[Federal Register Volume 70, Number 116 (Friday, June 17, 2005)]
[Notices]
[Pages 35311-35312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3103]


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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, Washington, DC 
20549.

Extension:
    Rule 27d-1 and Form N-27D-1; SEC File No. 270-499; OMB Control 
No. 3235-0560; Rule 27d-2; SEC File No. 270-500; OMB Control No. 
3235-0566.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 350l et seq.), the Securities and Exchange 
Commission (the ``Commission'') has submitted to the Office of 
Management and Budget (``OMB'') a request for approval of the 
collections of information under the Investment Company Act of 1940 
(``Act'') summarized below.
    Rule 27d-1 [17 CFR 270.27d-1] is entitled ``Reserve Requirements 
for Principal Underwriters and Depositors to Carry Out the Obligations 
to Refund Charges Required by Section 27(d) and Section 27(f) of the 
Act.'' Form N-27D-1 is entitled ``Accounting of Segregated Trust 
Account.'' Rule 27d-2 [17 CFR 270.27d-2] is entitled ``Insurance 
Company Undertaking in Lieu of Segregated Trust Account.'' Rule 27d-1 
requires the depositor or principal underwriter for an issuer to 
deposit funds into a segregated trust account to provide assurance of 
its ability to fulfill its refund obligations under sections 27(d) and 
27(f). The rule sets forth minimum reserve amounts and guidelines for 
the management and disbursement of the assets in the account. A single 
account may be used for the periodic payment plans of multiple 
investment companies. Rule 27d-1(j) directs depositors and principal 
underwriters to make an accounting of their segregated trust

[[Page 35312]]

accounts on Form N-27D-1, which is intended to facilitate the 
Commission's oversight of compliance with the reserve requirements set 
forth in rule 27d-1. The form requires depositors and principal 
underwriters to report deposits to a segregated trust account, 
including those made pursuant to paragraphs (c) and (e) of the rule. 
Withdrawals pursuant to paragraph (f) of the rule also must be 
reported. In addition, the form solicits information regarding the 
minimum amount required to be maintained under paragraphs (d) and (e) 
of rule 27d-1. Depositors and principal underwriters must file the form 
once a year on or before January 31 of the year following the year for 
which information is presented.
    Instead of relying on rule 27d-1 and filing Form N-27D-1, 
depositors or principal underwriters for the issuers of periodic 
payment plans may rely on the exemption afforded by rule 27d-2. In 
order to comply with the rule, (i) the depositor or principal 
underwriter must secure from an insurance company a written guarantee 
of the refund requirements, (ii) the insurance company must satisfy 
certain financial criteria, and (iii) the depositor or principal 
underwriter must file as an exhibit to the issuer's registration 
statement, a copy of the written undertaking, an annual statement that 
the insurance company has met the requisite financial criteria on a 
monthly basis, and an annual audited balance sheet.
    Rules 27d-1 and 27d-2, which were explicitly authorized by statute, 
provide assurance that depositors and principal underwriters of issuers 
have access to sufficient cash to meet the demands of certificate 
holders who reconsider their decisions to invest in a periodic payment 
plan. The information collection requirements in rules 27d-1 and 27d-2 
enable the Commission to monitor compliance with reserve rules.
    Commission staff estimates that there are four issuers of periodic 
payment plan certificates. The depositor or principal underwriter of 
each of these issuers must file Form N-27D-1 annually or comply with 
the requirements in rule 27d-2. On average, the Commission receives two 
Form N-27D-1 filings annually. The staff estimates that a staff 
accountant spends 8 hours and an accounting manager spends 3 hours 
preparing the form. Therefore, the total annual hour burden associated 
with rule 27d-1 and Form N-27d-1 is estimated to be 22 hours.\1\ The 
staff estimates that two depositors or principal underwriters rely on 
rule 27d-2 and that each of these respondents makes three responses 
annually. We estimate that each depositor or underwriter expends 
approximately two hours per year obtaining a written guarantee from an 
insurance company or negotiating changes to coverage with the insurance 
company and five hours per year filing the two required documents from 
the insurance company on EDGAR. Thus, we estimate that the annual 
burden is approximately 14 hours.\2\
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    \1\ This estimate is based on the following calculation: 2 funds 
x (8 hours of staff accountant time + 3 hours of accounting time) = 
22 hours.
    \2\ This estimate is based on the following calculation: 2 funds 
x (2 hours negotiating coverage + 5 hours filing necessary proof of 
adequate coverage) = 14 hours.
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    The staff believes that rules 27d-1 and 27d-2 and Form N-27D-1 do 
not impose any cost burdens other than those arising from the hour 
burdens discussed above.
    The estimates of average burden hours and costs are made solely for 
the purposes of the Paperwork Reduction Act, and are not derived from a 
comprehensive or even a representative survey or study of the costs of 
Commission rules and forms.\3\
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    \3\ These estimates are based on telephone interviews between 
the Commission staff and representatives of depositors or principle 
underwriters of periodic payment plan issuers.
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    Complying with the collection of information requirements of rule 
27d-1 is mandatory for depositors or principal underwriters of issuers 
of periodic payment plans unless they comply with the requirements in 
rule 27d-2. The information provided pursuant to rules 27d-1 and 27d-2 
is public and, therefore, will not be kept confidential. 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 OMB 
control number.
    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; or e-mail to: [email protected]; and (ii) R. Corey 
Booth, Director/Chief Information Officer, Office of Information 
Technology, Securities and Exchange Commission, 450 5th Street, NW., 
Washington, DC 20549. Comments must be submitted to OMB within 30 days 
of this notice.

    June 6, 2005.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3103 Filed 6-16-05; 8:45 am]
BILLING CODE 8010-01-P