30 Day Notice

31000

Federal Register / Vol. 86, No. 110 / Thursday, June 10, 2021 / Notices

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–321, OMB Control No.
3235–0358]

Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736.
Extension:
Rule 11a–3

Notice is hereby given that pursuant
to 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 11(a) of the Investment
Company Act of 1940 (‘‘Act’’) (15 U.S.C.
80a–11(a)) provides that it is unlawful
for a registered open-end investment
company (‘‘fund’’) or its underwriter to
make an offer to the fund’s shareholders
or the shareholders of any other fund to
exchange the fund’s securities for
securities of the same or another fund
on any basis other than the relative net
asset values (‘‘NAVs’’) of the respective
securities to be exchanged, ‘‘unless the
terms of the offer have first been
submitted to and approved by the
Commission or are in accordance with
such rules and regulations as the
Commission may have prescribed in
respect of such offers.’’ Section 11(a)
was designed to prevent ‘‘switching,’’
the practice of inducing shareholders of
one fund to exchange their shares for
the shares of another fund for the

purpose of exacting additional sales
charges.
Rule 11a–3 (17 CFR 270.11a–3) under
the Act of 1940 is an exemptive rule that
permits open-end investment
companies (‘‘funds’’), other than
insurance company separate accounts,
and funds’ principal underwriters, to
make certain exchange offers to fund
shareholders and shareholders of other
funds in the same group of investment
companies. The rule requires a fund,
among other things, (i) to disclose in its
prospectus and advertising literature the
amount of any administrative or
redemption fee imposed on an exchange
transaction, (ii) if the fund imposes an
administrative fee on exchange
transactions, other than a nominal one,
to maintain and preserve records with
respect to the actual costs incurred in
connection with exchanges for at least
six years, and (iii) give the fund’s
shareholders a sixty day notice of a
termination of an exchange offer or any
material amendment to the terms of an
exchange offer (unless the only material
effect of an amendment is to reduce or
eliminate an administrative fee, sales
load or redemption fee payable at the
time of an exchange).
The rule’s requirements are designed
to protect investors against abuses
associated with exchange offers, provide
fund shareholders with information
necessary to evaluate exchange offers
and certain material changes in the
terms of exchange offers, and enable the
Commission staff to monitor funds’ use
of administrative fees charged in
connection with exchange transactions.
The staff estimates that there are
approximately 1,397 active open-end
investment companies registered with
the Commission as of October 2020. The
staff estimates that 25 percent of these
funds (349 funds) impose a non-

nominal administrative fee on exchange
transactions. The staff estimates that the
recordkeeping requirement of the rule
requires approximately 1 hour annually
of clerical time (at an estimated $63 per
hour) 1 per fund, for a total of 349 hours
for all funds (at a total annual cost of
$21,987).2
The staff estimates that 5 percent of
these 1,397 funds (or 70 funds)
terminate an exchange offer or make a
material change to the terms of their
exchange offer each year, requiring the
fund to comply with the notice
requirement of the rule. The staff
estimates that complying with the
notice requirement of the rule requires
approximately 1 hour of attorney time
(at an estimated $419 per hour) 3 and 2
hours of clerical time (at an estimated
$63 per hour) per fund, for a total of
approximately 210 hours for all funds to
comply with the notice requirement (at
a total annual cost of $38,150).4 The
staff estimates that such notices will be
enclosed with other written materials
sent to shareholders, such as annual
shareholder reports or account
statements, and therefore any burdens
associated with mailing required notices
are accounted for in the burdens
associated with Form N–1A registration
statements for funds.
The recordkeeping and notice
requirements together impose an
estimated total burden of 559 hours on
all funds (at a total annual cost of
$60,137).5 The total number of
respondents is 419, each responding
once a year.6 The burdens associated
with the disclosure requirement of the
rule are accounted for in the burdens
associated with the Form N–1A
registration statement for funds.
Table 1 below summarizes the
currently-approved and updated
burdens associated with rule 11a–3.

TABLE 1—SUMMARY OF BURDEN ESTIMATES FOR RULE 11a–3
Internal burden

Wage rate

Cost of
internal
burden

Currently-Approved Burden Estimates

khammond on DSKJM1Z7X2PROD with NOTICES

Recordkeeping Requirement ....................
Respondents .............................................

1 hour .......................................................
402 funds .................................................

1 This estimate of $63 per hour for clerical work
and the other estimated wage rates below are
derived from the Securities Industry and Financial
Markets Association’s (‘‘SIFMA’’) Office Salaries in
the Securities Industry 2013, modified to account
for an 1,800-hour work-year and multiplied by 5.35
to account for bonuses, firm size, employee benefits
and overhead (updated for inflation).
2 This estimate is based on the following
calculations: (1,397 funds × 25% = 349 funds); (349
× 1 (clerical hour) = 349 clerical hours); (349 × $
63 = $21,987 total annual cost for recordkeeping
requirement).

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19:43 Jun 09, 2021

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$59/hr. (clerk) ...........................................
..................................................................

3 The estimate of $419 per hour for an Attorney
is derived from SIFMA’s Management &
Professional Earnings in the Securities Industry
2013, modified to account for an 1,800-hour workyear and multiplied by 5.35 to account for bonuses,
firm size, employee benefits and overhead (adjusted
for inflation).
4 This estimate is based on the following
calculations: (1,397 (funds) × 5% = 70 funds); (70
× 1 (attorney hour) = 70 total attorney hours); (70
(funds) × 2 (clerical hours) = 140 total clerical
hours); (70 (attorney hours) + 140 (clerical hours)
= 210 total hours); (70 (attorney hours) × $419 =

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$59.
402 funds.

$29,330 total attorney cost); (140 (clerical hours) ×
$63 = $8,820 clerical cost); ($29,330 + $8,820 =
$38,150 total annual cost).
5 This estimate is based on the following
calculations: (210 (notice hours) + 349
(recordkeeping hours) = 559 total hours); ($38,150
(notice costs) + $21,987 (recordkeeping costs) =
$60,137 total annual costs).
6 This estimate is based on the following
calculation: (349 funds responding to recordkeeping
requirement + 70 funds responding to notice
requirement = 419 total respondents).

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Federal Register / Vol. 86, No. 110 / Thursday, June 10, 2021 / Notices

31001

TABLE 1—SUMMARY OF BURDEN ESTIMATES FOR RULE 11a–3—Continued
Cost of
internal
burden

Internal burden

Wage rate

Total ...................................................

402 hours .................................................

..................................................................

$23,718.

Notice Requirement ..................................

1 hour .......................................................
2 hours .....................................................
80 funds ...................................................
240 hours .................................................

$392/hr. (attorney) ...................................
$59/hr. (clerk) ...........................................
..................................................................
..................................................................

$392.
$118.
80 funds.
$40,800.

..................................................................

$64,518.

Respondents .............................................
Total ...................................................
Total Responses (Recordkeeping + Notice).
Total Burden (Recordkeeping + Notice) ...

482.
642 hours .................................................
Updated Burden Estimates

Recordkeeping Requirement ....................
Respondents .............................................
Total ...................................................

1 hour .......................................................
349 funds .................................................
349 hours .................................................

$63/hr. (clerk) ...........................................
..................................................................
..................................................................

$63.
349 funds.
$21,987.

Notice Requirement ..................................

1 hour .......................................................
2 hours .....................................................
70 funds ...................................................
210 hours .................................................

$419/hr. (attorney) ...................................
$63/hr. (clerk) ...........................................
..................................................................
..................................................................

$419.
$126.
70 funds.
$38,150.

..................................................................

$60,137.

Respondents .............................................
Total ...................................................

khammond on DSKJM1Z7X2PROD with NOTICES

Total Responses (Recordkeeping + Notice).
Total Burden (Recordkeeping + Notice) ...

419.
559 hours .................................................

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 and forms.
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 control
number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) www.reginfo.gov/public/do/
PRAMain and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission, c/
o Cynthia Roscoe, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
Dated: June 4, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–12101 Filed 6–9–21; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–563, OMB Control No.
3235–0694]

Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Rule 17g–10 and Form ABS Due
Diligence—15E

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’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 17g–10 under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.).1
Rule 17g–10 contains certain
certification requirements for thirdparty due diligence service providers
that are employed by an NRSRO, an
issuer, or an underwriter, which must
be made on Form ABS Due Diligence—
15E. The Commission estimates that the
1 See

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total burden for respondents to comply
with Rule 17g–10 is 330 hours.
An agency may not conduct or
sponsor a collection of information
unless it displays a currently valid OMB
control number. No person shall be
subject to any penalty for failing to
comply with a collection of information
subject to the PRA that does not display
a valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
>www.reginfo.gov<. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) >www.reginfo.gov/public/
do/PRAMain< and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission, c/
o Cynthia Roscoe, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
Dated: June 4, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–12112 Filed 6–9–21; 8:45 am]
BILLING CODE 8011–01–P

17 CFR 240.17g–1 and 17 CFR 249b.300.

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