[Federal Register Volume 61, Number 215 (Tuesday, November 5, 1996)]
[Notices]
[Pages 56978-56979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28389]
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SECURITIES AND EXCHANGE COMMISSION
Request for Public Comment
Upon Written Request, Copies Available From:
Securities and Exchange Commission, Office of Filings and
Information Services, Washington, D.C. 20549
Extension:
Rule 2a-7--SEC File No. 270-258--OMB Control No. 3235-0268
Rule 17a-7--SEC File No. 270-238--OMB Control No. 3235-0214
Rule 17e-1--SEC File No. 270-224--OMB Control No. 3235-0217
Rule 19a-1--SEC File No. 270-240--OMB Control No. 3235-0216
Rule 31a-1--SEC File No. 270-173--OMB Control No. 3235-0178
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 publishing for public comment the
following summary of previously approved information collection
requirements.
Rule 2a-7 (17 CFR 270.2a-7) under the Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) (``Act'') governs money market funds.
The rule exempts money market funds from the valuation requirements of
the Act, and, subject to certain risk-limiting conditions, permits
money market funds to use the ``amortized cost method'' of asset
valuation or the ``penny-rounding method'' of share pricing.
Rule 2a-7 imposes certain recordkeeping and reporting obligations
upon money market funds. The board of directors of a money market fund
must establish written procedures designed to stabilize the fund's net
asset value. These procedures typically address various aspects of the
fund's operations. The fund must maintain and preserve for six years a
written copy of these procedures. Additionally, the fund must maintain
and preserve for six years a written record of the board's
considerations and actions taken in connection with the discharge of
its responsibilities, to be included in the board's minutes. The fund
must also maintain and preserve for three years written records of
certain credit risk analyses, evaluations with respect to securities
subject to puts, and determinations with respect to adjustable rate
securities and asset backed securities. If the board takes action with
respect to defaulted securities, events of insolvency, or deviations in
share price, the fund must file with the Commission an exhibit to Form
N-SAR describing the nature and circumstances of such action. In the
event of certain default or insolvency events, the fund must notify the
Commission of the event and the actions the fund intends to take in
response to the situation. As a matter of sound business practices, the
board must develop and maintain certain additional procedures and
records to ensure compliance with the risk-limiting conditions of Rule
2a-7.
It is estimated that approximately 1,345 money market funds are
subject to the rule each year. It is further estimated that compliance
with the rule's recordkeeping and reporting requirements imposes an
average annual burden per money market fund of approximately 146 hours,
so that the total annual burden for all money market funds would be
196,371 hours.
Rule 17a-7 (17 CFR 270.17a-7) under the Act requires registered
investment companies to keep various records in connection with certain
purchase or sale transactions between investment companies and certain
of their affiliates. The annual burden of meeting this requirement is
estimated to be about one hour for each of an estimated 500
recordkeepers that enter into subject transactions each year, for a
total annual burden of 500 hours.
Rule 17e-1 (17 CFR 270.17e-1) under the Act governs the
remuneration a broker affiliated with an investment company may receive
in connection with securities transactions by the investment company.
The rule requires an investment company's board of directors to
establish, and review, as necessary, procedures reasonably designed to
provide that the remuneration to an affiliated broker is a fair amount
compared to that received by other brokers in connection with
transactions in similar securities during a comparable period of time.
Each quarter, the board must determine that all transactions effected
pursuant to the rule during the preceding quarter complied with the
established procedures. Rule 17e-1(c) also requires the investment
company to (i) maintain permanently a written copy of the procedures
adopted by the board for complying with the requirements of the rule;
and (ii) maintain for a period of six years a written record of each
transaction subject to the rule setting forth the amount and source of
the commission, fee or other remuneration received; the identity of the
broker; the terms of the transaction; and the materials used to
determine that the transactions were effected in compliance with the
procedures adopted by the board.
The Commission estimates that approximately 1,462 funds rely upon
Rule 17e-1 each year. The total average annual burden for Rule 17e-1
per
[[Page 56979]]
respondent is estimated to be 10 hours, for a total annual burden of
14,620 hours.
Rule 19a-1 (17 CFR 270.19a-1) under the Act sets forth specific
requirements for the information which must be included in statements
made pursuant to Section 19(a) by registered management investment
companies (funds). The rule requires that the statement indicate what
portions of the payment are made from net income, net profits and paid-
in capital. When any part of the payment is made from net profits, Rule
19a-1 requires that the statement disclose certain other information
relating to the appreciation or depreciation of portfolio securities.
If an estimated portion is subsequently determined to be significantly
inaccurate, a correction must be made on a statement made pursuant to
Section 19(a) or in the first report to shareholders following the
discovery of the inaccuracy.
It is estimated that approximately 3,000 funds are subject to the
rule each year. It is estimated that compliance with the rule's
requirements imposes a total annual burden per fund of approximately 30
minutes. The total annual burden for all funds is estimated at 1,500
hours.
Rule 31a-1 (17 CFR 270.31a-1) under the Act requires registered
investment companies, and every underwriter, broker, dealer or
investment adviser which is a majority-owned subsidiary of a registered
investment company, to maintain and keep current accounts, books and
other documents which constitute the record forming the basis for
financial statements required to be filed pursuant to Section 30 (15
U.S.C. 80a-29) of the Act and of the auditor's certificates relating
thereto. The rule lists specific records to be maintained by registered
investment companies. The rule also requires certain underwriters,
brokers, dealers, depositors and investment advisers to maintain such
records as they are required to maintain under federal securities laws.
It is estimated that Rule 31a-1 imposes an average burden of
approximately 5,260 hours annually per investment company. It is
further estimated that approximately 5,000 investment companies are
subject to the rule each year, so that the total annual burden for all
investment companies would be 26,300,000 hours. Most of the records
required to be maintained by the rule are the type that generally would
be maintained as a matter of good business practice and to prepare the
investment company's financial statements.
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 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.
Direct your written comments to Michael E. Bartell, Associate
Executive Director, Office of Information Technology, Securities and
Exchange Commission, 450 5th Street, N.W., Washington, DC 20549.
Dated: October 15, 1996.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-28389 Filed 11-4-96; 8:45 am]
BILLING CODE 8010-01-M
