
[Federal Register Volume 78, Number 117 (Tuesday, June 18, 2013)]
[Notices]
[Pages 36604-36605]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14452]


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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 237, OMB Control No. 3235-0528, SEC File No. 270-465.

    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 (``OMB'') for extension and approval.
    In Canada, as in the United States, individuals can invest a 
portion of their earnings in tax-deferred retirement savings accounts 
(``Canadian retirement accounts''). These accounts, which operate in a 
manner similar to individual retirement accounts in the United States, 
encourage retirement savings by permitting savings on a tax-deferred 
basis. Individuals who establish Canadian retirement accounts while 
living and working in Canada and who later move to the United States 
(``Canadian-U.S. Participants'' or ``participants'') often continue to 
hold their retirement assets in their Canadian

[[Page 36605]]

retirement accounts rather than prematurely withdrawing (or ``cashing 
out'') those assets, which would result in immediate taxation in 
Canada.
    Once in the United States, however, these participants historically 
have been unable to manage their Canadian retirement account 
investments. Most securities that are ``qualified investments'' for 
Canadian retirement accounts are not registered under the U.S. 
securities laws. Those securities, therefore, generally cannot be 
publicly offered and sold in the United States without violating the 
registration requirement of the Securities Act of 1933 (``Securities 
Act'').\1\ As a result of this registration requirement, Canadian-U.S. 
Participants previously were not able to purchase or exchange 
securities for their Canadian retirement accounts as needed to meet 
their changing investment goals or income needs.
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    \1\ 15 U.S.C. 77. In addition, the offering and selling of 
securities of investment companies (``funds'') that are not 
registered pursuant to the Investment Company Act of 1940 
(``Investment Company Act'') is generally prohibited by U.S. 
securities laws. 15 U.S.C. 80a.
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    The Commission issued a rulemaking in 2000 that enabled Canadian-
U.S. Participants to manage the assets in their Canadian retirement 
accounts by providing relief from the U.S. registration requirements 
for offers of securities of foreign issuers to Canadian-U.S. 
Participants and sales to Canadian retirement accounts.\2\ Rule 237 
under the Securities Act \3\ permits securities of foreign issuers, 
including securities of foreign funds, to be offered to Canadian-U.S. 
Participants and sold to their Canadian retirement accounts without 
being registered under the Securities Act.
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    \2\ See Offer and Sale of Securities to Canadian Tax-Deferred 
Retirement Savings Accounts, Release Nos. 33-7860, 34-42905, IC-
24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking 
also included new rule 7d-2 under the Investment Company Act, 
permitting foreign funds to offer securities to Canadian-U.S. 
Participants and sell securities to Canadian retirement accounts 
without registering as investment companies under the Investment 
Company Act. 17 CFR 270.7d-2.
    \3\ 17 CFR 230.237.
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    Rule 237 requires written offering documents for securities offered 
and sold in reliance on the rule to disclose prominently that the 
securities are not registered with the Commission and are exempt from 
registration under the U.S. securities laws. The burden under the rule 
associated with adding this disclosure to written offering documents is 
minimal and is non-recurring. The foreign issuer, underwriter, or 
broker-dealer can redraft an existing prospectus or other written 
offering material to add this disclosure statement, or may draft a 
sticker or supplement containing this disclosure to be added to 
existing offering materials. In either case, based on discussions with 
representatives of the Canadian fund industry, the staff estimates that 
it would take an average of 10 minutes per document to draft the 
requisite disclosure statement.
    The Commission understands that there are approximately 4101 
Canadian issuers other than funds that may rely on rule 237 to make an 
initial public offering of their securities to Canadian-U.S. 
Participants.\4\ The staff estimates that in any given year 
approximately 41 (or 1 percent) of those issuers are likely to rely on 
rule 237 to make a public offering of their securities to participants, 
and that each of those 41 issuers, on average, distributes 3 different 
written offering documents concerning those securities, for a total of 
123 offering documents.
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    \4\ This estimate is based on the following calculation: 3970 
equity issuers + 131 bond issuers = 4101 total issuers. See World 
Federation of Exchanges, Number of Listed Issuers, available at 
http://www.world-exchanges.org/statistics/annual-query-tool 
(providing number of equity issuers listed on Canada's Toronto Stock 
Exchange in 2012). After 2009, the World Federation of Exchanges 
ceased reporting the number of fixed-income issuers on Canada's 
Toronto Stock Exchange. The number of fixed-income issuers in 2012 
is based on the ratio of the number of fixed-income issuers listed 
on Canada's Toronto Stock Exchange in 2009 (111) relative to the 
number of bonds listed on that exchange in that year (178) 
multiplied against the number of bonds listed on that exchange in 
2012 (210): (111/178) x 210 = 131.
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    The staff therefore estimates that during each year that rule 237 
is in effect, approximately 41 respondents \5\ would be required to 
make 123 responses by adding the new disclosure statements to 
approximately 123 written offering documents. Thus, the staff estimates 
that the total annual burden associated with the rule 237 disclosure 
requirement would be approximately 20.5 hours (123 offering documents x 
10 minutes per document). The total annual cost of burden hours is 
estimated to be $7769.50 (20.5 hours x $379 per hour of attorney 
time).\6\
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    \5\ This estimate of respondents only includes foreign issuers. 
The number of respondents would be greater if foreign underwriters 
or broker-dealers draft stickers or supplements to add the required 
disclosure to existing offering documents.
    \6\ The Commission's estimate concerning the wage rate for 
attorney time is based on salary information for the securities 
industry compiled by the Securities Industry and Financial Markets 
Association (``SIFMA''). The $379 per hour figure for an attorney is 
from SIFMA's Management & Professional Earnings in the Securities 
Industry 2012, modified by Commission staff to account for an 1800-
hour work-year and multiplied by 5.35 to account for bonuses, firm 
size, employee benefits, and overhead.
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    In addition, issuers from foreign countries other than Canada could 
rely on rule 237 to offer securities to Canadian-U.S. Participants and 
sell securities to their accounts without becoming subject to the 
registration requirements of the Securities Act. However, the staff 
believes that the number of issuers from other countries that rely on 
rule 237, and that therefore are required to comply with the offering 
document disclosure requirements, is negligible.
    These burden hour estimates are based upon the Commission staff's 
experience and discussions with the fund industry. The 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 the costs of Commission rules.
    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.
    Please direct your written comments to Thomas Bayer, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an 
email to: PRA_Mailbox@sec.gov.

    Dated: June 13, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14452 Filed 6-17-13; 8:45 am]
BILLING CODE 8011-01-P


