Proposed Collection; Comment Request, 61720-61722 [E9-28226]
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Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Notices
suggestions submitted in writing within
60 days of this publication.
Please direct your written comments
to Charles Boucher, 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 17, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28228 Filed 11–24–09; 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.
sroberts on DSKD5P82C1PROD with NOTICES
Extension:
Form N–3; SEC File No. 270–281; OMB
Control No. 3235–0316.
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.
The title for the collection of
information is ‘‘Form N–3 (17 CFR
239.17a and 274.11b) under the
Securities Act of 1933 (15 U.S.C. 77)
and under the Investment Company Act
of 1940 (15 U.S.C. 80a), Registration
Statement of Separate Accounts
Organized as Management Investment
Companies.’’ Form N–3 is the form used
by separate accounts offering variable
annuity contracts which are organized
as management investment companies
to register under the Investment
Company Act of 1940 (‘‘Investment
Company Act’’) and/or to register their
securities under the Securities Act of
1933 (‘‘Securities Act’’). Form N–3 is
also the form used to file a registration
statement under the Securities Act (and
any amendments thereto) for variable
annuity contracts funded by separate
accounts which would be required to be
registered under the Investment
Company Act as management
investment companies except for the
exclusion provided by Section 3(c)(11)
of the Investment Company Act (15
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U.S.C. 80a–3(c)(11)). Section 5 of the
Securities Act (15 U.S.C. 77e) requires
the filing of a registration statement
prior to the offer of securities to the
public and that the statement be
effective before any securities are sold,
and Section 8 of the Investment
Company Act (15 U.S.C. 80a–8) requires
a separate account to register as an
investment company.
Form N–3 also permits separate
accounts offering variable annuity
contracts which are organized as
investment companies to provide
investors with a prospectus and a
statement of additional information
covering essential information about the
separate account when it makes an
initial or additional offering of its
securities. Section 5(b) of the Securities
Act requires that investors be provided
with a prospectus containing the
information required in a registration
statement prior to the sale or at the time
of confirmation or delivery of the
securities. The form also may be used by
the Commission in its regulatory review,
inspection, and policy-making roles.
The Commission estimates that there
is one initial registration statement and
30 post-effective amendments to initial
registration statements filed on Form N–
3 annually and that the average number
of portfolios referenced in each initial
filing and post-effective amendment is
2. The Commission further estimates
that the hour burden for preparing and
filing a post-effective amendment on
Form N–3 is 154.7 hours per portfolio.
The total annual hour burden for
preparing and filing post-effective
amendments is 9,282 hours (30 posteffective amendments × 2 portfolios ×
154.7 hours per portfolio). The
estimated annual hour burden for
preparing and filing initial registration
statements is 1,845.4 hours (1 initial
registration statement × 2 portfolios ×
922.7 hours per portfolio). The total
annual hour burden for Form N–3,
therefore, is estimated to be 11,127.4
hours (9,282 hours + 1,845.4 hours).
The information collection
requirements imposed by Form N–3 are
mandatory. Responses to the collection
of information 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.
Written comments are invited on: (a)
Whether the proposed 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 of the collection of
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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 Charles Boucher, 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 18, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28225 Filed 11–24–09; 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 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 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
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Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Notices
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‘‘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
rule prohibits fraudulent, deceptive or
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,
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).
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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)
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
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.
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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 75,757 respondents
under rule 17j–1, of which 5,757 are
rule 17j–1 organizations and 70,000 are
Access Persons. In the aggregate, these
respondents make approximately
105,125 responses annually. We
estimate that the total annual burden of
complying with the information
collection requirements in rule 17j–1 is
approximately 292,740 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
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61722
Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Notices
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.
We estimate that there is an annual
cost burden of approximately $5,000 per
fund complex, for a total of $3,275,000,
associated with complying with the
information collection requirements in
rule 17j–1. 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.
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 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
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 Charles Boucher, 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.
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17:36 Nov 24, 2009
Jkt 220001
November 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28226 Filed 11–24–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Rule 17Ad–16; SEC File No. 270–363; OMB
Control No. 3235–0413]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
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’’) is soliciting comments
on the existing collection of information
provided for in Rule 17Ad–13 (17 CFR
240.17Ad–13) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.) (‘‘Exchange Act’’). The
Commission plans to submit this
existing collection of information to the
Office of Management and Budget for
extension and approval.
Rule 17Ad–16 requires a registered
transfer agent to provide written notice
to the appropriate qualified registered
securities depository when assuming or
terminating transfer agent services on
behalf of an issuer or when changing its
name or address. In addition, transfer
agents that provide such notice shall
maintain such notice for a period of at
least two years in an easily accessible
place. This rule addresses the problem
of certificate transfer delays caused by
transfer requests that are directed to the
wrong transfer agent or the wrong
address.
We estimate that the transfer agent
industry submits 3,000 Rule 17Ad–16
notices to appropriate qualified
registered securities depositories. The
staff estimates that the average amount
of time necessary to create and submit
each notice is approximately 15 minutes
per notice. Accordingly, the estimated
total industry burden is 750 hours per
year (15 minutes multiplied by 3,000
notices filed annually).
Because the information needed by
transfer agents to properly notify the
appropriate registered securities
depository is readily available to them
and the report is simple and
straightforward, the cost is relatively
minimal. The average cost to prepare
and send a notice is approximately
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$7.50 (15 minutes at $30 per hour). This
yields an industry-wide cost estimate of
$22,500 (3,000 notices multiplied by
$7.50 per notice).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be 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.
Comments should be directed to
Charles Boucher, Director/Chief
Information Officer, 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 18, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28227 Filed 11–24–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61032; File No. PCAOB–
2009–01]
Public Company Accounting Oversight
Board; Notice of Filing of Proposed
Amendment to Board Rules Relating to
Inspections
November 19, 2009.
Pursuant to Section 107(b) of the
Sarbanes-Oxley Act of 2002 (the ‘‘Act’’),
notice is hereby given that on July 2,
2009, the Public Company Accounting
Oversight Board (the ‘‘Board’’ or
‘‘PCAOB’’) filed with the Securities and
Exchange Commission (the ‘‘SEC’’ or
‘‘Commission’’) the proposed rule
changes described in Items I, II, and III
below, which items have been prepared
by the Board. The Commission is
publishing this notice to solicit
comments on the proposed rule from
interested persons.
I. Board’s Statement of the Terms of
Substance of the Proposed Rule
On June 25, 2009, the Board adopted
an amendment to its rule relating to the
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]]>Agencies
[Federal Register Volume 74, Number 226 (Wednesday, November 25, 2009)]
[Notices]
[Pages 61720-61722]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28226]
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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 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 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
[[Page 61721]]
``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)).
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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 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.
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\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.
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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 75,757
respondents under rule 17j-1, of which 5,757 are rule 17j-1
organizations and 70,000 are Access Persons. In the aggregate, these
respondents make approximately 105,125 responses annually. We estimate
that the total annual burden of complying with the information
collection requirements in rule 17j-1 is approximately 292,740 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
[[Page 61722]]
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.
We estimate that there is an annual cost burden of approximately
$5,000 per fund complex, for a total of $3,275,000, associated with
complying with the information collection requirements in rule 17j-1.
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.
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 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 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 Charles Boucher, 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.
November 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-28226 Filed 11-24-09; 8:45 am]
BILLING CODE 8011-01-P
