31332 Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Notices 

1See Investment Company Institute, Trends in 

Mutual Fund Investing: April 2009 (May 28, 2009), 

http://www.ici.org/highlights/trends_04_09. These 

include registered money market funds and series 

of registered funds. 

2This average is based on discussions with 

individuals at money market funds and their 

advisers. The actual number of burden hours may 

vary significantly depending on the type and 

number of portfolio securities held by individual 

funds. 

3The estimated hourly cost was based on the 

weighted average annual salaries reported for senior 

business analysts, accountants, floor supervisors, 

and portfolio managers in SIFMA’s Management & 

Professional Earnings in the Securities Industry 

2008 (Sept. 2008), 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. 

4This estimate is based on information from 

Lipper Inc.’s LANA database for the period of 

January 1, 2007 through December 31, 2008. 

5For PRA purposes we assumed that on average 

25% of money market funds would review and 

update their procedures on an annual basis. 

6This estimate is based on the following 

calculation: 310,370 hours + 139.5 hours + 453.6 

hours + 19.5 hours = 310,982.6 hours. 

7A significant portion of the recordkeeping 

burden involves organizing information that the 

funds already collect when initially purchasing 

securities. In addition, when a money market fund 

analyzes a security, the analysis need not be 

presented in any particular format. Money market 

funds therefore have a choice of methods for 

maintaining these records that vary in technical 

sophistication and formality (e.g., handwritten 

notes, computer disks, etc.). Accordingly, the cost 

of preparing these documents may vary 

significantly among individual funds. The burden 

hours associated with filing reports to the 

Commission as an exhibit to Form N–SAR are 

included in the PRA burden estimate for that form. 

longer wish to receive it, or would like 

to be added to the distribution, please 

contact the Office of the Secretary, 

Washington, DC 20555 (301–415–1969), 

or send an e-mail to 

darlene.wright@nrc.gov. 

Dated: June 25, 2009. 

Rochelle C. Bavol, 

Office of the Secretary. 

[FR Doc. E9–15515 Filed 6–26–09; 11:15 am] 

BILLING CODE 7590–01–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 2a–7, SEC File No. 270–258, OMB 

Control No. 3235–0268. 

Notice is hereby given that under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501), the Securities and 

Exchange Commission (‘‘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 2a–7 (17 CFR 270.2a–7) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a) (the ‘‘Act’’) governs 

money market funds. Money market 

funds are open-end management 

investment companies that differ from 

other open-end management investment 

companies in that they seek to maintain 

a stable price per share, usually $1.00. 

The rule exempts money market funds 

from the valuation requirements of the 

Act, and, subject to certain risk-limiting 

conditions, permits money market funds 

to use the ‘‘amortized cost method’’ of 

asset valuation or the ‘‘penny-rounding 

method’’ of share pricing. 

Rule 2a–7 imposes certain 

recordkeeping and reporting obligations 

on money market funds. The board of 

directors of a money market fund, in 

supervising the fund’s operations, must 

establish written procedures designed to 

stabilize the fund’s net asset value 

(‘‘NAV’’). The board also must adopt 

guidelines and procedures relating to 

certain responsibilities it delegates to 

the fund’s investment adviser. These 

procedures typically address various 

aspects of the fund’s operations. The 

fund must maintain and preserve for six 

years a written copy of both these 

procedures and guidelines. The fund 

also must maintain and preserve for six 

years a written record of the board’s 

considerations and actions taken in 

connection with the discharge of its 

responsibilities, to be included in the 

board’s minutes. In addition, the fund 

must maintain and preserve for three 

years written records of certain credit 

risk analyses, evaluations with respect 

to securities subject to demand features 

or guarantees, and determinations with 

respect to adjustable rate securities and 

asset backed securities. If the board 

takes action with respect to defaulted 

securities, events of insolvency, or 

deviations in share price, the fund must 

file with the Commission an exhibit to 

Form N–SAR (17 CFR 249.330) 

describing the nature and circumstances 

of the action. If any portfolio security 

fails to meet certain eligibility standards 

under the rule, the fund also must 

identify those securities in an exhibit to 

Form N–SAR. After certain events of 

default or insolvency relating to a 

portfolio security, the fund must notify 

the Commission of the event and the 

actions the fund intends to take in 

response to the situation. 

The recordkeeping requirements in 

rule 2a–7 are designed to enable 

Commission staff in its examinations of 

money market funds to determine 

compliance with the rule, as well as to 

ensure that money market funds have 

established procedures for collecting the 

information necessary to make adequate 

credit reviews of securities in their 

portfolios. The reporting requirements 

of rule 2a–7 are intended to assist 

Commission staff in overseeing money 

market funds. 

Commission staff estimates that each 

of 757 1 money market funds spends a 

total of approximately 410 hours 2 of 

professional time (at $193 per hour) 3 to 

record credit risk analyses and 

determinations regarding adjustable rate 

securities, asset backed securities and 

securities subject to a demand feature or 

guarantee, for a total of approximately 

$59,901,410. The staff further estimates 

that each of 9 new money market funds 

spends a total of 15.5 hours of director, 

legal, and support staff time at a total 

cost of approximately $50,487.30 to 

adopt procedures designed to stabilize 

the fund’s NAV and guidelines 

regarding the delegation of certain 

responsibilities to the fund’s adviser.4

The staff further estimates that on 

average each of 189 money market funds 

spends a total of 2.4 hours of director 

and legal time at a total cost of 

approximately $442,260 to review and 

amend written procedures and 

guidelines each year.5 Finally, the staff 

estimates that each of 13 money market 

funds that experience a change in 

certain eligibility standards for portfolio 

securities or an event of default or 

insolvency relating to portfolio 

securities spends a total of one and a 

half hours of professional legal time 

documenting board determinations and 

notifying the Commission regarding the 

event, for a total of $5265.00. Thus, 

Commission staff estimates the total 

annual burden of the rule’s information 

collection requirements are 310,983 

hours 6 at an annual cost of 

$60,399,422.7

The Commission staff estimate of 

310,983 burden hours is a decrease from 

the previous estimate of 1,034,800 

hours. The decrease is primarily 

attributable to the decrease in the 

number of money market funds and 

updated information from money 

market funds regarding hourly burdens, 

including significant differences in 

burden hours reported by the funds 

surveyed in this submission year than 

those reported by funds in prior 

submission years. 

These estimates of burden hours are 

made solely for the purposes of the 

Paperwork Reduction Act. The 


sroberts on PROD1PC70 with NOTICES6
Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Notices 31333 

8The amount of assets under management in 

individual money market funds ranges from 

approximately $300,000 to approximately $162 

billion. 

9For purpose of this PRA submission, 

Commission staff used the following categories for 

fund sizes: (i) Small—money market funds with $50 

million or less in assets under management, (ii) 

medium—money market funds with more than $50 

million up to and including $1 billion in assets 

under management; and (iii) large—money market 

funds with more than $1 billion in assets under 

management. 

10The staff estimated the annual cost of 

preserving the required books and records by 

identifying the annual costs incurred by several 

funds and then relating this total cost to the average 

net assets of these funds during the year. With a 

total of $1 billion under management in small 

funds, $126.8 billion under management in medium 

funds and $3.7 trillion under management in large 

funds, the costs of preservation were estimated as 

follows: ((0.0051295 × $1 billion) + (0.0005041 × 

$126.8 billion) + (0.0000009 × $3.7 trillion) = 

$72.38 million. 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59601 

(March 19, 2009), 74 FR 13281. 

4See Securities Exchange Act Release No. 54123 

(July 11, 2006), 71 FR 40558, (July 17, 2006) (SR– 

CBOE–2006–65). The QOS Program has since been 

extended and is currently scheduled to expire on 

July 10, 2009. See Securities Exchange Act Release 

Nos. 56035 (July 10, 2007), 72 FR 38851, (July 16, 

2007) (SR–CBOE–2007–70) (immediately effective 

rule change extending the QOS Program through 

July 10, 2008) and 58018 (June 25, 2008), 73 FR 

38010 (July 2, 2008) (SR–CBOE–2008–62) 

(immediately effective rule change extending the 

QOS Program through July 10, 2009). 

estimates are not derived from a 

comprehensive or even a representative 

survey or study of Commission rules. 

In addition to the burden hours, 

Commission staff estimates that money 

market funds will incur costs to 

preserve records 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.8

Commission staff estimates that the 

amount an individual fund may spend 

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

Based on a cost of $0.0051295 per dollar 

of assets under management for small 

funds, $0.0005041 per dollar assets 

under management for medium funds, 

and $0.0000009 per dollar of assets 

under management for large funds,9 the 

staff estimates compliance with rule 2a– 

7 costs the fund industry approximately 

$72.4 million per year.10 Based on 

responses from individuals in the 

money market fund industry, the staff 

estimates that some of the largest fund 

complexes have created computer 

programs for maintaining and 

preserving compliance records for rule 

2a–7. Based on a cost of $0.0000132 per 

dollar of assets under management for 

large funds, the staff estimates that total 

annualized capital/startup costs range 

from $0 for small funds to $48.8 million 

for all large funds. Commission staff 

further estimates that, even absent the 

requirements of rule 2a–7, money 

market funds would spend at least half 

of the amount for capital costs ($24.4 

million) and for record preservation 

($36.2 million) to establish and 

maintain these records and the systems 

for preserving them as a part of sound 

business practices to ensure 

diversification and minimal credit risk 

in a portfolio for a fund that seeks to 

maintain a stable price per share. 

The collections of information 

required by rule 2a–7 are necessary 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. 

The Commission requests written 

comments are requested on: (a) Whether 

the collections of information are 

necessary for the proper performance of 

the functions of the Commission, 

including whether the information has 

practical utility; (b) the accuracy of the 

Commission’s estimate of the burdens 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 Charles Boucher, Director/CIO, 

Securities and Exchange Commission, 

C/O Shirley Martinson, 6432 General 

Green Way, Alexandria, VA 22312; or 

send an e-mail to: 

PRA_Mailbox@sec.gov. 

Dated: June 24, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–15399 Filed 6–29–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60164; File No. SR–CBOE– 

2009–029] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Order Approving a 

Proposed Rule Change To 

Permanently Establish the Quarterly 

Option Series Program 

June 23, 2009. 

On May 7, 2009, the Chicago Board 

Options Exchange, Incorporated 

(‘‘Exchange’’ or ‘‘CBOE’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

permanently establish its Quarterly 

Option Series pilot program (the ‘‘QOS 

Program’’). The proposed rule change 

was published for comment in the 

Federal Register on May 21, 2009.3 The 

Commission received no comment 

letters on the proposed rule change. 

This order approves the proposed rule 

change. 

The Exchange established the QOS 

Program on a pilot basis on July 7, 

2006.4 The QOS Program allows CBOE 

to list and trade Quarterly Option 

Series, which expire at the close of 

business on the last business day of a 

calendar quarter. Under the QOS 

Program, CBOE may select up to five (5) 

currently listed exchange traded fund 

(‘‘ETF’’) or index option classes on 

which Quarterly Option Series may be 

opened. The Exchange has selected the 

following five ETF option classes to 

participate in the QOS Program: 

DIAMONDS Trust (DIA) options; 

Standard and Poor’s Depositary 

Receipts/SPDRs (SPY) options; iShares 

Russell 2000 Index Fund (IWM) options; 

PowerShares QQQ Trust (QQQQ) 

options; and Energy Select SPDR (XLE) 

options. In addition, CBOE may also list 

Quarterly Option Series on any options 

classes that are selected by other 

securities exchanges that employ a 

similar pilot program under their 

respective rules. 

The Exchange may list series that 

expire at the end of the next consecutive 

four (4) calendar quarters, as well as the 

fourth quarter of the following calendar 

year. For example, if the Exchange is 

trading Quarterly Options Series in the 

month of May 2009, it may list series 

that expire at the end of the second, 

third, and fourth quarters of 2009, as 

well as the first and fourth quarters of 

2010. Following the second quarter 

2009 expiration, the Exchange could 

add series that expire at the end of the 

second quarter of 2010. 

For each class of ETF options selected 

for the QOS Program, the Exchange may 

list strike prices within $5 from the 


sroberts on PROD1PC70 with NOTICES6