Proposed Collection; Comment Request, 11403-11405 [E7-4458]

Download as PDF Federal Register / Vol. 72, No. 48 / Tuesday, March 13, 2007 / Notices cprice-sewell on PROD1PC66 with NOTICES Commission, Washington, DC 20555– 0001, Attention: Rulemaking and Adjudications Staff; (2) courier, express mail, and expedited delivery services: Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and Adjudications Staff; (3) E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, HearingDocket@nrc.gov; or (4) facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemakings and Adjudications Staff at (301) 415–1101, verification number is (301) 415–1966. A copy of the request for hearing and petition for leave to intervene should also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555– 0001, and it is requested that copies be transmitted either by means of facsimile transmission to (301) 415–3725 or by email to OGCMailCenter@nrc.gov. A copy of the request for hearing and petition for leave to intervene should also be sent to the attorney for the licensee. Nontimely requests and/or petitions and contentions will not be entertained absent a determination by the Commission or the presiding officer or the Atomic Safety and Licensing Board that the petition, request and/or the contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(a)(1)(i)–(viii). Energy Northwest, Docket No. 50–397, Columbia Generating Station, Benton County, Washington Date of amendment request: February 2, 2007. Description of amendment request: The amendment revised Technical Specification 3.6.1.7, ‘‘Suppression Chamber-to-Drywell Vacuum Breakers,’’ to allow a one-time extension to the current closure verification surveillance requirement for one of two redundant disks in one of nine vacuum breakers until reliable position indication can be restored in the main control room during the next refueling outage (R–18), which is scheduled to begin on May 12, 2007. Date of issuance: February 27, 2007. Effective date: As of its date of issuance and shall be implemented within 14 days from the date of issuance. Amendment No.: 202. Facility Operating License No.: NPF– 21: Amendment revises the technical specifications and license. Public comments requested as to proposed no significant hazards VerDate Aug<31>2005 14:58 Mar 12, 2007 Jkt 211001 consideration (NSHC): Yes. 72 FR 6606, published February 12, 2007. The notice provided an opportunity to submit comments on the Commission’s proposed NSHC determination. No comments have been received. The notice also provided an opportunity to request a hearing within 60 days after the date of publication of the notice, but indicated that if the Commission makes a final NSHC determination, any such hearing would take place after issuance of the amendment. The Commission’s related evaluation of the amendment, finding of exigent circumstances, state consultation, and final NSHC determination are contained in a safety evaluation dated February 27, 2007. Attorney for licensee: William A. Horin, Esq., Winston & Strawn, 1700 K Street, NW., Washington, DC 20006– 3817. NRC Branch Chief: David Terao. Dated at Rockville, Maryland, this 2nd day of March 2007. For the Nuclear Regulatory Commission. Michael C. Cheok, Acting Director, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E7–4251 Filed 3–12–07; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. Extension: Rule 17j–1, SEC File No. 270–239, OMB Control No. 3235–0224. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l–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. Conflicts of interest between investment company personnel (such as portfolio managers) and their funds can arise when these persons buy and sell securities for their own accounts (‘‘personal investment activities’’). These conflicts arise because fund personnel have the opportunity to profit PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 11403 from information about fund transactions, often to the detriment of fund investors. Beginning in the early 1960s, Congress and the Securities and Exchange Commission (‘‘Commission’’) sought to devise a regulatory scheme to effectively address these potential conflicts. These efforts culminated in the addition of section 17(j) to the Investment Company Act of 1940 (the ‘‘Investment Company Act’’) (15 U.S.C. 80a–17(j)) in 1970 and the adoption by the Commission of rule 17j–1 (17 CFR 270.17j–1) in 1980.1 The Commission proposed amendments to rule 17j–1 in 1995 in response to recommendations made in the first detailed study of fund policies concerning personal investment activities by the Commission’s Division of Investment Management since rule 17j–1 was adopted. Amendments to rule 17j–1, which were adopted in 1999, enhanced fund oversight of personal investment activities and the board’s role in carrying out that oversight.2 Additional amendments to rule 17j–1 were made in 2004, conforming rule 17j–1 to rule 204A–1 under the Investment Advisers Act of 1940 (15 U.S.C. 80b), avoiding duplicative reporting, and modifying certain definitions and time restrictions.3 Section 17(j) makes it unlawful for persons affiliated with a registered investment company(‘‘fund’’) or with the fund’s investment adviser or principal underwriter (each a ‘‘17j–1 organization’’), in connection with the purchase or sale of securities held or to be acquired by the investment company, to engage in any fraudulent, deceptive, or manipulative act or practice in contravention of the Commission’s rules and regulations. Section 17(j) also authorizes the Commission to promulgate rules requiring 17j–1 organizations to adopt codes of ethics. In order to implement section 17(j), rule 17j–1 imposes certain requirements on 17j–1 organizations and ‘‘Access Persons’’ 4 of those organizations. The 1 Prevention of Certain Unlawful Activities with Respect to Registered Investment Companies, Investment Company Act Release No. 11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)). 2 Personal Investment Activities of Investment Company Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999) (64 FR 46821– 01 (Aug. 27, 1999)). 3 Investment Adviser Codes of Ethics, Investment Advisers Act Release No. 2256 (Jul. 2, 2004) (66 FR 41696 (Jul. 9, 2004)). 4 Rule 17j–1(a)(1) defines an ‘‘access person’’ as ‘‘Any advisory person of a Fund or of a Fund’s investment adviser. If an investment adviser’s primary business is advising Funds or other advisory clients, all of the investment adviser’s directors, officers, and general partners are presumed to be Access Persons of any Fund advised by the investment adviser. All of a Fund’s directors, E:\FR\FM\13MRN1.SGM Continued 13MRN1 11404 Federal Register / Vol. 72, No. 48 / Tuesday, March 13, 2007 / Notices cprice-sewell on PROD1PC66 with NOTICES rule prohibits fraudulent, deceptive or manipulative acts by persons affiliated with a 17j–1 organization in connection with their personal securities transactions in securities held or to be acquired by the fund. The rule requires each 17j–1 organization, unless it is a money market fund or a fund that does not invest in Covered Securities,5 to: (i) Adopt a written codes of ethics, (ii) submit the code and any material changes to the code, along with a certification that it has adopted procedures reasonably necessary to prevent Access Persons from violating the code of ethics, to the fund board for approval, (iii) use reasonable diligence and institute procedures reasonably necessary to prevent violations of the code, (iv) submit a written report to the fund describing any issues arising under the code and procedures and certifying that the 17j–1 entity has adopted procedures reasonably necessary to prevent Access Persons from violating the code, (v) identify Access Persons and notify them of their reporting obligations, and (vi) maintain and make available to the Commission for review certain records related to the code of ethics and transaction reporting by Access Persons. The rule requires each Access Person of a fund (other than a money market fund or a fund that does not invest in Covered Securities) and of an investment adviser or principal underwriter of the fund, who is not subject to an exception,6 to file: (i) officers, and general partners are presumed to be Access Persons of the Fund.’’ The definition of Access Person also includes ‘‘Any director, officer or general partner of a principal underwriter who, in the ordinary course of business, makes, participates in or obtains information regarding, the purchase or sale of Covered Securities by the Fund for which the principal underwriter acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of Covered Securities.’’ Rule 17j– 1(a)(1). 5 A ‘‘Covered Security’’ is any security that falls within the definition in section 2(a)(36) of the Act, except for direct obligations of the U.S. Government, bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements, and shares issued by open-end funds. Rule 17j–1(a)(4). 6 Rule 17j–1(d)(2) contains the following exceptions: (i) An Access Person need not file a report for transactions effected for, and securities held in, any account over which the Access Person does not have control; (ii) an independent director of the fund, who would otherwise not need to report and who does not have information with respect to the fund’s transactions in a particular security, does not have to file an initial holdings report or a quarterly transaction report; (iii) an Access Person of a principal underwriter of the fund does not have to file reports if the principal underwriter is not affiliated with the fund (unless the fund is a unit investment trust) or any VerDate Aug<31>2005 14:58 Mar 12, 2007 Jkt 211001 Within 10 days of becoming an Access Person, a dated initial holdings report that sets forth certain information with respect to the access person’s securities and accounts; (ii) dated quarterly transaction reports within 30 days of the end of each calendar quarter providing certain information with respect to any securities transactions during the quarter and any account established by the Access Person in which any securities were held during the quarter; and (iii) dated annual holding reports providing information with respect to each Covered Security the Access Person beneficially owns and accounts in which securities are held for his or her benefit. In addition, rule 17j–1 requires investment personnel of a fund or its investment adviser, before acquiring beneficial ownership in securities through an initial public offering (IPO) or in a private placement, to obtain approval from the fund or the fund’s investment adviser. The requirements that the management of a rule 17j–1 organization provide the fund’s board with new and amended codes of ethics and an annual issues and certification report are intended to enhance board oversight of personal investment policies applicable to the fund and the personal investment activities of Access Persons. The requirements that Access Persons provide initial holdings reports, quarterly transaction reports, and annual holdings reports and request approval for purchases of securities through IPOs and private placements are intended to help fund compliance personnel and the Commission’s examinations staff monitor potential conflicts of interest and detect potentially abusive activities. The requirement that each rule 17j–1 organization maintain certain records is intended to assist the organization and the Commission’s examinations staff in determining if there have been violations of rule 17j–1. We estimate that annually there are approximately 75,363 respondents under rule 17j–1, of which 5,363 are rule 17j–1 organizations and 70,000 are Access Persons. In the aggregate, these investment adviser of the fund and the principal underwriter of the fund does not have any officer, director, or general partner who serves in one of those capacities for the fund or any investment adviser of the fund; (iv) an Access Person to an investment adviser need not make quarterly reports if the report would duplicate information provided under the reporting provisions of the Investment Adviser’s Act; and (v) an Access Person need not make quarterly transaction reports if the information provided in the report would duplicate information received by the 17j–1 organization in the form of broker trade confirmations or account statements or information otherwise in the records of the 17j–1 organization. PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 respondents make approximately 113,970 responses annually. We estimate that the total annual burden of complying with the information collection requirements in rule 17j–1 is approximately 169,950 hours. This hour burden represents time spent by Access Persons that must file initial and annual holdings reports and quarterly transaction reports, investment personnel that must obtain approval before acquiring beneficial ownership in any securities through an IPO or private placement, and the responsibilities of Rule 17j–1 organizations arising from information collection requirements under rule 17j–1. These include notifying Access Persons of their reporting obligations, preparing an annual rule 17j–1 report and certification for the board, documenting their approval or rejection of IPO and private placement requests, maintaining annual rule 17j–1 records, maintaining electronic reporting and recordkeeping systems, amending their codes of ethics as necessary, and, for new fund complexes, adopting a code of ethics. In addition, we estimate that there is an additional annual cost burden of approximately $2,000 per fund complex, for a total of $1,100,000, associated with complying with the information collection requirements in rule 17j–1, aside from the cost of the burden hours discussed above.7 This represents the costs of purchasing and maintaining computers and software to assist funds in carrying out rule 17j–1 recordkeeping. These burden hour and cost estimates are based upon the Commission staff’s experience and discussions with the fund industry. The estimates of average burden hours and costs 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. Written comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (b) the accuracy of the Commission’s estimate of the burden of the collections of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burdens of the collection of information on respondents, including through the use 7 The cost burden associated with filing of new and amended codes of ethics on the Commission’s Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) is included in the Paperwork Reduction Act estimates for the relevant forms to which these codes must be appended. E:\FR\FM\13MRN1.SGM 13MRN1 Federal Register / Vol. 72, No. 48 / Tuesday, March 13, 2007 / Notices 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 R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, Virginia, 22312; or send an e-mail to: PRA_Mailbox@sec.gov. Dated: March 5, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–4458 Filed 3–12–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. cprice-sewell on PROD1PC66 with NOTICES Extension: Rule 3a–4, SEC File No. 270–401, OMB Control No. 3235–0459. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l–3520), the Securities and Exchange Commission (the ‘‘Commission’’) is soliciting comments on the collections 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. Rule 3a–4 (17 CFR 270.3a–4) under the Investment Company Act of 1940 (15 U.S.C. 80a) (‘‘Investment Company Act’’ or ‘‘Act’’) provides a nonexclusive safe harbor from the definition of investment company under the Act for certain investment advisory programs. These programs, which include ‘‘wrap fee’’ and ‘‘mutual fund wrap’’ programs, generally are designed to provide professional portfolio management services to clients who are investing less than the minimum usually required by portfolio managers but more than the minimum account size of most mutual funds. Under wrap fee and similar programs, a client’s account is typically managed on a discretionary basis according to pre-selected investment objectives. Clients with similar investment objectives often receive the same investment advice and may hold the same or substantially the same VerDate Aug<31>2005 14:58 Mar 12, 2007 Jkt 211001 securities in their accounts. Some of these investment advisory programs may meet the definition of investment company under the Act because of the similarity of account management. In 1997, the Commission adopted rule 3a–4, which clarifies that programs organized and operated in a manner consistent with the conditions of rule 3a–4 are not required to register under the Investment Company Act or comply with the Act’s requirements.1 These programs differ from investment companies because, among other things, they provide individualized investment advice to the client. The rule’s provisions have the effect of ensuring that clients in a program relying on the rule receive advice tailored to the client’s needs. Rule 3a–4 provides that each client’s account must be managed on the basis of the client’s financial situation and investment objectives and consistent with any reasonable restrictions the client imposes on managing the account. When an account is opened, the sponsor 2 (or its designee) must obtain information from each client regarding the client’s financial situation and investment objectives, and must allow the client an opportunity to impose reasonable restrictions on managing the account.3 In addition, the sponsor (or its designee) annually must contact the client to determine whether the client’s financial situation or investment objectives have changed and whether the client wishes to impose any reasonable restrictions on the management of the account or reasonably modify existing restrictions. The sponsor (or its designee) also must notify the client quarterly, in writing, to contact the sponsor (or the designee) regarding changes to the client’s financial situation, investment 1 Status of Investment Advisory Programs Under the Investment Company Act of 1940, Investment Company Act Release No. 22579 (Mar. 24, 1997) (62 FR 15098 (Mar. 31, 1997)) (‘‘Adopting Release’’). In addition, there are no registration requirements under section 5 of the Securities Act of 1933 for these programs. See 17 CFR 270.3a–4, introductory note. 2 For purposes of rule 3a–4, the term ‘‘sponsor’’ refers to any person who receives compensation for sponsoring, organizing or administering the program, or for selecting, or providing advice to clients regarding the selection of, persons responsible for managing the client’s account in the program. 3 Clients specifically must be allowed to designate securities that should not be purchased for the account or that should be sold if held in the account. The rule does not require that a client be able to require particular securities be purchased for the account. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 11405 objectives, or restrictions on the account’s management.4 The program must provide each client with a quarterly statement describing all activity in the client’s account during the previous quarter. The sponsor and personnel of the client’s account manager who know about the client’s account and its management must be reasonably available to consult with the client. Each client also must retain certain indicia of ownership of all securities and funds in the account. Rule 3a–4 is intended primarily to provide guidance regarding the status of investment advisory programs under the Investment Company Act. The rule is not intended to create a presumption about a program that is not operated according to the rule’s guidelines. The requirement that the sponsor (or its designee) obtain information about the client’s financial situation and investment objectives when the account is opened is designed to ensure that the investment adviser has sufficient information regarding the client’s unique needs and goals to enable the portfolio manager to provide individualized investment advice. The sponsor is required to contact clients annually and provide them with quarterly notices to ensure that the sponsor has current information about the client’s financial status, investment objectives, and restrictions on management of the account. Maintaining current information enables the program manager to evaluate the client’s portfolio in light of the client’s changing needs and circumstances. The requirement that clients be provided with quarterly statements of account activity is designed to ensure the client receives an individualized report, which the Commission believes is a key element of individualized advisory services. The Commission staff estimates that approximately 64 wrap fee and mutual fund wrap programs administered by 56 program sponsors use the procedures under rule 3a–4.5 Although it is impossible to determine the exact number of clients that participate in investment advisory programs, an estimate can be made by dividing total assets by the industry average account 4 The sponsor also must provide a means by which clients can contact the sponsor (or its designee). 5 These estimates are based on statistical information on wrap fee and mutual fund wrap programs provided by Cerulli Associates in 2003. We request comment on whether the number of wrap programs and program sponsors has changed. E:\FR\FM\13MRN1.SGM 13MRN1

Agencies

[Federal Register Volume 72, Number 48 (Tuesday, March 13, 2007)]
[Notices]
[Pages 11403-11405]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4458]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension:
    Rule 17j-1, SEC File No. 270-239, OMB Control No. 3235-0224.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 350l-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.
    Conflicts of interest between investment company personnel (such as 
portfolio managers) and their funds can arise when these persons buy 
and sell securities for their own accounts (``personal investment 
activities''). These conflicts arise because fund personnel have the 
opportunity to profit from information about fund transactions, often 
to the detriment of fund investors. Beginning in the early 1960s, 
Congress and the Securities and Exchange Commission (``Commission'') 
sought to devise a regulatory scheme to effectively address these 
potential conflicts. These efforts culminated in the addition of 
section 17(j) to the Investment Company Act of 1940 (the ``Investment 
Company Act'') (15 U.S.C. 80a-17(j)) in 1970 and the adoption by the 
Commission of rule 17j-1 (17 CFR 270.17j-1) in 1980.\1\ The Commission 
proposed amendments to rule 17j-1 in 1995 in response to 
recommendations made in the first detailed study of fund policies 
concerning personal investment activities by the Commission's Division 
of Investment Management since rule 17j-1 was adopted. Amendments to 
rule 17j-1, which were adopted in 1999, enhanced fund oversight of 
personal investment activities and the board's role in carrying out 
that oversight.\2\ Additional amendments to rule 17j-1 were made in 
2004, conforming rule 17j-1 to rule 204A-1 under the Investment 
Advisers Act of 1940 (15 U.S.C. 80b), avoiding duplicative reporting, 
and modifying certain definitions and time restrictions.\3\
---------------------------------------------------------------------------

    \1\ Prevention of Certain Unlawful Activities with Respect to 
Registered Investment Companies, Investment Company Act Release No. 
11421 (Oct. 31, 1980) (45 FR 73915 (Nov. 7, 1980)).
    \2\ Personal Investment Activities of Investment Company 
Personnel, Investment Company Act Release No. 23958 (Aug. 20, 1999) 
(64 FR 46821-01 (Aug. 27, 1999)).
    \3\ Investment Adviser Codes of Ethics, Investment Advisers Act 
Release No. 2256 (Jul. 2, 2004) (66 FR 41696 (Jul. 9, 2004)).
---------------------------------------------------------------------------

    Section 17(j) makes it unlawful for persons affiliated with a 
registered investment company(``fund'') or with the fund's investment 
adviser or principal underwriter (each a ``17j-1 organization''), in 
connection with the purchase or sale of securities held or to be 
acquired by the investment company, to engage in any fraudulent, 
deceptive, or manipulative act or practice in contravention of the 
Commission's rules and regulations. Section 17(j) also authorizes the 
Commission to promulgate rules requiring 17j-1 organizations to adopt 
codes of ethics.
    In order to implement section 17(j), rule 17j-1 imposes certain 
requirements on 17j-1 organizations and ``Access Persons'' \4\ of those 
organizations. The

[[Page 11404]]

rule prohibits fraudulent, deceptive or manipulative acts by persons 
affiliated with a 17j-1 organization in connection with their personal 
securities transactions in securities held or to be acquired by the 
fund. The rule requires each 17j-1 organization, unless it is a money 
market fund or a fund that does not invest in Covered Securities,\5\ 
to: (i) Adopt a written codes of ethics, (ii) submit the code and any 
material changes to the code, along with a certification that it has 
adopted procedures reasonably necessary to prevent Access Persons from 
violating the code of ethics, to the fund board for approval, (iii) use 
reasonable diligence and institute procedures reasonably necessary to 
prevent violations of the code, (iv) submit a written report to the 
fund describing any issues arising under the code and procedures and 
certifying that the 17j-1 entity has adopted procedures reasonably 
necessary to prevent Access Persons from violating the code, (v) 
identify Access Persons and notify them of their reporting obligations, 
and (vi) maintain and make available to the Commission for review 
certain records related to the code of ethics and transaction reporting 
by Access Persons.
---------------------------------------------------------------------------

    \4\ Rule 17j-1(a)(1) defines an ``access person'' as ``Any 
advisory person of a Fund or of a Fund's investment adviser. If an 
investment adviser's primary business is advising Funds or other 
advisory clients, all of the investment adviser's directors, 
officers, and general partners are presumed to be Access Persons of 
any Fund advised by the investment adviser. All of a Fund's 
directors, officers, and general partners are presumed to be Access 
Persons of the Fund.'' The definition of Access Person also includes 
``Any director, officer or general partner of a principal 
underwriter who, in the ordinary course of business, makes, 
participates in or obtains information regarding, the purchase or 
sale of Covered Securities by the Fund for which the principal 
underwriter acts, or whose functions or duties in the ordinary 
course of business relate to the making of any recommendation to the 
Fund regarding the purchase or sale of Covered Securities.'' Rule 
17j-1(a)(1).
    \5\ A ``Covered Security'' is any security that falls within the 
definition in section 2(a)(36) of the Act, except for direct 
obligations of the U.S. Government, bankers' acceptances, bank 
certificates of deposit, commercial paper and high quality short-
term debt instruments, including repurchase agreements, and shares 
issued by open-end funds. Rule 17j-1(a)(4).
---------------------------------------------------------------------------

    The rule requires each Access Person of a fund (other than a money 
market fund or a fund that does not invest in Covered Securities) and 
of an investment adviser or principal underwriter of the fund, who is 
not subject to an exception,\6\ to file: (i) Within 10 days of becoming 
an Access Person, a dated initial holdings report that sets forth 
certain information with respect to the access person's securities and 
accounts; (ii) dated quarterly transaction reports within 30 days of 
the end of each calendar quarter providing certain information with 
respect to any securities transactions during the quarter and any 
account established by the Access Person in which any securities were 
held during the quarter; and (iii) dated annual holding reports 
providing information with respect to each Covered Security the Access 
Person beneficially owns and accounts in which securities are held for 
his or her benefit. In addition, rule 17j-1 requires investment 
personnel of a fund or its investment adviser, before acquiring 
beneficial ownership in securities through an initial public offering 
(IPO) or in a private placement, to obtain approval from the fund or 
the fund's investment adviser.
---------------------------------------------------------------------------

    \6\ Rule 17j-1(d)(2) contains the following exceptions: (i) An 
Access Person need not file a report for transactions effected for, 
and securities held in, any account over which the Access Person 
does not have control; (ii) an independent director of the fund, who 
would otherwise not need to report and who does not have information 
with respect to the fund's transactions in a particular security, 
does not have to file an initial holdings report or a quarterly 
transaction report; (iii) an Access Person of a principal 
underwriter of the fund does not have to file reports if the 
principal underwriter is not affiliated with the fund (unless the 
fund is a unit investment trust) or any investment adviser of the 
fund and the principal underwriter of the fund does not have any 
officer, director, or general partner who serves in one of those 
capacities for the fund or any investment adviser of the fund; (iv) 
an Access Person to an investment adviser need not make quarterly 
reports if the report would duplicate information provided under the 
reporting provisions of the Investment Adviser's Act; and (v) an 
Access Person need not make quarterly transaction reports if the 
information provided in the report would duplicate information 
received by the 17j-1 organization in the form of broker trade 
confirmations or account statements or information otherwise in the 
records of the 17j-1 organization.
---------------------------------------------------------------------------

    The requirements that the management of a rule 17j-1 organization 
provide the fund's board with new and amended codes of ethics and an 
annual issues and certification report are intended to enhance board 
oversight of personal investment policies applicable to the fund and 
the personal investment activities of Access Persons. The requirements 
that Access Persons provide initial holdings reports, quarterly 
transaction reports, and annual holdings reports and request approval 
for purchases of securities through IPOs and private placements are 
intended to help fund compliance personnel and the Commission's 
examinations staff monitor potential conflicts of interest and detect 
potentially abusive activities. The requirement that each rule 17j-1 
organization maintain certain records is intended to assist the 
organization and the Commission's examinations staff in determining if 
there have been violations of rule 17j-1.
    We estimate that annually there are approximately 75,363 
respondents under rule 17j-1, of which 5,363 are rule 17j-1 
organizations and 70,000 are Access Persons. In the aggregate, these 
respondents make approximately 113,970 responses annually. We estimate 
that the total annual burden of complying with the information 
collection requirements in rule 17j-1 is approximately 169,950 hours. 
This hour burden represents time spent by Access Persons that must file 
initial and annual holdings reports and quarterly transaction reports, 
investment personnel that must obtain approval before acquiring 
beneficial ownership in any securities through an IPO or private 
placement, and the responsibilities of Rule 17j-1 organizations arising 
from information collection requirements under rule 17j-1. These 
include notifying Access Persons of their reporting obligations, 
preparing an annual rule 17j-1 report and certification for the board, 
documenting their approval or rejection of IPO and private placement 
requests, maintaining annual rule 17j-1 records, maintaining electronic 
reporting and recordkeeping systems, amending their codes of ethics as 
necessary, and, for new fund complexes, adopting a code of ethics.
    In addition, we estimate that there is an additional annual cost 
burden of approximately $2,000 per fund complex, for a total of 
$1,100,000, associated with complying with the information collection 
requirements in rule 17j-1, aside from the cost of the burden hours 
discussed above.\7\ This represents the costs of purchasing and 
maintaining computers and software to assist funds in carrying out rule 
17j-1 recordkeeping.
---------------------------------------------------------------------------

    \7\ The cost burden associated with filing of new and amended 
codes of ethics on the Commission's Electronic Data Gathering, 
Analysis, and Retrieval system (EDGAR) is included in the Paperwork 
Reduction Act estimates for the relevant forms to which these codes 
must be appended.
---------------------------------------------------------------------------

    These burden hour and cost estimates are based upon the Commission 
staff's experience and discussions with the fund industry. The 
estimates of average burden hours and costs 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.
    Written comments are invited on: (a) Whether the collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information will have practical 
utility; (b) the accuracy of the Commission's estimate of the burden of 
the collections of information; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burdens of the collection of information on respondents, 
including through the use

[[Page 11405]]

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 R. Corey Booth, Director/
Chief Information Officer, Securities and Exchange Commission, C/O 
Shirley Martinson, 6432 General Green Way, Alexandria, Virginia, 22312; 
or send an e-mail to: PRA--Mailbox@sec.gov.

    Dated: March 5, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4458 Filed 3-12-07; 8:45 am]
BILLING CODE 8010-01-P