[Federal Register Volume 76, Number 42 (Thursday, March 3, 2011)]
[Notices]
[Pages 11826-11827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4724]
-----------------------------------------------------------------------
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 17a-6; SEC File No. 270-506; OMB Control No. 3235-0564.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501), the Securities and Exchange Commission
(``Commission'') has submitted to the Office of Management and Budget
(``OMB'') a request for extension of the previously approved collection
of information discussed below.
Section 17(a) of the Investment Company Act of 1940 (the ``Act'')
generally prohibits affiliated persons of a registered investment
company (``fund'') from borrowing money or other property from, or
selling or buying securities or other property to or from, the fund or
any company that the fund controls.\1\ Rule 17a-6 (17 CFR 270.17a-6)
permits a fund and a ``portfolio affiliate'' (a company that is an
affiliated person of the fund because the fund controls the company, or
holds five percent or more of the company's outstanding voting
securities) to engage in principal transactions that would otherwise be
prohibited under section 17(a) of the Act under certain conditions. A
fund may not rely on the exemption in the rule to enter into a
principal transaction with a portfolio affiliate if certain prohibited
participants (e.g., directors, officers, employees, or investment
advisers of the fund) have a financial interest in a party to the
transaction. Rule 17a-6 specifies certain interests that are not
``financial interests,'' including any interest that the fund's board
of directors (including a majority of the directors who are not
interested persons of the fund) finds to be not material. A board
making this finding is required to record the basis for the finding in
its meeting minutes. This recordkeeping requirement is a collection of
information under the Paperwork Reduction Act of 1995 (``PRA'').\2\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 80a-17(a).
\2\ 44 U.S.C. 3501.
---------------------------------------------------------------------------
The rule is designed to permit transactions between funds and their
portfolio affiliates in circumstances in which it is unlikely that the
affiliate would be in a position to take advantage of the fund. In
determining whether a financial interest is ``material,'' the board of
the fund should consider whether the nature and extent of the interest
in the transaction is sufficiently small that a reasonable person would
not believe that the interest affected the determination of whether to
enter into the transaction or arrangement or the terms of the
transaction or arrangement. The information collection requirements in
rule 17a-6 are intended to ensure that Commission staff can review, in
the course of its compliance and examination functions, the basis for a
board of director's finding that the financial interest of an otherwise
prohibited participant in a party to a transaction with a portfolio
affiliate is not material.
Based on staff discussions with fund representatives, we estimate
that funds currently do not rely on the exemption from the term
``financial interest'' with respect to any interest that the fund's
board of directors (including a majority of the directors who are not
interested persons of the fund) finds to be not material. Accordingly,
we estimate that annually there will be no principal transactions under
rule 17a-6 that will result in a collection of information.
The Commission requests authorization to maintain an inventory of
one burden hour to ease future renewals of rule 17a-6's collection of
information analysis should funds rely
[[Page 11827]]
on this exemption to the term ``financial interest'' as defined in rule
17a-6.
The estimate of burden hours is made solely for the purposes of the
Paperwork Reduction Act. The estimate is not derived from a
comprehensive or even a representative survey or study of the costs of
Commission rules. Complying with this collection of information
requirement is necessary to obtain the benefit of relying on rule 17a-
6. 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 e-
mail to: [email protected]; and (ii) Thomas Bayer, Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312 or send an
e-mail to: [email protected]. Comments must be submitted to OMB
within 30 days of this notice.
Dated: February 25, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4724 Filed 3-2-11; 8:45 am]
BILLING CODE 8011-01-P