Document ID: SEC-2019-1035-0003
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2022-08-05T04:00Z

[Federal Register Volume 87, Number 150 (Friday, August 5, 2022)]
[Notices]
[Page 48050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16847]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-504, OMB Control No. 3235-0561]

Submission for OMB Review; Comment Request: Extension: Rule 12d3-
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 (``OMB'') a request for extension of the 
previously approved collection of information discussed below.
    Rule 12d3-1 (17 CFR 270.12d3-1) under the Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) (``Investment Company Act'') permits a 
fund to invest up to five percent of its assets in securities of an 
issuer deriving more than fifteen percent of its gross revenues from 
securities-related businesses (subject to certain limitations), 
notwithstanding the general prohibition in Section 12(d)(3) of the 
Investment Company Act of a registered investment company (``fund'') 
and companies controlled by the fund purchasing securities issued by a 
registered investment adviser, broker, dealer, or underwriter 
(``securities-related businesses'').
    A fund may, however, rely on an exemption in rule 12d3-1 to acquire 
securities issued by its subadvisers in circumstances in which the 
subadviser would have little ability to take advantage of the fund, 
because it is not in a position to direct the fund's securities 
purchases. This exemption in rule 12d3-1 is available if: (i) the 
subadviser is not, and is not an affiliated person of, an investment 
adviser that provides advice with respect to the portion of the fund 
that is acquiring the securities; and (ii) the advisory contracts of 
the subadviser, and any subadviser that is advising the purchasing 
portion of the fund, prohibit them from consulting with each other 
concerning securities transactions of the fund, and limit their 
responsibility in providing advice to providing advice with respect to 
discrete portions of the fund's portfolio.\1\
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    \1\ See 17 CFR 270.270.12d3-1(c)(3).
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    Based on an analysis of fund filings, Commission staff estimates 
that approximately 285 funds enter into such new subadvisory agreements 
each year, and that it will require approximately 3 attorney hours to 
draft and execute additional clauses in new subadvisory contracts in 
order for funds and subadvisers to be able to rely on the exemptions in 
rule 12d3-1. Because these additional clauses are identical to the 
clauses that a fund would need to insert in their subadvisory contracts 
to rely on rules 10f-3 (17 CFR 270.10f-3), 17a-10 (17 CFR 270.17a-10), 
and 17e-1 (17 CFR 270.17e-1), and because we believe that funds that 
use one such rule generally use all of these rules, we apportion this 3 
hour time burden equally to all four rules. Therefore, we estimate that 
the burden allocated to rule 12d3-1 for this contract change would be 
0.75 hours. Assuming that all 285 funds that enter into new subadvisory 
contracts each year make the modification to their contract required by 
the rule, we estimate that the rule's contract modification requirement 
will result in 214 burden hours annually, with an associated time cost 
of approximately $90,950.
    The estimate of average burden hours is made solely for the 
purposes of the Paperwork Reduction Act. The estimate is not derived 
from a comprehensive or even a representative survey or study of the 
costs of Commission rules. Complying with this collection of 
information requirement is necessary to obtain the benefit of relying 
on rule 12d3-1. 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 September 6, 2022 to (i) [email protected] 
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: [email protected].

    Dated: August 1, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-16847 Filed 8-4-22; 8:45 am]
BILLING CODE 8011-01-P