[Federal Register Volume 73, Number 89 (Wednesday, May 7, 2008)]
[Notices]
[Pages 25784-25785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10042]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; 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

[[Page 25785]]

Exchange Commission (``Commission'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    Section 17(a) of the Investment Company Act of 1940 (15 U.S.C. 80a) 
(the ``Act'') generally prohibits affiliated persons of a registered 
investment company (``fund'') from borrowing money or other property 
from, or selling or buying securities or other property to or from the 
fund, or any company that the fund controls. 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 5 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 rule.
    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 directors' 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 analysis of past filings, Commission staff estimates that 
148 funds are affiliated persons of 668 issuers as a result of the 
fund's ownership or control of the issuer's voting securities, and that 
there are approximately 1,000 such affiliate relationships. Based on 
staff discussions with a limited number of 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 average 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.
    Please direct general comments regarding the above information to 
the following persons: (i) Desk Officer for the Securities and Exchange 
Commission, Office of Management and Budget, Room 10102, New Executive 
Office Building, Washington, DC 20503 or e-mail to: <a href="/cdn-cgi/l/email-protection#450429203d242b2120371a116b1a0d302b31052a28276b202a356b222a33"><span class="__cf_email__" data-cfemail="d899b4bda0b9b6bcbdaa878cf68790adb6ac98b7b5baf6bdb7a8f6bfb7ae">[email protected]</span></a>; and (ii) R. Corey Booth, Director/Chief Information 
Officer, Securities and Exchange Commission, C/O Shirley Martinson, 
6432 General Green Way, Alexandria, VA 22312; or send an email to: 
<a href="/cdn-cgi/l/email-protection#b4e4e6f5ebf9d5ddd8d6dbccf4c7d1d79ad3dbc2"><span class="__cf_email__" data-cfemail="29797b6876644840454b4651695a4c4a074e465f">[email protected]</span></a>. Comments must be submitted to OMB within 30 days 
of this notice.

    Dated: April 30, 2008.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-10042 Filed 5-6-08; 8:45 am]
BILLING CODE 8010-01-P


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