

[Federal Register: January 23, 2008 (Volume 73, Number 15)]
[Notices]               
[Page 4020-4021]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23ja08-90]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

Extension:
    Rule 237, SEC File No. 270-465, OMB Control No. 3235-0528.

    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'') has submitted to the Office of 
Management and Budget a request for extension and approval of the 
collection of information discussed below.
    In Canada, as in the United States, individuals can invest a 
portion of their earnings in tax-deferred retirement savings accounts 
(``Canadian retirement accounts''). In cases where these individuals 
move to the United States, these participants (``Canadian/U.S. 
Participants'' or ``participants'') may not be able to manage their 
Canadian retirement account investments. Most securities and most 
investment companies (``funds'') that are ``qualified investments'' for 
Canadian retirement accounts are not registered under the U.S. 
securities laws. Those securities, therefore, generally cannot be 
publicly offered and sold in the United States without violating the 
registration requirements of the Securities Act of 1933 (``Securities 
Act'').\1\ As a result of these registration requirements of the U.S. 
securities laws, Canadian/U.S. Participants, in the past, had not been 
able to purchase or exchange securities for their Canadian retirement 
accounts as needed to meet their changing investment goals or income 
needs.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 77a.
---------------------------------------------------------------------------

    In 2000, the Commission issued a rule that enabled Canadian/U.S. 
Participants to manage the assets in their Canadian retirement accounts 
by providing relief from the U.S. registration requirements for offers 
of securities of foreign issuers to Canadian/U.S. Participants and 
sales to their accounts.\2\ Rule 237 under the Securities Act \3\ 
permits securities of foreign issuers, including securities of foreign 
funds, to be offered to Canadian/U.S. Participants and sold to their 
Canadian retirement accounts without

[[Page 4021]]

being registered under the Securities Act.
---------------------------------------------------------------------------

    \2\ See Offer and Sale of Securities to Canadian Tax-Deferred 
Retirement Savings Account, Release Nos. 33-7860, 34-42905, IC-24491 
(June 7, 2000) [65 FR 37672 (June 15, 2000)].
    \3\ 17 CFR 230.237.
---------------------------------------------------------------------------

    Rule 237 requires written offering materials for securities that 
are offered and sold in reliance on the rule to disclose prominently 
that those securities are not registered with the Commission and may 
not be offered or sold in the United States unless they are registered 
or exempt from registration under the U.S. securities laws. Rule 237 
does not require any documents to be filed with the Commission. The 
burden under the rule associated with adding this disclosure to written 
offering documents is minimal and is non-recurring. The foreign issuer, 
underwriter or broker-dealer can redraft an existing prospectus or 
other written offering material to add this disclosure statement, or 
may draft a sticker or supplement containing this disclosure to be 
added to existing offering materials. In either case, based on 
discussions with representatives of the Canadian fund industry, the 
staff estimates that it would take an average of 10 minutes per 
document to draft the requisite disclosure statement.
    The Commission understands that there are approximately 3,500 
Canadian issuers other than funds that may rely on rule 237 to make an 
initial public offering of their securities to Canadian/U.S. 
Participants. The staff estimates that in any given year approximately 
35 (or 1 percent) of those issuers are likely to rely on rule 237 to 
make a public offering of their securities to participants, and that 
each of those 35 issuers, on average, distributes 3 different written 
offering documents concerning those securities, for a total of 105 
offering documents.
    The staff therefore estimates that during each year that rule 237 
is in effect; approximately 35 respondents \4\ would be required to 
make 105 responses by adding the new disclosure statements to 
approximately 105 written offering documents. Thus, the staff estimates 
that the total annual burden associated with the rule 237 disclosure 
requirement would be approximately 17.5 hours (105 offering documents x 
10 minutes per document). The total annual cost of burden hours is 
estimated to be $5,110.00 (17.5 hours x $292 \5\ per hour of attorney 
time).
---------------------------------------------------------------------------

    \4\ This estimate of respondents also assumes that all 
respondents are foreign issuers. The number of respondents may be 
greater if foreign underwriters or broker-dealers draft a sticker or 
supplement to add the required disclosure to an existing offering 
document.
    \5\ The Commission's estimate concerning the wage rate for 
attorney time is based on salary information for the securities 
industry compiled by the Securities Industry Association. $292 per 
hour figure for an attorney is from the SIA Report on Management & 
Professional Earnings in the Securities Industry 2006, modified to 
account for an 1800-hour work-year and multiplied by 5.35 to account 
for bonuses, firm size, employee benefits and overhead.
---------------------------------------------------------------------------

    In addition, issuers from foreign countries other than Canada could 
rely on rule 237 to offer securities to Canadian/U.S. Participants and 
sell securities to their accounts without becoming subject to the 
registration requirements of the Securities Act. Because Canadian law 
strictly limits the amount of foreign investments that may be held in a 
Canadian retirement account, however, the staff believes that the 
number of issuers from other countries that relies on rule 237, and 
that therefore is required to comply with the offering document 
disclosure requirements, is negligible.
    These burden hour estimates are based upon the Commission staff's 
experience and discussions with the fund industry. The estimates of 
average burden hours are made solely for the purposes of the Paperwork 
Reduction Act. These estimates are not derived from a comprehensive or 
even a representative survey or study of the costs of Commission rules.
    Compliance with the collection of information requirements of the 
rule is mandatory and is necessary to comply with the requirements of 
the rule in general. 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: 
Alexander_T._Hunt@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, VA 22312; or send an email to: 
PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days 

of this notice.

    Dated: January 14, 2008.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1058 Filed 1-22-08; 8:45 am]

BILLING CODE 8011-01-P
