SEC Requests OMB Extension of Rule 22e-4 Liquidity Risk Management Information Collection

Content

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 22(e) of the Investment Company Act of 1940 (“Investment Company Act”) provides that no registered investment company
shall suspend the right of redemption or postpone the date of payment of redemption proceeds for more than seven days after
tender of the security absent specified unusual circumstances. The provision was designed to prevent funds and their investment
advisers from interfering with the redemption rights of shareholders for improper purposes, such as the preservation of management
fees. Although section 22(e) permits funds to postpone the date of payment or satisfaction upon redemption for up to seven
days, it does not permit funds to suspend the right of redemption for any amount of time, absent certain specified circumstances
or a Commission order.

Rule 22e-4 under the Act [17 CFR 270.22e-4] requires an open-end fund and an exchange-traded fund that redeems in kind (“In-Kind
ETF”) to establish a written liquidity risk management program that is reasonably designed to assess and manage the fund's
or In-Kind ETF's liquidity risk. This program includes policies and procedures that incorporate certain program elements,
including: (i) for funds and In-Kind ETFs, the assessment, management, and periodic review of liquidity risk (with such review
occurring no less frequently than annually); (ii) for funds, the classification of the liquidity of a fund's portfolio investments,
as well as at-least-monthly reviews of the fund's liquidity classifications; (iii) for funds that do not primarily hold assets
that are highly liquid investments, the determination of and periodic review of the fund's highly liquid investment minimum
and establishment of policies and procedures for responding to a shortfall of the fund's highly liquid investment minimum,
which includes reporting to the fund's board of directors; (iv) for funds and In-Kind ETFs, the limitation of the fund's or
In-Kind ETF's investment in illiquid investments that are assets to no more than 15% of the fund's or In-Kind ETF's net assets;
and (iv) for funds and In-Kind ETFs, the establishment of policies and procedures regarding redemptions in kind, to the extent
that the fund engages in or reserves the right to engage in redemptions in kind. The rule also requires board approval and
oversight of a fund's or In-Kind ETF's liquidity risk management program and recordkeeping.

Rule 22e-4 also requires a limited liquidity review, under which an unit investment trust's (“UIT”) principal underwriter
or depositor determines, on or before the date of the initial deposit of portfolio securities into the UIT, that the portion
of the illiquid investments that the UIT holds or will hold at the date of deposit that are assets is consistent with the
redeemable nature of the securities it issues and retains a record of such determination for the life of the UIT and for five
years thereafter.

The requirements under rule 22e-4 that a fund and In-Kind ETF, as applicable, adopt a written liquidity risk management program,
report to the board, maintain a written record of how the highly liquid investment minimum was determined and written policies
and procedures for responding to a shortfall of the fund's highly liquid investment minimum, which includes reporting to the
fund's board of directors (for funds that do not primarily hold highly liquid investments), establish written policies and
procedures regarding how the fund will engage in redemptions in kind, and retain certain other records are all collections
of information. In addition, the requirement under rule 22e-4 that the principal underwriter or depositor of a UIT assess
the liquidity of the UIT on or before the date of the initial deposit of portfolio securities into the UIT and retain a record
of such determination for the life of the UIT, and for five years thereafter, is also a collection of information.

The Commission staff estimates that 12,183 funds, 705 newly-registered funds, and 3 UITs are subject to rule 22e-4. The internal
annual burden estimate is 16 hours for a fund, 11 for a newly-registered fund, and 8 hours for an UIT. Based on these estimates,
the total annual burden hours associated with the rule is estimated to be 202,699 hours. The estimated burden hours associated
with rule 22e-4 have increased by 9,458 hours from the current allocation of 193,241 hours. This increase is due to an increase
in the estimated number of affected entities, as well as revisions in the manner of calculation. The external cost associated
with this collection of information is approximately $3,200 per fund and $2,200 per newly-registered fund, and the total annual
external cost burden is $40,536,60037. The estimated external cost has increased by $2,907,884 from the current estimate of
$37,628,716. This increase is due to the staff's determination to revise the manner in which it calculates these estimates.

The estimate of average burden hours is made solely for purposes of the Paperwork Reduction Act and is not derived from a
comprehensive or even a representative survey or study of the cost of Commission rules. The collection of information required
by rule 22e-4 is necessary to obtain the benefits of the rule. Information regarding a fund's monthly position-level liquidity
classification and its highly liquid investment minimum reported on Form N-PORT will be kept confidential. Other information
provided to the Commission in connection with staff examinations or investigations is kept confidential subject to the provisions
of applicable law. If information collected pursuant to rule 22e-4 is reviewed by the Commission's examination staff, it is
accorded the same level of confidentiality accorded to other responses provided to the Commission in the context of its examination
and oversight program.

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=202601-3235-021 or send an email comment to MBX.OMB.OIRA.SECdeskofficer@omb.eop.gov within 30 days of the day after publication of this notice by May 11, 2026.

Dated: April 7, 2026. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2026-06934 Filed 4-9-26; 8:45 am] BILLING CODE 8011-01-P

Download File

Download