[Federal Register Volume 67, Number 125 (Friday, June 28, 2002)]
[Rules and Regulations]
[Pages 43534-43537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16346]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 200, 240, 249, 270, and 274

[Release Nos. 34-46106 and IC-25621]
RIN 3235-AI53


Technical Amendments to Rules and Forms Due to the National 
Securities Markets Improvement Act of 1996 and the Gramm-Leach-Bliley 
Act

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Commission is adopting technical amendments to rules and 
forms under the Investment Company Act of 1940 (``Investment Company 
Act'' or ``Act'') and the Securities Exchange Act of 1934 (``Securities 
Exchange Act''). The amendments correct statutory references currently 
included in the rules and the forms.

EFFECTIVE DATE: July 8, 2002.

FOR FURTHER INFORMATION CONTACT: Hugh P. Lutz, Attorney, at (202) 942-
0695, Office of Regulatory Policy, Division of Investment Management, 
Securities and Exchange Commission, 450 5th Street, NW., Washington, DC 
20549-0506.

SUPPLEMENTARY INFORMATION: The passage of the National Securities 
Markets Improvement Act of 1996 (``NSMIA'') \1\ and the Gramm-Leach-
Bliley Act (``G-L-B Act'') \2\ removed and renumbered certain 
subparagraphs of the Act.\3\ As a result, references to those 
subparagraphs, contained in our rules, are inaccurate.\4\ We are 
amending rules 3a-1, 3a-2, 3a-3, 3a-5, 3a-6, 6c-6, 6e-2, 6e-3(T), 20b, 
and 30f-1 under the Act and rules 16a-2 and 16a-3 under the Securities 
Exchange Act to correct these references. In addition, we are amending 
Forms 3, 4, and 5 by replacing outdated references in the forms to 
section 30(f) of the Act with correct references to section 30(h) of 
the Act. We are also amending the description of these forms contained 
in 17 CFR 249.103, 249.104, 249.105, 274.202, and 274.203.
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    \1\ Pub. L. 104-290, 110 Stat. 3416 (1996).
    \2\ Pub. L. 106-102, 113 Stat. 1338 (1999).
    \3\ See, e.g., section 209(c) of NSMIA.
    \4\ See rules 3a-1 [17 CFR 270.3a-1], 3a-2 [17 CFR 270.3a-2], 
3a-3 [17 CFR 270.3a-3], 3a-5 [17 CFR 270.3a-5], 3a-6 [17 CFR 270.3a-
6], 6c-6 [17 CFR 270.6c-6], 6e-2 [17 CFR 270.6e-2], 6e-3(T) [17 CFR 
270.6e-3(T)], 16a-2 [17 CFR 240.16a-2], 16a-3 [17 CFR 240.16a-3], 
20b [17 CFR 200.20b], and 30f-1 [17 CFR 270.30f-1].
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Certain Findings

    Under the Administrative Procedure Act (``APA''), notice of 
proposed rulemaking is not required when an

[[Page 43535]]

agency, for good cause, finds ``that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the public 
interest.'' \5\ The amendments to rules 3a-1, 3a-2, 3a-3, 3a-5, 3a-6, 
6c-6, 6e-2, 6e-3(T), 16a-2, 16a-3, 20b, and 30f-1, and Forms 3, 4, and 
5, are technical changes that conform statutory references that are 
currently included in the rules and forms to the current paragraph 
designations contained in the Act. Accordingly, we find that there is 
no need to publish notice of these amendments.\6\
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    \5\ 5 U.S.C. 553(b)(3)(B).
    \6\ For similar reasons, the amendments do not require analysis 
under the Regulatory Flexibility Act. See 5 U.S.C. 601(2) (for 
purposes of Regulatory Flexibility Act analyses, the term ``rule'' 
means any rule for which the agency publishes a general notice of 
proposed rulemaking).
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    The APA also requires publication of a rule at least 30 days before 
its effective date unless the agency finds otherwise for good cause.\7\ 
For the same reasons described with respect to opportunity for notice 
and comment, we find there is good cause for the amendments to take 
effect immediately.
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    \7\ See 5 U.S.C. 553(d)(3).
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Statutory Authority

    The Commission is adopting amendments to rules 3a-1, 3a-2, 3a-3, 
3a-5, 3a-6, 6c-6, 6e-2, 6e-3(T), 20b, and 30f-1 pursuant to authority 
set forth in sections 6(c) and 38(a) of the Investment Company Act [15 
U.S.C. 80a-6(c) and 80a-37(a)]. The Commission is adopting amendments 
to rules 16a-2 and 16a-3 pursuant to the authority set forth in 
sections 16(a) and 23(a) of the Securities Exchange Act [15 U.S.C. 
78p(a) and 78w(a)]. The Commission is adopting amendments to Forms 3, 
4, and 5 pursuant to authority set forth in sections 30(h) and 38 of 
the Investment Company Act [15 U.S.C. 80a-29(h) and 80a-37] and 
sections 16(a) and 23(a) of the Securities Exchange Act [15 U.S.C. 
78p(a) and 78w(a)].

List of Subjects

17 CFR Part 200

    Administrative practice and procedure.

17 CFR Parts 240 and 249

    Reporting and recordkeeping requirements, Securities.

17 CFR Parts 270 and 274

    Investment companies, Reporting and recordkeeping requirements, 
Securities.

Text of Final Rules and Forms

    For reasons set forth in the preamble, Title 17, Chapter II, of the 
Code of Federal Regulations is amended as follows:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND 
REQUESTS

    1. The authority citation for Part 200 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 78ll(d), 78mm, 79t, 
77sss, 80a-37, 89b-11, unless otherwise noted.

* * * * *

    2. Section 200.20b is amended by revising paragraph (a) to read as 
follows:


Sec. 200.20b  Director of Division of Investment Management.

* * * * *
    (a) The administration of all matters arising under the Investment 
Company Act of 1940 (15 U.S.C. 80a), except those arising under section 
30(h) of the Act (15 U.S.C. 80a-29(h)).
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    3. The authority citation for Part 240 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 777sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 
78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 
78ll, 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 
and 80b-11, unless otherwise noted.

* * * * *

    4. Section 240.16a-2 is amended by revising the first sentence of 
the introductory text to read as follows:


Sec. 240.16a-2  Persons and transactions subject to section 16.

    Any person who is the beneficial owner, directly or indirectly, of 
more than ten percent of any class of equity securities (``ten percent 
beneficial owner'') registered pursuant to section 12 of the Act (15 
U.S.C. 78l), any director or officer of the issuer of such securities, 
and any person specified in section 17(a) of the Public Utility Holding 
Company Act of 1935 (15 U.S.C. 79q(a)) or section 30(h) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-29(h)), including any 
person specified in Sec. 240.16a-8, shall be subject to the provisions 
of section 16 of the Act (15 U.S.C. 78p). * * *
* * * * *

    5. Section 240.16a-3 is amended by revising paragraph (d) to read 
as follows:


Sec. 240.16a-3  Reporting transactions and holdings.

* * * * *
    (d) Any person required to file a statement with respect to 
securities of a single issuer under both section 16(a) of the Act (15 
U.S.C. 78p(a)) and either section 17(a) of the Public Utility Holding 
Company Act of 1935 (15 U.S.C. 79q(a)) or section 30(h) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-29(h)) may file a single 
statement containing the required information, which will be deemed to 
be filed under both Acts.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

    6. The authority citation for Part 249 continues to read in part as 
follows:

    Authority: 15 U.S.C. 78a et seq., unless otherwise noted.
* * * * *

    7. Section 249.103 is amended by revising the second sentence to 
read as follows:


Sec. 249.103  Form 3, initial statement of beneficial ownership of 
securities.

    * * * The Commission is authorized to solicit the information 
required by this Form pursuant to sections 16(a) and 23(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78p(a) and 78w(a)); sections 
17(a) and 20(a) of the Public Utility Holding Company Act of 1935 (15 
U.S.C. 79q(a) and 79t(a)); and sections 30(h) and 38 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-29(h) and 80a-37), and the rules and 
regulations thereunder. * * *

    8. Section 249.104 is amended by revising the second sentence to 
read as follows:


Sec. 249.104  Form 4, statement of changes in beneficial ownership of 
securities.

    * * * The Commission is authorized to solicit the information 
required by this Form pursuant to sections 16(a) and 23(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78p(a) and 78w(a)); sections 
17(a) and 20(a) of the Public Utility Holding Company Act of 1935 (15 
U.S.C. 79q(a) and 79t(a)); and sections 30(h) and 38 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-29(h) and 80a-37), and the rules and 
regulations thereunder. * * *

    9. Section 249.105 is amended by revising the second sentence to 
read as follows:

[[Page 43536]]

Sec. 249.105  Form 5, annual statement of beneficial ownership of 
securities.

    * * * The Commission is authorized to solicit the information 
required by this Form pursuant to sections 16(a) and 23(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78p(a) and 78w(a)); sections 
17(a) and 20(a) of the Public Utility Holding Company Act of 1935 (15 
U.S.C. 79q(a) and 79t(a)); and sections 30(h) and 38 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-29(h) and 80a-37), and the rules and 
regulations thereunder. * * *

    Note: The text of Form 5 does not and these amendments will not 
appear in the Code of Federal Regulations.


    10. Form 5 (referenced in Sec. 249.105) is amended by revising the 
reference ``Sections 30(f) and 38 of the Investment Company Act of 
1940'' to read ``Sections 30(h) and 38 of the Investment Company Act of 
1940'' in the first paragraph of the cover page.

    11. Form 5 (referenced in Sec. 249.105) is amended by revising the 
reference ``Section 30(f) of the Investment Company Act of 1940'' to 
read ``Section 30(h) of the Investment Company Act'' in the following 
places:
    (a) General Instruction 3.(a)(iii) and
    (b) Above Item 1 of the Form.

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

    12. The authority citation for Part 270 continues to read in part 
as follows:

    Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39, 
unless otherwise noted;
* * * * *

    13. Section 270.3a-1 is amended by revising the introductory 
paragraph and paragraph (b) to read as follows:


Sec. 270.3a-1  Certain prima facie investment companies.

    Notwithstanding section 3(a)(1)(C) of the Act (15 U.S.C. 80a-
3(a)(1)(c)), an issuer will be deemed not to be an investment company 
under the Act; Provided, That:
* * * * *
    (b) The issuer is not an investment company as defined in section 
3(a)(1)(A) or 3(a)(1)(B) of the Act (15 U.S.C. 80a-3(a)(1)(A) or 80a-
3(a)(1)(B)) and is not a special situation investment company; and
* * * * *

    14. Section 270.3a-2 is amended by revising the introductory text 
of paragraph (a) to read as follows:


Sec. 270.3a-2  Transient investment companies.

    (a) For purposes of sections 3(a)(1)(A) and 3(a)(1)(C) of the Act 
(15 U.S.C. 80a-3(a)(1)(A) and 80a-3(a)(1)(C)), an issuer is deemed not 
to be engaged in the business of investing, reinvesting, owning, 
holding or trading in securities during a period of time not to exceed 
one year; Provided, That the issuer has a bona fide intent to be 
engaged primarily, as soon as is reasonably possible (in any event by 
the termination of such period of time), in a business other than that 
of investing, reinvesting, owning, holding or trading in securities, 
such intent to be evidenced by:
* * * * *

    15. Section 270.3a-3 is amended by revising the introductory text 
and paragraph (b) to read as follows:


Sec. 270.3a-3  Certain investment companies owned by companies which 
are not investment companies.

    Notwithstanding section 3(a)(1)(A) or section 3(a)(1)(C) of the Act 
(15 U.S.C. 80a-3(a)(1)(A) or 80a-3(a)(1)(C)), an issuer will be deemed 
not to be an investment company for purposes of the Act; Provided, That 
all of the outstanding securities of the issuer (other than short-term 
paper, directors' qualifying shares, and debt securities owned by the 
Small Business Administration) are directly or indirectly owned by a 
company which satisfies the conditions of Sec. 270.3a-1(a) and which 
is:
* * * * *
    (b) A company that is an investment company as defined in section 
3(a)(1)(C) of the Act (15 U.S.C. 80a-3(a)(1)(C)), but which is excluded 
from the definition of the term ``investment company'' by section 
3(b)(1) or 3(b)(2) of the Act (15 U.S.C. 80a-3(b)(1) or 80a-3(b)(2)); 
or
* * * * *

    16. Section 270.3a-5 is amended by revising the introductory text 
of paragraph (a) to read as follows:


Sec. 270.3a-5  Exemption for subsidiaries organized to finance the 
operations of domestic or foreign companies.

    (a) A finance subsidiary will not be considered an investment 
company under section 3(a) of the Act (15 U.S.C. 80a-3(a)) and 
securities of a finance subsidiary held by the parent company or a 
company controlled by the parent company will not be considered 
``investment securities'' under section 3(a)(1)(C) of the Act (15 
U.S.C. 80a-3(a)(1)(C)); Provided, That:
* * * * *

    17. Section 270.3a-6 is amended by revising paragraph (a) to read 
as follows:


Sec. 270.3a-6  Foreign banks and foreign insurance companies.

    (a) Notwithstanding section 3(a)(1)(A) or section 3(a)(1)(C) of the 
Act (15 U.S.C. 80a-3(a)(1)(A) or 80a-3(a)(1)(C)), a foreign bank or 
foreign insurance company shall not be considered an investment company 
for purposes of the Act.
* * * * *

    18. Section 270.6c-6 is amended by revising the introductory text 
of paragraph (h) to read as follows:


Sec. 270.6c-6  Exemption for certain registered separate accounts and 
other persons.

* * * * *
    (h) The depositor or trustee of an existing separate account shall 
be exempt from section 26(c) of the Act (15 U.S.C. 80a-26(c)) to the 
extent necessary to permit the substitution of securities of the new 
portfolio company for securities of the existing portfolio company; 
Provided; That, within thirty days of such substitution:
* * * * *

    19. Section 270.6e-2 is amended by revising paragraph (b)(15)(iv) 
to read as follows:


Sec. 270.6e-2  Exemptions for certain variable life insurance separate 
accounts.

* * * * *
    (b) * * *
    (15) * * *
    (iv) Any action taken in accordance with paragraph (b)(15)(iii)(A) 
or (B) of this section and the reasons therefor shall be disclosed in 
the next report to contractholders made pursuant to section 30(e) (15 
U.S.C. 80a-29(e)) and Sec. 270.30e-2;
* * * * *

    20. Section 270.6e-3(T) is amended by revising paragraph 
(b)(15)(iii)(B) to read as follows:


Sec. 270.6e-3(T)  Temporary exemptions for flexible premium variable 
life insurance separate accounts.

* * * * *
    (b) * * *
    (15) * * *
    (iii) * * *
    (B) Any action taken in accordance with paragraph 
(b)(15)(iii)(A)(1) or (2) of this section and the reasons therefor 
shall be disclosed in the next report contractholders made under 
section 30(e) (15 U.S.C. 80a-29(e)) and Sec. 270.30e-2;
* * * * *

[[Page 43537]]


    21. Section 270.30f-1 is redesignated as Sec. 270.30h-1 and revised 
to read as follows:


Sec. 270.30h-1  Applicability of section 16 of the Exchange Act to 
section 30(h).

    (a) The filing of any statement prescribed under section 16(a) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78p(a)) shall satisfy 
the corresponding requirements of section 30(h) of the Act (15 U.S.C. 
80a-29(h)).
    (b) The rules under section 16 of the Securities Exchange Act of 
1934 (15 U.S.C. 78p) shall apply to any duty, liability or prohibition 
imposed with respect to a transaction involving any security of a 
registered closed-end company under section 30(h) of the Act (15 U.S.C. 
80a-29(h)).
    (c) No statements need be filed pursuant to section 30(h) of the 
Act (15 U.S.C. 80a-29(h)) by an affiliated person of an investment 
adviser in his or her capacity as such if such person is solely an 
employee, other than an officer, of such investment adviser.

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

    22. The authority citation for Part 274 continues to read as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 
78n, 78o(d), 80a-8, 80a-24, 80a-26, and 80a-29, unless otherwise 
noted.


    23. Section 274.202 is revised to read as follows:


Sec. 274.202  Form 3, initial statement of beneficial ownership of 
securities.

    This form shall be filed pursuant to Sec. 270.30h-1 for initial 
statements of beneficial ownership of securities required to be filed 
pursuant to section 30(h) of the Investment Company Act of 1940 (15 
U.S.C. 80a-29(h)). (Same as Sec. 249.103 of this chapter.)

    Note: The text of Form 3 does not and these amendments will not 
appear in the Code of Federal Regulations.


    24. Form 3 (referenced in Secs. 249.103 and 274.202) is amended by 
revising the reference ``Sections 30(f) and 38 of the Investment 
Company Act of 1940'' to read ``Sections 30(h) and 38 of the Investment 
Company Act of 1940'' in the first paragraph of the cover page.

    25. Form 3 (referenced in Secs. 249.103 and 274.202) is amended by 
revising the reference ``Section 30(f) of the Investment Company Act of 
1940'' to read ``Section 30(h) of the Investment Company Act'' in the 
following places:
    (a) General Instructions 1.(a)(iv) and 4.(a)(iii) and
    (b) Above Item 1 of the Form.

    26. Section 274.203 is revised to read as follows:


Sec. 274.203  Form 4, statement of changes in beneficial ownership of 
securities.

    This form shall be filed pursuant to Sec. 270.30h-1 for statements 
of changes in beneficial ownership of securities required to be filed 
pursuant to section 30(h) of the Investment Company Act of 1940 (15 
U.S.C. 80a-29(h)). (Same as Sec. 249.104 of this chapter.)

    Note: The text of Form 4 does not and these amendments will not 
appear in the Code of Federal Regulations.



    27. Form 4 (referenced in Secs. 249.104 and 274.203) is amended by 
revising the reference ``Sections 30(f) and 38 of the Investment 
Company Act of 1940'' to read ``Sections 30(h) and 38 of the Investment 
Company Act of 1940'' in the first paragraph of the cover page.

    28. Form 4 (referenced in Secs. 249.104 and 274.203) is amended by 
revising the reference ``Section 30(f) of the Investment Company Act of 
1940'' to read ``Section 30(h) of the Investment Company Act'' in the 
following places:
    (a) General Instruction 3.(a)(iii) and
    (b) Above Item 1 of the Form.

    Dated: June 24, 2002.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-16346 Filed 6-27-02; 8:45 am]
BILLING CODE 8010-01-P