[Federal Register Volume 62, Number 138 (Friday, July 18, 1997)]
[Proposed Rules]
[Pages 38495-38509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18857]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 202, 230, 232, 239, 270, and 274
[Release Nos. 33-7430, IC-22747, 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: Proposed rules.
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SUMMARY: The Commission is proposing amendments to 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 proposed amendments are
designed to implement the provisions of the National Securities Markets
Improvement Act of 1996 that simplify the method of determining the
amount of these fees.
DATES: Comments must be received on or before August 18, 1997.
ADDRESSES: Comments should be submitted in triplicate to Jonathan G.
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW., Stop 6-9, Washington, DC 20549. Comments also may be submitted
electronically at the following E-mail address: rule-comments@sec.gov.
All comment letters should refer to File No. S7-19-97; this file number
should be included on the subject line if E-mail is used. Comment
letters will be available for public inspection and copying in the
Commission's Public Reference Room,
[[Page 38496]]
450 Fifth Street, NW., Washington, DC 20549. Electronically submitted
comment letters also will be posted on the Commission's Internet web
site (http://www.sec.gov).
FOR FURTHER INFORMATION CONTACT: Robin S. Gross, Staff Attorney, or
Nadya B. Roytblat, Assistant Office Chief, at (202) 942-0690, Office of
Regulatory Policy, Division of Investment Management, Stop 10-2,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington,
DC 20549.
SUPPLEMENTARY INFORMATION: The Commission is requesting public comment
on amendments to 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 proposing
conforming amendments to rule 485 (17 CFR 230.485) under the Securities
Act of 1933 (15 U.S.C. 77a) (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; 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 Informal and Other
Procedures (17 CFR 202.3a). The Commission is also proposing to rescind
rules 24e-2 and 24f-1 under the Investment Company Act (17 CFR 270.24e-
2 and 270.24f-1).
Table of Contents
Executive Summary
I. Background
II. Discussion
A. Amendments to Rule 24f-2
1. Form Filing Requirements
2. Fund Mergers and Reorganizations
B. Amendments to Form 24F-2
1. General Information (Proposed Items 1-4)
2. The Worksheet
a. Sales Information (Proposed Item 5(i))
b. Redemption Information (Proposed Items 5(ii)-5(iv))
c. Registration Fee Calculation (Proposed Items 5(v)-5(iii))
3. Interest and Other Payment Information (Proposed Items 6-8)
4. Request for Comment
C. Conforming Amendments
1. Rule Rescissions
2. Conforming Amendments to Forms and Rules
D. General Request for Comment
III. Cost/Benefit Analysis
IV. Paperwork Reduction Act
V. Summary of Regulatory Flexibility Analysis
VI. Statutory Authority
Text of Proposed Rule and Form Amendments
Executive Summary
The Commission is proposing amendments to rule 24f-2 and Form 24F-2
under the Investment Company Act that prescribe the methods by which
certain investment companies calculate and pay registration fees under
the Securities Act. The proposed amendments are designed to implement a
provision of the National Securities Markets Improvement Act of 1996
(``Improvement Act'') that amended sections 24 (e) and (f) of the
Investment Company Act to simplify the current system for registering
investment company securities. The proposed amendments to rule 24f-2
and Form 24F-2 would streamline the rule and Form to make them
consistent with amended section 24.
I. Background
The Securities Act generally requires issuers that wish to offer
their securities publicly to register the securities with the
Commission and pay a registration fee.1 The application of
these provisions has presented operational problems for certain types
of investment companies. Unlike other issuers, open-end management
investment companies, unit investment trusts and face-amount
certificate companies (collectively, ``funds'') sell and redeem their
securities on a continuous basis. A fund often cannot predict the
number of securities it will sell at the time it files its registration
statement under the Securities Act. In addition, funds often experience
a high turnover in their outstanding securities, as a substantial
number of securities that are sold replace securities that recently
have been redeemed or repurchased.2
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\1\ Section 5(a) of the Securities Act (15 U.S.C. 77e(a)) makes
it unlawful to sell a security through the mails or in interstate
commerce unless a registration statement is in effect as to that
security. Section 6(a) (15 U.S.C.77f(a)) sets forth certain
requirements for registration statements. Section 6(b) (15 U.S.C.
77f(b)) specifies the fees that must be paid in connection with
registering securities with the Commission under the Securities Act.
\2\ See Computation of Filing Fees for Securities Registered by
Open-End Management Companies, Investment Company Act Rel. No. 9677
(Mar. 15, 1977) (42 FR 15922 (Mar. 24, 1977)) (adopting amendments
to rule 24e-2).
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Section 24 of the Investment Company Act modifies the Securities
Act registration provisions for funds.3 Section 24 and
related rules were designed to address the problem of inadvertent
``over sales'' (i.e., sales in excess of securities registered) that
easily could occur with a fund that continually issues
securities.4 Section 24(e) permits a fund to register
additional securities by a post-effective amendment to a registration
statement.5 Section 24(f) permits a fund to register
securities within six months after their sale, but requires that the
fund pay three times the registration fee that otherwise would be due
under section 6(c) of the Securities Act.6
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\3\ 15 U.S.C. 80a-24.
\4\ See Investment Company Act Rel. No. 15611 (Mar. 9, 1987) (52
FR 8302 (Mar. 17, 1987)) (proposing amendments to rule 24f-2
relating to certain unit investment trusts).
\5\ 15 U.S.C. 80a-24(e).
\6\ 15 U.S.C. 80a-24(f).
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Section 24(f) also authorizes the Commission to adopt rules to
permit funds to register an indefinite number of securities. In 1977,
the Commission exercised this authority and adopted rule 24f-
2.7 Rule 24f-2 permits a fund to declare that it is
registering an indefinite number of securities (``rule 24f-2
declaration'').8 After the end of each of its fiscal years,
the fund must file a notice on Form 24F-2 to make the registration of
securities it sold during the fiscal year ``definite'' and pay a
registration fee with respect to those securities.9 Under
certain circumstances, the fund may offset, or ``net,'' sales made
during the fiscal year against redemptions effected during the fiscal
year for the purpose of calculating the fund's Securities Act
registration fee.10
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\7\ Registration of an Indefinite Number of Investment Company
Shares, Investment Company Act Rel. No. 9989 (Nov. 3, 1977) (42 FR
58400 (Nov. 9, 1977)).
\8\ Rule 24f-2(a)(1) (17 CFR 270.24f-2(a)(1)).
\9\ Rule 24f-2(b)(1) (17 CFR 270.24f-2(b)(1)).
\10\ Rule 24f-2(c) (17 CFR 270.24f-2(c)). The rule that governs
the computation of fees for registering securities by post-effective
amendment, rule 24e-2, allows a fund to take a credit for securities
redeemed during the previous fiscal year. Thus, a fund that has had
redemptions in excess of sales in one fiscal year can apply the
unused redemptions to reduce registration fees that it would pay
under rule 24e-2 in the next fiscal year (in effect, preserving the
unused redemptions).
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These statutory provisions and rules, taken together, have provided
funds with significant flexibility to avoid over sales and to reduce
their registration fees. These provisions, however, are highly complex.
Funds are presented with a number of options for registering their
securities and using redemptions to offset sales. Inadvertent non-
compliance with, failure to understand the interrelationship of, or a
late filing
[[Page 38497]]
pursuant to these provisions can result in a fund facing significant
adverse consequences.11
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\11\ Under rule 24f-2, failure to pay the registration fee
within 60 days after the end of the fund's fiscal year precludes the
fund's netting sales against redemptions for purposes of fee
calculations, resulting in a significantly higher registration fee.
Failure to pay the fee within 180 days could result in the fund
being deemed to have sold unregistered securities. These penalties
were not designed to protect the interests of fund shareholders;
rather, they reflected a mismatch of the fee payment structure of
the Securities Act and the reality of fund operations. See The
Securities Investment Promotion Act of 1996: Hearing on S. 1815
Before the Senate Comm. on Banking, Housing, and Urban Affairs,
104th Cong., 2d Sess. 39 (1996) (testimony of Arthur Levitt,
Chairman, SEC).
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The Improvement Act amended sections 24 (e) and (f) of the
Investment Company Act, among other things, to create a new, simpler
system for the registration of fund securities under the Securities
Act.12 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.13
The fund then will pay a fee within 90 days after the end of each of
its fiscal years based upon the sale price of the fund securities sold
during that fiscal year (including securities issued pursuant to a
dividend reinvestment plan (``DRIP securities'')) reduced by (i) the
aggregate redemption price of the securities redeemed during that year
and (ii) the aggregate redemption price of the securities redeemed
during any prior fiscal year ending on or after October 11, 1995 that
were not used previously by the fund to reduce its registration fees.
Section 24(f) will provide the exclusive means for registering fund
securities.14
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\12\ Section 203 of the Improvement Act, Pub. L. 104-290 (1996).
\13\ 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 it
will be 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.''
\14\ Section 203 of the Improvement Act will rescind the
provisions of sections 24 (e) and (f) that allow for post-effective
amendment and post-sale registration of securities. See supra notes
5-6 and accompanying text.
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The Improvement Act also will replace the current provisions for
late payment of registration fees with an interest payment requirement.
A fund will not be deemed to have sold unregistered securities or lose
the ability to net sales against redemptions solely because its
registration fee was paid late. Instead, to compensate the U.S.
Treasury for any delay in the receipt of revenues from a late payment
of registration fees, amended section 24(f) will require the fund to
pay interest charges on late payments.15
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\15\ Section 24(f)(3), as amended. See also, H.R. Rep. No. 622,
104th Cong., 2d Sess. 44 (1996) [hereinafter ``House Report''].
Payment of interest will not preclude the Commission from bringing
an action to enforce the requirements of section 24(f). Section
24(f)(3), as amended.
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The Commission is proposing amendments to several rules and forms
under the Investment Company Act and the Securities Act to implement
the Improvement Act's amendments to section 24. The Commission also is
proposing to rescind two rules under the Investment Company Act
relating to the registration of fund securities that will no longer be
necessary when the amendments to section 24 become effective.
II. Discussion
A. Amendments to Rule 24f-2
Rule 24f-2 currently contains detailed technical provisions setting
out when Securities Act registration fees must be paid, the calculation
of registration fees, and the circumstances under which a fund may net
sales against redemptions in calculating its fee. As a result of the
amendments to section 24(f), many of these provisions can be eliminated
and the rule can be simplified significantly.16
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\16\ For example, the current rule requires a fund to elect to
register an unlimited number of securities. Rule 24f-2(a) (17 CFR
24f-2(a)). This provision can be eliminated because, under section
24(f) as amended, all funds will be deemed to have registered an
indefinite number of securities upon the effective date of their
Securities Act registration statement. Similarly, the rule's netting
provision can be eliminated because amended section 24(f) includes a
netting provision. Finally, because funds are required to file Form
24F-2 with the Commission electronically using the Commission's
Electronic Data Gathering, Analysis, and Retrieval system, the
amended rule would not contain any provisions that suggest that the
Form can be filed on paper.
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1. Form Filing Requirements
The rule, as proposed to be amended, generally would require a fund
to file a Form 24F-2 within 90 days after the end of each of its fiscal
years.17 The amended rule also would specify that any fund
that pays the fee more than 90 days after the end of its fiscal year
will be required to pay interest in the manner specified in amended
section 24(f) and in Form 24F-2.
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\17\ The current rule has a provision explaining how to
calculate the relevant time periods under the rule. Rule 24f-2(e)
(17 CFR 270.24f-2(e)). The amended rule would retain this provision,
as well as the explanatory note that provides an example of how to
determine the filing date. Proposed rule 24f-2(c).
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The Commission is proposing to eliminate the provision in current
rule 24f-2 that a Form 24F-2 is deemed timely filed, regardless of when
it reaches the Commission, if the fund establishes that it timely
transmitted the Form to a third party that guaranteed delivery no later
than the filing date.18 This provision was adopted in 1995
in response to a series of late filings made by certain funds that
would have resulted in these funds losing the ability to net
redemptions against sales without exemptive relief from the
Commission.19 This provision appears inconsistent with one
of the reasons for the interest payment requirement in amended section
24(f)--to compensate the U.S. Treasury for any delay in the timely
receipt of revenue.20
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\18\ Rule 24f-2(f) (17 CFR 24f-2(f)).
\19\ See Registration Fees for Certain Investment Companies,
Investment Company Act Release No. 21332 (Sept. 1, 1995) (60 FR
47041 (Sept. 11, 1995)) (``1995 Adopting Release'') at nn.7-10 and
accompanying text.
\20\ See supra note 15 and accompanying text.
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The Commission is proposing to eliminate the requirement in current
rule 24f-2 that a fund's Form 24F-2 be accompanied by an opinion of
counsel stating that the securities which Form 24F-2 ``makes definite
in number,'' were legally issued, fully paid, and non-
assessable.21 This opinion requirement no longer seems
necessary in light of amended section 24(f)'s providing for the
registration of an indefinite number of securities in all cases. In
addition, the relevant registration forms require funds to file an
opinion of counsel to address the legality of the securities being
registered.22
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\21\ Rule 24f-2(b)(1) (17 CFR 24f-2(b)(1)).
\22\ See, e.g., item 24(b)(10) of Form N-1A (requiring an
opinion of counsel stating that the securities registered will, when
sold, be legally issued, fully paid and non-assessable).
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Comment is requested on the general approach of the proposed
amendments. Should any provisions that would be eliminated from the
rule be retained? Comment also is requested whether the opinion
requirement should be retained in order to provide additional assurance
that fund securities are legally issued.
2. Fund Mergers and Reorganizations
Like the current rule, the amended rule would specify that the date
on which a fund ceases operations would be deemed to be the end of the
fund's fiscal year.23 As under the current rule, a fund that
ceases operations because it is merged into an operating fund would
file a Form 24F-2 with respect to its final fiscal year. The acquiring
fund would not assume the redemptions
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(``redemption credits'') of the acquired fund to reduce its
registration fees.
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\23\ Rule 24f-2(b)(3) (17 CFR 270.24f-2(b)(3)); proposed rule
24f-2(b).
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Rule 24f-2 provides two exceptions to this provision that would
continue to be available under the amendment (``reorganization
exceptions''). The first exception is a reorganization undertaken for
the purpose of changing the state of incorporation or form of
organization of a fund (``predecessor fund''), that satisfies the
requirements of rule 414 of Regulation C under the Securities
Act.24 In such a reorganization, the fund that remains after
the transaction (``successor fund''), may assume any remaining
redemption credits of the predecessor fund. The other exception
involves the merger of the predecessor fund into a newly-created series
of a ``series company'' as defined in rule 18f-2 under the Investment
Company Act.25 In each case, the successor fund assumes the
assets and liabilities of the predecessor fund, continues the
predecessor fund's business, and each shareholder of the predecessor
fund, following the transaction, owns the same pro rata interest in the
same portfolio of securities as the shareholder owned before the
transaction occurred. In both instances, therefore, the predecessor
fund is not being acquired by an operating fund.
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\24\ Rule 24f-2(b)(3)(i) (17 CFR 270.24f-2(b)(3)(i)); rule 414
([17 CFR 230.414). Rule 414 generally provides that the registration
statement of a predecessor company will be deemed to be the
registration statement of the successor company when the purpose of
the reorganization is to change the company's domicile or form of
organization, provided certain conditions are satisfied.
\25\ Rule 24f-2(b)(3)(ii) (17 CFR 270.24f-2(b)(3)(ii)); rule
18f-2 (17 CFR 270.18f-2). A series company is a fund that issues two
or more series of securities, each of which is preferred over all
other series with respect to a specific portfolio of assets. A
merger into a series of another fund generally would not satisfy the
requirements of rule 414 because the successor series would be part
of a separately registered series company and would not necessarily
adopt the predecessor fund's registration statement as its own, as
required by rule 414.
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The proposed amendments would simplify the reorganization
exceptions by deleting the references to rules 414 and 18f-2. The
amended rule would permit the successor fund to assume the redemption
credits of the predecessor fund if the successor fund (i) had no assets
or liabilities, other than nominal assets or liabilities, and no
operating history prior to the merger; and (ii) acquired all of the
assets and assumed all of the liabilities and obligations of the
predecessor fund.26 Satisfying these conditions, which are
derived from rule 414, demonstrates that the transaction was effected
solely to change the form of organization of the predecessor fund.
Comment is requested whether the proposed amendments would simplify the
rule or whether the terminology of the current rule should be retained.
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\26\ Proposed rule 24f-2(b). The proposed amendments would make
clear that the successor fund may be a series of a series company.
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The proposed amendments would clarify that the reorganization
exceptions are not available in a transaction designed to result in the
predecessor fund merging with a fund that was not a shell prior to the
merger.27 This clarification is intended to prevent
redemption credits from being preserved in instances when the ultimate
purpose of the transaction is to merge the predecessor fund into an
operating fund.
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\27\ Proposed rule 24f-2(b)(3).
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B. Amendments to Form 24F-2
Form 24F-2 was adopted by the Commission in 1995 to provide a
standard format for the annual registration fee filings required by
rule 24f-2.28 The Commission is proposing amendments to Form
24F-2 to reflect the changes made by the Improvement Act. Form 24F-2,
as proposed to be amended, would consist of 8 Items and Instructions
for completing and filing the Form.29 The proposed Items
include identifying information about the fund, a worksheet for
calculating the registration fee, and provisions regarding paying the
fee and any interest that may be due.
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\28\ See 1995 Adopting Release, supra note 19, at nn. 33-43 and
accompanying text.
\29\ Reflecting current practice, the proposed amendments would
require a fund choosing to calculate registration fees on a class-
by-class or series-by-series basis to make one filing, consisting of
a separate Form 24F-2 for each class or series. See Instruction A.1
to Form 24F-2 as proposed to be amended.
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1. General Information (Proposed Items 1-4)
Like the current Form, the amended Form would require certain
identifying information concerning the fund and the class or series of
securities to which the filing relates.30 Unlike the current
Form, the amended Form would not require information about securities
registered other than pursuant to rule 24f-2.31 This
information is not directly relevant to the calculation of the
registration fee; rather the Items requiring this information were
designed to assist funds in determining that all their securities were
registered. The need to determine this information will be
substantially reduced as funds sell shares that were previously
registered. Comment is requested whether the Form should continue to
require this information to assist fund compliance personnel in
determining whether securities sold by the fund have been appropriately
registered.
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\30\ Items 1, 2, 3 and 4 of Form 24F-2 as proposed to be
amended. Proposed Item 4, which requires the fund to provide the
date of its fiscal year-end also would require the fund to indicate
whether the Form was being filed late. This requirement is designed
to facilitate Commission processing of a late filing that would
require the payment of interest. Proposed Item 4 also would include
a box to be checked if the filing is the last time the fund will be
filing the Form (for example, if the fund is ceasing operations).
This Item would replace current Item 6, which requires a fund to
indicate if it is terminating its rule 24f--2 declaration.
\31\ Items 7, 8 and 9 of Form 24F-2.
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2. The Worksheet
The proposed worksheet in Form 24F-2 would be less complex than the
one in the current Form, reflecting the simplified registration system
of amended section 24(f). It would consist of eight line items.
a. Sales Information (Proposed Item 5(i)).
Section 24(f)(2), as amended, will require that a fund calculate
its fee based only on the number of securities sold during the fiscal
year pursuant to an indefinite registration of securities under section
24(f). In this way, section 24(f) will avoid imposing a fee on
securities that were registered pursuant to section 24(e) prior to the
effective date of the amendments to section 24(f) and on which a
registration fee had already been paid.32
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\32\ As discussed above, after the effective date of the
amendments to section 24(f), all funds will be deemed to have
registered an indefinite number of securities and no fund will have
reason to register a definite number of securities and pay a
registration fee on the securities at the time of their
registration. In addition, with the repeal of section 24(e)(1),
funds may not register additional securities on a post-effective
amendment.
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Reflecting the statutory provision, proposed Item 5(i) of the
worksheet would require the aggregate sale price of securities sold
during the fiscal year pursuant to section 24(f). Proposed Instruction
to the amended Form would remind funds to include in this Item DRIP
securities, as required by amended section 24(f), but not to include
previously registered shares.33
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\33\ Instruction C.4 to Form 24F-2, as proposed to be amended.
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b. Redemption Information (Proposed Items 5(ii)--5(iv)). Section
24(f)(2), as amended, will provide that in calculating its registration
fee a fund may reduce the amount of securities sold during the fiscal
year by (i) the aggregate price of securities redeemed during the
fiscal year, and (ii) the aggregate price of the securities redeemed
during any prior fiscal year ending on or after October 11, 1995 that
were not used previously to reduce fees. In this way, amended section
24(f) will
[[Page 38499]]
permit funds to net redemptions during the fiscal year or earlier
fiscal years against sales without having to ``preserve'' those
redemption credits through filing periodic post-effective amendments
pursuant to section 24(e).34
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\34\ Had Congress not included a ``cut-off'' date (i.e., fiscal
years ended on or after October 11, 1995), funds arguably could have
used as credits securities redeemed before rule 24f-2 was adopted in
1977. Since redemptions occurring before October 11, 1995 would have
to have been ``preserved'' by registering securities pursuant to
rule 24e-2 before the effective date of the amendments, and since
such newly registered securities would not have been registered
pursuant to an indefinite registration pursuant to amended section
24(f), the provision should not result in the loss of any redemption
credits of any fund that is entitled to use them to reduce
registration fees. See House Report, supra note 15, at 44. See also
supra note 10.
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Reflecting the statutory provision, proposed Item 5(ii) would
require the aggregate price of securities redeemed or repurchased
during the fiscal year, and proposed Item 5(iii) would require the
aggregate price of securities redeemed or repurchased during any prior
fiscal year ending no earlier than October 11, 1995.35 The
total amount of available redemption credits would be set forth in
proposed Item 5(iv).
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\35\ In each case, proposed Instructions C.5 and C.6 to the
amended Form would remind funds not to include redemptions that were
previously used to reduce registration fees payable to the
Commission.
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c. Registration Fee Calculation (Proposed Items 5(v)-5(viii)).
In order to determine the fund's net aggregate sale price of
securities for purposes of calculating the registration fee, the fund's
aggregate redemptions (proposed Item 5(iv)) would be subtracted from
the fund's aggregate sales (proposed Item 5(i)). If sales exceeded
redemptions, the result would be set forth in proposed Item 5(v). This
amount would be used to calculate the fund's registration fee.
If the fund's aggregate redemptions exceeded the fund's aggregate
sales, the amount would be set forth in proposed Item 5(vi). In this
case, the fund would not be required to pay a registration fee. As
provided by amended section 24(f), these redemption credits could be
used by the fund in future years to reduce registration fees.
Proposed Item 5(vii) would require the fund to set forth the
multiplier for determining the registration fee. 36 The
registration fee due would be set forth in proposed Item
5(viii).37
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\36\ The multiplier for calculation of the registration fee is
determined by the Commission in accordance with section 6(b) of the
Securities Act. As of October 1, 1996, the multiplier was 1/3300.
This multiplier is subject to change from time to time, without
notice, by act of Congress. The Commission staff has found that most
mistakes in Form 24F-2 filings arise from the use of the wrong
multiplier. Having the fund set forth the multiplier it used often
enables the staff to quickly determine and notify the fund of the
source of the error. Proposed Instruction C.3 to the Form would
remind funds to determine the current fee rate prior to filing.
Changes in the multiplier are generally posted on the Commission's
web site.
\37\ A fund that showed net redemptions in proposed Item 5(vi)
would enter ``0'' in Item 5(viii).
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3. Interest and Other Payment Information (Proposed Items 6-8)
Proposed Item 6 would be completed only by funds that filed the
Form late. It would require the fund to report the amount of interest
due (if any).38 The total of the registration fee and
interest payment would be reported in proposed Item 7. Proposed Item 8
would contain information about when and how the fund's payment was
sent to the Commission's lockbox depository.
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\38\ The manner in which interest should be calculated would be
set forth in proposed Instruction D.
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4. Request for Comment
Comment is requested on the proposed amendments to Form 24F-2. Will
the amended Form assist funds in calculating their registration fees?
Should any additional information be required or is any of the
information proposed to be set forth on the Form unnecessary? Do the
proposed Instructions to the amended Form adequately address the
procedures for completing and filing the Form?
C. Conforming Amendments
1. Rule Rescissions
The Improvement Act will, when effective, eliminate the provisions
of the Investment Company Act that relate to the registration of fund
securities by post-effective amendment.39 As a result of
those changes, rule 24e-2, the rule that addresses the computation of
fees on securities registered by post-effective amendment, will be
extraneous, and the Commission is proposing that it be rescinded.
Similarly, because the Improvement Act will eliminate the provision of
section 24(f) of the Investment Company Act that allows for post-sale
registration, the Commission is proposing to rescind rule 24f-1, which
details the procedures for post-sale registration.
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\39\ See 15 USC 80a-24(e) (1) and (2).
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2. Conforming Amendments to Forms and Rules
The forms used by funds to register securities under the Securities
Act contain provisions on their cover pages and related instructions
concerning the calculation and payment of registration fees and the
registration of an indefinite number of securities under current rule
24f-2.40 The Commission is proposing to modify these forms
to delete these provisions or to conform them to amended section 24(f).
---------------------------------------------------------------------------
\40\ Form S-6, Form N-1A, Form N-3, Form N-4, and Form N-14.
---------------------------------------------------------------------------
The Commission also is proposing a conforming amendment to rule 485
under the Securities Act, the rule that permits post-effective
amendments to certain fund registration statements to become effective
automatically. Currently, rule 485 permits a fund's registration
statement filed to increase the number of securities registered or to
register an indefinite number of securities to become effective
immediately.41 These provisions would be eliminated. In
addition, the Commission is proposing to amend certain rules relating
to registration fee payments to reflect amended section
24.42 Finally, cross-references to section 24(e)(3) of the
Investment Company Act in rule 24e-1 under the Investment Company Act
would be changed to reflect that that section will become section
24(e).
---------------------------------------------------------------------------
\41\ Rule 485(b) (i) and (ii) [17 CFR 230.485(b) (i) and (ii)].
\42\ Rule 3a of Informal and Other Procedures and rule 13 of
Regulation S-T.
---------------------------------------------------------------------------
D. General Request for Comment
Any interested persons wishing to submit written comments on the
proposed rule and form changes that are the subject of this Release, to
suggest additional changes (including changes to provisions of the
rules that the Commission is not proposing to amend), or to submit
comments on other matters that might have an effect on the proposals
described above, are requested to do so. Commenters suggesting
alternative approaches are encouraged to submit proposed rule text.
III. Cost/Benefit Analysis
The Commission is sensitive to the costs and benefits imposed by
its rules. The Commission notes that the proposed amendments implement
the changes mandated by the Improvement Act to the system for
registering fund securities under the Securities Act. The proposed
amendments reflect the requirements of amended section 24 of the
Investment Company Act and do not impose any additional requirements.
The proposed 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
[[Page 38500]]
filings and the guidance provided by the Form should outweigh any
burdens associated with filing the Form. Form 24F-2 has made it easier
for funds to calculate registration fees and reduced errors in fee
calculations. The Form as proposed to be amended would continue these
benefits. The Commission does not believe that the amended Form would
impose any significant one-time or ongoing costs on funds. The proposed
amendments to funds' registration forms also are designed to reflect
amended section 24 and would not require funds to obtain or provide any
information that is not currently required by these forms.
The Commission requests comment on any of these matters.
IV. Paperwork Reduction Act
Certain provisions of the proposed amendments contain ``collection
of information'' requirements within the meaning of the Paperwork
Reduction Act of 1995,43 and the Commission has submitted
them to the Office of Management and Budget (``OMB'') for review in
accordance with 44 USC 3507(d) and 5 CFR 1320.11. The title for the
collection of information is ``Proposed Amendments to Forms 24F-2, N-
1A, N-3, N-4, N-14 and S-6.'' The Forms contain currently approved
collections of information under OMB control numbers 3235-0456, 3235-
0307, 3235-0316, 3235-0318, 3235-0336 and 3235-0184, respectively. The
proposed amendments to these collections of information are necessary
to implement the changes to section 24 of the Investment Company Act
made by the Improvement Act. An agency may not sponsor, conduct, or
require response to an information collection unless a currently valid
OMB control number is displayed.
---------------------------------------------------------------------------
\43\ 44 USC 3501.
---------------------------------------------------------------------------
Form 24F-2 provides a standardized format for funds' annual
registration fee filings and assists funds in calculating the fees.
Form N-1A is used by open-end management investment companies to
register with the Commission as investment companies under the
Investment Company Act and to register their offerings of securities
under the Securities Act. Form N-3 is used by insurance company
separate accounts organized as management investment companies to
register with the Commission as investment companies under the
Investment Company Act and to register their offerings of securities
under the Securities Act. Form N-4 is used by insurance company
separate accounts organized as unit investment trusts (``UITs'') to
register with the Commission as investment companies under the
Investment Company Act and to register their offerings of securities
under the Securities Act. Form S-6 is used by UITs to register their
securities under the Securities Act (UITs register as investment
companies on a separate Form N-8B-2). Form N-14 is used by investment
companies to register under the Securities Act securities issued in
business combination transactions. The primary purpose of the
registration process and registration forms is to provide disclosure of
financial and other information to investors and potential investors
for the purpose of evaluating an investment in a security.
Form 24F-2 is required to be filed annually. Forms N-1A, N-3, and
N-4 are filed annually and updated on occasion. Form N-14 is filed on
occasion. Form S-6 is filed annually. It is estimated that
approximately 6681 funds file Form 24F-2, 7500 funds file Form N-1A, 53
funds file Form N-3, 288 funds file Form N-4, 95 funds file Form N-14,
and 3263 funds file Form S-6. The average annual burden per respondent
for Form 24F-2 is estimated to be 1.9 hours, for Form N-1A, 213 hours,
for Form N-3, 512.3 hours, for Form N-4, 138.35 hours, for Form N-14,
620 hours, and for Form S-6, 35 hours. The total annual burden for all
respondents for Form 24F-2 is estimated to be 12,694 hours, for Form N-
1A, 990,000 hours, for Form N-3, 27,499 hours, for Form N-4, 40,562
hours, for Form N-14, 58,900 hours, and for Form S-6, 114,205 hours.
The proposed amendments would reduce the annual burden per respondent
for Form 24F-2 from 1.9 hours to 1 hour. The proposed amendments would
not result in any change in the burden hours for the registration
forms.
The information collection requirements imposed by Form 24F-2 and
the registration forms are mandatory. Responses to the collection of
information will not be kept confidential.
Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits
comments to (i) evaluate whether the proposed collections of
information are necessary for the proper performance of the functions
of the agency, including whether the information shall have practical
utility; (ii) evaluate the accuracy of the agency's estimate of the
burden of the proposed collections of information; (iii) enhance the
quality, utility, and clarity of the information to be collected; (iv)
minimize the burden of the collections of information on those who are
to respond, including through the use of automated collection
techniques or other forms of information technology.
Persons desiring to submit comments on the collection of
information requirements should direct them to the Office of Management
and Budget, Attention: Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Washington,
D.C. 20503, and should also send a copy of their comments to Jonathan
G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth
Street, NW., Stop 6-9, Washington, DC 20549 with reference to File No.
S7-19-97. OMB is required to make a decision concerning the collections
of information between 30 and 60 days after publication, so a comment
to OMB is best assured of having its full affect if OMB receives it
within 30 days of publication.
V. Summary of Regulatory Flexibility Analysis
The Commission has prepared an Initial Regulatory Flexibility
Analysis (``IRFA'') in accordance with 5 U.S.C. 603 regarding the
proposed rule and form amendments. The IRFA states that the proposed
amendments to rule 24f-2 and Form 24F-2 would implement the provisions
of the Improvement Act governing registration of fund securities under
the Securities Act. The IRFA further states that the proposed
conforming amendments to rules and forms would conform the relevant
provisions of these rules and forms to the requirements of amended
section 24 of the Investment Company Act. The IRFA indicates that the
proposed 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 IRFA sets forth the statutory authority for the proposed
amendments. The IRFA also discusses the effect of the proposed
amendments on funds that are small entities. For purposes of the
proposed 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 IRFA
states that the proposed amendments would assist small entities in
complying with the new statutory requirements.
The IRFA states that the proposed amendments would not impose any
new reporting, recordkeeping or other compliance requirements, and that
the Commission believes that there are no
[[Page 38501]]
rules that duplicate, overlap or conflict with the proposed amendments.
The IRFA discusses the various alternatives considered by the
Commission in connection with the proposed 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 Act, and are therefore incorporated into the
proposed 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 proposed 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 proposed 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 proposed amendments for small entities.
The IRFA includes information concerning the solicitation of
comments with respect to the IRFA. Cost-benefit information reflected
in the ``Cost-Benefit Analysis'' section of this Release also is
reflected in the IRFA. A copy of the IRFA may be obtained by contacting
Robin S. Gross, Securities and Exchange Commission, 450 5th Street,
NW., Mail Stop 10-2, Washington, DC. 20549.
For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996, the Commission also requests information regarding the
potential impact of the proposed amendments on an annual basis.
Commenters should provide empirical data to support their views.
VI. Statutory Authority
The Commission is proposing to rescind rules 24e-2 and 24f-1, and
amend 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 proposing to amend 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, 77h, 77j, 77s(a)) and section 38
of the Investment Company Act. The authority citations for the proposed
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 Informal and Other Procedures precede the
text of the amendments.
Text of Proposed Rule and Form 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.
17 CFR Part 239
Reporting and recordkeeping requirements, Securities.
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is proposed to be 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 two 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.
[[Page 38502]]
Note: Form N-14 does not and the amendments will not appear in
the Code of Federal Regulations.
Sec. 239.23 [Form N-14 Amended]
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).
* * * * *
Sec. 239.23 [Form N-14 amended]
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)) shall, 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 shall be prepared in accordance with the
requirements of that Form, and shall 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 such
Form. An issuer that pays the registration fee more than 90 days after
the end of its fiscal year shall 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 this section, if an issuer ceases operations, the date the
issuer ceases operations shall 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
shall 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 that issuer (``Successor
Issuer''), the Predecessor Issuer shall not be deemed to have ceased
operations and the Successor Issuer shall 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 the
effective date of its rescission) 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 all of the assets and assumed 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 that 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 shall be 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 shall end 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.
Note: Form N-1A does not and the amendments will not appear in
the Code of Federal Regulations.
Secs. 239.15A and 274.11A [Form N-1A Amended]
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.''
Secs. 239.15A and 274.11A [Form N-1A Amended]
18. Form N-1A (referenced in Sec. 239.15A and Sec. 274.11A) is
amended by
[[Page 38503]]
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.
* * * * *
Secs. 239.15A and 274.11A [Form N-1A Amended]
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:
Note: Form N-1A does not and the amendments will not appear in
the Code of Federal Regulations.
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.
* * * * *
Secs. 239.15A and 274.11A [Form N-1A Amended]
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.
Note: Form N-1A does not and the amendments will not appear in
the Code of Federal Regulations.
Secs. 239.17a and 274.11b [Form N-3 Amended]
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.
Note: Form N-3 does not and the amendments will not appear in
the Code of Federal Regulations.
Secs. 239.17a and 274.11b [Form N-3 Amended]
22. Form N-3 (referenced in Sec. 239.17a and Sec. 274.11b) is
amended by revising General Instruction B to read as follows:
Note: Form N-3 does not and the amendments will not appear in
the Code of Federal Regulations.
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.
* * * * *
Secs. 239.17a and 274.11b [Form N-3 Amended]
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:
Note: Form N-3 does not and the amendments will not appear in
the Code of Federal Regulations.
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.
* * * * *
Secs. 239.17a and 274.11b [Form N-3 Amended]
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.
Note: Form N-3 does not and the amendments will not appear in
the Code of Federal Regulations.
Secs. 239.17b and 274.11c [Form N-4 Amended]
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 . . .
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.''
Note: Form N-4 does not and the amendments will not appear in
the Code of Federal Regulations.
Secs. 239.17b and 274.11c [Form N-4 Amended]
26. Form N-4 (referenced in Sec. 239.17b and Sec. 274.11c) is
amended by revising General Instruction B to read as follows:
Note: Form N-4 does not and the amendments will not appear in
the Code of Federal Regulations.
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.
* * * * *
Secs. 239.17b and 274.11c [Form N-4 Amended]
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:
Note: Form N-4 does not and the amendments will not appear in
the Code of Federal Regulations.
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.
* * * * *
Secs. 239.17b and 274.11c [Form N-4 Amended]
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:
[[Page 38504]]
Sec. 274.24 Form 24F-2, annual notice 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 proposed to
be revised is attached as Appendix I to this document.
Dated: July 14, 1997.
By the Commission.
Margaret H. McFarland
Deputy Secretary.
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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 notices required by rule 24f-2 under the
Investment Company Act of 1940 [15 U.S.C. 80a et seq.] (``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 et seq.] (``Securities Act''),
the issuer may file a single Form 24F-2 for those classes or series
that have 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.
2. This Form must be filed within 90 days after the end of the
issuer's fiscal year. See Instruction B.4.
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 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 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 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 be returned to the issuer for proper
payment and will not be deemed 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 Regulation 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, Item 2 may be left blank.
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 in Item 3 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 average investment
rate for 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 has discontinued operations).
C. Computation of Registration Fee
1. Item 5 is a work sheet for calculating the registration fee
due. An issuer must aggregate prices within each class 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. Special Rule for Separate Accounts--The sale price of
securities sold to an unmanaged separate account that offers
interests that are registered under the Securities Act and on which
a registration fee has been or will be paid may be excluded from the
sale price of securities reported in Item 5(i). If the issuer
chooses to exclude the sale price of these securities from Item
5(i), the issuer may not use securities redeemed or repurchased from
those unmanaged separate accounts for purposes of determining the
redemption or repurchase price of securities in Items 5(ii) and
5(iii).
3. 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.
4. Item 5(i)--Report the total sale price of securities sold
during the fiscal year in reliance upon registration under section
24(f). Include securities issued pursuant to dividend 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, which 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 [effective date of
rescission of rule 24e-2]. 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.
5. 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 [effective date of rescission of rule
24e-2]. 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 securities should not be included in Item
5(ii).
6. 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 [effective date of rescission of rule
24e-2]. See the Example to Item 5(ii).
7. 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).
8. 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 on 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.
9. Item 5(viii)--If the issuer reports net redemptions or
repurchases in Item 5(vi), report ``0'' in Item 5(viii).
D. Computation of Interest Due if Form is Filed Late
1. Item 6--Section 24(f) requires any issuer that pays its
registration fee more than 90 days after the end of its fiscal year
to pay interest to the Commission on unpaid amounts. 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 USC 3717], that rate is published by the
Secretary of the Treasury. The rate is subject to quarterly
revisions if the annual average of investment rates changes by two
percent. Otherwise, the rate
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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. As noted above,
however, that rate is subject to change and 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 91st day following
the end of the issuer's fiscal year. 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 percentage
Z = Number of days by which the registration fee payment is late
E. Payment and Signature
1. Item 8--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.
[FR Doc. 97-18857 Filed 7-17-8:45 am]
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