[Federal Register Volume 65, Number 149 (Wednesday, August 2, 2000)]
[Notices]
[Pages 47524-47525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19447]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION


[Rule 17f-6; SEC File No. 270-392; OMB Control No. 3235-0447]

Proposed Collection; Comment Request

    Upon Written Request, Copies Available From: Securities and 
Exchange Commission, Office of Filings and Information Services, 
Washington, D.C. 20549.
    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'' 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 17f-6 under the Investment Company Act of 1940 [17 CFR 
270.17f-6] permits registered investment companies (``funds'') to 
maintain assets (i.e., margin) with futures commission merchants 
(``FCMs'') in connection with commodity transactions effected on both 
domestic and foreign exchanges.\1\ Prior to the rule's adoption, funds 
generally were required to maintain these assets in special accounts 
with a custodian bank.
---------------------------------------------------------------------------

    \1\ Custody of Investment Company Assets With Futures Commission 
Merchants and Commodity Clearing Organizations, Investment Company 
Act Release No. 22389 (Dec. 11, 1996) [61 FR 66207 (Dec. 17, 1996)].
---------------------------------------------------------------------------

    Rule 17f-6 permits funds to maintain their assets with FCMs that 
are registered under the Commodity Exchange Act (``CEA'') and that are 
not affiliated with the fund. The rule requires that a written contract 
containing the following provisions govern the manner in which the FCM 
maintains a fund's assets:
     The FCM must comply with the segregation requirements of 
section 4d(2) of the CEA [7 U.S.C. 6d(2)] and the rules under that 
statute [17 CFR Chapter I] or, if applicable, the secured amount 
requirements of rule 30.7 under the CEA [17 CFR 30.7];
     If the FCM places the fund's margin with another entity 
for clearing purposes, the FCM must obtain an acknowledgment from the 
clearing organization that the fund's assets are held on behalf of the 
FCM's customers in accordance with provisions under the CEA; and
     Upon request the FCM must furnish records about the fund's 
assets to the Commission or its staff.
    The rule requires a written contract that contains certain 
provisions to ensure important safeguards and other benefits relating 
to the custody of fund assets by FCMs. For example, the requirement 
that FCMs comply with the segregation or secured amount requirements of 
the CEA and the rules under that statute is designed to protect fund 
assets held by FCMs. The contract requirement that an FCM obtain an 
acknowledgment from an entity that clears fund transactions that the 
fund's assets are held on behalf of the FCM's

[[Page 47525]]

customers according to CEA provisions seeks to accommodate the 
legitimate needs of the participants in the commodity settlement 
process, consistent with the protection of fund assets. Finally, FCMs 
are required to furnish to the Commission or its staff on request 
information concerning the fund's assets in order to facilitate 
Commission inspections of funds.
    The Commission estimates that approximately 3,031 funds could 
deposit margin with FCMs under rule 17f-6 in connection with their 
investments in futures contracts and commodity options. The Commission 
further estimates that each fund uses and deposits margin with 3 
different FCMs in connection with its commodity transactions. 
Approximately 211 FCMs are eligible to hold fund and margin under the 
rule.\2\
---------------------------------------------------------------------------

    \2\ Commodity Futures Trading Commission, ANNUAL REPORT (1999).
---------------------------------------------------------------------------

    The only collection of information requirements of rule 17f-6 are 
the rule's contract requirements. The Commission estimates that 3,031 
funds will spend an average of 1 hour complying with the contract 
requirements of the rule (e.g., signing contracts with additional 
FCMs), for a total of 3,031 burden hours. The estimate of average 
burden hours is made solely for the purposes of the Paperwork Reduction 
Act, and is not derived from a comprehensive or even a representative 
survey or study of the costs of Commission rules and forms.
    Written comments are invited 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 or respondents, 
including through the use of automated collection techniques or other 
forms of information technology. The Commission will consider comments 
and suggestions submitted in writing within 60 days after 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: July 24, 2000.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-19447 Filed 8-11-00; 8:45 am]
BILLING CODE 8010-01-M