Federal Register / Vol. 80, No. 62 / Wednesday, April 1, 2015 / Notices 17533 

1Based on statistics compiled by Commission 

staff, we estimate that there are approximately 3,319 

funds that must comply with the collections of 

information under rule 17g–1 and have made a 

filing within the last 12 months. 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

Washington, DC 20549–0213. 

Extension: 

Rule 17g–1, SEC File No. 270–208, OMB 

Control No. 3235–0213. 

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’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

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 3,319 active funds 

(respondents),1 the average annual 

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 6,638 

hours (3,319 funds × 2 hours = 6,638 

hours). 

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. 

Written comments are requested on: 

(i) Whether the collection of information 

is necessary for the proper performance 

of the functions of the Commission, 

including whether the information has 

practical utility; (ii) the accuracy of the 

Commission’s estimate of the burden of 

the collection of information; (iii) ways 

to enhance the quality, utility and 

clarity of the information collected; and 

(iv) 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 Pamela Dyson, Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

100 F Street NE., Washington, DC 

20549; or send an email to: PRA_

Mailbox@sec.gov. 

Dated: March 27, 2015. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07465 Filed 3–31–15; 8:45 am] 

BILLING CODE 8011–01–P 

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