[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Notices]
[Pages 75390-75391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-29501]
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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 482, OMB Control No. 3235-0565, SEC File No. 270-508.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.) (``Paperwork Reduction Act''), 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.
Like most issuers of securities, when an investment company
(``fund'') \1\ offers its shares to the public, its promotional efforts
become subject to the advertising restrictions of the Securities Act of
1933 (15 U.S.C. 77) (the ``Securities Act''). In recognition of the
particular problems faced by funds that continually offer securities
and wish to advertise their securities, the Commission has previously
adopted advertising safe harbor rules. The most important of these is
rule 482 (17 CFR 230.482) under the Securities Act, which, under
certain circumstances, permits funds to advertise investment
performance data, as well as other information. Rule 482 advertisements
are deemed to be ``prospectuses'' under Section 10(b) of the Securities
Act.\2\
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\1\ ``Investment company'' refers to both investment companies
registered under the Investment Company Act of 1940 (``Investment
Company Act'') (15 U.S.C. 80a-1 et seq.) and business development
companies.
\2\ 15 U.S.C. 77j(b).
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Rule 482 contains certain requirements regarding the disclosure
that funds are required to provide in qualifying advertisements. These
requirements are intended to encourage the provision to investors of
information that is balanced and informative, particularly in the area
of investment performance. For example, a fund is required to include
disclosure advising investors to consider the fund's investment
objectives, risks, charges and expenses, and other information
described in the fund's prospectus, and highlighting the availability
of the fund's prospectus and, if applicable, its summary prospectus. In
addition, rule
[[Page 75391]]
482 advertisements that include performance data of open-end funds or
insurance company separate accounts offering variable annuity contracts
are required to include certain standardized performance information,
information about any sales loads or other nonrecurring fees, and a
legend warning that past performance does not guarantee future results.
Such funds including performance information in rule 482 advertisements
are also required to make available to investors month-end performance
figures via Web site disclosure or by a toll-free telephone number, and
to disclose the availability of the month-end performance data in the
advertisement. The rule also sets forth requirements regarding the
prominence of certain disclosures, requirements regarding
advertisements that make tax representations, requirements regarding
advertisements used prior to the effectiveness of the fund's
registration statement, requirements regarding the timeliness of
performance data, and certain required disclosures by money market
funds.
Rule 482 advertisements must be filed with the Commission or, in
the alternative, with the Financial Industry Regulatory Authority
(``FINRA'').\3\ This information collection differs from many other
federal information collections that are primarily for the use and
benefit of the collecting agency.
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\3\ See rule 24b-3 under the Investment Company Act (17 CFR
270.24b-3), which provides that any sales material, including rule
482 advertisements, shall be deemed filed with the Commission for
purposes of Section 24(b) of the Investment Company Act upon filing
with FINRA.
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Rule 482 contains requirements that are intended to encourage the
provision to investors of information that is balanced and informative,
particularly in the area of investment performance. The Commission is
concerned that in the absence of such provisions fund investors may be
misled by deceptive rule 482 advertisements and may rely on less-than-
adequate information when determining in which funds they should invest
money. As a result, the Commission believes it is beneficial for funds
to provide investors with balanced information in fund advertisements
in order to allow investors to make better-informed decisions.
The Commission estimates that 59,245 responses to rule 482 are
filed annually by 3,430 investment companies offering approximately
16,428 portfolios, or approximately 3.6 responses per portfolio
annually. The burden associated with rule 482 is presently estimated to
be 5.16 hours per response. The hourly burden is therefore
approximately 305,704 hours.\4\
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\4\ 59,245 responses x 5.16 hours per response = 305,704 hours.
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The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act and is not derived from a
comprehensive or even a representative survey or study of the costs of
Commission rules and forms. The provision of information under rule 482
is necessary to obtain the benefits of the safe harbor offered by the
rule. The information provided under rule 482 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.
Written comments are invited on: (a) Whether the proposed
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 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 of this publication.
Please direct your written comments to Thomas Bayer, Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an
email to: [email protected].
Dated: December 5, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29501 Filed 12-10-13; 8:45 am]
BILLING CODE 8011-01-P