[Federal Register Volume 86, Number 75 (Wednesday, April 21, 2021)]
[Notices]
[Pages 20777-20778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08138]


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SECURITIES AND EXCHANGE COMMISSION[SEC File No. 270-208, OMB Control 
No. 3235-0213]


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

Extension:
    Rule 17g-1

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 350l-3520), the Securities and Exchange 
Commission (the ``Commission'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    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. Finally, 
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: (i) A copy of the 
executed bond or any amendment to the bond, (ii) the independent 
directors' resolution approving the bond, and (iii) 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.
    Rule 17g-1's independent directors' annual review requirements, 
fidelity bond content requirements, joint bond agreement requirement, 
and the required notices to directors are designed 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 2.200 
active funds (respondents),\1\ the average annual

[[Page 20778]]

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 a compliance attorney includes 
time spent filing reports with the Commission for 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 4,400 hours (2,200 funds x 2 hours = 
4,400 hours). Commission staff continues to estimate that the filing 
and reporting requirements of rule 17g-1 do not entail any external 
cost burdens.
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    \1\ Based on a review of fund filings for the three-year period 
from 2018 to 2020, Commission staff estimates there are 
approximately 2,200 funds (registered open- and closed-end funds, 
and business development companies) that must comply with the 
collections of information under rule 17g-1, and which collectively 
submit an estimated 2,597 filings on Form 17G annually.
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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.
    The public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by 
sending an email to: [email protected].

    Dated: April 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-08138 Filed 4-20-21; 8:45 am]
BILLING CODE 8011-01-P