[Federal Register Volume 86, Number 201 (Thursday, October 21, 2021)]
[Notices]
[Pages 58372-58373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22899]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-392, OMB Control No. 3235-0447]


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:
    Rule 17f-6

    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. Before 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

[[Page 58373]]

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\ 
Commission staff estimates that approximately 1,302 series of 155 funds 
report that futures commission merchants and commodity clearing 
organizations provide custodial services to the fund.\2\
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    \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 thereunder. 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.
    \2\ This estimate is based on the number of funds that reported 
on Form N-CEN from July 31, 2020- July 31, 2021, in response to sub-
items C.12.6. and D.14.6. Money market funds are excluded from this 
estimate because they are not eligible securities.
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    Commission staff, however, estimates that any burden of the rule 
would be borne by funds and FCMs entering into new contracts pursuant 
to the rule as set forth in Table 1 below:

                     Table 1--Burden of Information Collection for Complying With Rule 17f-6
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                                         Estimated responses     Estimated hours burden   Estimated cost burdens
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New contracts with FCMs annually.....
                                       130 series.............  130 series x 0.1 hours   13 hours x $425
                                       15 funds \1\...........   = 13 hours.              (attorney) \4\ =
                                                                15 funds x 1 hour = 15    $5,525
                                                                 hours.                  15 hours x $425
                                                                                          (attorney) \4\ =
                                                                                          $6,375
                                                                13 hours + 15 hours =    $5,525 + $6,375 =
                                                                 28 hours \3\.            $11,900
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    Totals...........................  130 series and 15 funds  28 hours annually......  $11,900 annually
                                        annually \2\.
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\1\ These estimates are based on the assumption that 10% of series and funds that currently effect commodities
  transactions enter into new FCM contracts each year. This assumption encompasses series and fund 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.
\2\ Commission staff estimates that approximately155 funds, representing 1,302 separate fund series, currently
  effect commodities transactions and could deposit margin with FCMs in connection with those transactions
  pursuant to rule 17f-6. Staff further estimates that of this number, 15 funds and 130 series enter into new
  contracts with FCMs each year.
\3\ Based on conversations with fund representatives, Commission staff understands that funds typically enter
  into contracts with FCMs on behalf of series that engage in commodities transactions. Series covered by the
  contract are typically listed in an attachment, which may be amended to encompass new series. Commission staff
  estimates that the burden for a fund 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 series to an existing
  contract between a fund and an FCM is 6 minutes.
\4\ The $425 per hour figure for an attorney is from SIFMA's Management & Professional Earnings in the
  Securities Industry 2013, updated for 2021 modified by Commission staff to account for an 1,800-hour work-year
  and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead.

    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.
    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 David Bottom, Director/Chief 
Information Officer, Securities and Exchange Commission, C/O Cynthia 
Roscoe, 100 F Street NE, Washington, DC 20549; or send an email to: 
[email protected].

    Dated: October 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22899 Filed 10-20-21; 8:45 am]
BILLING CODE 8011-01-P