Federal Register / Vol. 73, No. 180 / Tuesday, September 16, 2008 / Notices 53457 

1 17 CFR 270.17f–5. All references to rules 17f– 

5, 17f–7, 17d–1, or 19b–1 in this notice are to 17 

CFR 270.17f–5, 17 CFR 270.17f–7, 17 CFR 270.17d– 

1, and 17 CFR 270.19b–1, respectively. 

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 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 by sending an 

e-mail to: 

Kimberly_P._Nelson@omb.eop.gov; and 

(ii) Lewis W. Walker, Acting Director/ 

Chief Information Officer, Securities 

and Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312; or by 

sending an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: September 8, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21531 Filed 9–15–08; 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 Investor 

Education and Advocacy, 

Washington, DC 20549–0213 

Extension: 

Rule 17f–2(d), SEC File No. 270–36, OMB 

Control No. 3235–0028 

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 a 

request for approval of extension of the 

previously approved collection of 

information discussed below. 

• Rule 17f–2(d) (17 CFR 240.17f–2(d)) 

Rule 17f–2(d) was adopted on March 

16, 1976, and was last amended on 

November 18, 1982. Paragraph (d) of the 

rule (i) requires that records produced 

pursuant to the fingerprinting 

requirements of Section 17(f)(2) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) be maintained, (ii) 

permits the designated examining 

authorities of broker-dealers or members 

of exchanges, under certain 

circumstances, to store and maintain 

records required to be kept by this rule, 

and (iii) permits the required records to 

be maintained on microfilm. 

The general purpose of Rule 17f–2 is: 

(i) To identify security risk personnel; 

(ii) to provide criminal record 

information so that employers can make 

fully informed employment decisions; 

and (iii) to deter persons with criminal 

records from seeking employment or 

association with covered entities. 

Retention of fingerprint records, as 

required under paragraph (d) of the 

Rule, enables the Commission or other 

examining authority to ascertain 

whether all required persons are being 

fingerprinted and whether proper 

procedures regarding fingerprint are 

being followed. Retention of these 

records for the term of employment of 

all personnel plus three years ensures 

that law enforcement officials will have 

easy access to fingerprint cards on 

timely basis. This in turn acts as an 

effective deterrent to employee 

misconduct. 

Approximately 5,984 respondents are 

subject to the recordkeeping 

requirements of the rule. Each 

respondent keeps approximately 62 new 

records per year, which takes 

approximately 2 minutes per record for 

the respondent to maintain, for an 

annual burden of approximately 2 hours 

per respondent or a total annual burden 

of approximately 11,968 hours on all 

respondents, collectively. All records 

subject to the rule must be retained for 

the term of employment plus 3 years. 

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 

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 by 

sending an e-mail to: 

Kimberly_P._Nelson@omb.eop.gov; and 

(ii) Lewis W. Walker, Acting Director/ 

Chief Information Officer, Securities 

and Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312; or by 

sending an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: September 8, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21532 Filed 9–15–08; 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 Investor 

Education and Advocacy, 

Washington, DC 20549–0213 

Extension: 

Rule 17f–5, SEC File No. 270–259, OMB 

Control No. 3235–0269 

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. 

Rule 17f–5 under the Investment 

Company Act of 1940 (15 U.S.C. 80a) 

(‘‘Investment Company Act’’ or ‘‘Act’’) 

governs the custody of the assets of 

registered management investment 

companies (‘‘funds’’) with custodians 

outside the United States.1 Under rule 

17f–5, the fund’s board of directors must 

find that it is reasonable to rely on each 

delegate it selects to act as the fund’s 

foreign custody manager. The delegate 

must agree to provide written reports 

that notify the board when the fund’s 

assets are placed with a foreign 

custodian and when any material 

change occurs in the fund’s custody 

arrangements. The delegate must agree 

to exercise reasonable care, prudence, 

and diligence, or to adhere to a higher 

standard of care. When the foreign 

custody manager selects an eligible 

foreign custodian, it must determine 

that the fund’s assets will be subject to 

reasonable care if maintained with that 

custodian, and that the written contract 

that governs each custody arrangement 

will provide reasonable care for fund 

assets. The contract must contain 

certain specified provisions or others 

that provide at least equivalent care. 

The foreign custody manager must 

establish a system to monitor the 

contract and the appropriateness of 


ebenthall on PROD1PC60 with NOTICES
53458 Federal Register / Vol. 73, No. 180 / Tuesday, September 16, 2008 / Notices 

2See section 17(f) of the Investment Company Act 

[15 U.S.C. 80a–17(f)]. 

3This figure is an estimate of the number of new 

funds each year, based on data reported by funds 

in 2007 on Form N–1A and Form N–2 [17 CFR 

274.101]. In practice, not all funds will use foreign 

custody managers, and the actual figure may be 

smaller. 

4This estimate is based on staff research. 

5The $164/hour figure for a trust administrator is 

from SIFMA’s Management & Professional Earnings 

in the Securities Industry 2007, modified to account 

for an 1800-hour work-year and multiplied by 5.35 

to account for bonuses, firm size, employee benefits 

and overhead. The $2000/hr board of director time 

is from industry sources. 

1Custody of Investment Company Assets Outside 

the United States, Investment Company Act Release 

No. IC–23815 (April 29, 1999) (64 FR 24489 (May 

6, 1999)). 

continuing to maintain assets with the 

eligible foreign custodian. 

The collection of information 

requirements in rule 17f–5 are intended 

to provide protection for fund assets 

maintained with a foreign bank 

custodian whose use is not authorized 

by statutory provisions that govern fund 

custody arrangements,2 and that is not 

subject to regulation and examination 

by U.S. regulators. The requirement that 

the fund board determine that it is 

reasonable to rely on each delegate is 

intended to ensure that the board 

carefully considers each delegate’s 

qualifications to perform its 

responsibilities. The requirement that 

the delegate provide written reports to 

the board is intended to ensure that the 

delegate notifies the board of important 

developments concerning custody 

arrangements so that the board may 

exercise effective oversight. The 

requirement that the delegate agree to 

exercise reasonable care is intended to 

provide assurances to the fund that the 

delegate will properly perform its 

duties. 

The requirements that the foreign 

custody manager determine that fund 

assets will be subject to reasonable care 

with the eligible foreign custodian and 

under the custody contract, and that 

each contract contain specified 

provisions or equivalent provisions, are 

intended to ensure that the delegate has 

evaluated the level of care provided by 

the custodian, that it weighs the 

adequacy of contractual provisions, and 

that fund assets are protected by 

minimal contractual safeguards. The 

requirement that the foreign custody 

manager establish a monitoring system 

is intended to ensure that the manager 

periodically reviews each custody 

arrangement and takes appropriate 

action if developing custody risks may 

threaten fund assets. 

The Commission’s staff estimates that 

each year, approximately 159 

registrants 3 could be required to make 

an average of one response per registrant 

under rule 17f–5, requiring 

approximately 2 hours of board of 

director time per response, to make the 

necessary findings concerning foreign 

custody managers. The total annual 

burden associated with these 

requirements of the rule would be up to 

approximately 318 hours (159 

registrants × 2 hours per registrant). The 

staff further estimates that during each 

year, approximately 15 global 

custodians 4 would be required to make 

an average of 4 responses per custodian 

concerning the use of foreign custodians 

other than depositories. The staff 

estimates that each response would take 

approximately 262 hours, requiring 

approximately 1048 total hours 

annually per custodian. The total 

annual burden associated with these 

requirements of the rule would be 

approximately 15,720 hours (15 global 

custodians x 1048 hours per custodian). 

Therefore, the total annual burden of all 

collection of information requirements 

of rule 17f–5 is estimated to be up to 

16,038 hours (318 + 15,720). The total 

annual cost of burden hours is estimated 

to be $3,214,080 (318 hours × $2000/ 

hour for board of director’s time, plus 

15,720 hours × $164/hour for a trust 

administrator’s time).5 Compliance with 

the collection of information 

requirements of the rule is necessary to 

obtain the benefit of relying on the 

rule’s permission for funds to maintain 

their assets in foreign custodians. 

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 and 

forms. Compliance with the collection 

of information requirements of the rule 

is necessary to obtain the benefit of 

relying on the rule’s permission for 

funds to maintain their assets in foreign 

custodians. 

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: 

Kimberly_P._Nelson@omb.eop.gov; and 

(ii) Lewis W. Walker, Acting Director/ 

Chief Information Officer, Securities 

and Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, VA 22312; or send an email to: PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: September 8, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21533 Filed 9–15–08; 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 Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 17f–7; SEC File No. 270–470; OMB 

Control No. 3235–0529. 

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. 

Rule 17f–7 (17 CFR 270.17f–7) 

permits funds to maintain their assets in 

foreign securities depositories based on 

conditions that reflect the operations 

and role of these depositories.1 Rule 

17f–7 contains some ‘‘collection of 

information’’ requirements. An eligible 

securities depository has to meet 

minimum standards for a depository. 

The fund or its investment adviser 

generally determines whether the 

depository complies with those 

requirements based on information 

provided by the fund’s primary 

custodian (a bank that acts as global 

custodian). The depository custody 

arrangement has to meet certain risk 

limiting requirements. The fund can 

obtain indemnification or insurance 

arrangements that adequately protect 

the fund against custody risks. The fund 

or its investment adviser generally 

determines whether indemnification or 

insurance provisions are adequate. If the 

fund does not rely on indemnification 

or insurance, the fund’s contract with its 

primary custodian is required to state 

that the custodian will provide to the 

fund or its investment adviser a custody 

risk analysis of each depository, monitor 

risks on a continuous basis, and 

promptly notify the fund or its adviser 

of material changes in risks. The 

primary custodian and other custodians 


ebenthall on PROD1PC60 with NOTICES