83 FR 26510 - Submission for OMB Review; Comment Request
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 110 (June 7, 2018)
Federal Register Volume 83, Issue 110 (June 7, 2018)
| Page Range | 26510-26511 | |
| FR Document | 2018-12192 |
[Federal Register Volume 83, Number 110 (Thursday, June 7, 2018)] [Notices] [Pages 26510-26511] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-12192] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270-233, OMB Control No. 3235-0223] 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 17f-2 Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l 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 17f-2 (17 CFR 270.17f-2), entitled ``Custody of Investments by Registered Management Investment Company,'' was adopted in 1940 under section 17(f) of the Investment Company Act of 1940 (15 U.S.C. 80a- 17(f)) (the ``Act''), and was last amended materially in 1947. Rule 17f-2 establishes safeguards for arrangements in which a registered management investment company (``fund'') is deemed to maintain custody of its own assets, such as when the fund maintains its assets in a facility that provides safekeeping but not custodial services.\1\ The rule includes several recordkeeping or reporting requirements. The fund's directors must prepare a resolution designating not more than five fund officers or responsible employees who may have access to the fund's assets. The designated access persons (two or more of whom must act jointly when handling fund assets) must prepare a written notation providing certain information about each deposit or withdrawal of fund assets, and must transmit the notation to another officer or director designated by the directors. An independent public accountant must verify the fund's assets three times each year, and two of those examinations must be unscheduled.\2\ --------------------------------------------------------------------------- \1\ The rule generally requires all assets to be deposited in the safekeeping of a ``bank or other company whose functions and physical facilities are supervised by Federal or State authority.'' The fund's securities must be physically segregated at all times from the securities of any other person. \2\ The accountant must transmit to the Commission promptly after each examination a certificate describing the examination on Form N-17f-2. The third (scheduled) examination may coincide with the annual verification required for every fund by section 30(g) of the Act (15 U.S.C. 80a-29(g)). --------------------------------------------------------------------------- [[Page 26511]] Rule 17f-2's requirement that directors designate access persons is intended to ensure that directors evaluate the trustworthiness of insiders who handle fund assets. The requirements that access persons act jointly in handling fund assets, prepare a written notation of each transaction, and transmit the notation to another designated person are intended to reduce the risk of misappropriation of fund assets by access persons, and to ensure that adequate records are prepared, reviewed by a responsible third person, and available for examination by the Commission. The requirement that auditors verify fund assets without notice twice each year is intended to provide an additional deterrent to the misappropriation of fund assets and to detect any irregularities. The Commission staff estimates that each fund makes 974 responses and spends an average of 252 hours annually in complying with the rule's requirements.\3\ Commission staff estimates that on an annual basis it takes: (i) 0.5 hours of fund accounting personnel at a total cost of $102 to draft director resolutions; \4\ (ii) 0.5 hours of the fund's board of directors at a total cost of $2,233 to adopt the resolution; \5\ (iii) 244 hours for the fund's accounting personnel at a total cost of $65,745 to prepare written notations of transactions; \6\ and (iv) 7 hours for the fund's accounting personnel at a total cost of $1,428 to assist the independent public accountants when they perform verifications of fund assets.\7\ Commission staff estimates that approximately 206 funds file Form N-17f-2 each year.\8\ Thus, the total annual hour burden for rule 17f-2 is estimated to be 51,912 hours.\9\ Based on the total costs per fund listed above, the total cost of rule 17f-2's collection of information requirements is estimated to be approximately $13.5 million.\10\ --------------------------------------------------------------------------- \3\ The 974 responses are: 1 (one) response to draft and adopt the resolution and 973 notations. Estimates of the number of hours are based on conversations with individuals in the fund industry. The actual number of hours may vary significantly depending on individual fund assets. \4\ This estimate is based on the following calculation: 0.5 (burden hours per fund) x $204 (senior accountant's hourly rate) = $102. Unless otherwise indicated, the hourly wage figures used herein are from the Securities Industry and Financial Markets Association's Management & Professional Earnings in the Securities Industry 2013, modified by Commission staff 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. \5\ The estimate for the cost of board time as a whole is derived from estimates made by the staff regarding typical board size and compensation that is based on information received from fund representatives and publicly available sources. \6\ Respondents estimated that each fund makes 974 responses on an annual basis and spends a total of 0.25 hours per response. The fund personnel involved are Accounts Payable Manager ($192 hourly rate), Operations Manager ($345 hourly rate) and Accounting Manager ($274 hourly rate). The average hourly rate of these personnel is $270. The estimated cost of preparing notations is based on the following calculation: 974 x 0.25 x $270 = $65,745. \7\ This estimate is based on the following calculation: 7 x $204 (senior accountant's hourly rate) = $1,428. \8\ On average, each year approximately 206 funds filed Form N- 17f-2 with the Commission during calendar years 2015-2017. \9\ This estimate is based on the following calculation: 206 (funds) x 252 (total annual hourly burden per fund) = 51,912 hours for rule. The annual burden for rule 17f-2 does not include time spent preparing Form N-17f-2. The burden for Form N-17f-2 is included in a separate collection of information. \10\ This estimate is based on the following calculation: $65,745 (total annual cost per fund) x 206 funds = $13,543,470. --------------------------------------------------------------------------- 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 and forms. Complying with the collections of information required by rule 17f-2 is mandatory for those funds that maintain custody of their own assets. 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 website, 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: June 1, 2018. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-12192 Filed 6-6-18; 8:45 am] BILLING CODE 8011-01-P
![26510 Federal Register / Vol. 83, No. 110 / Thursday, June 7, 2018 / Notices
A proposed rule change filed Electronic Comments SECURITIES AND EXCHANGE
pursuant to Rule 19b–4(f)(6) under the COMMISSION
Act 24 normally does not become • Use the Commission’s internet
comment form (http://www.sec.gov/ [SEC File No. 270–233, OMB Control No.
operative for 30 days after the date of its 3235–0223]
filing. However, Rule 19b–4(f)(6)(iii) 25 rules/sro.shtml); or
permits the Commission to designate a • Send an email to rule-comments@ Submission for OMB Review;
shorter time if such action is consistent sec.gov. Please include File Number SR– Comment Request
with the protection of investors and the NYSE–2018–22 on the subject line.
Upon Written Request, Copies Available
public interest. The Exchange has asked
Paper Comments From: Securities and Exchange
the Commission to waive the 30-day Commission, Office of FOIA Services,
operative delay so that the proposed • Send paper comments in triplicate 100 F Street NE, Washington, DC
rule change may become operative upon to Secretary, Securities and Exchange 20549–2736
filing. The Exchange states that waiver Commission, 100 F Street NE, Extension:
of the operative delay would be Washington, DC 20549–1090. Rule 17f–2
consistent with the protection of
investors and the public interest All submissions should refer to File Notice is hereby given that, pursuant
because it will allow the Exchange to Number SR–NYSE–2018–22. This file to the Paperwork Reduction Act of 1995
provide an amended NYSE BQT market number should be included on the (44 U.S.C. 350l et seq.), the Securities
data feed that will include the NYSE subject line if email is used. To help the and Exchange Commission (the
Commission process and review your ‘‘Commission’’) has submitted to the
National Market Data Feeds
comments more efficiently, please use Office of Management and Budget a
immediately upon launch of NYSE
only one method. The Commission will request for extension of the previously
National, which the Exchange states is approved collection of information
intended in May 2018, and will further post all comments on the Commission’s
internet website (http://www.sec.gov/ discussed below.
allow the Exchange to compete directly Rule 17f–2 (17 CFR 270.17f–2),
with the similar NASDAQ and Cboe rules/sro.shtml). Copies of the
entitled ‘‘Custody of Investments by
market data products on a timely basis. submission, all subsequent Registered Management Investment
The Commission believes that waiving amendments, all written statements Company,’’ was adopted in 1940 under
the 30-day operative delay is consistent with respect to the proposed rule section 17(f) of the Investment Company
with the protection of investors and the change that are filed with the Act of 1940 (15 U.S.C. 80a–17(f)) (the
public interest. Therefore, the Commission, and all written ‘‘Act’’), and was last amended
Commission hereby waives the communications relating to the materially in 1947. Rule 17f–2
operative delay and designates the proposed rule change between the establishes safeguards for arrangements
proposal as operative upon filing.26 Commission and any person, other than in which a registered management
At any time within 60 days of the those that may be withheld from the investment company (‘‘fund’’) is
filing of the proposed rule change, the public in accordance with the deemed to maintain custody of its own
provisions of 5 U.S.C. 552, will be assets, such as when the fund maintains
Commission summarily may
available for website viewing and its assets in a facility that provides
temporarily suspend such rule change if
printing in the Commission’s Public safekeeping but not custodial services.1
it appears to the Commission that such The rule includes several recordkeeping
action is necessary or appropriate in the Reference Room, 100 F Street NE,
Washington, DC 20549 on official or reporting requirements. The fund’s
public interest, for the protection of directors must prepare a resolution
investors, or otherwise in furtherance of business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the designating not more than five fund
the purposes of the Act. If the officers or responsible employees who
Commission takes such action, the filing also will be available for
may have access to the fund’s assets.
Commission shall institute proceedings inspection and copying at the principal
The designated access persons (two or
to determine whether the proposed rule office of the Exchange. All comments
more of whom must act jointly when
should be approved or disapproved. received will be posted without change. handling fund assets) must prepare a
Persons submitting comments are written notation providing certain
IV. Solicitation of Comments cautioned that we do not redact or edit information about each deposit or
Interested persons are invited to personal identifying information from withdrawal of fund assets, and must
submit written data, views, and comment submissions. You should transmit the notation to another officer
arguments concerning the foregoing, submit only information that you wish or director designated by the directors.
including whether the proposed rule to make available publicly. All An independent public accountant must
change is consistent with the Act. submissions should refer to File verify the fund’s assets three times each
Comments may be submitted by any of Number SR–NYSE–2018–22, and year, and two of those examinations
the following methods: should be submitted on or before June must be unscheduled.2
28, 2018.
1 The rule generally requires all assets to be
the proposed rule change, along with a brief For the Commission, by the Division of deposited in the safekeeping of a ‘‘bank or other
description and the text of the proposed rule Trading and Markets, pursuant to delegated company whose functions and physical facilities
change, at least five business days prior to the date are supervised by Federal or State authority.’’ The
authority.27
sradovich on DSK3GMQ082PROD with NOTICES
of filing of the proposed rule change, or such fund’s securities must be physically segregated at
shorter time as designated by the Commission. Eduardo A. Aleman, all times from the securities of any other person.
24 17 CFR 240.19b–4(f)(6).
Assistant Secretary. 2 The accountant must transmit to the
25 17 CFR 240.19b–4(f)(6)(iii).
[FR Doc. 2018–12193 Filed 6–6–18; 8:45 am] Commission promptly after each examination a
26 For purposes only of waiving the 30-day certificate describing the examination on Form N–
operative delay, the Commission has also BILLING CODE 8011–01–P 17f–2. The third (scheduled) examination may
considered the proposed rule’s impact on coincide with the annual verification required for
efficiency, competition, and capital formation. See every fund by section 30(g) of the Act (15 U.S.C.
15 U.S.C. 78c(f). 27 17 CFR 200.30–3(a)(12). 80a–29(g)).
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![Federal Register / Vol. 83, No. 110 / Thursday, June 7, 2018 / Notices 26511
Rule 17f–2’s requirement that verifications of fund assets.7 SECURITIES AND EXCHANGE
directors designate access persons is Commission staff estimates that COMMISSION
intended to ensure that directors approximately 206 funds file Form N–
evaluate the trustworthiness of insiders 17f–2 each year.8 Thus, the total annual [Release No. 34–83360; File No. SR–NYSE–
who handle fund assets. The hour burden for rule 17f–2 is estimated 2018–24]
requirements that access persons act to be 51,912 hours.9 Based on the total
jointly in handling fund assets, prepare costs per fund listed above, the total Self-Regulatory Organizations; New
a written notation of each transaction, cost of rule 17f–2’s collection of York Stock Exchange LLC; Notice of
and transmit the notation to another information requirements is estimated Filing and Immediate Effectiveness of
designated person are intended to to be approximately $13.5 million.10 Proposed Rule Change To Amend the
reduce the risk of misappropriation of NYSE Proprietary Market Data Fee
The estimate of average burden hours
fund assets by access persons, and to Schedule Regarding the NYSE Best
is made solely for the purposes of the
ensure that adequate records are Quote and Trades Market Data Feed
Paperwork Reduction Act, and is not
prepared, reviewed by a responsible
derived from a comprehensive or even June 1, 2018.
third person, and available for
a representative survey or study of the
examination by the Commission. The Pursuant to Section 19(b)(1) 1 of the
requirement that auditors verify fund costs of Commission rules and forms.
Securities Exchange Act of 1934 (the
assets without notice twice each year is Complying with the collections of
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
intended to provide an additional information required by rule 17f–2 is notice is hereby given that on May 21,
deterrent to the misappropriation of mandatory for those funds that maintain 2018, New York Stock Exchange LLC
fund assets and to detect any custody of their own assets. Responses (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
irregularities. will not be kept confidential. An agency the Securities and Exchange
may not conduct or sponsor, and a Commission (‘‘Commission’’) the
The Commission staff estimates that person is not required to respond to, a
each fund makes 974 responses and proposed rule change as described in
collection of information unless it Items I, II, and III below, which Items
spends an average of 252 hours annually
displays a currently valid control have been prepared by the self-
in complying with the rule’s
number. regulatory organization. The
requirements.3 Commission staff
estimates that on an annual basis it The public may view the background Commission is publishing this notice to
takes: (i) 0.5 hours of fund accounting documentation for this information solicit comments on the proposed rule
personnel at a total cost of $102 to draft collection at the following website, change from interested persons.
director resolutions; 4 (ii) 0.5 hours of www.reginfo.gov. Comments should be I. Self-Regulatory Organization’s
the fund’s board of directors at a total directed to: (i) Desk Officer for the Statement of the Terms of the Substance
cost of $2,233 to adopt the resolution; 5 Securities and Exchange Commission, of the Proposed Rule Change
(iii) 244 hours for the fund’s accounting Office of Information and Regulatory
personnel at a total cost of $65,745 to Affairs, Office of Management and The Exchange proposes to amend the
prepare written notations of Budget, Room 10102, New Executive NYSE Proprietary Market Data Fee
transactions; 6 and (iv) 7 hours for the Office Building, Washington, DC 20503, Schedule (‘‘Fee Schedule’’) regarding
fund’s accounting personnel at a total or by sending an email to: Shagufta_ the NYSE Best Quote and Trades
cost of $1,428 to assist the independent Ahmed@omb.eop.gov; and (ii) Pamela (‘‘BQT’’) market data feed. The
public accountants when they perform Dyson, Director/Chief Information Exchange proposes to make the fee
Officer, Securities and Exchange change effective May 21, 2018. The
3 The 974 responses are: 1 (one) response to draft
Commission, c/o Remi Pavlik-Simon, proposed rule change is available on the
and adopt the resolution and 973 notations. 100 F Street NE, Washington, DC 20549 Exchange’s website at www.nyse.com, at
Estimates of the number of hours are based on the principal office of the Exchange, and
conversations with individuals in the fund or send an email to: PRA_Mailbox@
industry. The actual number of hours may vary sec.gov. Comments must be submitted to at the Commission’s Public Reference
significantly depending on individual fund assets. OMB within 30 days of this notice. Room.
4 This estimate is based on the following
calculation: 0.5 (burden hours per fund) × $204 Dated: June 1, 2018. II. Self-Regulatory Organization’s
(senior accountant’s hourly rate) = $102. Unless Eduardo A. Aleman, Statement of the Purpose of, and
otherwise indicated, the hourly wage figures used Statutory Basis for, the Proposed Rule
herein are from the Securities Industry and Assistant Secretary.
Financial Markets Association’s Management &
Change
[FR Doc. 2018–12192 Filed 6–6–18; 8:45 am]
Professional Earnings in the Securities Industry
2013, modified by Commission staff to account for BILLING CODE 8011–01–P In its filing with the Commission, the
an 1800-hour work-year and inflation, and self-regulatory organization included
multiplied by 5.35 to account for bonuses, firm size, 7 This estimate is based on the following statements concerning the purpose of,
employee benefits and overhead. calculation: 7 × $204 (senior accountant’s hourly and basis for, the proposed rule change
5 The estimate for the cost of board time as a
rate) = $1,428. and discussed any comments it received
whole is derived from estimates made by the staff 8 On average, each year approximately 206 funds
regarding typical board size and compensation that on the proposed rule change. The text
filed Form N–17f–2 with the Commission during
is based on information received from fund
calendar years 2015–2017.
of those statements may be examined at
representatives and publicly available sources. 9 This estimate is based on the following the places specified in Item IV below.
6 Respondents estimated that each fund makes
sradovich on DSK3GMQ082PROD with NOTICES
calculation: 206 (funds) × 252 (total annual hourly The Exchange has prepared summaries,
974 responses on an annual basis and spends a total
of 0.25 hours per response. The fund personnel burden per fund) = 51,912 hours for rule. The set forth in sections A, B, and C below,
involved are Accounts Payable Manager ($192 annual burden for rule 17f–2 does not include time of the most significant parts of such
spent preparing Form N–17f–2. The burden for
hourly rate), Operations Manager ($345 hourly rate) statements.
and Accounting Manager ($274 hourly rate). The Form N–17f–2 is included in a separate collection
average hourly rate of these personnel is $270. The of information.
10 This estimate is based on the following 1 15 U.S.C. 78s(b)(1).
estimated cost of preparing notations is based on
the following calculation: 974 × 0.25 × $270 = calculation: $65,745 (total annual cost per fund) × 2 15 U.S.C. 78a.
$65,745. 206 funds = $13,543,470. 3 17 CFR 240.19b–4.
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Document Created: 2018-06-07 00:50:15
Document Modified: 2018-06-07 00:50:15
| 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 26510 |
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