3668 Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 

1See 15 U.S.C. 80a. 

2See 15 U.S.C. 80a–12(d)(1)(A). If an acquiring 

fund is not registered, these limitations apply only 

with respect to the acquiring fund’s acquisition of 

registered funds. 

3See 15 U.S.C. 80a–12(d)(1)(B). 

4See 17 CFR 270.12d1–1. 

5See rule 12d1–1(b)(1). 

6See 15 U.S.C. 80a–17(a), 15 U.S.C. 80a–17(d); 17 

CFR 270.17d–1. 

7An affiliated person of a fund includes any 

person directly or indirectly controlling, controlled 

by, or under common control with such other 

person. See 15 U.S.C. 80a–2(a)(3) (definition of 

‘‘affiliated person’’). Most funds today are organized 

by an investment adviser that advises or provides 

administrative services to other funds in the same 

complex. Funds in a fund complex are generally 

under common control of an investment adviser or 

other person exercising a controlling influence over 

the management or policies of the funds. See 15 

U.S.C. 80a–2(a)(9) (definition of ‘‘control’’). Not all 

advisers control funds they advise. The 

determination of whether a fund is under the 

control of its adviser, officers, or directors depends 

on all the relevant facts and circumstances. See 

Investment Company Mergers, Investment 

Company Act Release No. 25259 (Nov. 8, 2001) [66 

FR 57602 (Nov. 15, 2001)], at n.11. To the extent 

that an acquiring fund in a fund complex is under 

common control with a money market fund in the 

same complex, the funds would rely on the rule’s 

exemptions from section 17(a) and rule 17d–1. 

8See 15 U.S.C. 80a–2(a)(3)(A), (B). 

9See 17 CFR 270.2a–7. 

10See 15 U.S.C. 80a–17(a), 15 U.S.C. 80a–17(d), 

15 U.S.C. 80a–17(e), 15 U.S.C. 80a–18, 15 U.S.C. 

80a–22(e). 

11See 17 CFR 270.31a–1(b)(1), 17 CFR 270.31a– 

1(b)(2)(ii), 17 CFR 270.31a–1(b)(2)(iv), 17 CFR 

270.31a–1(b)(9). 

The Commission requests written 

comments 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 Pamela Dyson, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Remi 

Pavlik-Simon, 100 F Street NE., 

Washington, DC 20549; or send an email 

to: PRA_Mailbox@sec.gov. 

Dated: January 16, 2015. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01074 Filed 1–22–15; 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 12d1–1; SEC File No. 270–526, OMB 

Control No. 3235–0584. 

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 collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

An investment company (‘‘fund’’) is 

generally limited in the amount of 

securities the fund (‘‘acquiring fund’’) 

can acquire from another fund 

(‘‘acquired fund’’). Section 12(d) of the 

Investment Company Act of 1940 (the 

‘‘Investment Company Act’’ or ‘‘Act’’) 1

provides that a registered fund (and 

companies it controls) cannot: 

• Acquire more than three percent of 

another fund’s securities; 

• invest more than five percent of its 

own assets in another fund; or 

• invest more than ten percent of its 

own assets in other funds in the 

aggregate.2

In addition, a registered open-end 

fund, its principal underwriter, and any 

registered broker or dealer cannot sell 

that fund’s shares to another fund if, as 

a result: 

• The acquiring fund (and any 

companies it controls) owns more than 

three percent of the acquired fund’s 

stock; or 

• all acquiring funds (and companies 

they control) in the aggregate own more 

than ten percent of the acquired fund’s 

stock.3

Rule 12d1–1 under the Act provides 

an exemption from these limitations for 

‘‘cash sweep’’ arrangements in which a 

fund invests all or a portion of its 

available cash in a money market fund 

rather than directly in short-term 

instruments.4 An acquiring fund relying 

on the exemption may not pay a sales 

load, distribution fee, or service fee on 

acquired fund shares, or if it does, the 

acquiring fund’s investment adviser 

must waive a sufficient amount of its 

advisory fee to offset the cost of the 

loads or distribution fees.5 The acquired 

fund may be a fund in the same fund 

complex or in a different fund complex. 

In addition to providing an exemption 

from section 12(d)(1) of the Act, the rule 

provides exemptions from section 17(a) 

of the Act and rule 17d–1 thereunder, 

which restrict a fund’s ability to enter 

into transactions and joint arrangements 

with affiliated persons.6 These 

provisions would otherwise prohibit an 

acquiring fund from investing in a 

money market fund in the same fund 

complex,7 and prohibit a fund that 

acquires five percent or more of the 

securities of a money market fund in 

another fund complex from making any 

additional investments in the money 

market fund.8

The rule also permits a registered 

fund to rely on the exemption to invest 

in an unregistered money market fund 

that limits its investments to those in 

which a registered money market fund 

may invest under rule 2a–7 under the 

Act, and undertakes to comply with all 

the other provisions of rule 2a–7.9 In 

addition, the acquiring fund must 

reasonably believe that the unregistered 

money market fund (i) operates in 

compliance with rule 2a–7, (ii) complies 

with sections 17(a), (d), (e), 18, and 

22(e) of the Act 10 as if it were a 

registered open-end fund, (iii) has 

adopted procedures designed to ensure 

that it complies with these statutory 

provisions, (iv) maintains the records 

required by rules 31a–1(b)(1), 31a– 

1(b)(2)(ii), 31a–1(b)(2)(iv), and 31a– 

1(b)(9); 11 and (v) preserves 

permanently, the first two years in an 

easily accessible place, all books and 

records required to be made under these 

rules. 

Rule 2a–7 contains certain collection 

of information requirements. An 

unregistered money market fund that 

complies with rule 2a–7 would be 

subject to these collection of 

information requirements. In addition, 

the recordkeeping requirements under 

rule 31a–1 with which the acquiring 

fund reasonably believes the 

unregistered money market fund 

complies are collections of information 

for the unregistered money market fund. 

The adoption of procedures by 

unregistered money market funds to 

ensure that they comply with sections 

17(a), (d), (e), 18, and 22(e) of the Act 

also constitute collections of 

information. By allowing funds to invest 

in registered and unregistered money 

market funds, rule 12d1–1 is intended 

to provide funds greater options for cash 

management. In order for a registered 

fund to rely on the exemption to invest 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 3669 

12See U.S. Securities and Exchange Commission 

Annual Staff Report Relating to the Use of Data 

Collected from Private Fund Systemic Risk Reports, 

Appendix A, Census PF Data as of May 7, 2014, 

available at http://www.sec.gov/reportspubs/

special-studies/im-private-fund-annual-report081514.pdf. In the past, the staff has estimated the 

number of affected unregistered money market 

funds based on the latest number of exemptive 

applications received by the Commission that 

sought relief for registered funds to purchase shares 

in an unregistered money market fund in excess of 

the section 12(d)(1) limits. The staff’s prior estimate 

of 30 affected unregistered money market funds was 

based on 40 exemptive applications received by the 

Commission in 2005 (the last full year in which the 

Commission received applications seeking an 

exemption to invest in unregistered money market 

funds in excess of the statutory limits) and adjusted 

by the percentage change in registered money 

market funds from 2005 to November 2011 (870 

funds to 641 funds, according to the Investment 

Company Institute). The staff noted that this 

estimate may be understated because applicants 

generally did not identify the name or number of 

unregistered money market funds in which 

registered funds intended to invest, and each 

application also applies to unregistered money 

market funds to be organized in the future. 

13See Securities and Exchange Commission, 

Request for OMB Approval of Extension for 

Approved Collection for Rule 2a–7 under the 

Investment Company Act of 1940 (OMB Control No. 

3235–0268) (approved Aug. 28, 2013). In 

connection with amendments to rule 2a–7 adopted 

in July 2014, the Commission also submitted a 

Revision of a Currently Approved Collection for 

Rule 2a–7, which is not yet approved. See Money 

Market Fund Reform, Investment Company Act 

Release No. 31166 (July 23, 2014) [79 FR 47736 

(Aug. 14, 2014)], available at http://www.sec.gov/

rules/final/2014/33-9616.pdf; Securities and 

Exchange Commission, Revision of a Currently 

Approved Collection (OMB Control No. 3235–0268) 

(pending, submitted September 4, 2014). 

14This estimate is based on the following 

calculation: (680 burden hours × $262 per hour for 

professional time) = $178,160 per fund. 

15This estimate is based on the following 

calculation: (12 × 7 burden hours × $206 per hour 

for a webmaster) = $17,304 per fund. 

16This estimate is based on the following 

calculation: (1 hour × $4,500 per hour for board 

time) + (4 hours × $365 per hour for professional 

time) = $5,960 per fund. 

17See supra note 12. The staff notes, however, 

that this estimate may be overstated to the extent 

that a private liquidity fund reported on Form PF 

does not follow all of rule 2a-7’s requirements (that 

include collections of information) or because no 

registered investment companies invest in such a 

fund. The staff also notes, however, that this 

estimate may be understated to the extent that there 

are additional unregistered money market funds 

that are not required to be reported on Form PF 

(because Form PF is filed only by certain 

investments advisers to private funds that have 

$150 million in private fund assets under 

management). 

18The estimate is based on the following 

calculations: (69 funds × 85 responses for 

documentation of credit analyses and other 

determinations) = 5,865 responses. (69 funds × 12 

responses for public Web site posting) = 828 

responses. (69 funds × 1 response for policies and 

procedures related to delegation to an investment 

adviser) = 69 responses. 5,865 responses + 828 

responses + 69 responses = 6,762 responses. 

19This estimate is based on the following 

calculations: (69 funds × 680 hours for 

documentation of credit analyses and other 

determinations) = 46,920 hours. (69 funds × 7 hours 

for public Web site posting) = 483 hours. (69 funds 

× 5 hours for policies and procedures related to 

delegation to an investment adviser) = 345 hours. 

46,920 hours + 483 hours + 345 hours = 47,748 

hours. 

20This estimate is based on the following 

calculations: (69 funds × $178,160) = $12,293,040. 

(69 funds × $17,304) = $1,193,976. (69 funds × 

$5,960) = $411,240. $12,293,040 + $1,193,976 + 

$411,240 = $13,898,256. 

21This estimate is based on the following 

calculation: (1 hour × $4,500 per hour for board 

time) + (5 hours × $322 per hour for a portfolio 

manager) + (3 hours × $259 per hour for a risk 

management specialist) + (3 hours × $378 per hour 

for an attorney) = $8,021 per response. 

22This estimate is based on the following 

calculation: (5 responses × 5 hours × $322 per hour 

for a portfolio manager) + (5 responses × 2 hours 

× $279 per hour for a compliance manager) + (5 

responses × 2 hours × $378 per hour for an attorney) 

+ (5 responses × 1 hour × $174 per hour for support 

staff) = $15,490 per fund complex. 

23See 17 CFR 270.17a–9. 

24The estimate is based on the following 

calculations: (1 response × $378 per hour for an 

attorney) = $378 per response. 

in an unregistered money market fund, 

the unregistered money market fund 

must comply with certain collection of 

information requirements for registered 

money market funds. These 

requirements are intended to ensure that 

the unregistered money market fund has 

established procedures for collecting the 

information necessary to make adequate 

credit reviews of securities in its 

portfolio, as well as other recordkeeping 

requirements that will assist the 

acquiring fund in overseeing the 

unregistered money market fund (and 

Commission staff in its examination of 

the unregistered money market fund’s 

adviser). 

The number of unregistered money 

market funds that are affected by rule 

12d1–1 is an estimate based on the 

number of private liquidity funds 

reported on Form PF as of May 7, 

2014.12 The hour burden estimates for 

the condition that an unregistered 

money market fund comply with rule 

2a–7 are based on the burden hours 

included in the Commission’s 2013 PRA 

submission regarding rule 2a–7.13 The 

estimated average burden hours in this 

collection of information are made 

solely for purposes of the Paperwork 

Reduction Act and are not derived from 

a quantitative, comprehensive or even 

representative survey or study of the 

burdens associated with Commission 

rules and forms. 

In the most recent rule 2a–7 

submission, Commission staff made the 

following estimates with respect to 

aggregate annual hour and cost burdens 

for collections of information for each 

existing registered money market fund: 

Record of credit risk analyses, and 

determinations regarding adjustable rate 

securities, asset backed securities, 

securities subject to a demand feature or 

guarantee, and counterparties to 

repurchase agreements: 

85 responses 

680 hours of professional time 

Cost: $178,160 14

Public Web site posting of monthly 

portfolio information: 

12 responses 

7 hours of professional time 

Cost: $17,304 15

Review of procedures and guidelines 

of any investment adviser to whom the 

fund’s board has delegated 

responsibility under rule 2a–7 and 

amendment of such procedures: 

1 response 

5 hours of professional and director 

time 

Cost: $5,960 16

Based on new census data available 

on Form PF, the staff now believes that 

the number of private liquidity funds 

reported on Form PF (69) is a more 

current and accurate estimate the 

number of unregistered money market 

funds affected by rule 12d1–1.17 Each of 

these unregistered money market funds 

engages in the collections of information 

described above. Accordingly, the staff 

estimates that unregistered money 

market funds complying with the 

collections of information described 

above engage in a total of 6,762 annual 

responses under rule 12d1–1,18 the 

aggregate annual burden hours 

associated with these responses is 

47,748,19 and the aggregate annual cost 

to funds is $13,898,256.20

In the rule 2a–7 submissions, 

Commission staff further estimated the 

aggregate annual hour and cost burdens 

for collections of information for fund 

complexes with registered money 

market funds as follows: 

Review, revise, and approve 

procedures concerning stress testing: 

1 response 

12 burden hours of professional and 

director time 

Cost: $8,021 21

Report to fund boards on the results 

of stress testing: 

5 responses 

10 burden hours of professional and 

support staff time 

Cost: $15,490 22

Reporting of rule 17a–9 

transactions: 23

1 response 

1 burden hour of legal time 

Cost: $378 24

Based on the number of large liquidity 

fund advisers reported on Form PF, the 

staff estimates that there are 25 fund 

complexes with unregistered money 

market funds invested in by mutual 


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25See supra note 12. 

26The estimate is based on the following 

calculations: (25 fund complexes × 1 response for 

revision of procedures concerning stress testing) = 

25 responses. (25 fund complexes × 5 responses to 

provide stress testing reports) = 125 responses. (25 

fund complexes × 1 response for reporting of rule 

17a–9 transactions) = 25 responses. 25 responses + 

125 responses + 25 responses = 175 responses. 

27This estimate is based on the following 

calculations: (25 fund complexes × 12 hours for 

revision of procedures concerning stress testing) = 

300 hours. (25 fund complexes × 10 hours to 

provide stress testing reports) = 250 hours. (25 fund 

complexes × 1 hour for reporting of rule 17a–9 

transactions) = 25 hours. 300 hours + 250 hours + 

25 hours = 575 hours. 

28This estimate is based on the following 

calculations: (25 fund complexes × $8,021 for 

revision of procedures concerning stress testing) = 

$200,525. (25 fund complexes × $15,490 to provide 

stress testing reports) = $387,250. (25 fund 

complexes × $378 for reporting of rule 17a–9 

transactions) = $9,450. $200,525 + $387,250 + 

$9,450 = $597,225. 

29The estimate is based on the following 

calculations: (1 fund × 2 responses) + (1 fund × 1 

response) = 3 responses. 

30This estimate is based on the following 

calculations: (1 fund × 1 hour) + (1 fund × 0.5 

hours) = 1.5 hours. 

31This estimate is based on the following 

calculations: (1 fund × $378) + (1 fund × $189) = 

$567. 

32This estimate is based on the following 

calculation: (0.5 hours × $4,500 per hour for board 

time) + (7.2 hours × $378 per hour for an attorney) 

+ (7.8 hours × $174 per hour for support staff) = 

$6,328 per response. 

33This estimate is based on the following 

calculation: (3 hours × $4,500 per hour for board 

time) + (8 hours × $378 per hour for an attorney) 

+ (11 hours × $259 per hour for a risk management 

specialist) = $19,373 per response. See also infra 

note 34. 

34The staff’s estimate is based on historical data 

provided in Lipper Inc.’s LANA database and 

projections about the growth of the money market 

mutual fund industry going forward. The actual 

number of new money market funds launched may 

vary significantly from our estimates depending 

upon developments in market interest rates and 

reactions to recent amendments adopted to money 

market funds in July 2014. The staff does not 

estimate any new fund complexes being launched 

in the next year. 

35The estimate is based on the following 

calculations: (10 funds × 1 response) = 10 

responses. 

36This estimate is based on the following 

calculations: (10 funds × 15.5 hours) = 155 hours. 

37This estimate is based on the following 

calculations: (10 funds × $6,238) = $62,380. 

38These estimates are based upon the following 

calculations: (6,762 + 175 + 3+ 10) = 6,950 annual 

responses; (47,748 + 575 + 1.5 + 155) = 48,479.5 

burden hours; and ($13,898,256 + $597,225 + $567 

+ $62,380) = $14,558,428. 

funds in excess of the statutory limits 

under rule 12d1–1.25 Each of these fund 

complexes engages in the collections of 

information described above. 

Accordingly, the staff estimates that 

these fund complexes complying with 

the collections of information described 

above engage in a total of 175 annual 

responses under rule 12d1–1,26 the 

aggregate annual burden hours 

associated with these responses is 575,27

and the aggregate annual cost to funds 

is $597,225.28

In the rule 2a–7 submissions, 

Commission staff further estimated the 

aggregate annual burdens for registered 

money market funds that experience an 

event of default or insolvency as 

follows: 

Written record of board 

determinations and actions related to 

failure of a security to meet certain 

eligibility standards or an event of 

default of default or insolvency: 

2 responses 

1 burden hour of legal time 

Cost: $378 

Notice to Commission of an event of 

default or insolvency: 

1 response 

0.5 burden hours of legal time 

Cost: $189 

Consistent with the estimate in the 

rule 2a–7 submissions, Commission 

staff estimates that approximately 2 

percent, or 1, unregistered money 

market fund experiences an event of 

default or insolvency each year. 

Accordingly, the staff estimates that one 

unregistered money market fund will 

comply with these collection of 

information requirements and engage in 

3 annual responses under rule 12d1–1,29

the aggregate annual burden hours 

associated with these responses is 1.5,30

and the aggregate annual cost to funds 

is $567.31

In the rule 2a–7 submissions, 

Commission staff further estimated the 

aggregate annual burdens for newly 

registered money market funds as 

follows: 

Establish written procedures and 

guidelines designed to stabilize the 

fund’s net asset value and establish 

procedures for board delegation of 

authority: 

1 response 

15.5 hours of director, legal, and 

support staff time 

Cost: $6,328 32

Adopt procedures concerning stress 

testing: 

1 response per fund complex 

22 burden hours of professional and 

director time per fund complex 

Cost: $19,373 per fund complex 33

Commission staff estimates that the 

proportion of unregistered money 

market funds that intend to newly 

undertake the collection of information 

burdens of rule 2a–7 will be similar to 

the proportion of money market funds 

that are newly registered. Based on a 

projection of 10 new money market 

funds per year (in the most recent rule 

2a–7 submission), the staff estimates 

that, similarly, there will be 10 new 

unregistered money market funds that 

undertake the above burden to establish 

written procedures and guidelines 

designed to stabilize the fund’s net asset 

value and establish procedures for board 

delegation of authority.34 Accordingly, 

the staff estimates that 10 unregistered 

money market funds will comply with 

this collection of information 

requirement and engage in 10 annual 

responses under rule 12d1–1,35 the 

aggregate annual burden hours 

associated with these responses is 155,36

and the aggregate annual cost to funds 

is $62,380.37

Accordingly, the estimated total 

number of annual responses under rule 

12d1–1 for the collections of 

information described in the rule 2a–7 

submissions is 6,950, the aggregate 

annual burden hours associated with 

these responses is 48,479.5, and the 

aggregate cost to funds is $14,558,428.38

Rules 31a–1(b)(1), 31a–1(b)(2)(ii), 

31a–1(b)(2)(iv), and 31a–1(b)(9) require 

registered funds to keep certain records, 

which include journals and general and 

auxiliary ledgers, including ledgers for 

each portfolio security and each 

shareholder of record of the fund. Most 

of the records required to be maintained 

by the rule are the type that generally 

would be maintained as a matter of good 

business practice and to prepare the 

unregistered money market fund’s 

financial statements. Accordingly, 

Commission staff estimates that the 

requirements under rules 31a–1(b)(1), 

31a–1(b)(2)(ii), 31a–1(b)(2)(iv), and 31a– 

1(b)(9) would not impose any additional 

burden because the costs of maintaining 

these records would be incurred by 

unregistered money market funds in any 

case to keep books and records that are 

necessary to prepare financial 

statements for shareholders, to prepare 

the fund’s annual income tax returns, 

and as a normal business custom. 

Rule 12d1–1 also requires 

unregistered money market funds in 

which registered funds invest to adopt 

procedures designed to ensure that the 

unregistered money market funds 

comply with sections 17(a), (d), (e), and 

22(e) of the Act. This is a one-time 

collection of information requirement 

that applies to unregistered money 

market funds that intend to comply with 

the requirements of rule 12d1–1. As 

discussed above, based on a projection 

of 10 new money market funds per year, 

the staff estimates that, similarly, there 

will be 10 new unregistered money 

market funds that undertake the above 

burden to establish written procedures 

and guidelines designed to ensure that 

the unregistered money market funds 

comply with sections 17(a), (d), (e), and 


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39This estimate is based on the following 

calculation: (0.5 hours × $4,500 per hour for board 

time) + (7.2 hours × $378 per hour for an attorney) 

+ (7.8 hours × $174 per hour for support staff) = 

$6,328 per response. 

40The estimate is based on the following 

calculations: (10 funds × 1 response) = 10 

responses. 

41This estimate is based on the following 

calculations: (10 funds × 15.5 hours) = 155 hours. 

42This estimate is based on the following 

calculations: (10 funds × $6,238) = $62,380. 

43See supra note 12. 

44The recordkeeping cost estimates are 

$0.0051295 per dollar of assets under management 

for small funds, and $0.0005041 per dollar of assets 

under management for medium-sized funds. The 

cost estimates are the same as those used in the 

most recently approved rule 2a–7 submission. 

45This estimate is based on the following 

calculation: ($257 billion × $0.0000009) = $231,300 

billion for small funds. 

46This estimate is based on the following 

calculation: ($257 billion × 0.0000132) = $3.39 

million. 

22(e) of the Act. The staff estimates the 

burden as follows: 

Establish written procedures and 

guidelines designed to ensure that the 

unregistered money market funds 

comply with sections 17(a), (d), (e), and 

22(e) of the Act: 

1 response 

15.5 hours of director, legal, and 

support staff time 

Cost: $6,328 39

Accordingly, the staff estimates that 

10 unregistered money market funds 

will comply with this collection of 

information requirement and engage in 

10 annual responses under rule 12d1– 

1,40 the aggregate annual burden hours 

associated with these responses is 155,41

and the aggregate annual cost to funds 

is $62,380.42

Commission staff also estimates that 

unregistered money market funds will 

incur costs to preserve records, as 

required under rule 2a–7. These costs 

will vary significantly for individual 

funds, depending on the amount of 

assets under fund management and 

whether the fund preserves its records 

in a storage facility in hard copy or has 

developed and maintains a computer 

system to create and preserve 

compliance records. In the rule 2a–7 

submissions, Commission staff 

estimated that the amount an individual 

money market fund may spend ranges 

from $100 per year to $300,000. We 

have no reason to believe the range is 

different for unregistered money market 

funds. Based on Form PF data as of May 

7, 2014, private liquidity funds have 

$257 billion in regulatory assets under 

management.43 The Commission does 

not have specific information about the 

proportion of assets held in small, 

medium-sized, or large unregistered 

money market funds. Because private 

liquidity funds are often used as cash 

management vehicles, the staff estimates 

that each private liquidity fund is a 

‘‘large’’ fund (i.e., more than $1 billion 

in assets under management). Based on 

a cost of $0.0000009 per dollar of assets 

under management (for large funds),44

the staff estimates compliance with rule 

2–7 for these unregistered money 

market funds totals $231,300 

annually.45

Consistent with estimates made in the 

rule 2a–7 submissions, Commission 

staff estimates that unregistered money 

market funds also incur capital costs to 

create computer programs for 

maintaining and preserving compliance 

records for rule 2a–7 of $0.0000132 per 

dollar of assets under management. 

Based on the assets under management 

figures described above, staff estimates 

annual capital costs for all unregistered 

money market funds of $3.39 million.46

Commission staff further estimates that, 

even absent the requirements of rule 2a– 

7, money market funds would spend at 

least half of the amounts described 

above for record preservation ($115,650) 

and for capital costs ($1.7 million). 

Commission staff concludes that the 

aggregate annual costs of compliance 

with the rule are $115,650 for record 

preservation and $1.7 million for capital 

costs. 

The collections of information 

required for unregistered money market 

funds by rule 12d1–1 are necessary in 

order for acquiring funds to be able to 

obtain the benefits described above. 

Notices to the Commission 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 Pamela Dyson, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Remi 

Pavlik-Simon, 100 F Street NE., 

Washington, DC 20549; or send an email 

to: PRA_Mailbox@sec.gov. 

Dated: January 16, 2015. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01076 Filed 1–22–15; 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 206(3)–2; SEC File No. 270–216, OMB 

Control No. 3235–0243. 

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 collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Rule 206(3)–2, (17 CFR 275.206(3)–2) 

which is entitled ‘‘Agency Cross 

Transactions for Advisory Clients,’’ 

permits investment advisers to comply 

with section 206(3) of the Investment 

Advisers Act of 1940 (the ‘‘Act’’) (15 

U.S.C. 80b–6(3)) by obtaining a client’s 

blanket consent to enter into agency 

cross transactions (i.e., a transaction in 

which an adviser acts as a broker to both 

the advisory client and the opposite 

party to the transaction), provided that 

certain disclosures are made to the 

client. Rule 206(3)–2 applies to all 

registered investment advisers. In 

relying on the rule, investment advisers 

must provide certain disclosures to their 

clients. Advisory clients can use the 

disclosures to monitor agency cross 

transactions that affect their advisory 

account. The Commission also uses the 

information required by Rule 206(3)–2 

in connection with its investment 

adviser inspection program to ensure 

that advisers are in compliance with the 

rule. Without the information collected 

under the rule, advisory clients would 

not have information necessary for 

monitoring their adviser’s handling of 

their accounts and the Commission 

would be less efficient and effective in 

its inspection program. 


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