[Federal Register Volume 64, Number 234 (Tuesday, December 7, 1999)]
[Notices]
[Page 68397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31638]
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SECURITIES AND EXCHANGE COMMISSION
Existing Collection; Comment Request
Upon written request, copies available from: Securities and
Exchange Commission, Office of Filings and Information Services, 450
5th Street, NW., Washington, DC 20549.
Extension: Rule 18f-3; SEC File No. 270-385; OMB Control No. 3235-
0441
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 (``OMB'') for extension and approval.
Section 18(f)(1) \1\ of the Investment Company Act of 1940 \2\ (the
``Investment Company Act'') prohibits registered open-end management
investment companies (``funds'') from issuing any senior security. Rule
18f-3 under the Act \3\ exempts from section 18(f)(1) a fund that
issues multiple classes of shares representing interests in the same
portfolio of securities (a ``multiple class fund'') if the fund
satisfies the conditions of the rule. In general, each class must
differ in its arrangement for shareholder services or distribution or
both, and must pay the related expenses of the different arrangement.
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\1\ 15 U.S.C. 80a-18(f)(1).
\2\ 15 U.S.C. 80a.
\3\ 17 CFR 270.18f-3.
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The rule includes one requirement for the collection of
information. A multiple class fund must prepare and fund directors must
approve a written plan setting forth the separate arrangement and
expense allocation of each class, and any related conversion features
or exchange privileges (``rule 18f-3 plan''). \4\ Approval of the plan
must occur before the fund issues any shares of multiple classes, and
whenever the fund materially amends the plan. In approving the plan,
the fund board, including a majority of the independent directors, must
determine that the plan is in the best interests of each class and the
fund as a whole.
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\4\ Rule 18f-3(d).
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The requirement that the fund prepare and directors approve a
written rule 18f-3 plan is intended to ensure that the fund compiles
information relevant to the fairness of the separate arrangement and
expense allocation for each class, and that directors review and
approve the information. Without a blueprint that highlights material
differences among classes, directors might not perceive potential
conflicts of interests when they determine whether the plan is in the
best interests of each class and the fund. In addition, the plan may be
useful to Commission staff in reviewing the fund's compliance with the
rule.
There are approximately 550 multiple class funds.\5\ Based on a
review of typical rule 18f-3 plans, the Commission's staff estimates
that the 550 funds together make an average of 275 responses each year
to prepare and approve a written rule 18f-3 plan, requiring
approximately 5.5 hours per response, and a total of 1512.5 burden
hours per year in the aggregate.\6\ The estimated annual burden of
1512.5 hours represents an increase of 912.5 hours over the prior
estimate of 600 hours. The increase in burden hours is attributable to
more accurate estimates of the burden hours that reflect additional
time spent by professionals and time spent by directors. The estimated
number of multiple class funds has decreased, however, from 600 to 550.
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\5\ This estimate is based on data from Form N-SAR, the semi-
annual report that funds file with the Commission.
\6\ The estimate reflects the assumption that each multiple
class fund prepares and approves a rule 18f-3 plan every two years
when issuing a new class or amending a plan (or that 275 of all 550
funds prepare and approve a plan each year). The estimate assumes
that the time required to prepare a plan is 3 hours per plan (or 825
hours for 275 funds annually), and the time required to approve a
plan is an additional 2.5 hours per plan (or 687.5 hours for 275
funds annually.)
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The estimate of average burden hours is make 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 18f-3. Responses 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 invited on: (a) whether the collections of
information are 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 burdens
of the collections of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burdens of the collections 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 Michael E. Bartell,
Associate Executive Director, Office of Information Technology,
Securities and Exchange Commission, 450 5th Street, NW, Washington, DC
20549.
Dated: November 30, 1999.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-31638 Filed 12-6-99; 8:45 am]
BILLING CODE 8010-01-M