3960 Federal Register / Vol. 89, No. 14 / Monday, January 22, 2024 / 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). 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission (the 

‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 11a–2 (17 CFR 270.11a–2) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) permits certain 

registered insurance company separate 

accounts, subject to certain conditions, 

to make exchange offers without prior 

approval by the Commission of the 

terms of those offers. Rule 11a–2 

requires disclosure, in certain 

registration statements filed pursuant to 

the Securities Act of 1933 (15 U.S.C. 77a 

et seq.) of any administrative fee or sales 

load imposed in connection with an 

exchange offer. 

The Commission staff estimates that 

657 registrants are governed by Rule 

11a–2. Based on this estimate, the total 

annual burden hours associated with 

the rule is estimated to be 657 hours. 

The estimated burden hours associated 

with rule 11a–2 has decreased by 19 

hours from the current allocation of 676 

hours. The decrease is due to a decrease 

in the number of registrants. The 

estimated external cost associated with 

this collection of information continues 

to be $0. The Commission includes the 

estimated burden of complying with the 

information collection required by Rule 

11a–2 in the total number of burden 

hours estimated for completing the 

relevant registration statements and 

reports the burden of Rule 11a–2 in the 

separate Paperwork Reduction Act 

(‘‘PRA’’) submissions for those 

registration statements (see the separate 

PRA submissions for Form N–3 (17 CFR 

274.11b), Form N–4 (17 CFR 274.11c) 

and Form N–6 (17 CFR 274.11d). The 

Commission is requesting a burden of 

one hour for Rule 11a–2 for 

administrative purposes. 

The estimate of average burden hours 

is made solely for the purposes of the 

PRA and is not derived from a 

comprehensive or even a representative 

survey or study of the costs of 

Commission rules or forms. The 

information collection requirements 

imposed by Rule 11a–2 are mandatory. 

Responses to the collection of 

information 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 background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice by February 21, 2024 to (i) 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o John Pezzullo, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov . 

Dated: January 17, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01102 Filed 1–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

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

3235–0222] 

Submission for OMB Review; 

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’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

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 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 14 / Monday, January 22, 2024 / Notices 3961 

1See 17 CFR 270.12d1–4. 

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). 

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 public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice by February 21, 2024 to (i) 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, c/ 

o John Pezzullo, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: January 17, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01125 Filed 1–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

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

3235–0639] 

Submission for OMB Review; 

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 

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 


ddrumheller on DSK120RN23PROD with NOTICES1