its rules.
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    Thus, Commission staff estimates that any burden of the rule would 
be borne by funds and FCMs entering into new contracts pursuant to the 
rule. Commission staff estimates that approximately 291 fund complexes 
and 965 funds currently effect commodities transactions and could 
deposit margin with FCMs in connection with those transactions pursuant 
to rule 17f-6.\2\ Staff further estimates that of this number, 29 fund 
complexes and 97 funds enter into new contracts with FCMs each year.\3\
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    \2\ This estimate is based on the number of funds that reported 
on Form N-SAR from June 1, 2014-November 30, 2014, in response to 
items (b) through (i) of question 70, that they engaged in futures 
and commodity option transactions.
    \3\ These estimates are based on the assumption that 10% of fund 
complexes and funds enter into new FCM contracts each year. This 
assumption encompasses fund complexes and funds that enter into FCM 
contracts for the first time, as well as fund complexes and fund 
that change the FCM with whom they maintain margin accounts for 
commodities transactions.
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    Based on conversations with fund representatives, Commission staff 
understands that fund complexes typically enter into contracts with 
FCMs on behalf of all funds in the fund complex that engage in 
commodities transactions. Funds covered by the contract are typically 
listed in an attachment, which may be amended to encompass new funds. 
Commission staff estimates that the burden for a fund complex to enter 
into a contract with an FCM that contains the contract requirements of 
rule 17f-6 is one hour, and further estimates that the burden to add a 
fund to an existing contract between a fund complex and an FCM is 6 
minutes.
    Accordingly, Commission staff estimates that funds and FCMs spend 
39 burden hours annually complying with the information collection 
requirements of rule 17f-6.\4\ At $380 per hour of professional 
(attorney) time, Commission staff estimates that the annual dollar cost 
for the 39 hours is $14,820.\5\ 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 and forms.
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    \4\ This estimate is based upon the following calculation: (29 
fund complexes x 1 hour) + (97 funds x 0.1 hours) = 39 hours.
    \5\ The $380 per hour figure for an attorney is from SIFMA's 
Management & Professional Earnings in the Securities Industry 2013, 
modified by Commission staff to account for an 1800-hour work-year 
and multiplied by 5.35 to account for bonuses, firm size, employee 
benefits and overhead.
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    Compliance with the collection of information requirements of the 
rule is necessary to obtain the benefit of relying on the rule. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid control number.
    The public may view the background documentation for this 
information collection at the following Web site, www.reginfo.gov. 
Comments should be directed to: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503, or by sending an email to: 
[email protected]; and (ii) Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email 
to: [email protected]. Comments must be submitted to OMB within 30 
days of this notice.

    Dated: June 5, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-14245 Filed 6-10-15; 8:45 am]
 BILLING CODE 8011-01-P
33318 Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Notices

(C) Self-Regulatory Organization’s Commission summarily may available publicly. All submissions
Statement on Comments on the temporarily suspend such rule change if should refer to File Number SR–EDGA–
Proposed Rule Change Received From it appears to the Commission that such 2015–20 and should be submitted on or
Members, Participants or Others action is necessary or appropriate in the before July 2, 2015.
The Exchange has neither solicited public interest, for the protection of For the Commission, by the Division of
nor received written comments on the investors, or otherwise in furtherance of Trading and Markets, pursuant to delegated
proposed rule change. the purposes of the Act. If the authority.20
Commission takes such action, the Robert W. Errett,
III. Date of Effectiveness of the Commission shall institute proceedings
Proposed Rule Change and Timing for Deputy Secretary.
to determine whether the proposed rule
Commission Action [FR Doc. 2015–14241 Filed 6–10–15; 8:45 am]
should be approved or disapproved.
BILLING CODE 8011–01–P
Because the proposed rule change IV. Solicitation of Comments
does not (i) significantly affect the
protection of investors or the public Interested persons are invited to
submit written data, views, and SECURITIES AND EXCHANGE
interest; (ii) impose any significant COMMISSION
burden on competition; and (iii) become arguments concerning the foregoing,
operative for 30 days from the date on including whether the proposed rule
Submission for OMB Review;
which it was filed, or such shorter time change is consistent with the Act.
Comment Request
as the Commission may designate, the Comments may be submitted by any of
proposed rule change has become the following methods: Upon Written Request, Copies Available
effective pursuant to Section 19(b)(3)(A) From: Securities and Exchange
Electronic Comments
of the Act and Rule 19b–4(f)(6) Commission, Office of FOIA Services,
• Use the Commission’s Internet 100 F Street NE., Washington, DC
thereunder.17 comment form (http://www.sec.gov/
A proposed rule change filed 20549–2736.
rules/sro.shtml); or Extension:
pursuant to Rule 19b–4(f)(6) under the • Send an email to rule-comments@ Rule 17f–6; OMB Control No. 3235–0447,
Act normally does not become operative sec.gov. Please include File Number SR– SEC File No. 270–392.
for 30 days after the date of its filing. EDGA–2015–20 on the subject line.
However, Rule 19b–4(f)(6)(iii) permits Notice is hereby given that, under the
the Commission to designate a shorter Paper Comments Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520), the Securities and
time if such action is consistent with the • Send paper comments in triplicate Exchange Commission (the
protection of investors and the public to Brent J. Fields, Secretary, Securities
interest. The Exchange has asked the ‘‘Commission’’) has submitted to the
and Exchange Commission, 100 F Street Office of Management and Budget a
Commission to waive the 30-day NE., Washington, DC 20549–1090.
operative delay so that the proposal may request for extension of the previously
All submissions should refer to File approved collection of information
become operative immediately upon Number SR–EDGA–2015–20. This file
filing. Waiver of the 30-day operative discussed below.
number should be included on the Rule 17f–6 (17 CFR 270.17f–6) under
delay would permit the Exchange to subject line if email is used. To help the the Investment Company Act of 1940
provide Members with an alternative Commission process and review your (15 U.S.C. 80a) permits registered
means to access other market centers, comments more efficiently, please use investment companies (‘‘funds’’) to
particularly in the event of a market only one method. The Commission will maintain assets (i.e., margin) with
disruption. In addition, the Exchange post all comments on the Commission’s futures commission merchants
represents that BATS Connect does not Internet Web site (http://www.sec.gov/ (‘‘FCMs’’) in connection with
provide any advantage to subscribers for rules/sro.shtml). Copies of the commodity transactions effected on
connecting to the Exchange’s affiliates submission, all subsequent both domestic and foreign exchanges.
as compared to other methods of amendments, all written statements Before the rule was adopted, funds
connectivity available to subscribers.18 with respect to the proposed rule generally were required to maintain
Based on the foregoing, the Commission change that are filed with the such assets in special accounts with a
believes the waiver of the operative Commission, and all written custodian bank.
delay is consistent with the protection communications relating to the The rule requires a written contract
of investors and the public interest.19 proposed rule change between the that contains certain provisions
The Commission hereby grants the Commission and any person, other than designed to ensure important safeguards
waiver and designates the proposal those that may be withheld from the and other benefits relating to the
operative upon filing. public in accordance with the custody of fund assets by FCMs. To
At any time within 60 days of the provisions of 5 U.S.C. 552, will be protect fund assets, the contract must
filing of the proposed rule change, the available for Web site viewing and require that FCMs comply with the
17 In addition, Rule 19b–4(f)(6)(iii) requires the
printing in the Commission’s Public segregation or secured amount
Exchange to give the Commission written notice of
Reference Room, 100 F Street NE., requirements of the Commodity
the Exchange’s intent to file the proposed rule Washington, DC 20549, on official Exchange Act (‘‘CEA’’) and the rules
change, along with a brief description and text of business days between the hours of under that statute. The contract also
the proposed rule change, at least five business days 10:00 a.m. and 3:00 p.m. Copies of the must contain a requirement that FCMs
prior to the date of filing of the proposed rule
mstockstill on DSK4VPTVN1PROD with NOTICES

change, or such shorter time as designated by the
filing will also be available for obtain an acknowledgment from any
Commission. The Exchange has satisfied this inspection and copying at the principal clearing organization that the fund’s
requirement. office of the Exchange. All comments assets are held on behalf of the FCM’s
18 See supra note 8.
received will be posted without change; customers according to CEA provisions.
19 For purposes only of waiving the 30-day
the Commission does not edit personal Because rule 17f–6 does not impose
operative delay, the Commission has also
considered the proposed rule’s impact on
identifying information from any ongoing obligations on funds or
efficiency, competition, and capital formation. See submissions. You should submit only
15 U.S.C. 78c(f). information that you wish to make 20 17 CFR 200.30–3(a)(12).

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Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Notices 33319

FCMs, Commission staff estimates there professional (attorney) time, Office of Management and Budget a
are no costs related to existing contracts Commission staff estimates that the request for extension of the previously
between funds and FCMs. This estimate annual dollar cost for the 39 hours is approved collection of information
does not include the time required by an $14,820.5 These estimates are made discussed below.
FCM to comply with the rule’s contract solely for the purposes of the Paperwork Rule 17f–2 (17 CFR 270.17f–2),
requirements because, to the extent that Reduction Act, and are not derived from entitled ‘‘Custody of Investments by
complying with the contract provisions a comprehensive or even a Registered Management Investment
could be considered ‘‘collections of representative survey or study of the Company,’’ was adopted in 1940 under
information,’’ the burden hours for costs of Commission rules and forms. section 17(f) of the Investment Company
compliance are already included in Compliance with the collection of Act of 1940 (15 U.S.C. 80a–17(f)) (the
other PRA submissions.1 information requirements of the rule is ‘‘Act’’), and was last amended
Thus, Commission staff estimates that necessary to obtain the benefit of relying materially in 1947. Rule 17f–2
any burden of the rule would be borne on the rule. An agency may not conduct establishes safeguards for arrangements
by funds and FCMs entering into new or sponsor, and a person is not required in which a registered management
contracts pursuant to the rule. to respond to, a collection of investment company (‘‘fund’’) is
Commission staff estimates that information unless it displays a deemed to maintain custody of its own
approximately 291 fund complexes and currently valid control number. assets, such as when the fund maintains
965 funds currently effect commodities The public may view the background its assets in a facility that provides
transactions and could deposit margin documentation for this information safekeeping but not custodial services.1
with FCMs in connection with those collection at the following Web site, The rule includes several recordkeeping
transactions pursuant to rule 17f–6.2 www.reginfo.gov. Comments should be or reporting requirements. The fund’s
Staff further estimates that of this directed to: (i) Desk Officer for the directors must prepare a resolution
number, 29 fund complexes and 97 Securities and Exchange Commission, designating not more than five fund
funds enter into new contracts with Office of Information and Regulatory officers or responsible employees who
FCMs each year.3 Affairs, Office of Management and may have access to the fund’s assets.
Based on conversations with fund Budget, Room 10102, New Executive The designated access persons (two or
representatives, Commission staff Office Building, Washington, DC 20503, more of whom must act jointly when
understands that fund complexes or by sending an email to: Shagufta_ handling fund assets) must prepare a
typically enter into contracts with FCMs Ahmed@omb.eop.gov; and (ii) Pamela written notation providing certain
on behalf of all funds in the fund Dyson, Director/Chief Information information about each deposit or
complex that engage in commodities Officer, Securities and Exchange withdrawal of fund assets, and must
transactions. Funds covered by the Commission, c/o Remi Pavlik-Simon, transmit the notation to another officer
contract are typically listed in an 100 F Street NE., Washington, DC 20549 or director designated by the directors.
attachment, which may be amended to or send an email to: PRA_Mailbox@ An independent public accountant must
encompass new funds. Commission staff sec.gov. Comments must be submitted to verify the fund’s assets three times each
estimates that the burden for a fund OMB within 30 days of this notice. year, and two of those examinations
complex to enter into a contract with an must be unscheduled.2
Dated: June 5, 2015. Rule 17f–2’s requirement that
FCM that contains the contract
requirements of rule 17f–6 is one hour, Robert W. Errett, directors designate access persons is
and further estimates that the burden to Deputy Secretary. intended to ensure that directors
add a fund to an existing contract [FR Doc. 2015–14245 Filed 6–10–15; 8:45 am] evaluate the trustworthiness of insiders
between a fund complex and an FCM is BILLING CODE 8011–01–P who handle fund assets. The
6 minutes. requirements that access persons act
Accordingly, Commission staff jointly in handling fund assets, prepare
estimates that funds and FCMs spend 39 SECURITIES AND EXCHANGE a written notation of each transaction,
burden hours annually complying with COMMISSION and transmit the notation to another
the information collection requirements designated person are intended to
of rule 17f–6.4 At $380 per hour of Submission for OMB Review; reduce the risk of misappropriation of
Comment Request fund assets by access persons, and to
1 The rule requires a contract with the FCM to
Upon Written Request Copies Available ensure that adequate records are
contain two provisions requiring the FCM to prepared, reviewed by a responsible
comply with existing requirements under the CEA From: U.S. Securities and Exchange
and rules adopted thereunder. Thus, to the extent Commission, Office of FOIA Services, third person, and available for
these provisions could be considered collections of 100 F Street NE., Washington, DC examination by the Commission. The
information, the hours required for compliance 20549–2736. requirement that auditors verify fund
would be included in the collection of information assets without notice twice each year is
burden hours submitted by the CFTC for its rules. Extension:
2 This estimate is based on the number of funds Rule 17f–2; OMB Control No. 3235–0223,
intended to provide an additional
that reported on Form N–SAR from June 1, 2014– SEC File No. 270–233. deterrent to the misappropriation of
November 30, 2014, in response to items (b)
through (i) of question 70, that they engaged in Notice is hereby given that, pursuant 1 The rule generally requires all assets to be
futures and commodity option transactions. to the Paperwork Reduction Act of 1995 deposited in the safekeeping of a ‘‘bank or other
3 These estimates are based on the assumption company whose functions and physical facilities
(44 U.S.C. 350l et seq.), the Securities
that 10% of fund complexes and funds enter into are supervised by Federal or State authority.’’ The
mstockstill on DSK4VPTVN1PROD with NOTICES

new FCM contracts each year. This assumption
and Exchange Commission (the fund’s securities must be physically segregated at
encompasses fund complexes and funds that enter ‘‘Commission’’) has submitted to the all times from the securities of any other person.
into FCM contracts for the first time, as well as fund 2 The accountant must transmit to the
complexes and fund that change the FCM with 5 The $380 per hour figure for an attorney is from Commission promptly after each examination a
whom they maintain margin accounts for SIFMA’s Management & Professional Earnings in certificate describing the examination on Form
commodities transactions. the Securities Industry 2013, modified by N–17f–2. The third (scheduled) examination may
4 This estimate is based upon the following Commission staff to account for an 1800-hour work- coincide with the annual verification required for
calculation: (29 fund complexes × 1 hour) + (97 year and multiplied by 5.35 to account for bonuses, every fund by section 30(g) of the Act (15 U.S.C.
funds × 0.1 hours) = 39 hours. firm size, employee benefits and overhead. 80a–29(g)).

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Document Created: 2015-12-15 15:07:43
Document Modified: 2015-12-15 15:07:43
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 33318