82 FR 43063 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 176 (September 13, 2017)

[Federal Register Volume 82, Number 176 (Wednesday, September 13, 2017)]
[Notices]
[Pages 43063-43064]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19446]


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

    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'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    Rule (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.
    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 4,133 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

[[Page 43064]]

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 annual aggregate 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.
    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: September 8, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19446 Filed 9-12-17; 8:45 am]
 BILLING CODE 8011-01-P