[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Notices]
[Pages 65877-65878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25866]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; 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 17f-7; SEC File No. 270-470; OMB Control No. 3235-0529.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3521) (``Paperwork Reduction Act''), the
Securities and Exchange Commission (the ``Commission'') is soliciting
comments on the collections of information summarized below. The
Commission plans to submit these existing collections of information to
the Office of Management and Budget (``OMB'') for extension and
approval.
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
[[Page 65878]]
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 960 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. The staff estimates each response will take 6 hours,
requiring a total of approximately 48 hours for each adviser.\2\ Thus
the total annual burden associated with these requirements of the rule
is approximately 46,080.\3\ The staff further estimates that during
each year, each of approximately 40 global custodians will make an
average of 4 responses to analyze custody risks and provide notice of
any material changes to custody risk under the rule. The staff
estimates that each response will take 260 hours, requiring
approximately 1,040 hours annually per global custodian.\4\ Thus the
total annual burden associated with these requirements is approximately
41,600 hours.\5\ The staff estimates that the total annual hour burden
associated with all collection of information requirements of the rule
is therefore 87,680 hours.\6\
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\1\ In October 2019, Commission staff estimated that 960
investment advisers managed or sponsored open-end registered funds
(including exchange-traded funds) and closed-end registered funds.
\2\ 8 responses per adviser x 6 hours per response = 48 hours
per adviser.
\3\ 960 advisers x 48 hours per adviser = 46,080 hours.
\4\ 260 hours per response x 4 responses per global custodian =
1,040 hours per global custodian.
\5\ 40 global custodians x 1,040 hours per global custodian =
41,600 hours.
\6\ 46,080 hours + 41,600 hours = 87,680 hours.
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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 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.
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information has
practical utility; (b) the accuracy of the agency's estimate of the
burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
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.
Please direct your written comments to Charles Riddle, Acting
Director/Chief Information Officer, Securities and Exchange Commission,
C/O Cynthia Roscoe, 100 F Street NE, Washington, DC 20549; or send an
email to: [email protected].
Dated: November 25, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-25866 Filed 11-27-19; 8:45 am]
BILLING CODE 8011-01-P