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