Notice2026-04150
Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension: Rule 17f-7
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, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 41 (Tuesday, March 3, 2026)</title>
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[Federal Register Volume 91, Number 41 (Tuesday, March 3, 2026)]
[Notices]
[Pages 10434-10435]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04150]
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SECURITIES AND EXCHANGE COMMISSION
[OMB Control No. 3235-0529]
Agency Information Collection Activities; Submission for OMB
Review; Comment Request; Extension: Rule 17f-7
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-3521) (``Paperwork Reduction Act''), 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 collections of information
discussed below.
Rule 17f-7 (17 CFR 270.17f-7) permits a fund under certain conditions
to maintain its foreign assets with an eligible securities depository,
which has to meet minimum standards for a depository. The fund or its
investment adviser generally determines whether the depository complies
with those requirements based on information provided by the fund's
primary custodian (a bank that acts as global custodian). The
depository custody arrangement also must meet certain conditions. The
fund or its adviser must receive from the primary custodian (or its
agent) an initial risk analysis of the depository arrangements, and the
fund's contract with its primary custodian must state that the
custodian will monitor risks and promptly notify the fund or its
adviser of material changes in risks. The primary custodian and other
custodians also are required to agree to exercise at least reasonable
care, prudence, and diligence.
The collection of information requirements in rule 17f-7 are
intended to provide workable standards that protect funds from the
risks of using foreign securities depositories while assigning
appropriate responsibilities to the fund's primary custodian and
investment adviser based on their capabilities. The requirement that
the foreign securities depository meet specified minimum standards is
intended to ensure that the depository is subject to basic safeguards
deemed appropriate for all depositories. The requirement that the fund
or its adviser must receive from the primary custodian (or its agent)
an initial risk analysis of the depository arrangements, and that the
fund's contract with its primary custodian must state that the
custodian will monitor risks and promptly notify the fund or its
adviser of material changes in risks, is intended to provide essential
information about custody risks to the fund's investment adviser as
necessary for it to approve the continued use of the depository. The
requirement that the primary custodian agree to exercise reasonable
care is intended to provide assurances that its services and the
information it provides will meet an appropriate standard of care.
The staff estimates that each of approximately 1,264 investment
advisers \1\ will make an average of 8 responses annually under the
rule to address depository compliance with minimum requirements, any
indemnification or insurance arrangements, and reviews of risk analyses
or notifications.\2\ The staff estimates each response will take 6
hours, requiring a total of approximately 48 hours for each adviser.\3\
Thus, the total annual burden associated with these requirements of the
rule is approximately 60,672 hours.\4\ Assuming an estimated wage rate
of approximately $381 per hour,\5\ the total internal cost to the
industry is approximately $23,116,032 to comply this aspect of the
rule.\6\
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\1\ From a review of the Form N-CEN filings as of September 16,
2025, the Commission staff estimated that 1,264 registered
investment advisers managed or sponsored open-end registered funds
(including exchange-traded funds) and closed-end registered funds.
\2\ 1,264 advisers x 8 responses = 10,112 responses.
\3\ 8 responses per adviser x 6 hours per response = 48 hours
per adviser.
\4\ 1,264 advisers x48 hours per adviser = 60,672 hours.
\5\ The Commission's estimated relevant wage rates are from
SIFMA's Management & Professional Earnings in the Securities
Industry 2013, and modified by the Commission staff in 2024 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; these estimates yield effective hourly wage figures for
compliance managers and trust administrators of $381 and $287,
respectively.
\6\ 60,672 hours x $381 per hour (wage rate for compliance
managers) = $23,116,032.
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In addition, based on public filings made with the Commission, we
calculate that there are approximately 87 global custodians that are
engaged to perform global custodial services to funds and thus subject
to the provisions of rule 17f-7.\7\ This estimate is based on
information that is publicly available on Form N-CEN filings.\8\ The
staff further estimates that during each year, each of the
approximately 87 global custodians will make an average of 4 responses
to analyze custody risks and provide notice of any materials changes to
custody risks under the rule.\9\ The staff estimates that each response
will take 260 hours, requiring approximately 1,040 hours annually per
global custodian.\10\ Thus the total annual burden associated with this
aspect of the rule is approximately 90,480 hours.\11\ Assuming an
estimated wage rate of approximately $287 per hour, the total internal
cost to the industry is approximately $25,967,760 to comply with this
aspect of the rule.\12\
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\7\ We analyzed Form N-CEN filings for registrants as of
September 15, 2025 and based on these filings, we calculated the
number of global custodians that have been retained by funds and are
subject to the provisions of rule 17f-7 to be 87.
\8\ See Item C.12.a.vii.7 of Form N-CEN.
\9\ 87 custodians x 4 responses = 348 responses.
\10\ 260 hours per response x 4 responses per global custodian =
1,040 hours per global custodian.
\11\ 87 global custodians x 1,040 hours per global custodian =
90,480 hours.
\12\ 90,480 hours x $287 per hour (wage rate for trust
administrators) = $25,967,760.
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The total annual hour burden associated with all collection of
information requirements of the rule is therefore 151,152 hours,\13\
and the total internal cost to the industry of the hour burden is
approximately $49,083,792.\14\
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\13\ 60,672 hours + 90,480 hours = 151,152 hours.
\14\ $23,116,032 + $25,967,760 = $49,083,792.
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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
[[Page 10435]]
costs of Commission rules and forms. Compliance with the collection of
information requirements of the rule is necessary to obtain the benefit
of relying on the rule's permission for funds to maintain their assets
in foreign custodians. The information provided under rule 17f-7 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 OMB Control Number.
The public may view and comment on this information collection
request at: <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202512-3235-007">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202512-3235-007</a> or email comment to
<a href="/cdn-cgi/l/email-protection#f0bdb2a8debfbdb2debfb9a2b1dea3b5b3af9495839baf9f969699939582b09f9d92de959f80de979f86"><span class="__cf_email__" data-cfemail="ce838c96e081838ce081879c8fe09d8b8d91aaabbda591a1a8a8a7adabbc8ea1a3ace0aba1bee0a9a1b8">[email protected]</span></a> within 30 days of the day
after publication of this notice, by April 3, 2026.
Dated: February 26, 2026.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-04150 Filed 3-2-26; 8:45 am]
BILLING CODE 8011-01-P
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