Federal Register / Vol. 72, No. 78 / Tuesday April 24, 2007 / Notices 20391 

1 15 U.S.C. 80a–30(a)(1). 

2 17 CFR 270.31a–1. 

3 17 CFR 270.31a–2. 

4 17 CFR 270.31a–1(b)(1)–(4). These include, 

among other records, journals detailing daily 

purchases and sales of securities or contracts to 

purchase and sell securities, general and auxiliary 

ledgers reflecting all asset, liability, reserve, capital, 

income and expense accounts, separate ledgers 

reflecting, separately for each portfolio security as 

of the trade date all ‘‘long’’ and ‘‘short’’ positions 

carried by the fund for its own account, and 

corporate charters, certificates of incorporation and 

by-laws. 

5 17 CFR 270.31a–1(b)(5)–(12). These include, 

among other records, records of each brokerage 

order given in connection with purchases and sales 

of securities by the fund, all other portfolio 

purchases, records of all puts, calls, spreads, 

straddles or other options in which the fund has an 

interest, has granted, or has guaranteed, records of 

proof of money balances in all ledger accounts, files 

of all advisory material received from the 

investment adviser, and memoranda identifying 

persons, committees or groups authorizing the 

purchase or sale of securities for the fund. 

6 15 U.S.C. 78q. 

7 15 U.S.C. 80b–4. 

8 In addition, the fund, or whoever maintains the 

documents for the fund must provide promptly any 

of the following that the Commission (by its 

examiners or other representatives) or the directors 

of the fund may request: (A) A legible, true, and 

complete copy of the record in the medium and 

format in which it is stored; (B) a legible, true, and 

complete printout of the record; and (C) means to 

access, view, and print the records; and separately 

store, for the time required for preservation of the 

original record, a duplicate copy of the record on 

Continued 

been previously reported or erroneously 

reported by a beneficiary. If a 

respondent fails to complete the form, 

the RRB may be unable to pay them 

benefits. One response is requested of 

each respondent. 

In order to enhance program integrity, 

the RRB proposes to revise Form G–19–

F to expand a current item that requests 

information about the annuitant’s 

employer to include the employer’s 

identification number (EID). Other 

minor non-burden impacting editorial 

changes are also proposed. 

The RRB estimates that 900 G–19–F’s 

are completed annually at an estimated 

completion time of eight minutes per 

response. Total respondent burden is 

estimated at 120 hours. 

Additional Information or Comments: 

To request more information or to 

obtain a copy of the information 

collection justification, forms, and/or 

supporting material, please call the RRB 

Clearance Officer at (312) 751–3363 or 

send an e-mail request to 

Charles.Mierzwa@RRB.GOV. Comments 

regarding the information collection 

should be addressed to Ronald J. 

Hodapp, Railroad Retirement Board, 844 

North Rush Street, Chicago, Illinois 

60611–2092 or send an e-mail to 

Ronald.Hodapp@RRB.GOV. Written 

comments should be received within 60 

days of this notice. 

Charles Mierzwa, 

Clearance Officer. 

[FR Doc. E7–7716 Filed 4–23–07; 8:45 am] 

BILLING CODE 7905–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission of 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 31a–2, SEC File No. 270–174, OMB 

Control No. 3235–0179. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520), 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. 

Section 31(a)(1) of the Investment 

Company Act of 1940 (the ‘‘Act’’) 

requires registered investment 

companies (‘‘funds’’) and certain 

principal underwriters, broker-dealers, 

investment advisers and depositors of 

funds to maintain and preserve records 

as prescribed by Commission rules.1

Rule 31a–1 specifies the books and 

records that each of these entities must 

maintain.2 Rule 31a–2, which was 

adopted on April 17, 1944, specifies the 

time periods that entities must retain 

books and records required to be 

maintained under rule 31a–1.3

Rule 31a–2 requires the following: 

1. Every fund must preserve 

permanently, and in an easily accessible 

place for the first two years, all books 

and records required under rule 31a–

1(b)(1)–(4).4

2. Every fund must preserve for at 

least six years, and in an easily 

accessible place for the first two years: 

a. All books and records required 

under rule 31a–1(b)(5)–(12); 5

b. All vouchers, memoranda, 

correspondence, checkbooks, bank 

statements, canceled checks, cash 

reconciliations, canceled stock 

certificates and all schedules that 

support each computation of net asset 

value of fund shares; 

c. Any advertisement, pamphlet, 

circular, form letter or other sales 

literature addressed or intended for 

distribution to prospective investors; 

d. Any record of the initial 

determination that a director is not an 

interested person of the fund, and each 

subsequent determination that the 

director is not an interested person of 

the fund, including any questionnaire 

and any other document used to 

determine that a director is not an 

interested person of the company; 

e. Any materials used by the 

disinterested directors of an fund to 

determine that a person who is acting as 

legal counsel to those directors is an 

independent legal counsel; and 

f. Any documents or other written 

information considered by the directors 

of the fund pursuant to section 15(c) of 

the Act in approving the terms or 

renewal of a contract or agreement 

between the company and an 

investment advisor. 

3. Every underwriter, broker or dealer 

that is a majority-owned subsidiary of a 

fund must preserve records required to 

be preserved by brokers and dealers 

under rules adopted under section 17 of 

the Securities Exchange Act of 1934 6

(‘‘section 17’’) for the periods 

established in those rules. 

4. Every depositor of any fund, and 

every principal underwriter of any fund 

other than a closed-end fund, must 

preserve for at least six years records 

required to be preserved by brokers and 

dealers under rules adopted under 

section 17 to the extent the records are 

necessary or appropriate to record the 

entity’s transactions with the fund. 

5. Every investment adviser that is a 

majority-owned subsidiary of a fund 

must preserve the records required to be 

maintained by investment advisers 

under rules adopted under section 204 

of the Investment Advisers Act of 1940 7

(‘‘section 204’’) for the periods specified 

in those rules. 

6. Every investment adviser that is not 

a majority-owned subsidiary of a fund 

must preserve for at least six years 

records required to be maintained by 

registered investment advisers under 

rules adopted under section 204 to the 

extent the records are necessary or 

appropriate to reflect the adviser’s 

transactions with the fund. 

The records required to be maintained 

and preserved under this part may be 

maintained and preserved for the 

required time by, or on behalf of, a fund 

on (i) Micrographic media, including 

microfilm, microfiche, or any similar 

medium, or (ii) electronic storage media, 

including any digital storage medium or 

system that meets the terms of this 

section. The fund, or person that 

maintains and preserves records on its 

behalf, must arrange and index the 

records in a way that permits easy 

location, access, and retrieval of any 

particular record.8


jlentini on PROD1PC65 with NOTICES
20392 Federal Register / Vol. 72, No. 78 / Tuesday April 24, 2007 / Notices 

any medium allowed by this section. In the case of 

records retained on electronic storage media, the 

fund, or person that maintains and preserves 

records on its behalf, must establish and maintain 

procedures: (i) To maintain and preserve the 

records, so as to reasonably safeguard them from 

loss, alteration, or destruction; (ii) to limit access to 

the records to properly authorized personnel, the 

directors of the fund, and the Commission 

(including its examiners and other representatives); 

and (iii) to reasonably ensure that any reproduction 

of a non-electronic original record on electronic 

storage media is complete, true, and legible when 

retrieved. 

9This estimate is based on the following 

calculation: 4,920 registered investment company’s 

× 220 hours = 1,082,400 total hours. 

10The staff estimated the annual cost of 

preserving the required books and records by 

identifying the annual costs for several funds and 

then relating this total cost to the average net assets 

of these funds during the year. The staff estimates 

that the annual cost of preserving records is $70,000 

per fund; the funds queried in support of this 

analysis had an average asset base of approximately 

$2 billion (70,000/2 billion = .000035). 

11This estimate is based on the annual cost per 

dollar of net assets of the average fund as applied 

to the net assets of all funds ($10 trillion × .000035 

= $350 million). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(6). 

4The Commission has modified the text of the 

summaries prepared by Amex. 

The Commission periodically inspects 

the operations of all funds to ensure 

their compliance with the provisions of 

the Act and the rules under the Act. The 

Commission staff spends a significant 

portion of their time in these 

inspections reviewing the information 

contained in the books and records 

required to be kept by rule 31a–1 and 

to be preserved by rule 31a–2. 

There are approximately 4,920 funds 

as of December 31, 2006, all of which 

are required to comply with rule 31a–

2. Based on recent conversations with 

representatives of the fund industry and 

past estimates, our staff estimates that 

each fund currently spends 220 hours 

per year complying with the records 

preservation required by rule 31a–2. 

The hour burden is incurred by a variety 

of fund staff, and the type of staff 

position used for compliance with the 

rule varies widely from fund to fund. 

Based on these estimates, our staff 

estimates that the total annual burden of 

a fund to comply with rule 31a–2, is 220 

hours, with a total annual burden for all 

funds of 1,082,400 hours.9

The hour burden estimates for 

retaining records under rule 31a–2 are 

based on our experience with registrants 

and our experience with similar 

requirements under the Act and the 

rules under the Act. The number of 

burden hours may vary depending on, 

among other things, the complexity of 

the fund, the issues faced by the fund, 

and the number of series and classes of 

the fund. The estimated average burden 

hours are made solely for purposes of 

the Paperwork Reduction Act and are 

not derived from quantitative, 

comprehensive, or even representative 

survey or study of the burdens 

associated with our rules and forms. 

The Commission staff estimates the 

average cost of preserving books and 

records required by rule 31a–2, to be 

approximately $.000035 per $1.00 of net 

assets per year.10 As of December 31, 

2006, our staff estimates total net assets 

of all funds at about $10 trillion, and 

that compliance with rule 31a–2 costs 

the fund industry approximately $350 

million per year.11 Our staff estimates, 

however, based on conversations with 

representatives of the fund industry, 

that funds would already spend half of 

this amount ($175 million) to preserve 

these same books and records, as they 

are also necessary to prepare financial 

statements, meet various state reporting 

requirements, and prepare their annual 

federal and state income tax returns. 

Therefore, we estimate that the total 

annual cost burden for registered fund 

due to compliance with rule 31a–2 is 

$175 million per year. 

These estimates of average costs are 

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. 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 OMB control 

number. 

General comments regarding the 

above information should be directed to 

the following persons: (i) Desk officer 

for the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Room 10102, 

New Executive Office Building, 

Washington, DC 20503, or e-mail to: 

David_Rostker@omb.eop.gov; and (ii) R. 

Corey Booth, Director/Chief Information 

Officer, Securities and Exchange 

Commission, c/o Shirley Martinson, 

6432 General Green Way, Alexandria, 

Virginia 22312, or send an e-mail to 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: April 16, 2007. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–7710 Filed 4–23–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55640; File No. SR–Amex–

2007–04] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Relating to 

Its Buy-In Rules 

April 17, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

January 8, 2007, the American Stock 

Exchange LLC (‘‘Amex’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by Amex. Amex filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 2 and Rule 

19b–4(f)(6) thereunder 3 so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the proposed rule 

change is to amend Amex Rules 759, 

783, 784, and 789 and to adopt new 

Rule 798 to standardize Amex’s buy-in 

rules. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Amex included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. Amex has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.4

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

Amex is amending its Rules 783, 784, 

and 789 and is adopting new Rule 798 


jlentini on PROD1PC65 with NOTICES