Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85719 

1Estimates of the number of hours are based on 

conversations with representatives of mutual funds 

Continued 

existence, substance and effect of any 

order granted pursuant to the 

application. In addition, each SubAdvised Fund will hold itself out to the 

public as employing the multi-manager 

structure described in the application. 

The prospectus will prominently 

disclose that the Adviser has the 

ultimate responsibility, subject to 

oversight by the Board, to oversee the 

Sub-Advisers and recommend their 

hiring, termination, and replacement. 

3. The Adviser will provide general 

management services to each SubAdvised Fund, including overall 

supervisory responsibility for the 

general management and investment of 

the Sub-Advised Fund’s assets, and 

subject to review and oversight of the 

Board, will (i) set the Sub-Advised 

Fund’s overall investment strategies, (ii) 

evaluate, select, and recommend SubAdvisers for all or a portion of the SubAdvised Fund’s assets, (iii) allocate and, 

when appropriate, reallocate the SubAdvised Fund’s assets among SubAdvisers, (iv) monitor and evaluate the 

Sub-Advisers’ performance, and (v) 

implement procedures reasonably 

designed to ensure that Sub-Advisers 

comply with the Sub-Advised Fund’s 

investment objective, policies and 

restrictions. 

4. Sub-Advised Funds will inform 

shareholders of the hiring of a new SubAdviser within 90 days after the hiring 

of the new Sub-Adviser pursuant to the 

Modified Notice and Access Procedures. 

5. At all times, at least a majority of 

the Board will be Independent Trustees, 

and the selection and nomination of 

new or additional Independent Trustees 

will be placed within the discretion of 

the then-existing Independent Trustees. 

6. Independent Legal Counsel, as 

defined in Rule 0–1(a)(6) under the Act, 

will be engaged to represent the 

Independent Trustees. The selection of 

such counsel will be within the 

discretion of the then-existing 

Independent Trustees. 

7. Whenever a Sub-Adviser is hired or 

terminated, the Adviser will provide the 

Board with information showing the 

expected impact on the profitability of 

the Adviser. 

8. The Board must evaluate any 

material conflicts that may be present in 

a sub-advisory arrangement. 

Specifically, whenever a sub-adviser 

change is proposed for a Sub-Advised 

Fund (‘‘Sub-Adviser Change’’) or the 

Board considers an existing SubAdvisory Agreement as part of its 

annual review process (‘‘Sub-Adviser 

Review’’): 

(a) The Adviser will provide the 

Board, to the extent not already being 

provided pursuant to Section 15(c) of 

the Act, with all relevant information 

concerning: 

(i) Any material interest in the 

proposed new Sub-Adviser, in the case 

of a Sub-Adviser Change, or the SubAdviser in the case of a Sub-Adviser 

Review, held directly or indirectly by 

the Adviser or a parent or sister 

company of the Adviser, and any 

material impact the proposed SubAdvisory Agreement may have on that 

interest; 

(ii) any arrangement or understanding 

in which the Adviser or any parent or 

sister company of the Adviser is a 

participant that (A) may have had a 

material effect on the proposed SubAdviser Change or Sub-Adviser Review, 

or (B) may be materially affected by the 

proposed Sub-Adviser Change or SubAdviser Review; 

(iii) any material interest in a SubAdviser held directly or indirectly by an 

officer or Trustee of the Sub-Advised 

Fund, or an officer or board member of 

the Adviser (other than through a 

pooled investment vehicle not 

controlled by such person); and 

(iv) any other information that may be 

relevant to the Board in evaluating any 

potential material conflicts of interest in 

the proposed Sub-Adviser Change or 

Sub-Adviser Review. 

(b) the Board, including a majority of 

the Independent Trustees, will make a 

separate finding, reflected in the Board 

minutes, that the Sub-Adviser Change or 

continuation after Sub-Adviser Review 

is in the best interests of the SubAdvised Fund and its shareholders and, 

based on the information provided to 

the Board, does not involve a conflict of 

interest from which the Adviser, a SubAdviser, any officer or Trustee of the 

Sub-Advised Fund, or any officer or 

board member of the Adviser derives an 

inappropriate advantage. 

9. Each Sub-Advised Fund will 

disclose in its registration statement the 

Aggregate Fee Disclosure. 

10. In the event that the Commission 

adopts a rule under the Act providing 

substantially similar relief to that in the 

order requested in the application, the 

requested order will expire on the 

effective date of that rule. 

11. Any new Sub-Advisory 

Agreement or any amendment to an 

existing Investment Advisory 

Agreement or Sub-Advisory Agreement 

that directly or indirectly results in an 

increase in the aggregate advisory fee 

rate payable by the Sub-Advised Fund 

will be submitted to the Sub-Advised 

Fund’s shareholders for approval. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28688 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

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–1; SEC File No. 270–236, OMB 

Control No. 3235–0222 

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 (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 for 

extension and approval. 

Rule 17f–1 (17 CFR 270.17f–1) under 

the Investment Company Act of 1940 

(the ‘‘Act’’) (15 U.S.C. 80a) is entitled: 

‘‘Custody of Securities with Members of 

National Securities Exchanges.’’ Rule 

17f–1 provides that any registered 

management investment company 

(‘‘fund’’) that wishes to place its assets 

in the custody of a national securities 

exchange member may do so only under 

a written contract that must be ratified 

initially and approved annually by a 

majority of the fund’s board of directors. 

The written contract also must contain 

certain specified provisions. In addition, 

the rule requires an independent public 

accountant to examine the fund’s assets 

in the custody of the exchange member 

at least three times during the fund’s 

fiscal year. The rule requires the written 

contract and the certificate of each 

examination to be transmitted to the 

Commission. The purpose of the rule is 

to ensure the safekeeping of fund assets. 

Commission staff estimates that each 

fund makes 1 response and spends an 

average of 3.5 hours annually in 

complying with the rule’s requirements. 

Commission staff estimates that on an 

annual basis it takes: (i) 0.5 Hours for 

the board of directors 1 to review and 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
85720 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

that comply with the rule. The actual number of 

hours may vary significantly depending on 

individual fund assets. The hour burden for rule 

17f–1 does not include preparing the custody 

contract because that would be part of customary 

and usual business practice. 

2Based on a review of Form N–17f–1 filings over 

the last three years the Commission staff estimates 

that an average of 6 funds rely on rule 17f–1 each 

year. 

3This estimate is based on the following 

calculation: (6 Respondents × 3.5 hours = 21 hours). 

The annual burden for rule 17f–1 does not include 

time spent preparing Form N–17f–1. The burden for 

Form N–17f–1 is included in a separate collection 

of information. 

4This estimate is based on the following 

calculation: (2 hours of outside counsel time × $489 

= $978). The staff has estimated the average cost of 

outside counsel at $489 per hour, based on 

information received from funds and their counsel. 

5This estimate is based on information received 

from fund representatives estimating the aggregate 

annual cost of an independent public accountant’s 

periodic verification of assets and preparation of the 

certificate of examination. 

6This estimate is based on the following 

calculation: ($978 + $9,050 = $10,028). 

7This estimate is based on the following 

calculation: (6 funds × $10,028 = $60,168). 

ratify the custodial contracts; and (ii) 3 

hours for the fund’s controller to assist 

the fund’s independent public auditors 

in verifying the fund’s assets. 

Approximately 6 funds rely on the rule 

annually, with a total of 6 responses.2

Thus, the total annual hour burden for 

rule 17f–1 is approximately 21 hours.3

Funds that rely on rule 17f–1 

generally use outside counsel to prepare 

the custodial contract for the board’s 

review and to transmit the contract to 

the Commission. Commission staff 

estimates the cost of outside counsel to 

perform these tasks for a fund each year 

is $978.4 Funds also must have an 

independent public accountant verify 

the fund’s assets three times each year 

and prepare the certificate of 

examination. Commission staff 

estimates the annual cost for an 

independent public accountant to 

perform this service is $9,050.5

Therefore, the total annual cost burden 

for a fund that relies on rule 17f–1 

would be approximately $10,028.6 As 

noted above, the staff estimates that 6 

funds rely on rule 17f–1 each year, for 

an estimated total annualized cost 

burden of $60,168.7

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. Compliance 

with the collections of information 

required by rule 17f–1 is mandatory for 

funds that place their assets in the 

custody of a national securities 

exchange member. 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 Commission requests written 

comments on: (a) Whether the 

collections of information are necessary 

for the proper performance of the 

functions of the Commission, including 

whether the information has practical 

utility; (b) the accuracy of the 

Commission’s estimate of the burdens 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 David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Cynthia 

Roscoe, 100 F Street NE, Washington, 

DC 20549; or send an email to: PRA_

Mailbox@sec.gov. 

Dated: December 22, 2020. 

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2020–28768 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90766; File No. S7–22–20] 

Notice of Substituted Compliance 

Application Submitted by the French 

Autorite ́ des Marche ́s Financiers and 

the Autorite ́ de Controˆle Prudential et 

de Re ́solution in Connection With 

Certain Requirements Applicable to 

Non-U.S. Security-Based Swap Dealers 

and Major Security-Based Swap 

Participants Subject to Regulation in 

the French Republic; Proposed Order 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Notice of application for 

substituted compliance determination; 

proposed order. 

SUMMARY: The Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’) 

is soliciting public comment on an 

application by the French Autorite ́ des 

Marche ́s Financiers (‘‘AMF’’) and the 

Autorite ́ de Controˆle Prudential et de 

Re ́solution (‘‘ACPR’’) requesting that, 

pursuant to rule 3a71–6 under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’), the Commission 

determine that registered security-based 

swap dealers and registered major 

security-based swap participants (‘‘SBS 

Entities’’) that are not U.S. persons and 

that are subject to certain regulation in 

the French Republic (‘‘France’’) may 

comply with certain requirements under 

the Exchange Act via compliance with 

corresponding requirements of France 

and the European Union. The 

Commission also is soliciting comment 

on a proposed Order providing for 

conditional substituted compliance in 

connection with the application. 

DATES: Submit comments on or before 

January 25, 2021. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/proposed.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

22–20 on the subject line. 

Paper Comments 

• Send paper comments to Vanessa 

A. Countryman, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number S7–22–20. This file number 

should be included on the subject line 

if email 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 website (http://www.sec.gov/ 

rules/proposed.shtml). Comments are 

also available for website 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 

10:00 a.m. and 3:00 p.m. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that the Commission does not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make publicly 

available. 

FOR FURTHER INFORMATION CONTACT: 

Carol M. McGee, Assistant Director or 

Laura Compton, Senior Special Counsel 

at 202–551–5870, Office of Derivatives 

Policy, Division of Trading and Markets, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–7010. 

SUPPLEMENTARY INFORMATION: 

The Commission is soliciting public 

comment on an application by the AMF 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES