82 FR 42564 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 173 (September 8, 2017)

Page Range		42564-42565
FR Document		2017-19070
Federal Register, Volume 82 Issue 173 (Friday, September 8, 2017)
[Federal Register Volume 82, Number 173 (Friday, September 8, 2017)]
[Notices]
[Pages 42564-42565]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19070]


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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 19a-1; SEC File No. 270-240, OMB Control No. 3235-0216

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), 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.
    Section 19(a) (15 U.S.C. 80a-19(a)) of the Investment Company Act 
of 1940 (the ``Act'') \1\ makes it unlawful for any registered 
investment company to pay any dividend or similar distribution from any 
source other than the company's net income, unless the payment is 
accompanied by a written statement to the company's shareholders which 
adequately discloses the sources of the payment. Section 19(a) 
authorizes the Commission to prescribe the form of such statement by 
rule.
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    \1\ 15 U.S.C. 80a.
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    Rule 19a-1 (17 CFR 270.19a-1) under the Act, entitled ``Written 
Statement to Accompany Dividend Payments by Management Companies,'' 
sets forth specific requirements for the information that must be 
included in statements made pursuant to section 19(a) by or on behalf 
of management companies.\2\ The rule requires that the statement 
indicate what portions of distribution payments are made from net 
income, net profits from the sale of a security or other property 
(``capital gains'') and paid-in capital. When any part of the payment 
is made from capital gains, rule 19a-1 also requires that the statement 
disclose certain other information relating to the appreciation or 
depreciation of portfolio securities. If an estimated portion is 
subsequently determined to be significantly inaccurate, a correction 
must be made on a statement made pursuant to section 19(a) or in the 
first report to

[[Page 42565]]

shareholders following the discovery of the inaccuracy.
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    \2\ Section 4(3) of the Act (15 U.S.C. 80a-4(3)) defines 
``management company'' as ``any investment company other than a face 
amount certificate company or a unit investment trust.''
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    The purpose of rule 19a-1 is to afford fund shareholders adequate 
disclosure of the sources from which distribution payments are made. 
The rule is intended to prevent shareholders from confusing income 
dividends with distributions made from capital sources. Absent rule 
19a-1, shareholders might receive a false impression of fund gains.
    Based on a review of filings made with the Commission, the staff 
estimates that approximately 11,818 series of registered investment 
companies that are management companies may be subject to rule 19a-1 
each year,\3\ and that each portfolio on average mails two statements 
per year to meet the requirements of the rule.\4\ The staff further 
estimates that the time needed to make the determinations required by 
the rule and to prepare the statement required under the rule is 
approximately 1 hour per statement. The total annual burden for all 
portfolios therefore is estimated to be approximately 23,636 burden 
hours.\5\
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    \3\ This estimate is based on statistics compiled by Commission 
staff as of April 30, 2017. The number of management investment 
company portfolios that make distributions for which compliance with 
rule 19a-1 is required depends on a wide range of factors and can 
vary greatly across years. Therefore, the calculation of estimated 
burden hours is based on the total number of management investment 
company portfolios, each of which may be subject to rule 19a-1.
    \4\ A few portfolios make monthly distributions from sources 
other than net income, so the rule requires them to send out a 
statement 12 times a year. Other portfolios never make such 
distributions.
    \5\ This estimate is based on the following calculation: 11,818 
management investment company portfolios x 2 statements per year x 1 
hour per statement = 23,636 burden hours.
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    The staff estimates that approximately one-third of the total 
annual burden (7,879 hours) would be incurred by a paralegal with an 
average hourly wage rate of approximately $205 per hour,\6\ and 
approximately two-thirds of the annual burden (15,757 hours) would be 
incurred by a compliance clerk with an average hourly wage rate of $66 
per hour.\7\ The staff therefore estimates that the aggregate annual 
cost of complying with the paperwork requirements of the rule is 
approximately $2,655,157 ((7,879 hours x $205 = $1,615,195) + (15,757 
hours x $66 = $1,039,962)).
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    \6\ Hourly rates are derived from the Securities Industry and 
Financial Markets Association (``SIFMA''), Management and 
Professional Earnings in the Securities Industry 2013, modified to 
account for an 1,800-hour work-year and inflation, and multiplied by 
5.35 to account for bonuses, firm size, employee benefits, and 
overhead.
    \7\ Hourly rates are derived from SIFMA's Office Salaries in the 
Securities Industry 2013, modified to account for an 1,800-hour 
work-year and multiplied by 2.93 to account for bonuses, firm size, 
employee benefits and overhead.
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    To comply with state law, many investment companies already must 
distinguish the different sources from which a shareholder distribution 
is paid and disclose that information to shareholders. Thus, many 
investment companies would be required to distinguish the sources of 
shareholder dividends whether or not the Commission required them to do 
so under rule 19a-1.
    The estimate of average burden hours is made solely for the 
purposes of the Paperwork Reduction Act, and is not derived from a 
comprehensive or even a representative survey or study of the costs of 
Commission rules. Compliance with the collection of information 
required by rule 19a-1 is mandatory for management companies that make 
statements to shareholders pursuant to section 19(a) of the Act. 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: September 5, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19070 Filed 9-7-17; 8:45 am]
 BILLING CODE 8011-01-P
42564 Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices

Dated: September 6, 2017 covered person’s employment or SECURITIES AND EXCHANGE
Denise L. McGovern, relationship with a covered entity COMMISSION
Policy Coordinator, Office of the Secretary. ensures that law enforcement officials
[FR Doc. 2017–19138 Filed 9–6–17; 11:15 am] will have easy access to fingerprint Proposed Collection; Comment
BILLING CODE 7590–01–P cards on a timely basis. This in turn acts Request
as an effective deterrent to employee Upon Written Request, Copies Available
misconduct. From: Securities and Exchange
SECURITIES AND EXCHANGE Approximately 4,200 respondents are Commission, Office of FOIA Services,
COMMISSION subject to the recordkeeping 100 F Street NE., Washington, DC
requirements of the rule. Each 20549–2736.
Proposed Collection; Comment respondent maintains approximately 68
Request Extension:
new records per year, each of which Rule 19a–1; SEC File No. 270–240, OMB
Upon Written Request, Copies Available takes approximately 2 minutes per Control No. 3235–0216
From: Securities and Exchange record to maintain, for an annual Notice is hereby given that, pursuant
Commission, Office of FOIA Services, burden of approximately 2.2666667 to the Paperwork Reduction Act of 1995
100 F Street NE., Washington, DC hours (68 records times 2 minutes). The (44 U.S.C. 3501–3520), the Securities
20549–2736. total annual burden for all respondents and Exchange Commission (the
Extension:
is approximately 9,520 (4,200 ‘‘Commission’’) is soliciting comments
Rule 17f–2 (d), SEC File No. 270–036, OMB respondents times 2.2666667 hours). As on the collection of information
Control No. 3235–0028. noted above, all records maintained summarized below. The Commission
subject to the rule must be retained for plans to submit this existing collection
Notice is hereby given that pursuant
a period of not less than three years after of information to the Office of
to the Paperwork Reduction Act of 1995
termination of a covered person’s Management and Budget for extension
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
employment or relationship with a and approval.
Securities and Exchange Commission
covered entity. In addition, we estimate Section 19(a) (15 U.S.C. 80a–19(a)) of
(‘‘Commission’’) is soliciting comments
on the existing collection of information the total cost to respondents is the Investment Company Act of 1940
provided for in Rule 17f–2(d) (17 CFR approximately $42,000 in third party (the ‘‘Act’’) 1 makes it unlawful for any
240.17f–2(d)), under the Securities storage costs. registered investment company to pay
Exchange Act of 1934 (15 U.S.C. 78a et Written comments are invited on: (a) any dividend or similar distribution
seq.). The Commission plans to submit Whether the proposed collection of from any source other than the
this existing collection of information to information is necessary for the proper company’s net income, unless the
the Office of Management and Budget performance of the functions of the payment is accompanied by a written
(‘‘OMB’’) for extension and approval. Commission, including whether the statement to the company’s
Rule 17f–2(d) requires that records information shall have practical utility; shareholders which adequately
created pursuant to the fingerprinting (b) the accuracy of the Commission’s discloses the sources of the payment.
requirements of Section 17(f)(2) of the estimates of the burden of the proposed Section 19(a) authorizes the
Act be maintained and preserved by collection of information; (c) ways to Commission to prescribe the form of
every member of a national securities enhance the quality, utility, and clarity such statement by rule.
exchange, broker, dealer, registered of the information collected; and (d) Rule 19a–1 (17 CFR 270.19a–1) under
transfer agent and registered clearing ways to minimize the burden of the the Act, entitled ‘‘Written Statement to
agency (‘‘covered entities’’ or collection of information on Accompany Dividend Payments by
‘‘respondents’’); permits, under certain respondents, including through the use Management Companies,’’ sets forth
circumstances, the records required to of automated collection techniques or specific requirements for the
be maintained and preserved by a other forms of information technology. information that must be included in
member of a national securities Consideration will be given to statements made pursuant to section
exchange, broker, or dealer to be comments and suggestions submitted in 19(a) by or on behalf of management
maintained and preserved by a self- writing within 60 days of this companies.2 The rule requires that the
regulatory organization that is also the publication. statement indicate what portions of
designated examining authority for that distribution payments are made from
An agency may not conduct or net income, net profits from the sale of
member, broker or dealer; and permits
the required records to be preserved on sponsor, and a person is not required to a security or other property (‘‘capital
microfilm. The general purpose for Rule respond to, a collection of information gains’’) and paid-in capital. When any
17f–2 is to: (i) Identify security risk under the PRA unless it displays a part of the payment is made from capital
personnel; (ii) provide criminal record currently valid OMB control number. gains, rule 19a–1 also requires that the
information so that employers can make Please direct your written comments statement disclose certain other
fully informed employment decisions; to: Pamela Dyson, Director/Chief information relating to the appreciation
and (iii) deter persons with criminal Information Officer, Securities and or depreciation of portfolio securities. If
records from seeking employment or Exchange Commission, c/o Remi Pavlik- an estimated portion is subsequently
association with covered entities. The Simon, 100 F Street NE., Washington, determined to be significantly
rule enables the Commission or other DC 20549, or send an email to: PRA_ inaccurate, a correction must be made
sradovich on DSK3GMQ082PROD with NOTICES

examining authority to ascertain Mailbox@sec.gov. on a statement made pursuant to section
whether all required persons are being 19(a) or in the first report to
Dated: September 5, 2017.
fingerprinted and whether proper
Eduardo A. Aleman, 1 15 U.S.C. 80a.
procedures regarding fingerprinting are 2 Section
Assistant Secretary. 4(3) of the Act (15 U.S.C. 80a–4(3))
being followed. Retention of these defines ‘‘management company’’ as ‘‘any
records for a period of not less than [FR Doc. 2017–19069 Filed 9–7–17; 8:45 am]
investment company other than a face amount
three years after termination of a BILLING CODE 8011–01–P certificate company or a unit investment trust.’’

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Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices 42565

shareholders following the discovery of hours × $205 = $1,615,195) + (15,757 Commission, Office of FOIA Services,
the inaccuracy. hours × $66 = $1,039,962)). 100 F Street NE., Washington, DC
The purpose of rule 19a–1 is to afford To comply with state law, many 20549–2736.
fund shareholders adequate disclosure investment companies already must Extension:
of the sources from which distribution distinguish the different sources from Rule 17Ad–3(b),
payments are made. The rule is which a shareholder distribution is paid SEC File No. 270–424, OMB Control No.
intended to prevent shareholders from and disclose that information to 3235–0473.
confusing income dividends with shareholders. Thus, many investment
Notice is hereby given that pursuant
distributions made from capital sources. companies would be required to
to the Paperwork Reduction Act of 1995
Absent rule 19a–1, shareholders might distinguish the sources of shareholder
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
receive a false impression of fund gains. dividends whether or not the
Securities and Exchange Commission
Commission required them to do so
Based on a review of filings made (‘‘Commission’’) has submitted to the
under rule 19a–1.
with the Commission, the staff estimates The estimate of average burden hours Office of Management and Budget
that approximately 11,818 series of is made solely for the purposes of the (‘‘OMB’’) a request for approval of
registered investment companies that Paperwork Reduction Act, and is not extension of the previously approved
are management companies may be derived from a comprehensive or even collection of information provided for in
subject to rule 19a–1 each year,3 and a representative survey or study of the Rule 17Ad–3(b) (17 CFR 240.17Ad–
that each portfolio on average mails two costs of Commission rules. Compliance 3(b)), under the Securities Exchange Act
statements per year to meet the with the collection of information of 1934 (15 U.S.C. 78a et seq.).
requirements of the rule.4 The staff required by rule 19a–1 is mandatory for Rule 17Ad–3(b) requires registered
further estimates that the time needed to management companies that make transfer agents to send a copy of the
make the determinations required by the statements to shareholders pursuant to written notice required under Rules
rule and to prepare the statement section 19(a) of the Act. An agency may 17Ad–2(c), (d), and (h) to the chief
required under the rule is not conduct or sponsor, and a person is executive officer of each issuer for
approximately 1 hour per statement. not required to respond to, a collection which the transfer agent acts when it
The total annual burden for all of information unless it displays a has failed to turnaround at least 75% of
portfolios therefore is estimated to be currently valid control number. all routine items in accordance with the
approximately 23,636 burden hours.5 Written comments are invited on: (a) requirements of Rule 17Ad–2(a), or to
The staff estimates that approximately Whether the collections of information process at least 75% of all items in
one-third of the total annual burden are necessary for the proper accordance with the requirements of
(7,879 hours) would be incurred by a performance of the functions of the Rule 17Ad–2(b), for two consecutive
paralegal with an average hourly wage Commission, including whether the months. The issuer may use the
rate of approximately $205 per hour,6 information has practical utility; (b) the information contained in the notices: (1)
and approximately two-thirds of the accuracy of the Commission’s estimate As an early warning of the transfer
annual burden (15,757 hours) would be of the burdens of the collections of agent’s non-compliance with the
incurred by a compliance clerk with an information; (c) ways to enhance the Commission’s minimum performance
average hourly wage rate of $66 per quality, utility, and clarity of the standards regarding registered transfer
hour.7 The staff therefore estimates that information collected; and (d) ways to agents; and (2) to become aware of
the aggregate annual cost of complying minimize the burdens of the collections certain problems and poor performances
with the paperwork requirements of the of information on respondents, with respect to the transfer agents that
rule is approximately $2,655,157 ((7,879 including through the use of automated are servicing the issuer’s issues. If the
collection techniques or other forms of issuer does not receive notice of a
3 This estimate is based on statistics compiled by information technology. Consideration registered transfer agent’s failure to
Commission staff as of April 30, 2017. The number will be given to comments and comply with the Commission’s
of management investment company portfolios that suggestions submitted in writing within minimum performance standards then
make distributions for which compliance with rule
60 days of this publication. the issuer will be unable to take
19a–1 is required depends on a wide range of remedial action to correct the problem
factors and can vary greatly across years. Therefore, Please direct your written comments
the calculation of estimated burden hours is based to Pamela Dyson, Director/Chief or to find another registered transfer
on the total number of management investment Information Officer, Securities and agent. Pursuant to Rule 17Ad–3(b), a
company portfolios, each of which may be subject Exchange Commission, C/O Remi transfer agent that has already filed a
to rule 19a–1. Notice of Non-Compliance with the
4 A few portfolios make monthly distributions
Pavlik-Simon, 100 F Street NE.,
from sources other than net income, so the rule Washington, DC 20549; or send an email Commission pursuant to Rule 17Ad–2
requires them to send out a statement 12 times a to: PRA_Mailbox@sec.gov. will only be required to send a copy of
year. Other portfolios never make such that notice to issuers for which it acts
distributions. Dated: September 5, 2017.
when that transfer agent fails to
5 This estimate is based on the following Eduardo A. Aleman,
turnaround 75% of all routine items or
calculation: 11,818 management investment Assistant Secretary.
company portfolios × 2 statements per year × 1 hour to process 75% of all items.
[FR Doc. 2017–19070 Filed 9–7–17; 8:45 am] The Commission estimates that only
per statement = 23,636 burden hours.
6 Hourly rates are derived from the Securities BILLING CODE 8011–01–P one transfer agent will meet the
Industry and Financial Markets Association requirements of Rule 17Ad–3(b) each
(‘‘SIFMA’’), Management and Professional Earnings year. If a transfer agent fails to meet
sradovich on DSK3GMQ082PROD with NOTICES

in the Securities Industry 2013, modified to account SECURITIES AND EXCHANGE
for an 1,800-hour work-year and inflation, and those turnaround and processing
multiplied by 5.35 to account for bonuses, firm size,
COMMISSION performance requirements under 17Ad–
employee benefits, and overhead. 3(b), it would simply send a copy of the
7 Hourly rates are derived from SIFMA’s Office Submission for OMB Review;
notice to its issuer-clients that had
Salaries in the Securities Industry 2013, modified Comment Request
to account for an 1,800-hour work-year and
already been produced for the
multiplied by 2.93 to account for bonuses, firm size, Upon Written Request, Copies Available Commission pursuant to Rule 17Ad–
employee benefits and overhead. From: Securities and Exchange 2(c) or (d). The Commission estimates

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Document Created: 2018-10-24 14:10:11
Document Modified: 2018-10-24 14:10:11
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 42564