[Federal Register Volume 68, Number 156 (Wednesday, August 13, 2003)]
[Notices]
[Pages 48419-48420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20542]


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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, 450 
Fifth Street, NW., Washington, DC 20549.
    Extension: Rule 17f-6 (17 CFR 270.17f-6), SEC File No. 270-392, OMB 
Control No. 3235-0447.
    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (the ``Commission'') is soliciting comments on the 
collection of information summarized below. The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget for extension and approval.
    Rule 17f-6 under the Investment Company Act of 1940 (17 CFR 
270.17f-6) permits registered investment companies (``funds'') to 
maintain assets (i.e., margin) with futures commission merchants 
(``FCMs'') in connection with commodity transactions effected on both 
domestic and foreign exchanges.\1\ Prior to the rule's adoption, funds 
generally were required to maintain these assets in special accounts 
with a custodian bank.
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    \1\ Custody of Investment Company Assets With Futures Commission 
Merchants and Commodity Clearing Organizations, Investment Company 
Act Release No. 22389 (Dec. 11, 1996) [61 FR 66207 (Dec. 17, 1996)].
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    The rule requires a written contract that contains certain 
provisions to ensure important safeguards and other benefits relating 
to the custody of fund assets by FCMs. The requirement that FCMs comply 
with the segregation or secured amount requirements of the Commodity 
Exchange Act (``CEA'') and the rules under that statute is designed to 
protect fund assets held by FCMs. The contract requirement that an FCM 
obtain an acknowledgment from an entity that clears fund transactions 
that the fund's assets are held on behalf of the FCM's customers 
according to CEA provisions seeks to accommodate the legitimate needs 
of the participants in the commodity settlement process, consistent 
with the protection of fund assets. Finally, FCMs are required to 
furnish to the Commission or its staff on request information 
concerning the fund's assets in order to facilitate Commission 
inspections of funds.
    The Commission estimates that approximately 2,154 funds effect 
commodities transactions and could deposit margin with FCMs under rule 
17f-6 in connection with those transactions. Commission staff estimates 
that each fund uses and deposits margin with 2 different FCMs in 
connection with its commodity transactions.\2\ Approximately 179 FCMs 
are eligible to hold fund margin under the rule.\3\ The Commission 
estimates that each of the 2,154 funds spend an average of 1 hour 
annually complying with the contract requirements of the rule (e.g., 
executing contracts that contain the requisite provisions with 
additional FCMs), for a total of 2,154 burden hours. The estimate does 
not include the time required by an FCM to comply with the rule's 
contract requirements because, to the extent that complying with the 
contract provisions could be considered ``collections of information,'' 
the burden hours for compliance are already included in other PRA 
submissions or are de minimis.\4\ The estimate of average

[[Page 48420]]

burden hours is 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.
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    \2\ This estimate is based on information conversations with 
representatives of the fund industry.
    \3\ Commodity Futures Trading Commission, Annual Report (2002).
    \4\ The rule requires a contract with the FCM to contain three 
provisions. Two of the provisions require the FCM to comply with 
existing requirements under the CEA and rules adopted under that 
Act. Thus, to the extent these provisions could be considered 
collections of information, the hours required for compliance would 
be included in the collection of information burden hours submitted 
by the Commodity Futures Trading Commission for its rules. The third 
contract provision requires that the FCM produce records or other 
information requested by the Commission or its staff. Commission 
staff has requested this type of information from an FCM so 
infrequently in the past that the annual burden hours are de 
minimis.
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    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) 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. The Commission will consider comments 
and suggestions submitted in writing within 60 days after this 
publication.
    Please direct your written comments to Kenneth A. Fogash, Acting 
Associate Executive Director/CIO, Office of Information Technology, 
Securities and Exchange Commission, 450 5th Street, NW., Washington, DC 
20549.

    Dated: July 31, 2003.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-20542 Filed 8-12-03; 8:45 am]
BILLING CODE 8010-01-P