81 FR 87636 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 233 (December 5, 2016)

Page Range		87636-87637
FR Document		2016-29090
Federal Register, Volume 81 Issue 233 (Monday, December 5, 2016)
[Federal Register Volume 81, Number 233 (Monday, December 5, 2016)]
[Notices]
[Pages 87636-87637]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-29090]



[[Page 87636]]

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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213

Extension:
    Rule 17-1, SEC File No. 270-505, OMB Control No. 3235-0562

    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 (``Commission'') is soliciting comments on the collections 
of information summarized below. The Commission plans to submit these 
existing collections of information to the Office of Management and 
Budget for extension and approval.
    Section 17(d) (15 U.S.C. 80a-17(d)) of the Investment Company Act 
of 1940 (15 U.S.C. 80a et seq.) (the ``Act'') prohibits first- and 
second-tier affiliates of a fund, the fund's principal underwriters, 
and affiliated persons of the fund's principal underwriters, acting as 
principal, to effect any transaction in which the fund or a company 
controlled by the fund is a joint or a joint and several participant in 
contravention of the Commission's rules. Rule 17d-1 (17 CFR 270.17d-1) 
prohibits an affiliated person of or principal underwriter for any fund 
(a ``first-tier affiliate''), or any affiliated person of such person 
or underwriter (a ``second-tier affiliate''), acting as principal, from 
participating in or effecting any transaction in connection with a 
joint enterprise or other joint arrangement in which the fund is a 
participant, unless prior to entering into the enterprise or 
arrangement ``an application regarding [the transaction] has been filed 
with the Commission and has been granted by an order.'' In reviewing 
the proposed affiliated transaction, the rule provides that the 
Commission will consider whether the proposal is (i) consistent with 
the provisions, policies, and purposes of the Act, and (ii) on a basis 
different from or less advantageous than that of other participants in 
determining whether to grant an exemptive application for a proposed 
joint enterprise, joint arrangement, or profit-sharing plan.
    Rule 17d-1 also contains a number of exceptions to the requirement 
that a fund must obtain Commission approval prior to entering into 
joint transactions or arrangements with affiliates. For example, funds 
do not have to obtain Commission approval for certain employee 
compensation plans, certain tax-deferred employee benefit plans, 
certain transactions involving small business investment companies, the 
receipt of securities or cash by certain affiliates pursuant to a plan 
of reorganization, certain arrangements regarding liability insurance 
policies and transactions with ``portfolio affiliates'' (companies that 
are affiliated with the fund solely as a result of the fund (or an 
affiliated fund) controlling them or owning more than five percent of 
their voting securities) so long as certain other affiliated persons of 
the fund (e.g., the fund's adviser, persons controlling the fund, and 
persons under common control with the fund) are not parties to the 
transaction and do not have a ``financial interest'' in a party to the 
transaction. The rule excludes from the definition of ``financial 
interest'' any interest that the fund's board of directors (including a 
majority of the directors who are not interested persons of the fund) 
finds to be not material, as long as the board records the basis for 
its finding in their meeting minutes.
    Thus, the rule contains two filing and recordkeeping requirements 
that constitute collections of information. First, rule 17d-1 requires 
funds that wish to engage in a joint transaction or arrangement with 
affiliates to meet the procedural requirements for obtaining exemptive 
relief from the rule's prohibition on joint transactions or 
arrangements involving first- or second-tier affiliates. Second, rule 
17d-1 permits a portfolio affiliate to enter into a joint transaction 
or arrangement with the fund if a prohibited participant has a 
financial interest that the fund's board determines is not material and 
records the basis for this finding in their meeting minutes. These 
requirements of rule 17d-1 are designed to prevent fund insiders from 
managing funds for their own benefit, rather than for the benefit of 
the funds' shareholders.
    Based on an analysis of past filings, Commission staff estimates 
that 18 funds file applications under section 17(d) and rule 17d-1 per 
year. The staff understands that funds that file an application 
generally obtain assistance from outside counsel to prepare the 
application. The cost burden of using outside counsel is discussed 
below. The Commission staff estimates that each applicant will spend an 
average of 154 hours to comply with the Commission's applications 
process. The Commission staff therefore estimates the annual burden 
hours per year for all funds under rule 17d-1's application process to 
be 2772 hours at a cost of $1,113,228.\1\ The Commission, therefore, 
requests authorization to increase the inventory of total burden hours 
per year for all funds under rule 17d-1 from the current authorized 
burden of 2002 hours to 2772 hours. The increase is due to an increase 
in the number of funds that filed applications for exemptions under 
rule 17d-1.
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    \1\ The Commission staff estimates that a senior executive, such 
as the fund's chief compliance officer, will spend an average of 62 
hours and a mid-level compliance attorney will spend an average of 
92 hours to comply with this collection of information: 62 hours + 
92 hours = 154 hours. 18 funds x 154 burden hours = 2772 burden 
hours. The Commission staff estimate that the chief compliance 
officer is paid $493 per hour and the compliance attorney is paid 
$340 per hour. ($493 per hour x 62 hours) + ($340 per hour x 92 
hours) = $61,846 per fund. $61,846 x 18 funds = $1,113,228. The $493 
and $340 per hour figures are based on salary information compiled 
by SIFMA's Management & Professional Earnings in the Securities 
Industry, 2013. The Commission staff has modified SIFMA's 
information 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.
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    As noted above, the Commission staff understands that funds that 
file an application under rule 17d-1 generally use outside counsel to 
assist in preparing the application. The staff estimates that, on 
average, funds spend an additional $93,131 for outside legal services 
in connection with seeking Commission approval of affiliated joint 
transactions. Thus, the staff estimates that the total annual cost 
burden imposed by the exemptive application requirements of rule 17d-1 
is $1,676,358.\2\
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    \2\ The estimate is based on the following calculation: $93,131 
x 18 funds = $1,676,358.
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    We estimate that funds currently do not rely on the exemption from 
the term ``financial interest'' with respect to any interest that the 
fund's board of directors (including a majority of the directors who 
are not interested persons of the fund) finds to be not material. 
Accordingly, we estimate that annually there will be no transactions 
under rule 17d-1 that will result in this aspect of the collection of 
information.
    Based on these calculations, the total annual hour burden is 
estimated to be 2772 hours and the total annual cost burden is 
estimated to be $1,676,358.
    The estimate of average burden hours is made solely for the 
purposes of the Paperwork Reduction Act. The estimate is not derived 
from a comprehensive or even a representative survey or study of the 
costs of Commission rules. Complying with these collections of 
information requirement is necessary to obtain the benefit of relying 
on rule 17d-1. Responses will not be kept confidential. An agency may 
not conduct or sponsor, and a person is not

[[Page 87637]]

required to respond to, a collection of information unless it displays 
a currently valid control number.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information collected; and (d) 
ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology. Consideration will 
be given to comments and suggestions submitted in writing within 60 
days of this publication.
    Please direct your written comments to 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].

    Dated: November 22, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-29090 Filed 12-2-16; 8:45 am]
 BILLING CODE 8011-01-P
87636 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Notices

SECURITIES AND EXCHANGE Commission approval for certain $1,113,228.1 The Commission,
COMMISSION employee compensation plans, certain therefore, requests authorization to
tax-deferred employee benefit plans, increase the inventory of total burden
Proposed Collection; Comment certain transactions involving small hours per year for all funds under rule
Request business investment companies, the 17d–1 from the current authorized
Upon Written Request, Copies Available receipt of securities or cash by certain burden of 2002 hours to 2772 hours.
From: Securities and Exchange affiliates pursuant to a plan of The increase is due to an increase in the
Commission, Office of Investor reorganization, certain arrangements number of funds that filed applications
Education and Advocacy, regarding liability insurance policies for exemptions under rule 17d–1.
and transactions with ‘‘portfolio As noted above, the Commission staff
Washington, DC 20549–0213
affiliates’’ (companies that are affiliated understands that funds that file an
Extension: with the fund solely as a result of the application under rule 17d–1 generally
Rule 17–1, SEC File No. 270–505, OMB use outside counsel to assist in
Control No. 3235–0562 fund (or an affiliated fund) controlling
them or owning more than five percent preparing the application. The staff
Notice is hereby given that, pursuant of their voting securities) so long as estimates that, on average, funds spend
to the Paperwork Reduction Act of 1995 certain other affiliated persons of the an additional $93,131 for outside legal
(44 U.S.C. 3501 et seq.), the Securities fund (e.g., the fund’s adviser, persons services in connection with seeking
and Exchange Commission controlling the fund, and persons under Commission approval of affiliated joint
(‘‘Commission’’) is soliciting comments common control with the fund) are not transactions. Thus, the staff estimates
on the collections of information parties to the transaction and do not that the total annual cost burden
summarized below. The Commission have a ‘‘financial interest’’ in a party to imposed by the exemptive application
plans to submit these existing the transaction. The rule excludes from requirements of rule 17d–1 is
collections of information to the Office the definition of ‘‘financial interest’’ any $1,676,358.2
of Management and Budget for interest that the fund’s board of We estimate that funds currently do
extension and approval. directors (including a majority of the not rely on the exemption from the term
Section 17(d) (15 U.S.C. 80a–17(d)) of ‘‘financial interest’’ with respect to any
directors who are not interested persons
the Investment Company Act of 1940 interest that the fund’s board of
of the fund) finds to be not material, as
(15 U.S.C. 80a et seq.) (the ‘‘Act’’) directors (including a majority of the
long as the board records the basis for
prohibits first- and second-tier affiliates directors who are not interested persons
its finding in their meeting minutes.
of a fund, the fund’s principal of the fund) finds to be not material.
Thus, the rule contains two filing and
underwriters, and affiliated persons of Accordingly, we estimate that annually
recordkeeping requirements that
the fund’s principal underwriters, acting there will be no transactions under rule
constitute collections of information.
as principal, to effect any transaction in 17d–1 that will result in this aspect of
which the fund or a company controlled First, rule 17d–1 requires funds that
the collection of information.
by the fund is a joint or a joint and wish to engage in a joint transaction or
Based on these calculations, the total
several participant in contravention of arrangement with affiliates to meet the annual hour burden is estimated to be
the Commission’s rules. Rule 17d–1 (17 procedural requirements for obtaining 2772 hours and the total annual cost
CFR 270.17d–1) prohibits an affiliated exemptive relief from the rule’s burden is estimated to be $1,676,358.
person of or principal underwriter for prohibition on joint transactions or The estimate of average burden hours
any fund (a ‘‘first-tier affiliate’’), or any arrangements involving first- or second- is made solely for the purposes of the
affiliated person of such person or tier affiliates. Second, rule 17d–1 Paperwork Reduction Act. The estimate
underwriter (a ‘‘second-tier affiliate’’), permits a portfolio affiliate to enter into is not derived from a comprehensive or
acting as principal, from participating in a joint transaction or arrangement with even a representative survey or study of
or effecting any transaction in the fund if a prohibited participant has the costs of Commission rules.
connection with a joint enterprise or a financial interest that the fund’s board Complying with these collections of
other joint arrangement in which the determines is not material and records information requirement is necessary to
fund is a participant, unless prior to the basis for this finding in their obtain the benefit of relying on rule
entering into the enterprise or meeting minutes. These requirements of 17d–1. Responses will not be kept
arrangement ‘‘an application regarding rule 17d–1 are designed to prevent fund confidential. An agency may not
[the transaction] has been filed with the insiders from managing funds for their conduct or sponsor, and a person is not
Commission and has been granted by an own benefit, rather than for the benefit
order.’’ In reviewing the proposed of the funds’ shareholders. 1 The Commission staff estimates that a senior

affiliated transaction, the rule provides Based on an analysis of past filings, executive, such as the fund’s chief compliance
that the Commission will consider Commission staff estimates that 18 officer, will spend an average of 62 hours and a
funds file applications under section mid-level compliance attorney will spend an
whether the proposal is (i) consistent average of 92 hours to comply with this collection
with the provisions, policies, and 17(d) and rule 17d–1 per year. The staff of information: 62 hours + 92 hours = 154 hours.
purposes of the Act, and (ii) on a basis understands that funds that file an 18 funds × 154 burden hours = 2772 burden hours.
different from or less advantageous than application generally obtain assistance The Commission staff estimate that the chief
from outside counsel to prepare the compliance officer is paid $493 per hour and the
that of other participants in determining compliance attorney is paid $340 per hour. ($493
whether to grant an exemptive application. The cost burden of using per hour × 62 hours) + ($340 per hour × 92 hours)
application for a proposed joint outside counsel is discussed below. The = $61,846 per fund. $61,846 × 18 funds =
Commission staff estimates that each $1,113,228. The $493 and $340 per hour figures are
sradovich on DSK3GMQ082PROD with NOTICES

enterprise, joint arrangement, or profit- based on salary information compiled by SIFMA’s
sharing plan. applicant will spend an average of 154
Management & Professional Earnings in the
Rule 17d–1 also contains a number of hours to comply with the Commission’s Securities Industry, 2013. The Commission staff has
exceptions to the requirement that a applications process. The Commission modified SIFMA’s information to account for an
fund must obtain Commission approval staff therefore estimates the annual 1800-hour work year and inflation, and multiplied
burden hours per year for all funds by 5.35 to account for bonuses, firm size, employee
prior to entering into joint transactions benefits, and overhead.
or arrangements with affiliates. For under rule 17d–1’s application process 2 The estimate is based on the following

example, funds do not have to obtain to be 2772 hours at a cost of calculation: $93,131 × 18 funds = $1,676,358.

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Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Notices 87637

required to respond to, a collection of forth guidelines for the uniform obligations pursuant to Exchange Act
information unless it displays a preparation of Exchange Act registration Rule 12h–6 (17 CFR 240.12h–6). Form
currently valid control number. statement and reports. All information 15F requires a foreign private issuer to
Written comments are invited on: (a) is provided to the public for review. The disclose information that helps
Whether the proposed collection of information required is filed on investors understand the foreign private
information is necessary for the proper occasion and it is mandatory. issuer’s decision to terminate its
performance of the functions of the Regulation 12B is assigned one burden Exchange Act reporting obligations and
agency, including whether the hour for administrative convenience assists the Commission staff in
information will have practical utility; because the regulation simply prescribes determining whether the filer is eligible
(b) the accuracy of the agency’s estimate the disclosure that must appear in other to terminate its Exchange Act reporting
of the burden of the collection of filings under the federal securities laws. obligations pursuant to Rule 12h–6.
information; (c) ways to enhance the An agency may not conduct or
Rule 12h–6 provides a process for a
quality, utility, and clarity of the sponsor, and a person is not required to
foreign private issuer to exit the
information collected; and (d) ways to respond to, a collection of information
minimize the burden of the collection of unless it displays a currently valid Exchange Act registration and reporting
information on respondents, including control number. regime when there is relatively little
through the use of automated collection The public may view the background U.S. investor interest in its securities.
techniques or other forms of information documentation for this information Rule 12h–6 is intended to remove a
technology. Consideration will be given collection at the following Web site, disincentive for foreign private issuers
to comments and suggestions submitted www.reginfo.gov. Comments should be to register their securities with the
in writing within 60 days of this directed to: (i) Desk Officer for the Commission by lessening concerns that
publication. Securities and Exchange Commission, the Exchange Act registration and
Please direct your written comments Office of Information and Regulatory reporting system would be difficult to
to Pamela Dyson, Director/Chief Affairs, Office of Management and exit once an issuer enters it. The
Information Officer, Securities and Budget, Room 10102, New Executive information provided to the
Exchange Commission, C/O Remi Office Building, Washington, DC 20503, Commission is mandatory and all
Pavlik-Simon, 100 F Street NE., or by sending an email to: Shagufta_ information is made available to the
Washington, DC 20549; or send an email Ahmed@omb.eop.gov; and (ii) Pamela public upon request. We estimate that
to: PRA_Mailbox@sec.gov. Dyson, Director/Chief Information Form 15F takes approximately 30 hours
Dated: November 22, 2016. Officer, Securities and Exchange to prepare and is filed by approximately
Robert W. Errett,
Commission, c/o Remi Pavlik-Simon, 30 foreign private issuers. We estimate
100 F Street NE., Washington, DC 20549 that 25% of the 30 hours per response
Deputy Secretary.
or send an email to: PRA_Mailbox@ (7.5 hours per response) is prepared by
[FR Doc. 2016–29090 Filed 12–2–16; 8:45 am]
sec.gov. Comments must be submitted to the filer for a total annual reporting
BILLING CODE 8011–01–P OMB within 30 days of this notice. burden of 225 hours (7.5 hours per
Dated: November 23, 2016. response × 30 responses).
SECURITIES AND EXCHANGE Robert W. Errett, An agency may not conduct or
COMMISSION Deputy Secretary. sponsor, and a person is not required to
[FR Doc. 2016–29086 Filed 12–2–16; 8:45 am] respond to, a collection of information
Submission for OMB Review;
Comment Request
BILLING CODE 8011–01–P unless it displays a currently valid
control number.
Upon Written Request Copies Available The public may view the background
From: Securities and Exchange SECURITIES AND EXCHANGE
COMMISSION documentation for this information
Commission, Office of FOIA Services,
collection at the following Web site,
100 F Street NE., Washington, DC
Submission for OMB Review; www.reginfo.gov. Comments should be
20549–2736
Comment Request directed to: (i) Desk Officer for the
Extension: Securities and Exchange Commission,
Regulation 12B, SEC File No. 270–70, OMB Upon Written Request Copies Available
From: Securities and Exchange Office of Information and Regulatory
Control No. 3235–0062
Commission, Office of FOIA Services, Affairs, Office of Management and
Notice is hereby given that, pursuant Budget, Room 10102, New Executive
100 F Street NE., Washington, DC
to the Paperwork Reduction Act of 1995 Office Building, Washington, DC 20503,
20549–2736.
(44 U.S.C. 3501 et seq.), the Securities or by sending an email to: Shagufta_
and Exchange Commission Extension:
Form 15F, SEC File No. 270–559, OMB Ahmed@omb.eop.gov; and (ii) Pamela
(‘‘Commission’’) has submitted to the Dyson, Director/Chief Information
Office of Management and Budget this Control No. 3235–0621
Officer, Securities and Exchange
request for extension of the previously Notice is hereby given that, pursuant
Commission, c/o Remi Pavlik-Simon,
approved collection of information to the Paperwork Reduction Act of 1995
100 F Street NE., Washington, DC 20549
discussed below. (44 U.S.C. 3501 et seq.), the Securities
Regulation 12B (17 CFR 240.12b–1 and Exchange Commission or send an email to: PRA_Mailbox@
through 12b–37) under the Securities sec.gov. Comments must be submitted to
sradovich on DSK3GMQ082PROD with NOTICES

(‘‘Commission’’) has submitted to the
Exchange Act of 1934 (15 U.S.C. 78a et Office of Management and Budget this OMB within 30 days of this notice.
seq.) (‘‘Exchange Act’’) includes rules request for extension of the previously Dated: November 23, 2016.
governing the registration and periodic approved collection of information Robert W. Errett,
reporting under Sections 12(b), 12(g), discussed below. Deputy Secretary.
13, and 15(d) (15 U.S.C. 78l(b), 78l(g), Form 15F (17 CFR 249.324) is filed by
[FR Doc. 2016–29084 Filed 12–2–16; 8:45 am]
78m and 78o(d)) of the Exchange Act. a foreign private issuer when
The purpose of the regulation is set terminating its Exchange Act reporting BILLING CODE 8011–01–P

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Document Created: 2016-12-03 00:26:09
Document Modified: 2016-12-03 00:26:09
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 87636