[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Notices]
[Pages 8303-8304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3337]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Extension:
Rule 17g-1; SEC File No. 270-208; OMB Control No. 3235-0213.
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'') is soliciting comments on the
collection of information summarized below. The Commission plans to
submit this existing collection of information to the Office of
Management and Budget for extension and approval.
Rule 17g-1 (17 CFR 270.17g-1) under the Investment Company Act of
1940 (the ``Act'') (15 U.S.C. 80a-17(g)) governs the fidelity bonding
of officers and employees of registered management investment companies
(``funds'') and their advisers. Rule 17g-1 requires, in part, the
following:
Independent Directors' Approval
The form and amount of the fidelity bond must be approved by a
majority of the fund's independent directors at least once annually,
and the amount of any premium paid by the fund for any ``joint insured
bond,'' covering multiple funds or certain affiliates, must be approved
by a majority of the fund's independent directors.
Terms and Provisions of the Bond
The amount of the bond may not be less than the minimum amounts of
coverage set forth in a schedule based on the fund's gross assets; the
bond must provide that it shall not be cancelled, terminated, or
modified except upon 60-days written notice to the affected party and
to the Commission; in the case of a joint insured bond, 60-days written
notice must also be given to each fund covered by the bond; a joint
insured bond must provide that the fidelity insurance company will
provide all funds covered by the bond with a copy of the agreement, a
copy of any claim on the bond, and notification of the terms of the
settlement of any claim prior to execution of that settlement; and a
fund that is insured by a joint bond must enter into an agreement with
all other parties insured by the joint bond regarding recovery under
the bond.
Filings With the Commission
Upon the execution of a fidelity bond or any amendment thereto, a
fund must file with the Commission within 10 days a copy of the
executed bond or any amendment to the bond, the independent directors'
resolution approving the bond, and a statement as to the period for
which premiums have been paid on the bond. In the case of a joint
insured bond, a fund must also file (i) a statement showing the amount
the fund would have been required to maintain under the rule if it were
insured under a single insured bond and (ii) the agreement between the
fund and all other insured parties regarding recovery under the bond. A
fund must also notify the Commission in writing within five days of any
claim or settlement on a claim under the fidelity bond.
Notices to Directors
A fund must notify by registered mail each member of its board of
directors of (i) any cancellation, termination, or modification of the
fidelity bond at least 45 days prior to the effective date, and (ii)
the filing or settlement of any claim under the fidelity bond when
notification is filed with the Commission.
[[Page 8304]]
Rule 17g-1's independent directors' annual review requirements,
fidelity bond content requirements, joint bond agreement requirement
and the required notices to directors seek to ensure the safety of fund
assets against losses due to the conduct of persons who may obtain
access to those assets. These requirements also seek to facilitate
oversight of a fund's fidelity bond. The rule's required filings with
the Commission are designed to assist the Commission in monitoring
funds' compliance with the fidelity bond requirements.
Based on conversations with representatives in the fund industry,
the Commission staff estimates that for each of the estimated 3479
active funds,\1\ the average annual paperwork burden associated with
rule 17g-1's requirements is two hours, one hour each for a compliance
attorney and the board of directors as a whole. The time spent by
compliance attorney includes time spent filing reports with the
Commission for any fidelity losses (if any) as well as paperwork
associated with any notices to directors, and managing any updates to
the bond and the joint agreement (if one exists). The time spent by the
board of directors as a whole includes any time spent initially
establishing the bond, as well as time spent on annual updates and
approvals. The Commission staff therefore estimates the total ongoing
paperwork burden hours per year for all funds required by rule 17g-1 to
be 6958 hours (3479 funds x 2 hours = 6958 hours).
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\1\ Based on statistics compiled by Commission staff, we
estimate that there are approximately 3479 funds that must comply
with the collections of information under rule 17g-1 and have made a
filing within the last 12 months.
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These 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 Commission rules. The collection of information required by rule
17g-1 is mandatory and 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 control
number.
Written comments are requested on: (a) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information has practical
utility; (b) the accuracy of the Commission's estimate of the burden of
the collection of information; (c) ways to enhance the quality, utility
and clarity of the information collected; and (d) ways to minimize the
burden of the collection of information on respondents, including
through the use of automated collection techniques or other forms of
information technology. Consideration will be given to comments and
suggestions submitted in writing within 60 days of this publication.
Please direct your written comments to 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: [email protected].
February 8, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3337 Filed 2-13-12; 8:45 am]
BILLING CODE 8011-01-P