[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Notices]
[Pages 8303-8304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3337]


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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 17g-1; SEC File No. 270-208; OMB Control No. 3235-0213.

    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'') is soliciting comments on the 
collection of information summarized below. The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget for extension and approval.
    Rule 17g-1 (17 CFR 270.17g-1) under the Investment Company Act of 
1940 (the ``Act'') (15 U.S.C. 80a-17(g)) governs the fidelity bonding 
of officers and employees of registered management investment companies 
(``funds'') and their advisers. Rule 17g-1 requires, in part, the 
following:

Independent Directors' Approval

    The form and amount of the fidelity bond must be approved by a 
majority of the fund's independent directors at least once annually, 
and the amount of any premium paid by the fund for any ``joint insured 
bond,'' covering multiple funds or certain affiliates, must be approved 
by a majority of the fund's independent directors.

Terms and Provisions of the Bond

    The amount of the bond may not be less than the minimum amounts of 
coverage set forth in a schedule based on the fund's gross assets; the 
bond must provide that it shall not be cancelled, terminated, or 
modified except upon 60-days written notice to the affected party and 
to the Commission; in the case of a joint insured bond, 60-days written 
notice must also be given to each fund covered by the bond; a joint 
insured bond must provide that the fidelity insurance company will 
provide all funds covered by the bond with a copy of the agreement, a 
copy of any claim on the bond, and notification of the terms of the 
settlement of any claim prior to execution of that settlement; and a 
fund that is insured by a joint bond must enter into an agreement with 
all other parties insured by the joint bond regarding recovery under 
the bond.

Filings With the Commission

    Upon the execution of a fidelity bond or any amendment thereto, a 
fund must file with the Commission within 10 days a copy of the 
executed bond or any amendment to the bond, the independent directors' 
resolution approving the bond, and a statement as to the period for 
which premiums have been paid on the bond. In the case of a joint 
insured bond, a fund must also file (i) a statement showing the amount 
the fund would have been required to maintain under the rule if it were 
insured under a single insured bond and (ii) the agreement between the 
fund and all other insured parties regarding recovery under the bond. A 
fund must also notify the Commission in writing within five days of any 
claim or settlement on a claim under the fidelity bond.

Notices to Directors

    A fund must notify by registered mail each member of its board of 
directors of (i) any cancellation, termination, or modification of the 
fidelity bond at least 45 days prior to the effective date, and (ii) 
the filing or settlement of any claim under the fidelity bond when 
notification is filed with the Commission.

[[Page 8304]]

    Rule 17g-1's independent directors' annual review requirements, 
fidelity bond content requirements, joint bond agreement requirement 
and the required notices to directors seek to ensure the safety of fund 
assets against losses due to the conduct of persons who may obtain 
access to those assets. These requirements also seek to facilitate 
oversight of a fund's fidelity bond. The rule's required filings with 
the Commission are designed to assist the Commission in monitoring 
funds' compliance with the fidelity bond requirements.
    Based on conversations with representatives in the fund industry, 
the Commission staff estimates that for each of the estimated 3479 
active funds,\1\ the average annual paperwork burden associated with 
rule 17g-1's requirements is two hours, one hour each for a compliance 
attorney and the board of directors as a whole. The time spent by 
compliance attorney includes time spent filing reports with the 
Commission for any fidelity losses (if any) as well as paperwork 
associated with any notices to directors, and managing any updates to 
the bond and the joint agreement (if one exists). The time spent by the 
board of directors as a whole includes any time spent initially 
establishing the bond, as well as time spent on annual updates and 
approvals. The Commission staff therefore estimates the total ongoing 
paperwork burden hours per year for all funds required by rule 17g-1 to 
be 6958 hours (3479 funds x 2 hours = 6958 hours).
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    \1\ Based on statistics compiled by Commission staff, we 
estimate that there are approximately 3479 funds that must comply 
with the collections of information under rule 17g-1 and have made a 
filing within the last 12 months.
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    These 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 Commission rules. The collection of information required by rule 
17g-1 is mandatory and 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 control 
number.
    Written comments are requested on: (a) Whether the collection of 
information is 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 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, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an 
email to: [email protected].

     February 8, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3337 Filed 2-13-12; 8:45 am]
BILLING CODE 8011-01-P