[Federal Register Volume 87, Number 191 (Tuesday, October 4, 2022)]
[Notices]
[Page 60230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21445]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-174, OMB Control No. 3235-0179]


Submission for OMB Review; Comment Request; Extension: Rule 31a-2

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 (the ``Commission'') has submitted to the Office of 
Management and Budget (``OMB'') a request for extension of the 
previously approved collection of information discussed below.
    Section 31(a)(1) of the Investment Company Act of 1940 (15 U.S.C. 
80a-1 et seq.) (the ``Act'') requires registered investment companies 
(``funds'') and certain underwriters, broker-dealers, investment 
advisers, and depositors to maintain and preserve records as prescribed 
by Commission rules. Rule 31a-1 (17 CFR 270.31a-1) under the Act 
specifies the books and records that each of these entities must 
maintain. Rule 31a-2 (17 CFR 270.31a-2) under the Act specifies the 
time periods that entities must retain certain books and records, 
including those required to be maintained under rule 31a-1.
    The retention of records, as required by the rule, is necessary to 
ensure access to material business and financial information about 
funds and certain related entities. We periodically inspect the 
operations of funds to ensure they are in compliance with the Act and 
regulations under the Act. Due to the limits on our resources, however, 
each fund may only be inspected at intervals of several years. In 
addition, the prosecution of persons who have engaged in certain 
violations of the federal securities laws may not be limited by timing 
restrictions. For these reasons, we often need information relating to 
events or transactions that occurred years ago. Without the requirement 
to preserve books, records, and other documents, our staff would have 
difficulty determining whether the fund was in compliance with the law 
in such areas as valuation of its portfolio securities, computation of 
the prices investors paid, and, when purchasing and selling fund 
shares, types and amounts of expenses the fund incurred, kinds of 
investments the fund purchased, actions of affiliated persons, or 
whether the fund had engaged in any illegal or fraudulent activities. 
As part of our examinations of funds, our staff also reviews the 
materials that directors consider in approving the advisory contract.
    There are 2,754 funds currently operating as of December 31, 2021, 
all of which are required to comply with rule 31a-2. The Commission 
staff estimates that, on average, a fund spends 220.4 hours annually to 
comply with the rule. The Commission therefore estimates the total 
annual hour burden of the rule's and form's paperwork requirements to 
be 606,981.60 hours. In addition to the burden hours, the Commission 
staff estimates that the average yearly cost to each fund that is 
subject to rule 31a-2 is about $40,577.95. The Commission estimates 
total annual cost is therefore about $111.8 million.
    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 costs of 
Commission rules and forms. Compliance with the collection of 
information requirements of the rule is mandatory. 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 public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
by November 3, 2022 to (i) [email protected] 
and (ii) David Bottom, Director/Chief Information Officer, Securities 
and Exchange Commission, c/o John Pezzullo, 100 F Street NE, 
Washington, DC 20549, or by sending an email to: [email protected].

    Dated: September 28, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21445 Filed 10-3-22; 8:45 am]
BILLING CODE 8011-01-P


