[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Notices]
[Pages 81681-81682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32518]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

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

Extension: Rule 17a-6, SEC File No. 270-506, OMB Control No. 3235-
0564.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501), the Securities and Exchange Commission 
(the ``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 17(a) of the Investment Company Act of 1940 (the ``Act'') 
generally prohibits affiliated persons of a registered investment 
company (``fund'') from borrowing money or other property from, or 
selling or buying

[[Page 81682]]

securities or other property to or from, the fund or any company that 
the fund controls.\1\ Rule 17a-6 (17 CFR 270.17a-6) permits a fund and 
a ``portfolio affiliate'' (a company that is an affiliated person of 
the fund because the fund controls the company, or holds five percent 
or more of the company's outstanding voting securities) to engage in 
principal transactions that would otherwise be prohibited under section 
17(a) of the Act under certain conditions. A fund may not rely on the 
exemption in the rule to enter into a principal transaction with a 
portfolio affiliate if certain prohibited participants (e.g., 
directors, officers, employees, or investment advisers of the fund) 
have a financial interest in a party to the transaction. Rule 17a-6 
specifies certain interests that are not ``financial interests,'' 
including any interest that the fund's board of directors (including a 
majority of the directors who are not interested persons of the fund) 
finds to be not material. A board making this finding is required to 
record the basis for the finding in its meeting minutes. This 
recordkeeping requirement is a collection of information under the 
Paperwork Reduction Act of 1995 (``PRA'').\2\
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    \1\ 15 U.S.C. 80a-17(a).
    \2\ 44 U.S.C. 3501.
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    The rule is designed to permit transactions between funds and their 
portfolio affiliates in circumstances in which it is unlikely that the 
affiliate would be in a position to take advantage of the fund. In 
determining whether a financial interest is ``material,'' the board of 
the fund should consider whether the nature and extent of the interest 
in the transaction is sufficiently small that a reasonable person would 
not believe that the interest affected the determination of whether to 
enter into the transaction or arrangement or the terms of the 
transaction or arrangement. The information collection requirements in 
rule 17a-6 are intended to ensure that Commission staff can review, in 
the course of its compliance and examination functions, the basis for a 
board of director's finding that the financial interest of an otherwise 
prohibited participant in a party to a transaction with a portfolio 
affiliate is not material.
    Based on staff discussions with fund representatives, we estimate 
that funds currently do not rely on the exemption from the term 
``financial interest'' with respect to any interest that the fund's 
board of directors (including a majority of the directors who are not 
interested persons of the fund) finds to be not material. Accordingly, 
we estimate that annually there will be no principal transactions under 
rule 17a-6 that will result in a collection of information.
    The Commission requests authorization to maintain an inventory of 
one burden hour to ease future renewals of rule 17a-6's collection of 
information analysis should funds rely on this exemption to the term 
``financial interest'' as defined in rule 17a-6.
    The estimate of burden hours is made solely for the purposes of the 
Paperwork Reduction Act. The estimate is not derived from a 
comprehensive or even a representative survey or study of the costs of 
Commission rules. Complying with this collection of information 
requirement is necessary to obtain the benefit of relying on rule 17a-
6. 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.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency'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. Consideration will 
be given to comments and suggestions submitted in writing within 60 
days of this publication.
    Please direct your written comments to Thomas Bayer/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an 
e-mail to: [email protected].

    Dated: December 20, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32518 Filed 12-27-10; 8:45 am]
BILLING CODE 8011-01-P