[Federal Register Volume 67, Number 40 (Thursday, February 28, 2002)]
[Notices]
[Pages 9335-9336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4720]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, 
DC 20549.
Approval of Existing Information Collections:
    Rule 27d-1 and Form N-27D-1, SEC File No. 270-499, OMB Control 
No. 3235-new,
    Rule 27d-2, SEC File No. 270-500, OMB Control No. 3235-new.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 350l et seq., the Securities and Exchange 
Commission (the ``Commission'') is soliciting comments on the 
collections of information under the Investment Company Act of 1940 
(``Act'') summarized below. The Commission plans to submit these 
collections of information to the Office of Management and Budget for 
approval.
    Rule 27d-1 [17 CFR 270.27d-1] is entitled ``Reserve Requirements 
for Principal Underwriters and Depositors to Carry Out the Obligations 
to Refund Charges Required by Section 27(d) and Section 27(f) of the 
Act.'' Form N-27D-1 is entitled ``Accounting of Segregated Trust 
Account.'' Rule 27d-2 [17 CFR 270.27d-2] is entitled ``Insurance 
Company Undertaking in Lieu of Segregated Trust Account.'' Rule 27d-1 
requires the depositor or principal underwriter for an issuer to 
deposit funds into a segregated trust account to provide assurance of 
its ability to fulfill its refund obligations under sections 27(d) and 
27(f). The rule sets forth minimum reserve amounts and guidelines for 
the management and disbursement of the assets in the account. A single 
account may be used for the periodic payment plans of multiple 
investment companies. Rule 27d-1(j) directs depositors and principal 
underwriters to make an accounting of their segregated trust accounts 
on Form N-27D-1, which is intended to facilitate the Commission's 
oversight of compliance with the reserve requirements set forth in rule 
27d-1. The form requires depositors and principal underwriters to 
report deposits to a segregated trust account, including those made 
pursuant to paragraphs (c) and (e) of the rule. Withdrawals pursuant to 
paragraph (f) of the rule also must be reported. In addition, the form 
solicits information regarding the minimum amount required to be 
maintained under paragraphs (d) and (e) of rule 27d-1. Depositors and 
principal underwriters must file the form once a year on or before 
January 31 of the year following the year for which information is 
presented.
    Instead of relying on rule 27d-1 and filing Form N-27D-1, 
depositors or principal underwriters for the issuers of periodic 
payment plans may rely on the exemption afforded by rule 27d-2. In 
order to comply with the rule, (i) the depositor or principal 
underwriter must secure from an insurance company a written guarantee 
of the refund requirements, (ii) the insurance company must satisfy 
certain financial criteria, and (iii) the depositor or principal 
underwriter must file as an exhibit to its registration statement, a 
copy of the written undertaking, an annual statement that the insurance 
company has met the requisite financial criteria on a monthly basis, 
and an annual audited balance sheet.
    Rules 27d-1 and 27d-2, which were explicitly authorized by statute, 
provide assurance that depositors and principal underwriters of issuers 
have access to sufficient cash to meet the demands of certificate 
holders who reconsider their decision to invest in a periodic payment 
plan. The information collection requirements in rules 27d-1 and 27d-2 
enable the Commission to monitor compliance with reserve rules.
    Commission staff estimates that there are three issuers of periodic 
payment plan certificates. The depositor or principal underwriter of 
each of these issuers must file Form N-27D-1 annually or comply with 
the requirements in rule 27d-2. One Form N-27D-1 is filed annually. The 
Commission estimates that a staff accountant spends 4 hours and an 
accounting manager spends 2 hours preparing Form N-27D-1. Therefore, 
the total annual hour burden associated with rule 27d-1 and Form N-27d-
1 is estimated to be 6 hours. The staff estimates that two depositors 
or principal underwriters rely on rule 27d-2 and that each of these 
respondents makes three responses annually. We estimate that each 
depositor or underwriter expends approximately two hours per year 
obtaining a written guarantee from an insurance company or negotiating 
changes to coverage with the insurance company and 4.5 hours per year 
filing the two required documents from the insurance company on EDGAR. 
Thus, we estimate that the annual burden is approximately 13 hours.\1\
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    \1\ 2 funds  x  (2 hours negotiating coverage + 4.5 hours filing 
necessary proof of adequate coverage) = 13 hours.
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    In addition to the hour burden described above, rule 27d-1 imposes 
certain costs. First, outside accountants review Form N-27D-1 at an 
annual cost of $90. Second, a financial printer files the form at an 
annual cost of $70. Thus, assuming that an average of one Form N-27D-1 
is filed each year, the staff estimates that the total annual cost of 
the information collection burden in rule 27d-1 is $160. The staff 
believes that rule 27d-2 does not impose any cost burdens other than 
those arising from the hour burdens discussed above.
    The estimates of average burden hours and costs are 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.\2\
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    \2\ These estimates are based on telephone interviews between 
the Commission staff and representatives of depositors or principle 
underwriters of periodic payment plan issuers.
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    Complying with the collection of information requirements of rule 
27e-1 is mandatory for issuers of periodic payment plans or their 
depositors or underwriters in the event holders of plan certificates 
miss certain payments within eighteen months after issuance. Complying 
with the collection of information requirements of rule 27f-1 is 
mandatory for custodian banks of periodic payment plans for which the 
sales load deducted from any payment exceeds 9 percent of the payment. 
The information provided pursuant to rules 27e-1 and 27f-1 will be 
provided to third parties and, therefore, will not be kept 
confidential. The Commission is seeking OMB approval, because 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 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)

[[Page 9336]]

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. 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: February 21, 2002.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 02-4720 Filed 2-27-02; 8:45 am]
BILLING CODE 8010-01-U