Proposed Collection; Comment Request, 67216-67217 [E8-26956]

Download as PDF 67216 Federal Register / Vol. 73, No. 220 / Thursday, November 13, 2008 / Notices 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 17f–1; SEC File No. 270–236; OMB Control No. 3235–0222. mstockstill on PROD1PC66 with NOTICES 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’’) 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 for extension and approval. Rule 17f–1 (17 CFR 270.17f–1) under the Investment Company Act of 1940 (the ‘‘Act’’) (15 U.S.C. 80a) is entitled: ‘‘Custody of Securities with Members of National Securities Exchanges.’’ Rule 17f–1 provides that any registered management investment company (‘‘fund’’) that wishes to place its assets in the custody of a national securities exchange member may do so only under a written contract that must be ratified initially and approved annually by a majority of the fund’s board of directors. The written contract also must contain certain specified provisions. In addition, the rule requires an independent public accountant to examine the fund’s assets in the custody of the exchange member at least three times during the fund’s fiscal year. The rule requires the written contract and the certificate of each examination to be transmitted to the Commission. The purpose of the rule is to ensure the safekeeping of fund assets. Commission staff estimates that each fund makes 1 response and spends an average of 3.5 hours annually in complying with the rule’s requirements. Commission staff estimates that on an annual basis it takes: (i) 0.5 hours for the board of directors 1 to review and ratify the custodial contracts; and (ii) 3 hours for the fund’s controller to assist the fund’s independent public auditors in verifying the fund’s assets. Approximately 5 funds rely on the rule 1 Estimates of the number of hours are based on conversations with representatives of mutual funds that comply with the rule. The actual number of hours may vary significantly depending on individual fund assets. The hour burden for rule 17f–1 does not include preparing the custody contract because that would be part of customary and usual business practice. VerDate Aug<31>2005 17:13 Nov 12, 2008 Jkt 217001 annually, with a total of 5 responses.2 Thus, the total annual hour burden for rule 17f–1 is approximately 17.5 hours.3 Funds that rely on rule 17f–1 generally use outside counsel to prepare the custodial contract for the board’s review and to transmit the contract to the Commission. Commission staff estimates the cost of outside counsel to perform these tasks for a fund each year is $800.4 Funds also must have an independent public accountant verify the fund’s assets three times each year and prepare the certificate of examination. Commission staff estimates the annual cost for an independent public accountant to perform this service is $4000.5 Therefore, the total annual cost burden for a fund that relies on rule 17f–1 would be approximately $4800.6 As noted above, the staff estimates that 5 funds rely on rule 17f–1 each year, for an estimated total annualized cost burden of $24,000.7 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. Compliance with the collections of information required by rule 17f–1 is mandatory for funds that place their assets in the custody of a national securities exchange member. 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. The Commission requests written comments on: (a) Whether the collections of information are necessary for the proper performance of the functions of the Commission, including whether the information has practical utility; (b) the accuracy of the 2 Based on a review of Form N–17f–1 filings in 2006 and 2007, the Commission staff estimates that an average of 5 funds rely on rule 17f–1 each year. 3 This estimate is based on the following calculation: (5 respondents x 3.5 hours = 17.5 hours. The annual burden for rule 17f–1 does not include time spent preparing Form N–17f–1. The burden for Form N–17f–1 is included in a separate collection of information. 4 This estimate is based on the following calculation: (2 hours of outside counsel time x $400 = $800). The staff has estimated the average cost of outside counsel at $400 per hour, based on information received from funds, fund intermediaries, and their counsel. 5 This estimate is based on information received from fund representatives estimating the aggregate annual cost of an independent public accountant’s periodic verification of assets and preparation of the certificate of examination. 6 This estimate is based on the following calculation: ($800 + $4000 = $4800). 7 This estimate is based on the following calculation: (5 funds × $4800 = $24,000). PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 Commission’s estimate of the burdens 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 Lewis W. Walker, Acting Director/ CIO, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: PRA_Mailbox@sec.gov. Dated: November 5, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–26955 Filed 11–12–08; 8:45 am] BILLING CODE 8011–01–P 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 11a–3; SEC File No. 270–321; OMB Control No. 3235–0358. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520), 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 for extension and approval. Section 11(a) of the Investment Company Act of 1940 (‘‘Act’’) (15 U.S.C. 80a–11(a)) provides that it is unlawful for a registered open-end investment company (‘‘fund’’) or its underwriter to make an offer to the fund’s shareholders or the shareholders of any other fund to exchange the fund’s securities for securities of the same or another fund on any basis other than the relative net asset values (‘‘NAVs’’) of the respective securities to be exchanged, ‘‘unless the terms of the offer have first been submitted to and approved by the Commission or are in accordance with such rules and regulations as the E:\FR\FM\13NON1.SGM 13NON1 mstockstill on PROD1PC66 with NOTICES Federal Register / Vol. 73, No. 220 / Thursday, November 13, 2008 / Notices Commission may have prescribed in respect of such offers.’’ Section 11(a) was designed to prevent ‘‘switching,’’ the practice of inducing shareholders of one fund to exchange their shares for the shares of another fund for the purpose of exacting additional sales charges. Rule 11a–3 (17 CFR 270.11a–3) under the Act is an exemptive rule that permits open-end investment companies (‘‘funds’’), other than insurance company separate accounts, and funds’ principal underwriters, to make certain exchange offers to fund shareholders and shareholders of other funds in the same group of investment companies. The rule requires a fund, among other things, (i) to disclose in its prospectus and advertising literature the amount of any administrative or redemption fee imposed on an exchange transaction, (ii) if the fund imposes an administrative fee on exchange transactions, other than a nominal one, to maintain and preserve records with respect to the actual costs incurred in connection with exchanges for at least six years, and (iii) give the fund’s shareholders a sixty-day notice of a termination of an exchange offer or any material amendment to the terms of an exchange offer (unless the only material effect of an amendment is to reduce or eliminate an administrative fee, sales load or redemption fee payable at the time of an exchange). The rule’s requirements are designed to protect investors against abuses associated with exchange offers, provide fund shareholders with information necessary to evaluate exchange offers and certain material changes in the terms of exchange offers, and enable the Commission staff to monitor funds’ use of administrative fees charged in connection with exchange transactions. The staff estimates that there are approximately 1958 active open-end investment companies registered with the Commission as of September 2008. The staff estimates that 25 percent (or 490) of these funds impose a nonnominal administrative fee on exchange transactions. The staff estimates that the recordkeeping requirement of the rule requires approximately 1 hour annually of clerical time per fund, for a total of 490 hours for all funds.1 The staff estimates that 5 percent of these 1958 funds (or 98) terminate an exchange offer or make a material change to the terms of their exchange offer each year, requiring the fund to comply with the notice requirement of 1 This estimate is based on the following calculations: (1958 funds × 0.25% = 490 funds); (490 × 1 (clerical hour) = 490 clerical hours). VerDate Aug<31>2005 17:13 Nov 12, 2008 Jkt 217001 the rule. The staff estimates that complying with the notice requirement of the rule requires approximately 1 hour of attorney time and 2 hours of clerical time per fund, for a total of approximately 294 hours for all funds to comply with the notice requirement.2 The recordkeeping and notice requirements together therefore impose a total burden of 784 hours on all funds.3 The total number of respondents is 588, each responding once a year.4 The burdens associated with the disclosure requirement of the rule are accounted for in the burdens associated with the Form N–1A registration statement for funds. 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.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. Written comments are requested on: (a) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility; (b) the accuracy of the Commission’s estimate of the burden(s) 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 Lewis W. Walker, Acting Director/ CIO, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: PRA_Mailbox@sec.gov. 2 This estimate is based on the following calculations: (1958 (funds) × 0.05% = 98 funds); (98 × 1 (attorney hour) = 98 total attorney hours); (98 (funds) × 2 (clerical hours) = 196 total clerical hours); (98 (attorney hours) + 196 (clerical hours) = 294 total hours). 3 This estimate is based on the following calculations: (294 (notice hours) + 490 (recordkeeping hours) = 784 total hours). 4 This estimate is based on the following calculation: (490 funds responding to recordkeeping requirement + 98 funds responding to notice requirement = 588 total respondents). PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 67217 Dated: November 5, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–26956 Filed 11–12–08; 8:45 am] BILLING CODE 8011–01–P 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: Form N–17f–1, SEC File No. 270–316, OMB Control No. 3235–0359. 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’’) 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 for extension and approval. Form N–17f–1 (17 CFR 274.219) is entitled ‘‘Certificate of Accounting of Securities and Similar Investments of a Management Investment Company in the Custody of Members of National Securities Exchanges.’’ The form serves as a cover sheet to the accountant’s certificate that is required to be filed periodically with the Commission pursuant to rule 17f–1 (17 CFR 270.17f– 1) under the Act, entitled ‘‘Custody of Securities with Members of National Securities Exchanges,’’ which sets forth the conditions under which a fund may place its assets in the custody of a member of a national securities exchange. Rule 17f–1 requires, among other things, that an independent public accountant verify the fund’s assets at the end of every annual and semi-annual fiscal period, and at least one other time during the fiscal year as chosen by the independent accountant. Requiring an independent accountant to examine the fund’s assets in the custody of a member of a national securities exchange assists Commission staff in its inspection program and helps to ensure that the fund assets are subject to proper auditing procedures. The accountant’s certificate stating that it has made an examination, and describing the nature and the extent of the examination, must be attached to Form N–17f–1 and filed with the Commission promptly after each examination. The form facilitates the filing of the accountant’s certificates, E:\FR\FM\13NON1.SGM 13NON1

Agencies

[Federal Register Volume 73, Number 220 (Thursday, November 13, 2008)]
[Notices]
[Pages 67216-67217]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26956]


-----------------------------------------------------------------------

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 11a-3; SEC File No. 270-321; OMB Control No. 3235-0358.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501-3520), 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 for extension and approval.
    Section 11(a) of the Investment Company Act of 1940 (``Act'') (15 
U.S.C. 80a-11(a)) provides that it is unlawful for a registered open-
end investment company (``fund'') or its underwriter to make an offer 
to the fund's shareholders or the shareholders of any other fund to 
exchange the fund's securities for securities of the same or another 
fund on any basis other than the relative net asset values (``NAVs'') 
of the respective securities to be exchanged, ``unless the terms of the 
offer have first been submitted to and approved by the Commission or 
are in accordance with such rules and regulations as the

[[Page 67217]]

Commission may have prescribed in respect of such offers.'' Section 
11(a) was designed to prevent ``switching,'' the practice of inducing 
shareholders of one fund to exchange their shares for the shares of 
another fund for the purpose of exacting additional sales charges.
    Rule 11a-3 (17 CFR 270.11a-3) under the Act is an exemptive rule 
that permits open-end investment companies (``funds''), other than 
insurance company separate accounts, and funds' principal underwriters, 
to make certain exchange offers to fund shareholders and shareholders 
of other funds in the same group of investment companies. The rule 
requires a fund, among other things, (i) to disclose in its prospectus 
and advertising literature the amount of any administrative or 
redemption fee imposed on an exchange transaction, (ii) if the fund 
imposes an administrative fee on exchange transactions, other than a 
nominal one, to maintain and preserve records with respect to the 
actual costs incurred in connection with exchanges for at least six 
years, and (iii) give the fund's shareholders a sixty-day notice of a 
termination of an exchange offer or any material amendment to the terms 
of an exchange offer (unless the only material effect of an amendment 
is to reduce or eliminate an administrative fee, sales load or 
redemption fee payable at the time of an exchange).
    The rule's requirements are designed to protect investors against 
abuses associated with exchange offers, provide fund shareholders with 
information necessary to evaluate exchange offers and certain material 
changes in the terms of exchange offers, and enable the Commission 
staff to monitor funds' use of administrative fees charged in 
connection with exchange transactions.
    The staff estimates that there are approximately 1958 active open-
end investment companies registered with the Commission as of September 
2008. The staff estimates that 25 percent (or 490) of these funds 
impose a non-nominal administrative fee on exchange transactions. The 
staff estimates that the recordkeeping requirement of the rule requires 
approximately 1 hour annually of clerical time per fund, for a total of 
490 hours for all funds.\1\
---------------------------------------------------------------------------

    \1\ This estimate is based on the following calculations: (1958 
funds x 0.25% = 490 funds); (490 x 1 (clerical hour) = 490 clerical 
hours).
---------------------------------------------------------------------------

    The staff estimates that 5 percent of these 1958 funds (or 98) 
terminate an exchange offer or make a material change to the terms of 
their exchange offer each year, requiring the fund to comply with the 
notice requirement of the rule. The staff estimates that complying with 
the notice requirement of the rule requires approximately 1 hour of 
attorney time and 2 hours of clerical time per fund, for a total of 
approximately 294 hours for all funds to comply with the notice 
requirement.\2\ The recordkeeping and notice requirements together 
therefore impose a total burden of 784 hours on all funds.\3\ The total 
number of respondents is 588, each responding once a year.\4\ The 
burdens associated with the disclosure requirement of the rule are 
accounted for in the burdens associated with the Form N-1A registration 
statement for funds.
---------------------------------------------------------------------------

    \2\ This estimate is based on the following calculations: (1958 
(funds) x 0.05% = 98 funds); (98 x 1 (attorney hour) = 98 total 
attorney hours); (98 (funds) x 2 (clerical hours) = 196 total 
clerical hours); (98 (attorney hours) + 196 (clerical hours) = 294 
total hours).
    \3\ This estimate is based on the following calculations: (294 
(notice hours) + 490 (recordkeeping hours) = 784 total hours).
    \4\ This estimate is based on the following calculation: (490 
funds responding to recordkeeping requirement + 98 funds responding 
to notice requirement = 588 total respondents).
---------------------------------------------------------------------------

    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.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.
    Written comments are requested on: (a) Whether the collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information has practical 
utility; (b) the accuracy of the Commission's estimate of the burden(s) 
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 Lewis W. Walker, Acting 
Director/CIO, Securities and Exchange Commission, C/O Shirley 
Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-
mail to: PRA_Mailbox@sec.gov.

    Dated: November 5, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-26956 Filed 11-12-08; 8:45 am]
BILLING CODE 8011-01-P