82 FR 42205 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 171 (September 6, 2017)

Page Range		42205-42206
FR Document		2017-18857
Federal Register, Volume 82 Issue 171 (Wednesday, September 6, 2017)
[Federal Register Volume 82, Number 171 (Wednesday, September 6, 2017)]
[Notices]
[Pages 42205-42206]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-18857]


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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 17a-7, SEC File No. 270-238, OMB Control No. 3235-0214.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collections 
of information summarized below. The Commission plans to submit the 
existing collection of information to the Office of Management and 
Budget for extension and approval.
    Rule 17a-7 (17 CFR 270.17a-7) (the ``rule'') under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) (the ``Act'') is entitled 
``Exemption of certain purchase or sale transactions between an 
investment company and certain affiliated persons thereof.'' It 
provides an exemption from section 17(a) of the Act for purchases and 
sales of securities between registered investment companies 
(``funds''), that are affiliated persons (``first-tier affiliates'') or 
affiliated persons of affiliated persons (``second-tier affiliates''), 
or between a fund and a first- or second-tier affiliate other than 
another fund, when the affiliation arises solely because of a common 
investment adviser, director, or officer. Rule 17a-7 requires funds to 
keep various records in connection with purchase or sale transactions 
effected in reliance on the rule. The rule requires the fund's board of 
directors to establish procedures reasonably designed to ensure that 
the rule's conditions have been satisfied. The board is also required 
to determine, at least on a quarterly basis, that all affiliated 
transactions effected during the preceding quarter in reliance on the 
rule were made in compliance with these established procedures. If a 
fund enters into a purchase or sale transaction with an affiliated 
person, the rule requires the fund to compile and maintain written 
records of the transaction.\1\ The Commission's examination staff uses 
these records to evaluate for compliance with the rule.
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    \1\ The written records are required to set forth a description 
of the security purchased or sold, the identity of the person on the 
other side of the transaction, and the information or materials upon 
which the board of directors' determination that the transaction was 
in compliance with the procedures was made.
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    While most funds do not commonly engage in transactions covered by 
rule 17a-7, the Commission staff estimates that nearly all funds have 
adopted procedures for complying with the rule.\2\ Of the approximately 
3,243 currently active funds, the staff estimates that virtually all 
have already adopted procedures for compliance with rule 17a-7. This is 
a one-time burden, and the staff therefore does not estimate an ongoing 
burden related to the policies and procedures requirement of the rule 
for funds.\3\ The staff estimates that there are approximately 97 new 
funds that register each year, and that each of these funds adopts the 
relevant policies and procedures. The staff estimates that it takes 
approximately 4 hours to develop and adopt these policies and 
procedures. Therefore, the

[[Page 42206]]

total annual burden related to developing and adopting these policies 
and procedures would be approximately 388 hours.\4\
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    \2\ Unless stated otherwise, these estimates are based on 
conversations with the examination and inspections staff of the 
Commission and fund representatives.
    \3\ Based on our reviews and conversations with fund 
representatives, we understand that funds rarely, if ever, need to 
make changes to these policies and procedures once adopted, and 
therefore we do not estimate a paperwork burden for such updates.
    \4\ This estimate is based on the following calculations: (4 
hours x 97 new funds = 388 hours).
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    Of the 3,243 existing funds, the staff assumes that approximately 
25%, (or 811) enter into transactions affected by rule 17a-7 each year 
(either by the fund directly or through one of the fund's series), and 
that the same percentage (25%, or 24 funds) of the estimated 97 funds 
that newly register each year will also enter into these transactions, 
for a total of 835 \5\ companies that are affected by the recordkeeping 
requirements of rule 17a-7. These funds must keep records of each of 
these transactions, and the board of directors must quarterly determine 
that all relevant transactions were made in compliance with the 
company's policies and procedures. The rule generally imposes a minimal 
burden of collecting and storing records already generated for other 
purposes.\6\ The staff estimates that the burden related to making 
these records and for the board to review all transactions would be 3 
hours annually for each respondent, (2 hours spent by compliance 
attorneys and 1 hour spent by the board of directors) \7\ or 2,505 
total hours each year.\8\
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    \5\ This estimate is based on the following calculation: (811 + 
24 = 835).
    \6\ Commission staff believes that rule 17a-7 does not impose 
any costs associated with record preservation in addition to the 
costs that funds already incur to comply with the record 
preservation requirements of rule 31a-2 under the Act. Rule 31a-2 
requires companies to preserve certain records for specified periods 
of time.
    \7\ The staff estimates that funds that rely on rule 17a-7 
annually enter into an average of 8 rule 17a-7 transactions each 
year. The staff estimates that the compliance attorneys of the 
companies spend approximately 15 minutes per transaction on this 
recordkeeping, and the board of directors spends a total of 1 hour 
annually in determining that all transactions made that year were 
done in compliance with the company's policies and procedures.
    \8\ This estimate is based on the following calculation: (3 
hours x 835 companies = 2,505 hours).
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    Based on these estimates, the staff estimates the combined total 
annual burden hours associated with rule 17a-7 is 2,893 hours.\9\ The 
staff also estimates that there are approximately 835 respondents and 
6,680 total responses.\10\
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    \9\ This estimate is based on the following calculation: (388 
hours + 2,505 hours = 2,893 total hours).
    \10\ This estimate is based on the following calculations: 835 
funds that engage in rule 17a-7 transactions x 8 transactions per 
year = 6,680.
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    The estimates of 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. The collection of information required by rule 17a-7 is 
necessary to obtain the benefits of the rule. 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 collections of 
information are necessary for the proper performance of the functions 
of the Commission, including whether the information has practical 
utility; (b) the accuracy of the Commission's estimate of the burdens 
of the collections of information; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burdens of the collections 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: August 31, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-18857 Filed 9-5-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 42205

proper settlement date in connection with respect to the proposed rule certain affiliated persons thereof.’’ It
with the transition to the T+2 settlement change that are filed with the provides an exemption from section
cycle on September 5, 2017 would help Commission, and all written 17(a) of the Act for purchases and sales
to avoid the confusion that could arise communications relating to the of securities between registered
if ‘‘regular’’ distributions were to be ex- proposed rule change between the investment companies (‘‘funds’’), that
dividend on that date and is consistent Commission and any person, other than are affiliated persons (‘‘first-tier
with the rules of other self-regulatory those that may be withheld from the affiliates’’) or affiliated persons of
organizations.22 Accordingly, the public in accordance with the affiliated persons (‘‘second-tier
Commission hereby waives the 30-day provisions of 5 U.S.C. 552, will be affiliates’’), or between a fund and a
operative delay requirement and available for Web site viewing and first- or second-tier affiliate other than
designates the proposed rule change as printing in the Commission’s Public another fund, when the affiliation arises
operative upon filing.23 Reference Room, 100 F Street NE., solely because of a common investment
At any time within 60 days of the Washington, DC 20549, on official adviser, director, or officer. Rule 17a–7
filing of the proposed rule change, the business days between the hours of requires funds to keep various records
Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the in connection with purchase or sale
temporarily suspend such rule change if filing also will be available for transactions effected in reliance on the
it appears to the Commission that such inspection and copying at the principal rule. The rule requires the fund’s board
action is necessary or appropriate in the office of the Exchange. All comments of directors to establish procedures
public interest, for the protection of received will be posted without change; reasonably designed to ensure that the
investors, or otherwise in furtherance of the Commission does not edit personal rule’s conditions have been satisfied.
the purposes of the Act. If the identifying information from The board is also required to determine,
Commission takes such action, the submissions. You should submit only at least on a quarterly basis, that all
Commission shall institute proceedings information that you wish to make affiliated transactions effected during
to determine whether the proposed rule available publicly. All submissions the preceding quarter in reliance on the
should be approved or disapproved. should refer to File Number SR–Phlx– rule were made in compliance with
IV. Solicitation of Comments 2017–71, and should be submitted on or these established procedures. If a fund
before September 27, 2017. enters into a purchase or sale
Interested persons are invited to transaction with an affiliated person, the
For the Commission, by the Division of
submit written data, views, and Trading and Markets, pursuant to delegated rule requires the fund to compile and
arguments concerning the foregoing, authority.24 maintain written records of the
including whether the proposed rule Eduardo A. Aleman, transaction.1 The Commission’s
change is consistent with the Act. examination staff uses these records to
Assistant Secretary.
Comments may be submitted by any of evaluate for compliance with the rule.
[FR Doc. 2017–18795 Filed 9–5–17; 8:45 am]
the following methods: While most funds do not commonly
BILLING CODE 8011–01–P
Electronic Comments engage in transactions covered by rule
17a–7, the Commission staff estimates
• Use the Commission’s Internet that nearly all funds have adopted
comment form (http://www.sec.gov/ SECURITIES AND EXCHANGE
COMMISSION procedures for complying with the
rules/sro.shtml); or rule.2 Of the approximately 3,243
• Send an email to rule-comments@ currently active funds, the staff
sec.gov. Please include File Number SR– Proposed Collection; Comment
Request estimates that virtually all have already
Phlx–2017–71 on the subject line. adopted procedures for compliance with
Paper Comments Upon Written Request, Copies Available rule 17a–7. This is a one-time burden,
From: Securities and Exchange and the staff therefore does not estimate
• Send paper comments in triplicate Commission, Office of FOIA Services,
to Secretary, Securities and Exchange an ongoing burden related to the
100 F Street NE., Washington, DC policies and procedures requirement of
Commission, 100 F Street NE., 20549–2736.
Washington, DC 20549–1090. the rule for funds.3 The staff estimates
Extension: that there are approximately 97 new
All submissions should refer to File Rule 17a–7, SEC File No. 270–238, OMB funds that register each year, and that
Number SR–Phlx–2017–71. This file Control No. 3235–0214. each of these funds adopts the relevant
number should be included on the
Notice is hereby given that, pursuant policies and procedures. The staff
subject line if email is used. To help the
to the Paperwork Reduction Act of 1995 estimates that it takes approximately 4
Commission process and review your
(44 U.S.C. 3501–3520), the Securities hours to develop and adopt these
comments more efficiently, please use
and Exchange Commission policies and procedures. Therefore, the
only one method. The Commission will
(‘‘Commission’’) is soliciting comments
post all comments on the Commission’s
on the collections of information 1 The written records are required to set forth a
Internet Web site (http://www.sec.gov/ description of the security purchased or sold, the
summarized below. The Commission
rules/sro.shtml). Copies of the identity of the person on the other side of the
plans to submit the existing collection transaction, and the information or materials upon
submission, all subsequent
of information to the Office of which the board of directors’ determination that the
amendments, all written statements
Management and Budget for extension transaction was in compliance with the procedures
asabaliauskas on DSKBBXCHB2PROD with NOTICES

and approval. was made.
22 See Securities Exchange Act Release Nos. 2 Unless stated otherwise, these estimates are
81448 (August 21, 2017), 82 FR 40610 (August 25, Rule 17a–7 (17 CFR 270.17a–7) (the based on conversations with the examination and
2017) (SR–FINRA–2017–026) and 81446 (August ‘‘rule’’) under the Investment Company inspections staff of the Commission and fund
21, 2017), 82 FR 40604 (August 25, 2017) (SR– Act of 1940 (15 U.S.C. 80a–1 et seq.) representatives.
NASDAQ–2017–084). (the ‘‘Act’’) is entitled ‘‘Exemption of 3 Based on our reviews and conversations with
23 For purposes only of waiving the 30-day fund representatives, we understand that funds
certain purchase or sale transactions
operative delay, the Commission has also rarely, if ever, need to make changes to these
considered the proposed rule’s impact on between an investment company and policies and procedures once adopted, and
efficiency, competition, and capital formation. See therefore we do not estimate a paperwork burden
15 U.S.C. 78c(f). 24 17 CFR 200.30–3(a)(12). for such updates.

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42206 Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices

total annual burden related to a representative survey or study of the Securities and Exchange Commission
developing and adopting these policies costs of Commission rules. The (‘‘Commission’’) the proposed rule
and procedures would be approximately collection of information required by change as described in Items I and II
388 hours.4 rule 17a–7 is necessary to obtain the below, which Items have been prepared
Of the 3,243 existing funds, the staff benefits of the rule. Responses will not by the Exchange. On August 25, 2017,
assumes that approximately 25%, (or be kept confidential. An agency may not the Exchange filed Amendment No. 1 to
811) enter into transactions affected by conduct or sponsor, and a person is not the proposed rule change. The
rule 17a–7 each year (either by the fund required to respond to, a collection of Commission is publishing this notice to
directly or through one of the fund’s information unless it displays a solicit comments on the proposed rule
series), and that the same percentage currently valid control number. change, as modified by Amendment No.
(25%, or 24 funds) of the estimated 97 Written comments are invited on: (a) 1, from interested persons.
funds that newly register each year will Whether the collections of information
also enter into these transactions, for a I. Self-Regulatory Organization’s
are necessary for the proper
total of 835 5 companies that are affected Statement of the Terms of Substance of
performance of the functions of the
by the recordkeeping requirements of the Proposed Rule Change
Commission, including whether the
rule 17a–7. These funds must keep information has practical utility; (b) the The Exchange filed a proposal to
records of each of these transactions, accuracy of the Commission’s estimate amend and restate its certificate of
and the board of directors must of the burdens of the collections of incorporation and bylaws, as well as
quarterly determine that all relevant information; (c) ways to enhance the amend its Rules.
transactions were made in compliance quality, utility, and clarity of the The text of the proposed rule change
with the company’s policies and information collected; and (d) ways to is available at the Exchange’s Web site
procedures. The rule generally imposes minimize the burdens of the collections at www.bats.com, at the principal office
a minimal burden of collecting and of information on respondents, of the Exchange, and at the
storing records already generated for including through the use of automated Commission’s Public Reference Room.
other purposes.6 The staff estimates that collection techniques or other forms of
the burden related to making these II. Self-Regulatory Organization’s
information technology. Consideration Statement of the Purpose of, and
records and for the board to review all will be given to comments and
transactions would be 3 hours annually Statutory Basis for, the Proposed Rule
suggestions submitted in writing within Change
for each respondent, (2 hours spent by 60 days of this publication.
compliance attorneys and 1 hour spent Please direct your written comments In its filing with the Commission, the
by the board of directors) 7 or 2,505 total to Pamela Dyson, Director/Chief Exchange included statements
hours each year.8 Information Officer, Securities and concerning the purpose of and basis for
Based on these estimates, the staff Exchange Commission, C/O Remi the proposed rule change and discussed
estimates the combined total annual Pavlik-Simon, 100 F Street NE., any comments it received on the
burden hours associated with rule 17a– Washington, DC 20549; or send an email proposed rule change. The text of these
7 is 2,893 hours.9 The staff also to: PRA_Mailbox@sec.gov. statements may be examined at the
estimates that there are approximately places specified in Item IV below. The
835 respondents and 6,680 total Dated: August 31, 2017.
Exchange has prepared summaries, set
responses.10 Eduardo A. Aleman,
forth in Sections A, B, and C below, of
The estimates of burden hours are Assistant Secretary. the most significant parts of such
made solely for the purposes of the [FR Doc. 2017–18857 Filed 9–5–17; 8:45 am] statements.
Paperwork Reduction Act, and are not BILLING CODE 8011–01–P
derived from a comprehensive or even A. Self-Regulatory Organization’s
Statement of the Purpose of, and
4 This estimate is based on the following
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule
calculations: (4 hours × 97 new funds = 388 hours). COMMISSION Change
5 This estimate is based on the following

calculation: (811 + 24 = 835). [Release No. 34–81496; File No. SR– 1. Purpose
6 Commission staff believes that rule 17a–7 does
BatsEDGA–2017–22] EDGA submits this rule filing to the
not impose any costs associated with record
preservation in addition to the costs that funds Securities and Exchange Commission
Self-Regulatory Organizations; Bats
already incur to comply with the record (the ‘‘Commission’’) in connection with
preservation requirements of rule 31a–2 under the EDGA Exchange, Inc.; Notice of Filing
a corporate transaction (the
Act. Rule 31a–2 requires companies to preserve of a Proposed Rule Change, as
‘‘Transaction’’) involving, among other
certain records for specified periods of time. Modified by Amendment No. 1, To
7 The staff estimates that funds that rely on rule things, the recent acquisition of EDGA
Harmonize the Corporate Governance
17a–7 annually enter into an average of 8 rule 17a– along with Bats BYX Exchange, Inc.
Framework With That of Chicago
7 transactions each year. The staff estimates that the (‘‘Bats BYX’’), Bats BZX Exchange, Inc.
compliance attorneys of the companies spend Board Options Exchange, Incorporated
(‘‘Bats BZX’’) and Bats EDGX Exchange,
approximately 15 minutes per transaction on this and C2 Options Exchange
recordkeeping, and the board of directors spends a Inc. (‘‘Bats EDGX’’ and, together with
Incorporated
total of 1 hour annually in determining that all Bats BYX, Bats BZX, and Bats EDGA,
transactions made that year were done in August 30, 2017. the ‘‘Bats Exchanges’’) by CBOE
compliance with the company’s policies and
asabaliauskas on DSKBBXCHB2PROD with NOTICES

Pursuant to Section 19(b)(1) of the Holdings, Inc. (‘‘CBOE Holdings’’).
procedures.
8 This estimate is based on the following Securities Exchange Act of 1934 (the CBOE Holdings is also the parent of
calculation: (3 hours × 835 companies = 2,505 ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Chicago Board Options Exchange,
hours). notice is hereby given that on August Incorporated (‘‘CBOE’’) and C2 Options
9 This estimate is based on the following
23, 2017, Bats EDGA Exchange, Inc. Exchange, Incorporated (‘‘C2’’). This
calculation: (388 hours + 2,505 hours = 2,893 total filing proposes to amend and restate the
hours). (‘‘Exchange’’ or ‘‘EDGA’’) filed with the
10 This estimate is based on the following bylaws (and amend the rules,
calculations: 835 funds that engage in rule 17a–7 1 15 U.S.C. 78s(b)(1). accordingly) and the certificate of
transactions × 8 transactions per year = 6,680. 2 17 CFR 240.19b–4. incorporation of the Exchange based on

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Document Created: 2017-09-06 00:56:19
Document Modified: 2017-09-06 00:56:19
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 42205