Notice2022-16847
Submission for OMB Review; Comment Request: Extension: Rule 12d3-1
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 5, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 150 (Friday, August 5, 2022)</title>
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[Federal Register Volume 87, Number 150 (Friday, August 5, 2022)]
[Notices]
[Page 48050]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-16847]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-504, OMB Control No. 3235-0561]
Submission for OMB Review; Comment Request: Extension: Rule 12d3-
1
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
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 12d3-1 (17 CFR 270.12d3-1) under the Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) (``Investment Company Act'') permits a
fund to invest up to five percent of its assets in securities of an
issuer deriving more than fifteen percent of its gross revenues from
securities-related businesses (subject to certain limitations),
notwithstanding the general prohibition in Section 12(d)(3) of the
Investment Company Act of a registered investment company (``fund'')
and companies controlled by the fund purchasing securities issued by a
registered investment adviser, broker, dealer, or underwriter
(``securities-related businesses'').
A fund may, however, rely on an exemption in rule 12d3-1 to acquire
securities issued by its subadvisers in circumstances in which the
subadviser would have little ability to take advantage of the fund,
because it is not in a position to direct the fund's securities
purchases. This exemption in rule 12d3-1 is available if: (i) the
subadviser is not, and is not an affiliated person of, an investment
adviser that provides advice with respect to the portion of the fund
that is acquiring the securities; and (ii) the advisory contracts of
the subadviser, and any subadviser that is advising the purchasing
portion of the fund, prohibit them from consulting with each other
concerning securities transactions of the fund, and limit their
responsibility in providing advice to providing advice with respect to
discrete portions of the fund's portfolio.\1\
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\1\ See 17 CFR 270.270.12d3-1(c)(3).
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Based on an analysis of fund filings, Commission staff estimates
that approximately 285 funds enter into such new subadvisory agreements
each year, and that it will require approximately 3 attorney hours to
draft and execute additional clauses in new subadvisory contracts in
order for funds and subadvisers to be able to rely on the exemptions in
rule 12d3-1. Because these additional clauses are identical to the
clauses that a fund would need to insert in their subadvisory contracts
to rely on rules 10f-3 (17 CFR 270.10f-3), 17a-10 (17 CFR 270.17a-10),
and 17e-1 (17 CFR 270.17e-1), and because we believe that funds that
use one such rule generally use all of these rules, we apportion this 3
hour time burden equally to all four rules. Therefore, we estimate that
the burden allocated to rule 12d3-1 for this contract change would be
0.75 hours. Assuming that all 285 funds that enter into new subadvisory
contracts each year make the modification to their contract required by
the rule, we estimate that the rule's contract modification requirement
will result in 214 burden hours annually, with an associated time cost
of approximately $90,950.
The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act. The estimate is not derived
from a comprehensive or even a representative survey or study of the
costs of Commission rules. Complying with this collection of
information requirement is necessary to obtain the benefit of relying
on rule 12d3-1. 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 background documentation for this information
collection at the following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
by September 6, 2022 to (i) <a href="/cdn-cgi/l/email-protection#cf828d97e180828de180869d8ee19c8a8c90abaabca490a0a9a9a6acaabd8fa0a2ade1aaa0bfe1a8a0b9"><span class="__cf_email__" data-cfemail="b9f4fbe197f6f4fb97f6f0ebf897eafcfae6dddccad2e6d6dfdfd0dadccbf9d6d4db97dcd6c997ded6cf">[email protected]</span></a>
and (ii) David Bottom, Director/Chief Information Officer, Securities
and Exchange Commission, c/o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an email to: <a href="/cdn-cgi/l/email-protection#114143504e5c70787d737e69516274723f767e67"><span class="__cf_email__" data-cfemail="c7979586988aa6aeaba5a8bf87b4a2a4e9a0a8b1">[email protected]</span></a>.
Dated: August 1, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-16847 Filed 8-4-22; 8:45 am]
BILLING CODE 8011-01-P
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