Federal Register / Vol. 71, No. 169 / Thursday, August 31, 2006 / Notices 51867 

1 In this notice, we use the term ‘‘subadviser’’ to 

mean a party that contracts with a fund’s principal 

adviser to provide investment advisory services to 

the fund, and the term ‘‘principal adviser’’ to mean 

a party that contracts directly with a fund to 

provide investment advisory services to the fund. 

2Most subadvisory contracts already contain 

terms that allow the principal adviser to terminate 

the contract at any time. We therefore estimate there 

would be no burden hours or costs imposed on 

funds by this requirement. 

3These estimates are based on discussions with 

fund representatives. 

4These 149 funds include 125 funds that 

currently rely on exemptive orders, 14 funds that 

have filed an application for an exemptive order 

and, as explained infra note 5, 10 additional funds 

that we estimate would choose to rely on the 

proposed rule during the first year. 

Section 213.3339 United States 

International Trade Commission 

TCGS60030 Confidential Assistant 

to a Commissioner. Effective July 24, 

2006. 

Section 213.3343 Farm Credit 

Administration 

FLOT60013 Executive Assistant to a 

Member, Farm Credit Administration 

Board. Effective July 18, 2006. 

Section 213.3344 Occupational Safety 

and Health Review Commission 

SHGS00004 Confidential Assistant 

to a Commission Member. Effective July 

19, 2006. 

Section 213.3351 Federal Mine Safety 

and Health Review Commission 

FRGS60017 Confidential Assistant 

to the Chairman. Effective July 7, 2006. 

Section 213.3360 Consumer Product 

Safety Commission 

PSGS60064 Special Assistant (Legal) 

to a Commissioner. Effective July 25, 

2006. 

Section 213.3373 Trade and 

Development Agency 

TDGS60002 Congressional Liaison 

to the Director. Effective July 5, 2006. 

Section 213.3384 Department of 

Housing and Urban Development 

DUGS60330 Special Policy Advisor 

to the Assistant Secretary for 

Community Planning and Development. 

Effective July 13, 2006. 

DUGS60293 Staff Assistant to the 

President, Government National 

Mortgage Association. Effective July 17, 

2006. 

DUGS60502 Special Policy Advisor 

to the Assistant Secretary for Public and 

Indian Housing. Effective July 17, 2006. 

DUGS60213 Staff Assistant to the 

Assistant Secretary for Policy 

Development and Research. Effective 

July 20, 2006. 

Section 213.3394 Department of 

Transportation 

DTGS60372 Deputy Assistant 

Secretary for Governmental Affairs to 

the Assistant Secretary for 

Governmental Affairs. Effective July 17, 

2006. 

Section 213.3371 Office of 

Government Ethics 

GGGS02900 Confidential Assistant 

to the Director. Effective July 21, 2006. 

Authority: 5 U.S.C. 3301 and 3302; E.O. 

10577, 3 CFR 1954–1958 Comp., p. 218. 

Office of Personnel Management. 

Dan G. Blair, 

Deputy Director. 

[FR Doc. E6–14490 Filed 8–30–06; 8:45 am] 

BILLING CODE 6325–39–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Filings and 

Information Services, Washington, DC 

20549. 

Extension: Rule 15a–5; SEC File No. 270–

527; OMB Control No. 3235–0587. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), 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 15(a) of the Investment 

Company Act of 1940 (15 U.S.C. 80a–

15(a)) (the ‘‘Investment Company Act’’

or ‘‘Act’’) prohibits any person from 

serving as an investment adviser (or a 

subadviser) to a fund except under a 

written contract that the fund’s 

shareholders have approved. The 

Commission has granted exemptive 

relief, by order, to a number of 

registered open-end management 

investment companies (‘‘funds’’) whose 

investment advisers do not directly 

manage a portfolio of securities, but 

instead supervise one or more 

subadvisers, which are themselves 

responsible for the day-to-day 

management of the funds’ portfolios 

(‘‘manager of managers funds’’).1

Sponsors have analogized subadvisers 

in a manager of managers arrangement 

to portfolio managers employed by a 

fund adviser who may be hired and 

fired without the consent of 

shareholders. 

Proposed Rule 15a–5 (17 CFR 

270.15a–5) and amendments to Form N–

1A (17 CFR 239.15A, 17 CFR 274.11A) 

together would codify the orders we 

have issued for manager of managers 

funds, including many of their 

conditions, allowing any fund that 

satisfies the conditions to enter into or 

materially amend a subadvisory contract 

without shareholder approval. To 

provide for the protection of fund 

shareholders, a fund that relied on the 

proposed rule would have to satisfy a 

number of conditions, some of which 

would result in information collection 

requirements. 

For example, any fund that relied on 

the proposed rule would have to 

include certain provisions in all its 

advisory and subadvisory contracts. 

Specifically, all the fund’s subadvisory 

contracts for which shareholder 

approval is not sought would have to 

provide the principal adviser with the 

authority to terminate the subadvisory 

contract at any time, on no more than 

60 days written notice, without payment 

of penalty.2 In addition, the advisory 

contract between each principal adviser 

and the fund would have to require that 

the principal adviser supervise the 

activities of its subadvisers. These 

provisions are intended to ensure that 

only manager of managers funds (in 

which subadvisers resemble and 

perform the duties of a portfolio 

manager in a typical fund) are eligible 

for relief under the proposed rule and to 

allow the principal adviser to carry out 

its principal duties to the fund, the 

selection and monitoring of subadvisers, 

in an efficient manner. 

During the first year after adoption of 

the rule, Commission staff estimates that 

each fund relying on the rule would 

incur an initial one-time burden to 

modify its existing contract with the 

principal adviser to require the 

principal adviser to supervise the 

activities of its subadvisers. Staff 

estimates this burden would be 5 hours 

per fund (4 hours by in-house counsel, 

0.5 hours by fund directors, 0.5 hours by 

support staff).3 Commission staff 

estimates that 149 funds would have to 

modify their advisory contracts with 

their principal advisers to comply with 

the proposed rule, which would result 

in an estimated total of 745 burden 

hours and 149 responses.4


erjones on PROD1PC72 with NOTICES
51868 Federal Register / Vol. 71, No. 169 / Thursday, August 31, 2006 / Notices 

5Based on the number of manager of managers 

applications submitted since 1995, the staff 

estimates that 20 additional funds would seek to 

rely on the proposed rule each year. Approximately 

10 of those funds would be funds whose securities 

have already been publicly offered, and therefore 

would need to modify their advisory contracts with 

principal advisers. We estimate that the 10 new 

funds that would rely on the proposed rule would 

incur no additional burden or costs to include these 

provisions in the initial advisory contract. 

6Commission staff estimates that 159 funds 

(including 125 funds that currently rely on 

exemptive orders, 14 funds that have filed an 

application for an exemptive order, and 20 

additional funds that would have filed for 

exemptive relief during the first year after the rule’s 

adoption) would rely on the proposed rule during 

the first year after its adoption. After the first year, 

the staff estimates that each year 20 additional 

funds would rely on the proposed rule. 

7Based on discussions with fund representatives, 

the Commission estimates that on average each 

fund would hire 2 new subadvisers per year. 

Therefore, funds would be required to send to 

shareholders 2 information statements per year. 

Based on discussions with fund representatives, the 

Commission estimates that each fund would spend 

10 hours to prepare and mail each information 

statement. 

8This estimate is based on the following 

calculation: (4325 hours (year 1) + 3630 hours (year 

2) + 3630 hours (year 3)) ÷ 3 = 3861.6 hours. 

9This estimate is based on the following 

calculation: (507 responses (year 1) + 368 responses 

(year 2) + 368 responses (year 3)) ÷ 3 = 414.3 

responses. 

Commission staff estimates that after 

the first year, approximately 10 funds 5

would spend, on average, 5 hours 

annually (4 hours by in-house counsel, 

0.5 hours by fund directors, 0.5 hours by 

support staff) to modify their advisory 

contracts with their principal advisers 

to comply with the proposed rule. Thus, 

the Commission estimates these 

modifications would result in a total of 

50 burden hours and 10 responses. 

The proposed rule also would require 

funds to provide shareholders (and file 

with the Commission) an information 

statement within 90 days after entry into 

the subadvisory contract or after making 

a material change to a wholly-owned 

subsidiary’s existing subadvisory 

contract. The information statement 

must describe the agreement and 

contain all of the information that 

shareholders would have received in a 

proxy statement had a shareholder vote 

been held. This information collection 

is needed to ensure that shareholders 

are aware of the identity of the 

subadvisers that would be making 

investment decisions for the fund and 

the terms of each subadvisory contract. 

During the first 3 years after adoption 

of the proposed rule, Commission staff 

estimates that 179 funds 6 would each 

spend 20 hours 7 annually in preparing 

and distributing information statements. 

The total annual estimate for complying 

with the third party disclosure 

requirement of rule 15a–5 would be 

3580 burden hours and 358 responses. 

To arrive at the total information 

collection burden, staff has calculated a 

weighted average of the first year 

burden and the annual burden 

thereafter. Using a three-year period, the 

estimated weighted annual average 

information collection burden is 3862 

hours 8 and 414 responses.9

The collections of information 

required by proposed rule 15a–5 would 

be voluntary because rule 15a–5 is an 

exemptive rule and, therefore, funds 

may choose not to rely on the proposed 

rule. The filings with the Commission 

required under the proposed rule would 

be available to the public. 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 R. Corey Booth, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312 or send am 

e-mail to: PRA_Mailbox@sec.gov. 

Dated: August 23, 2006. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 06–7300 Filed 8–30–06; 8:45 am] 

BILLING CODE 8010–01–P 

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 6c–7; SEC File No. 270–269; 

OMB Control No. 3235–0276. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for extension of the 

previously approved collection of 

information discussed below. 

Rule 6c–7 (17 CFR 270.6c–7) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) (‘‘1940 Act’’) 

provides exemption from certain 

provisions of Sections 22(e) and 27 of 

the 1940 Act for registered separate 

accounts offering variable annuity 

contracts to certain employees of Texas 

institutions of higher education 

participating in the Texas Optional 

Retirement Program. There are 

approximately 80 registrants governed 

by Rule 6c–7. The burden of compliance 

with Rule 6c–7, in connection with the 

registrants obtaining from a purchaser, 

prior to or at the time of purchase, a 

signed document acknowledging the 

restrictions on redeemability imposed 

by Texas law, is estimated to be 

approximately 3 minutes per response 

for each of approximately 2,600 

purchasers annually (at an estimated 

$70 per hour), for a total annual burden 

of 130 hours (at a total annual cost of 

$9,100). 

Rule 6c–7 requires that the separate 

account’s registration statement under 

the Securities Act of 1933 (15 U.S.C. 77a 

et seq.) include a representation that 

Rule 6c–7 is being relied upon and is 

being complied with. This requirement 

enhances the Commission’s ability to 

monitor utilization of and compliance 

with the rule. There are no 

recordkeeping requirements with 

respect to Rule 6c–7. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules or forms. The 

Commission does not include in the 

estimate of average burden hours the 

time preparing registration statements 

and sales literature disclosure regarding 

the restrictions on redeemability 

imposed by Texas law. The estimate of 

burden hours for completing the 

relevant registration statements are 

reported on the separate PRA 

submissions for those statements. (See 

the separate PRA submissions for Form 

N–3 (17 CFR 274.11b) and Form N–4 (17 

CFR 274.11c). 

Complying with the collection of 

information requirements of the rules is 

necessary to obtain a benefit. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 


erjones on PROD1PC72 with NOTICES