Submission for OMB Review; Comment Request, 35319 [E5-3121]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 116 (Friday, June 17, 2005)]
[Notices]
[Page 35319]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3121]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon written request, copies available from: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension:
    Rule 12d3-1, SEC File No. 270-504, OMB Control No. 3235-0561.

    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'') has submitted to the Office of Management and Budget 
(``OMB'') a request for extension of the previously approved collection 
of information discussed below.
    Section 12(d)(3) of the Act generally prohibits registered 
investment companies (``funds''), and companies controlled by funds, 
from purchasing securities issued by a registered investment adviser, 
broker, dealer, or underwriter (``securities-related businesses''). 
Rule 12d3-1 (``Exemption of acquisitions of securities issued by 
persons engaged in securities related businesses'' [17 CFR 270.12d3-1]) 
permits a fund to invest up to five percent of its assets in securities 
of an issuer deriving more than fifteen percent of its gross revenues 
from securities-related businesses, but a fund may not rely on rule 
12d3-1 to acquire securities of its own investment adviser or any 
affiliated person of its own investment adviser.
    A fund may, however, rely on an exemption in rule 12d3-1 to acquire 
securities issued by its subadvisers in circumstances in which the 
subadviser would have little ability to take advantage of the fund, 
because it is not in a position to direct the fund's securities 
purchases. The exemption in rule 12d3-1 is available if (i) the 
subadviser is not, and is not an affiliated person of, an investment 
adviser that provides advice with respect to the portion of the fund 
that is acquiring the securities, and (ii) the advisory contracts of 
the subadviser, and any subadviser that is advising the purchasing 
portion of the fund, prohibit them from consulting with each other 
concerning securities transactions of the fund, and limit their 
responsibility in providing advice to providing advice with respect to 
discrete portions of the fund's portfolio.
    The Commission staff estimates that 3,028 portfolios of 
approximately 2,126 funds use the services of one or more subadvisers. 
Based on an analysis of investment company filings, the staff estimates 
that approximately 200 funds are registered annually. Assuming that the 
number of these funds that will use the services of subadvisers is 
proportionate to the number of funds that currently use the services of 
subadvisers, then we estimate that 46 new funds will enter into 
subadvisory agreements each year.\1\ The Commission staff further 
estimates, based on analysis of investment company filings, that 10 
extant funds will employ the services of subadvisers for the first time 
each year. Thus, the staff estimates that a total of 56 funds, with a 
total of 78 portfolios (respondents),\2\ will enter into subadvisory 
agreements each year. Assuming that each of these funds enters into a 
subadvisory contract that permits it to rely on the exemptions in rule 
12d3-1(c)(3),\3\ we estimate that the rule's contract modification 
requirement will result in 117 burden hours annually.\4\
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    \1\ The Commission staff estimates that approximately 23 percent 
of funds are advised by subadvisers.
    \2\ Based on existing statistics, we assume that each fund has 
1.4 portfolios advised by a subadviser.
    \3\ Rules 12d3-1, 10f-3, 17a-10, and 17e-1 require virtually 
identical modifications to fund advisory contracts. The Commission 
staff assumes that funds would rely equally on the exemptions in 
these rules, and therefore the Commission has apportioned the burden 
hours associated with the required contract modifications equally 
among the four rules.
    \4\ This estimate is based on the following calculations: (78 
portfolios x 6 hours = 468 burden hours for rules 12d3-1, 10f-3, 
17a-10, and 17e-1; 468 total burden hours for all of the rules/four 
rules = 117 annual burden hours per rule.)
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    The estimate of average burden hours is made solely for the 
purposes of the Paperwork Reduction Act. The estimate is not derived 
from a comprehensive or even a representative survey or study of the 
costs of Commission rules. Complying with this collection of 
information requirement is necessary to obtain the benefit of relying 
on rule 12d3-1. Responses 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 control 
number.
    General comments regarding the above information should be directed 
to the following persons: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503 or email to: David--Rostker@omb.eop.gov; 
and (ii) R. Corey Booth, Director/Chief Information Officer, Office of 
Information Technology, Securities and Exchange Commission, 450 Fifth 
Street, NW., Washington, DC 20549. Comments must be submitted to OMB 
within 30 days of this notice.

    Dated: June 6, 2005.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3121 Filed 6-16-05; 8:45 am]
BILLING CODE 8010-01-P