30 Day Notice

lotter on DSK11XQN23PROD with NOTICES1

54274

Federal Register / Vol. 87, No. 170 / Friday, September 2, 2022 / Notices

supplements (or just a statement
describing the amendments) to clients
only when disciplinary information in
the brochures or supplements becomes
materially inaccurate.
The brochure assists the client in
determining whether to retain, or
continue employing, the adviser. The
information that rule 204–3 requires to
be contained in the brochure is also
used by the Commission and staff in its
enforcement, regulatory, and
examination programs. This collection
of information is found at 17 CFR
275.204–3 and is mandatory.
The respondents to this information
collection are certain investment
advisers registered with the
Commission. The Commission has
estimated that compliance with rule
204–3 imposes a burden of
approximately 3.9 hours annually based
on advisers having a median of 92
clients each. Our latest data indicate
that there were 14,777 advisers
registered with the Commission as of
March 31, 2022. Based on this figure,
the Commission estimates a total annual
burden of 57,589 hours for this
collection of information.
Rule 204–3 does not require
recordkeeping or record retention. The
collection of information requirements
under the rule are mandatory. The
information collected pursuant to the
rule is not filed with the Commission,
but rather takes the form of disclosures
to clients and prospective clients.
Accordingly, these disclosures are not
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.
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 by October 3, 2022 to (i)
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission,
c/o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: [email protected].
Dated: August 29, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–18978 Filed 9–1–22; 8:45 am]
BILLING CODE 8011–01–P

VerDate Sep<11>2014

16:40 Sep 01, 2022

Jkt 256001

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–176, OMB Control No.
3235–0311]

Submission for OMB Review;
Comment Request; Extension: Rule
7d–1
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. 3501–3520), 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 collection of
information discussed below.
Section 7(d) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
7(d)) (the ‘‘Act’’ or ‘‘Investment
Company Act’’) requires an investment
company (‘‘fund’’) organized outside the
United States (‘‘foreign fund’’) to obtain
an order from the Commission allowing
the fund to register under the Act before
making a public offering of its securities
through the United States mail or any
means of interstate commerce. The
Commission may issue an order only if
it finds that it is both legally and
practically feasible effectively to enforce
the provisions of the Act against the
foreign fund, and that the registration of
the fund is consistent with the public
interest and protection of investors.
Rule 7d–1 (17 CFR 270.7d–1) under
the Act, which was adopted in 1954,
specifies the conditions under which a
Canadian management investment
company (‘‘Canadian fund’’) may
request an order from the Commission
permitting it to register under the Act.
Although rule 7d–1 by its terms applies
only to Canadian funds, other foreign
funds generally have agreed to comply
with the requirements of rule 7d–1 as a
prerequisite to receiving an order
permitting the foreign fund’s
registration under the Act.
The rule requires a Canadian fund
proposing to register under the Act to
file an application with the Commission
that contains various undertakings and
agreements of the fund. The
requirement for the Canadian fund to
file an application is a collection of
information under the Paperwork
Reduction Act. Certain of the
undertakings and agreements, in turn,
impose the following additional
information collection requirements:
(1) the fund must file with the Commission
agreements between the fund and its

PO 00000

Frm 00088

Fmt 4703

Sfmt 4703

directors, officers, and service providers
requiring them to comply with the fund’s
charter and bylaws, the Act, and certain other
obligations relating to the undertakings and
agreements in the application;
(2) the fund and each of its directors,
officers, and investment advisers that is not
a U.S. resident, must file with the
Commission an irrevocable designation of the
fund’s custodian in the United States as agent
for service of process;
(3) the fund’s charter and bylaws must
provide that (a) the fund will comply with
certain provisions of the Act applicable to all
funds, (b) the fund will maintain originals or
copies of its books and records in the United
States, and (c) the fund’s contracts with its
custodian, investment adviser, and principal
underwriter, will contain certain terms,
including a requirement that the adviser
maintain originals or copies of pertinent
records in the United States;
(4) the fund’s contracts with service
providers will require that the provider
perform the contract in accordance with the
Act, the Securities Act of 1933 (15 U.S.C.
77a), and the Securities Exchange Act of 1934
(15 U.S.C. 78a), as applicable; and
(5) the fund must file, and periodically
revise, a list of persons affiliated with the
fund or its adviser or underwriter.

As noted above, under section 7(d) of
the Act the Commission may issue an
order permitting a foreign fund’s
registration only if the Commission
finds that ‘‘by reason of special
circumstances or arrangements, it is
both legally and practically feasible
effectively to enforce the provisions of
the (Act).’’ The information collection
requirements are necessary to ensure
that the substantive provisions of the
Act may be enforced as a matter of
contract right in the United States or
Canada by the fund’s shareholders or by
the Commission.
Rule 7d–1 also contains certain
information collection requirements that
are associated with other provisions of
the Act. These requirements are
applicable to all registered funds and
are outside the scope of this request.
The Commission believes that one
foreign fund is registered under rule 7d–
1 and currently active. Apart from
requirements under the Act applicable
to all registered funds, rule 7d–1
imposes ongoing burdens to maintain
records in the United States, and to
update, as necessary, certain fund
agreements, designations of the fund’s
custodian as service agent, and the
fund’s list of affiliated persons. The
Commission staff estimates that each
year under the rule, the active registrant
and its directors, officers, and service
providers engage in the following
collections of information and
associated burden hours:

E:\FR\FM\02SEN1.SGM

02SEN1

Federal Register / Vol. 87, No. 170 / Friday, September 2, 2022 / Notices

lotter on DSK11XQN23PROD with NOTICES1

• For the fund and its investment
adviser to maintain records in the
United States:1
0 hours: 0 minutes of compliance
clerk time.
• For the fund to update its list of
affiliated persons:
2 hours: 2 hours of support staff time.
• For new officers, directors, and
service providers to enter into and file
agreements requiring them to comply
with the fund’s charter and bylaws, the
Act, and certain other obligations:
0.5 hours: 7.5 minutes of director
time; 2.5 minutes of officer time; 20
minutes of support staff time.
• For new officers, directors, and
investment advisers who are not
residents of the United States to file
irrevocable designation of the fund’s
custodian as agent for process of service:
0.25 hours: 5 minutes of director time;
10 minutes of support staff time.
Based on the estimates above, the
Commission estimates that the total
annual burden of the rule’s paperwork
requirements is 2.75 hours.2 If a fund
were to file an application under rule
7d–1 to register under the Act, the
Commission estimates that the rule
would impose initial information
collection burdens (for filing an
application, preparing the specified
charter, bylaw, and contract provisions,
designations of agents for service of
process, and an initial list of affiliated
persons, and establishing a means of
keeping records in the United States) of
approximately 90 hours for the fund and
its associated persons. The Commission
is not including these hours in its
calculation of the annual burden
because no fund has applied to register
under the Act pursuant to rule 7d–1 in
the last three years.
As noted above, after registration, a
Canadian fund may file a supplemental
application seeking special relief
designed for the fund’s particular
circumstances. Rule 7d–1 does not
mandate these applications. For
purposes of this PRA we are assuming
one registrant has filed a substantive
1 The rule requires an applicant and its
investment adviser to maintain records in the
United States (which, without the requirement,
might be maintained in Canada or another foreign
jurisdiction), which facilitates routine inspections
and any special investigations of the fund by
Commission staff. The registrant and its investment
adviser, however, already maintain the registrant’s
records in the United States and in no other
jurisdiction. Therefore, maintenance of the
registrant’s records in the United States does not
impose an additional burden beyond that imposed
by other provisions of the Act. Those provisions are
applicable to all registered funds and the
compliance burden of those provisions is outside
the scope of this request.
2 This estimate is based on the following
calculation: (0 + 2 + 0.5 + 0.25) = 2.75 hours.

VerDate Sep<11>2014

16:40 Sep 01, 2022

Jkt 256001

54275

supplemental application within the
past three years. The Commission staff
estimates that the rule would impose an
additional information collection
burden of 5 hours on a fund to comply
with the Commission’s application
process. The staff understands that
funds also obtain assistance from
outside counsel to comply with the
Commission’s application process and
the cost burden of using outside counsel
is discussed below.
Therefore, the Commission staff
estimates the aggregate annual burden
hours of the collection of information
associated with rule 7d–1 is 13.25
hours.3 Amortized over three years we
estimate an hourly annual burden of
4.42 hours.4 These estimates of average
burden hours are made solely for the
purposes of the Paperwork Reduction
Act. The estimate is not derived from a
comprehensive or even a representative
survey or study of Commission rules.
If a Canadian or other foreign fund in
the future applied to register under the
Act under rule 7d–1, the fund initially
might have capital and start-up costs
(not including hourly burdens) of an
estimated $20,000 to comply with the
rule’s initial information collection
requirements. These costs include legal
and processing-related fees for
preparing the required documentation
(such as the application, charter, bylaw,
and contract provisions, designations
for service of process, and the list of
affiliated persons). Other related costs
would include fees for establishing
arrangements with a custodian or other
agent for maintaining records in the
United States, copying and
transportation costs for records, and the
costs of purchasing or leasing computer
equipment, software, or other record
storage equipment for records
maintained in electronic or
photographic form.
The Commission expects that a
foreign fund and its sponsors would
incur these costs immediately, and that
the annualized cost of the expenditures
would be $20,000 in the first year. Some
expenditures might involve capital
improvements, such as computer
equipment, having expected useful lives
for which annualized figures beyond the
first year would be meaningful. These
annualized figures are not provided,
however, because, in most cases, the
expenses would be incurred
immediately rather than on an annual
basis. The Commission is not including

these costs in its calculation of the
annualized capital/start-up costs
because no fund has applied under rule
7d–1 to register under the Act pursuant
to rule 7d–1 in the last three years.
As indicated above, a Canadian fund
may file a supplemental application
seeking special relief designed for the
fund’s particular circumstances. Rule
7d–1 does not mandate these
applications. The active registrant filed
a substantive application in the past
three years. The staff understands that
funds generally use outside counsel to
prepare the application. The staff
estimates that outside counsel spends
10 hours preparing the application,
including 8 hours by an associate and 2
hours by a partner. Outside counsel
billing arrangements vary based on
numerous factors, but the staff has
estimated the average cost of outside
counsel at $531 per hour, based on
information received from funds,
intermediaries and their counsel. The
Commission therefore estimates that the
fund would obtain assistance from
outside counsel at a cost of $5,130.5
These estimates of average costs are
made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
the costs of Commission rules. 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 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 by October 3, 2022 to (i)
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission, c/
o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: [email protected] .

3 This estimate is based on the following
calculation: 2.75 hours year 1 + 5 hours year 1 +
2.75 hours year 2 + 2.75 hours year 3 = 13.25 hours
4 The estimates are based on the following
calculations: 4.42 hours = 13.25 cumulative burden
hours/3 years.

[FR Doc. 2022–18979 Filed 9–1–22; 8:45 am]

PO 00000

Frm 00089

Fmt 4703

Sfmt 9990

Dated: August 29, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
BILLING CODE 8011–01–P
5 This estimate is based on the following
calculation: 10 hours × $531 per hour = $5,130.

E:\FR\FM\02SEN1.SGM

02SEN1