[Federal Register Volume 68, Number 76 (Monday, April 21, 2003)]
[Notices]
[Pages 19587-19588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9702]


-----------------------------------------------------------------------

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:
    Form N-23C-1, SEC File No. 270-230, OMB Control No. 3235-0230
    Rule 19a-1, SEC File No. 270-240, OMB Control No. 3235-0216
    Rule 22d-1, SEC File No. 270-275, OMB Control No. 3235-0310
    Rule 30b2-1, SEC File No. 270-213, OMB Control No. 3235-0220
    Form ADV-E, SEC File No. 270-318, OMB Control No. 3235-0361

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission 
(``Commission'') has submitted to the Office of Management and Budget 
requests for extension of the previously approved collections of 
information discussed below.
    Section 23(c) of the Investment Company Act of 1940 (15 U.S.C. 80a-
23(c)) (``Investment Company Act'' or ``Act'') prohibits a registered 
closed-end investment company (``closed-end fund'' or ``fund'') from 
purchasing any security it issues except on a securities exchange, 
pursuant to tender offers, or under such other circumstances as the 
Commission may permit by rules or orders designed to ensure that 
purchases are made in a manner that does not unfairly discriminate 
against any holders of the securities to be purchased. Rule 23c-1 (17 
CFR 270.23c-1) under the Act permits a closed-end fund that meets 
certain requirements to repurchase its securities other than on an 
exchange or pursuant to a tender.
    A registered closed-end fund that relies on Rule 23c-1 may purchase 
its securities for cash if, among other conditions set forth in the 
rule, certain conditions are met: (i) Payment of the purchase price is 
accompanied or preceded by a written confirmation of the purchase; (ii) 
the purchase is made at a price not above the market value, if any, or 
the asset value of the security, whichever is lower, at the time of the 
purchase; and (iii) if the security is stock, the issuer has, within 
the preceding six months, informed stockholders of its intention to 
purchase stock of the class by letter or report addressed to all the 
stockholders of the class.
    In addition, the issuer must file with the Commission, on or before 
the tenth day of the month following the date in which the purchase 
occurs, two copies of Form N-23C-1. The form requires the issuer to 
report all purchases it has made during the month, together with a copy 
of any written solicitation to purchase securities under Rule 23c-1 
sent or given during the month by or on behalf of the issuer to ten or 
more persons.
    The purpose of Rule 23c-1 is to protect shareholders of closed-end 
funds from fraud in connection with the repurchase by funds of their 
own securities. The purpose of the rule's requirement that the fund 
file Form N-23C-1 with the Commission is to allow the Commission to 
monitor funds' repurchase of securities as well as any written 
solicitation used by the fund to effect those repurchases, and to make 
that information available to the public. Investors may seek this 
information when determining whether to invest in certain funds.
    The requirement to file Form N-23C-1 applies to a closed-end fund 
only when the fund has repurchased its securities. If the information 
provided in the form were collected less frequently than a month after 
repurchases occur, the Commission and investing public would lack 
current information about closed-end funds that repurchase their own 
securities.
    Commission staff estimates that each year approximately 30 closed-
end funds use the repurchase procedures under Rule 23c-1, and that 
these funds file a total of 180 forms each year. The number of forms 
filed by each fund ranges from 1 to 12 depending on the number of 
months in which the fund repurchases its securities under Rule 23c-1. 
Commission staff estimates that each response requires 1 burden hour to 
prepare and file Form N-23C-1 with a copy of any written solicitation 
to purchase securities under the rule (if necessary).\1\ The total 
annual burden of the rule's paperwork requirements is estimated to be 
180 hours.
---------------------------------------------------------------------------

    \1\ The burden hour estimates are based upon consultation with 
lawyers and accountants familiar with the practices of fund boards 
and the staff of investment advisers.
---------------------------------------------------------------------------

    Section 19(a) (15 U.S.C. 80a-19(a)) of the Investment Company Act 
makes it unlawful for any registered investment company to pay any 
dividend or similar distribution from any source other than the 
company's net income, unless the payment is accompanied by a written 
statement to the company's shareholders which adequately discloses the 
sources of the payment.

[[Page 19588]]

Section 19(a) authorizes the Commission to prescribe the form of the 
statement by rule.
    Rule 19a-1 (17 CFR 270.19a-1) under the Act is entitled: ``Written 
Statement to Accompany Dividend Payments by Management Companies.'' 
Rule 19a-1 sets forth specific requirements for the information that 
must be included in statements made under section 19(a) by registered 
investment companies. The rule requires that the statements indicate 
what portions of the payment are made from net income, net profits and 
paid-in capital.\2\ When any part of the payment is made from net 
profits, the rule requires that the statement disclose certain other 
information relating to the appreciation or depreciation of portfolio 
securities. If an estimated portion of the payment is subsequently 
determined to be significantly inaccurate, a correction must be made on 
a statement made under section 19(a) or in the first report to 
shareholders following the discovery of the inaccuracy. The purpose of 
Rule 19a-1 is to afford fund shareholders adequate disclosure of the 
sources from which dividend payments are made.
---------------------------------------------------------------------------

    \2\ Rule 19a-1 requires, among other things, that every written 
statement made under Section 19 of the Act by or on behalf of a 
management company clearly indicate what portion of the payment per 
share is made from the following sources: net income for the current 
or preceding fiscal year, or accumulated undistributed net income, 
or both, not including in either case profits or losses from the 
sale of securities or other properties; accumulated undistributed 
net profits from the sale of securities or other properties; and 
paid-in surplus or other capital source.
---------------------------------------------------------------------------

    The Commission staff estimates that approximately 8,400 portfolios 
of management companies may be subject to Rule 19a-1 each year.\3\ The 
total average annual burden for Rule 19a-1 per portfolio is estimated 
to be approximately 30 minutes.\4\ The total annual burden for all 
portfolios therefore is estimated to be approximately 4,200 burden 
hours.
---------------------------------------------------------------------------

    \3\ The Commission staff estimates that there are approximately 
3,800 registered investment companies that are ``management 
companies'' as defined by the Act, and each may have one or more 
separate portfolios that report dividends to shareholders. The 
Commission's records indicate that those 3,800 management companies 
have approximately 8,200 portfolios that report paying dividends, 
and so may be subject to Rule 19a-1.
    \4\ According to respondents, no more than approximately 15 
minutes is needed to make the determinations required by the rule 
and include the required information in the shareholders' dividend 
statements. The Commission staff estimates that, on average, each 
portfolio mails two notices per year to meet the requirements of the 
rule, for an average total annual burden of approximately 30 
minutes.
---------------------------------------------------------------------------

    Compliance with the collection of information required by Rule 19a-
1 is mandatory for management companies that make written statements to 
shareholders pursuant to section 19(a) of the Act. Responses will not 
be kept confidential.
    Rule 22d-1 (17 CFR 270.22d-1) under the Investment Company Act 
provides registered investment companies that issue redeemable 
securities an exemption from section 22(d) of the Investment Company 
Act to the extent necessary to permit scheduled variations in or 
elimination of the sales load on fund securities for particular classes 
of investors or transactions, provided certain conditions are met. The 
rule imposes an annual burden per series of a fund of approximately 15 
minutes, so that the total annual burden for the approximately 6,100 
series of funds that might rely on the rule is estimated to be 1,525 
hours. The collection of information required by Rule 22d-1 is 
mandatory. Responses will not be kept confidential.
    Rule 30b2-1 under the Investment Company Act (17 CFR 270.30b2-1) 
requires the filing of four copies of every periodic or interim report 
transmitted by or on behalf of any registered investment company to its 
stockholders.\5\ This requirement ensures that the Commission has 
information in its files to perform its regulatory functions and to 
apprise investors of the operational and financial condition of a 
registered investment companies.\6\
---------------------------------------------------------------------------

    \5\ Most filings are made via the Commission's electronic filing 
system; therefore, paper filings under Rule 30b2-1 occur only in 
exceptional circumstances. Electronic filing eliminates the need for 
multiple copies of filings.
    \6\ Annual and periodic reports to the Commission become part of 
its public files and, therefore, are available for use by 
prospective investors and stockholders.
---------------------------------------------------------------------------

    It is estimated that approximately 3,700 registered management 
investment companies are required to send reports to stockholders at 
least twice annually. In addition, under recently proposed amendments 
to Rule 30b2-1, if adopted, each registered investment company would be 
required to file with the Commission new form N-CSR, certifying the 
financial statements. The annual burden of filing the reports is 
included in the burden estimate for Form N-CSR.
    The collection of information under Rule 30b2-1 is mandatory. The 
information provided by Rule 30b2-1 is not kept confidential.
    Form ADV-E (17 CFR 279.8) is the cover sheet for accountant 
examination certificates filed pursuant to Rule 206(4)-2 under the 
Investment Advisers Act by investment advisers retaining custody of 
client securities or funds. The annual burden is approximately three 
minutes per respondent.
    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.
    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 regarding the above information should be directed 
to the following persons: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503; and (ii) Kenneth A. Fogash, Acting 
Associate Executive Director/CIO, Office of Information Technology, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549. Comments must be submitted to OMB within 30 days of this 
notice.

    Dated: April 14, 2003.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-9702 Filed 4-18-03; 8:45 am]
BILLING CODE 8010-01-P