Notice2025-03338
Submission for OMB Review; Comment Request; Extension: Rule 22e-3
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
March 3, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 40 (Monday, March 3, 2025)</title>
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[Federal Register Volume 90, Number 40 (Monday, March 3, 2025)]
[Notices]
[Page 11084]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-03338]
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SECURITIES AND EXCHANGE COMMISSION
[OMB Control No. 3235-0658]
Submission for OMB Review; Comment Request; Extension: Rule 22e-3
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, 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.
Section 22(e) of the Investment Company Act of 1940, as amended [15
U.S.C. 80a-22(e)] (``Act'') generally prohibits funds, including money
market funds, from suspending the right of redemption, and from
postponing the payment or satisfaction upon redemption of any
redeemable security for more than seven days. The provision was
designed to prevent funds and their investment advisers from
interfering with the redemption rights of shareholders for improper
purposes, such as the preservation of management fees. Although section
22(e) permits funds to postpone the date of payment or satisfaction
upon redemption for up to seven days, it does not permit funds to
suspend the right of redemption for any longer amount of time, absent
certain specified circumstances or a Commission order.
Rule 22e-3 under the Act [17 CFR 270.22e-3] exempts money market
funds from section 22(e) to permit them to suspend redemptions in order
to facilitate an orderly liquidation of the fund. Specifically, rule
22e-3 permits a money market fund to suspend redemptions and postpone
the payment of proceeds pending board-approved liquidation proceedings
if: (i) the fund, at the end of a business day, has invested less than
ten percent of its total assets in weekly liquid assets or, in the case
of a fund that is a government money market fund or a retail money
market fund, the fund's price per share as computed for the purpose of
distribution, redemption and repurchase, rounded to the nearest one
percent, has deviated from the stable price established by the board of
directors or the fund's board of directors, including a majority of
directors who are not interested persons of the fund, determines that
such a deviation is likely to occur; (ii) the fund's board of
directors, including a majority of disinterested directors, irrevocably
has approved the liquidation of the fund; and (iii) the fund, prior to
suspending redemptions, notifies the Commission of its decision to
liquidate and suspend redemptions. Rule 22e-3 also provides an
exemption from section 22(e) for registered investment companies that
own shares of a money market fund pursuant to section 12(d)(1)(E) of
the Act (``conduit funds''), if the underlying money market fund has
suspended redemptions pursuant to the rule. A conduit fund that
suspends redemptions in reliance on the exemption provided by rule 22e-
3 is required to provide prompt notice of the suspension of redemptions
to the Commission. Notices required by the rule must be provided by
electronic mail, directed to the attention of the Director of the
Division of Investment Management or the Director's designee.\1\
Compliance with the notification requirement is mandatory for money
market funds and conduit funds that rely on rule 22e-3 to suspend
redemptions and postpone payment of proceeds pending a liquidation, and
are not kept confidential.
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\1\ See rule 22e-3(a)(3) and 22e-3(b).
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Commission staff estimates that, on average, one fund would be
required to make the required notice every year.\2\ Commission staff
further estimates that a money market fund or conduit fund would spend
approximately one hour of an in-house attorney's time to prepare and
submit the notice required by the rule. Given these estimates, the
total annual burden of the notification requirement of rule 22e-3 for
all money market funds and conduit funds would be approximately one
hour at a cost of $511. The estimated total annual burden hours
associated with rule 22e-3 is 1 hour and external costs increased from
$0 to $584. This change in external costs reflects revised estimates.
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\2\ The Commission has not received any notices invoking rule
22e-3 to halt redemptions. However, for administrative purposes, we
are reporting one respondent and one annual response.
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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.
Compliance with the collection of information requirements of the
rule is necessary to obtain the benefit of relying on the rule.
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 OMB Control Number.
Written comments are invited on: (a) whether this collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden
imposed by the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology.
The public may view and comment on this information collection
request at: <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202412-3235-008">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202412-3235-008</a> or send an email comment to
<a href="/cdn-cgi/l/email-protection#e7aaa5bfc9a8aaa5c9a8aeb5a6c9b4a2a4b88382948cb88881818e848295a7888a85c9828897c9808891"><span class="__cf_email__" data-cfemail="83cec1dbadcccec1adcccad1c2add0c6c0dce7e6f0e8dcece5e5eae0e6f1c3eceee1ade6ecf3ade4ecf5">[email protected]</span></a> within 30 days of the day
after publication of this notice by April 3, 2025.
Dated: February 25, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-03338 Filed 2-28-25; 8:45 am]
BILLING CODE 8011-01-P
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