[Federal Register Volume 62, Number 177 (Friday, September 12, 1997)]
[Rules and Regulations]
[Pages 47934-47944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24344]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 202, 230, 232, 239, 270, and 274
[Release Nos. 33-7448, IC-22815; File No. S7-19-97]
RIN 3235-AG73
Registration Under the Securities Act of 1933 of Certain
Investment Company Securities
AGENCY: Securities and Exchange Commission.
ACTION: Final rules.
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SUMMARY: The Commission is amending the rule and the form under the
Investment Company Act of 1940 that prescribe the method by which
certain investment companies calculate and pay registration fees under
the Securities Act of 1933. The amendments implement the provisions of
the National Securities Markets Improvement Act of 1996 that simplify
the method of determining the amount of these fees.
EFFECTIVE DATE: October 11, 1997.
FOR FURTHER INFORMATION CONTACT: Robin S. Gross, Staff Attorney, Office
of Regulatory Policy at (202) 942-0690, or Carolyn A. Miller, Senior
Financial Analyst, Office of Financial Analysis at (202) 942-0513,
Division of Investment Management, Mail Stop 10-2, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
Requests for formal interpretive advice should be directed to the
Office of Chief Counsel at (202) 942-0659, Division of Investment
Management, Securities and Exchange Commission, 450 Fifth Street, NW.,
Mail Stop 10-6, Washington, DC 20549.
SUPPLEMENTARY INFORMATION: The Commission today is amending rule 24f-2
[17 CFR 270.24f-2] and Form 24F-2 [17 CFR 274.24] under the Investment
Company Act of 1940 [15 U.S.C. 80a] (the ``Investment Company Act'').
In addition, the Commission is amending rule 485 [17 CFR 230.485] under
the Securities Act of 1933 [15 U.S.C. 77a-aa] (the ``Securities Act'');
Form N-1A [17 CFR 274.11A and 239.15A], Form N-3 [17 CFR 274.11b and
239.17a], and Form N-4 [17 CFR 274.11c and 239.17b], the registration
forms used by certain types of investment companies to register under
the Investment Company Act and to register their securities under the
Securities Act; Form S-6 [17 CFR 239.16], the form used by unit
investment trusts to register their securities under the Securities
Act;
[[Page 47935]]
Form N-14 [17 CFR 239.23], the form used by investment companies to
register under the Securities Act securities issued in business
combination transactions; rule 24e-1 under the Investment Company Act
[17 CFR 270.24e-1]; rule 13 of Regulation S-T [17 CFR 232.13]; and rule
3a of the Commission's Informal and Other Procedures [17 CFR 202.3a].
The Commission is also rescinding rules 24e-2 and 24f-1 under the
Investment Company Act [17 CFR 270.24e-2 and 270.24f-1].
I. Background
The National Securities Markets Improvement Act of 1996
(``Improvement Act'') 1 amended sections 24(e) and (f) of
the Investment Company Act to create a new, simpler system for the
registration of securities under the Securities Act that are issued by
open-end management investment companies, unit investment trusts
(``UITs'') and face-amount certificate companies (collectively,
``funds'').2 Amended section 24(f) of the Investment Company
Act, when effective, will provide that a fund will be deemed to have
registered an indefinite amount of securities upon the effective date
of its registration statement under the Securities Act.3 The
fund then will pay a registration fee within 90 days after the end of
each fiscal year based upon the aggregate sale price of fund securities
sold during that fiscal year, reduced by the aggregate redemption price
of the securities that were redeemed during that year (and during any
earlier fiscal year ending on or after October 11, 1995), but that were
not used previously by the fund to reduce its registration fees. A fund
that makes its fee payment late will be required to pay interest on the
unpaid amount at a rate set by the Secretary of the
Treasury.4 Amended section 24(f) will provide the exclusive
means for registering fund securities under the Securities
Act.5
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\1\ Pub. L. 104-290 (1996).
\2\ Section 203 of the Improvement Act (codified at 15 U.S.C.
80a-24 (e) and (f)).
\3\ Section 24(f)(1), as amended. Amended section 24(f) becomes
effective on the earlier of October 11, 1997 or the effective date
of Commission rulemaking implementing amended section 24(f). See 15
U.S.C. 80a-24 note. For purposes of convenience, section 24, as
amended when section 203 of the Improvement Act becomes effective,
is referred to in this Release as ``amended section 24'' or
``section 24, as amended.''
\4\ Section 24(f)(3), as amended.
\5\ Section 203 of the Improvement Act rescinded the provisions
of sections 24(e) and (f) that allow for post-effective amendment
and post-sale registration of securities. Closed-end management
investment companies will continue to register their shares and pay
registration fees pursuant to section 6(b) of the Securities Act at
the time of the offering.
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On July 14, 1997, the Commission issued a release proposing to
amend or rescind several rules and forms under the Investment Company
Act and the Securities Act to implement the Improvement Act's
amendments to section 24 (``Proposing Release'').6 The
proposals included revisions to Form 24F-2, the Form that is required
to accompany fund registration fees. The Commission received seven
comment letters, which generally supported the proposed amendments. The
Commission is adopting the amendments substantially as proposed.
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\6\ Registration under the Securities Act of 1933 of Certain
Investment Company Securities, Investment Company Act Release No.
22747 (July 14, 1997) [62 FR 38495 (July 18, 1997)].
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II. Discussion
A. Amendments to Rule 24f-2
The Commission proposed amending rule 24f-2 to delete provisions
made unnecessary as a result of the Improvement Act, to eliminate the
requirement that Form 24F-2 be accompanied by an opinion of counsel,
and to require the filing of Form 24F-2 within 90 days as required by
amended section 24(f). Commenters supported these amendments, which the
Commission is adopting as proposed.
The Commission also proposed certain technical amendments to rule
24f-2 concerning fee payments when a fund ceases operations as a result
of a liquidation, merger, or sale of all or substantially all of the
assets (collectively, ``merger'') of the fund. The Commission is
adopting these amendments, modified slightly from the proposal to
reflect technical suggestions by commenters.7
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\7\ The proposed amendments included a provision clarifying that
the special rule provisions for reorganizations are not available in
a transaction designed to result in the merger of two operating
funds. No commenter addressed this proposed clarification, but one
commenter urged that the rule treat all mergers as it does
reorganizations and permit any unused redemption credits to be
assumed by the successor fund. The Commission's proposal entailed
merely clarifying the rule's provisions relating to mergers; thus,
the commenter's suggestion is beyond the scope of the rule proposal.
The Commission believes this suggestion should be addressed only
after its consequences can be fully determined, and is therefore
adopting the merger provisions as proposed.
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Finally, the Commission is rescinding, as proposed, rule 24e-2 and
rule 24f-1, which are no longer necessary as a result of the amendment
of section 24(f).
B. Amendments to Form 24F-2
The Commission proposed amendments to Form 24F-2 that would
substantially shorten and simplify the form. The Commission is adopting
these amendments, modified to reflect comments and to add additional
instructions to clarify the operation of rule 24f-2, as amended.
1. Prepaid Shares
Since 1977, rule 24f-2 has permitted a fund to offset its aggregate
sales with aggregate redemptions in calculating its registration
fee.8 If redemptions exceed sales in a fiscal year, under
rule 24e-2 a fund may, under existing rules, use those ``redemption
credits'' to offset registration fees payable for securities registered
during the next fiscal year in a post-effective amendment to the fund's
registration statement. Shares registered pursuant to rule 24e-2 are,
in effect, ``pre-paid.''
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\8\ See Proposing Release, supra note 6 at nn.8-10 and
accompanying text.
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This system has been substantially revised by the Improvement Act.
After the effective date of the adopted rule amendments, unused
redemption credits from one fiscal year will be available in succeeding
fiscal years, and there will be no need to register shares pursuant to
a post-effective amendment.9 Before the effective date of
these rules, however, some funds will have accumulated a ``bank'' of
pre-paid shares on which a new registration fee need not be paid under
section 24(f), as amended. Form 24F-2, currently and as amended,
requires that only shares registered pursuant to section 24(f) be
included in determining the aggregate shares sold during the
year.10 At the suggestion of three commenters, the
Commission is adding a new item to the Form that will provide funds
space on the Form to reflect information on pre-paid shares, which
should assist their personnel in tracking that
information.11
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\9\ The Improvement Act amended section 24(f) to permit a fund
to reduce its registration fee by the aggregate price of securities
redeemed during the fiscal year, and any prior fiscal year ending on
or after October 11, 1995 that were not used previously to reduce
fees payable to the Commission. In this way, amended section 24(f)
will permit funds to net redemptions from previous fiscal years
without having to ``preserve'' those redemption credits through
filing periodic post-effective amendments pursuant to rule 24e-2,
which, as noted above, is being rescinded.
\10\ Shares registered pursuant to rule 24e-2 may be excluded
from the aggregate shares sold. See Item 5(i). Funds may therefore
sell pre-paid shares without being required to pay additional
registration fees.
\11\ Item 6 requires the fund to include the information
regarding the number of pre-paid shares, if any, that were used to
reduce the aggregate sales price of fund shares sold during the
fiscal year, and the balance of any pre-paid shares that may remain
and are eligible for use in future years. Commenters and others have
inquired if there is a specific method they should use when
converting a number of pre-paid shares into a dollar amount. The
Commission believes that a fund may use any reasonable method that
is applied consistently when converting a number of pre-paid shares
into a dollar amount for purposes of determining the aggregate price
of securities sold during the fiscal year pursuant to rule 24f-2.
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[[Page 47936]]
2. Mergers
The Commission is adding two instructions to Form 24F-2 to clarify
the operation of the merger provisions of rule 24f-2. The first
clarifies that the securities of a fund that are converted or exchanged
(the ``Predecessor Fund'') to those of another (the ``Successor Fund'')
must be treated as redemptions on the Predecessor Fund's final Form
24F-2.12 The second clarifies that, in a reorganization in
which the Predecessor Fund is not deemed to cease operations for
purposes of rule 24f-2, the Successor Fund assumes the sales and the
redemption credits of the Predecessor Fund, which need not file a final
Form 24F-2.13
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\12\ See Instruction C.2(a).
\13\ See Instruction C.2(b).
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3. Shares Sold to Unit Investment Trusts
Form 24F-2 has included since its adoption a special instruction
that permits a fund to exclude from its aggregate sales, the sales of
securities sold to an unmanaged separate account organized as a UIT
that itself issued securities on which registration fees have been
paid.14 This exclusion was created to prevent ``double
payment'' of registration fees for the same aggregate proceeds from
investors in variable insurance products.15 Two commenters
argued that the logic of this exclusion supported extending it to funds
selling shares to UITs issuing periodic payment plans. The Commission
agrees and is revising the instruction to Form 24F-2 to apply to shares
sold to any UIT.16
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\14\ See Instruction C.3.
\15\ See Registration Fees for Certain Investment Companies,
Investment Company Act Release No. 21332 (Sept. 1, 1995) [60 FR
47041 (Sept. 11, 1995)] at nn.29-31 and accompanying text.
\16\ See Instruction C.3. In both arrangements, a fund sells
shares to a UIT that acts as a mere conduit for the investor's
investment in the underlying fund. The Commission believes,
therefore, that the rationale for relieving investors in variable
insurance products from double payment of registration fees applies
with equal force to investors in periodic payment plans. The
Commission is not adopting, however, two commenters' suggestion that
the instructions permit exclusion of the value of fund shares sold
to a management investment company in a ``fund-of-funds''
arrangement. Unlike the UIT arrangements discussed above, a
management company in a fund-of-funds arrangement does not act as a
conduit for investments in the other funds.
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C. Conforming Amendments
The Commission is adopting, as proposed, amendments to several
forms and rules to reflect the revisions to section 24(f) and rule 24f-
2 and the rescission of rules 24e-2 and 24f-1.17
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\17\ Rule 485 under the Securities Act; Form N-1A; Form N-3;
Form N-4; Form S-6; Form N-14; rule 24e-1 under the Investment
Company Act; rule 13 of Regulation S-T; and rule 3a of the
Commission's Informal and Other Procedures.
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D. Transition/Effective Date
The rule and form amendments adopted today are effective on October
11, 1997, the effective date of the amendments to section 24 of the
Investment Company Act. All funds must use Form 24F-2, as revised by
these amendments, for filings made on or after October 11, 1997. Funds
with a fiscal year ending on or after July 13, 1997 (90 days before
October 11, 1997) that file Form 24F-2 on or after October 11, 1997 may
net redemptions against sales pursuant to section 24(f) as amended.
Funds that file for fiscal years ended after April 14, 1997, but before
July 13, 1997 may net redemptions against sales, but must pay interest
from the due date of the filing.
Section 24(f), as revised, applies to any fund with an effective
registration statement under the Securities Act. Accordingly, the
Commission will consider any fund that has an effective registration
statement on October 11, 1997 to have registered, by operation of law,
an indefinite amount of shares. After October 11, 1997, when the fund
next files its post-effective amendment(s), it should also revise the
cover pages of its registration statement to delete statements
regarding the indefinite registration of securities.
The October 11, 1997 effective date of the rule and form amendments
is less than 30 days after publication in the Federal Register,
pursuant to the ``good cause'' exception under the Administrative
Procedure Act, 5 U.S.C. 553(d)(3). As discussed above, these rule and
form amendments are needed to accommodate changes to the statute
concerning the registration of securities and the payment of
registration fees, and they clarify certain transitional issues that
the statutory amendments do not address. In the absence of the
amendments adopted today, the current rules and forms would continue to
be in effect, even though they do not correspond to the amended
statutory provisions. The potential confusion that could result
concerning the applicable requirements for funds could be detrimental
to investors and to market participants. In addition, because funds are
currently required to file Form 24F-2 and the rule and form amendments
simplify this process, the Commission does not believe that an
accelerated effective date will cause hardship to affected funds.
Accordingly, the Commission finds that there is good cause for
effectiveness of the rule and form amendments on October 11, 1997.
III. Cost-Benefit Analysis
In the Proposing Release, the Commission provided a Cost-Benefit
Analysis on the amendments and requested comments. No comments were
received on these matters. The Commission is sensitive to the costs and
benefits imposed by its rules. The Commission notes that the amendments
implement the changes mandated by the Improvement Act to the system for
registering fund securities under the Securities Act. The amendments
reflect the requirements of amended section 24 of the Investment
Company Act and do not impose any additional requirements. The
amendments to Form 24F-2 should assist funds in calculating their
registration fees and interest, if any, under amended section 24(f).
Based on its experience with Form 24F-2, the Commission believes that
the benefits to funds and the Commission of having a standardized
format for registration fee filings and the guidance provided by the
Form outweigh any burdens associated with filing the Form. In the past,
Form 24F-2 has made it easier for funds to calculate registration fees
and reduced errors in fee calculations. Amended Form 24F-2 would
continue these benefits.
The principal economic effect of the amendments is to increase the
number of filers of Form 24F-2. The Commission estimates that there
will be approximately 500 new filers of the Form. The only new costs
that will be imposed for these new filers will be the cost of filing
the form annually, which is estimated to average $10 per filer. While
in the aggregate there will be more filers of Form 24F-2, the reduction
in the amount of time required to file the Form is expected to reduce
the total filing costs by $60,120.
The other possible economic effect of the amendments is due to the
requirement (also included in the changes made by Congress to section
24) that interest be paid on any registration fees that are paid more
than 90 days after the end of the fiscal year. This economic effect
also should be insignificant because, based on the Commission's past
experience, very few (less than five) registrants annually file Form
24F-2 late.
The Commission estimates that there will be a nearly 50% reduction
in the average time it takes filers to complete the Form. The
additional guidance provided on the Form will make it easier and less
time consuming for
[[Page 47937]]
investment companies to calculate the registration fees due and to
avoid errors in fee calculations. Thus, the amendments will not result
in a major increase in either costs or prices. In addition, the
amendments should have no adverse effects on efficiency, competition,
or capital formation.
IV. Paperwork Reduction Act
As set forth in the Proposing Release, Form 24F-2 contains
``collection of information'' requirements within the meaning of the
Paperwork Reduction Act of 1995 (``PRA'').18 Accordingly,
the collection of information requirements contained in the rule
amendments were submitted to the Office of Management and Budget
(``OMB'') for review pursuant to section 3507(d) of the PRA. No
comments were received on the proposal with respect to the PRA
submission.19 The collection of information requirements are
in accordance with section 3507 of the PRA. An agency may not conduct
or sponsor, and a person is not required to respond to, a collection of
information unless the agency displays a valid OMB control number. OMB
approved the PRA request and assigned a control number of 3235-0456,
with an expiration date of August 31, 2000.
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\18\ 44 U.S.C. 3501--3520.
\19\ One commenter did refer to the Paperwork Reduction Act in
connection with suggesting amendments not proposed by the
Commission.
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Form 24F-2 provides a standardized format for funds' annual
registration fee filings and assists funds in calculating the fees.
Form 24F-2 is required to be filed annually. It is estimated that
approximately 6681 funds file Form 24F-2. The current average annual
burden per respondent for Form 24F-2 is estimated to be 1.9 hours. The
total annual burden for all respondents for Form 24F-2 is estimated to
be 12,694 hours. The amendments would reduce the annual burden per
respondent for Form 24F-2 from 1.9 hours to 1 hour.
The amendments to this collection of information are necessary to
implement the changes to section 24 of the Investment Company Act made
by the Improvement Act. The information collection requirements imposed
by Form 24F-2 are mandatory. Responses to the collection of information
will not be kept confidential.
V. Summary of Regulatory Flexibility Analysis
A summary of the Initial Regulatory Flexibility Analysis, which was
prepared in accordance with 5 U.S.C. 603, was published in the
Proposing Release. No comments were received on this analysis. The
Commission has prepared a Final Regulatory Flexibility Analysis
(``FRFA'') in accordance with 5 U.S.C. 604 regarding the rule and form
amendments. The FRFA states that the amendments to rule 24F-2 and Form
24F-2 implement the provisions of the Improvement Act governing
registration of fund securities under the Securities Act. The FRFA
further states that the conforming amendments to rules and forms
conform the relevant provisions to the requirements of amended section
24 of the Investment Company Act. The FRFA indicates that the
amendments are designed to make it easier for funds to comply with the
new statutory provisions and provide guidance on calculating
registration fees on fund securities.
The FRFA sets forth the statutory authority for the amendments. The
FRFA also discusses the effect of the amendments on funds that are
small entities. For purposes of the amendments, small entities are
funds with assets of $50 million or less at the end of their most
recent fiscal year. Based on a review of data filed by funds with the
Commission, it is estimated that approximately 948 funds may be
considered small entities. The FRFA states that the amendments would
assist small entities in complying with the new statutory requirements.
The FRFA states that the amendments would not impose any new
reporting, recordkeeping or other compliance requirements, and that the
Commission believes that there are no rules that duplicate, overlap or
conflict with the amendments.
The FRFA discusses the various alternatives considered by the
Commission in connection with the amendments that might minimize the
effect on small entities, including: (a) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (b) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for small entities; (c) the use
of performance rather than design standards; and (d) an exemption from
coverage of the rule, or any part of the rule, for small entities.
Performance, rather than design, standards are incorporated in amended
section 24(f) of the Investment Company Act, and are therefore
incorporated into the rule and form amendments, to the extent that (i)
registration fees on fund shares are based on sales less redemptions,
and (ii) a fund is required to pay interest if the registration fee is
paid late.
The Commission believes that it would be inconsistent with the
purposes of amended section 24 of the Investment Company Act to exempt
small entities from the amendments. The Commission considered not
having a standardized form to accompany the funds' annual registration
fee filings. Based on the Commission's and funds' experience prior to
the adoption of Form 24F-2, and the comments received when Form 24F-2
was proposed, however, the Commission believes that Form 24F-2 has been
beneficial. Form 24F-2 has made it easier for funds to calculate
registration fees and reduced errors in fee calculations.
Different compliance or reporting requirements for small entities
are not necessary because the amendments do not establish any new
reporting, recordkeeping or compliance requirements. The Commission has
determined that it is not feasible to further clarify, consolidate or
simplify the amendments for small entities. Cost-benefit information
reflected in the ``Cost-Benefit Analysis'' section of this Release also
is reflected in the FRFA. A copy of the FRFA may be obtained by
contacting Robin S. Gross, Mail Stop 10-2, Securities and Exchange
Commission, 450 Fifth Street, NW., Washington, DC 20549.
VI. Statutory Authority
The Commission is rescinding rules 24e-2 and 24f-1, and amending
rules 24e-1 and 24f-2 and Form 24F-2, pursuant to the authority set
forth in sections 24 and 38(a) of the Investment Company Act [15 U.S.C.
80a-24, -37(a)]. The Commission is amending rule 485 pursuant to the
authority set forth in sections 6, 7, 8, 10 and 19(a) of the Securities
Act [15 U.S.C. 77f, 77g, 77h, 77j, 77s(a)] and section 38 of the
Investment Company Act. The authority citations for the amendments to
Forms N-1A, N-3, N-4, N-14 and S-6, and rule 13 of Regulation S-T and
rule 3a of the Commission's Informal and Other Procedures precede the
text of the amendments.
List of Subjects
17 CFR Part 202
Administrative practice and procedure, Securities.
17 CFR Parts 230, 270 and 274
Investment companies, Reporting and recordkeeping requirements,
Securities.
17 CFR Part 232
Administrative practice and procedure, Reporting and recordkeeping
requirements, Securities.
[[Page 47938]]
17 CFR Part 239
Reporting and recordkeeping requirements, Securities.
Text of Rule and Form Amendments
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is amended as follows:
PART 202--INFORMAL AND OTHER PROCEDURES
1. The authority citation for part 202 continues to read in part as
follows:
Authority: 15 U.S.C. 77s, 77t, 78d-1, 78u, 78w, 78ll(d), 79r,
79t, 77sss, 77uuu, 80a-37, 80a-41, 80b-9, and 80b-11, unless
otherwise noted.
* * * * *
Sec. 202.3a [Amended]
2. In Sec. 202.3a, the seventh sentence of the introductory text is
amended by adding the phrase ``, including fees paid pursuant to
Section 24(f) of the Investment Company Act of 1940 (15 U.S.C. 80a-
24(f))'' after the phrase ``Section 6(b) of the Securities Act of
1933''.
PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933
3. The authority citation for Part 230 continues to read in part as
follows:
Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c,
78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 78t, 80a-8, 80a-29, 80a-30,
and 80a-37, unless otherwise noted.
* * * * *
Sec. 230.485 [Amended]
4. Section 230.485 is amended by removing paragraphs (b)(1)(i) and
(ii) and redesignating paragraphs (b)(1)(iii) through (ix) as
paragraphs (b)(1)(i) through (vii), revising the reference to
``paragraph (b)(1)(ix)'' in the introductory text of paragraph (b)(2)
to read ``paragraph (b)(1)(vii)'' and the references to ``paragraph
(b)(1)(v)'' in paragraph (d)(2)(ii)(B) and the undesignated paragraph
that follows to read ``paragraph (b)(1)(iii)''.
PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR
ELECTRONIC FILINGS
5. The authority citation for part 232 continues to read as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a),
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-
29, 80a-30 and 80a-37.
Sec. 232.13 [Amended]
6. Section 232.13 is amended in paragraph (a)(1)(iii) by adding
after the words ``Securities Act filings'' the phrase ``, including
filings under section 24(f) of the Investment Company Act (15 U.S.C.
80a-24(f))''.
PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
7. The authority citation for Part 239 continues to read in part as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77sss, 78c,
78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79e, 79f, 79g, 79j,
79l, 79m, 79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless
otherwise noted.
* * * * *
Sec. 239.16 [Form S-6 amended]
8. Form S-6 (referenced in Sec. 239.16) is amended on the cover
page by removing the words ``and amount'' in Item E, removing Items F
and G, and redesignating Item H as Item F.
Note: Form S-6 does not, and the amendment will not, appear in
the Code of Federal Regulations.
Sec. 239.23 [Form N-14 amended]
Note: Form N-14 does not, and the amendments will not, appear in
the Code of Federal Regulations.
9. Form N-14 (referenced in Sec. 239.23) is amended on the cover
page by revising the Instruction to the table ``Calculation of
Registration Fee under the Securities Act of 1933'' to read as follows:
FORM N-14
* * * * *
Calculation of Registration Fee under the Securities Act of 1933
* * * * *
Instruction
Registrants relying on section 24(f) of the Investment Company
Act, which permits registration of an indefinite number of
securities, need not include the Securities Act registration fee
table, but must provide the ``Title of Securities Being Registered''
and state that no filing fee is due because of reliance on section
24(f).
* * * * *
10. Form N-14 (referenced in Sec. 239.23) is amended by revising
General Instruction B to read as follows:
FORM N-14
* * * * *
General Instructions
* * * * *
B. Registration Fee
Section 6(b) of the 1933 Act and Rule 457 [17 CFR 230.457]
thereunder set forth the fee requirements under the 1933 Act.
Registrants relying on section 24(f) of the 1940 Act, which permits
registration of an indefinite number of shares, are directed to rule
24f-2 under the 1940 Act [17 CFR 270.24f-2] regarding payment of the
registration fee. If, contemporaneous with a filing on Form N-14, an
open-end management company is offering its securities to the public
by means of a current prospectus under an effective registration
statement, the prospectus included in a registration statement filed
on Form N-14 may be used, under Rule 429(a) [17 CFR 230.429(a)], in
connection with the securities covered by the earlier registration
statement.
* * * * *
PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940
11. The authority citation for part 270 is amended by adding the
following citation to read as follows:
Authority: 15 U.S.C. 80a-1 et seq., 80a-37, 80a-39 unless
otherwise noted;
* * * * *
Section 270.24f-2 also issued under 15 U.S.C. 80a-24(f)(4).
Sec. 270.24e-1 [Amended]
12. Section 270.24e-1 is amended by removing the reference
``24(e)(3)'' each time it appears and adding the reference ``24(e)''.
Sec. 270.24e-2 [Removed]
13. Section 270.24e-2 is removed.
Sec. 270.24f-1 [Removed]
14. Section 270.24f-1 is removed.
15. Section 270.24f-2 is revised to read as follows:
Sec. 270.24f-2 Registration under the Securities Act of 1933 of
certain investment company securities.
(a) General. Any face-amount certificate company, open-end
management company or unit investment trust (``issuer'') that is deemed
to have registered an indefinite amount of securities pursuant to
section 24(f) of the Act [15 U.S.C. 80a-24(f)] must, not later than 90
days after the end of any fiscal year during which it has publicly
offered such securities, file Form 24F-2 (17 CFR 274.24) with the
Commission. Form 24F-2 must be prepared in accordance with the
requirements of that Form, and must be accompanied by the payment of a
registration fee with respect to the securities sold during the fiscal
year in reliance upon registration pursuant to section 24(f) of the Act
calculated in the manner specified in section 24(f) of the Act and in
the Form. An issuer that pays the registration fee more than 90 days
after the end of its fiscal year must pay interest in the manner
specified in section 24(f) of the Act and in Form 24F-2.
(b) Issuer ceasing operations; mergers and other transactions. For
purposes of
[[Page 47939]]
this section, if an issuer ceases operations, the date the issuer
ceases operations will be deemed to be the end of its fiscal year. In
the case of a liquidation, merger, or sale of all or substantially all
of the assets (``merger'') of the issuer, the issuer will be deemed to
have ceased operations for purposes of this section on the date the
merger is consummated; provided, however, that in the case of a merger
of an issuer or a series of an issuer (``Predecessor Issuer'') with
another issuer or a series of an issuer (``Successor Issuer''), the
Predecessor Issuer will not be deemed to have ceased operations and the
Successor Issuer will assume the obligations, fees, and redemption
credits of the Predecessor Issuer incurred pursuant to section 24(f) of
the Act and Sec. 270.24e-2 (as in effect prior to October 11, 1997; see
17 CFR part 240 to end, revised as of April 1, 1997) if the Successor
Issuer:
(1) Had no assets or liabilities, other than nominal assets or
liabilities, and no operating history immediately prior to the merger;
(2) Acquired substantially all of the assets and assumed
substantially all of the liabilities and obligations of the Predecessor
Issuer; and
(3) The merger is not designed to result in the Predecessor Issuer
merging with, or substantially all of its assets being acquired by, an
issuer (or a series of an issuer) that would not meet the conditions of
paragraph (b)(1) of this section.
(c) Counting days. To determine the date on which Form 24F-2 must
be filed with the Commission under paragraph (a) of this section, the
first day of the 90-day period is the first calendar day of the fiscal
year following the fiscal year for which the Form is to be filed. If
the last day of the 90-day period falls on a Saturday, Sunday or
federal holiday, the period ends on the first business day thereafter.
Note to paragraph (c): For example, a Form 24F-2 for a fiscal
year ending on June 30 must be filed no later than September 28. If
September 28 falls on a Saturday or Sunday, the Form must be filed
on the following Monday.
PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940
16. The authority citation for part 274 continues to read as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-8, 80a-24, and 80a-29, unless otherwise noted.
Secs. 239.15A and 274.11A [Form N-1A Amended]
Note: Form N-1A does not, and the amendments will not, appear in
the Code of Federal Regulations.
17. Form N-1A (referenced in Sec. 239.15A and Sec. 274.11A) is
amended on the cover page by removing the words ``Calculation of
Registration Fee Under the Securities Act of 1933'' and the
accompanying chart and note, and adding the following:
``Title of Securities Being Registered......
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the
Acts. Include the ``Approximate Date of Proposed Public Offering''
and ``Title of Securities Being Registered'' only where securities
are being registered under the Securities Act of 1933.''
18. Form N-1A (referenced in Sec. 239.15A and Sec. 274.11A) is
amended by revising General Instruction B to read as follows:
Form N-1A
* * * * *
General Instructions
* * * * *
B. Registration Fees
Registration fees should not be paid when filing this form. See
section 24(f) of the Investment Company Act and rule 24f-2
thereunder.
* * * * *
19. Form N-1A (referenced in Sec. 239.15A and Sec. 274.11A) is
amended by revising General Instruction F.2 to read as follows:
Form N-1A
* * * * *
General Instructions
* * * * *
F. Documents Comprising Registration Statement or Amendment
* * * * *
2. A registration statement or an amendment thereto which is
filed under only the 1933 Act shall contain all the information and
documents specified in paragraph 1 of this Instruction F.
* * * * *
20. Form N-1A (referenced in Sec. 239.15A and Sec. 274.11A) is
amended by removing General Instruction F.3 and redesignating General
Instruction F.4 as General Instruction F.3.
Secs. 239.17a and 274.11b [Form N-3 Amended]
Note: Form N-3 does not, and the amendments will not, appear in
the Code of Federal Regulations.
21. Form N-3 (referenced in Sec. 239.17a and Sec. 274.11b) is
amended on the cover page by removing the words ``Calculation of
Registration Fee Under the Securities Act of 1933'' and the
accompanying chart and note, and adding the following:
``Title of Securities Being Registered......
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the
Acts. Include the ``Approximate Date of Proposed Public Offering''
and ``Title of Securities Being Registered'' only where securities
are being registered under the Securities Act of 1933.''
22. Form N-3 (referenced in Sec. 239.17a and Sec. 274.11b) is
amended by revising General Instruction B to read as follows:
Form N-3
* * * * *
General Instructions
* * * * *
B. Registration Fees
Registration fees should not be paid when filing this form. See
section 24(f) of the Investment Company Act and rule 24f-2
thereunder.
* * * * *
23. Form N-3 (referenced in Sec. 239.17a and Sec. 274.11b) is
amended by revising General Instruction H.2 to read as follows:
Form N-3
* * * * *
General Instructions
* * * * *
H. Documents Comprising Registration Statement or Amendment
* * * * *
2. A registration statement or an amendment to it which is filed
under only the 1933 Act shall contain all the information and
documents specified in paragraph 1 of this Instruction H.
* * * * *
24. Form N-3 (referenced in Sec. 239.17a and Sec. 274.11b) is
amended by removing General Instruction H.3 and redesignating General
Instructions H.4 and H.5 as General Instructions H.3 and H.4.
Secs. 239.17b and 274.11c [Form N-4 Amended]
Note: Form N-4 does not, and the amendments will not, appear in
the Code of Federal Regulations.
25. Form N-4 (referenced in Sec. 239.17b and Sec. 274.11c) is
amended on the cover page by removing the words ``Calculation of
Registration Fee Under the Securities Act of 1933'' and the
accompanying chart and note, and adding the following:
``Title of Securities Being Registered......
[[Page 47940]]
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the
Acts. Include the ``Approximate Date of Proposed Public Offering''
and ``Title of Securities Being Registered'' only where securities
are being registered under the Securities Act of 1933.''
26. Form N-4 (referenced in Sec. 239.17b and Sec. 274.11c) is
amended by revising General Instruction B to read as follows:
Form N-4
* * * * *
General Instructions
* * * * *
B. Registration Fees
Registration fees should not be paid when filing this form. See
section 24(f) of the Investment Company Act and rule 24f-2
thereunder.
* * * * *
27. Form N-4 (referenced in Sec. 239.17b and Sec. 274.11c) is
amended by revising General Instruction H.2 to read as follows:
Form N-4
* * * * *
General Instructions
* * * * *
H. Documents Comprising Registration Statement or Amendment
* * * * *
2. A registration statement or an amendment to it which is filed
under only the 1933 Act shall contain all the information and
documents specified in paragraph 1 of this Instruction H.
* * * * *
28. Form N-4 (referenced in Sec. 239.17b and Sec. 274.11c) is
amended by removing General Instruction H.3 and redesignating General
Instructions H.4 and H.5 as General Instructions H.3 and H.4.
29. Section 274.24 and Form 24F-2 are revised to read as follows:
Sec. 274.24 Form 24F-2, annual filing of securities sold pursuant to
registration of certain investment company securities.
Form 24F-2 shall be used as the annual report filed by face amount
certificate companies, open-end management companies, and unit
investment trusts pursuant to Sec. 270.24f-2 of this chapter for
reporting securities sold during the fiscal year.
Note: Form 24F-2 does not, and the amendments will not, appear
in the Code of Federal Regulations. A copy of Form 24F-2 as revised
is attached as Appendix I to this document.
By the Commission.
Dated: September 10, 1997.
Margaret H. McFarland,
Deputy Secretary.
BILLING CODE 8010-01-P
[[Page 47941]]
[GRAPHIC] [TIFF OMITTED] TR12SE97.002
[[Page 47942]]
[GRAPHIC] [TIFF OMITTED] TR12SE97.003
[[Page 47943]]
[GRAPHIC] [TIFF OMITTED] TR12SE97.004
BILLING CODE 8010-01-C
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 24F-2
Annual Filing Under Rule 24f-2 of the Investment Company Act of 1940
Instructions
A. General
1. This Form should be used by an open-end management investment
company, face amount certificate company, or unit investment trust
(``issuer'') for annual filings required by rule 24f-2 under the
Investment Company Act of 1940 [15 U.S.C. 80a] (``Investment Company
Act''). If the issuer has registered more than one class or series
of securities on the same registration statement under the
Securities Act of 1933 [15 U.S.C. 77a-aa] (``Securities Act''), the
issuer may file a single Form 24F-2 for those classes or series that
have the same fiscal year end. Such an issuer may calculate its fees
based on aggregate net sales of the series having the same fiscal
year end. An issuer choosing to calculate registration fees on a
class-by-class or series-by-series basis should make a single filing
consisting of a separate Form 24F-2 for each class or series in a
single EDGAR document.
2. This Form must be filed within 90 calendar days after the end
of the issuer's fiscal year or, if the last day of the 90 day period
falls on Saturday, Sunday or a federal holiday, the first business
day thereafter. For example, a Form 24F-2 for a fiscal year ending
on June 30 must be filed no later than September 28. If September 28
falls on a Saturday or Sunday, the Form must be filed on the
following Monday. In these instructions, we refer to this as the
``Due Date.''
3. Pursuant to rule 101(a)(1)(i) of Regulation S-T [17 CFR
232.101(a)(1)(i)] this Form must be submitted in electronic format
using the Commission's Electronic Data Gathering, Analysis, and
Retrieval (``EDGAR'') system. Consult the EDGAR Filer Manual and
Appendices for instructions on how to properly construct the
submission header for an electronic Form 24F-2 EDGAR filing.
4. This Form must be accompanied by the appropriate registration
fee. If the Form is being filed late, interest must be paid. See
Instruction D.
5. This Form will be deemed filed with the Commission on the
date on which it is received and accepted by the Commission. The
Commission will not accept for filing any Form accompanied by
insufficient payment of the registration fee. A Form accompanied by
insufficient payment of the registration fee will not be deemed
accepted and filed until receipt by the Commission of proper payment
of the registration fee. No part of the registration fee is
refundable. Issuers should refer to rule 0-8 under the Investment
Company Act [17 CFR 270.0-8], rule 3a of the Commission's Rules of
Informal and Other Procedures [17 CFR 202.3a], and rule 13(c) under
Regulations S-T [17 CFR 232.13(c)] for instructions on payment of
fees to the Commission.
B. Identifying Information
1. Item 1--Provide the name of the issuer as it appears on the
cover of the issuer's most recent Securities Act registration
statement or post-effective amendment.
2. Item 2--If the Form is being filed for all classes and series
of securities of the issuer, the issuer should check the box and not
list the names of the classes and series.
3. Item 3--The Investment Company Act file number should be the
number assigned to the issuer's registration statement filed under
the Investment Company Act (beginning with ``811-''). The Securities
Act file number is the number of the registrant's most recent
Securities Act registration statement (beginning with ``2-'', ``33-
'' or ``333-'').
4. Item 4(a)--In the case of an issuer that ceases operations,
the date it ceases operations is deemed the last day of its fiscal
year for purposes of section 24(f) of the Investment Company Act.
5. Item 4(b)--Check the box if the Form is filed late. If the
issuer files the Form late, the issuer is required under section
24(f) to pay interest on unpaid amounts at the rate applicable to
Treasury and tax loan accounts. See Instruction D.
6. Item 4(c)--Check the box if this is the last time the issuer
will be filing Form 24F-2 (i.e., if the issuer had ceased
operations).
C. Computation of Registration Fee
1. Item 5 is a work sheet for calculating the registration fee
due. An issuer must aggregate prices for all classes or series for
which the Form is being filed. If the issuer charges a front-end
sales load on its securities, the aggregate sale price must include
the sales load.
2. Mergers--
(a) In the case of a liquidation, merger, or sale of all or
substantially all of the assets of an issuer (``merger''), the
securities of the fund ceasing operation (the ``Predecessor Fund'')
that are exchanged for or converted into the other issuer (the
``Successor Fund'') should be treated as redemptions on the
Predecessor Fund's final Form 24f-2 (not the Successor Fund's).
(b) In the case of a merger in which the Predecessor Fund is not
deemed to cease operations (e.g. a reorganization), the Successor
Fund inherits the sales and redemption credits of the Predecessor
Fund, and the Successor Fund must report them as sales and
redemptions on its next Form 24f-2 filing. The Predecessor fund in
this type of merger need not file a final Form 24F-2. See Rule 24f-
2(b) (1) and (2) [17 CFR 270.24f-2(b) (1) and (2)].
3. Special Rule for Unit Investment Trusts--The aggregate sale
price of securities sold to a unit investment trust (``UIT'') that
offers interests that offers interests that are registered under the
Securities Act on which a registration fee has been or will be paid
to the Commission, may be excluded from the aggregate sale price of
securities reported in Item 5(i). If the issuer chooses to exclude
the aggregate sale price of these securities from Item 5(i), the
issuer may not use securities redeemed or repurchased from those
UITs for purposes of determining the redemption of repurchase price
of securities in Items 5(ii) and 5(iii).
4. EDGAR--Report responses for Item 5 under the following EDGAR
header-tags:
Item 5(i)--
Item 5(iv)--
Item 5(viii)--
The and tags are located
immediately after the tag in the 24F-2 submission header.
5. Item 5(i)--Report the aggregate sale price of securities sold
during the fiscal year in reliance upon registration under section
24(f). Include securities issued pursuant to divided reinvestment
plans (``DRIP shares'') whether or not they are required to be
registered under the Securities Act. Do not include the sale price
of securities, if any, that were registered under the Securities Act
other than pursuant to section 24(f), such as securities registered
by post-effective amendment pursuant to rule 24e-2 under the
Investment Company Act as in effect before October 11, 1997.
[[Page 47944]]
Example: An issuer sold 1,000,000 shares, and 250,000 shares had
previously been registered pursuant to rule 24e-2. Item 5(i) should
show the aggregate sale price of 750,000 shares.
6. Item 5(ii)--Report the aggregate redemption or repurchase
price of securities redeemed or repurchased during the fiscal year.
Do not include securities that have been redeemed or repurchased and
previously applied as a reduction to registration fees pursuant to
rule 24e-2 as in effect before October 11, 1997.
Example: An issuer with an August 30, 1997 fiscal year end
registered shares pursuant to rule 24e-2 in September 1997. The
issuer applied securities redeemed during its 1997 fiscal year to
reduce its registration fees payable under rule 24e-2. The
redemption price of these redeemed securities should not be included
in Item 5(ii).
7. Item 5(iii)--Report the aggregate redemption or repurchase
price of securities redeemed or repurchased during any prior fiscal
year ending no earlier than October 11, 1995, that were not used
previously to reduce registration fees payable to the Commission. Do
not include securities that have been redeemed or repurchased and
previously applied as a reduction to registration fees pursuant to
rule 24e-2 as in effect before October 11, 1997. See the Example to
Item 5(ii).
8. Items 5(iv) through 5(vi)--Report the sum of Items 5(ii) and
5(iii) in Item 5(iv). Subtract Item 5(iv) from Item 5(i). If Item
5(iv) is less than Item 5(i), report the result in Item 5(v) (net
sales). If Item 5(iv) is greater than Item 5(i), report the
resulting negative number in parentheses in Item 5(vi) (net
redemptions or repurchases). The amount of redemptions or
repurchases reported in Item 5(vi) may be used by the issuer in
future years to offset sales (by including it in response to Item
5(iii) of Form 24F-2 filed for the next fiscal year).
9. Item 5(vii)--The multiplier for calculation of the
registration fee is determined by the Commission in accordance with
Section 6(b) of the Securities Act [15 U.S.C. 77f(b)]. As of October
1, 1996, the multiplier was 1/3300. Use of a decimal factor or some
other method to calculate registration fees may result in payment of
an incorrect amount. This multiplier is subject to change from time
to time, without notice, by act of Congress through appropriations
for the Commission or other laws. Issuers should determine the
current fee rate prior to the time of filing by reference to Section
6(b) and any law or regulation affecting Section 6(b). The
Commission generally makes available information concerning changes
in the fee rate of its Internet site at http://www.sec.gov/news/
press. Unless otherwise specified by act of Congress, the fee rate
in effect at the time of filing applies to all securities sold
during the fiscal year, regardless of whether the fee rate changed
during the year.
10. Item 5(viii)--If the issuer reports net redemptions or
repurchases in Item 5(vi), report ``0'' in Item 5(viii).
11. Item 6--If the issuer has sold securities during the fiscal
year that were registered under rule 24e-2 as in effect prior to
October 11, 1997 (and thus are pre-paid), the issuer should exclude
the pre-paid securities from 5(i) and instead report them in item 6.
If, after deducting the pre-paid securities from the aggregate sale
price of securities sold during the fiscal year, there is a balance
of pre-paid shares remaining, the issuer should report those pre-
paid shares that remain.
Example: An issuer sold 1,000,000 shares, and had 1,250,000 shares
which were pre-paid because they had previously been registered
pursuant to rule 24e-2. Item 5(i) should show the aggregate sale
price was 0, and Item 6 should show that 1,000,000 pre-paid shares
were used and that 250,000 prepaid shares remain.
D. Computation of Interest Due if Form is Filed Late
1. Item 7--Section 24(f) requires any issuer that pays its
registration fee after the Due Date (see Instruction A.2) to pay
interest to the Commission on amounts not timely paid. The payment
of interest does not preclude the Commission from bringing an action
to enforce the requirements of section 24(f). Pursuant to section 11
of the Debt Collection Act [31 U.S.C. 3717(a)], that rate is
published by the Secretary of the Treasury. The rate is computed
each year for the 12-month period ending September 30 for
applicability effective January 1 of the following year. The rate in
effect for calendar year 1997 is 5 percent. In some circumstances
the rate may be changed on a quarterly basis. Filers owing interest
should verify the current interest rate.
2. The interest is assessed only on the amount of the
registration fee due, and begins to accrue on the day after the Due
Date. The amount of interest due should be calculated based on the
interest rate in effect at the time the interest payment is made
using the following formula:
I = (X), (Y), (Z/365)
where:
I = Amount of interest due
X = Amount of registration fee due
Y = Applicable interest rate, expressed as a fraction
Z = Number of days by which the registration fee payment is late
E. Payment and Signature
1. Item 9--Identify which SEC account number (payor's CIK
number) was designated to receive the payment.
2. The Form must be signed on behalf of the issuer by an
authorized officer of the issuer. See rule 302 of Regulation S-T [17
CFR 232.302] regarding signatures on forms filed electronically.
F. SEC's Collection of Information
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. Filing of this Form is
mandatory. The principal purpose of this collection of information
is to enable issuers to calculate the registration fee payable to
the Commission. The Commission estimates that the burden for
completing the Form will be approximately 1 hour per filing. Any
member of the public may direct to the Commission any comments
concerning the accuracy of the burden estimate of this Form, and any
suggestions for reducing this burden. This collection of information
has been reviewed by the Office of Management and Budget in
accordance with the clearance requirements of 44 U.S.C. Sec. 3507.
The responses to the collection of information will not be kept
confidential.
[FR Doc. 97-24344 Filed 9-11-97; 8:45 am]
BILLING CODE 8010-01-P
