Submission for OMB Review; Comment Request


Federal Register, Volume 83 Issue 17 (Thursday, January 25, 2018)

Federal Register Volume 83, Number 17 (Thursday, January 25, 2018)


Pages 3460-3461

From the Federal Register Online via the Government Publishing Office

FR Doc No: 2018-01340



SEC File No. 270-516, OMB Control No. 3235-0574

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.


Rule 3a-8.

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 a request for extension of the previously approved collection of information discussed below.

Rule 3a-8 (17 CFR 270.3a-8) of the Investment Company Act of 1940 (15 U.S.C. 80a) (the ``Act''), serves as a nonexclusive safe harbor from investment company status for certain research and development companies (``R&D companies'').

The rule requires that the board of directors of an R&D company seeking to rely on the safe harbor adopt an appropriate resolution evidencing that the company is primarily engaged in a non-investment business and record that resolution contemporaneously in its minute books or comparable documents.\1\ An R&D company seeking to rely on the safe harbor must retain these records only as long as such

Page 3461

records must be maintained in accordance with state law.


\1\ Rule 3a-8(a)(6) (17 CFR 270.3a-8(6)).


Rule 3a-8 contains an additional requirement that is also a collection of information within the meaning of the PRA. The board of directors of a company that relies on the safe harbor under rule 3a-8 must adopt a written policy with respect to the company's capital preservation investments. We expect that the board of directors will base its decision to adopt the resolution discussed above, in part, on investment guidelines that the company will follow to ensure its investment portfolio is in compliance with the rule's requirements.

The collection of information imposed by rule 3a-8 is voluntary because the rule is an exemptive safe harbor, and therefore, R&D companies may choose whether or not to rely on it. The purposes of the information collection requirements in rule 3a-8 are to ensure that: (i) The board of directors of an R&D company is involved in determining whether the company should be considered an investment company and subject to regulation under the Act, and (ii) adequate records are available for Commission review, if necessary. Rule 3a-8 would not require the reporting of any information or the filing of any documents with the Commission.

Commission staff estimates that there is no annual recordkeeping burden associated with the rule's requirements. Nevertheless, the Commission requests authorization to maintain an inventory of one burden hour for administrative purposes.

Commission staff estimates that approximately 65,139 R&D companies may take advantage of rule 3a-8.\2\ Given that the board resolutions and investment guidelines will generally need to be adopted only once (unless relevant circumstances change),\3\ the Commission believes that all the R&D companies that existed prior to the adoption of rule 3a-8 adopted their board resolutions and established written investment guidelines in 2003 when the rule was adopted. We expect that R&D companies formed subsequent to the adoption of rule 3a-8 would adopt the board resolution and investment guidelines simultaneously with their formation documents in the ordinary course of business.\4\ Therefore, we estimate that rule 3a-8 does not impose additional burdens.


\2\ See National Science Foundation/Division of Science Resources Statistics, Business Research and Development and Innovation Survey: 2013 (results published August 2, 2016).

\3\ In the event of changed circumstances, the Commission believes that the board resolution and investment guidelines will be amended and recorded in the ordinary course of business and would not create additional time burdens.

\4\ In order for these companies to raise sufficient capital to fund their product development stage, Commission staff believes that they will need to present potential investors with investment guidelines. Investors generally want to be assured that the company's funds are invested consistent with the goals of capital preservation and liquidity.


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 the background documentation for this information collection at the following website, Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: email protected; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE, Washington, DC 20549 or send an email to: email protected. Comments must be submitted to OMB within 30 days of this notice.

Dated: January 19, 2018.

Eduardo A. Aleman,

Assistant Secretary.

FR Doc. 2018-01340 Filed 1-24-18; 8:45 am