81 FR 18931 - Submission for OMB Review; Comment Request
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 63 (April 1, 2016)
Federal Register Volume 81, Issue 63 (April 1, 2016)
| Page Range | 18931-18932 | |
| FR Document | 2016-07356 |
[Federal Register Volume 81, Number 63 (Friday, April 1, 2016)] [Notices] [Pages 18931-18932] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-07356] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [OMB Control No. 3235-0217, SEC File No. 270-224] 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 17e-1. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (``Paperwork Reduction Act''), the Securities and Exchange Commission (the ``Commission'') has submitted to the Office of Management and Budget (``OMB'') a request for extension of the previously approved collection of information described below. Rule 17e-1 (17 CFR 270.17e-1) under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) (the ``Investment Company Act'') deems a remuneration as ``not exceeding the usual and customary broker's commission'' for purposes of Section 17(e)(2)(A) if, among other things, a registered investment company's (``fund's'') board of directors has adopted procedures reasonably designed to provide that the remuneration to an affiliated broker is a reasonable and fair amount compared to that received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time and the board makes and approves such changes as it deems necessary. In addition, each quarter, the board must determine that all transactions effected under the rule during the preceding quarter complied with the established procedures. Rule 17e-1 also requires the fund to (i) maintain permanently a written copy of the procedures adopted by the board for complying with the requirements of the rule; and (ii) maintain for a period of six years, the first two in an easily accessible place, a written record of each transaction subject to the rule, setting forth the amount and source of the commission, fee, or other remuneration received; the identity of the broker; the terms of the transaction; and the materials used to determine that the transactions were effected in compliance with the procedures adopted by the board. The recordkeeping requirements under rule 17e-1 enable the Commission to ensure that affiliated brokers receive compensation that does not exceed the usual and customary broker's commission. Without the recordkeeping requirements, Commission inspectors would have difficulty ascertaining whether funds were complying with rule 17e-1. Based on an analysis of fund filings, the staff estimates that approximately 320 funds enter into subadvisory agreements each year.\1\ Based on discussions with industry representatives, the staff estimates that it will require approximately 3 attorney hours to draft and execute additional clauses in new subadvisory contracts in order for funds and subadvisers to be able to rely on the exemptions in rule 17e- 1. Because these additional clauses are identical to the clauses that a fund would need to insert in their subadvisory contracts to rely on rules 12d3-1, 10f-3, and 17a-10, and because we believe that funds that use one such rule generally use all of these rules, we apportion this 3 hour time burden equally to all four rules. Therefore, we estimate that the burden allocated to rule 17e-1 for this contract change would be 0.75 hours.\2\ Assuming that all 320 funds enter into new subadvisory contracts each year make the modification to their contract required by the rule, we estimate that the rule's contract modification requirement will result in 240 burden hours annually.\3\ --------------------------------------------------------------------------- \1\ Based on data from Morningstar, as of September, 2015, there are 12,426 registered funds (open-end funds, closed-end funds, and exchange-traded funds), 4,683 funds of which have subadvisory relationships (approximately 38%). Based on data from the 2015 ICI Factbook, 843 new funds were established in 2014 (654 open-end funds + 176 exchange-traded funds + 13 closed-end funds (from the ICI Research Perspective, April 2015)). 843 new funds x 38% = 320 funds. \2\ 3 hours / 4 rules = 0.75 hours. \3\ This estimate is based on the following calculation: 0.75 hours x 320 funds = 240 burden hours. --------------------------------------------------------------------------- Based on an analysis of fund filings, we estimate that approximately 1,696 funds use at least one affiliated broker. Based on staff experience and conversations with fund representatives, the staff estimates approximately 40 percent of transactions (and thus, 40% of funds) that occur under the rule 17e- [[Page 18932]] 1 would be exempt from its recordkeeping and review requirements. This would leave approximately 1,018 funds \4\ still subject to the rule's recordkeeping and review requirements. Based on staff experience and conversations with fund representatives, we estimate that the burden of compliance with rule 17e-1 is approximately 50 hours per fund per year. This time is spent, for example, reviewing the applicable transactions and maintaining records. Accordingly, we calculate the total estimated annual internal burden of complying with the review and recordkeeping requirements of rule 17e-1 to be approximately 50,900 hours,\5\ and the total annual burden of the rule's paperwork requirements is 51,140 hours.\6\ --------------------------------------------------------------------------- \4\ 1,696 funds x 0.6 = 1,018 funds. \5\ 1,018 funds x 50 hours per fund = 50,900 hours. \6\ 240 hours + 50,900 hours = 51,140 hours. --------------------------------------------------------------------------- Estimates of the average burden hours 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. The collection of information under rule 17e-1 is mandatory. The information provided under rule 17e-1 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 OMB 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: March 29, 2016. Robert W. Errett, Deputy Secretary. [FR Doc. 2016-07356 Filed 3-31-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 63 / Friday, April 1, 2016 / Notices 18931
the public interest; (ii) for the protection For the Commission, by the Division of written record of each transaction
of investors; or (iii) otherwise in Trading and Markets, pursuant to delegated subject to the rule, setting forth the
furtherance of the purposes of the Act. authority.44 amount and source of the commission,
If the Commission takes such action, the Robert W. Errett, fee, or other remuneration received; the
Commission shall institute proceedings Deputy Secretary. identity of the broker; the terms of the
to determine whether the proposed rule [FR Doc. 2016–07333 Filed 3–31–16; 8:45 am] transaction; and the materials used to
should be approved or disapproved. BILLING CODE 8011–01–P determine that the transactions were
effected in compliance with the
IV. Solicitation of Comments
procedures adopted by the board. The
Interested persons are invited to SECURITIES AND EXCHANGE recordkeeping requirements under rule
submit written data, views, and COMMISSION 17e–1 enable the Commission to ensure
arguments concerning the foregoing, that affiliated brokers receive
including whether the proposed rule [OMB Control No. 3235–0217, SEC File No.
270–224] compensation that does not exceed the
change is consistent with the Act. usual and customary broker’s
Comments may be submitted by any of Submission for OMB Review; commission. Without the recordkeeping
the following methods: Comment Request requirements, Commission inspectors
Electronic Comments would have difficulty ascertaining
Upon Written Request, Copies Available whether funds were complying with
• Use the Commission’s Internet From: Securities and Exchange rule 17e–1.
comment form (http://www.sec.gov/ Commission, Office of FOIA Services, Based on an analysis of fund filings,
rules/sro.shtml); or 100 F Street NE., Washington, DC the staff estimates that approximately
• Send an email to rule-comments@ 20549–2736. 320 funds enter into subadvisory
sec.gov. Please include File Number SR– agreements each year.1 Based on
NASDAQ–2016–043 on the subject line. Extension:
Rule 17e–1. discussions with industry
Paper Comments representatives, the staff estimates that
Notice is hereby given that, pursuant
• Send paper comments in triplicate it will require approximately 3 attorney
to the Paperwork Reduction Act of 1995
to Brent J. Fields, Secretary, Securities hours to draft and execute additional
(44 U.S.C. 3501 et seq.) (‘‘Paperwork
and Exchange Commission, 100 F Street clauses in new subadvisory contracts in
Reduction Act’’), the Securities and
NE., Washington, DC 20549–1090. order for funds and subadvisers to be
Exchange Commission (the
able to rely on the exemptions in rule
All submissions should refer to File ‘‘Commission’’) has submitted to the
17e–1. Because these additional clauses
Number SR–NASDAQ–2016–043. This Office of Management and Budget
are identical to the clauses that a fund
file number should be included on the (‘‘OMB’’) a request for extension of the
would need to insert in their
subject line if email is used. To help the previously approved collection of
subadvisory contracts to rely on rules
Commission process and review your information described below.
12d3–1, 10f–3, and 17a–10, and because
comments more efficiently, please use Rule 17e–1 (17 CFR 270.17e–1) under
we believe that funds that use one such
only one method. The Commission will the Investment Company Act of 1940
rule generally use all of these rules, we
post all comments on the Commission’s (15 U.S.C. 80a–1 et seq.) (the
apportion this 3 hour time burden
Internet Web site (http://www.sec.gov/ ‘‘Investment Company Act’’) deems a
equally to all four rules. Therefore, we
rules/sro.shtml). remuneration as ‘‘not exceeding the
estimate that the burden allocated to
Copies of the submission, all usual and customary broker’s
rule 17e–1 for this contract change
subsequent amendments, all written commission’’ for purposes of Section
would be 0.75 hours.2 Assuming that all
statements with respect to the proposed 17(e)(2)(A) if, among other things, a
320 funds enter into new subadvisory
rule change that are filed with the registered investment company’s
contracts each year make the
Commission, and all written (‘‘fund’s’’) board of directors has
modification to their contract required
communications relating to the adopted procedures reasonably
by the rule, we estimate that the rule’s
proposed rule change between the designed to provide that the
contract modification requirement will
Commission and any person, other than remuneration to an affiliated broker is a
result in 240 burden hours annually.3
those that may be withheld from the reasonable and fair amount compared to Based on an analysis of fund filings,
public in accordance with the that received by other brokers in we estimate that approximately 1,696
provisions of 5 U.S.C. 552, will be connection with comparable funds use at least one affiliated broker.
available for Web site viewing and transactions involving similar securities Based on staff experience and
printing in the Commission’s Public being purchased or sold on a securities conversations with fund representatives,
Reference Room, 100 F Street NE., exchange during a comparable period of the staff estimates approximately 40
Washington, DC 20549, on official time and the board makes and approves percent of transactions (and thus, 40%
business days between the hours of such changes as it deems necessary. In of funds) that occur under the rule 17e–
10:00 a.m. and 3:00 p.m. Copies of the addition, each quarter, the board must
filing also will be available for determine that all transactions effected 1 Based on data from Morningstar, as of
inspection and copying at the principal under the rule during the preceding September, 2015, there are 12,426 registered funds
office of the Exchange. All comments quarter complied with the established (open-end funds, closed-end funds, and exchange-
received will be posted without change; procedures. Rule 17e–1 also requires the traded funds), 4,683 funds of which have
asabaliauskas on DSK3SPTVN1PROD with NOTICES
subadvisory relationships (approximately 38%).
the Commission does not edit personal fund to (i) maintain permanently a Based on data from the 2015 ICI Factbook, 843 new
identifying information from written copy of the procedures adopted funds were established in 2014 (654 open-end
submissions. You should submit only by the board for complying with the funds + 176 exchange-traded funds + 13 closed-end
information that you wish to make requirements of the rule; and (ii) funds (from the ICI Research Perspective, April
2015)). 843 new funds × 38% = 320 funds.
available publicly. All submissions maintain for a period of six years, the 2 3 hours ÷ 4 rules = 0.75 hours.
should refer to File Number SR– first two in an easily accessible place, a 3 This estimate is based on the following
NASDAQ–2016–043 and should be calculation: 0.75 hours × 320 funds = 240 burden
submitted on or before April 22, 2016. 44 17 CFR 200.30–3(a)(12). hours.
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![18932 Federal Register / Vol. 81, No. 63 / Friday, April 1, 2016 / Notices
1 would be exempt from its DEPARTMENT OF STATE According to SSC, the Line connects
recordkeeping and review requirements. with a rail line owned and operated by
[Public Notice: 9506]
This would leave approximately 1,018 Union Pacific Railroad Company
funds 4 still subject to the rule’s In the Matter of the Review of the between Dallas and El Paso, Tex.
recordkeeping and review requirements. Designation of Ansar al Islam (and SSC states that the agreement
Based on staff experience and other Aliases) as a Foreign Terrorist regarding the subject line does not
conversations with fund representatives, Organization Pursuant to Section 219 involve an interchange commitment.
we estimate that the burden of of the Immigration and Nationality Act, SSC also states that its projected annual
compliance with rule 17e–1 is as Amended revenues as a result of this transaction
approximately 50 hours per fund per do not exceed those that would qualify
year. This time is spent, for example, Based upon a review of the
Administrative Record assembled it as a Class III rail carrier and will not
reviewing the applicable transactions exceed $5 million.
and maintaining records. Accordingly, pursuant to Section 219(a)(4)(C) of the
Immigration and Nationality Act, as The transaction may be consummated
we calculate the total estimated annual
amended (8 U.S.C. 1189(a)(4)(C)) on or after April 16, 2016, the effective
internal burden of complying with the
(‘‘INA’’), and in consultation with the date of the exemption (30 days after the
review and recordkeeping requirements Attorney General and the Secretary of verified notice of exemption was filed).
of rule 17e–1 to be approximately the Treasury, I conclude that the
50,900 hours,5 and the total annual If the verified notice contains false or
circumstances that were the basis for the
burden of the rule’s paperwork misleading information, the exemption
designation of the aforementioned
requirements is 51,140 hours.6 is void ab initio. Petitions to revoke the
organization as a Foreign Terrorist
Organization have not changed in such exemption under 49 U.S.C. 10502(d)
Estimates of the average burden hours
a manner as to warrant revocation of the may be filed at any time. The filing of
are made solely for the purposes of the
designation and that the national a petition to revoke will not
Paperwork Reduction Act and are not
security of the United States does not automatically stay the effectiveness of
derived from a comprehensive or even
warrant a revocation of the designation. the exemption. Petitions for stay must
a representative survey or study of the
Therefore, I hereby determine that the be filed no later than April 8, 2016 (at
costs of Commission rules and forms.
designation of the aforementioned least seven days before the exemption
The collection of information under rule
organization as a Foreign Terrorist becomes effective).
17e–1 is mandatory. The information
provided under rule 17e–1 will not be Organization, pursuant to Section 219 of An original and 10 copies of all
kept confidential. An agency may not the INA (8 U.S.C. 1189), shall be pleadings, referring to Docket No. FD
conduct or sponsor, and a person is not maintained. 36013, must be filed with the Surface
This determination shall be published Transportation Board, 395 E Street SW.,
required to respond to, a collection of
in the Federal Register. Washington, DC 20423–0001. In
information unless it displays a
currently valid OMB control number. John F. Kerry, addition, one copy of each pleading
Secretary of State, Department of State. must be served on applicant’s
The public may view the background
[FR Doc. 2016–07432 Filed 3–31–16; 8:45 am] representative, Thomas F. McFarland,
documentation for this information
Thomas F. McFarland, P.C., 208 South
collection at the following Web site, BILLING CODE 4710–AD–P
LaSalle Street, Suite 1890, Chicago, IL
www.reginfo.gov. Comments should be
60604.
directed to: (i) Desk Officer for the
Securities and Exchange Commission, SURFACE TRANSPORTATION BOARD According to SSC, this action is
Office of Information and Regulatory categorically excluded from
[Docket No. FD 36013]
Affairs, Office of Management and environmental review under 49 CFR
Budget, Room 10102, New Executive Southern Switching Company— 1105.6(c).
Office Building, Washington, DC 20503, Operation Exemption—Lone Star Board decisions and notices are
or by sending an email to: Shagufta_ Railroad, Inc. available on our Web site at
Ahmed@omb.eop.gov; and (ii) Pamela WWW.STB.DOT.GOV.
Dyson, Director/Chief Information Southern Switching Company (SSC),
a Class III rail carrier, has filed a verified Decided: March 25, 2016.
Officer, Securities and Exchange
notice of exemption under 49 CFR By the Board, Scott M. Zimmerman, Acting
Commission, c/o Remi Pavlik-Simon,
1150.41 to operate approximately 3.18 Director, Office of Proceedings.
100 F Street NE., Washington, DC 20549
miles of rail line at an industrial park Kenyatta Clay,
or send an email to: PRA_Mailbox@ near Big Springs, in Howard County,
sec.gov. Comments must be submitted to Clearance Clerk.
Tex. (the Line), pursuant to an operating [FR Doc. 2016–07366 Filed 3–31–16; 8:45 am]
OMB within 30 days of this notice. agreement with its sister rail carrier,
BILLING CODE 4915–01–P
Dated: March 29, 2016. Lone Star Railroad, Inc. (LSR), the
Robert W. Errett, owner of the Line.1 There are no
mileposts on the Line.2 the petition as it pertained to construction of the
Deputy Secretary. new line but denied it with respect to SSC’s
asabaliauskas on DSK3SPTVN1PROD with NOTICES
[FR Doc. 2016–07356 Filed 3–31–16; 8:45 am] 1 LSR is a wholly owned subsidiary of CGX, Inc.
operation of the Line because the record did not
support the authority requested. That denial was
BILLING CODE 8011–01–P (CGX). SSC is a wholly owned subsidiary of
Ironhorse Resources, Inc. (Ironhorse), which is a without prejudice to SSC’s submitting either a
wholly owned subsidiary of CGX. Ironhorse and properly supported petition for exemption from
CGX are holding companies. § 10902 or a verified notice of exemption pursuant
2 LSR and SSC initially filed a joint petition for to 49 CFR 1150.41. See Lone Star R.R.—Track
exemption under 49 U.S.C. 10502 from the prior Constr. & Operation Exemption—in Howard Cty.,
4 1,696funds × 0.6 = 1,018 funds. Tex., FD 35874 (STB served March 3, 2016). SSC’s
approval requirements of 49 U.S.C. 10901 for LSR
5 1,018funds × 50 hours per fund = 50,900 hours. to construct, and of § 10902 for SSC to operate, the verified notice here seeks the operating authority
6 240 hours + 50,900 hours = 51,140 hours. new 3.18-mile line of railroad. The Board granted that was denied in that case.
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Document Created: 2016-04-06 00:09:04
Document Modified: 2016-04-06 00:09:04
| 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 | 81 FR 18931 |
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