[Federal Register Volume 87, Number 61 (Wednesday, March 30, 2022)]
[Notices]
[Pages 18414-18416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06704]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-604, OMB Control No. 3235-0657]
Proposed Collection; Comment Request; Extension: Form N-MFP and
Rule 30b1-7
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736.
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-
[[Page 18415]]
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'').
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a-1 et seq.
\2\ 15 U.S.C. 80a-29(b).
\3\ 17 CFR 270.2a-7.
\4\ 17 CFR 274.201.
\5\ 17 CFR 270.30b1-7.
---------------------------------------------------------------------------
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.
The Commission calculates there are currently 353 \6\ money market
funds that report information on Form N-MFP, with approximately 8 \7\
of them being new money market funds that are filing reports on Form N-
MFP for the first time.
---------------------------------------------------------------------------
\6\ This estimate is based on staff review of reports on Form N-
MFP filed with the Commission for the month ended December 31, 2021
and includes both feeder and non-feeder money market funds.
\7\ This calculation is based on staff review of reports on Form
N-MFP filed with the Commission for 2019 (16 new funds), 2020 (5 new
funds) and 2021 (2 new funds). Averaging those numbers over three
years provides an estimate of 8 new funds per year.
---------------------------------------------------------------------------
We estimate that 35% of money market funds (or 124 money market
funds, broken down into 121 existing funds and 3 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 156 hours \10\ for existing funds and 190
hours \11\ for new money market funds. Based on an estimate of 121
existing funds and 3 new funds each year, we estimate that filing
reports on Form N-MFP in house takes 19,446 hours and costs funds, in
aggregate, $6,319,950 per year.\12\
---------------------------------------------------------------------------
\8\ The estimate is based on the following calculation: (353
money market funds x 35% = 124 money market funds. Of that amount,
we estimate that 3 are new money market funds (8 new money market
funds each year x 35% = 2.8 funds, rounded to 3). Therefore, 124
money market funds-3 new money market funds = 121 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 monthly
filings x 13 burden hours per filing) = 190 burden hours per year.
\12\ These estimates are based on the following calculations:
Existing funds: (156 hours x blended hourly rate of $325 for a
financial reporting manager ($318 per hour), senior accountant ($237
per hour), senior database administrator ($373 per hour), senior
portfolio manager ($360 per hour) and compliance manager ($339 per
hour)) = $44,772. The blended hourly rate was calculated as ($318 +
$237 + $373 + $360 + $339/5 = $325. There are 121 existing money
market funds that use in house solutions x 156 hours with an
internal time cost of $50,700 per fund = 18,876 hours with an
internal time cost of $6,134,700.
New money market funds: (190 hours x blended hourly rate of $325
for a financial reporting manager ($318 per hour), senior accountant
($237 per hour), senior database administrator ($373 per hour),
senior portfolio manager ($360 per hour) and compliance manager
($339 per hour)) = $61,750. The blended hourly rate was calculated
as ($318 + $237 + $373 + $360 + $339/5 = $325. Three new money
market funds x 190 hours with an internal time cost of $61,750 per
fund = 570 hours with an internal time cost of $185,250.
Aggregate annual hourly burden for all funds filing reports on
Form N-MFP in house: 18,876 hours + 570 hours = 19,446 hours.
Aggregate annual costs for all funds filing reports on Form N-
MFP in house: $6,134,700 + $185,250 = $6,319,950.
---------------------------------------------------------------------------
We estimate that 65% of money market funds (or 229 money market
funds, broken down into 224 existing funds and 5 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 224 existing funds and 5 new funds each year, we
estimate that filing reports on Form N-MFP using a service provider
takes 24,817 hours and costs funds, in aggregate, $8,065,525 per
year.\16\ In sum, we estimate that filing reports on Form N-MFP imposes
a total annual hour burden of 44,263 hours,\17\ at an aggregate cost of
$14,385,475 on all money market funds.\18\
---------------------------------------------------------------------------
\13\ The estimate is based on the following calculation: (353
money market funds x 65% = 229 money market funds. Of that amount,
we estimate that 5 are new money market funds (8 new money market
funds each year x 65% = 5.2 funds, rounded to 5). Therefore, 229
money market funds--5 new money market funds = 224 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 funds: (108 hours x blended hourly rate of $325 for a
financial reporting manager ($318 per hour), senior accountant ($237
per hour), senior database administrator ($373 per hour), senior
portfolio manager ($360 per hour) and compliance manager ($339 per
hour)) = $35,000. The blended hourly rate was calculated as ($318 +
$237 + $373 + $360 + $339)/5 = $325. There are 224 existing money
market funds who use a third-party service provider x 108 hours with
an internal time cost of $35,100 per fund = 24,192 hours with an
internal time cost of $7,862,400.
New money market funds: (125 hours x blended hourly rate of $325
for a financial reporting manager ($318 per hour), fund senior
accountant ($237 per hour), senior database administrator ($373 per
hour), senior portfolio manager ($360 per hour) and compliance
manager ($339 per hour)) = $40,625. The blended hourly rate was
calculated as ($318 + $237 + $373 + $360 + $339)/5 = $325. Five new
money market funds x 125 hours with an internal cost of $40,625 per
fund = 625 hours with an internal time cost of $203,125.
Aggregate annual hourly burden for all funds filing reports on
Form N-MFP using a third party service provider: 24,192 6 hours +
625 hours = 24,817 hours.
Aggregate annual costs for all funds filing reports on Form N-
MFP using a third party service provider: $7,862,400 + $203,125 =
$8,065,525.
\17\ This estimate is based on the following calculation: 19,446
hours for filers licensing a software solution and filing in-house +
24,817 hours for filers using a third-party service provider =
44,263 hours in total.
\18\ This estimate is based on the following calculation:
$6,319,950 (in-house filers) + $8,065,525 (filers using a service
provider) = $14,385,475.
---------------------------------------------------------------------------
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 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
[[Page 18416]]
incur on average, in the aggregate, external annual costs of
$2,613,300.\19\
---------------------------------------------------------------------------
\19\ This estimate is based on the following calculation: (124
money market funds (121 existing funds + 3 new funds) that file
reports on Form N-MFP in house x $3,900 per fund, per year) + (229
money market funds (224 existing funds + 5 new funds) that file
reports on Form N-MFP using a service provider x $9,300 per fund,
per year) = $2,613,300.
---------------------------------------------------------------------------
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimates of the burden of the proposed 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 by May 31, 2022.
Please direct your written comments to David Bottom, Director/Chief
Information Officer, Securities and Exchange Commission, C/O John
Pezzullo, 100 F Street NE, Washington, DC 20549; or send an email to:
[email protected].
Dated: March 25, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06704 Filed 3-29-22; 8:45 am]
BILLING CODE 8011-01-P