60 Day Notice

Federal Register / Vol. 87, No. 49 / Monday, March 14, 2022 / Notices
JoAnn M. Strasser, JoAnn.Strasser@
ThompsonHine.com.
FOR FURTHER INFORMATION CONTACT:
Steven I. Amchan, Senior Counsel, or
Lisa Reid Ragen, Branch Chief, at (202)
551–6825 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ second amended and
restated application, dated February 3,
2022, which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field, on the
SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at, at
http://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Dated: March 9, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–05345 Filed 3–11–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–644, OMB Control No.
3235–0692]

jspears on DSK121TN23PROD with NOTICES1

Proposed Collection; Comment
Request; Extension: Regulation S–ID
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 (the
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Regulation S–ID (17 CFR 248),
including the information collection
requirements thereunder, is designed to
better protect investors from the risks of
identity theft. Under Regulation S–ID,
SEC-regulated entities are required to
develop and implement reasonable
policies and procedures to identify,
detect, and respond to relevant red flags
(the ‘‘Identity Theft Red Flags Rules’’)
and, in the case of entities that issue

VerDate Sep<11>2014

17:51 Mar 11, 2022

Jkt 256001

credit or debit cards, to assess the
validity of, and communicate with
cardholders regarding, address changes.
Section 248.201 of Regulation S–ID
includes the following information
collection requirements for each SECregulated entity that qualifies as a
‘‘financial institution’’ or ‘‘creditor’’
under Regulation S–ID and that offers or
maintains covered accounts: (i) Creation
and periodic updating of an identity
theft prevention program (‘‘Program’’)
that is approved by the board of
directors, an appropriate committee
thereof, or a designated senior
management employee; (ii) periodic
staff reporting to the board of directors
on compliance with the Identity Theft
Red Flags Rules and related guidelines;
and (iii) training of staff to implement
the Program. Section 248.202 of
Regulation S–ID includes the following
information collection requirements for
each SEC-regulated entity that is a credit
or debit card issuer: (i) Establishment of
policies and procedures that assess the
validity of a change of address
notification if a request for an additional
or replacement card on the account
follows soon after the address change;
and (ii) notification of a cardholder,
before issuance of an additional or
replacement card, at the previous
address or through some other
previously agreed-upon form of
communication, or alternatively,
assessment of the validity of the address
change request through the entity’s
established policies and procedures.
SEC staff estimates of the hour
burdens associated with section 248.201
under Regulation S–ID include the onetime burden of complying with this
section for newly-formed SEC-regulated
entities, as well as the ongoing costs of
compliance for all SEC-regulated
entities.
All newly-formed financial
institutions and creditors would be
required to conduct an initial
assessment of covered accounts, which
SEC staff estimates would entail a onetime burden of 2 hours. Staff estimates
that this burden would result in a cost
of $910 to each newly-formed financial
institution or creditor.1 To the extent a
financial institution or creditor offers or
maintains covered accounts, SEC staff
estimates that the financial institution
or creditor would also incur a one-time
burden of 25 hours to develop and
obtain board approval of a Program, and
a one-time burden of 4 hours to train the
financial institution’s or creditor’s staff,
1 This estimate is based on the following
calculation: 2 hours × $455 (hourly rate for internal
counsel) = $910. See infra note 2 (discussing the
methodology for estimating the hourly rate for
internal counsel).

PO 00000

Frm 00069

Fmt 4703

Sfmt 4703

14305

for a total of 29 additional burden hours.
Staff estimates that these burdens would
result in additional costs of $15,603 for
each financial institution or creditor
that offers or maintains covered
accounts.2
SEC staff estimates that approximately
571 SEC-regulated financial institutions
and creditors are newly formed each
year.3 Each of these 571 entities will
need to conduct an initial assessment of
covered accounts, for a total of 1,142
hours at a total cost of $519,610.4 Of
these 571 entities, staff estimates that
approximately 90% (or 514) maintain
covered accounts.5 Accordingly, staff
estimates that the additional initial
burden for SEC-regulated entities that
are likely to qualify as financial
institutions or creditors and maintain
covered accounts is 14,906 hours at an
2 SEC staff estimates that, of the 29 hours
incurred to develop and obtain board approval of
a Program and train the financial institution’s or
creditor’s staff, 10 hours will be spent by internal
counsel at an hourly rate of $455, 17 hours will be
spent by administrative assistants at an hourly rate
of $89, and 2 hours will be spent by the board of
directors as a whole at an hourly rate of $4,770.
Thus, the estimated $15,603 in additional costs is
based on the following calculation: (10 hours ×
$455 = $4,550) + (17 hours × $89 = $1,513) + (2
hours × $4,770 = $9,540) = $15,603.
The cost estimate for internal counsel is derived
from SIFMA’s Management & Professional Earnings
in the Securities Industry 2013, modified to account
for an 1800-hour work-year and multiplied by 5.35
to account for bonuses, entity size, employee
benefits, and overhead, and adjusted for inflation.
The cost estimated for administrative assistants is
derived from SIFMA’s Office Salaries in the
Securities Industry 2013, modified to account for an
1800-hour work-year and multiplied by 2.93 to
account for bonuses, entity size, employee benefits
and overhead, and adjusted for inflation. The cost
estimate for the board of directors is derived from
estimates made by SEC staff regarding typical board
size and compensation that is based on information
received from fund representatives and publicly
available sources, and adjusted for inflation.
3 Based on a review of new registrations typically
filed with the SEC each year, SEC staff estimates
that approximately 1,277 investment advisers, 109
broker dealers, 34 investment companies, and 2
ESCs typically apply for registration with the SEC
or otherwise are newly formed each year, for a total
of 1,422 entities that could be financial institutions
or creditors. Of these, staff estimates that all of the
investment companies, ESCs, and broker-dealers are
likely to qualify as financial institutions or
creditors, and 33% of investment advisers (or 426)
are likely to qualify. See Identity Theft Red Flags,
Investment Company Act Release No. 30456 (Apr.
10, 2013) (‘‘Adopting Release’’) at n.190 (discussing
the staff’s analysis supporting its estimate that 33%
of investment advisers are likely to qualify as
financial institutions or creditors). We therefore
estimate that a total of 571 total financial
institutions or creditors will bear the initial onetime burden of assessing covered accounts under
Regulation S–ID.
4 These estimates are based on the following
calculations: 571 entities × 2 hours = 1,142 hours;
571 entities × $910 = $519,610.
5 In the Proposing Release, the SEC requested
comment on the estimate that approximately 90%
of all financial institutions and creditors maintain
covered accounts; the SEC received no comments
on this estimate.

E:\FR\FM\14MRN1.SGM

14MRN1

14306

Federal Register / Vol. 87, No. 49 / Monday, March 14, 2022 / Notices

additional cost of $8,019,942.6 Thus, the
total initial estimated burden for all
newly-formed SEC-regulated entities is
16,048 hours at a total estimated cost of
$8,539,552.7
Each financial institution and creditor
would be required to conduct periodic
assessments to determine if the entity
offers or maintains covered accounts,
which SEC staff estimates would entail
an annual burden of 1 hour per entity.
Staff estimates that this burden would
result in an annual cost of $455 to each
financial institution or creditor.8 To the
extent a financial institution or creditor
offers or maintains covered accounts,
staff estimates that the financial
institution or creditor also would incur
an annual burden of 2.5 hours to
prepare and present an annual report to
the board, and an annual burden of 7
hours to periodically review and update
the Program (including review and
preservation of contracts with service
providers, as well as review and
preservation of any documentation
received from service providers). Staff
estimates that these burdens would
result in additional annual costs of
$8,638 for each financial institution or
creditor that offers or maintains covered
accounts.9
SEC staff estimates that there are
9,915 SEC-regulated entities that are
either financial institutions or creditors,
and that all of these will be required to
periodically review their accounts to
determine if they offer or maintain
covered accounts, for a total of 9,915
hours for these entities at a total cost of
$4,511,325.10 Of these 9,915 entities,
These estimates are based on the following
calculations: 514 financial institutions and creditors
that maintain covered accounts × 29 hours = 14,906
hours; 514 financial institutions and creditors that
maintain covered accounts × $15,603 = $8,019,942.
7 These estimates are based on the following
calculations: 1,142 hours + 14,906 hours = 16,048
hours; $519,610 + $8,019,942 = $8,539,552.
8 This estimate is based on the following
calculation: 1 hour × $455 (hourly rate for internal
counsel) = $455. See supra note 2 (discussing the
methodology for estimating the hourly rate for
internal counsel).
9 Staff estimates that, of the 9.5 hours incurred
to prepare and present the annual report to the
board and periodically review and update the
Program, 8.5 hours will be spent by internal counsel
at an hourly rate of $455, and 1 hour will be spent
by the board of directors as a whole at an hourly
rate of $4,770. Thus, the estimated $7,874 in
additional annual costs is based on the following
calculation: (8.5 hours × $455 = $3,868) + (1 hour
× $4,770 = $4,770) = $8,638. See supra note 2
(discussing the methodology for estimating the
hourly rate for internal counsel and the board of
directors).
10 Based on a review of entities that the SEC
regulates, SEC staff estimates that, as of September
30, 2021, there are approximately 14,705
investment advisers, 3,533 broker-dealers, 1,380
active open-end investment companies, and 100
ESCs. Of these, staff estimates that all of the brokerdealers, open-end investment companies and ESCs

jspears on DSK121TN23PROD with NOTICES1

6

VerDate Sep<11>2014

17:51 Mar 11, 2022

Jkt 256001

staff estimates that approximately 90
percent, or 8,924, maintain covered
accounts, and thus will need the
additional burdens related to complying
with the rules.11 Accordingly, staff
estimates that the additional annual
burden for SEC-regulated entities that
qualify as financial institutions or
creditors and maintain covered accounts
is 84,778 hours at an additional cost of
$77,085,512.12 Thus, the total estimated
ongoing annual burden for all SECregulated entities is 94,693 hours at a
total estimated annual cost of
$81,596,837.13
The collections of information
required by section 248.202 will apply
only to SEC-regulated entities that issue
credit or debit cards.14 SEC staff
understands that SEC-regulated entities
generally do not issue credit or debit
cards, but instead partner with other
entities, such as banks, that issue cards
on their behalf. These other entities,
which are not regulated by the SEC, are
already subject to substantially similar
change of address obligations pursuant
to the Agencies’ identity theft red flags
rules. Therefore, staff does not expect
that any SEC-regulated entities will be
subject to the information collection
requirements of section 248.202, and
accordingly, staff estimates that there is
no hour or cost burden for SECregulated entities related to section
248.202.
In total, SEC staff estimates that the
aggregate annual information collection
burden of Regulation S–ID is 110,741
hours (16,048 hours + 94,693 hours).
are likely to qualify as financial institutions or
creditors. We also estimate that approximately 33%
of investment advisers, or 4,902 investment
advisers, are likely to qualify. See Adopting
Release, supra note 3, at n.190 (discussing the
staff’s analysis supporting its estimate that 33% of
investment advisers are likely to qualify as financial
institutions or creditors). We therefore estimate that
a total of 9,915 financial institutions or creditors
will bear the ongoing burden of assessing covered
accounts under Regulation S–ID. (The SEC staff
estimates that the other types of entities that are
covered by the scope of the SEC’s rules will not be
financial institutions or creditors and therefore will
not be subject to the rules’ requirements.)
The estimates of 9,915 hours and $3,784,800 are
based on the following calculations: 9,915 financial
institutions and creditors × 1 hour = 9,915 hours;
9,915 financial institutions and creditors × $455 =
$4,511,325.
11 See supra note 5 and accompanying text. If a
financial institution or creditor does not maintain
covered accounts, there would be no ongoing
annual burden for purposes of the PRA.
12 These estimates are based on the following
calculations: 8,924 financial institutions and
creditors that maintain covered accounts × 9.5
hours = 84,778 hours; 8,924 financial institutions
and creditors that maintain covered accounts ×
$8,638 = $77,085,512.
13 These estimates are based on the following
calculations: 9,915 hours + 84,778 hours = 94,693
hours; $4,511,325 + $77,085,512 = $81,596,837.
14 § 248.202(a).

PO 00000

Frm 00070

Fmt 4703

Sfmt 4703

This estimate of burden hours is made
solely for the purposes of the Paperwork
Reduction Act and is not derived from
a quantitative, comprehensive, or even
representative survey or study of the
burdens associated with Commission
rules and forms. Compliance with
Regulation S–ID, including compliance
with the information collection
requirements thereunder, is mandatory
for each SEC-regulated entity that
qualifies as a ‘‘financial institution’’ or
‘‘creditor’’ under Regulation S–ID (as
discussed above, certain collections of
information under Regulation S–ID are
mandatory only for financial
institutions or creditors that offer or
maintain covered accounts). Responses
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 control
number.
Written comments are invited on: (i)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(ii) the accuracy of the agency’s estimate
of the burden of the collection of
information; (iii) ways to enhance the
quality, utility, and clarity of the
information collected; and (iv) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication May 13, 2022.
Please direct your written comments
to David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O John R.
Pezzullo, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
[email protected].
Dated: March 9, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–05350 Filed 3–11–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
2:00 p.m. on Thursday,
March 17, 2022.
PLACE: The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
TIME AND DATE:

E:\FR\FM\14MRN1.SGM

14MRN1