[Federal Register Volume 73, Number 15 (Wednesday, January 23, 2008)]
[Notices]
[Pages 4021-4022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-1060]


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

SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

Extension:
    Rule 7d-2, SEC File No. 270-464, OMB Control No. 3235-0527.

    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'') has submitted to the Office of 
Management and Budget a request for extension and approval of the 
collection of information discussed below.
    In Canada, as in the United States, individuals can invest a 
portion of their earnings in tax-deferred retirement savings accounts 
(``Canadian retirement accounts''). In cases where these individuals 
move to the United States, these participants (``Canadian/U.S. 
Participants'' or ``participants'') may not be able to manage their 
Canadian retirement account investments. Most securities and most 
investment companies (``funds'') that are ``qualified investments'' for 
Canadian retirement accounts are not registered under the U.S. 
securities laws. Those securities, therefore, generally cannot be 
publicly offered and sold in the United States without violating the 
registration requirements of the Securities Act of 1933 (``Securities 
Act'') \1\ and, in the case of securities of an unregistered fund, the 
Investment Company Act of 1940 (``Investment Company Act'').\2\ As a 
result of these registration requirements of the U.S. securities laws, 
Canadian/U.S. Participants, in the past, had not been able to purchase 
or exchange securities for their Canadian retirement accounts as needed 
to meet their changing investment goals or income needs.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 77a.
    \2\ 15 U.S.C. 80a.
---------------------------------------------------------------------------

    In 2000, the Commission issued two rules that enabled Canadian/U.S. 
Participants to manage the assets in their Canadian retirement accounts 
by providing relief from the U.S. registration requirements for offers 
of securities of foreign issuers to Canadian/U.S. Participants and 
sales to their accounts.\3\ Rule 237 under the Securities

[[Page 4022]]

Act \4\ permits securities of foreign issuers, including securities of 
foreign funds, to be offered to Canadian/U.S. Participants and sold to 
their Canadian retirement accounts without being registered under the 
Securities Act. Rule 7d-2 under the Investment Company Act \5\ permits 
foreign funds to offer securities to Canadian/U.S. Participants and 
sell securities to their Canadian retirement accounts without 
registering as investment companies under the Investment Company Act.
---------------------------------------------------------------------------

    \3\ See Offer and Sale of Securities to Canadian Tax-Deferred 
Retirement Savings Account, Release Nos. 33-7860, 34-42905, IC-24491 
(June 7, 2000) [65 FR 37672 (June 15, 2000)].
    \4\ 17 CFR 230.237.
    \5\ 17 CFR 270.7d-2.
---------------------------------------------------------------------------

    Rule 7d-2 requires written offering documents for securities 
offered or sold in reliance on the rule to disclose prominently that 
the securities are not registered with the Commission and may not be 
offered or sold in the United States unless registered or exempt from 
registration under the U.S. securities laws, and also to disclose 
prominently that the fund that issued the securities is not registered 
with the Commission. The burden under the rule associated with adding 
this disclosure to written offering documents is minimal and is non-
recurring. The foreign issuer, underwriter or broker-dealer can redraft 
an existing prospectus or other written offering material to add this 
disclosure statement, or may draft a sticker or supplement containing 
this disclosure to be added to existing offering materials. In either 
case, based on discussions with representatives of the Canadian fund 
industry, the staff estimates that it would take an average of 10 
minutes per document to draft the requisite disclosure statement.
    The staff estimates that there are approximately 1,994 publicly 
offered Canadian funds that potentially would rely on the rule to offer 
securities to participants and sell securities to their Canadian 
retirement accounts without registering under the Investment Company 
Act. Most of these funds have already relied upon the rule and have 
made the one time change to their offering documents required to rely 
on the rule. The staff estimates that approximately 100 (5 percent) 
additional Canadian funds may newly rely on the rule each year to offer 
securities to Canadian/U.S. Participants and sell securities to their 
Canadian retirement accounts, thus incurring the paperwork burden 
required under the rule. The staff estimates that each of those funds, 
on average, distributes 3 different written offering documents 
concerning those securities, for a total of 300 offering documents. The 
staff therefore estimates that approximately 100 respondents would make 
300 responses by adding the new disclosure statement to approximately 
300 written offering documents. The staff therefore estimates that the 
annual burden associated with the rule 7d-2 disclosure requirement 
would be approximately 50 hours (300 offering documents x 10 minutes 
per document). The total annual cost of these burden hours is estimated 
to be $14,600.00 (50 hours x $292.00 per hour of attorney time).\6\
---------------------------------------------------------------------------

    \6\ The Commission's estimate concerning the wage rate for 
attorney time is based on salary information for the securities 
industry compiled by the Securities Industry Association. $292 per 
hour figure for an attorney is from the SIA Report on Management & 
Professional Earnings in the Securities Industry 2005, modified to 
account for an 1800-hour work-year and multiplied by 5.35 to account 
for bonuses, firm size, employee benefits and overhead.
---------------------------------------------------------------------------

    These burden hour estimates are based upon the Commission staff's 
experience and discussions with the fund industry. The estimates of 
average burden hours are made solely for the purposes of the Paperwork 
Reduction Act. These estimates are not derived from a comprehensive or 
even a representative survey or study of the costs of Commission rules.
    Compliance with the collection of information requirements of the 
rule is mandatory and is necessary to comply with the requirements of 
the rule in general. 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 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, Securities and Exchange Commission, C/O Shirley Martinson, 
6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: 
[email protected]. Comments must be submitted to OMB within 30 days 
of this notice.

    Dated: January 14, 2008.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1060 Filed 1-22-08; 8:45 am]
BILLING CODE 8011-01-P