[Federal Register Volume 65, Number 197 (Wednesday, October 11, 2000)]
[Notices]
[Pages 60478-60479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26030]


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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 Filings and Information Services, 
Washington, DC 20549.
    Extension: Rule 17f-6; SEC File No. 270-392; OMB Control No. 3235-
0447.
    Notice is hereby given that, under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501 et seq.), 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 17f-6 under the Investment Company Act of 1940 [17 CFR 
270.17f-6] permits registered investment companies (``funds'') to 
maintain assets (i.e., margin) with futures commission merchants 
(``FCMs'') in connection with commodity transactions effected on both 
domestic and foreign exchanges. Before the rule was adopted, funds 
generally were required to maintain such assets in special accounts 
with a custodian bank.\1\
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    \1\ See Custody of Investment Company Assets With Futures 
Commission Merchants and Commodity Clearing Organizations, 
Investment Company Act Release No. 22389 (Dec. 11, 1996) [61 FR 
66207 (Dec. 17, 1996)].
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    Rule 17f-6 permits funds to maintain their assets with FCMs that 
are registered under the Commodity Exchange Act (``CEA'') and that are 
not affiliated with the fund. The rule requires that a written contract 
containing the following provisions govern the manner in which the FCM 
maintains a fund's assets:
    <bullet> The PCM must comply with the segregation requirements of 
section 4d(2) of the CEA [7 U.S.C. 6d(2)] and the rules under that 
statute [17 CFR Chapter I] or, if applicable, the secured amount 
requirements of rule 30.7 under the CEA [17 CFR 30.7];
    <bullet> If the FCM places the fund's margin with another entity 
for clearing purposes the FCM must obtain an acknowledgement from the 
clearing organization that the fund's assets are held on behalf of the 
FCM's customers in accordance with provisions under the CEA; and
    <bullet> Upon request the FCM must furnish records about the fund's 
assets to the Commission or its staff.
    The rule requires a written contract that contains certain 
provisions to ensure important safeguards and other benefits relating 
to the custody of fund assets by FCMs. For example, the requirement 
that FCMs comply with the segregation or secured amount requirements of 
the CEA and the rules under the statue is designed to protect fund 
assets held by FCMs. The contract requirement that an FCM obtain an 
acknowledgement from an entity that clears fund transactions that the 
fund's assets are held on behalf of the FCM's customers according to 
CEA provisions seeks to accommodate the legitimate needs of the 
participants in the commodity settlement process, consistent with the 
protection of fund assets. Finally, FCMs are required to furnish to the 
Commission or its staff on request information concerning the fund's 
assets in order to facilitate Commission inspections of funds.

[[Page 60479]]

    The Commission estimates that approximately 3,031 funds could 
deposit margin with FCMs under rule 17f-6 in connection with their 
investments in futures contracts and commodity options. The Commission 
further estimates that each fund uses and deposits margin with 3 
different FCMs in connection with its commodity transactions. 
Approximately 211 FCMs are eligible to hold investment company margin 
under the rule.\2\
    The only paperwork burden of the rule consists of meeting the 
rule's contract requirements. The Commission estimates that 3,031 funds 
will spend an average of 1 hour complying with the contract 
requirements of the rule (e.g., signing contracts with additional 
FCMs), for a total of 3,031 burden hours. 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 and forms.
    Complying with the collection of information requirements of the 
rule is necessary to obtain the benefit of relying on the rule. 
Although the rule requires that the FCM provide certain records upon 
request, these records are not made public. The rule does not require 
these records be retained for any specific period of time. 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 Information and Regulatory Affairs, Office of 
Management and Budget, New Executive Office Building, Washington, DC 
20503; and (ii) Michael E. Bartell, Associate Executive Director, 
Office of Information Technology, Securities and Exchange Commission, 
450 Fifth Street, NW., Washington, DC 20549. Comment must be submitted 
to OMB within 30 days after this notice.

    Dated: October 2, 2000.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-26030 Filed 10-10-00; 8:45 am]
BILLING CODE 8010-01-M