82 FR 31117 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 127 (July 5, 2017)

Page Range		31117-31118
FR Document		2017-14064
Federal Register, Volume 82 Issue 127 (Wednesday, July 5, 2017)
[Federal Register Volume 82, Number 127 (Wednesday, July 5, 2017)]
[Notices]
[Pages 31117-31118]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14064]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; 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 38a-1; SEC File No. 270-522, OMB Control No. 3235-0586

    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'') is soliciting comments on the 
collection of information summarized below. The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget for extension and approval.
    Rule 38a-1 (17 CFR 270.38a-1) under the Investment Company Act of 
1940 (15 U.S.C. 80a) (``Investment Company Act'') is intended to 
protect investors by fostering better fund compliance with securities 
laws. The rule requires every registered investment company and 
business development company (``fund'') to: (i) Adopt and implement 
written policies and procedures reasonably designed to prevent 
violations of the federal securities laws by the fund, including 
procedures for oversight of compliance by each investment adviser, 
principal underwriter, administrator, and transfer agent of the fund; 
(ii) obtain the fund board of directors' approval of those policies and 
procedures; (iii) annually review the adequacy of those policies and 
procedures and the policies and procedures of each investment adviser, 
principal underwriter, administrator, and transfer agent of the fund, 
and the effectiveness of their implementation; (iv) designate a chief 
compliance officer to administer the fund's policies and procedures and 
prepare an annual report to the board that addresses certain specified 
items relating to the policies and procedures; and (v) maintain for 
five years the compliance policies and procedures and the chief 
compliance officer's annual report to the board.
    The rule contains certain information collection requirements that 
are designed to ensure that funds establish and maintain comprehensive, 
written internal compliance programs. The information collections also 
assist the Commission's examination staff in assessing the adequacy of 
funds' compliance programs.

[[Page 31118]]

    While Rule 38a-1 requires each fund to maintain written policies 
and procedures, most funds are located within a fund complex. The 
experience of the Commission's examination and oversight staff suggests 
that each fund in a complex is able to draw extensively from the fund 
complex's ``master'' compliance program to assemble appropriate 
compliance policies and procedures. Many fund complexes already have 
written policies and procedures documenting their compliance programs. 
Further, a fund needing to develop or revise policies and procedures on 
one or more topics in order to achieve a comprehensive compliance 
program can draw on a number of outlines and model programs available 
from a variety of industry representatives, commentators, and 
organizations.
    There are approximately 4,333 funds subject to Rule 38a-1. Among 
these funds, 97 were newly registered in the past year. These 97 funds, 
therefore, were required to adopt and document the policies and 
procedures that make up their compliance programs. Commission staff 
estimates that the average annual hour burden for a fund to adopt and 
document these policies and procedures is 105 hours. Thus, we estimate 
that the aggregate annual burden hours associated with the adoption and 
documentation requirement is 10,185 hours.
    All funds are required to conduct an annual review of the adequacy 
of their existing policies and procedures and the policies and 
procedures of each investment adviser, principal underwriter, 
administrator, and transfer agent of the fund, and the effectiveness of 
their implementation. In addition, each fund chief compliance officer 
is required to prepare an annual report that addresses the operation of 
the policies and procedures of the fund and the policies and procedures 
of each investment adviser, principal underwriter, administrator, and 
transfer agent of the fund, any material changes made to those policies 
and procedures since the date of the last report, any material changes 
to the policies and procedures recommended as a result of the annual 
review, and certain compliance matters that occurred since the date of 
the last report. The staff estimates that each fund spends 49 hours per 
year, on average, conducting the annual review and preparing the annual 
report to the board of directors. Thus, we estimate that the annual 
aggregate burden hours associated with the annual review and annual 
report requirement is 202,517 hours.
    Finally, the staff estimates that each fund spends 6 hours 
annually, on average, maintaining the records required by proposed Rule 
38a-1. Thus, the aggregate annual burden hours associated with the 
recordkeeping requirement is 24,798 hours.
    In total, the staff estimates that the aggregate annual information 
collection burden of Rule 38a-1 is 237,500 hours. The estimate of 
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 this collection of information requirement is mandatory. 
Responses 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 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, 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: June 28, 2017.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-14064 Filed 7-3-17; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 127 / Wednesday, July 5, 2017 / Notices 31117

Additionally, the proposal to put Electronic Comments SECURITIES AND EXCHANGE
additional arrangements into place COMMISSION
concerning the procedures, information • Use the Commission’s Internet
sharing, and overall governance comment form (http://www.sec.gov/ Proposed Collection; Comment
processes under the New Accord would rules/sro.shtml); or Request
create new efficiencies in the • Send an email to rule-comments@ Upon Written Request, Copies Available
management of this important link sec.gov. Please include File Number SR– From: Securities and Exchange
between OCC and NSCC. The proposal OCC–2017–804 on the subject line. Commission, Office of FOIA Services,
to enhance information sharing between 100 F Street NE., Washington, DC
OCC and NSCC would allow the Paper Comments
20549–2736
clearing agencies to more effectively
• Send paper comments in triplicate Extension:
identify, monitor, and manage risks that
may be presented by certain Common to Secretary, Securities and Exchange Rule 38a–1; SEC File No. 270–522, OMB
Commission, 100 F Street NE., Control No. 3235–0586
Members, and would create new
efficiencies in their general surveillance Washington, DC 20549. Notice is hereby given that, pursuant
efforts with respect to these firms. All submissions should refer to File to the Paperwork Reduction Act of 1995
In these ways, OCC believes the (44 U.S.C. 3501 et seq.), the Securities
Number SR–OCC–2017–804. This file
proposed New Accord is consistent with and Exchange Commission (the
number should be included on the ‘‘Commission’’) is soliciting comments
the requirements of Rule 17Ad– subject line if email is used. To help the
22(e)(21).34 on the collection of information
Commission process and review your summarized below. The Commission
III. Date of Effectiveness of the Advance comments more efficiently, please use plans to submit this existing collection
Notice and Timing for Commission only one method. The Commission will of information to the Office of
Action post all comments on the Commission’s Management and Budget for extension
The proposed change may be Internet Web site (http://www.sec.gov/ and approval.
implemented if the Commission does rules/sro.shtml). Copies of the Rule 38a–1 (17 CFR 270.38a–1) under
not object to the proposed change submission, all subsequent the Investment Company Act of 1940
within 60 days of the later of (i) the date amendments, all written statements (15 U.S.C. 80a) (‘‘Investment Company
the proposed change was filed with the with respect to the advance notice that Act’’) is intended to protect investors by
Commission or (ii) the date any are filed with the Commission, and all fostering better fund compliance with
additional information requested by the written communications relating to the securities laws. The rule requires every
Commission is received. OCC shall not advance notice between the registered investment company and
implement the proposed change if the Commission and any person, other than business development company
Commission has any objection to the those that may be withheld from the (‘‘fund’’) to: (i) Adopt and implement
proposed change. public in accordance with the written policies and procedures
The Commission may extend the reasonably designed to prevent
provisions of 5 U.S.C. 552, will be
period for review by an additional 60 violations of the federal securities laws
available for Web site viewing and
days if the proposed change raises novel by the fund, including procedures for
printing in the Commission’s Public oversight of compliance by each
or complex issues, subject to the Reference Room, 100 F Street NE.,
Commission providing the clearing investment adviser, principal
Washington, DC 20549 on official underwriter, administrator, and transfer
agency with prompt written notice of
business days between the hours of agent of the fund; (ii) obtain the fund
the extension. A proposed change may
10:00 a.m. and 3:00 p.m. Copies of the board of directors’ approval of those
be implemented in less than 60 days
from the date the advance notice is filing also will be available for policies and procedures; (iii) annually
filed, or the date further information inspection and copying at the principal review the adequacy of those policies
requested by the Commission is office of OCC and on OCC’s Web site at and procedures and the policies and
received, if the Commission notifies the http://www.theocc.com/components/ procedures of each investment adviser,
clearing agency in writing that it does docs/legal/rules_and_bylaws/sr_occ_17_ principal underwriter, administrator,
not object to the proposed change and 804.pdf. and transfer agent of the fund, and the
authorizes the clearing agency to All comments received will be posted effectiveness of their implementation;
implement the proposed change on an (iv) designate a chief compliance officer
without change; the Commission does
earlier date, subject to any conditions to administer the fund’s policies and
not edit personal identifying
imposed by the Commission. procedures and prepare an annual
information from submissions. You report to the board that addresses
OCC shall post notice on its Web site should submit only information that
of proposed changes that are certain specified items relating to the
you wish to make available publicly. policies and procedures; and (v)
implemented.
The proposal shall not take effect All submissions should refer to File maintain for five years the compliance
until all regulatory actions required Number SR–OCC–2017–804 and should policies and procedures and the chief
with respect to the proposal are be submitted on or before July 20, 2017. compliance officer’s annual report to the
completed. By the Commission.
board.
The rule contains certain information
IV. Solicitation of Comments Robert W. Errett, collection requirements that are
sradovich on DSK3GMQ082PROD with NOTICES

Interested persons are invited to Deputy Secretary. designed to ensure that funds establish
submit written data, views and [FR Doc. 2017–14016 Filed 7–3–17; 8:45 am] and maintain comprehensive, written
arguments concerning the foregoing. BILLING CODE 8011–01–P internal compliance programs. The
Comments may be submitted by any of information collections also assist the
the following methods: Commission’s examination staff in
assessing the adequacy of funds’
34 Id. compliance programs.

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31118 Federal Register / Vol. 82, No. 127 / Wednesday, July 5, 2017 / Notices

While Rule 38a–1 requires each fund Finally, the staff estimates that each SECURITIES AND EXCHANGE
to maintain written policies and fund spends 6 hours annually, on COMMISSION
procedures, most funds are located average, maintaining the records
[Release No. 34–81038; File No. SR–
within a fund complex. The experience required by proposed Rule 38a–1. Thus, NYSEMKT–2016–103]
of the Commission’s examination and the aggregate annual burden hours
oversight staff suggests that each fund in associated with the recordkeeping Self-Regulatory Organizations; NYSE
a complex is able to draw extensively requirement is 24,798 hours. MKT LLC; Order Granting Approval of
from the fund complex’s ‘‘master’’ Proposed Rule Change, as Modified by
compliance program to assemble In total, the staff estimates that the
aggregate annual information collection Amendments No. 1, 2, and 3, To Allow
appropriate compliance policies and the Exchange To Trade, Pursuant to
procedures. Many fund complexes burden of Rule 38a–1 is 237,500 hours.
Unlisted Trading Privileges, any NMS
already have written policies and The estimate of burden hours is made
Stock Listed on Another National
procedures documenting their solely for the purposes of the Paperwork Securities Exchange; Establish Rules
compliance programs. Further, a fund Reduction Act. The estimate is not for the Trading Pursuant to UTP of
needing to develop or revise policies derived from a comprehensive or even Exchange-Traded Products; and Adopt
and procedures on one or more topics a representative survey or study of the New Equity Trading Rules Relating To
in order to achieve a comprehensive costs of Commission rules. Complying Trading Halts of Securities Traded
compliance program can draw on a with this collection of information Pursuant to UTP on the Pillar Platform
number of outlines and model programs requirement is mandatory. Responses
available from a variety of industry will not be kept confidential. An agency June 28, 2017.
representatives, commentators, and may not conduct or sponsor, and a I. Introduction
organizations. person is not required to respond to, a On November 17, 2016, NYSE MKT
There are approximately 4,333 funds collection of information unless it LLC (‘‘Exchange’’ or ‘‘NYSE MKT’’) filed
subject to Rule 38a–1. Among these displays a currently valid control with the Securities and Exchange
funds, 97 were newly registered in the number. Commission (‘‘Commission’’), pursuant
past year. These 97 funds, therefore, Written comments are invited on: (a) to Section 19(b)(1) of the Securities
were required to adopt and document Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Whether the proposed collection of
the policies and procedures that make 19b–4 thereunder,2 a proposed rule
information is necessary for the proper
up their compliance programs. change to: (1) Allow the Exchange to
performance of the functions of the
Commission staff estimates that the trade, pursuant to unlisted trading
average annual hour burden for a fund agency, including whether the
information will have practical utility; privileges (‘‘UTP’’), any NMS stock 3
to adopt and document these policies listed on another national securities
and procedures is 105 hours. Thus, we (b) the accuracy of the agency’s estimate
of the burden of the collection of exchange; (2) establish rules for the
estimate that the aggregate annual trading pursuant to UTP of certain
burden hours associated with the information; (c) ways to enhance the
exchange-traded products (‘‘ETPs’’); and
adoption and documentation quality, utility, and clarity of the
(3) adopt new equity trading rules
requirement is 10,185 hours. information collected; and (d) ways to
relating to trading halts of securities
All funds are required to conduct an minimize the burden of the collection of traded pursuant to UTP on the
annual review of the adequacy of their information on respondents, including Exchange’s new trading platform, Pillar.
existing policies and procedures and the through the use of automated collection The proposed rule change was
policies and procedures of each techniques or other forms of information published for comment in the Federal
investment adviser, principal technology. Consideration will be given Register on December 1, 2016.4 On
underwriter, administrator, and transfer to comments and suggestions submitted January 4, 2017, pursuant to Section
agent of the fund, and the effectiveness in writing within 60 days of this 19(b)(2) of the Act,5 the Commission
of their implementation. In addition, publication. designated a longer period within which
each fund chief compliance officer is Please direct your written comments to approve the proposed rule change,
required to prepare an annual report to Pamela Dyson, Chief Information disapprove the proposed rule change, or
that addresses the operation of the institute proceedings to determine
Officer, Securities and Exchange
policies and procedures of the fund and whether to disapprove the proposed
Commission, c/o Remi Pavlik-Simon,
the policies and procedures of each rule change.6 On February 24, 2017, the
100 F Street NE., Washington, DC
investment adviser, principal Commission instituted proceedings
underwriter, administrator, and transfer 20549, or send an email to: PRA_
Mailbox@sec.gov. under Section 19(b)(2)(B) of the Act7 to
agent of the fund, any material changes determine whether to approve or
made to those policies and procedures Dated: June 28, 2017. disapprove the proposed rule change.8
since the date of the last report, any Robert W. Errett,
material changes to the policies and Deputy Secretary.
1 15 U.S.C. 78s(b)(1).
procedures recommended as a result of [FR Doc. 2017–14064 Filed 7–3–17; 8:45 am]
2 17 CFR 240.19b–4.
the annual review, and certain 3 The term ‘‘NMS stock’’ is defined in Rule 600

compliance matters that occurred since BILLING CODE 8011–01–P of Regulation NMS. See 17 CFR 242.600(b)(47).
4 See Securities Exchange Act Release No. 79400
the date of the last report. The staff (Nov. 25, 2016), 81 FR 86750 (Dec. 1, 2016).
estimates that each fund spends 49
sradovich on DSK3GMQ082PROD with NOTICES

5 15 U.S.C. 78s(b)(2).
hours per year, on average, conducting 6 See Securities Exchange Act Release No. 79738,

the annual review and preparing the 82 FR 3068 (Jan. 10, 2017).
annual report to the board of directors. 7 15 U.S.C. 78s(b)(2)(B).
8 See Securities Exchange Act Release No. 80097
Thus, we estimate that the annual
(Feb. 24, 2017), 82 FR 12251 (Mar. 1, 2017).
aggregate burden hours associated with Specifically, the Commission instituted proceedings
the annual review and annual report to allow for additional analysis of the proposed rule
requirement is 202,517 hours. change’s consistency with Section 6(b)(5) of the

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Document Created: 2017-07-04 02:00:55
Document Modified: 2017-07-04 02:00:55
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		82 FR 31117