82 FR 53537 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 220 (November 16, 2017)

Page Range		53537-53538
FR Document		2017-24751

Federal Register, Volume 82 Issue 220 (Thursday, November 16, 2017)

[Federal Register Volume 82, Number 220 (Thursday, November 16, 2017)]
[Notices]
[Pages 53537-53538]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-24751]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-173, OMB Control No. 3235-0178]


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 31a-1

    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 these 
existing collections of information to the Office of Management and 
Budget for extension.
    Rule 31a-1 (17 CFR 270.31a-1) under the Investment Company Act of 
1940 (the ``Act'') (15 U.S.C. 80a) is entitled ``Records to be 
maintained by registered investment companies, certain majority-owned 
subsidiaries thereof, and other persons having transactions with 
registered investment companies.'' Rule 31a-1 requires registered 
investment companies (``funds''), and every underwriter, broker, 
dealer, or investment adviser that is a majority-owned subsidiary of a 
fund, to maintain and keep current accounts, books, and other documents 
which constitute the record forming the basis for financial statements 
required to be filed pursuant to section 31 of the Act (15 U.S.C. 80a-
30) and of the auditor's certificates relating thereto. The rule lists 
specific records to be maintained by funds. The rule also requires 
certain underwriters, brokers, dealers, depositors, and investment 
advisers to maintain the records that they are required to maintain 
under federal securities laws.
    There are approximately 4,029 investment companies registered with 
the Commission, all of which are required to comply with rule 31a-1. 
For purposes of determining the burden imposed by rule 31a-1, the 
Commission staff estimates that each fund is divided into approximately 
four series, on average, and that each series is required to comply 
with the recordkeeping requirements of rule 31a-1. Based on 
conversations with fund representatives, it is estimated that rule 31a-
1 imposes an average burden of approximately 1,750 hours annually per 
series for a total of 7,000 annual hours per fund.

[[Page 53538]]

The estimated total annual burden for all 4,029 funds subject to the 
rule therefore is approximately 28,203,000 hours. Based on 
conversations with fund representatives, however, the Commission staff 
estimates that even absent the requirements of rule 31a-1, 90 percent 
of the records created pursuant to the rule are the type that generally 
would be created as a matter of normal business practice and to prepare 
financial statements. Thus, the Commission staff estimates that the 
total annual burden associated with rule 31a-1 is 2,820,300 hours.
    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. 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 OMB 
control number.
    Written comments are requested on: (a) Whether the collection of 
information is 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 burden(s) 
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, 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: November 9, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24751 Filed 11-15-17; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 220 / Thursday, November 16, 2017 / Notices 53537

Therefore, LCH SA believes that the Comments may be submitted by any of SECURITIES AND EXCHANGE
proposed rule change is consistent with the following methods: COMMISSION
Rule 17Ad–22(e)(6)(i) and (v).
Electronic Comments [SEC File No. 270–173, OMB Control No.
B. Clearing Agency’s Statement on • Use the Commission’s Internet 3235–0178]
Burden on Competition comment form (http://www.sec.gov/ Proposed Collection; Comment
Section 17A(b)(3)(I) of the Act rules/sro.shtml); or Request
requires that the rules of a clearing • Send an email to rule-comments@
agency not impose any burden on sec.gov. Please include File Number SR– Upon Written Request, Copies Available
competition not necessary or LCH SA–2017–009 on the subject line. From: Securities and Exchange
appropriate in furtherance of the Commission, Office of FOIA Services,
Paper Comments
purposes of the Act.9 LCH SA does not 100 F Street NE., Washington, DC
believe that the proposed rule change • Send paper comments in triplicate 20549–2736
would impose burdens on competition to Secretary, Securities and Exchange Extension:
that are not necessary or appropriate in Commission, 100 F Street NE., Rule 31a–1
furtherance of the purposes of the Act. Washington, DC 20549–1090.
Notice is hereby given that, pursuant
While the proposed rule change may All submissions should refer to File
to the Paperwork Reduction Act of 1995
result in higher WWR margin charges on Number SR–LCH SA–2017–009. This
(44 U.S.C. 3501–3520), the Securities
participants, the revisions to the margin file number should be included on the
and Exchange Commission
methodology will uniformly apply subject line if email is used. To help the
(‘‘Commission’’) is soliciting comments
across all participants. In addition, as Commission process and review your
on the collections of information
stated above, the proposed rule change comments more efficiently, please use
summarized below. The Commission
is consistent with the applicable only one method. The Commission will
plans to submit these existing
requirements of the Act and is post all comments on the Commission’s
collections of information to the Office
appropriate in order to more Internet Web site (http://www.sec.gov/
of Management and Budget for
conservatively calculate WWR margin. rules/sro.shtml). Copies of the
extension.
Therefore, LCH SA does not believe that submission, all subsequent
Rule 31a–1 (17 CFR 270.31a–1) under
the proposed rule change imposes any amendments, all written statements
the Investment Company Act of 1940
burden on competition that is not with respect to the proposed rule
(the ‘‘Act’’) (15 U.S.C. 80a) is entitled
necessary or appropriate in furtherance change that are filed with the
‘‘Records to be maintained by registered
of the purposes of the Act. Commission, and all written
investment companies, certain majority-
communications relating to the
C. Clearing Agency’s Statement on owned subsidiaries thereof, and other
proposed rule change between the
Comments on the Proposed Rule persons having transactions with
Commission and any person, other than
Change Received From Members, registered investment companies.’’ Rule
those that may be withheld from the
Participants or Others 31a–1 requires registered investment
public in accordance with the
companies (‘‘funds’’), and every
Written comments relating to the provisions of 5 U.S.C. 552, will be
underwriter, broker, dealer, or
proposed rule change have not been available for Web site viewing and
investment adviser that is a majority-
solicited or received. LCH SA will printing in the Commission’s Public
owned subsidiary of a fund, to maintain
notify the Commission of any written Reference Room, 100 F Street NE.,
and keep current accounts, books, and
comments received by LCH SA. Washington, DC 20549 on official
other documents which constitute the
business days between the hours of
III. Date of Effectiveness of the record forming the basis for financial
10:00 a.m. and 3:00 p.m. Copies of the
Proposed Rule Change and Timing for statements required to be filed pursuant
filing also will be available for
Commission Action to section 31 of the Act (15 U.S.C. 80a–
inspection and copying at the principal
30) and of the auditor’s certificates
Within 45 days of the date of office of LCH SA and on LCH SA’s Web
relating thereto. The rule lists specific
publication of this notice in the Federal site at http://www.lch.com/asset-
records to be maintained by funds. The
Register or within such longer period classes/cdsclear.
rule also requires certain underwriters,
up to 90 days (i) as the Commission may All comments received will be posted
brokers, dealers, depositors, and
designate if it finds such longer period without change. Persons submitting
investment advisers to maintain the
to be appropriate and publishes its comments are cautioned that we do not
records that they are required to
reasons for so finding or (ii) as to which redact or edit personal identifying
maintain under federal securities laws.
the self-regulatory organization information from comment submissions.
There are approximately 4,029
consents, the Commission will: You should submit only information
investment companies registered with
(A) By order approve or disapprove that you wish to make available
the Commission, all of which are
such proposed rule change, or publicly. All submissions should refer
required to comply with rule 31a–1. For
(B) institute proceedings to determine to File Number SR–LCH SA–2017–009
purposes of determining the burden
whether the proposed rule change and should be submitted on or before
imposed by rule 31a–1, the Commission
should be disapproved. December 7, 2017.
staff estimates that each fund is divided
For the Commission, by the Division of
asabaliauskas on DSKBBXCHB2PROD with NOTICES

IV. Solicitation of Comments into approximately four series, on
Trading and Markets, pursuant to delegated average, and that each series is required
Interested persons are invited to authority.10 to comply with the recordkeeping
submit written data, views, and Eduardo A. Aleman, requirements of rule 31a–1. Based on
arguments concerning the foregoing, Assistant Secretary. conversations with fund representatives,
including whether the proposed rule [FR Doc. 2017–24784 Filed 11–15–17; 8:45 am] it is estimated that rule 31a–1 imposes
change is consistent with the Act. BILLING CODE 8011–01–P an average burden of approximately
1,750 hours annually per series for a
9 15 U.S.C. 78q–1(b)(3)(I). 10 17 CFR 200.30–3(a)(12). total of 7,000 annual hours per fund.

VerDate Sep<11>2014 16:52 Nov 15, 2017 Jkt 244001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\16NON1.SGM 16NON1

53538 Federal Register / Vol. 82, No. 220 / Thursday, November 16, 2017 / Notices

The estimated total annual burden for Extension: enhance the effectiveness of fund boards
all 4,029 funds subject to the rule Rule 0–1, SEC File No. 270–472, OMB of directors and to better enable
therefore is approximately 28,203,000 Control No. 3235–0531 investors to assess the independence of
hours. Based on conversations with Notice is hereby given that, pursuant those directors. The Commission also
fund representatives, however, the to the Paperwork Reduction Act of 1995 amended the exemptive rules to require
Commission staff estimates that even (44 U.S.C. 3501 et. seq.), the Securities that any person who serves as legal
absent the requirements of rule 31a–1, and Exchange Commission counsel to the independent directors of
90 percent of the records created (‘‘Commission’’) has submitted to the any fund that relies on any of the
pursuant to the rule are the type that Office of Management and Budget a exemptive rules must be an
generally would be created as a matter request for extension of the previous ‘‘independent legal counsel.’’ This
of normal business practice and to approved collection of information requirement was added because
prepare financial statements. Thus, the discussed below. independent directors can better
Commission staff estimates that the total The Investment Company Act of 1940 perform the responsibilities assigned to
annual burden associated with rule 31a– (the ‘‘Act’’) 1 establishes a them under the Act and the rules if they
1 is 2,820,300 hours. comprehensive framework for regulating have the assistance of truly independent
The estimate of average burden hours the organization and operation of legal counsel.
is made solely for the purposes of the investment companies (‘‘funds’’). A If the board’s counsel has represented
Paperwork Reduction Act, and is not principal objective of the Act is to the fund’s investment adviser, principal
derived from a comprehensive or even protect fund investors by addressing the underwriter, administrator (collectively,
a representative survey or study. An conflicts of interest that exist between ‘‘management organizations’’) or their
agency may not conduct or sponsor, and funds and their investment advisers and ‘‘control persons’’ 6 during the past two
a person is not required to respond to, other affiliated persons. The Act places years, rule 0–1 requires that the board’s
a collection of information unless it significant responsibility on the fund independent directors make a
displays a currently valid OMB control board of directors in overseeing the determination about the adequacy of the
number. operations of the fund and policing the counsel’s independence. A majority of
Written comments are requested on: relevant conflicts of interest.2 the board’s independent directors are
(a) Whether the collection of In one of its first releases, the required to reasonably determine, in the
information is necessary for the proper Commission exercised its rulemaking exercise of their judgment, that the
performance of the functions of the authority pursuant to sections 38(a) and counsel’s prior or current representation
Commission, including whether the 40(b) of the Act by adopting rule 0–1 (17 of the management organizations or
information has practical utility; (b) the CFR 270.0–1).3 Rule 0–1, as their control persons was sufficiently
accuracy of the Commission’s estimate subsequently amended on numerous limited to conclude that it is unlikely to
of the burden(s) of the collection of occasions, provides definitions for the adversely affect the counsel’s
information; (c) ways to enhance the terms used by the Commission in the professional judgment and legal
quality, utility, and clarity of the rules and regulations it has adopted representation. Rule 0–1 also requires
information collected; and (d) ways to pursuant to the Act. The rule also that a record for the basis of this
minimize the burden of the collection of contains a number of rules of determination is made in the minutes of
information on respondents, including construction for terms that are defined the directors’ meeting. In addition, the
through the use of automated collection either in the Act itself or elsewhere in independent directors must have
techniques or other forms of information the Commission’s rules and regulations. obtained an undertaking from the
technology. Consideration will be given Finally, rule 0–1 defines terms that counsel to provide them with the
to comments and suggestions submitted serve as conditions to the availability of information necessary to make their
in writing within 60 days of this certain of the Commission’s exemptive determination and to update promptly
publication. rules. More specifically, the term that information when the person begins
Please direct your written comments ‘‘independent legal counsel,’’ as defined to represent a management organization
to Pamela Dyson, Director/Chief in rule 0–1, sets out conditions that or control person, or when he or she
Information Officer, Securities and funds must meet in order to rely on any materially increases his or her
Exchange Commission, C/O Remi of ten exemptive rules (‘‘exemptive representation. Generally, the
Pavlik-Simon, 100 F Street NE., rules’’) under the Act.4 independent directors must re-evaluate
Washington, DC 20549; or send an email The Commission amended rule 0–1 to their determination no less frequently
to: PRA_Mailbox@sec.gov. include the definition of the term than annually.
‘‘independent legal counsel’’ in 2001.5 Any fund that relies on one of the
Dated: November 9, 2017.
This amendment was designed to exemptive rules must comply with the
Eduardo A. Aleman,
requirements in the definition of
Assistant Secretary. 1 15 U.S.C. 80a. ‘‘independent legal counsel’’ under rule
[FR Doc. 2017–24751 Filed 11–15–17; 8:45 am] 2 For example, fund directors must approve 0–1. We assume that approximately
BILLING CODE 8011–01–P investment advisory and distribution contracts. See
15 U.S.C. 80a–15(a), (b), and (c). 3,108 funds rely on at least one of the
3 Investment Company Act Release No. 4 (Oct. 29, exemptive rules annually.7 We further
1940) (5 FR 4316 (Oct. 31, 1940)). Note that rule 0–
SECURITIES AND EXCHANGE 1 was originally adopted as rule N–1. 6 A ‘‘control person’’ is any person—other than a
COMMISSION
asabaliauskas on DSKBBXCHB2PROD with NOTICES

4 The relevant exemptive rules are: Rule 10f–3 (17 fund—directly or indirectly controlling, controlled
CFR 270.10f–3), rule 12b–1 (17 CFR 270.12b–1), by, or under common control, with any of the
Submission for OMB Review; rule 15a–4(b)(2) (17 CFR 270.15a–4(b)(2)), rule 17a– fund’s management organizations. See 17 CFR
Comment Request 7 (17 CFR 270.17a–7), rule 17a–8 (17 CFR 270.17a– 270.01(a)(6)(iv)(B).
8), rule 17d–1(d)(7) (17 CFR 270.17d–1(d)(7)), rule 7 Based on statistics compiled by Commission

Upon Written Request, Copies Available 17e–1(c) (17 CFR 270.17e–1(c)), rule 17g–1 (17 CFR staff, we estimate that there are approximately 3,453
From: Securities and Exchange 270.17g–1), rule 18f–3 (17 CFR 270.18f–3), and rule funds that could rely on one or more of the
23c–3 (17 CFR 270.23c–3). exemptive rules (this figure reflects the three-year
Commission, Office of FOIA Services, 5 See Role of Independent Directors of Investment average of open-end and closed-end funds (3,349)
100 F Street NE., Washington, DC Companies, Investment Company Act Release No. and business development companies (104)). Of
20549–2736 24816 (Jan. 2, 2001) (66 FR 3735 (Jan. 16, 2001)). those funds, we assume that approximately 90

VerDate Sep<11>2014 16:52 Nov 15, 2017 Jkt 244001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 E:\FR\FM\16NON1.SGM 16NON1

Document Created: 2017-11-16 03:53:34
Document Modified: 2017-11-16 03:53:34

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 53537