82 FR 53546 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

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

Page Range		53546-53547
FR Document		2017-24749
Federal Register, Volume 82 Issue 220 (Thursday, November 16, 2017)
[Federal Register Volume 82, Number 220 (Thursday, November 16, 2017)]
[Notices]
[Pages 53546-53547]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-24749]


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

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 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'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a.
---------------------------------------------------------------------------

    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 shareholders following the discovery of the inaccuracy.
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

    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

[[Page 53547]]

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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)).
---------------------------------------------------------------------------

    \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 1800-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 1800-hour work-
year and multiplied by 2.93 to account for bonuses, firm size, 
employee benefits and overhead.
---------------------------------------------------------------------------

    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.
    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: November 9, 2017.
 Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24749 Filed 11-15-17; 8:45 am]
 BILLING CODE P
53546 Federal Register / Vol. 82, No. 220 / Thursday, November 16, 2017 / Notices

Commission, Office of FOIA Services, total annual burden for all respondents Section 19(a) (15 U.S.C. 80a–19(a)) of
100 F Street NE., Washington, DC is approximately 9,520 (4,200 the Investment Company Act of 1940
20549–2736 respondents times 2.2666667 hours). As (the ‘‘Act’’) 1 makes it unlawful for any
Extension: noted above, all records maintained registered investment company to pay
Rule 17f–2(d); SEC File No. 270–36, OMB subject to the rule must be retained for any dividend or similar distribution
Control No. 3235–0028 a period of not less than three years after from any source other than the
Notice is hereby given that pursuant termination of a covered person’s company’s net income, unless the
to the Paperwork Reduction Act of 1995 employment or relationship with a payment is accompanied by a written
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the covered entity. In addition, we estimate statement to the company’s
Securities and Exchange Commission the total cost to respondents is shareholders which adequately
(‘‘Commission’’) has submitted to the approximately $42,000 in third party discloses the sources of the payment.
Office of Management and Budget storage costs. Section 19(a) authorizes the
(‘‘OMB’’) a request for approval of An agency may not conduct or Commission to prescribe the form of
extension of the previously approved sponsor, and a person is not required to such statement by rule.
collection of information provided for in respond to, a collection of information Rule 19a–1 (17 CFR 270.19a–1) under
Rule 17f–2(d) (17 CFR 240.17f–2(d)), under the PRA unless it displays a the Act, entitled ‘‘Written Statement to
under the Securities Exchange Act of currently valid OMB control number. Accompany Dividend Payments by
1934 (15 U.S.C. 78a et seq.). The public may view background Management Companies,’’ sets forth
Rule 17f–2(d) requires that records documentation for this information specific requirements for the
created pursuant to the fingerprinting collection at the following Web site: information that must be included in
requirements of Section 17(f)(2) of the www.reginfo.gov. Comments should be statements made pursuant to section
Act be maintained and preserved by directed to: (i) Desk Officer for the 19(a) by or on behalf of management
every member of a national securities Securities and Exchange Commission, companies.2 The rule requires that the
exchange, broker, dealer, registered Office of Information and Regulatory statement indicate what portions of
transfer agent and registered clearing Affairs, Office of Management and distribution payments are made from
agency (‘‘covered entities’’ or Budget, Room 10102, New Executive net income, net profits from the sale of
‘‘respondents’’); permits, under certain Office Building, Washington, DC 20503, a security or other property (‘‘capital
circumstances, the records required to or by sending an email to: Shagufta_ gains’’) and paid-in capital. When any
be maintained and preserved by a Ahmed@omb.eop.gov; and (ii) Pamela part of the payment is made from capital
member of a national securities Dyson, Director/Chief Information gains, rule 19a–1 also requires that the
exchange, broker, or dealer to be Officer, Securities and Exchange statement disclose certain other
maintained and preserved by a self- Commission, c/o Remi Pavlik-Simon, information relating to the appreciation
regulatory organization that is also the 100 F Street NE., Washington, DC or depreciation of portfolio securities. If
designated examining authority for that 20549, or by sending an email to: PRA_ an estimated portion is subsequently
member, broker or dealer; and permits Mailbox@sec.gov. Comments must be determined to be significantly
the required records to be preserved on submitted to OMB within 30 days of inaccurate, a correction must be made
microfilm. The general purpose of Rule this notice. on a statement made pursuant to section
17f–2 is to: (i) Identify security risk 19(a) or in the first report to
Dated: November 9, 2017. shareholders following the discovery of
personnel; (ii) provide criminal record
Eduardo A. Aleman, the inaccuracy.
information so that employers can make
fully informed employment decisions; Assistant Secretary. The purpose of rule 19a–1 is to afford
and (iii) deter persons with criminal [FR Doc. 2017–24752 Filed 11–15–17; 8:45 am] fund shareholders adequate disclosure
records from seeking employment or BILLING CODE P of the sources from which distribution
association with covered entities. The payments are made. The rule is
rule enables the Commission or other intended to prevent shareholders from
examining authority to ascertain SECURITIES AND EXCHANGE confusing income dividends with
whether all covered persons are being COMMISSION distributions made from capital sources.
fingerprinted and whether proper Absent rule 19a–1, shareholders might
Submission for OMB Review; receive a false impression of fund gains.
procedures regarding fingerprinting are Comment Request
being followed. Retention of these Based on a review of filings made
records for a period of not less than with the Commission, the staff estimates
Upon Written Request, Copies Available that approximately 11,818 series of
three years after termination of a From: Securities and Exchange
covered person’s employment or registered investment companies that
Commission, Office of FOIA Services, are management companies may be
relationship with a covered entity 100 F Street NE., Washington, DC
ensures that law enforcement officials subject to rule 19a–1 each year,3 and
20549–2736
will have easy access to fingerprint
Extension: 1 15 U.S.C. 80a.
cards on a timely basis. This in turn acts Rule 19a–1; SEC File No. 270–240, OMB 2 Section 4(3) of the Act (15 U.S. C. 80a–4(3))
as an effective deterrent to employee Control No. 3235–0216 defines ‘‘management company’’ as ‘‘any
misconduct. investment company other than a face amount
asabaliauskas on DSKBBXCHB2PROD with NOTICES

Approximately 4,200 respondents are Notice is hereby given that, pursuant certificate company or a unit investment trust.’’
3 This estimate is based on statistics compiled by
subject to the recordkeeping to the Paperwork Reduction Act of 1995
Commission staff as of April 30, 2017. The number
requirements of the rule. Each (44 U.S.C. 3501–3520), the Securities of management investment company portfolios that
respondent maintains approximately 68 and Exchange Commission (the make distributions for which compliance with rule
new records per year, each of which ‘‘Commission’’) has submitted to the 19a–1 is required depends on a wide range of
takes approximately 2 minutes per Office of Management and Budget a factors and can vary greatly across years. Therefore,
the calculation of estimated burden hours is based
record to maintain, for an annual request for extension of the previously on the total number of management investment
burden of approximately 2.2666667 approved collection of information company portfolios, each of which may be subject
hours (68 records times 2 minutes). The discussed below. to rule 19a–1.

VerDate Sep<11>2014 16:52 Nov 15, 2017 Jkt 244001 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 E:\FR\FM\16NON1.SGM 16NON1
Federal Register / Vol. 82, No. 220 / Thursday, November 16, 2017 / Notices 53547

that each portfolio on average mails two of information unless it displays a solicit comments on the proposed rule
statements per year to meet the currently valid control number. change from interested persons.
requirements of the rule.4 The staff The public may view the background
documentation for this information I. Self-Regulatory Organization’s
further estimates that the time needed to
collection at the following Web site, Statement of the Terms of Substance of
make the determinations required by the
www.reginfo.gov. Comments should be the Proposed Rule Change
rule and to prepare the statement
required under the rule is directed to: (i) Desk Officer for the The Exchange filed a proposal to
approximately 1 hour per statement. Securities and Exchange Commission, amend the fee schedule applicable to
The total annual burden for all Office of Information and Regulatory Members 5 and non-Members of the
portfolios therefore is estimated to be Affairs, Office of Management and Exchange pursuant to BZX Rules 15.1(a)
approximately 23,636 burden hours.5 Budget, Room 10102, New Executive and (c) to modify its fees for physical
The staff estimates that approximately Office Building, Washington, DC 20503, ports as they apply to the Exchange’s
one-third of the total annual burden or by sending an email to: Shagufta_ equity options platform (‘‘BZX
(7,879 hours) would be incurred by a Ahmed@omb.eop.gov; and (ii) Pamela Options’’).
paralegal with an average hourly wage Dyson, Director/Chief Information The text of the proposed rule change
rate of approximately $205 per hour,6 Officer, Securities and Exchange is available at the Exchange’s Web site
and approximately two-thirds of the Commission, c/o Remi Pavlik-Simon, at www.markets.cboe.com, at the
annual burden (15,757 hours) would be 100 F Street NE., Washington, DC 20549 principal office of the Exchange, and at
incurred by a compliance clerk with an or send an email to: PRA_Mailbox@ the Commission’s Public Reference
average hourly wage rate of $66 per sec.gov. Comments must be submitted to Room.
hour.7 The staff therefore estimates that OMB within 30 days of this notice.
II. Self-Regulatory Organization’s
the aggregate annual cost of complying Dated: November 9, 2017. Statement of the Purpose of, and
with the paperwork requirements of the Eduardo A. Aleman, Statutory Basis for, the Proposed Rule
rule is approximately $2,655,157 ((7,879 Assistant Secretary. Change
hours × $205 = $1,615,195) + (15,757 [FR Doc. 2017–24749 Filed 11–15–17; 8:45 am] In its filing with the Commission, the
hours × $66 = $1,039,962)). BILLING CODE P Exchange included statements
To comply with state law, many
concerning the purpose of and basis for
investment companies already must
the proposed rule change and discussed
distinguish the different sources from SECURITIES AND EXCHANGE any comments it received on the
which a shareholder distribution is paid COMMISSION proposed rule change. The text of these
and disclose that information to
[Release No. 34–82052; File No. SR- statements may be examined at the
shareholders. Thus, many investment
BatsBZX–2017–76] places specified in Item IV below. The
companies would be required to
Exchange has prepared summaries, set
distinguish the sources of shareholder Self-Regulatory Organizations; Cboe forth in Sections A, B, and C below, of
dividends whether or not the BZX Exchange, Inc.; Notice of Filing the most significant parts of such
Commission required them to do so and Immediate Effectiveness of statements.
under rule 19a–1. Proposed Rule Change To Modify Its
The estimate of average burden hours Fees for Physical Ports as They Apply A. Self-Regulatory Organization’s
is made solely for the purposes of the to the Exchange’s Equity Options Statement of the Purpose of, and the
Paperwork Reduction Act, and is not Platform Statutory Basis for, the Proposed Rule
derived from a comprehensive or even Change
a representative survey or study of the November 9, 2017.
Pursuant to Section 19(b)(1) of the 1. Purpose
costs of Commission rules. Compliance
with the collection of information Securities Exchange Act of 1934 A physical port is utilized by a
required by rule 19a–1 is mandatory for (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Member or non-Member to connect to
management companies that make notice is hereby given that on November the Exchange at the data centers where
statements to shareholders pursuant to 2, 2017, Cboe BZX Exchange, Inc. the Exchange’s servers are located. The
section 19(a) of the Act. An agency may (‘‘BZX’’ or the ‘‘Exchange’’) (formerly Exchange currently maintains a
not conduct or sponsor, and a person is known as Bats BZX Exchange, Inc.) filed presence in two third-party data centers:
not required to respond to, a collection with the Securities and Exchange (i) The primary data center where the
Commission (‘‘Commission’’) the Exchange’s business is primarily
4 A few portfolios make monthly distributions proposed rule change as described in conducted on a daily basis, and (ii) a
from sources other than net income, so the rule Items I, II, and III below, which Items secondary data center, which is
requires them to send out a statement 12 times a have been prepared by the Exchange. predominantly maintained for business
year. Other portfolios never make such
distributions.
The Exchange has designated the continuity purposes. The Exchange
5 This estimate is based on the following proposed rule change as one currently assesses the following
calculation: 11,818 management investment establishing or changing a member due, physical connectivity fees for Members
company portfolios × 2 statements per year × 1 hour fee, or other charge imposed by the and non-Members on a monthly basis:
per statement = 23,636 burden hours. Exchange under Section 19(b)(3)(A)(ii)
6 Hourly rates are derived from the Securities
$2,000 per physical port that connects
of the Act 3 and Rule 19b–4(f)(2) to the System 6 via 1 gigabyte circuit;
asabaliauskas on DSKBBXCHB2PROD with NOTICES

Industry and Financial Markets Association
(‘‘SIFMA’’), Management and Professional Earnings thereunder,4 which renders the
in the Securities Industry 2013, modified to account proposed rule change effective upon 5 The term ‘‘Member’’ is defined as ‘‘any

for an 1800-hour work-year and inflation, and filing with the Commission. The registered broker or dealer that has been admitted
multiplied by 5.35 to account for bonuses, firm size, Commission is publishing this notice to to membership in the Exchange.’’ See Exchange
employee benefits, and overhead. Rule 1.5(n).
7 Hourly rates are derived from SIFMA’s Office 6 The term ‘‘System’’ is defined as ‘‘the electronic
1 15 U.S.C. 78s(b)(1).
Salaries in the Securities Industry 2013, modified communications and trading facility designated by
2 17 CFR 240.19b–4.
to account for an 1800-hour work-year and the Board through which securities orders of Users
3 15 U.S.C. 78s(b)(3)(A)(ii).
multiplied by 2.93 to account for bonuses, firm size, are consolidated for ranking, execution and, when
employee benefits and overhead. 4 17 CFR 240.19b–4(f)(2). Continued

VerDate Sep<11>2014 16:52 Nov 15, 2017 Jkt 244001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\16NON1.SGM 16NON1
Document Created: 2017-11-16 03:53:03
Document Modified: 2017-11-16 03:53:03
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 53546