Document ID: SEC-2020-0158-0002
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2022-09-14T04:00Z

[Federal Register Volume 87, Number 177 (Wednesday, September 14, 2022)]
[Notices]
[Pages 56463-56464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19804]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-506, OMB Control No. 3235-0564]

Proposed Collection; Comment Request; Extension: Rule 17a-6

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'') is soliciting comments on the 
collections of information summarized below. The Commission plans to 
submit these existing collections of information to the Office of 
Management and Budget (``OMB'') for extension and approval.
    Section 17(a) of the Investment Company Act of 1940 (the ``Act'') 
generally prohibits affiliated persons of a registered investment 
company (``fund'') from borrowing money or other property from, or 
selling or buying securities or other property to or from, the fund or 
any company that the fund controls. Rule 17a-6 (17 CFR 270.17a-6) 
permits a fund, or a company controlled by the fund, and a ``portfolio 
affiliate'' of the fund (a company that is an affiliated person of the 
fund because the fund controls the company, or holds five percent or 
more of the company's outstanding voting securities) to engage in 
principal transactions that would otherwise be prohibited under section 
17(a) of the Act under certain conditions. A fund may not rely on the 
exemption in the rule to enter into a principal transaction with a 
portfolio affiliate if certain prohibited participants (e.g., 
directors, officers, employees, or investment advisers of the fund) 
have a financial interest in a party to the transaction. Rule 17a-6 
specifies certain interests that are not ``financial interests,'' 
including any interest that the fund's board of directors (including a 
majority of the directors who are not interested persons of the fund) 
finds to be not material. A board making this finding is required to 
record the basis for the finding in its meeting minutes. This 
recordkeeping requirement is a collection of information under the 
Paperwork Reduction Act of 1995 (``PRA'').
    The rule is designed to permit transactions between funds and their 
portfolio affiliates in circumstances in which it is unlikely that the 
affiliate would be in a position to take advantage of the fund. In 
determining whether a financial interest is ``material,'' the board of 
the fund should consider whether the nature and extent of the interest 
in the transaction is sufficiently small that a reasonable person would 
not believe that the interest affected the determination of whether to 
enter into the transaction or arrangement or the terms of the 
transaction or arrangement. The information collection requirements in 
rule 17a-6 are intended to ensure that Commission staff can review, in 
the course of its compliance and examination functions, the basis for a 
board of director's finding that the financial interest of an otherwise 
prohibited participant in a party to a transaction with a portfolio 
affiliate is not material.
    Based on public filings made with the Commission, we estimate that 
annually 335 funds and their series (collectively, ``funds'') may rely 
on rule 17a-6 to engage in otherwise prohibited transactions under 
section 17(a) of the 1940 Act. This estimate is based on publicly 
available Form N-CEN filings. Solely for the purposes of this PRA 
extension, we assume that each of these funds has engaged in one 
transaction per reporting period that resulted in a paperwork burden 
pursuant to rule 17a-6. We estimate that compliance with the 
recordkeeping requirement for rule 17a-6 will impose a burden of .2 
hours (12 minutes) for each transaction for which there is a paperwork 
burden. Therefore, we estimate 67 burden hours to be associated with 
rule 17a-6 recordkeeping requirements annually, with an associated 
internal cost of $5,762.
    The estimate of burden hours and burden costs is made solely for 
the purposes of the PRA. 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 17a-
6. 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 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

[[Page 56464]]

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 by 
November 14, 2022.
    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: David Bottom, Acting 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an 
email to: [email protected].

    Dated: September 8, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-19804 Filed 9-13-22; 8:45 am]
BILLING CODE 8011-01-P