
[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Notices]
[Page 69299]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28899]


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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 11a-3; SEC File No. 270-321; OMB Control No. 3235-0358.

    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 of the previously approved collection of 
information discussed below.
    Section 11(a) of the Investment Company Act of 1940 (``Act'') (15 
U.S.C. 80a-11(a)) provides that it is unlawful for a registered open-
end investment company (``fund'') or its underwriter to make an offer 
to the fund's shareholders or the shareholders of any other fund to 
exchange the fund's securities for securities of the same or another 
fund on any basis other than the relative net asset values (``NAVs'') 
of the respective securities to be exchanged, ``unless the terms of the 
offer have first been submitted to and approved by the Commission or 
are in accordance with such rules and regulations as the Commission may 
have prescribed in respect of such offers.'' Section 11(a) was designed 
to prevent ``switching,'' the practice of inducing shareholders of one 
fund to exchange their shares for the shares of another fund for the 
purpose of exacting additional sales charges.
    Rule 11a-3 (17 CFR 270.11a-3) under the Act of 1940 is an exemptive 
rule that permits open-end investment companies (``funds''), other than 
insurance company separate accounts, and funds' principal underwriters, 
to make certain exchange offers to fund shareholders and shareholders 
of other funds in the same group of investment companies. The rule 
requires a fund, among other things, (i) To disclose in its prospectus 
and advertising literature the amount of any administrative or 
redemption fee imposed on an exchange transaction, (ii) if the fund 
imposes an administrative fee on exchange transactions, other than a 
nominal one, to maintain and preserve records with respect to the 
actual costs incurred in connection with exchanges for at least six 
years, and (iii) give the fund's shareholders a sixty day notice of a 
termination of an exchange offer or any material amendment to the terms 
of an exchange offer (unless the only material effect of an amendment 
is to reduce or eliminate an administrative fee, sales load or 
redemption fee payable at the time of an exchange).
    The rule's requirements are designed to protect investors against 
abuses associated with exchange offers, provide fund shareholders with 
information necessary to evaluate exchange offers and certain material 
changes in the terms of exchange offers, and enable the Commission 
staff to monitor funds' use of administrative fees charged in 
connection with exchange transactions.
    The staff estimates that there are approximately 1,790 active open-
end investment companies registered with the Commission as of June 
2011. The staff estimates that 25 percent (or 448) of these funds 
impose a non-nominal administrative fee on exchange transactions. The 
staff estimates that the recordkeeping requirement of the rule requires 
approximately 1 hour annually of clerical time per fund, for a total of 
448 hours for all funds.\1\
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    \1\ This estimate is based on the following calculations: (1,790 
funds x 0.25% = 448 funds); (448 x 1 (clerical hour) = 448 clerical 
hours).
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    The staff estimates that 5 percent of these 1,790 funds (or 90) 
terminate an exchange offer or make a material change to the terms of 
their exchange offer each year, requiring the fund to comply with the 
notice requirement of the rule. The staff estimates that complying with 
the notice requirement of the rule requires approximately 1 hour of 
attorney time and 2 hours of clerical time per fund, for a total of 
approximately 270 hours for all funds to comply with the notice 
requirement.\2\ The recordkeeping and notice requirements together 
therefore impose a total burden of 718 hours on all funds.\3\ The total 
number of respondents is 538, each responding once a year.\4\ The 
burdens associated with the disclosure requirement of the rule are 
accounted for in the burdens associated with the Form N-1A registration 
statement for funds.
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    \2\ This estimate is based on the following calculations: (1790 
(funds) x 0.05% = 90 funds); (90 x 1 (attorney hour) = 90 total 
attorney hours); (90 (funds) x 2 (clerical hours) = 180 total 
clerical hours); (90 (attorney hours) + 180 (clerical hours) = 270 
total hours).
    \3\ This estimate is based on the following calculations: (270 
(notice hours) + 448 (recordkeeping hours) = 718 total hours).
    \4\ This estimate is based on the following calculation: (448 
funds responding to recordkeeping requirement + 90 funds responding 
to notice requirement = 538 total respondents).
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    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. 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.
    The public may view the background documentation for this 
information collection at the following Web site, http://www.reginfo.gov. Comments should be directed to: (i) Desk Officer for 
the Securities and Exchange Commission, Office of Information and 
Regulatory Affairs, Office of Management and Budget, Room 10102, New 
Executive Office Building, Washington, DC 20503, or by sending an email 
to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 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: November 3, 2011.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-28899 Filed 11-7-11; 8:45 am]
BILLING CODE 8011-01-P


