[Federal Register Volume 66, Number 110 (Thursday, June 7, 2001)]
[Notices]
[Page 30771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14329]



[[Page 30771]]

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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Extension: Rule 23c-3 and Form N-23c-3; SEC File No. 270-373; OMB 
Control No. 3235-0422]

    Upon written request, copies available from: Securities and 
Exchange Commission, Office of Filings and Information Services, 450 
5th Street, NW., Washington, DC 20549.
    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 350 et. seq.), 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] is entitled: ``Repurchase of Securities of Closed-End 
Companies.'' The rule 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'')) 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 
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 staff estimates that 23 funds currently rely upon 
the rule. The staff 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 offer, 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 2898 
hours. This represents an increase of 1638 hours from the prior 
estimate of 1260 hours. The increase results primarily from an increase 
in the number of funds relying upon the rule from 10 to 23 funds.
    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 mandatory only for those funds that rely on the rule 
in order to repurchase shares of the fund. 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, New Executive Office Building, Washington, DC 
20503; and (ii) Michael E. Bartell, Associate Executive Director, 
Office of Information Technology, Securities and Exchange Commission, 
450 5th Street, NW., Washington, DC 20549. Comments must be submitted 
to OMB within 30 days of this notice.

    Dated: June 1, 2001.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-14329 Filed 6-6-01; 8:45 am]
BILLING CODE 8010-01-M