[Federal Register Volume 77, Number 91 (Thursday, May 10, 2012)]
[Notices]
[Pages 27493-27494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11249]


-----------------------------------------------------------------------

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 17f-6, SEC File No. 270-392, OMB Control No. 3235-0447.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (the ``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 17f-6 (17 CFR 270.17f-6) under the Investment Company Act of 
1940 (15 U.S.C. 80a) permits registered investment companies 
(``funds'') to maintain assets (i.e., margin) with futures commission 
merchants (``FCMs'') in connection with commodity transactions effected 
on both domestic and foreign exchanges. Prior to the rule's adoption, 
funds generally were required to maintain these assets in special 
accounts with a custodian bank.
    The rule requires a written contract that contains certain 
provisions designed to ensure important safeguards and other benefits 
relating to the custody of fund assets by FCMs. To protect fund assets, 
the contract must require that FCMs comply with the segregation or 
secured amount requirements of the Commodity Exchange Act (``CEA'') and 
the rules under that statute. The contract also must contain a 
requirement that FCMs obtain an acknowledgment from any clearing 
organization that the fund's assets are held on behalf of the FCM's 
customers according to CEA provisions.
    Because rule 17f-6 does not impose any ongoing obligations on funds 
or FCMs, Commission staff estimates there are no costs related to 
existing contracts between funds and FCMs. This estimate does not 
include the time required by an FCM to comply with the rule's contract 
requirements because, to the extent that complying with the contract 
provisions could be considered ``collections of information,'' the 
burden hours for compliance are already included in other PRA 
submissions.\1\
---------------------------------------------------------------------------

    \1\ The rule requires a contract with the FCM to contain two 
provisions requiring the FCM to comply with existing requirements 
under the CEA and rules adopted under that Act. Thus, to the extent 
these provisions could be considered collections of information; the 
hours required for compliance would be included in the collection of 
information burden hours submitted by the CFTC for its rules.
---------------------------------------------------------------------------

    Thus, Commission staff estimates that any burden of the rule would 
be borne by funds and FCMs entering into new contracts pursuant to the 
rule. Commission staff estimates that approximately 761 fund complexes 
and 1997 funds currently effect commodities transactions and could 
deposit margin with FCMs in connection with those transactions pursuant 
to rule 17f-6.\2\ Staff further estimates that of this number, 76 fund 
complexes and 200 funds enter into new contracts with FCMs each 
year.\3\
---------------------------------------------------------------------------

    \2\ This estimate is based on the number of funds that reported 
on Form N-SAR from July 1, 2011-December 31, 2011, in response to 
items (b) through (i) of question 70, the ability to engage in 
futures and commodity option transactions.
    \3\ These estimates are based on the assumption that 10% of fund 
complexes and funds enter into new FCM contracts each year. This 
assumption encompasses fund complexes and funds that enter into FCM 
contracts for the first time, as well as fund complexes and fund 
that change the FCM with whom they maintain margin accounts for 
commodities transactions.
---------------------------------------------------------------------------

    Based on conversations with fund representatives, Commission staff 
understands that fund complexes typically enter into contracts with 
FCMs on behalf of all funds in the fund complex that engage in 
commodities transactions. Funds covered by the contract are typically 
listed in an attachment, which may be amended to encompass new funds. 
Commission staff estimates that the burden for a fund complex to enter 
into a contract with an FCM that contains the contract requirements of 
rule 17f-6 is one hour, and further estimates that the burden to add a 
fund to an existing contract between a fund complex and an FCM is 6 
minutes.
    Accordingly, Commission staff estimates that funds and FCMs spend 
96 burden hours annually complying with the information collection 
requirements of rule 17f-6.\4\ At $378 per hour of professional 
(attorney) time, Commission staff estimates that the annual dollar cost 
for the 96 hours is $36,288.\5\ These estimates 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 and forms.
---------------------------------------------------------------------------

    \4\ This estimate is based upon the following calculation: (76 
fund complexes x 1 hour) + (200 funds x 0.1 hours) = 96 hours.
    \5\ The $378 per hour figure for an attorney is from SIFMA's 
Management & Professional Earnings in the Securities Industry 2011, 
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.
---------------------------------------------------------------------------

    Compliance with the collection of information requirements of the 
rule is necessary to obtain the benefit of relying on the rule. 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.

[[Page 27494]]

    Written comments are invited on: (a) Whether the collection of 
information is 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 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 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 after this 
publication.
    Please direct your written comments to Thomas Bayer, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an 
email to: [email protected].

    Dated: May 4, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11249 Filed 5-9-12; 8:45 am]
BILLING CODE 8011-01-P