Notice2022-25101
Submission for OMB Review; Comment Request; Extension: Rule 17a-6
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
November 18, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 222 (Friday, November 18, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 222 (Friday, November 18, 2022)]
[Notices]
[Page 69355]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-25101]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-506, OMB Control No. 3235-0564]
Submission for OMB Review; Comment Request; Extension: Rule 17a-6
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.
Section 17(a) of the Investment Company Act of 1940 (the ``Act'')
generally prohibits affiliated persons of a registered investment
company (``fund'') from borrowing money or other property from, or
selling or buying securities or other property to or from, the fund or
any company that the fund controls. Rule 17a-6 (17 CFR 270.17a-6)
permits a fund, or a company controlled by the fund, and a ``portfolio
affiliate'' of the fund (a company that is an affiliated person of the
fund because the fund controls the company, or holds five percent or
more of the company's outstanding voting securities) to engage in
principal transactions that would otherwise be prohibited under section
17(a) of the Act under certain conditions. A fund may not rely on the
exemption in the rule to enter into a principal transaction with a
portfolio affiliate if certain prohibited participants (e.g.,
directors, officers, employees, or investment advisers of the fund)
have a financial interest in a party to the transaction. Rule 17a-6
specifies certain interests that are not ``financial interests,''
including any interest that the fund's board of directors (including a
majority of the directors who are not interested persons of the fund)
finds to be not material. A board making this finding is required to
record the basis for the finding in its meeting minutes. This
recordkeeping requirement is a collection of information under the
Paperwork Reduction Act of 1995 (``PRA'').
The rule is designed to permit transactions between funds and their
portfolio affiliates in circumstances in which it is unlikely that the
affiliate would be in a position to take advantage of the fund. In
determining whether a financial interest is ``material,'' the board of
the fund should consider whether the nature and extent of the interest
in the transaction is sufficiently small that a reasonable person would
not believe that the interest affected the determination of whether to
enter into the transaction or arrangement or the terms of the
transaction or arrangement. The information collection requirements in
rule 17a-6 are intended to ensure that Commission staff can review, in
the course of its compliance and examination functions, the basis for a
board of director's finding that the financial interest of an otherwise
prohibited participant in a party to a transaction with a portfolio
affiliate is not material.
Based on public filings made with the Commission, we estimate that
annually 335 funds and their series (collectively, ``funds'') may rely
on rule 17a-6 to engage in otherwise prohibited transactions under
section 17(a) of the 1940 Act. This estimate is based on publicly
available Form N-CEN filings. Solely for the purposes of this PRA
extension, we assume that each of these funds has engaged in one
transaction per reporting period that resulted in a paperwork burden
pursuant to rule 17a-6. We estimate that compliance with the
recordkeeping requirement for rule 17a-6 will impose a burden of .2
hours (12 minutes) for each transaction for which there is a paperwork
burden. Therefore, we estimate 67 burden hours to be associated with
rule 17a-6 recordkeeping requirements annually, with an associated
internal cost of $5,762.
The estimate of burden hours and burden costs is made solely for
the purposes of the PRA. 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 17a-
6. 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 December 19, 2022 to (i) <a href="/cdn-cgi/l/email-protection#7b36392355343639553432293a55283e38241f1e081024141d1d12181e093b141619551e140b551c140d"><span class="__cf_email__" data-cfemail="e4a9a6bccaaba9a6caabadb6a5cab7a1a7bb8081978fbb8b82828d878196a48b8986ca818b94ca838b92">[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#46161407190b272f2a24293e0635232568212930"><span class="__cf_email__" data-cfemail="79292b3826341810151b1601390a1c1a571e160f">[email protected]</span></a>.
Dated: November 14, 2022.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25101 Filed 11-17-22; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 18, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.