Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension: Rule 2a-5

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<title>Federal Register, Volume 91 Issue 166 (Friday, August 28, 2026)</title>
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[Federal Register Volume 91, Number 166 (Friday, August 28, 2026)]
[Notices]
[Page 55658]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17604]



[[Page 55658]]

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SECURITIES AND EXCHANGE COMMISSION

[OMB Control No. 3235-0779]


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request; Extension: Rule 2a-5

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.) (``PRA''), the Securities and 
Exchange Commission (``Commission'') is submitting to the Office of 
Management and Budget (``OMB'') this request for extension of the 
collection of information titled, ``Rule 2a-5 under the Investment 
Company Act of 1940, Fair Value.'' The OMB Control Number is 3235-0779. 
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.
    Section 2(a)(41) of the Investment Company Act of 1940 
(``Investment Company Act'') requires funds to value their portfolio 
investments using the market value of their portfolio securities when 
market quotations for those securities are ``readily available,'' and, 
when a market quotation for a portfolio security is not readily 
available, by using the fair value of that security, as determined in 
good faith by the fund's board. The aggregate value of a fund's 
investments is the primary determinant of the fund's net asset value 
(``NAV''), which for many funds determine the price at which their 
shares are offered and redeemed (or repurchased).
    17 CFR 270.2a-5 (``rule 2a-5'') provides requirements for 
determining in good faith the fair value of the investments of a 
registered investment company or companies that have elected to be 
treated as business development companies under the Investment Company 
Act (``BDCs'' and, collectively, ``funds'') for purposes of section 
2(a)(41) of the Investment Company Act and rule 2a-4 thereunder. Under 
the rule, fair value as determined in good faith requires assessing and 
managing material risks associated with fair value determinations; 
selecting, applying, and testing fair value methodologies; and 
overseeing and evaluating any pricing services used. The rule also 
permits a fund's board to designate a ``valuation designee'' to perform 
fair value determinations. The valuation designee can be the adviser of 
the fund or an officer of an internally managed fund. When a board 
designates the performance of determinations of fair value to a 
valuation designee for some or all of the fund's investments under the 
rule, the rule requires the board to oversee the valuation designee's 
performance of fair value determinations.
    To facilitate the board's oversight, the rule also includes certain 
reporting and other requirements in the case of designation to a 
valuation designee. As relevant here, the rule requires, if the board 
designates performance of fair value determinations to a valuation 
designee, that the valuation designee report to the board in both 
periodic and as needed reports on a per-fund basis.
    Specifically, on a periodic basis, the valuation designee must 
provide the following to the board:
    <bullet> Quarterly Reports. At least quarterly, in writing, (1) any 
reports or materials requested by the board related to the fair value 
of designated investments or the valuation designee's process for fair 
valuing fund investments and (2) a summary or description of material 
fair value matters that occurred in the prior quarter. This summary or 
description must include (1) any material changes in the assessment and 
management of valuation risks, including any material changes in 
conflicts of interest of the valuation designee (and any other service 
provider), (2) any material changes to, or material deviations from, 
the fair value methodologies, and (3) any material changes to the 
valuation designee's process for selecting and overseeing pricing 
services, as well as any material events related to the valuation 
designee's oversight of pricing services.
    <bullet> Annual Reports. At least annually, in writing, an 
assessment of the adequacy and effectiveness of the valuation 
designee's process for determining the fair value of the designated 
portfolio of investments. At a minimum, this annual report must include 
a summary of the results of the testing of fair value methodologies 
required under the rule and an assessment of the adequacy of resources 
allocated to the process for determining the fair value of designated 
investments, including any material changes to the roles or functions 
of the persons responsible for determining fair value.
    Further, the rule requires the valuation designee to provide a 
written notification to the board of the occurrence of matters that 
materially affect the fair value of the designated portfolio of 
investments (defined as ``material matters'') within a time period 
determined by the board, but in no event later than five business days 
after the valuation designee becomes aware of the material matter. 
Material matters in this instance include, as examples, a significant 
deficiency or material weakness in the design or effectiveness of the 
valuation designee's fair value determination process or of material 
errors in the calculation of net asset value. The valuation designee 
must also provide such timely follow-on reports as the board may 
reasonably determine are appropriate.
    The rule constitutes a ``collection of information'' for PRA 
purposes. Respondents are funds. Compliance with rule 2a-5 is mandatory 
for any fund that would need to determine fair value under the 
Investment Company Act. To the extent that records required to be 
created and maintained under the rule are provided to the Commission in 
connection with examinations or investigations, such information would 
be kept confidential subject to the provisions of applicable law.
    Commission staff estimates that 10,047 respondents will provide one 
response each, for an aggregate of 10,047 responses, annually. 
Commission staff estimates 34 hours per response, for an aggregate of 
341,598 hours, annually. Commission staff estimates a monetized time 
cost of $33,422 per response, for an aggregate monetized time cost of 
$335,790,834, annually. Commission staff estimates an external cost 
burden of $3,632 per response, for an aggregate external cost burden of 
$36,490,704, annually.
    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=202606-3235-004">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202606-3235-004</a> or email comment to 
<a href="/cdn-cgi/l/email-protection#0d404f552342404f2342445f4c235e484e5269687e6652626b6b646e687f4d62606f2368627d236a627b"><span class="__cf_email__" data-cfemail="0b46495325444649254442594a25584e48546f6e786054646d6d62686e794b646669256e647b256c647d">[email&#160;protected]</span></a> within 30 days of the day 
after publication of this notice, by September 28, 2026.

    Dated: August 26, 2026.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-17604 Filed 8-27-26; 8:45 am]
BILLING CODE 8011-01-P


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