

[Federal Register: November 28, 2005 (Volume 70, Number 227)]
[Notices]               
[Page 71339-71340]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28no05-96]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Proposed Collection; Comment Request

Upon written request, copies available from: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension:
    Rule 17a-7; SEC File No. 270-238; OMB Control No. 3235-0214.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), 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.
    Rule 17a-7 [17 CFR 270.17a-7] under the Investment Company Act of 
1940 (the ``Act'') is entitled ``Exemption of certain purchase or sale 
transactions between an investment company and certain affiliated 
persons thereof.'' It provides an exemption from section 17(a) of the 
Act for purchases and sales of securities between registered investment 
companies (``funds''), that are affiliated persons (``first-tier 
affiliates'') or affiliated persons of affiliated persons (``second-
tier affiliates''), or between a fund and a first-or second-tier 
affiliate other than another fund, when the affiliation arises solely 
because of a common investment adviser, director, or officer. Rule 17a-
7 requires funds to keep various records in connection with purchase or 
sale transactions effected in reliance on the rule. The rule requires 
the fund's board of directors to establish procedures reasonably 
designed to ensure that the rule's conditions have been satisfied. The 
board is also required to determine, at least on a quarterly basis, 
that all affiliated transactions effected during the preceding quarter 
in reliance on the rule were made in compliance with these established 
procedures. If a fund enters into a purchase or sale transaction with 
an affiliated person, the rule requires the fund to compile and 
maintain written records of the transaction.\1\ The Commission's 
examination staff uses these records to evaluate for compliance with 
the rule.
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    \1\ The written records are required to set forth a description 
of the security purchased or sold, the identity of the person on the 
other side of the transaction, and the information or materials upon 
which the board of directors' determination that the transaction was 
in compliance with the procedures was made.
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    The Commission estimates that approximately 968 funds enter into 
transactions effected in reliance on rule 17a-7 each year and, 
therefore, are subject to the rule's information collection 
requirements.\2\ The average annual burden for rule 17a-7 is estimated 
to be approximately two burden hours per respondent, for an annual 
total of 1935 burden hours for all respondents.\3\ The estimates of 
burden hours are made solely for the purposes of the Paperwork 
Reduction Act, and are not derived from a comprehensive or even a 
representative survey or study of the costs of Commission rules.
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    \2\ These estimates are based on conversations with the 
examination and inspections staff of the Commission and fund 
representatives. Based on these conversations, the Commission staff 
estimates that most investment companies (3870 of the estimated 4300 
registered investment companies) have adopted procedures for 
compliance with rule 17a-7. Of these 3870 investment companies, the 
Commission staff estimates that each year approximately 25% (968) 
enter into transactions affected by rule 17a-7.
    \3\ This estimate is based in turn on the staff's estimate that 
the approximately 968 funds that rely on rule 17a-7 annually engage 
in an average of 8 rule 17a-7 transactions and spend approximately 
15 minutes per transaction on recordkeeping required by the rule.
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    Rule 17a-7 requires investment companies to maintain and preserve 
permanently a written copy of the procedures governing rule 17a-7 
transactions. In addition, investment companies are required to 
maintain written records of each rule 17a-7

[[Page 71340]]

transaction for a period of not less than six years from the end of the 
fiscal year in which the transaction occurred. The collection of 
information required by rule 17a-7 is necessary to obtain the benefits 
of the rule. Responses will not be kept confidential. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid control 
number.
    Written comments are invited on: (a) Whether the collections of 
information are 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 collections of information; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burdens of the collections 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, 100 F Street, NE., Washington, DC 20549.

    Dated: November 17, 2005.
Jonathan G. Katz,
Secretary.
[FR Doc. E5-6539 Filed 11-25-05; 8:45 am]

BILLING CODE 8010-01-P
