[Federal Register Volume 84, Number 26 (Thursday, February 7, 2019)]
[Notices]
[Pages 2626-2628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01371]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; 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:
Rules 8b-1 to 8b-33, SEC File No. 270-135, OMB Control No. 3235-
0176.
[[Page 2627]]
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 (``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 (``OMB'') for extension and approval.
Section 30(b) of the Investment Company Act of 1940 (``Investment
Company Act'') \1\ provides that ``[e]very registered investment
company shall file with the Commission . . . such information,
documents, and reports (other than financial statements), as the
Commission may require to keep reasonably current the information and
documents contained in the registration statement of such company. . .
.'' \2\ Rule 30b1-7 under the Investment Company Act, entitled
``Monthly Report for Money Market Funds,'' provides that every
registered investment company, or series thereof, that is regulated as
a money market funds under rule 2a-7 \3\ must file with the Commission
a monthly report of portfolio holdings on Form N-MFP \4\ no later than
the fifth business day of each month.\5\ Form N-MFP sets forth the
specific disclosure items that money market funds must provide. Filers
must submit this report electronically using the Commission's
electronic filing system (``EDGAR'') in Extensible Markup Language
(``XML'') format.
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\1\ 15 U.S.C. 80a-1 et seq.
\2\ 15 U.S.C. 80a-30(b).
\3\ 17 CFR 270.2a-7.
\4\ 17 CFR 274.201.
\5\ 17 CFR 270.30b1-7.
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Compliance with rule 30b1-7 is mandatory for any fund that holds
itself out as a money market fund in reliance on rule 2a-7. Responses
to the disclosure requirements 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 following estimates of average burden hours and costs are made
solely for purposes of the Paperwork Reduction Act and are not derived
from a comprehensive or even representative survey or study of the cost
of Commission rules and forms. A fund must comply with the requirement
to prepare Form N-MFP in order to hold itself out to investors as a
money market fund or the equivalent of a money market fund in reliance
on rule 2a-7. The collection of information is mandatory for money
market funds that rely on rule 2a-7, and responses to the information
collections will not be kept confidential.
The Commission estimates there are currently 429 \6\ money market
funds that report information on Form N-MFP, with approximately 10 \7\
of them being new money market funds that are filing reports on Form N-
PORT for the first time.
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\6\ This estimate is based on staff review of reports on Form N-
MFP filed with the Commission for the month ended February 28, 2018.
\7\ This estimate is based on staff review of reports on Form N-
MFP filed with the Commission for 2015 (1 new filer), 2016 (23 new
filers), and 2017 (6 new filers). Amortizing those numbers over
three years provides an estimate of 10 new filers per year.
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We estimate that 35% of money market funds (or 150 money market
funds, broken down into 146 existing funds and 4 new funds) \8\ license
a software solution and file reports on Form N-MFP in house; we further
estimate that each fund that files reports on Form N-MFP in house
requires an average of approximately 47 burden hours to compile
(including review of the information), tag, and electronically file the
Form N-MFP for the first time and an average of approximately 13 burden
hours for subsequent filings.\9\ Therefore, we estimate the per fund
average annual hour burden is 96 hours \10\ for existing funds and 130
hours \11\ for new money market funds. Based on an estimate of 146
existing fund filers and 4 new fund filers each year, we estimate that
filing reports on Form N-MFP in house takes 23,536 hours and costs
funds, in aggregate, $6,754,832 per year.\12\
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\8\ The estimate is based on the following calculation: (429
money market funds x 35% = 150 money market funds. Of that amount,
we estimate that 4 are new money market funds (10 new money market
fund filers each year x 35% = 3.5 funds, rounded to 4). Therefore,
150 money market funds - 4 new money market funds = 146 existing
money market funds.
\9\ We understand that the required information is currently
maintained by money market funds pursuant to other regulatory
requirements or in the ordinary course of business. Accordingly, for
the purposes of our analysis, we do not ascribe any time to
producing the required information.
\10\ This estimate is based on the following calculation: 12
filings per year x 13 burden hours per filing = 156 burden hours per
year.
\11\ This estimate is based on the following calculation: (First
month's initial filing x 47 burden hours) + (11 subsequent month
filings x 13 burden hours per filing) = 190 burden hours per year.
\12\ These estimates are based on the following calculations:
Existing fund filers: (156 hours x blended hourly rate of $287 for a
Financial Reporting Manager ($280 per hour), Fund Senior Accountant
($209 per hour), Senior Database Administrator ($329 per hour),
Senior Portfolio Manager ($317 per hour), Compliance Manager ($298
per hour)) = $44,772. The blended hourly rate was calculated as
($280 + $209 + $329 + $317 + 209)/5 = $287. There are 146 existing
money market funds who use in house solutions x 156 hours with a
monetized cost of $44,772 per fund = 22,776 hours with a monetized
cost of $6,536,712.
New money market fund filers: (190 hours x blended hourly rate
of $287 for a Financial Reporting Manager ($280 per hour), Fund
Senior Accountant ($209 per hour), Senior Database Administrator
($329 per hour), Senior Portfolio Manager ($317 per hour),
Compliance Manager ($298 per hour)) = $54,530. The blended hourly
rate was calculated as ($280 + $209 + $329 + $317 + 209)/5 = $287.
Four new money market funds x 190 hours with a monetized cost of
$54,530 per fund = 760 hours with a monetized cost of $218,120.
Aggregate annual hourly burden for all funds filing reports on
Form N-MFP in house: 22,776 hours + 760 hours = 23,536 hours.
Aggregate annual costs for all funds filing reports on Form N-
MFP in house: $6,536,712 + $218,120 = $6,754,832.
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We estimate that 65% of money market funds (or 279 money market
funds, broken down into 272 existing fund and 7 new funds) \13\ retain
the services of a third party to provide data aggregation and
validation services as part of the preparation and filing of reports on
Form N-MFP on the fund's behalf; we further estimate that each fund
requires an average of approximately 26 burden hours to compile and
review the information with the service provider prior to
electronically filing the report for the first time and an average of
approximately 9 burden hours for subsequent filings. Therefore, we
estimate the per fund average annual hour burden is 108 hours \14\ for
existing funds and 125 hours \15\ for new money market funds. Based on
an estimate of 272 existing fund filers and 7 new fund filers each
year, we estimate that filing reports on Form N-MFP using a service
provider takes 41,131 hours and costs funds, in aggregate, $8,682,037
per year.\16\ In sum, we estimate that filing
[[Page 2628]]
reports on Form N-MFP imposes a total annual hour burden of 64,667
hours,\17\ at an aggregate cost of $15,436,869 on all money market
funds.\18\
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\13\ The estimate is based on the following calculation: (429
money market funds x 65% = 279 money market funds. Of that amount,
we estimate that 7 are new money market funds (10 new money market
fund filers each year x 65% = 6.5 funds, rounded to 7). Therefore,
279 money market funds-7 new money market funds = 272 existing money
market funds.
\14\ This estimate is based on the following calculation: 12
filings per year x 9 burden hours per filing = 108 burden hours per
year.
\15\ This estimate is based on the following calculation: (First
month's initial filing x 26 burden hours) + (11 subsequent month
filings x 9 burden hours per filing) = 125 burden hours per year.
\16\ These estimates are based on the following calculations:
Existing fund filers: (108 hours x blended hourly rate of $287 for a
Financial Reporting Manager ($280 per hour), Fund Senior Accountant
($209 per hour), Senior Database Administrator ($329 per hour),
Senior Portfolio Manager ($317 per hour), Compliance Manager ($298
per hour)) = $30,996. The blended hourly rate was calculated as
($280 + $209 + $329 + $317 + 209)/5 = $287. There are 272 existing
money market funds who use a third-party service provider x 148
hours with a monetized cost of $30,996 per fund = 40,256 hours with
a monetized cost of $8,430,912.
New money market fund filers: (125 hours x blended hourly rate
of $287 for a Financial Reporting Manager ($280 per hour), Fund
Senior Accountant ($209 per hour), Senior Database Administrator
($329 per hour), Senior Portfolio Manager ($317 per hour),
Compliance Manager ($298 per hour)) = $35,875. The blended hourly
rate was calculated as ($280 + $209 + $329 + $317 + 209)/5 = $287.
Seven new money market funds x 125 hours with a monetized cost of
$35,875 per fund = 875 hours with a monetized cost of $251,125.
Aggregate annual hourly burden for all funds filing reports on
Form N-MFP in house: 40,256 hours + 875 hours = 41,131 hours.
Aggregate annual costs for all funds filing reports on Form N-
MFP in house: $8,430,912 + $251,125= $8,682,037.
\17\ This estimate is based on the following calculation: 23,536
hours for filers licensing a software solution and filing in-house +
41,131 hours for filers using a third-party service provider =
64,667 hours in total.
\18\ This estimate is based on the following calculation:
$6,754,832 (in-house filers) + $8,682,037 (filers using a service
provider) = $15,436,869.
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Cost to Respondents
Cost burden is the cost of goods and services purchased in
connection with complying with the collection of information
requirements of rule 30b1-7 and Form N-MFP. The cost burden does not
include the cost of the hour burden discussed in Item 12 above.
Based on discussions with industry participants, we estimate that
money market funds that file reports on Form N-MFP in house license a
third-party software solution to assist in filing their reports at an
average cost of $3,900 per fund per year. In addition, we estimate that
money market funds that use a service provider to prepare and file
reports on Form N-MFP pay an average fee of $9,300 per fund per year.
In sum, we estimate that all money market funds incur on average, in
the aggregate, external annual costs of $3,179,700.\19\
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\19\ This estimate is based on the following calculation: (150
money market funds (146 existing funds + 4 new funds) that file
reports on Form N-MFP in house x $3,900 per fund, per year) + (279
money market funds (272 existing funds + 7 new funds) that file
reports on Form N-MFP using a service provider x $9,300 per fund,
per year) = $3,179,700.
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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 of this
publication.
Please direct your written comments to Charles Riddle, Acting
Director/Chief Information Officer, Securities and Exchange Commission,
C/O Candace Kenner, 100 F Street NE, Washington, DC 20549; or send an
email to: [email protected].
Dated: February 1, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-01371 Filed 2-6-19; 8:45 am]
BILLING CODE 8011-01-P