

[Federal Register: February 16, 2007 (Volume 72, Number 32)]
[Notices]               
[Page 7696-7697]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16fe07-137]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, 
DC 20549.

Extension:
    Rule 17f-6; SEC File No. 270-392; OMB Control No. 3235-0447.

    Notice is hereby given that, under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the 
``Commission'') has submitted to the Office of Management and Budget 
(``OMB'') a request for extension of the previously approved collection 
of information discussed below.
    Rule 17f-6 (17 CFR 270.17f-6) under the Investment Company Act of 
1940(15 U.S.C. 80a) permits registered investment companies (``funds'') 
to maintain assets (i.e., margin) with futures commission merchants 
(``FCMs'') in connection with commodity transactions effected on both 
domestic and foreign exchanges. Before the rule was adopted, funds 
generally were required to maintain such assets in special accounts 
with a custodian bank.\1\
---------------------------------------------------------------------------

    \1\ Custody of Investment Company Assets With Futures Commission 
Merchants and Commodity Clearing Organizations, Investment Company 
Act Release No. 22389 (Dec. 11, 1996) (61 FR 66207 (Dec. 17, 1996)).
---------------------------------------------------------------------------

    The rule requires a written contract that contains certain 
provisions designed to ensure important safeguards and other benefits 
relating to the custody of fund assets by FCMs. To protect fund assets, 
the contract must require that FCMs comply with the segregation or 
secured amount requirements of the Commodity Exchange Act (``CEA'') and 
the rules under that statute. The contract also must contain a 
requirement that FCMs obtain an acknowledgment from any clearing 
organization that the fund's assets are held on behalf of the FCM's 
customers according to CEA provisions. Finally, FCMs are required to 
furnish to the Commission or its staff on request information 
concerning the fund's assets in order to facilitate Commission 
inspections.
    The Commission estimates that approximately 2,275 funds effect 
commodities transactions and could deposit margin with FCMs under Rule 
17f-6 in connection with those transactions. Commission staff estimates 
that each fund uses and deposits margin with two different FCMs in 
connection with its commodity transactions.\2\
---------------------------------------------------------------------------

    \2\ This estimate is based on information conversations with 
representatives of the fund industry.
---------------------------------------------------------------------------

    The Commission estimates that each of the 2,275 funds spends an 
average of 1 hour annually complying with the contract requirements of 
the rule (i.e., executing contracts that contain the requisite 
provisions with additional FCMs), for a total of 2,275 burden hours. 
The estimate does not include the time required by an FCM to comply 
with the rule's contract requirements because, to the extent that 
complying with the contract provisions could be considered 
``collections of information,'' the burden hours for compliance are 
already included in other PRA submissions or are de minimis.\3\ The 
estimate of average burden hours is made solely for the purposes of the 
Paperwork Reduction Act, and is not derived from a comprehensive or 
even a representative survey or study of the costs of Commission rules 
and forms.
---------------------------------------------------------------------------

    \3\ The rule requires a contract with the FCM to contain three 
provisions. Two of the provisions require the FCM to comply with 
existing requirements under the CEA and rules adopted under that 
Act. Thus, to the extent these provisions could be considered 
collections of information, the hours required for compliance would 
be included in the collection of information burden hours submitted 
by the Commodity Futures Trading Commission for its rules. The third 
contract provision requires that the FCM produce records or other 
information requested by the Commission or its staff. Commission 
staff has requested this type of information from an FCM so 
infrequently in the past that the annual burden hours are de 
minimis.
---------------------------------------------------------------------------

    Compliance with the collection of information requirements of the 
rule is necessary to obtain the benefit of relying on the rule. If an 
FCM furnishes records pertaining to a fund's assets at the request of 
the Commission or its staff, the records will be kept confidential to 
the extent permitted by relevant statutory or regulatory provisions. 
The rule does not require these records be retained for any specific 
period of time. 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.
    Please direct general comments regarding the above information to 
the following persons: (i) Desk Officer for the Securities and Exchange 
Commission, Office of Management and Budget, Room 10102, New Executive 
Office Building, Washington, DC 20503 or e-mail to: 
David_Rostker@omb.eop.gov; and (ii) R. Corey Booth, Director/Chief 

Information Officer, Securities and Exchange Commission, C/O Shirley 
Martinson, 6432 General Green Way, Alexandria,

[[Page 7697]]

VA 22312; or send an e-mail to: PRA_Mailbox@sec.gov. Comments must be 
submitted to OMB within 30 days of this notice.

    Dated: February 6, 2007.
Florence E. Harmon,
Deputy Secretary.

[FR Doc. E7-2722 Filed 2-15-07; 8:45 am]

BILLING CODE 8010-01-P
