Document ID: SEC-2020-1088-0001
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2020-07-10T04:00Z

[Federal Register Volume 85, Number 133 (Friday, July 10, 2020)]
[Notices]
[Pages 41654-41655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14755]

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SECURITIES AND EXCHANGE COMMISSION

30 Day Notice--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 482 SEC File No. 270-508, OMB Control No. 3235-0565

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.) (``Paperwork Reduction Act''), the 
Securities and Exchange Commission (``Commission'') has submitted to 
the Office of Management and Budget (``OMB'') a request for extension 
of the previously approved collection of information discussed below.
    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 previously 
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)).
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    \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.
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    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.
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    \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.
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    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.
    The Commission estimates that 41,265 \3\ responses to rule 482 are 
filed annually by 2,877 investment companies offering approximately 
12,476 portfolios, or approximately 3.3 responses per portfolio 
annually.\4\ The burden associated with rule 482 is presently estimated 
to be 5.16 hours per response. The annual hourly burden is therefore 
approximately 212,927 hours.\5\
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    \3\ This estimated number of responses to rule 482 is composed 
of 41,003 responses filed with FINRA and 262 responses filed with 
the Commission in 2019.
    \4\ 41,265 responses / 12,476 portfolios = 3.3 responses per 
portfolio.
    \5\ 41,265 responses x 5.16 hours per response = 212,927 hours.
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    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

[[Page 41655]]

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.
    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 
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by 
sending an email to: PRA_Mailbox@sec.gov.

    Dated: July 2, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14755 Filed 7-9-20; 8:45 am]
BILLING CODE 8011-01-P