[Federal Register Volume 63, Number 91 (Tuesday, May 12, 1998)]
[Notices]
[Pages 26222-26223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12552]
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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 Filings and Information Services, 450 5th Street,
N.W., Washington, D.C. 20549.
Extension:
Rule 23c-3 and Form N-23c-3, SEC File No. 270-373, OMB Control
No. 3235-0422
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 (``OMB'') a request for extension and approval of
the collections of information discussed below.
Rule 23c-3 under the Investment Company Act of 1940 [17 CFR
270.23c-3] permits certain closed-end investment companies (``Closed-
end funds'' or ``funds'') periodically to offer to repurchase from
shareholders a limited number of shares at net asset value. The rule
includes several reporting and recordkeeping requirements. The fund
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'') or by sending three paper
copies) attached to Form N-23c-3 [17 CFR 274.221], a cover sheet that
provides limited information about the fund and the type of offer the
fund is making.\1\ 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.\2\
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\1\ Form N-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).
\2\ Rule 24b-3 under the Investment Company Act [17 CFR 270.24b-
3], however, would generally exempt the fund from that requirement
when the materials are filed instead with the National Association
of Securities Dealers (``NASD''), as nearly always occurs under NASD
procedures, which apply to the underwriter of every fund.
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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, which may
differ from previous offers on such matters as the maximum amount of
shares to be repurchased (the maximum repurchase amount may range from
5% to 25% of outstanding shares). 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
[[Page 26223]]
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 investment company is intended to facilitate
the review of these materials by the Commission or the NASD to prevent
incomplete, inaccurate, or misleading disclosure about the special
characteristics of a closed-end fund that makes periodic repurchase
offers.
The Commission estimates that 10 funds currently rely upon the
rule. The Commission estimates that each fund spends approximately 80
hours annually in preparing, mailing, and filing shareholder
notifications for each repurchase offer, 4 hours annually in preparing
and filing Form N-23c-3, 6 hours annually in preparing disclosures in
the annual shareholder report concerning the fund's repurchase policy
and recent offers, 28 hours annually in preparing procedures to protect
portfolio liquidity, and 8 hours annually in performing subsequent
reviews of these procedures. The total annual burden of the rule's
paperwork requirements for all funds thus is estimated to be 1,260
hours. This represents an increase of 940 hours from the prior estimate
of 320 hours. The increase results primarily from the recognition that
sending notifications to shareholders and completing Form N-23c-3
imposes burdens in addition to the burden of preparing and filing the
shareholder notifications with the Commission.\3\ The remaining
increase results from a more accurate calculation of the component
parts of other previously combined information burdens.
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\3\ The Commission has not previously submitted to OMB a request
for approval under the Paperwork Reduction Act for the collection of
information in Form N-23c-3.
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The estimate of average 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 and forms.
Compliance with the collection of information requirements of the
rule and form is necessary to obtain the benefit of relying on the rule
and form. 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.
Please direct general comments regarding the above information to
the following persons: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 3208, New Executive Office Building,
Washington, D.C. 20503; and (ii) Michael E. Bartell, Associate
Executive Director, Office of Information Technology, Securities and
Exchange Commission, Mail Stop 0-4, 450 5th Street, N.W., Washington,
D.C. 20549. Comments must be submitted to OMB on or before June 11,
1998.
Dated: May 4, 1998.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-12552 Filed 5-11-98; 8:45 am]
BILLING CODE 8010-01-M