[Federal Register Volume 69, Number 225 (Tuesday, November 23, 2004)]
[Notices]
[Pages 68194-68195]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3283]


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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, Washington, DC 
20549.

Extension:
    Rule 7d-1; SEC File No. 270-176; OMB Control No. 3235-0311.
    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'') is soliciting comments on the 
collections of information summarized below. The Commission plans to 
submit these existing collections of information to the Office of 
Management and Budget (``OMB'') for extension and approval.
    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 those 
foreign funds' registration under the Act.
    The rule requires a Canadian fund that wishes to register to 
file an application with the Commission that contains various 
undertakings and agreements by 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

[[Page 68195]]

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 
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 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 
$21.10 and $21.50 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 $537.78. The estimated number of 25.25 burden hours is identical 
to the current allocation.
    If a 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 foreign 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 
the applications.
    The estimates of burden hours are made solely for the purposes 
of the Paperwork Reduction Act. The estimates are not derived from a 
comprehensive or even a representative survey or study of Commission 
rules and forms.
    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 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 foreign fund has applied under 
rule 7d-1 to register under the Act pursuant to rule 7d-1 in the 
last three years.
    We request written comment on: (a) Whether the collections of 
information are 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 burdens 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. Consideration 
will be given to comments and suggestions submitted in writing 
within 60 days of this publication.
    Please direct your written comments to R. Corey Booth, Director/
Chief Information Officer, Office of Information Technology, 
Securities and Exchange Commission, 450 5th Street, NW., Washington, 
DC 20549.

    Dated: November 15, 2004.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-3283 Filed 11-22-04; 8:45 am]
BILLING CODE 8010-01-P