83 FR 23502 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 98 (May 21, 2018)

Page Range		23502-23503
FR Document		2018-10776
Federal Register, Volume 83 Issue 98 (Monday, May 21, 2018)
[Federal Register Volume 83, Number 98 (Monday, May 21, 2018)]
[Notices]
[Pages 23502-23503]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-10776]


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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 12b-1, SEC File No. 270-188, OMB Control No. 3235-0212.

    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'') 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 (``OMB'') for extension and approval.
    Rule 12b-1 under the Investment Company Act of 1940 (17 CFR 
270.12b-1) permits a registered open-end investment company (``fund'') 
to bear expenses associated with the distribution of its shares, 
provided that the fund complies with certain requirements, including, 
among other things, that it adopt a written plan (``rule 12b-1 plan'') 
and that it preserves in writing any agreements relating to the rule 
12b-1 plan. The rule in part requires that (i) the adoption or material 
amendment of a rule 12b-1 plan be approved by the fund's directors, 
including its independent directors, and, in certain circumstances, its 
shareholders; (ii) the board review quarterly reports of amounts spent 
under the rule 12b-1 plan; and (iii) the board, including the 
independent directors, consider continuation of the rule 12b-1 plan and 
any related agreements at least annually. Rule 12b-1 also requires 
funds relying on the rule to preserve for six years, the first two 
years in an easily accessible place, copies of the rule 12b-1 plan and 
any related agreements and reports, as well as minutes of board 
meetings that describe the factors considered and the basis for 
adopting or continuing a rule 12b-1 plan.
    Rule 12b-1 also prohibits funds from paying for distribution of 
fund shares with brokerage commissions on their portfolio transactions. 
The rule requires funds that use broker-dealers that sell their shares 
to also execute their portfolio securities transactions, to implement 
policies and procedures reasonably designed to prevent: (i) The persons 
responsible for selecting broker-dealers to effect transactions in fund

[[Page 23503]]

portfolio securities from taking into account broker-dealers' 
promotional or sales efforts when making those decisions; and (ii) a 
fund, its adviser, or its principal underwriter, from entering into any 
agreement under which the fund directs brokerage transactions or 
revenue generated by those transactions to a broker-dealer to pay for 
distribution of the fund's (or any other fund's) shares.
    The board and shareholder approval requirements of rule 12b-1 are 
designed to ensure that fund shareholders and directors receive 
adequate information to evaluate and approve a rule 12b-1 plan and, 
thus, are necessary for investor protection. The requirement of 
quarterly reporting to the board is designed to ensure that the rule 
12b-1 plan continues to benefit the fund and its shareholders. The 
recordkeeping requirements of the rule are necessary to enable 
Commission staff to oversee compliance with the rule. The requirement 
that funds or their advisers implement, and fund boards approve, 
policies and procedures in order to prevent persons charged with 
allocating fund brokerage from taking distribution efforts into account 
is designed to ensure that funds' selection of brokers to effect 
portfolio securities transactions is not influenced by considerations 
about the sale of fund shares.
    Commission staff estimates that there are approximately 7,858 fund 
portfolios that have at least one share class subject to a rule 12b-1 
plan and approximately 323 fund families with common boards of 
directors that have at least one fund with a 12b-1 plan. The Commission 
further estimates that the annual hour burden for complying with the 
rule is 425 hours for each fund family with a portfolio that has a rule 
12b-1 plan. We therefore estimate that the total hourly burden per year 
for all funds to comply with current information collection 
requirements under rule 12b-1 is 137,275 hours. Commission staff 
estimates that approximately three funds per year prepare a proxy in 
connection with the adoption or material amendment of a rule 12b-1 
plan. The staff further estimates that the cost of each fund's proxy is 
$34,849. Thus, the total annual cost burden of rule 12b-1 to the fund 
industry is $104,547.
    Estimates of average burden hours and costs are made solely for 
purposes of the Paperwork Reduction Act and are not derived from a 
comprehensive or even representative survey or study of the costs of 
Commission rules and forms. The collections of information required by 
Rule 12b-1 are necessary to obtain the benefits of the rule. Notices to 
the Commission 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 OMB control number.
    Written comments are invited 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 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, 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].
    All submissions should refer to File Number 270-188. This file 
number should be included on the subject line if email is used. The 
Commission will post all comments on the Commission's internet website 
(http://www.sec.gov). All comments received will be posted without 
change; we do not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly.

    Dated: May 16, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10776 Filed 5-18-18; 8:45 am]
 BILLING CODE 8011-01-P
23502 Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices

become effective pursuant to Section change is consistent with the Act. SECURITIES AND EXCHANGE
19(b)(3)(A)(iii) of the Act 24 and Comments may be submitted by any of COMMISSION
subparagraph (f)(6) of Rule 19b–4 the following methods:
thereunder.25 Proposed Collection; Comment
A proposed rule change filed Electronic Comments Request
pursuant to Rule 19b–4(f)(6) under the • Use the Commission’s internet Upon Written Request, Copies Available
Act 26 normally does not become comment form (http://www.sec.gov/ From: Securities and Exchange
operative for 30 days after the date of its rules/sro.shtml); or Commission, Office of FOIA Services,
filing. However, Rule 19b–4(f)(6)(iii) 27
permits the Commission to designate a • Send an email to rule-comments@ 100 F Street NE, Washington, DC
sec.gov. Please include File Number SR– 20549–2736.
shorter time if such action is consistent
with the protection of investors and the MRX–2018–14 on the subject line. Extension:
public interest. The Exchange has asked Rule 12b–1, SEC File No. 270–188, OMB
Paper Comments Control No. 3235–0212.
the Commission to waive the 30-day
operative delay so that the proposal may • Send paper comments in triplicate Notice is hereby given that, pursuant
become operative immediately upon to Secretary, Securities and Exchange to the Paperwork Reduction Act of 1995
filing. The Exchange represents that Commission, 100 F Street NE, (44 U.S.C. 3501 et seq.), the Securities
waiver of the operative delay would Washington, DC 20549–1090. and Exchange Commission (the
allow the Exchange to harmonize its ‘‘Commission’’) is soliciting comments
sponsored access rule to the rules of the All submissions should refer to File on the collection of information
Nasdaq Exchanges.28 The Commission Number SR–MRX–2018–14. This file summarized below. The Commission
believes that waiving the 30-day number should be included on the plans to submit this existing collection
operative delay is consistent with the subject line if email is used. To help the of information to the Office of
protection of investors and the public Commission process and review your Management and Budget (‘‘OMB’’) for
interest because the proposed rule comments more efficiently, please use extension and approval.
change would simplify the regulatory only one method. The Commission will Rule 12b–1 under the Investment
requirements of members of the post all comments on the Commission’s Company Act of 1940 (17 CFR
Exchange that are also participants on internet website (http://www.sec.gov/ 270.12b–1) permits a registered open-
the Nasdaq Exchanges. Further, the rules/sro.shtml). Copies of the end investment company (‘‘fund’’) to
Commission does not believe that the submission, all subsequent bear expenses associated with the
proposed rule change raises any new or amendments, all written statements distribution of its shares, provided that
novel issues. Accordingly, the with respect to the proposed rule the fund complies with certain
Commission hereby waives the change that are filed with the requirements, including, among other
operative delay and designates the Commission, and all written things, that it adopt a written plan
proposal operative upon filing.29 communications relating to the (‘‘rule 12b–1 plan’’) and that it preserves
At any time within 60 days of the proposed rule change between the in writing any agreements relating to the
filing of the proposed rule change, the Commission and any person, other than rule 12b–1 plan. The rule in part
Commission summarily may those that may be withheld from the requires that (i) the adoption or material
temporarily suspend such rule change if public in accordance with the amendment of a rule 12b–1 plan be
it appears to the Commission that such provisions of 5 U.S.C. 552, will be approved by the fund’s directors,
action is: (i) Necessary or appropriate in available for website viewing and including its independent directors,
the public interest; (ii) for the protection printing in the Commission’s Public and, in certain circumstances, its
of investors; or (iii) otherwise in Reference Room, 100 F Street NE, shareholders; (ii) the board review
furtherance of the purposes of the Act. Washington, DC 20549, on official quarterly reports of amounts spent
If the Commission takes such action, the business days between the hours of under the rule 12b–1 plan; and (iii) the
Commission shall institute proceedings 10:00 a.m. and 3:00 p.m. Copies of the board, including the independent
to determine whether the proposed rule filing also will be available for directors, consider continuation of the
should be approved or disapproved. inspection and copying at the principal rule 12b–1 plan and any related
office of the Exchange. All comments agreements at least annually. Rule
IV. Solicitation of Comments 12b–1 also requires funds relying on the
received will be posted without change.
Interested persons are invited to Persons submitting comments are rule to preserve for six years, the first
submit written data, views, and cautioned that we do not redact or edit two years in an easily accessible place,
arguments concerning the foregoing, personal identifying information from copies of the rule 12b–1 plan and any
including whether the proposed rule comment submissions. You should related agreements and reports, as well
submit only information that you wish as minutes of board meetings that
24 15 U.S.C. 78s(b)(3)(A)(iii). to make available publicly. All describe the factors considered and the
25 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
submissions should refer to File basis for adopting or continuing a rule
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file Number SR–MRX–2018–14 and should 12b–1 plan.
the proposed rule change at least five business days be submitted on or before June 11, 2018. Rule 12b–1 also prohibits funds from
prior to the date of filing of the proposed rule paying for distribution of fund shares
change, or such shorter time as designated by the For the Commission, by the Division of
Trading and Markets, pursuant to delegated
with brokerage commissions on their
Commission. The Exchange has satisfied this
portfolio transactions. The rule requires
sradovich on DSK3GMQ082PROD with NOTICES

requirement. authority.30
26 17 CFR 240.19b–4(f)(6). funds that use broker-dealers that sell
Eduardo A. Aleman,
27 17 CFR 240.19b–4(f)(6)(iii). their shares to also execute their
28 See supra note 3. Assistant Secretary. portfolio securities transactions, to
29 For purposes only of waiving the 30-day [FR Doc. 2018–10706 Filed 5–18–18; 8:45 am] implement policies and procedures
operative delay, the Commission has also
considered the proposed rule’s impact on
BILLING CODE 8011–01–P reasonably designed to prevent: (i) The
efficiency, competition, and capital formation. See persons responsible for selecting broker-
15 U.S.C. 78c(f). 30 17 CFR 200.30–3(a)(12). dealers to effect transactions in fund

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Document Created: 2018-11-02 11:08:13
Document Modified: 2018-11-02 11:08:13
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		83 FR 23502