82_FR_20480 82 FR 20398 - Submission for OMB Review; Comment Request

82 FR 20398 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 82 (May 1, 2017)

Page Range20398-20398
FR Document2017-08765

Federal Register, Volume 82 Issue 82 (Monday, May 1, 2017) 
[Federal Register Volume 82, Number 82 (Monday, May 1, 2017)]
[Notices]
[Page 20398]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-08765]


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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 32a-4, SEC File No. 270-473, OMB Control No. 3235-0530.

    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'') has submitted to the Office of Management 
and Budget requests for extension of the previously approved 
collections of information discussed below.
    Section 32(a)(2) of the Investment Company Act of 1940 (15 U.S.C. 
80a 31(a)(2)) (``Act'') requires that the selection of a registered 
management investment company's or registered face-amount certificate 
company's (collectively, ``funds'') independent public accountant be 
submitted to shareholders for ratification or rejection. Rule 32a-4 
under the Investment Company Act (17 CFR 270.32a-4) exempts a fund from 
this requirement if, among other things, the fund has an audit 
committee consisting entirely of independent directors. The rule 
permits continuing oversight of a fund's accounting and auditing 
processes by an independent audit committee in place of a shareholder 
vote.
    Among other things, in order to rely on rule 32a-4, a fund's board 
of directors must adopt an audit committee charter and must preserve 
that charter, and any modifications to the charter, permanently in an 
easily accessible place. The purpose of these conditions is to ensure 
that Commission staff will be able to monitor the duties and 
responsibilities of an audit committee of a fund relying on the rule.
    Commission staff estimates that on average the board of directors 
takes 15 minutes to adopt the audit committee charter. Commission staff 
has estimated that with an average of 8 directors on the board,\1\ 
total director time to adopt the charter is 2 hours. Combined with an 
estimated \1/2\ hour of paralegal time to prepare the charter for board 
review, the staff estimates a total one-time collection of information 
burden of 2\1/2\ hours for each fund. Once a board adopts an audit 
committee charter, the charter is preserved as part of the fund's 
records. Commission staff estimates that there is no annual hourly 
burden associated with preserving the charter in accordance with this 
rule.\2\
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    \1\ This estimate is based on staff experience and on 
discussions with a representative of an entity that surveys funds 
and calculates fund board statistics based on responses to its 
surveys.
    \2\ This estimate is based on staff experience and discussions 
with funds regarding the hour burden related to maintenance of the 
charter.
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    Because virtually all existing funds have now adopted audit 
committee charters, the annual one-time collection of information 
burden associated with adopting audit committee charters is limited to 
the burden incurred by newly established funds. Commission staff 
estimates that fund sponsors establish approximately 112 new funds each 
year,\3\ and that all of these funds will adopt an audit committee 
charter in order to rely on rule 32a-4. Thus, Commission staff 
estimates that the annual one-time hour burden associated with adopting 
an audit committee charter under rule 32a-4 is approximately 280 
hours.\4\
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    \3\ This estimate is based on the average number of 
notifications of registration on Form N-8A filed from 2013-2015.
    \4\ This estimate is based on the following calculation: (2.5 
burden hours for establishing charter x 112 new funds = 280 burden 
hours).
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    When funds adopt an audit committee charter in order to rely on 
rule 32a-4, they also may incur one-time costs related to hiring 
outside counsel to prepare the charter. Commission staff estimates that 
those costs average approximately $1500 per fund.\5\ As noted above, 
Commission staff estimates that approximately 112 new funds each year 
will adopt an audit committee charter in order to rely on rule 32a-4. 
Thus, Commission staff estimates that the ongoing annual cost burden 
associated with rule 32a-4 in the future will be approximately 
$168,000.\6\
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    \5\ Costs may vary based on the individual needs of each fund. 
However, based on the staff's experience and conversations with 
outside counsel that prepare these charters, legal fees related to 
the preparation and adoption of an audit committee charter usually 
average $1500 or less. The Commission also understands that model 
audit committee charters are available, which reduces the costs 
associated with drafting a charter.
    \6\ This estimate is based on the following calculations: ($1500 
cost of adopting charter x 112 newly established funds = $168,000).
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    The estimates of average burden hours and costs 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 collections of information required by 
rule 32a-4 are necessary to obtain the benefits of the rule. The 
Commission is seeking OMB approval, because 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: April 25, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08765 Filed 4-28-17; 8:45 am]
 BILLING CODE 8011-01-P

20398 Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices This Notice will be published in the the board,1 total director time to adopt purposes of the Paperwork Reduction Federal Register. the charter is 2 hours. Combined with Act, and are not derived from a an estimated 1⁄2 hour of paralegal time comprehensive or even a representative Stacy L. Ruble, to prepare the charter for board review, survey or study of the costs of Secretary. the staff estimates a total one-time Commission rules and forms. The [FR Doc. 2017–08745 Filed 4–28–17; 8:45 am] collection of information burden of 21⁄2 collections of information required by BILLING CODE 7710–FW–P hours for each fund. Once a board rule 32a–4 are necessary to obtain the adopts an audit committee charter, the benefits of the rule. The Commission is charter is preserved as part of the fund’s seeking OMB approval, because an records. Commission staff estimates that agency may not conduct or sponsor, and SECURITIES AND EXCHANGE there is no annual hourly burden a person is not required to respond to, COMMISSION associated with preserving the charter in a collection of information unless it accordance with this rule.2 displays a currently valid control Submission for OMB Review; Because virtually all existing funds number. Comment Request have now adopted audit committee The public may view the background Upon Written Request, Copies Available charters, the annual one-time collection documentation for this information From: Securities and Exchange of information burden associated with collection at the following Web site, Commission, Office of FOIA Services, adopting audit committee charters is www.reginfo.gov. Comments should be 100 F Street NE., Washington, DC limited to the burden incurred by newly directed to: (i) Desk Officer for the 20549–2736. established funds. Commission staff Securities and Exchange Commission, estimates that fund sponsors establish Office of Information and Regulatory Extension: approximately 112 new funds each Rule 32a–4, SEC File No. 270–473, OMB Affairs, Office of Management and year,3 and that all of these funds will Budget, Room 10102, New Executive Control No. 3235–0530. adopt an audit committee charter in Office Building, Washington, DC 20503, Notice is hereby given that, pursuant order to rely on rule 32a–4. Thus, or by sending an email to: Shagufta_ to the Paperwork Reduction Act of 1995 Commission staff estimates that the Ahmed@omb.eop.gov; and (ii) Pamela (44 U.S.C. 3501 et seq.), the Securities annual one-time hour burden associated Dyson, Director/Chief Information and Exchange Commission with adopting an audit committee Officer, Securities and Exchange (‘‘Commission’’) has submitted to the charter under rule 32a–4 is Commission, c/o Remi Pavlik-Simon, Office of Management and Budget approximately 280 hours.4 100 F Street NE., Washington, DC 20549 requests for extension of the previously When funds adopt an audit committee or send an email to: PRA_Mailbox@ approved collections of information charter in order to rely on rule 32a–4, sec.gov. Comments must be submitted to discussed below. they also may incur one-time costs OMB within 30 days of this notice. Section 32(a)(2) of the Investment related to hiring outside counsel to prepare the charter. Commission staff Dated: April 25, 2017. Company Act of 1940 (15 U.S.C. 80a estimates that those costs average Eduardo A. Aleman, 31(a)(2)) (‘‘Act’’) requires that the selection of a registered management approximately $1500 per fund.5 As Assistant Secretary. investment company’s or registered noted above, Commission staff estimates [FR Doc. 2017–08765 Filed 4–28–17; 8:45 am] face-amount certificate company’s that approximately 112 new funds each BILLING CODE 8011–01–P (collectively, ‘‘funds’’) independent year will adopt an audit committee public accountant be submitted to charter in order to rely on rule 32a–4. shareholders for ratification or rejection. Thus, Commission staff estimates that SECURITIES AND EXCHANGE Rule 32a–4 under the Investment the ongoing annual cost burden COMMISSION Company Act (17 CFR 270.32a–4) associated with rule 32a–4 in the future will be approximately $168,000.6 Submission for OMB Review; exempts a fund from this requirement if, Comment Request among other things, the fund has an The estimates of average burden hours audit committee consisting entirely of and costs are made solely for the Upon Written Request, Copies Available independent directors. The rule permits From: Securities and Exchange 1 This estimate is based on staff experience and continuing oversight of a fund’s Commission, Office of FOIA Services, on discussions with a representative of an entity accounting and auditing processes by an that surveys funds and calculates fund board 100 F Street NE., Washington, DC independent audit committee in place statistics based on responses to its surveys. 20549–2736. of a shareholder vote. 2 This estimate is based on staff experience and Extension: Among other things, in order to rely discussions with funds regarding the hour burden related to maintenance of the charter. Rule 17a–22, SEC File No. 270–202, OMB on rule 32a–4, a fund’s board of 3 This estimate is based on the average number of Control No. 3235–0196. directors must adopt an audit committee notifications of registration on Form N–8A filed Notice is hereby given that pursuant charter and must preserve that charter, from 2013–2015. to the Paperwork Reduction Act of 1995 and any modifications to the charter, 4 This estimate is based on the following (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the permanently in an easily accessible calculation: (2.5 burden hours for establishing charter × 112 new funds = 280 burden hours). Securities and Exchange Commission place. The purpose of these conditions 5 Costs may vary based on the individual needs (‘‘Commission’’) has submitted to the is to ensure that Commission staff will of each fund. However, based on the staff’s Office of Management and Budget be able to monitor the duties and experience and conversations with outside counsel (‘‘OMB’’) a request for approval of srobinson on DSK5SPTVN1PROD with NOTICES responsibilities of an audit committee of that prepare these charters, legal fees related to the preparation and adoption of an audit committee extension of the previously approved a fund relying on the rule. charter usually average $1500 or less. The collection of information provided for in Commission staff estimates that on Commission also understands that model audit Rule 17a–22 (17 CFR 240.17a–22) under average the board of directors takes 15 committee charters are available, which reduces the the Securities Exchange Act of 1934 minutes to adopt the audit committee costs associated with drafting a charter. 6 This estimate is based on the following (‘‘Exchange Act’’) (15 U.S.C. 78a et seq.). charter. Commission staff has estimated calculations: ($1500 cost of adopting charter × 112 Rule 17a–22 requires all registered that with an average of 8 directors on newly established funds = $168,000). clearing agencies to file with the VerDate Sep<11>2014 20:35 Apr 28, 2017 Jkt 241001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\01MYN1.SGM 01MYN1


Document Created: 2017-04-29 03:16:06
Document Modified: 2017-04-29 03:16:06
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 20398 
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