Submission for OMB Review; Comment Request
| Published date | 30 September 2019 |
| Citation | 84 FR 51645 |
| Record Number | 2019-21080 |
| Section | Notices |
| Court | Securities And Exchange Commission |
Federal Register, Volume 84 Issue 189 (Monday, September 30, 2019)
[Federal Register Volume 84, Number 189 (Monday, September 30, 2019)]
[Notices]
[Pages 51645-51646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21080]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-793, OMB Control No. 3235-0734]
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 22c-1
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
[[Page 51646]]
approved collection of information discussed below.
Rule 22c-1 (17 CFR 270.22c-1) under the Investment Company Act of
1940 (15 U.S.C. 80a) (the ``Investment Company Act'' or ``Act'')
enables a fund to choose to use ``swing pricing'' as a tool to mitigate
shareholder dilution. Rule 22c-1 is intended to promote investor
protection by providing funds with an additional tool to mitigate the
potentially dilutive effects of shareholder purchase or redemption
activity and a set of operational standards that allow funds to gain
comfort using swing pricing as a means of mitigating potential
dilution.
The respondents to amended rule 22c-1 are open-end management
investment companies (other than money market funds or exchange-traded
funds) that engage in swing pricing. Compliance with rule 22c-1(a)(3)
is mandatory for any fund that chooses to use swing pricing to adjust
its NAV in reliance on the rule.
While we are not aware of any funds that have engaged in swing
pricing,\1\ we are estimating for the purpose of this analysis that 5
fund complexes have funds that may adopt swing pricing policies and
procedures in the future pursuant to the rule. We estimate that the
total burden associated with the preparation and approval of swing
pricing policies and procedures by those fund complexes that would use
swing pricing will be 280 hours.\2\ We also estimate that it will cost
a fund complex $43,406 to document, review and initially approve these
policies and procedures, for a total cost of $217,030.\3\
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\1\ No funds have engaged in swing pricing as reported on Form
N-CEN as of August 14, 2019.
\2\ This estimate is based on the following calculation: (48 + 2
+ 6) hours x 5 fund complexes = 280 hours.
\3\ These estimates are based on the following calculations: 24
hours x $201 (hourly rate for a senior accountant) = $4,824; 24
hours x $463 (blended hourly rate for assistant general counsel
($433) and chief compliance officer ($493)) = $11,112; 2 hours (for
a fund attorney's time to prepare materials for the board's
determinations) x $340 (hourly rate for a compliance attorney) =
$680; 6 hours x $4,465 (hourly rate for a board of 8 directors) =
$26,790; ($4,824 + $11,112 + $680 + $26,790) = $43,406; $43,406 x 5
fund complexes = $217,030. The hourly wages used are from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for an 1800-hour work-year
and inflation, and multiplied by 5.35 to account for bonuses, firm
size, employee benefits, and overhead. The staff previously
estimated in 2009 that the average cost of board of director time
was $4,000 per hour for the board as a whole, based on information
received from funds and their counsel. Adjusting for inflation, the
staff estimates that the current average cost of board of director
time is approximately $4,465.
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Rule 22c-1 requires a fund that uses swing pricing to maintain the
fund's swing policies and procedures that are in effect, or at any time
within the past six years were in effect, in an easily accessible
place.\4\ The rule also requires a fund to retain a written copy of the
periodic report provided to the board prepared by the swing pricing
administrator that describes, among other things, the swing pricing
administrator's review of the adequacy of the fund's swing pricing
policies and procedures and the effectiveness of their implementation,
including the impact on mitigating dilution and any back-testing
performed.\5\ The retention of these records is necessary to allow the
staff during examinations of funds to determine whether a fund is in
compliance with its swing pricing policies and procedures and with rule
22c-1. We estimate a time cost per fund complex of $292.\6\ We estimate
that the total for recordkeeping related to swing pricing will be 20
hours, at an aggregate cost of $1,460, for all fund complexes that we
believe include funds that have adopted swing pricing policies and
procedures.\7\
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\4\ See rule 22c-1(a)(3)(iii).
\5\ See id.
\6\ This estimate is based on the following calculations: 2
hours x $58 (hourly rate for a general clerk) = $116; 2 hours x $88
(hourly rate for a senior computer operator) = $176. $116 + $176 =
$292.
\7\ These estimates are based on the following calculations: 4
hours x 5 fund complexes = 20 hours. 5 fund complexes x $292 =
$1,460.
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Amortized over a three-year period, we believe that the hour
burdens and time costs associated with rule 22c-1, including the burden
associated with the requirements that funds adopt policies and
procedures, obtain board approval, and periodic review of an annual
written report from the swing pricing administrator, and retain certain
records and written reports related to swing pricing, will result in an
average aggregate annual burden of 113.3 hours, and average aggregate
time costs of $73,803.\8\
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\8\ These estimates are based on the following calculations:
(280 hours (year 1) + (3 x 20 hours) (years 1, 2 and 3)) / 3 = 113.3
hours; ($217,030 (year 1) + (3 x $1,460) (years 1, 2 and 3)) / 3 =
$73,803.
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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.
This collection of information is necessary to obtain a benefit and
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.
The public may view the background documentation for this
information collection at the following website, www.reginfo.gov.
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) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o
Candace Kenner, 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: September 24, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-21080 Filed 9-27-19; 8:45 am]
BILLING CODE P
