[Federal Register Volume 78, Number 251 (Tuesday, December 31, 2013)]
[Notices]
[Pages 79711-79712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-31241]


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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 17f-7, OMB Control No. 3235-0529, SEC File No. 270-470.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3521) (``Paperwork Reduction Act''), 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.
    Rule 17f-7 (17 CFR 270.17f-7) permits a fund under certain 
conditions to maintain its foreign assets with an eligible securities 
depository, which has to meet minimum standards for a depository. The 
fund or its investment adviser generally determines whether the 
depository complies with those requirements based on information 
provided by the fund's primary custodian (a bank that acts as global 
custodian). The depository custody arrangement also must meet certain 
conditions. The fund or its adviser must receive from the primary 
custodian (or its agent) an initial risk analysis of the depository 
arrangements, and the fund's contract with its primary custodian must 
state that the custodian will monitor risks and promptly notify the 
fund or its adviser of material changes in risks. The primary custodian 
and other custodians also are required to agree to exercise at least 
reasonable care, prudence, and diligence.
    The collection of information requirements in rule 17f-7 are 
intended to provide workable standards that protect funds from the 
risks of using foreign securities depositories while assigning 
appropriate responsibilities to the fund's primary custodian and 
investment adviser based on their capabilities. The requirement that 
the foreign securities depository meet specified minimum standards is 
intended to ensure that the depository is subject to basic safeguards 
deemed appropriate for all depositories. The requirement that the fund 
or its adviser must receive from the primary custodian (or its agent) 
an initial risk analysis of the depository arrangements, and that the 
fund's contract with its primary custodian must state that the 
custodian will monitor risks and promptly notify the fund or its 
adviser of material changes in risks, is intended to provide essential 
information about custody risks to the fund's investment adviser as 
necessary for it to approve the continued use of the depository. The 
requirement that the primary custodian agree to exercise reasonable 
care is intended to provide assurances that its services and the 
information it provides will meet an appropriate standard of care.
    The staff estimates that each of approximately 938 investment 
advisers \1\ will make an average of 8 responses annually under the 
rule to address depository compliance with minimum requirements, any 
indemnification or insurance arrangements, and reviews of risk analyses 
or notifications. The staff estimates each response will take 6 hours, 
requiring a total of approximately 48 hours for each adviser.\2\ Thus 
the total annual burden associated with these requirements of the rule 
is approximately 45,024 hours.\3\ The staff further estimates that 
during each year, each of approximately 15 global custodians will make 
an average of 4 responses to analyze custody risks and provide notice 
of any material changes to custody risk under the rule. The staff 
estimates that each response will take 260 hours, requiring 
approximately 1,040 hours annually per global custodian.\4\ Thus the 
total annual burden associated with these requirements is approximately 
15,600 hours.\5\ The staff estimates that the total annual hour burden 
associated with all collection of information requirements of the rule 
is therefore 60,624 hours.\6\
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    \1\ As of October 2013, 938 investment advisers managed or 
sponsored open-end registered funds (including exchange-traded 
funds) and closed-end registered funds.
    \2\ 8 responses per adviser x 6 hours per response = 48 hours 
per adviser.
    \3\ 938 hours x 48 hours per adviser = 45,024 hours.
    \4\ 260 hours per response x 4 responses per global custodian = 
1,040 hours per global custodian.
    \5\ 15 global custodians x 1,040 hours per global custodian = 
15,600 hours.
    \6\ 45,024 hours + 15,600 hours = 60,624 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 costs of 
Commission rules and forms. Compliance with the collection of 
information requirements of the rule is necessary to obtain the benefit 
of relying on the rule's permission for funds to maintain their assets 
in foreign custodians. The information provided

[[Page 79712]]

under rule 17f-7 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.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information has 
practical utility; (b) the accuracy of the agency'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 of 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: December 24, 2013.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-31241 Filed 12-30-13; 8:45 am]
BILLING CODE 8011-01-P