83 FR 55222 - Submission for OMB Review; Comment Request
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 213 (November 2, 2018)
Federal Register Volume 83, Issue 213 (November 2, 2018)
| Page Range | 55222-55223 | |
| FR Document | 2018-23960 |
[Federal Register Volume 83, Number 213 (Friday, November 2, 2018)] [Notices] [Pages 55222-55223] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-23960] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copy Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549-2736 Extension: Rule 23c-3 and Form N-23c-3; SEC File No. 270-373, OMB Control No. 3235-0422 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 (``OMB'') a request for extension of the previously approved collection of information discussed below. Rule 23c-3 (17 CFR 270.23c-3) under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) permits a registered closed-end investment company (``closed-end fund'' or ``fund'') that meets certain requirements to repurchase common stock of which it is the issuer from shareholders at periodic intervals, pursuant to repurchase offers made to all holders of the stock. The rule enables these funds to offer their shareholders a limited ability to resell their shares in a manner that previously was available only to open-end investment company shareholders. To protect shareholders, a closed-end fund that relies on rule 23c-3 must send shareholders a notification that contains specified information each time the fund makes a repurchase offer (on a quarterly, semi-annual, or annual basis, or, for certain funds, on a discretionary basis not more often than every two years). The fund also must file copies of the shareholder notification with the Commission (electronically through the Commission's Electronic Data Gathering, Analysis, and Retrieval System (``EDGAR'')) on Form N-23c-3, a filing that provides certain information about the fund and the type of offer the fund is making.\1\ The fund must describe in its annual report to shareholders the fund's policy concerning repurchase offers and the results of any repurchase offers made during the reporting period. The fund's board of directors must adopt written procedures designed to ensure that the fund's investment portfolio is sufficiently liquid to meet its repurchase obligations and other obligations under the rule. The board periodically must review the composition of the fund's portfolio and change the liquidity procedures as necessary. The fund also must file copies of advertisements and other sales literature with the Commission as if it were an open-end investment company subject to Section 24 of the Investment Company Act (15 U.S.C. 80a-24) and the rules that implement Section 24. Rule 24b-3 under the Investment Company Act (17 CFR 270.24b-3), however, exempts the fund from that requirement if the materials are filed instead with the Financial Industry Regulatory Authority (``FINRA''). --------------------------------------------------------------------------- \1\ Form N-23c-3, entitled ``Notification of Repurchase Offer Pursuant to Rule 23c-3,'' requires the fund to state its registration number, its full name and address, the date of the accompanying shareholder notification, and the type of offer being made (periodic, discretionary, or both). --------------------------------------------------------------------------- The requirement that the fund send a notification to shareholders of each offer is intended to ensure that a fund provides material information to shareholders about the terms of each offer. The requirement that copies be sent to the Commission is intended to enable the Commission to monitor the fund's compliance with the notification requirement. The requirement that the shareholder notification be attached to Form N-23c-3 is intended to ensure that the fund provides basic information necessary for the Commission to process the notification and to monitor the fund's use of repurchase offers. The requirement that the fund describe its current policy on repurchase offers and the results of recent offers in the annual shareholder report is intended to provide shareholders current information about the fund's repurchase policies and its recent experience. The requirement that the board approve and review written procedures designed to maintain portfolio liquidity is intended to ensure that the fund has enough cash or liquid securities to meet its repurchase obligations, and that written procedures are available for review by shareholders and examination by the Commission. The requirement that the fund file advertisements and sales literature as if it were an open-end fund is intended to facilitate the review of these materials by the Commission or FINRA to prevent incomplete, inaccurate, or misleading disclosure about the special characteristics of a closed-end fund that makes periodic repurchase offers. The Commission staff estimates that 33 funds make use of rule 23c-3 annually, including eight funds that are relying upon rule 23c-3 for the first time. The Commission staff estimates that on average a fund spends 89 hours annually in complying with the requirements of the rule and Form N-23c-3, with funds relying upon rule 23c-3 for the first time incurring an additional one-time burden of 28 hours. The Commission therefore estimates the total annual hour burden of the rule's and form's paperwork requirements to be 3,161 hours. In addition to the burden hours, the Commission staff estimates that the average yearly cost to each fund that relies on rule 23c-3 to print and mail repurchase offers to shareholders is about $31,184.88. The Commission estimates total annual cost is therefore about $1,029,101. 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. Compliance with the collection of information requirements of the rule and form is mandatory only for those funds that rely on the rule in order to repurchase shares of the fund. The information provided to the Commission on Form N-23c-3 will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to a collection of [[Page 55223]] information unless it displays a currently valid OMB 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) Charles Riddle, Acting Director/ Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549 or by sending an email to: [email protected]. Comments must be submitted to OMB within 30 days of this notice. Dated: October 29, 2018. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-23960 Filed 11-1-18; 8:45 am] BILLING CODE 8011-01-P
![55222 Federal Register / Vol. 83, No. 213 / Friday, November 2, 2018 / Notices
representative survey or study of the the issuer from shareholders at periodic Form N–23c–3 is intended to ensure
cost of Commission rules and forms. intervals, pursuant to repurchase offers that the fund provides basic information
The collection of information under made to all holders of the stock. The necessary for the Commission to process
Form N–Q is mandatory. The rule enables these funds to offer their the notification and to monitor the
information provided by the form is not shareholders a limited ability to resell fund’s use of repurchase offers. The
kept confidential. An agency may not their shares in a manner that previously requirement that the fund describe its
conduct or sponsor, and a person is not was available only to open-end current policy on repurchase offers and
required to respond to, a collection of investment company shareholders. To the results of recent offers in the annual
information unless it displays a protect shareholders, a closed-end fund shareholder report is intended to
currently valid control number. that relies on rule 23c–3 must send provide shareholders current
The public may view the background shareholders a notification that contains information about the fund’s repurchase
documentation for this information specified information each time the policies and its recent experience. The
collection at the following website, fund makes a repurchase offer (on a requirement that the board approve and
www.reginfo.gov. Comments should be quarterly, semi-annual, or annual basis, review written procedures designed to
directed to: (i) Desk Officer for the or, for certain funds, on a discretionary maintain portfolio liquidity is intended
Securities and Exchange Commission, basis not more often than every two to ensure that the fund has enough cash
Office of Information and Regulatory years). The fund also must file copies of or liquid securities to meet its
Affairs, Office of Management and the shareholder notification with the repurchase obligations, and that written
Budget, Room 10102, New Executive Commission (electronically through the procedures are available for review by
Office Building, Washington, DC 20503, Commission’s Electronic Data shareholders and examination by the
or by sending an email to: Gathering, Analysis, and Retrieval Commission. The requirement that the
Lindsay.M.Abate@omb.eop.gov; and (ii) System (‘‘EDGAR’’)) on Form N–23c–3, fund file advertisements and sales
Charles Riddle, Acting Director/Chief a filing that provides certain literature as if it were an open-end fund
Information Officer, Securities and information about the fund and the type is intended to facilitate the review of
Exchange Commission, c/o Candace of offer the fund is making.1 The fund these materials by the Commission or
Kenner, 100 F Street NE, Washington, must describe in its annual report to FINRA to prevent incomplete,
DC 20549 or send an email to: PRA_ shareholders the fund’s policy inaccurate, or misleading disclosure
Mailbox@sec.gov. Comments must be concerning repurchase offers and the about the special characteristics of a
submitted to OMB within 30 days of results of any repurchase offers made closed-end fund that makes periodic
this notice. during the reporting period. The fund’s repurchase offers.
board of directors must adopt written The Commission staff estimates that
Dated: October 29, 2018.
procedures designed to ensure that the 33 funds make use of rule 23c–3
Eduardo A. Aleman, fund’s investment portfolio is
Assistant Secretary. annually, including eight funds that are
sufficiently liquid to meet its repurchase relying upon rule 23c–3 for the first
[FR Doc. 2018–23959 Filed 11–1–18; 8:45 am] obligations and other obligations under time. The Commission staff estimates
BILLING CODE 8011–01–P the rule. The board periodically must that on average a fund spends 89 hours
review the composition of the fund’s
annually in complying with the
portfolio and change the liquidity
SECURITIES AND EXCHANGE requirements of the rule and Form N–
procedures as necessary. The fund also
COMMISSION 23c–3, with funds relying upon rule
must file copies of advertisements and
23c–3 for the first time incurring an
other sales literature with the
Submission for OMB Review; additional one-time burden of 28 hours.
Commission as if it were an open-end
Comment Request The Commission therefore estimates the
investment company subject to Section
total annual hour burden of the rule’s
Upon Written Request, Copy Available 24 of the Investment Company Act (15
and form’s paperwork requirements to
From: Securities and Exchange U.S.C. 80a–24) and the rules that
be 3,161 hours. In addition to the
Commission, Office of FOIA Services, implement Section 24. Rule 24b–3
under the Investment Company Act (17 burden hours, the Commission staff
100 F Street NE, Washington, DC estimates that the average yearly cost to
20549–2736 CFR 270.24b–3), however, exempts the
fund from that requirement if the each fund that relies on rule 23c–3 to
Extension: materials are filed instead with the print and mail repurchase offers to
Rule 23c–3 and Form N–23c–3; SEC File
Financial Industry Regulatory Authority shareholders is about $31,184.88. The
No. 270–373, OMB Control No. 3235– Commission estimates total annual cost
0422 (‘‘FINRA’’).
The requirement that the fund send a is therefore about $1,029,101.
Notice is hereby given that, pursuant notification to shareholders of each offer Estimates of average burden hours
to the Paperwork Reduction Act of 1995 is intended to ensure that a fund and costs are made solely for purposes
(44 U.S.C. 3501 et seq.), the Securities provides material information to of the Paperwork Reduction Act and are
and Exchange Commission (the shareholders about the terms of each not derived from a comprehensive or
‘‘Commission’’) has submitted to the offer. The requirement that copies be even representative survey or study of
Office of Management and Budget sent to the Commission is intended to the costs of Commission rules and
(‘‘OMB’’) a request for extension of the enable the Commission to monitor the forms. Compliance with the collection
previously approved collection of fund’s compliance with the notification of information requirements of the rule
information discussed below. requirement. The requirement that the and form is mandatory only for those
Rule 23c–3 (17 CFR 270.23c–3) under shareholder notification be attached to funds that rely on the rule in order to
the Investment Company Act of 1940 repurchase shares of the fund. The
(15 U.S.C. 80a–1 et seq.) permits a 1 Form N–23c–3, entitled ‘‘Notification of information provided to the
registered closed-end investment Repurchase Offer Pursuant to Rule 23c–3,’’ requires Commission on Form N–23c–3 will not
the fund to state its registration number, its full
company (‘‘closed-end fund’’ or ‘‘fund’’) name and address, the date of the accompanying
be kept confidential. An agency may not
that meets certain requirements to shareholder notification, and the type of offer being conduct or sponsor, and a person is not
repurchase common stock of which it is made (periodic, discretionary, or both). required to respond to a collection of
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![Federal Register / Vol. 83, No. 213 / Friday, November 2, 2018 / Notices 55223
information unless it displays a postpone the date of payment or estimates that there are an average of
currently valid OMB control number. satisfaction upon redemption for up to two conduit funds that may be invested
The public may view the background seven days, it does not permit funds to in a money market fund that breaks the
documentation for this information suspend the right of redemption for any buck.3 Commission staff further
collection at the following website: amount of time, absent certain specified estimates that a money market fund or
www.reginfo.gov. Comments should be circumstances or a Commission order. conduit fund would spend
directed to: (i) Desk Officer for the Rule 22e–3 under the Act [17 CFR approximately one hour of an in-house
Securities and Exchange Commission, 270.22e–3] exempts money market attorney’s time to prepare and submit
Office of Information and Regulatory funds from section 22(e) to permit them the notice required by the rule. Given
Affairs, Office of Management and to suspend redemptions in order to these estimates, the total annual burden
Budget, Room 10102, New Executive facilitate an orderly liquidation of the of the notification requirement of rule
Office Building, Washington, DC 20503, fund. Specifically, rule 22e–3 permits a 22e–3 for all money market funds and
or by sending an email to: money market fund to suspend conduit funds would be approximately
Lindsay.M.Abate@omb.eop.gov; and (ii) redemptions and postpone the payment 30 minutes,4 at a cost of $201.5
Charles Riddle, Acting Director/Chief of proceeds pending board-approved The estimate of average burden hours
Information Officer, Securities and liquidation proceedings if: (i) The fund’s is made solely for the purposes of the
Exchange Commission, c/o Candace board of directors, including a majority Paperwork Reduction Act, and is not
Kenner, 100 F Street NE, Washington, of disinterested directors, determines derived from a comprehensive or even
DC 20549 or by sending an email to: pursuant to § 270.2a–7(c)(8)(ii)(C) that a representative survey or study of the
PRA_Mailbox@sec.gov. Comments must the extent of the deviation between the costs of Commission rules and forms.
be submitted to OMB within 30 days of fund’s amortized cost price per share Compliance with the collection of
this notice. and its current net asset value per share information requirements of the rule is
Dated: October 29, 2018. calculated using available market necessary to obtain the benefit of relying
Eduardo A. Aleman, quotations (or an appropriate substitute on the rule. An agency may not conduct
Assistant Secretary. that reflects current market conditions) or sponsor, and a person is not required
may result in material dilution or other to respond to, a collection of
[FR Doc. 2018–23960 Filed 11–1–18; 8:45 am]
unfair results to investors or existing information unless it displays a
BILLING CODE 8011–01–P
shareholders; (ii) the fund’s board of currently valid control number.
directors, including a majority of The public may view the background
SECURITIES AND EXCHANGE disinterested directors, irrevocably documentation for this information
COMMISSION approves the liquidation of the fund; collection at the following website,
and (iii) the fund, prior to suspending www.reginfo.gov. Comments should be
[SEC File No. 270–603, OMB Control No. redemptions, notifies the Commission of directed to: (i) Desk Officer for the
3235–0658] Securities and Exchange Commission,
its decision to liquidate and suspend
redemptions. Rule 22e–3 also provides Office of Information and Regulatory
Submission to OMB; Comment
an exemption from section 22(e) for Affairs, Office of Management and
Request
registered investment companies that Budget, Room 10102, New Executive
Upon Written Request, Copies Available own shares of a money market fund Office Building, Washington, DC 20503,
From: Securities and Exchange pursuant to section 12(d)(1)(E) of the or by sending an email to:
Commission, Office of FOIA Services, Act (‘‘conduit funds’’), if the underlying Lindsay.M.Abate@omb.eop.gov; and (ii)
100 F Street NE, Washington, DC money market fund has suspended Charles Riddle, Acting Director/Chief
20549–2736 redemptions pursuant to the rule. A Information Officer, Securities and
Extension: conduit fund that suspends redemptions Exchange Commission, c/o Candace
Rule 22e–3 in reliance on the exemption provided
by rule 22e–3 is required to provide market fund sponsors have supported their money
Notice is hereby given that, under the market funds in times of market distress, for
Paperwork Reduction Act of 1995 (44 prompt notice of the suspension of purposes of this estimate Commission staff
U.S.C. 3501–3520), the Securities and redemptions to the Commission. Notices conservatively estimates that one or more sponsors
Exchange Commission (the required by the rule must be provided may not provide support.
3 Based on a review of filings with the
‘‘Commission’’) has submitted to the by electronic mail, directed to the
Commission, Commission staff estimates that 2.3
Office of Management and Budget a attention of the Director of the Division conduit funds are invested in each master fund.
request for extension of the previously of Investment Management or the However, master funds account for only 5.1% of all
approved collection of information Director’s designee.1 Compliance with money market funds. Solely for the purposes of this
the notification requirement is information collection, and to avoid
discussed below. underestimating possible burdens, the Commission
Section 22(e) of the Investment mandatory for money market funds and conservatively assumes that any money market that
Company Act [15 U.S.C. 80a–22(e)] conduit funds that rely on rule 22e–3 to breaks the buck and liquidates would be a master
(‘‘Act’’) generally prohibits funds, suspend redemptions and postpone fund.
including money market funds, from payment of proceeds pending a 4 This estimate is based on the following
liquidation, and are not kept calculations: (1 hour ÷ 6 years) = 10 minutes per
suspending the right of redemption, and year for each fund and conduit fund that is required
from postponing the payment or confidential. to provide notice under the rule. 10 minutes per
satisfaction upon redemption of any Commission staff estimates that, on year × 3 (combined number of affected funds and
redeemable security for more than seven average, one money market fund would conduit funds) = 30 minutes.
5 This estimate is based on the following
days. The provision was designed to break the buck and liquidate every six
calculation: $401/hour × 30 minutes = $200.50. The
prevent funds and their investment years.2 In addition, Commission staff estimated hourly wages used in this PRA analysis
advisers from interfering with the were derived from reports prepared by the
1 Seerule 22e–3(a)(3).
redemption rights of shareholders for Securities Industry and Financial Markets
2 Thisestimate is based upon the Commission’s Association, modified to account for an 1800-hour
improper purposes, such as the experience with the frequency with which money work year and multiplied by 5.35 to account for
preservation of management fees. market funds have historically required sponsor bonuses, firm size, employee benefits and overhead,
Although section 22(e) permits funds to support. Although the vast majority of money and adjusted for inflation.
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Document Created: 2018-11-02 01:09:47
Document Modified: 2018-11-02 01:09:47
| 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 55222 |
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