81680 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

1 15 U.S.C. 80a–17(a). 

2 15 U.S.C. 80a–2(a)(3)(E). 

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 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. 

December 20, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32517 Filed 12–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: Regulation S–AM; SEC File No. 

270–548; OMB Control No. 3235–0609. 

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 approval of extension of the 

previously approved collection of 

information provided for in Regulation 

S–AM (17 CFR part 248, subpart B), 

under the Fair and Accurate Credit 

Transactions Act of 2003 (Pub. L. 108– 

159, Section 214, 117 Stat. 1952 (2003)) 

(‘‘FACT Act’’), the Securities Exchange 

Act of 1934 (15 U.S.C. 78a et seq.), the 

Investment Company Act of 1940 (15 

U.S.C. 80a–1 et seq.), and the 

Investment Advisers Act of 1940 (15 

U.S.C. 80b–1 et seq.). 

Regulation S–AM implements the 

requirements of Section 214 of the 

FACT Act as applied to brokers, dealers, 

and investment companies, as well as 

investment advisers and transfer agents 

that are registered with the Commission 

(collectively, ‘‘Covered Persons’’). As 

directed by Section 214 of the FACT 

Act, before a receiving affiliate may 

make marketing solicitations based on 

the communication of certain consumer 

financial information from a Covered 

Person, the Covered Person must 

provide a notice to each affected 

individual informing the individual of 

his or her right to prohibit such 

marketing. The regulation potentially 

applies to all of the approximately 

21,496 Covered Persons registered with 

the Commission, although only 

approximately 12,038 of them have one 

or more corporate affiliates, and the 

regulation would require only 

approximately 2,150 of them to provide 

consumers with notice and an opt-out 

opportunity. 

The Commission staff estimates that 

there are approximately 12,038 Covered 

Persons having one or more affiliates, 

and that they would require an average 

one-time burden of 1 hour to review 

affiliate marketing practices, for a total 

of 12,038 hours, at a total staff cost of 

approximately $2,527,929. The staff also 

estimates that approximately 2,150 

Covered Persons would be required to 

provide notice and opt-out 

opportunities to consumers, and would 

incur an average first-year burden of 18 

hours in doing so, for a total estimated 

first-year burden of 38,700 hours, at a 

total staff cost of approximately 

$10,294,200. With regard to continuing 

notice burdens, the staff estimates that 

each of the approximately 2,150 

Covered Persons required to provide 

notice and opt-out opportunities to 

consumers would incur a burden of 

approximately 4 hours per year to create 

and deliver notices to new consumers 

and record any opt outs that are 

received on an ongoing basis, for a total 

of 8,600 hours, at a total staff cost of 

approximately $490,200 per year. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information on respondents; 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. 

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: December 21, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32522 Filed 12–27–10; 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 Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: Rule 17a–10; SEC File No. 270– 

507; OMB Control No. 3235–0563. 

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 (‘‘OMB’’) for 

extension and approval. 

Section 17(a) of the Investment 

Company Act of 1940 (the ‘‘Act’’), 

generally prohibits affiliated persons of 

a registered investment company 

(‘‘fund’’) from borrowing money or other 

property from, or selling or buying 

securities or other property to or from, 

the fund or any company that the fund 

controls.1 Section 2(a)(3) of the Act 

defines ‘‘affiliated person’’ of a fund to 

include its investment advisers.2 Rule 

17a–10 (17 CFR 270.17a–10) permits (i) 

a subadviser of a fund to enter into 

transactions with funds the subadviser 

does not advise but that are affiliated 

persons of a fund that it does advise 

(e.g., other funds in the fund complex), 

and (ii) a subadviser (and its affiliated 

persons) to enter into transactions and 

arrangements with funds the subadviser 

does advise, but only with respect to 

discrete portions of the subadvised fund 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81681 

3 17 CFR 270.17a–10(a)(2). 

4 44 U.S.C. 3501. 

5We assume that funds formed after 2003 that 

intended to rely on rule 17a–10 would have 

included the required provision as a standard 

element in their initial subadvisory contracts. 

6Based on information in Commission filings, we 

estimate that 42.5 percent of funds are advised by 

subadvisers. 

7 17 CFR 270.17a–10(a)(2). 

8This estimate is based on the following 

calculation: 3 hours ÷ 4 rules = 0.75 hours. 

9These estimates are based on the following 

calculations: 0.75 hours × 252 portfolios = 189 

burden hours; $316 per hour × 189 hours = $59,724 

total cost. The Commission staff’s estimates 

concerning the wage rates for attorney time are 

based on salary information for the securities 

industry compiled by the Securities Industry and 

Financial Markets Association. The $316 per hour 

figure for an attorney is from the Securities Industry 

and Financial Markets Association’s Management & 

Professional Earnings in the Securities Industry 

2009, modified by Commission staff to account for 

an 1800-hour work-year and multiplied by 5.35 to 

account for bonuses, firm size, employee benefits, 

and overhead. 

for which the subadviser does not 

provide investment advice. 

To qualify for the exemptions in rule 

17a–10, the subadvisory relationship 

must be the sole reason why section 

17(a) prohibits the transaction. In 

addition, the advisory contracts of the 

subadviser entering into the transaction, 

and any subadviser that is advising the 

purchasing portion of the fund, must 

prohibit the subadvisers from consulting 

with each other concerning securities 

transactions of the fund, and limit their 

responsibility to providing advice with 

respect to discrete portions of the fund’s 

portfolio.3 Section 17(a) of the 

Investment Company Act of 1940 (the 

‘‘Act’’), generally prohibits affiliated 

persons of a registered investment 

company (‘‘fund’’) from borrowing 

money or other property from, or selling 

or buying securities or other property to 

or from, the fund or any company that 

the fund controls. Section 2(a)(3) of the 

Act defines ‘‘affiliated person’’ of a fund 

to include its investment advisers. Rule 

17a–10 permits (i) a subadviser of a 

fund to enter into transactions with 

funds the subadviser does not advise 

but that are affiliated persons of a fund 

that it does advise (e.g., other funds in 

the fund complex), and (ii) a subadviser 

(and its affiliated persons) to enter into 

transactions and arrangements with 

funds the subadviser does advise, but 

only with respect to discrete portions of 

the subadvised fund for which the 

subadviser does not provide investment 

advice. 

To qualify for the exemptions in rule 

17a–10, the subadvisory relationship 

must be the sole reason why section 

17(a) prohibits the transaction. In 

addition, the advisory contracts of the 

subadviser entering into the transaction, 

and any subadviser that is advising the 

purchasing portion of the fund, must 

prohibit the subadvisers from consulting 

with each other concerning securities 

transactions of the fund, and limit their 

responsibility to providing advice with 

respect to discrete portions of the fund’s 

portfolio. This requirement regarding 

the prohibitions and limitations in 

advisory contracts of subadvisors 

relying on the rule constitutes a 

collection of information under the 

Paperwork Reduction Act of 1995 

(‘‘PRA’’).4

The staff assumes that all funds 

existing in 2003 amended their advisory 

contracts following the amendments to 

rule 17a–10 that year that conditioned 

certain exemptions upon these 

contractual alterations, and therefore 

there is no continuing burden for those 

funds.5 Staff also assumes that funds 

that came into existence after 2003 

included the contractual requirements 

in rule 17a–10 in their subadvisory 

agreements and therefore there is no 

continuing burden for those funds. 

Based on an analysis of fund filings, 

the staff estimates that approximately 

252 fund portfolios enter into new 

subadvisory agreements each year.6

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 

17a–10. Because these additional 

clauses are identical to 7 the clauses that 

a fund would need to insert in their 

subadvisory contracts to rely on rules 

10f–3, 12d3–1, 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 among all four rules. Therefore, 

we estimate that the burden allocated to 

rule 17a–10 for this contract change 

would be 0.75 hours.8 Assuming that all 

252 funds that enter into new 

subadvisory contracts each year include 

in their contract the provisions required 

by the rule, we estimate that the rule’s 

contract requirement will result in 189 

burden hours annually, with an 

associated cost of approximately 

$59,724.9

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 

17a–10. 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. 

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 will have 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 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. 

December 20, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32521 Filed 12–27–10; 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 Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: Rule 17a–6, SEC File No. 270– 

506, OMB Control No. 3235–0564. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501), 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. 

Section 17(a) of the Investment 

Company Act of 1940 (the ‘‘Act’’) 

generally prohibits affiliated persons of 

a registered investment company 

(‘‘fund’’) from borrowing money or other 

property from, or selling or buying 


emcdonald on DSK2BSOYB1PROD with NOTICES