78802 Federal Register / Vol. 88, No. 220 / Thursday, November 16, 2023 / Notices 

1Estimates of the number of hours are based on 

conversations with representatives of mutual funds 

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 8 funds rely on rule 17f–1 each 

year. 

3This estimate is based on the following 

calculation: (8 respondents × 3.5 hours = 28 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 × $565 

= $1,130). The staff has estimated the average cost 

of outside counsel at $565 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: $1,130 + $10,412 = $11,542. 

7This estimate is based on the following 

calculation: 8 funds × $11,542 = $92,336. 1See 17 CFR 270.12d1–4. 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–236, OMB Control No. 

3235–0222] 

Proposed Collection; Comment 

Request; Extension: Rule 17f–1 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

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 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 8 funds rely on the rule 

annually, with a total of 8 responses.2

Thus, the total annual hour burden for 

rule 17f–1 is approximately 28 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 $1,130.4 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 $10,412.5

Therefore, the total annual cost burden 

for a fund that relies on rule 17f–1 

would be approximately $11,542.6 As 

noted above, the staff estimates that 8 

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

an estimated total annualized cost 

burden of $92,336.7

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. 

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 

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 

by January 16, 2024. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: David Bottom, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: November 13, 2023. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25361 Filed 11–15–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–578, OMB Control No. 

3235–0639] 

Proposed Collection; Comment 

Request; Extension: Rule 12d1–4 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

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’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for extension of the 

previously approved collection of 

information discussed below. 

Rule 12d1–4 (17 CFR 270.12d1– 

4)under the Investment Company Act of 

1940 (15 U.S.C. 80a–1 et seq.) 

(‘‘Investment Company Act’’) permits 

certain registered funds and business 

development companies (‘‘BDC’’) 

(‘‘acquiring fund’) that satisfy certain 

conditions to acquire shares of other 

certain registered funds and BDCs 

(‘‘acquired fund’’) in excess of the limits 

of section 12(d)(1) of the Act without 

obtaining an exemptive order from the 

Commission.1 This collection of 

information is voluntary because rule 


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Federal Register / Vol. 88, No. 220 / Thursday, November 16, 2023 / Notices 78803 

2 446 acquiring funds that will invest in open-end 

funds or UITs in reliance on rule 12d1–4 and 

beyond the 25% voting threshold = 4,061 series of 

management companies relying upon rule 12d1–4 

or statutory exemption per Form N–CEN items C.7.l 

and C.7.m (based on data as of December 2022, as 

derived from N–CEN filings through July 14, 2023) 

plus 37 acquiring BDCs (consistent with the prior 

renewal) and multiplied by 11% of acquiring funds 

that invest in at least one open-end fund or UIT 

beyond the 25% voting threshold of the rule (as 

estimated in the prior renewal). This estimate 

assumes that acquiring funds with current 

investments in other funds beyond the limits of 

section 12(d)(1) are subject to rule 12d1–4 at the 

same rate as the acquiring funds with current 

investments in other funds within the limits of 

section 12(d)(1). We lack structured data that would 

allow us to estimate the percentage of acquiring 

funds that are within the same group of investment 

companies as the acquired fund or the acquiring 

fund’s investment sub-adviser or any person 

controlling, controlled by, or under common 

control with such investment sub-adviser acts as 

the acquired fund’s investment adviser or depositor, 

and thus will be subject to the rule’s voting 

condition. To avoid underestimating the costs 

associated with this aspect of rule 12d1–4, we 

assume that all the 446 acquiring funds will be 

subject to the rule’s conditions. We estimate that of 

10 funds will utilize pass-through voting in limited 

circumstances. In circumstances where all holders 

of the outstanding voting securities of the acquired 

fund are required by rule 12d1–4 or otherwise 

under section 12(d)(1) to mirror vote the securities 

of the acquired fund, the acquiring fund may use 

pass-through instead of mirror voting. It is 

estimated that (consistent with the prior renewal) 

2.2% of acquiring funds that will invest in openend funds or UITs in reliance on rule 12d1–4 and 

beyond the 25% voting threshold will use passthrough voting (i.e., 2.2% of 446 acquiring funds 

equals 10 funds using pass-through voting). 

3This estimate is based on the following 

calculations: 2,616 = 6 hours × 436 funds. 4This estimate is based on the following 

calculations: 330 hours (33 hours × 10 funds). 5This estimate is based on the following 

calculations: 446 (436 + 10; combined total of funds 

using mirror voting and funds using pass-through 

voting); 2,946 (2,616 hours plus 330 hours). 

6This estimate is based on the number of 

acquiring-acquired fund pairs that do not share the 

same adviser as indicated in form N–PORT data 

between December 2022 and July 14, 2023 (18,695) 

and, consistent with the prior renewal, assumes that 

69% of such acquiring-acquired fund pairs will be 

subject to rule 12d1–4 (i.e., 12,900 = 18,695 × 0.69). 

7This estimate is based on the following 

calculation: 645 = 12,900 × 0.05. 

8This estimate is based on the following 

calculations: 26 hours = 20 + 6. 

9This estimate is based on the following 

calculations: 171,570 hours = (26 hours × 645 newly 

affected funds) + (12 hours × 12,900 affected funds). 

10 2,974 acquired management companies that 

will be subject to rule 12d1–4 = 4,310 acquired 

management companies × 69% of acquired 

management companies that will be subject to rule 

12d1–4 (as estimated in the prior renewal). Our 

calculation assumes that the estimate of acquiring 

funds that will be subject to rule 12d1–4 is also 

applicable to acquired funds. 4,310 acquired 

management companies = 3,170 acquired registered 

investment companies (based on data as of 

December 2022, as derived from N–PORT filings 

through July 14, 2023) × 17,546 registered 

investment companies (based on data as of 

December 2022, as derived from N–PORT filings 

through July 14, 2023)/12,906 management 

companies (based on data as of December 2022, as 

derived from N–CEN filings through July 14, 2023). 

This estimate assumes that acquired management 

companies with investments from acquiring funds 

beyond the limits of section 12(d)(1) will be subject 

to rule 12d1–4 at the same rate as the acquired 

management companies with investments from 

acquiring funds within the limits of section 

12(d)(1). 

11 4,965 acquiring management companies that 

will be subject to rule 12d1–4 = 7,195 acquiring 

management companies (based on data as of 

December 2022, as derived from N–PORT filings 

through July 14, 2023) × 69% of acquiring 

management companies that will be subject to rule 

12d1–4 (consistent with the prior renewal). This 

estimate assumes that acquiring management 

companies with current investments in other funds 

beyond the limits of section 12(d)(1) will be subject 

to rule 12d1–4 at the same rate as the acquiring 

management companies with current investments 

in other funds within the limits of section 12(d)(1) 

following the rule adoption. 

12 7,939 = 2,974 + 4,965. 

13This estimate is based on the following 

calculations: 142,902 = 18 hours × 7,939 funds. 

12d1–4 is an exemptive rule and, 

therefore, funds may choose not to rely 

on the proposed rule. 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 purpose of the information 

collection requirement in rule 12d1–4 is 

to ensure both that the concerns that led 

Congress to adopt section 12(d)(1) are 

mitigated and that funds relying upon 

the rule as an exemption from that 

section comply with the rule’s 

requirements. The following estimates 

of average internal burden hours are 

made solely for purposes of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.) and are not derived 

from a comprehensive or even 

representative survey or study of the 

cost of Commission rules and forms. 

Voting Provisions. With respect to 

voting provisions, Commission staff 

estimates that 446 acquiring funds will 

be subject to the requirements in rule 

12d1–4(b)(ii), 436 of which will be 

utilizing mirror voting and 10 of which 

will be utilizing pass-through voting.2

With respect to mirror voting, 

Commission staff estimates that, on 

average, internal counsel for such funds 

will spend 3 hours updating proxy 

voting policies and disclosures for such 

funds and 3 hours conducting voting 

procedures. Thus, the staff estimates 

that the annual hour burden of the 

collection of information imposed by 

the mirror voting provisions to be 6 

hours per fund, resulting in a total 

burden of 2,616 hours.3

In addition to the mirror voting 

provisions of the rule, there are some 

circumstances in which the acquiring 

funds are the only shareholders of an 

acquired fund, and in such cases, passthrough voting may be used. Staff 

estimates that 10 funds will use passthrough voting. Staff estimates that 

internal counsel for such funds will 

spend 3 hours updating proxy voting 

policies and disclosures and 30 hours 

communicating with shareholders and 

voting accordingly. Thus, the staff 

estimates that the annual hour burden of 

the collection of information imposed 

by the pass-through provisions to be 33 

hours per fund, resulting in a total 

burden of 330 hours.4

Combining the estimates for the 

mirror voting and pass-through voting 

calculations, staff estimates that 446 

funds will spend a total of 2,946 hours 

complying with the voting provisions of 

the rule.5

Fund of Funds Investment 

Agreements. With respect to the fund of 

funds investment agreement provisions, 

Commission staff estimates that 12,900 

funds that do not have the same 

investment adviser are subject to the 

requirement to enter into an agreement 

prior to the purchase of acquired fund 

shares in excess of section 12(d)(1)’s 

limits.6 Commission staff estimates, 

however, that the majority of affected 

funds have already complied with this 

requirement and staff assumes that, 

absent structured data to further 

calculate, 645 funds (5% of affected 

funds) would be newly subject to the 

rule on an annual basis.7 Commission 

staff estimates that such newly affected 

funds will spend 20 hours negotiating 

and memorializing the necessary 

agreements. Commission staff further 

estimates that newly affected funds will 

spend 6 hours establishing 

recordkeeping and policies and 

procedures. Accordingly, staff estimates 

that the annual burden solely for newly 

affected funds will be 26 hours.8

Commission staff further estimates that 

all affected funds will spend 12 hours 

on ongoing recordkeeping, resulting in a 

total annual hour burden of 171,570 

hours.9

Management Companies—Fund 

Filings. With respect to the management 

company fund finding provisions, 

Commission staff estimates that 2,974 

acquired management companies will 

be subject to rule 12d1–4.10 Commission 

staff further estimates that 4,965 

acquiring management companies will 

be subject to rule 12d1–4.11 This results 

in 7,939 management companies being 

subject to rule 12d1–4.12 Commission 

staff estimates that such management 

companies will spend 18 hours 

conducting evaluations and creating, 

reviewing, and maintaining written 

materials pursuant to the rule, resulting 

in a total annual hour burden of 142,902 

hours.13

UITs—Principal Underwriter or 

Depositor Evaluations. With respect to 


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78804 Federal Register / Vol. 88, No. 220 / Thursday, November 16, 2023 / Notices 

14This estimate assumes that there are 1,353 

series of UITs and that 40% of such UITS are 

acquiring UITs (as estimated in the prior renewal). 

The estimate of 1,353 series of UITs is based on data 

as of December 2022, as derived from N–CEN filings 

(items F.18 and F.19) through July 14, 2023. 

15This estimate assumes 2.5 hours of general 

clerk time and 2.5 hours of senior computer 

operator time 5 hours = 2.5 + 2.5. 

16This estimate is based on the following 

calculations: 2,705 = 5 hours × 541 funds. 

17 186 acquiring separate accounts that will be 

subject to rule 12d1–4 = [418 variable annuity 

separate accounts registered as UITs + 240 variable 

life insurance separate accounts registered as UITs 

+ 15 management company separate accounts (these 

figures are based on data as of December 2022, as 

derived from N–CEN filings through July 14, 2023)] 

× 40% of funds that are acquiring funds (as 

estimated in the prior renewal) × 69% of acquiring 

separate accounts that will be subject to rule 12d1– 

4 as estimated by a commenter (as estimated in the 

prior renewal). 

18This estimate is based on the following 

calculations: 744 = 4 hours × 186 funds. 

19 $246,340 = ($565 × 1 hour) × 436. 

20 $5,650 = ($565 × 1 hour) × 10 funds subject to 

pass through voting. 

21 $251,990 = $246,340 + $5,650. 

22 $2,186,550 = [($565 × 2) + ($565 × 4)] × 645 

funds newly subject to the fund of funds investment 

agreement provisions of the rule. See footnote 7 for 

the calculation of funds newly subject to the rule. 

23 $2,438,540 = $251,990 + $2,186,550. 

the UIT principal underwriter or 

depositor evaluations, Commission staff 

estimates that 541 acquiring UITs will 

be subject to rule 12d1–4.14 Commission 

staff estimates that such UITs will spend 

5 hours annually conducting 

evaluations and creating, reviewing, and 

maintaining written materials.15 This 

results in a total annual hour burden of 

2,705 hours.16

Separate Accounts Funding Variable 

Insurance Contracts. With respect to the 

separate account funding variable 

insurance contracts, Commission staff 

estimates that 186 acquiring separate 

accounts will be subject to rule 12d1– 

4.17 Commission staff estimates that 

separate accounts will spend 4 hours 

annually obtaining certificates and 

maintaining records, resulting in a total 

annual hour burden of 744 hours.18

The following estimates of external 

costs are made solely for purposes of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.) and are not derived 

from a comprehensive or even 

representative survey or study of the 

cost of Commission rules and forms. 

Voting Provisions. The staff estimates 

that, on average, outside counsel will 

spend 1 hour per vote conducting voting 

procedures with respect to mirror voting 

at a cost of $565 per hour. Staff therefore 

estimates an annual external cost 

burden of $246,340 with respect to 

mirror voting.19 Staff further estimates 

that, with respect to pass-through 

voting, outside counsel will spend 1 

hour to assist funds in communicating 

with shareholders and voting 

accordingly at a rate of $565 per hour. 

Staff therefore estimates an annual 

external cost burden of $5,650 with 

respect to pass-through voting.20

Accordingly, staff estimates a total 

annual external cost of $251,990 for 

compliance with the voting provisions 

of the rule.21

Fund of Funds Investment Agreement. 

Staff estimates that, on average, for 

funds newly subject to the rule, outside 

counsel will spend 2 hours negotiating 

and memorializing the necessary 

agreements under the rule at a cost of 

$565 per hour. Staff further estimates 

that, on average, for funds newly subject 

to the rule, outside counsel will spend 

4 hours establishing recordkeeping 

policies and procedures. Accordingly, 

staff estimates a total annual external 

costs of $2,186,550 for compliance with 

the fund of funds investment agreement 

provisions of the rule.22

Management Companies—Fund 

Filings. It is estimated that there is no 

external cost burden with respect to the 

management company findings 

provisions of the rule. 

UITs—Principal Underwriter or 

Depositor Evaluations. It is estimated 

that there is no external cost burden 

with respect to the UIT evaluation 

provisions of the rule. 

Separate Accounts Funding Variable 

Insurance Contracts. It is estimated that 

there is no external cost burden with 

respect to the separate account 

certification provisions of the rule. 

As outlined above, we estimate the 

total external cost burden to comply 

with rule 12d1–4 to be $2,438,540.23

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 

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 

by January 16, 2024. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: David Bottom, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: November 13, 2023. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25360 Filed 11–15–23; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

National Small Business Development 

Center Advisory Board 

AGENCY: Small Business Administration. 

ACTION: Notice of open Federal advisory 

committee meeting. 

SUMMARY: The SBA is issuing this notice 

to announce the date, time and agenda 

for a meeting of the National Small 

Business Development Center Advisory 

Board. The meeting will be open to the 

public; however, advance notice of 

attendance is required. 

DATES: Tuesday, December 5, 2023, at 

2:00 p.m. EST. 

ADDRESSES: Meeting will be held via 

Microsoft Teams. 

FOR FURTHER INFORMATION CONTACT: 

Rachel Karton, Office of Small Business 

Development Centers, U.S. Small 

Business Administration, 409 Third 

Street SW, Washington, DC 20416; 

Rachel.newman-karton@sba.gov; 202– 

619–1816. 

If anyone wishes to be a listening 

participant or would like to request 

accommodations, please contact Rachel 

Karton at the information above. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section l0(a) of the Federal Advisory 

Committee Act (5 U.S.C. Appendix 2), 

the SBA announces the meetings of the 

National SBDC Advisory Board. This 

Board provides advice and counsel to 

the SBA Administrator and Associate 

Administrator for Small Business 

Development Centers. 

Purpose 

The purpose of the meeting is to 

discuss the following pertaining to the 

SBDC Program: 

• Annual Plan 

• Outreach and Engagement with SBDC 

State Directors 

Additionally, SBA will be seeking 

three volunteers from the Advisory 

Board to participate as judges for the 

National Small Business Week Small 


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