Federal Register / Vol. 82, No. 217 / Monday, November 13, 2017 / Notices 52351 

1The written records are required to set forth a 

description of the security purchased or sold, the 

identity of the person on the other side of the 

transaction, and the information or materials upon 

which the board of directors’ determination that the 

transaction was in compliance with the procedures 

was made. 

2Unless stated otherwise, these estimates are 

based on conversations with the examination and 

inspections staff of the Commission and fund 

representatives. 

3Based on our reviews and conversations with 

fund representatives, we understand that funds 

rarely, if ever, need to make changes to these 

policies and procedures once adopted, and 

therefore we do not estimate a paperwork burden 

for such updates. 

4This estimate is based on the following 

calculations: (4 hours × 97 new funds = 388 hours). 

5This estimate is based on the following 

calculation: (811 + 24 = 835). 

6Commission staff believes that rule 17a–7 does 

not impose any costs associated with record 

preservation in addition to the costs that funds 

already incur to comply with the record 

preservation requirements of rule 31a–2 under the 

Act. Rule 31a–2 requires companies to preserve 

certain records for specified periods of time. 

7The staff estimates that funds that rely on rule 

17a–7 annually enter into an average of 8 rule 17a– 

7 transactions each year. The staff estimates that the 

compliance attorneys of the companies spend 

approximately 15 minutes per transaction on this 

recordkeeping, and the board of directors spends a 

total of 1 hour annually in determining that all 

transactions made that year were done in 

compliance with the company’s policies and 

procedures. 

8This estimate is based on the following 

calculation: (3 hours × 835 companies = 2,505 

hours). 

9This estimate is based on the following 

calculation: (388 hours + 2,505 hours = 2,893 total 

hours). 

10This estimate is based on the following 

calculations: 835 funds that engage in rule 17a–7 

transactions × 8 transactions per year = 6,680. 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

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 17a–7, SEC File No. 270–238, OMB 

Control No. 3235–0214 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

described below. 

Rule 17a–7 (17 CFR 270.17a–7) (the 

‘‘rule’’) under the Investment Company 

Act of 1940 (15 U.S.C. 80a–1 et seq.) 

(the ‘‘Act’’) is entitled ‘‘Exemption of 

certain purchase or sale transactions 

between an investment company and 

certain affiliated persons thereof.’’ It 

provides an exemption from section 

17(a) of the Act for purchases and sales 

of securities between registered 

investment companies (‘‘funds’’), that 

are affiliated persons (‘‘first-tier 

affiliates’’) or affiliated persons of 

affiliated persons (‘‘second-tier 

affiliates’’), or between a fund and a 

first- or second-tier affiliate other than 

another fund, when the affiliation arises 

solely because of a common investment 

adviser, director, or officer. Rule 17a–7 

requires funds to keep various records 

in connection with purchase or sale 

transactions effected in reliance on the 

rule. The rule requires the fund’s board 

of directors to establish procedures 

reasonably designed to ensure that the 

rule’s conditions have been satisfied. 

The board is also required to determine, 

at least on a quarterly basis, that all 

affiliated transactions effected during 

the preceding quarter in reliance on the 

rule were made in compliance with 

these established procedures. If a fund 

enters into a purchase or sale 

transaction with an affiliated person, the 

rule requires the fund to compile and 

maintain written records of the 

transaction.1 The Commission’s 

examination staff uses these records to 

evaluate for compliance with the rule. 

While most funds do not commonly 

engage in transactions covered by rule 

17a–7, the Commission staff estimates 

that nearly all funds have adopted 

procedures for complying with the 

rule.2 Of the approximately 3,243 

currently active funds, the staff 

estimates that virtually all have already 

adopted procedures for compliance with 

rule 17a–7. This is a one-time burden, 

and the staff therefore does not estimate 

an ongoing burden related to the 

policies and procedures requirement of 

the rule for funds.3 The staff estimates 

that there are approximately 97 new 

funds that register each year, and that 

each of these funds adopts the relevant 

policies and procedures. The staff 

estimates that it takes approximately 4 

hours to develop and adopt these 

policies and procedures. Therefore, the 

total annual burden related to 

developing and adopting these policies 

and procedures would be approximately 

388 hours.4

Of the 3,243 existing funds, the staff 

assumes that approximately 25%, (or 

811) enter into transactions affected by 

rule 17a–7 each year (either by the fund 

directly or through one of the fund’s 

series), and that the same percentage 

(25%, or 24 funds) of the estimated 97 

funds that newly register each year will 

also enter into these transactions, for a 

total of 835 5 companies that are affected 

by the recordkeeping requirements of 

rule 17a–7. These funds must keep 

records of each of these transactions, 

and the board of directors must 

quarterly determine that all relevant 

transactions were made in compliance 

with the company’s policies and 

procedures. The rule generally imposes 

a minimal burden of collecting and 

storing records already generated for 

other purposes.6 The staff estimates that 

the burden related to making these 

records and for the board to review all 

transactions would be 3 hours annually 

for each respondent, (2 hours spent by 

compliance attorneys and 1 hour spent 

by the board of directors) 7 or 2,505 total 

hours each year.8

Based on these estimates, the staff 

estimates the combined total annual 

burden hours associated with rule 17a– 

7 is 2,893 hours.9 The staff also 

estimates that there are approximately 

835 respondents and 6,680 total 

responses.10

The estimates of burden hours are 

made solely for the purposes of the 

Paperwork Reduction Act, and are not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules. The 

collection of information required by 

rule 17a–7 is necessary to obtain the 

benefits of the rule. 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 the background 

documentation for this information 

collection at the following Web site, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, 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. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: November 7, 2017. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24485 Filed 11–9–17; 8:45 am] 

BILLING CODE 8011–01–P 


asabaliauskas on DSKBBXCHB2PROD with NOTICES