```

[Federal Register Volume 90, Number 13 (Wednesday, January 22, 2025)]
[Notices]
[Pages 7718-7720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01417]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-508, OMB Control No. 3235-0565]

Proposed Collection; Comment Request; Revision: Rule 482

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services,

[[Page 7719]]

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 
collection of information summarized below. The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget (``OMB'') for revision and approval.
    Like most issuers of securities, when an investment company 
(``fund'') \1\ offers its shares to the public, its promotional efforts 
become subject to the advertising restrictions of the Securities Act of 
1933 (15 U.S.C. 77) (the ``Securities Act''). In recognition of the 
particular problems faced by funds that continually offer securities 
and wish to advertise their securities, the Commission has adopted 
advertising safe harbor rules. The most important of these is rule 482 
(17 CFR 230.482) under the Securities Act, which, under certain 
circumstances, permits funds to advertise investment performance data, 
as well as other information. Rule 482 advertisements are deemed to be 
``prospectuses'' under Section 10(b) of the Securities Act (15 U.S.C. 
77j(b)).
---------------------------------------------------------------------------

    \1\ ``Investment company'' refers to both investment companies 
registered under the Investment Company Act of 1940 (``Investment 
Company Act'') (15 U.S.C. 80a-1 et seq.) and business development 
companies.
---------------------------------------------------------------------------

    Rule 482 contains certain requirements regarding the disclosure 
that funds are required to provide in qualifying advertisements. These 
requirements are intended to encourage the provision to investors of 
information that is balanced and informative, particularly in the area 
of investment performance. For example, a fund is required to include 
disclosure advising investors to consider the fund's investment 
objectives, risks, charges and expenses, and other information 
described in the fund's prospectus, and highlighting the availability 
of the fund's prospectus and, if applicable, its summary prospectus. In 
addition, rule 482 advertisements that include performance data of 
open-end funds or insurance company separate accounts offering variable 
annuity contracts are required to include certain standardized 
performance information, information about any sales loads or other 
nonrecurring fees, and a legend warning that past performance does not 
guarantee future results. Such funds including performance information 
in rule 482 advertisements are also required to make available to 
investors month-end performance figures via website disclosure or by a 
toll-free telephone number, and to disclose the availability of the 
month-end performance data in the advertisement. The rule also sets 
forth requirements regarding the prominence of certain disclosures, 
requirements regarding advertisements that make tax representations, 
requirements regarding advertisements used prior to the effectiveness 
of the fund's registration statement, requirements regarding the 
timeliness of performance data, and certain required disclosures by 
money market funds.
    Rule 482 advertisements must be filed with the Commission or, in 
the alternative, with the Financial Industry Regulatory Authority 
(``FINRA'').\2\ This information collection differs from many other 
federal information collections that are primarily for the use and 
benefit of the collecting agency.
---------------------------------------------------------------------------

    \2\ See note to rule 482(h) under the Securities Act, which 
states that ``these advertisements, unless filed with [FINRA], are 
required to be filed in accordance with the requirements of Sec.  
230.497.'' See also rule 24b-3 under the Investment Company Act (17 
CFR 270.24b-3), which provides that any sales material, including 
rule 482 advertisements, shall be deemed filed with the Commission 
for purposes of Section 24(b) of the Investment Company Act upon 
filing with FINRA.
---------------------------------------------------------------------------

    Rule 482 contains requirements that are intended to encourage the 
provision to investors of information that is balanced and informative, 
particularly in the area of investment performance. The Commission is 
concerned that in the absence of such provisions fund investors may be 
misled by deceptive rule 482 advertisements and may rely on less-than-
adequate information when determining in which funds they should invest 
money. As a result, the Commission believes it is beneficial for funds 
to provide investors with balanced information in fund advertisements 
in order to allow investors to make better-informed decisions.
    On November 7, 2024, the Commission adopted amendments to rule 482 
to correct outdated cross-references and conform the risk statements 
that money market funds must include in their advertisements and sales 
literature to the risk statements that money market funds must include 
in their prospectuses.\3\ The 2023 money market fund reform adopting 
release amended the risk statements that money market funds must 
include in their prospectuses to align with the changes to money market 
fund regulations adopted in that release.\4\ However, rule 482 was not 
included in the amendments and the statements that rule 482 required 
were inconsistent with the recently amended regulatory framework for 
money market funds. Further, the risk statements that money market 
funds were required to include in prospectuses and advertisements have 
otherwise always been identical and the risk statements should not 
differ based on whether an investor is reviewing a prospectus or an 
advertisement. As a result, rule 482 included outdated references to 
concepts that have been removed or significantly modified in underlying 
money market fund regulations (e.g., allowing temporary suspensions of 
redemptions). The amendments to rule 482 correct this error, make 
certain other conforming edits to further align the language of the 
risk statements with the risk statements that money market funds must 
include in their prospectuses, and correct inaccurate cross references 
to money market fund rules.
---------------------------------------------------------------------------

    \3\ Conforming Amendments to Commission Rules and Forms, 
Investment Company Act Release No. 35377 (Nov. 7, 2024) (the 
``Adopting Release'').
    \4\ See Money Market Fund Reforms; Form PF Reporting 
Requirements for Large Liquidity Fund Advisers; Technical Amendments 
to Form N-CSR and Form N-1A, Investment Company Act Release No. 
34959 (July 12, 2023) [88 FR 51404 (Aug. 3, 2023)].
---------------------------------------------------------------------------

    We estimate the total annual burden to comply with amended rule 482 
to be 577,896 hours, at an average time cost of $213,154,498. 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 and 
forms. The provision of information under rule 482 is necessary to 
obtain the benefits of the safe harbor offered by the rule. The 
information provided under rule 482 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 OMB 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

[[Page 7720]]

to comments and suggestions submitted by March 24, 2025.
    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: Austin Gerig, Director/
Chief Data Officer, Securities and Exchange Commission, c/o Tanya 
Ruttenberg, 100 F Street NE Washington, DC 20549 or send an email to: 
[email protected].

    Dated: January 15, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-01417 Filed 1-21-25; 8:45 am]
BILLING CODE 8011-01-P
```