Notice2025-09480
Proposed Collection; Comment Request; Extension: Rule 7d-2
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
May 28, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 101 (Wednesday, May 28, 2025)</title>
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[Federal Register Volume 90, Number 101 (Wednesday, May 28, 2025)]
[Notices]
[Pages 22545-22546]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09480]
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SECURITIES AND EXCHANGE COMMISSION
[OMB Control No. 3235-0527]
Proposed Collection; Comment Request; Extension: Rule 7d-2
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 (``Commission'') is soliciting comments on the collection of
information.
In Canada, as in the United States, individuals can invest a
portion of their earnings in tax-deferred retirement savings accounts
(``Canadian retirement accounts''). These accounts, which operate in a
manner similar to individual retirement accounts in the United States,
encourage retirement savings by permitting savings on a tax-deferred
basis. Individuals who establish Canadian retirement accounts while
living and working in Canada and who later move to the United States
(``Canadian-U.S. Participants'' or ``participants'') often continue to
hold their retirement assets in their Canadian retirement accounts
rather than prematurely withdrawing (or ``cashing out'') those assets,
which would result in immediate taxation in Canada.
Once in the United States, however, these participants historically
have been unable to manage their Canadian retirement account
investments. Most investment companies (``funds'') that are ``qualified
companies'' for Canadian retirement accounts are not registered under
the U.S. securities laws. Securities of those unregistered funds,
therefore, generally cannot be publicly offered and sold in the United
States without violating the registration requirement of the Investment
Company Act of 1940 (``Investment Company Act'').\1\ As a result of
this registration requirement, Canadian-U.S. Participants previously
were not able to purchase or exchange securities for their Canadian
retirement accounts as needed to meet their changing investment goals
or income needs.
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\1\ 15 U.S.C. 80a. In addition, the offering and selling of
securities that are not registered pursuant to the Securities Act of
1933 (``Securities Act'') is generally prohibited by U.S. securities
laws. 15 U.S.C. 77.
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The Commission issued a rulemaking in 2000 that enabled Canadian-
U.S. Participants to manage the assets in their Canadian retirement
accounts by providing relief from the U.S. registration requirements
for offers of securities of foreign issuers to Canadian-U.S.
Participants and sales to Canadian retirement accounts.\2\ Rule 7d-2
under the Investment Company Act \3\ permits foreign funds to offer
securities to Canadian-U.S. Participants and sell securities to
Canadian retirement accounts without registering as investment
companies under the Investment Company Act.
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\2\ See Offer and Sale of Securities to Canadian Tax-Deferred
Retirement Savings Accounts, Release Nos. 33-7860, 34-42905, IC-
24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]; this rulemaking
also included new rule 237 under the Securities Act, permitting
securities of foreign issuers to be offered to Canadian-U.S.
Participants and sold to Canadian retirement accounts without being
registered under the Securities Act. 17 CFR 230.237.
\3\ 17 CFR 270.7d-2.
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Rule 7d-2 contains a ``collection of information'' requirement
within the meaning of the Paperwork Reduction Act of 1995.\4\ Rule 7d-2
requires written offering materials for securities offered or sold in
reliance on that rule to disclose prominently that those securities and
the fund issuing those securities are not registered with the
Commission, and that those securities and the fund issuing those
securities are exempt from registration under U.S. securities laws.
Rule 7d-2 does not require any documents to be filed with the
Commission.
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\4\ 44 U.S.C. 3501-3502.
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Rule 7d-2 requires written offering documents for securities
offered or sold in reliance on the rule to disclose prominently that
the securities are not registered with the Commission and may not be
offered or sold in the United States unless registered or exempt from
registration under the U.S. securities laws, and also to disclose
prominently that the fund that issued the securities is not registered
with the Commission. The burden under the rule associated with adding
this disclosure to written offering documents is minimal and is non-
recurring. The foreign issuer, underwriter, or broker-dealer can
redraft an existing prospectus or other written offering material to
add this disclosure statement, or may draft a sticker or supplement
containing this disclosure to be added to existing offering materials.
In either case, based on discussions with representatives of the
Canadian fund industry, the staff estimates that it would take an
average of 10 minutes per document to draft the requisite disclosure
statement.
The staff estimates that there are 3,887 publicly offered Canadian
funds that potentially would rely on the rule to offer securities to
participants and sell securities to their Canadian retirement accounts
without registering under the Investment Company Act.\5\ The staff
estimates that all of these funds have previously relied upon the rule
and have already made the one-time change to their offering documents
required to rely on the rule. The staff estimates that 194 (5 percent)
additional Canadian funds would newly rely on the rule each year to
offer securities to Canadian-U.S. Participants and sell securities to
their Canadian retirement accounts, thus incurring the paperwork burden
required under the rule. The staff estimates that each of those funds,
on average, distributes 3 different written offering documents
concerning those securities, for a total of 582 offering documents. The
staff therefore estimates that 194 respondents would make 582 responses
by adding the new disclosure statement to 582 written offering
documents. The staff therefore estimates that the annual burden
associated with the rule 7d-2 disclosure requirement would be 97 hours
(582 offering documents x 10 minutes per document). The total annual
cost of these burden hours is estimated to be $49,567 (97 hours x $511
per hour of attorney time).\6\
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\5\ International Investment Funds Association, Worldwide Public
Tables for the Second Quarter of 2024, at Table 4, available at
<a href="https://iifa.ca/resource/collection/658ACD2D-DB32-4C34-B2F7-129D184E7EAC/WorldwidePublicReportUS_2024-Q2.xlsx">https://iifa.ca/resource/collection/658ACD2D-DB32-4C34-B2F7-129D184E7EAC/WorldwidePublicReportUS_2024-Q2.xlsx</a>.
\6\ The Commission's estimate concerning the wage rate for
attorney time is based on salary information for the securities
industry compiled by the Securities Industry and Financial Markets
Association (``SIFMA''); the $511 per hour figure for an Attorney is
based on SIFMA's Management & Professional Earnings in the
Securities Industry 2013, updated for 2024, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits and overhead.
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These burden hour estimates are based upon the Commission staff's
experience and discussions with the fund industry. The estimates of
average burden hours are made solely for the purposes of the Paperwork
Reduction Act. These estimates are 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 mandatory and is necessary to comply
[[Page 22546]]
with the requirements of the rule in general.
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 proposed
collection of information is necessary for the proper performance of
the functions of the SEC, including whether the information will have
practical utility; (b) the accuracy of the SEC's estimate of the burden
imposed by the proposed collection of information, including the
validity of the methodology and the assumptions used; (c) ways to
enhance the quality, utility, and clarity of the information to be
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated,
electronic collection techniques or other forms of information
technology.
Please direct your written comment to Austin Gerig, Director/Chief
Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg,
100 F Street NE, Washington, DC 20549 and send it by email to
<a href="/cdn-cgi/l/email-protection#a7f7c6d7c2d5d0c8d5ccf5c2c3d2c4d3cec8c9e6c4d3e7d4c2c489c0c8d1"><span class="__cf_email__" data-cfemail="cc9cadbca9bebba3bea79ea9a8b9afb8a5a3a28dafb88cbfa9afe2aba3ba">[email protected]</span></a> by July 28, 2025.
Dated: May 21, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09480 Filed 5-27-25; 8:45 am]
BILLING CODE 8011-01-P
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