Notice2025-22535
Agency Information Collection Activities; Proposed Collection; Comment Request; Extension: Rule 32a-4
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
December 11, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 236 (Thursday, December 11, 2025)</title>
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[Federal Register Volume 90, Number 236 (Thursday, December 11, 2025)]
[Notices]
[Pages 57509-57510]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22535]
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SECURITIES AND EXCHANGE COMMISSION
[OMB Control No. 3235-0530]
Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension: Rule 32a-4
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. 350l et seq.), the Securities and Exchange
Commission (SEC or
[[Page 57510]]
``Commission'') is soliciting comments on the collections of
information summarized below. The Commission plans to submit these
existing collections of information to the Office of Management and
Budget (``OMB'') for extension and approval.
Section 32(a)(2) of the Investment Company Act of 1940 (15 U.S.C.
80a-31(a)(2)) (``Act'') requires that the selection of a registered
management investment company's or registered face-amount certificate
company's (collectively, ``funds'') independent public accountant be
submitted to shareholders for ratification or rejection. Rule 32a-4
under the Investment Company Act (17 CFR 270.32a-4) (``rule'') exempts
a fund from this requirement if, among other things, the fund has an
audit committee consisting entirely of independent directors. The rule
permits continuing oversight of a fund's accounting and auditing
processes by an independent audit committee in place of a shareholder
vote.
Among other things, to rely on rule 32a-4, a fund's board of
directors must adopt an audit committee charter and must preserve that
charter, and any modifications to the charter, permanently in an easily
accessible place. The purpose of these conditions is to ensure that
Commission staff will be able to monitor the duties and
responsibilities of an audit committee of a fund relying on the rule.
Commission staff estimates that on average the board of directors
takes 15 minutes to adopt the audit committee charter. Commission staff
has estimated that with an average of 9 directors on the board,\1\
total director time to adopt the charter is 2.25 hours. Combined with
an estimated \1/2\ hour of paralegal time to prepare the charter for
board review, the staff estimates a total one-time collection of
information burden of 2.75 hours for each fund. Once a board adopts an
audit committee charter, the charter is preserved as part of the fund's
records. Commission staff estimates that there is no annual hourly
burden associated with preserving the charter in accordance with this
rule.\2\
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\1\ This estimate is based on staff experience and on
discussions with a representative of an entity that surveys funds
and calculates fund board statistics based on responses to its
surveys.
\2\ This estimate is based on staff experience and discussions
with funds regarding the hour burden related to maintenance of the
charter.
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Because virtually all existing funds have now adopted audit
committee charters, the annual one-time collection of information
burden associated with adopting audit committee charters is limited to
the burden incurred by newly established funds. Commission staff
estimates that fund sponsors establish approximately 88 new funds each
year,\3\ and that all of these funds will adopt an audit committee
charter to rely on rule 32a-4. Thus, Commission staff estimates that
the annual one-time hour burden associated with adopting an audit
committee charter under rule 32a-4 is approximately 242 hours.\4\
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\3\ This estimate is based on the average annual number of
notifications of registration on Form N-8A filed from 2022 to 2024.
\4\ This estimate is based on the following calculation: (2.75
burden hours for establishing charter x 88 new funds = 242 burden
hours).
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When funds adopt an audit committee charter to rely on rule 32a-4,
they also may incur one-time costs related to hiring outside counsel to
prepare the charter. Commission staff estimates that those costs
average approximately $2,086 per fund.\5\ As noted above, Commission
staff estimates that approximately 88 new funds each year will adopt an
audit committee charter in order to rely on rule 32a-4. Thus,
Commission staff estimates that the ongoing annual cost burden
associated with rule 32a-4 in the future will be approximately
$183,568.\6\
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\5\ Costs may vary based on the individual needs of each fund;
however, based on the staff's experience and conversations with
outside counsel that prepare these charters, legal fees related to
the preparation and adoption of an audit committee charter usually
average $2,086 or less; the Commission also understands that model
audit committee charters are available, which reduces the costs
associated with drafting a charter.
\6\ This estimate is based on the following calculations:
($2,086 cost of adopting charter x 88 newly established funds =
$183,568).
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These estimates of average costs are made solely for the purposes
of the Paperwork Reduction Act. The estimates are not derived from a
comprehensive or even a representative survey or study of the costs of
Commission rules. The collections of information required by rule 32a-4
are necessary to obtain the benefits of 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 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 comments on this 60-Day Collection
Notice to Austin Gerig, Director/Chief Data Officer, Securities and
Exchange Commission, c/o Tanya Ruttenberg via email to
<a href="/cdn-cgi/l/email-protection#5d0d3c2d382f2a322f360f3839283e293432331c3e291d2e383e733a322b"><span class="__cf_email__" data-cfemail="6c3c0d1c091e1b031e073e0908190f180503022d0f182c1f090f420b031a">[email protected]</span></a> by February 9, 2026. There will be a
second opportunity to comment on this SEC request following the Federal
Register publishing a 30-Day Submission Notice.
Dated: December 9, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22535 Filed 12-10-25; 8:45 am]
BILLING CODE 8011-01-P
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