Upon Written Request, Copies Available From: Securities and Exchange Commission; Office of Filings and Information Services; Washington, DC 20549.
Rule 17d-1; SEC File No. 270-505; OMB Control No. 3235-0562.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collections of information summarized below. The Commission plans to submit these existing collections of information to the Office of Management and Budget (“OMB”) for extension and approval.
Section 17(d) of the Investment Company Act of 1940 (the “Act”) prohibits first- and second-tier affiliates of a fund, the fund's principal underwriters, and affiliated persons of the fund's principal underwriters, acting as principal, to effect any transaction in which the fund or a company controlled by the fund is a joint or a joint and several participant in contravention of the Commission's rules. Rule 17d-1 (“Applications regarding joint enterprises or arrangements and certain profit-sharing plans” [17 CFR 270.17d-1]) permit a fund to enter into a joint arrangement with a portfolio affiliate (an issuer of which a fund owns a position in excess of five percent of the voting securities), or an affiliated person of a portfolio affiliate, as long as certain other affiliated persons of the fund (e.g., the fund's adviser, persons controlling the fund, and persons under common control with the fund) are not parties to the transaction and do not have a financial interest in a party to the transaction.
Rule 17d-1 provides that, in addition to the interests identified in the rule not to be “financial interests,” the term “financial interest” also does not include any interest that the fund's board of directors (including a majority of the directors who are not interested persons of the fund) finds to be not material. The rule requires that the minutes of the board's meeting record the basis for the board's finding.
The information collection requirements in rule 17d-1 are intended to ensure that Commission staff can review, in the course of its compliance and examination functions, the basis for a board of director's finding that the financial interest of a prohibited participant in a party to a transaction with a portfolio affiliate is not material.
Based on analysis of past filings, the Commission's staff estimates that 148 funds are affiliated persons of 668 issuers as a result of the fund's ownership or control of the issuer's voting securities, and that there are approximately 1,000 such affiliate relationships. Staff discussions with mutual fund representatives have suggested that no funds are currently relying on rule 17d-1 exemptions. We do not know definitively the reasons for this change in transactional behavior, but differing market conditions from year to year may offer some explanation for the current lack of fund interest in the exemptions under rule 17d-1. Accordingly, we estimate that annually there will be no joint transactions under rule 17d-1 that will result in a collection of information.
The Commission requests authorization to maintain an inventory of one burden hour to ease future renewals of rule 17d-1 collection of information analysis should reliance on the rule increase in the coming years.
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Office of Information Technology, Securities and Exchange Commission, 450 5th Street, NW., Washington, DC 20549.Start Signature
Dated: March 29, 2005.
Margaret H. McFarland,
[FR Doc. E5-1583 Filed 4-6-05; 8:45 am]
BILLING CODE 8010-01-P