Federal Register / Vol. 76, No. 42 / Thursday, March 3, 2011 / Notices 11829 

1Based on information in Commission filings, we 

estimate that 42.5 percent of funds are advised by 

subadvisers. 

2This estimate is based on the following 

calculation (3 hours ÷ 4 rules = .75 hours). 

3This estimate is based on the following 

calculation: (0.75 hours × 252 portfolios = 189 

burden hours. 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

(44 U.S.C. 3501 et seq.), 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 12(d)(3) of the Investment 

Company Act of 1940 (15 U.S.C. 80a) 

generally prohibits registered 

investment companies (‘‘funds’’), and 

companies controlled by funds, from 

purchasing securities issued by a 

registered investment adviser, broker, 

dealer, or underwriter (‘‘securitiesrelated businesses’’). Rule 12d3–1 

(‘‘Exemption of acquisitions of securities 

issued by persons engaged in securities 

related businesses’’ (17 CFR 270.12d3– 

1)) permits a fund to invest up to five 

percent of its assets in securities of an 

issuer deriving more than fifteen 

percent of its gross revenues from 

securities-related businesses, but a fund 

may not rely on rule 12d3–1 to acquire 

securities of its own investment adviser 

or any affiliated person of its own 

investment adviser. 

A fund may, however, rely on an 

exemption in rule 12d3–1 to acquire 

securities issued by its subadvisers in 

circumstances in which the subadviser 

would have little ability to take 

advantage of the fund, because it is not 

in a position to direct the fund’s 

securities purchases. The exemption in 

rule 12d3–1 is available if (i) the 

subadviser is not, and is not an affiliated 

person of, an investment adviser that 

provides advice with respect to the 

portion of the fund that is acquiring the 

securities, and (ii) the advisory contracts 

of the subadviser, and any subadviser 

that is advising the purchasing portion 

of the fund, prohibit them from 

consulting with each other concerning 

securities transactions of the fund, and 

limit their responsibility in providing 

advice to providing advice with respect 

to discrete portions of the fund’s 

portfolio. 

Based on an analysis of fund filings, 

the staff estimates that approximately 

252 fund portfolios enter into 

subadvisory agreements each year.1

Based on discussions with industry 

representatives, the staff estimates that 

it will require approximately 3 attorney 

hours to draft and execute additional 

clauses in new subadvisory contracts in 

order for funds and subadvisers to be 

able to rely on the exemptions in rule 

12d3–1. Because these additional 

clauses are identical to the clauses that 

a fund would need to insert in their 

subadvisory contracts to rely on rules 

10f–3, 17a–10, and 17e–1 and because 

we believe that funds that use one such 

rule generally use all of these rules, we 

apportion this 3 hour time burden 

equally to all four rules. Therefore, we 

estimate that the burden allocated to 

rule 12d3–1 for this contract change 

would be 0.75 hours.2 Assuming that all 

252 funds that enter into new 

subadvisory contracts each year make 

the modification to their contract 

required by the rule, we estimate that 

the rule’s contract modification 

requirement will result in 189 burden 

hours annually.3

The estimate of average burden hours 

is 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. 

Complying with this collection of 

information requirement is necessary to 

obtain the benefit of relying on rule 

12d3–1. 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. 

The public may view the background 

documentation for this information 

collection at the following Web site, 

http://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 

e-mail to: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Thomas Bayer, Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

6432 General Green Way, Alexandria, 

VA 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: February 25, 2011. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4725 Filed 3–2–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63960; File No. SR–FINRA– 

2011–008] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of a 

Proposed Rule Change To Require 

Public Disclosure of Any Access or 

Post-Transaction Fees for Executions 

Against a Public Quotation in an OTC 

Equity Security 

February 24, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on February 18, 2011, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by FINRA. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to require 

members to disclose on the member’s 

Web site fees imposed against its 

published quotation in any OTC Equity 

Security consistent with FINRA Rule 

6450 (Restrictions on Access Fees). 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 


srobinson on DSKHWCL6B1PROD with NOTICES
11830 Federal Register / Vol. 76, No. 42 / Thursday, March 3, 2011 / Notices 

3See Securities Exchange Act Release No. 62359, 

75 FR 37488 (June 29, 2010) (Order Approving File 

No. SR–FINRA–2009–054). 

4For purposes of the first three business days of 

the disclosure rule’s operation, members would be 

in compliance with the advance notice requirement 

if they have posted the fees prior to 9 a.m. on the 

trading day upon which they impose the fee. 

5 15 U.S.C. 78o–3(b)(6). 

6 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On June 22, 2010, the SEC approved, 

among other rules, new FINRA Rule 

6450 (Restrictions on Access Fees).3

Rule 6450 provides that a firm may not 

impose, nor permit to be imposed, nonsubscriber access or post-transaction 

fees against its published quotation in 

any OTC Equity Security that exceed or 

accumulate to more than: 

• $0.003 per share, if the published 

quotation is priced equal to or greater 

than $1.00; or 

• The lesser of (a) 0.3% of the 

published quotation price on a per share 

basis or (b) 30% of the minimum pricing 

increment under Rule 6434 relevant to 

the display of the quotation on a per 

share basis if the published quotation is 

less than $1.00. 

FINRA is filing the proposed rule 

change to add Supplementary Material 

.01 (the ‘‘disclosure rule’’) to provide 

that a member must disclose on its Web 

site, in a clear and conspicuous manner, 

fees (and changes to fees) imposed 

against its published quotations as 

provided for in Rule 6450 at least three 

(3) business days in advance.4 Where a 

member makes multiple fee schedules 

available, the applicability of each 

schedule must be clear (e.g., volume 

discount tiers and rates). Members must 

maintain and preserve records of the fee 

schedules required to be made available 

pursuant to this disclosure rule for the 

period of time and accessibility 

specified in SEA Rule 17a–4(b) under 

the Exchange Act. 

FINRA has requested that the 

Commission approve the proposed rule 

change on an accelerated basis, so that 

it may become effective as soon as 

possible. The effective date of the 

proposed rule change will be two weeks 

after Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Exchange 

Act,5 which requires, among other 

things, that FINRA rules must be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. FINRA 

believes the proposed rule change will 

provide transparency to members as to 

the level of non-subscriber access or 

post-transaction fees imposed against 

published quotations in OTC Equity 

Securities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–FINRA–2011–008 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2011–008. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of 

FINRA. All comments received will be 

posted without change; the Commission 

does not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–FINRA–2011–008 and 

should be submitted on or before March 

24, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4720 Filed 3–2–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63966; File No. SR–FINRA– 

2011–009] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Eliminate Duplicative 

Filings Under FINRA Rule 9610(a) 

February 25, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 


srobinson on DSKHWCL6B1PROD with NOTICES