83 FR 57770 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 222 (November 16, 2018)

Page Range		57770-57771
FR Document		2018-25047
Federal Register, Volume 83 Issue 222 (Friday, November 16, 2018)
[Federal Register Volume 83, Number 222 (Friday, November 16, 2018)]
[Notices]
[Pages 57770-57771]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-25047]


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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 154 SEC File No. 270-438, OMB Control No. 3235-0495

    Notice is hereby given that, under 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.
    The federal securities laws generally prohibit an issuer, 
underwriter, or dealer from delivering a security for sale unless a 
prospectus meeting certain requirements accompanies or precedes the 
security. Rule 154 (17 CFR 230.154) under the Securities Act of 1933 
(15 U.S.C. 77a) (the ``Securities Act'') permits, under certain 
circumstances, delivery of a single prospectus to investors who 
purchase securities from the same issuer and share the same address 
(``householding'') to satisfy the applicable prospectus delivery 
requirements.\1\ The purpose of rule 154 is to reduce the amount of 
duplicative prospectuses delivered to investors sharing the same 
address.
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    \1\ The Securities Act requires the delivery of prospectuses to 
investors who buy securities from an issuer or from underwriters or 
dealers who participate in a registered distribution of securities. 
See Securities Act sections 2(a)(10), 4(1), 4(3), 5(b) (15 U.S.C. 
77b(a)(10), 77d(1), 77d(3), 77e(b)); see also rule 174 under the 
Securities Act (17 CFR 230.174) (regarding the prospectus delivery 
obligation of dealers); rule 15c2-8 under the Securities Exchange 
Act of 1934 (17 CFR 240.15c2-8) (prospectus delivery obligations of 
brokers and dealers).
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    Under rule 154, a prospectus is considered delivered to all 
investors at a shared address, for purposes of the federal securities 
laws, if the person relying on the rule delivers the prospectus to the 
shared address, addresses the prospectus to the investors as a group or 
to each of the investors individually, and the investors consent to the 
delivery of a single prospectus. The rule applies to prospectuses and 
prospectus supplements. Currently, the rule permits householding of all 
prospectuses by an issuer, underwriter, or dealer relying on the rule 
if, in addition to the other conditions set forth in the rule, the 
issuer, underwriter, or dealer has obtained from each investor written 
or implied consent to householding.\2\ The rule requires issuers, 
underwriters, or dealers that wish to household prospectuses with 
implied consent to send a notice to each investor stating that the 
investors in the household will receive one prospectus in the future 
unless the investors provide contrary instructions. In addition, at 
least once a year, issuers, underwriters, or dealers, relying on rule 
154 for the householding of prospectuses relating to open-end 
management investment companies that are registered under the 
Investment Company Act of 1940 (``mutual funds'') must explain to 
investors who have provided written or implied consent how they can 
revoke their consent.\3\ Preparing and sending the notice and the 
annual explanation of the right to revoke are collections of 
information.
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    \2\ Rule 154 permits the householding of prospectuses that are 
delivered electronically to investors only if delivery is made to a 
shared electronic address and the investors give written consent to 
householding. Implied consent is not permitted in such a situation. 
See rule 154(b)(4).
    \3\ See Rule 154(c).
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    The rule allows issuers, underwriters, or dealers to household 
prospectuses if certain conditions are met. Among the conditions with 
which a person relying on the rule must comply are providing notice to 
each investor that only one prospectus will be sent to the household 
and, in the case of issuers that are mutual funds, providing to each 
investor who consents to householding an annual explanation of the 
right to revoke consent to the delivery of a single prospectus to 
multiple investors sharing an address. The purpose of the notice and 
annual explanation requirements of the rule is to ensure that investors 
who wish to receive individual copies of prospectuses are able to do 
so.
    Although rule 154 is not limited to mutual funds, the Commission 
believes that it is used mainly by mutual funds and by broker-dealers 
that deliver mutual fund prospectuses. The Commission is unable to 
estimate the number of issuers other than mutual funds that rely on the 
rule.
    The Commission estimates that, as of August 2018, there are 
approximately 1,590 mutual funds, approximately 400 of which engage in 
direct marketing and therefore deliver their own prospectuses. Of the 
approximately 400 mutual funds that engage in direct marketing, the 
Commission estimates that approximately half of these mutual funds 
(200)(i) do not send the implied consent notice requirement because

[[Page 57771]]

they obtain affirmative written consent to household prospectuses in 
the fund's account opening documentation; or (ii) do not take advantage 
of the householding provision because of electronic delivery options 
which lessen the economic and operational benefits of rule 154 when 
compared with the costs of compliance.
    The Commission estimates that there are approximately 175 broker-
dealers that carry customer accounts for the remaining mutual funds and 
therefore may be required to deliver mutual fund prospectuses. The 
Commission estimates that each affected broker-dealer will spend, on 
average, 20 hours complying with the notice requirement of the rule, 
for a total of 3,500 hours. Therefore, the total number of respondents 
for rule 154 is 475 (300 \4\ mutual funds plus 175 broker-dealers), and 
the estimated total hour burden is approximately 7,975 hours (4,300 
hours for mutual funds plus 3,675 hours for broker-dealers).
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    \4\ The Commission estimates that 200 mutual funds prepare both 
the implied consent notice and the annual explanation of the right 
to revoke consent + 100 mutual funds that prepare only the annual 
explanation of the right to revoke.
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    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.
    Compliance with the collection of information requirements of the 
rule is necessary to obtain the benefit of relying on the rule. 
Responses to the collections of information will not be kept 
confidential. The rule does not require these records be retained for 
any specific period of time. 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) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Candace Kenner, 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 13, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25047 Filed 11-15-18; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices 57771

they obtain affirmative written consent Dated: November 13, 2018. Rule 17f–1(c) is a reporting rule and
to household prospectuses in the fund’s Eduardo A. Aleman, does not specify a retention period. The
account opening documentation; or (ii) Assistant Secretary. rule requires an incident-based
do not take advantage of the [FR Doc. 2018–25047 Filed 11–15–18; 8:45 am] reporting requirement by the reporting
householding provision because of BILLING CODE 8011–01–P
institutions when securities certificates
electronic delivery options which lessen are discovered to be missing, lost,
the economic and operational benefits counterfeit, or stolen. Registering under
of rule 154 when compared with the SECURITIES AND EXCHANGE Rule 17f–1(c) is mandatory to obtain the
costs of compliance. COMMISSION benefit of a central database that stores
The Commission estimates that there information about missing, lost,
are approximately 175 broker-dealers Submission for OMB Review; counterfeit, or stolen securities for the
that carry customer accounts for the Comment Request Lost and Stolen Securities Program.
remaining mutual funds and therefore Reporting institutions required to
may be required to deliver mutual fund Upon Written Request, Copies Available register under Rule 17f–1(c) will not be
prospectuses. The Commission From: Securities and Exchange kept confidential; however, the Lost and
estimates that each affected broker- Commission, Office of FOIA Services, Stolen Securities Program database will
dealer will spend, on average, 20 hours 100 F Street NE, Washington, DC be kept confidential.
complying with the notice requirement 20549–2736 An agency may not conduct or
of the rule, for a total of 3,500 hours. Extension: sponsor, and a person is not required to
Therefore, the total number of Rule 17f–1(c) and Form X–17F–1A, SEC respond to, a collection of information
respondents for rule 154 is 475 (300 4 File No. 270–29, OMB Control No. 3235– under the PRA unless it displays a
mutual funds plus 175 broker-dealers), 0037. currently valid OMB control number.
and the estimated total hour burden is Notice is hereby given that pursuant The public may view background
approximately 7,975 hours (4,300 hours to the Paperwork Reduction Act of 1995 documentation for this information
for mutual funds plus 3,675 hours for (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the collection at the following website:
broker-dealers). Securities and Exchange Commission www.reginfo.gov. Comments should be
The estimate of average burden hours directed to: (i) Desk Officer for the
(‘‘Commission’’) has submitted to the
is made solely for the purposes of the Securities and Exchange Commission,
Office of Management and Budget
Paperwork Reduction Act, and is not Office of Information and Regulatory
(‘‘OMB’’) a request for approval of
derived from a comprehensive or even Affairs, Office of Management and
extension of the previously approved
a representative survey or study of the Budget, Room 10102, New Executive
collection of information provided for in
costs of Commission rules and forms. Office Building, Washington, DC 20503
Compliance with the collection of Rule 17f–1(c) (17 CFR 240.17f–1(c) and
Form X–17F–1A (17 CFR 249.100) or by sending an email to:
information requirements of the rule is
under the Securities Exchange Act of Lindsay.M.Abate@omb.eop.gov and (ii)
necessary to obtain the benefit of relying
1934 (15 U.S.C. 78a et seq.). Charles Riddle, Acting Director/Chief
on the rule. Responses to the collections
Rule 17f–1(c) requires approximately Information Officer, Securities and
of information will not be kept
confidential. The rule does not require 15,500 entities in the securities industry Exchange Commission, c/o Candace
these records be retained for any to report lost, stolen, missing, or Kenner, 100 F Street NE, Washington,
specific period of time. An agency may counterfeit securities certificates to the DC 20549, or by sending an email to
not conduct or sponsor, and a person is Commission or its designee, to a PRA_Mailbox@sec.gov. Comments must
not required to respond to, a collection registered transfer agent for the issue, be submitted to OMB within 30 days of
of information unless it displays a and, when criminal activity is this notice.
currently valid control number. suspected, to the Federal Bureau of Dated: November 13, 2018.
The public may view the background Investigation. Such entities are required Eduardo A. Aleman,
documentation for this information to use Form X–17F–1A to make such Assistant Secretary.
collection at the following website, reports. Filing these reports fulfills a [FR Doc. 2018–25051 Filed 11–15–18; 8:45 am]
www.reginfo.gov. Comments should be statutory requirement that reporting
BILLING CODE 8011–01–P
directed to: (i) Desk Officer for the institutions report and inquire about
Securities and Exchange Commission, missing, lost, counterfeit, or stolen
Office of Information and Regulatory securities. Since these reports are SECURITIES AND EXCHANGE
Affairs, Office of Management and compiled in a central database, the rule COMMISSION
Budget, Room 10102, New Executive facilitates reporting institutions to
Office Building, Washington, DC 20503, access the database that stores [Release No. 34–84570; File No. SR–GEMX–
or by sending an email to: information for the Lost and Stolen 2018–36]
Lindsay.M.Abate@omb.eop.gov; and (ii) Securities Program.
Self-Regulatory Organizations; Nasdaq
Charles Riddle, Acting Director/Chief We estimate that 10,100 reporting
GEMX, LLC; Notice of Filing and
Information Officer, Securities and institutions will report that securities
Immediate Effectiveness of Proposed
Exchange Commission, c/o Candace certificates are either missing, lost,
Rule Change To Amend General 8 of
Kenner, 100 F Street NE, Washington, counterfeit, or stolen annually and that
the Exchange’s Rules
DC 20549 or send an email to: PRA_ each reporting institution will submit
Mailbox@sec.gov. Comments must be this report 30 times each year. The staff November 9, 2018.
amozie on DSK3GDR082PROD with NOTICES

submitted to OMB within 30 days of estimates that the average amount of Pursuant to Section 19(b)(1) of the
this notice. time necessary to comply with Rule Securities Exchange Act of 1934
17f–1(c) and Form X17F–1A is five (‘‘Act’’),1 and Rule 19b–4 thereunder,2
4 The Commission estimates that 200 mutual
minutes per submission. The total notice is hereby given that on October
funds prepare both the implied consent notice and
the annual explanation of the right to revoke
burden is 25,250 hours annually for the
consent + 100 mutual funds that prepare only the entire industry (10,100 times 30 times 5 1 15 U.S.C. 78s(b)(1).
annual explanation of the right to revoke. divided by 60). 2 17 CFR 240.19b–4.

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Document Created: 2018-11-16 07:23:00
Document Modified: 2018-11-16 07:23:00
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 57770