[Federal Register Volume 90, Number 154 (Wednesday, August 13, 2025)]
[Notices]
[Pages 39007-39008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-15313]
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SECURITIES AND EXCHANGE COMMISSION
[OMB Control No. 3235-0311]
Agency Information Collection Activities; Submission for OMB
Review; Comment Request; Extension: Rule 7d-1
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 discussed below
Section 7(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-
7(d)) (the ``Act'' or ``Investment Company Act'') requires an
investment company (``fund'') organized outside the United States
(``foreign fund'') to obtain an order from the Commission allowing the
fund to register under the Act before making a public offering of its
securities through the United States mail or any means of interstate
commerce. The Commission may issue an order only if it finds that it is
both legally and practically feasible effectively to enforce the
provisions of the Act against the foreign fund, and that the
registration of the fund is consistent with the public interest and
protection of investors.
Rule 7d-1 (17 CFR 270.7d-1) under the Act, which was adopted in
1954, specifies the conditions under which a Canadian management
investment company (``Canadian fund'') may request an order from the
Commission permitting it to register under the Act. Although rule 7d-1
by its terms applies only to Canadian funds, funds in other
jurisdictions generally have agreed to comply with the requirements of
rule 7d-1 as a prerequisite to receiving an order permitting the fund's
registration under the Act.
The rule requires Canadian funds that propose to register under the
Act to file an application with the Commission that contains various
undertakings and agreements by the fund. The requirement of the
Canadian fund to file an application is a collection of information
under the Paperwork Reduction Act. Certain of the undertakings and
agreements, in turn, impose the following additional information
collection requirements:
(1) the fund must file with the Commission agreements between the
fund and its directors, officers, and service providers requiring them
to comply with the fund's charter and bylaws, the Act, and certain
other obligations relating to the undertakings and agreements in the
application;
(2) the fund and each of its directors, officers, and investment
advisers that is not a U.S. resident, must file with the Commission an
irrevocable designation of the fund's custodian in the United States as
agent for service of process;
(3) the fund's charter and bylaws must provide that (a) the fund
will comply with certain provisions of the Act applicable to all funds,
(b) the fund will maintain originals or copies of its books and records
in the United States, and (c) the fund's contracts with its custodian,
investment adviser, and principal underwriter, will contain certain
terms, including a requirement that the adviser maintain originals or
copies of pertinent records in the United States;
(4) the fund's contracts with service providers will require that
the provider perform the contract in accordance with the Act, the
Securities Act of 1933 (15 U.S.C. 77a), and the Securities Exchange Act
of 1934 (15 U.S.C. 78a), as applicable; and
(5) the fund must file, and periodically revise, a list of persons
affiliated with the fund, its investment adviser, and principal
underwriter.
As noted above, under section 7(d) of the Act, the Commission may
issue an order permitting a foreign fund's registration only if the
Commission finds that ``by reason of special circumstances or
arrangements, it is both legally and practically feasible effectively
to enforce the provisions of the (Act).'' The information collection
requirements are necessary to ensure that the substantive provisions of
the Act may be enforced as a matter of contract right in the United
States or
[[Page 39008]]
Canada by the fund's shareholders or by the Commission.
Rule 7d-1 also contains certain information collection requirements
that are associated with other provisions of the Act. These
requirements are applicable to all registered funds and are outside the
scope of this request. The Commission staff estimates that one foreign
fund is registered under the Act pursuant to rule 7d-1 and is currently
active. The burden hours under the rule associated with the fund's
compliance with the Act's requirements are reflected in the information
collection burdens applicable to those requirements for all registered
funds. If a fund were to file an application under rule 7d-1 to
register under the Act, the Commission estimates that the rule would
impose initial information collection burdens (for example, for filing
an application, preparing the specified charter, bylaw, and contract
provisions, designations of agents for service of process, and an
initial list of affiliated persons, and establishing a means of keeping
records in the United States) of approximately 90 hours for the fund
and its associated persons. As noted above, after registration, a
Canadian fund may file a supplemental application seeking special
relief designed for the fund's particular circumstances. Rule 7d-1 does
not mandate these applications. The Commission is not including these
applications in its calculation of the annual burden because no fund
has applied to register under the Act pursuant to rule 7d-1 in the last
three years.
These estimates of average burden hours are made solely for the
purposes of the Paperwork Reduction Act. These estimates are not
derived from a comprehensive or even a representative survey or study
of Commission rules. Commission staff estimates the burden of the rule
as set forth in Table 1 below:
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Number of Internal Annual
affected annual burden Wage rate Internal time external cost
funds hours costs burden
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Rule 7d-1....................... 1 5 $1,910 $9,550 $5,256
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Total Annual Burden......... .............. 5 .............. 9,550 5,256
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Cost burden is the cost of goods and services purchased to comply
with rule 7d-1, such as legal and accounting services. As outlined in
the table above, we estimate the total external cost burden to comply
with rule 7d-1 to be $5,256.
If a Canadian or other foreign fund in the future applied to
register under the Act under rule 7d-1, the fund initially might have
capital and start-up costs (not including hourly burdens) of an
estimated $20,000 to comply with the rule's initial information
collection requirements. These costs include legal and processing-
related fees for preparing the required documentation (such as the
application, charter, bylaw, and contract provisions, designations for
service of process, and the list of affiliated persons). Other related
costs would include fees for establishing arrangements with a custodian
or other agent for maintaining records in the United States, copying
and transportation costs for records, and the costs of purchasing or
leasing computer equipment, software, or other record storage equipment
for records maintained in electronic or photographic form.
The Commission expects that the fund and its sponsors would incur
these costs immediately, and that the annualized cost of the
expenditures would be $20,000 in the first year. Some expenditures
might involve capital improvements, such as computer equipment, having
expected useful lives for which annualized figures beyond the first
year would be meaningful. These annualized figures are not provided,
however, because, in most cases, the expenses would be incurred
immediately rather than on an annual basis. As indicated above, a
Canadian or foreign fund may file a supplemental application seeking
special relief designed for the fund's particular circumstances. Rule
7d-1 does not mandate these applications. The Commission is not
including these costs because no fund has applied made an application
under rule 7d-1 in the last three years.
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 this collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden
imposed by 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.
The public may view and comment on this information collection
request at: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202505-3235-017 or send an email comment to
[email protected] within 30 days of the day
after publication of this notice by September 15, 2025.
Dated: August 8, 2025.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-15313 Filed 8-12-25; 8:45 am]
BILLING CODE 8011-01-P