[Federal Register Volume 77, Number 209 (Monday, October 29, 2012)]
[Notices]
[Pages 65592-65593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26541]


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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 22e-3, OMB Control No. 3235-0658, SEC File No. 270-603.

    Notice is hereby given that, under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the 
``Commission'') has submitted to the Office of Management and Budget a 
request for extension of the previously approved collection of 
information discussed below.
    Section 22(e) of the Investment Company Act [15 U.S.C. 80a-22(e)] 
(``Act'') generally prohibits funds, including money market funds, from 
suspending the right of redemption, and from postponing the payment or 
satisfaction upon redemption of any redeemable security for more than 
seven days. The provision was designed to prevent funds and their 
investment advisers from interfering with the redemption rights of 
shareholders for improper purposes, such as the preservation of 
management fees. Although section 22(e) permits funds to postpone the 
date of payment or satisfaction upon redemption for up to seven days, 
it does not permit funds to suspend the right of redemption for any 
amount of time, absent certain specified circumstances or a Commission 
order.
    Rule 22e-3 under the Act [17 CFR 270.22e-3] exempts money market 
funds from section 22(e) to permit them to suspend redemptions in order 
to facilitate an orderly liquidation of the fund. Specifically, rule 
22e-3 permits a money market fund to suspend redemptions and postpone 
the payment of proceeds pending board-approved liquidation proceedings 
if: (i) The fund's board of directors, including a majority of 
disinterested directors, determines pursuant to Sec.  270.2a-
7(c)(8)(ii)(C) that the extent of the deviation between the fund's 
amortized cost price per share and its current net asset value per 
share calculated using available market quotations (or an appropriate 
substitute that reflects current market conditions) may result in 
material dilution or other unfair results to investors or existing 
shareholders; (ii) the fund's board of directors, including a majority 
of disinterested directors, irrevocably approves the liquidation of the 
fund; and (iii) the fund, prior to suspending redemptions, notifies the 
Commission of its decision to liquidate and suspend redemptions. Rule 
22e-3 also provides an exemption from section 22(e) for registered 
investment companies that own shares of a money market fund pursuant to 
section 12(d)(1)(E) of the Act (``conduit funds''), if the underlying 
money market fund has suspended redemptions pursuant to the rule. A 
conduit fund that suspend redemptions in reliance on the exemption 
provided by rule 22e-3 is required to provide prompt notice of the 
suspension of redemptions to the Commission. Notices required by the 
rule must be provided by electronic mail, directed to the attention of 
the Director of the Division of Investment Management or the Director's 
designee.\1\ Compliance with the notification requirement is mandatory 
for money market funds and conduit funds that rely on rule 22e-3 to 
suspend redemptions and postpone payment of proceeds pending a 
liquidation, and are not kept confidential.
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    \1\ See rule 22e-3(a)(3).
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    Commission staff estimates that, on average, one money market fund 
would break the buck and liquidate every six years.\2\ In addition, 
Commission staff estimate that there are an average of two conduit 
funds that may be invested in a money market fund that breaks the 
buck.\3\ Commission staff further estimate that a money market fund or 
conduit fund would spend approximately one hour of an in-house 
attorney's time to prepare and submit the notice required by the rule. 
Given these estimates, the total annual burden of the notification 
requirement of rule 22e-3 for all money market funds and conduit funds 
would be approximately 30 minutes,\4\ at a cost of $189.\5\ 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

[[Page 65593]]

a representative survey or study of the costs of Commission rules and 
forms.
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    \2\ This estimate is based upon the Commission's experience with 
the frequency with which money market funds have historically 
required sponsor support. Although the vast majority of money market 
fund sponsors have supported their money market funds in times of 
market distress, for purposes of this estimate Commission staff 
conversatively estimates that one or more sponsors may not provide 
support.
    \3\ These estimates are based on a review of filings with the 
Commission.
    \4\ This estimate is based on the following calculations: (1 
hour / 6 years) = 10 minutes per year for each fund and conduit fund 
that is required to provide notice under the rule. 10 minutes per 
year x 3 (combined number of affected funds and conduit funds) = 30 
minutes.
    \5\ This estimate is based on the following calculation: $378/
hour x 30 minutes = $189. The estimated hourly wages used in this 
PRA analysis were derived from reports prepared by the Securities 
Industry and Financial Markets Association, modified to account for 
an 1800-hour work year and multiplied by 5.35 to account for 
bonuses, firm size, employee benefits and overhead. See Securities 
Industry and Financial Markets Association, Management & 
Professional Earnings in the Securities Industry 2011.
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    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.
    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, 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: October 24, 2012.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-26541 Filed 10-26-12; 8:45 am]
BILLING CODE 8011-01-P