[Federal Register Volume 67, Number 56 (Friday, March 22, 2002)]
[Notices]
[Pages 13377-13378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6934]


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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, 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'') has submitted to the Office of Management 
and Budget a request for extension and approval of the collections of 
information discussed below.
    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 the foreign fund's 
registration under the Act.
    The rule requires a Canadian fund proposing to register under the 
Act to file an application with the Commission that contains various 
undertakings and agreements of 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 or 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 fund's 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 information 
collection

[[Page 13378]]

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 foreign 
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 foreign fund were to file an application under the rule, the 
Commission estimates that the rule would impose 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 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 these applications.
    These estimates of average burden hours are 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 
Commission rules.
    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 foreign 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 investment company has applied under rule 7d-
1 to register under the Act pursuant to rule 7d-1 in the last three 
years.
    These estimates of average costs are 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.
    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 OMB 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, 
Mail Stop 0-4, 450 5th Street, NW., Washington, DC 20549. Comments must 
be submitted to OMB within 30 days of this notice.

    Dated: March 15, 2002.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-6934 Filed 3-21-02; 8:45 am]
BILLING CODE 8010-01-P