[Federal Register Volume 68, Number 200 (Thursday, October 16, 2003)]
[Notices]
[Pages 59647-59648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26097]


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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, 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, under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the 
``Commission'') has submitted to the Office of Management and Budget a 
request for extension of the previously approved collection of 
information discussed below.
    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. Before the rule was adopted, funds 
generally were required to maintain such assets in special accounts 
with a custodian bank.\1\
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    \1\ See 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

[[Page 59648]]

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\
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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).
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    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 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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    \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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    Compliance with the collection of information requirements of the 
rule is necessary to obtain the benefit of relying on the rule. If an 
FCM furnishes records pertaining to a fund's assets at the request of 
the Commission or its staff, the records will be kept confidential to 
the extent permitted by relevant statutory or regulatory provisions. 
The rule does not require these records be retained for any specific 
period of time. 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.
    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, 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 after this notice.

    Dated: October 8, 2003.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-26097 Filed 10-15-03; 8:45 am]
BILLING CODE 8010-01-P