[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Notices]
[Pages 55044-55045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21584]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-373; OMB Control No. 3235-0422]


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

Extension:
    Rule 23c-3 and Form N-23c-3

    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'') has submitted to the Office of 
Management and Budget (``OMB'') a request for extension of the 
previously approved collection of information discussed below.
    Rule 23c-3 (17 CFR 270.23c-3) under the Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) permits a registered closed-end 
investment company (``closed-end fund'' or ``fund'') that meets certain 
requirements to repurchase common stock of which it is the issuer from 
shareholders at periodic intervals, pursuant to repurchase offers made 
to all holders of the stock. The rule enables these funds to offer 
their shareholders a limited ability to resell their shares in a manner 
that previously was available only to open-end investment company 
shareholders.
    There have been recent regulatory developments put forth by the 
Commission that will provide shareholders of closed-end funds with

[[Page 55045]]

additional benefits. Effective August 1, 2021, rule 23c-3 will be 
amended by including a new subparagraph (e) that will permit a fund 
that relies on rule 23c-3 to register an indefinite amount of 
securities, under Section 24 of the Investment Company Act upon the 
effectiveness of a fund's registration statement.\1\ In addition, 
concurrent with the implementation of rule 23c-3(e), the Commission 
adopted an amendment to rule 24f-2 under the Investment Company Act, 
permitting closed-end funds to compute registration fees on an annual 
net basis.\2\ The Commission's intent in proposing and adopting rules 
23c-3(e) and 24f-2(a) respectively, was to avoid the possibility a 
closed-end fund of inadvertently selling more shares than it had 
registered.\3\ These revisions to rule 23c-3 do not impose additional 
collections of information.
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    \1\ 17 CFR 270.23c-3(e).
    \2\ 17 CFR 270.24f-2(a).
    \3\ Securities Offering Reform for Closed-End Investment 
Companies (SEC Rel. No. IC-33427) (Mar. 20, 2019) [84 FR 14448 (Apr. 
10, 2019)] at 64.
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    Notwithstanding these recent regulatory developments, a closed-end 
fund that relies on rule 23c-3 must send shareholders a notification 
that contains specified information each time the fund makes a 
repurchase offer (on a quarterly, semi-annual, or annual basis, or, for 
certain funds, on a discretionary basis not more often than every two 
years). The fund also must file copies of the shareholder notification 
with the Commission (electronically through the Commission's Electronic 
Data Gathering, Analysis, and Retrieval System (``EDGAR'')) on Form N-
23c-3, a filing that provides certain information about the fund and 
the type of offer the fund is making.\4\ The fund must describe in its 
annual report to shareholders the fund's policy concerning repurchase 
offers and the results of any repurchase offers made during the 
reporting period. The fund's board of directors must adopt written 
procedures designed to ensure that the fund's investment portfolio is 
sufficiently liquid to meet its repurchase obligations and other 
obligations under the rule. The board periodically must review the 
composition of the fund's portfolio and change the liquidity procedures 
as necessary. The fund also must file copies of advertisements and 
other sales literature with the Commission as if it were an open-end 
investment company subject to Section 24 of the Investment Company Act 
(15 U.S.C. 80a-24) and the rules that implement Section 24. Rule 24b-3 
under the Investment Company Act (17 CFR 270.24b-3), however, exempts 
the fund from that requirement if the materials are filed instead with 
the Financial Industry Regulatory Authority (``FINRA'').
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    \4\ Form N-23c-3, entitled ``Notification of Repurchase Offer 
Pursuant to Rule 23c-3,'' requires the fund to state its 
registration number, its full name and address, the date of the 
accompanying shareholder notification, and the type of offer being 
made (periodic, discretionary, or both).
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    The requirement that the fund send a notification to shareholders 
of each offer is intended to ensure that a fund provides material 
information to shareholders about the terms of each offer. The 
requirement that copies be sent to the Commission is intended to enable 
the Commission to monitor the fund's compliance with the notification 
requirement. The requirement that the shareholder notification be 
attached to Form N-23c-3 is intended to ensure that the fund provides 
basic information necessary for the Commission to process the 
notification and to monitor the fund's use of repurchase offers. The 
requirement that the fund describe its current policy on repurchase 
offers and the results of recent offers in the annual shareholder 
report is intended to provide shareholders current information about 
the fund's repurchase policies and its recent experience. The 
requirement that the board approve and review written procedures 
designed to maintain portfolio liquidity is intended to ensure that the 
fund has enough cash or liquid securities to meet its repurchase 
obligations, and that written procedures are available for review by 
shareholders and examination by the Commission. The requirement that 
the fund file advertisements and sales literature as if it were an 
open-end fund is intended to facilitate the review of these materials 
by the Commission or FINRA to prevent incomplete, inaccurate, or 
misleading disclosure about the special characteristics of a closed-end 
fund that makes periodic repurchase offers.
    The Commission staff estimates that 60 funds make use of rule 23c-3 
annually, including 32 funds that are relying upon rule 23c-3 for the 
first time. The Commission staff estimates that on average a fund 
spends 89 hours annually in complying with the requirements of the rule 
and Form N-23c-3, with funds relying upon rule 23c-3 for the first time 
incurring an additional one-time burden of 28 hours. The Commission 
therefore estimates the total annual hour burden of the rule's and 
form's paperwork requirements to be 6,236 hours. In addition to the 
burden hours, the Commission staff estimates that the average yearly 
cost to each fund that relies on rule 23c-3 to print and mail 
repurchase offers to shareholders is about $32,744.13. The Commission 
estimates total annual cost is therefore about $1,964,647.
    Estimates of average burden hours and costs are made solely for 
purposes of the Paperwork Reduction Act and are not derived from a 
comprehensive or even representative survey or study of the costs of 
Commission rules and forms. Compliance with the collection of 
information requirements of the rule and form is mandatory only for 
those funds that rely on the rule in order to repurchase shares of the 
fund. The information provided to the Commission on Form N-23c-3 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 OMB control number.
    The public may view background documentation for this information 
collection at the following website:www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by 
sending an email to: PRA_Mailbox@sec.gov.

    Dated: September 29, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21584 Filed 10-4-21; 8:45 am]
BILLING CODE 8011-01-P


