[Federal Register Volume 67, Number 11 (Wednesday, January 16, 2002)]
[Notices]
[Pages 2254-2255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1098]


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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, Washington, DC 
20549.

Extension:
    Rule 7d-1, OMB Control No. 3235-0311, SEC File No. 270-176

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collections 
of information summarized below. The Commission plans to submit these 
existing collections of information to the Office of Management and 
Budget for extension and approval.
    Section 7(d) of the Investment Company Act of 1940 [15 U.S.C. 80a-
7(d)] (the ``Act'' or ``Investment Company Act'') requires an 
investment company (``fund'') organized outside the United States 
(``foreign fund'') to obtain an order from the Commission allowing the 
fund to register under the Act before making a public offering of its 
securities through the United States mail or any means of interstate 
commerce. The Commission may issue an order only if it finds that it is 
both legally and practically feasible effectively to enforce the 
provisions of the Act against the foreign fund, and that the 
registration of the fund is consistent with the public interest and 
protection of investors.
    Rule 7d-1 [17 CFR 270.7d-1] under the Act, which was adopted in 
1954, specifies the conditions under which a Canadian management 
investment company (``Canadian fund'') may request an order from the 
Commission permitting it to register under the Act. Although rule 7d-1 
by its terms applies only to Canadian funds, other foreign funds 
generally have agreed to comply with the requirements of rule 7d-1 as a 
prerequisite to receiving an order permitting those foreign funds' 
registration under the Act.
    The rule requires a Canadian fund that wishes to register to file 
an application with the Commission that contains various undertakings 
and agreements by the fund. Certain of these undertakings and 
agreements, in turn, impose the following additional information 
collection requirements:
    (1) The fund must file agreements between the fund and its 
directors, officers, and service providers requiring them to comply 
with the fund's charter and bylaws, the Act, and certain other 
obligations relating to the undertakings and agreements in the 
application;
    (2) The fund and each of its directors, officers, and investment 
advisers that is not a U.S. resident, must file an irrevocable 
designation of the fund's custodian in the United States as agent for 
service of process;
    (3) The fund's charter and bylaws must provide that (a) the fund 
will comply with certain provisions of the Act applicable to all funds, 
(b) the fund will maintain originals and copies of its books and 
records in the United States, and (c) the fund's contracts with its 
custodian, investment adviser, and principal underwriter, will contain 
certain terms, including a requirement that the adviser maintain 
originals or copies of pertinent records in the United States;
    (4) The funds contracts with service providers will require that 
the provider perform the contract in accordance with the Act, the 
Securities Act of 1933 [15 U.S.C. 77a-77z-3], and the Securities 
Exchange Act of 1934 [15 U.S.C. 78a-78mm], as applicable; and
    (5) The fund must file, and periodically revise, a list of persons 
affiliated with the fund or its adviser or underwriter.
    Under section 7(d) of the Act the Commission may issue an order 
permitting a foreign fund's registration only if the Commission finds 
that ``by reason of special circumstances or arrangements, it is both 
legally and practically feasible effectively to enforce the provisions 
of the [Act].'' The information collection requirements are necessary 
to assure that the substantive provisions of the Act may be enforced as 
a matter of contract right in the United States or Canada by the fund's 
shareholders or by the Commission.
    Certain information collection requirements in rule 7d-1 are 
associated with complying with the Act's provisions. These requirements 
are reflected in the information collection requirements applicable to 
those provisions for all registered funds.
    The Commission believes that one fund is registered under rule 7d-1 
and currently active. Apart from requirements under the Act applicable 
to all registered funds, rule 7d-1 imposes ongoing burdens to maintain 
records in the United States, and to update, as necessary, the fund's 
list of affiliated persons. The Commission staff estimates that the 
rule requires a total of three responses each year. The staff estimates 
that a respondent would make two responses each year under the rule, 
one response to maintain records in the United States and one response 
to update its list of affiliated persons. The Commission staff further 
estimates that a respondent's investment adviser would make one 
response each year under the rule to maintain records in the United 
States. Commission staff estimates that each recordkeeping response 
would require 6.25 hours each of secretarial and compliance clerk time 
at a cost of $13.48 and $12.77 per hour, respectively, and the response 
to update the list of affiliated persons would require 0.25 hours of 
secretarial time, for a total annual burden of 25.25 hours at a cost of 
$331.49. The estimated number of 25.25 burden hours is identical to the 
current allocation.
    If a fund were to file an application under this rule, the 
Commission estimates that the rule would impose

[[Page 2255]]

initial information collection burdens (for filing an application, 
preparing the specified charter, bylaw, and contract provisions, 
designations of agents for service of process, and an initial list of 
affiliated persons, and establishing a means of keeping records in the 
United States) of approximately 90 hours for the fund and its 
associated persons. The Commission is not including these hours in its 
calculation of the annual burden because no foreign fund has applied 
under rule 7d-1 to register under the Act in the last three years.
    After registration, a foreign fund may file a supplemental 
application seeking special relief designed for the fund's particular 
circumstances. Because rule 7d-1 does not mandate these applications 
and the fund determines whether to submit an application, the 
Commission has not allocated any burden hours for the applications.
    The estimates of burden hours are made solely for the purposes of 
the Paperwork Reduction Act. The estimates are not derived from a 
comprehensive or even a representative survey or study of Commission 
rules and forms.
    The Commission believes that the active registrant and its 
associated persons may spend (excluding the cost of burden hours) 
approximately $540 per year in maintaining records in the United 
States. These estimated costs include fees for a custodian or other 
agent to retain records, storage costs, and the costs of transmitting 
records.
    If a Canadian or other foreign fund in the future applied to 
register under the Act under rule 7d-1, the fund initially might have 
capital and start-up costs (not including hourly burdens) of an 
estimated $17,280 to comply with the rule's initial information 
collection requirements. These costs include legal and processing-
related fees for preparing the required documentation (such as the 
application, charter, bylaw, and contract provisions), designations for 
service of process, and the list of affiliated persons. Other related 
costs would include fees for establishing arrangements with a custodian 
or other agent for maintaining records in the United States, copying 
and transportation costs for records, and the costs of purchasing or 
leasing computer equipment, software, or other record storage equipment 
for records maintained in electronic or photographic form.
    The Commission expects that a fund and its sponsors would incur 
these costs immediately, and that the annualized cost of the 
expenditures would be $17,280 in the first year. Some expenditures 
might involve capital improvements, such as computer equipment, having 
expected useful lives for which annualized figures beyond the first 
year would be meaningful. These annualized figures are not provided, 
however, because, in most cases, the expenses would be incurred 
immediately rather than on an annual basis. The Commission is not 
including these costs in its calculation of the annualized capital/
start-up costs because no foreign fund has applied under rule 7d-1 to 
register under the Act pursuant to rule 7d-1 in the last three years.
    We request written comment 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 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. We will consider comments and 
suggestions submitted in writing within 60 days of this publication.
    Direct your written comments to Michael E. Bartell, Associate 
Executive Director, Officer of Information Technology, Securities and 
Exchange Commission, Mail Stop 0-4, 450 5th Street, NW., Washington, DC 
20549.

    Dated: January 9, 2002.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-1098 Filed 1-15-02; 8:45 am]
BILLING CODE 8010-01-M