Document ID: SEC-2006-0148-0001
Agency: sec
Document Type: Notice
Title: Agency information collection activities; proposals, submissions, and approvals
Posted Date: 2006-02-07T05:00Z

[Federal Register: February 7, 2006 (Volume 71, Number 25)]
[Notices]               
[Page 6297]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07fe06-62]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Proposed Collection; Comment Request

Upon written request, copies available from: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension:
    Rule 19a-1; SEC File No. 270-240; OMB Control No. 3235-0216

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange 
Commission (the ``Commission'') is soliciting comments on the 
collections of information summarized below. The Commission plans to 
submit these existing collections of information to the Office of 
Management and Budget (``OMB'') for extension and approval.
    Section 19(a) [15 U.S.C. 80a-19(a)] of the Investment Company Act 
of 1940 (the ``Act'') makes it unlawful for any registered investment 
company to pay any dividend or similar distribution from any source 
other than the company's net income, unless the payment is accompanied 
by a written statement to the company's shareholders which adequately 
discloses the sources of the payment. Section 19(a) authorizes the 
Commission to prescribe the form of such statement by rule.
    Rule 19a-1 [17 CFR 270.19a-1] under the Act, entitled ``Written 
Statement to Accompany Dividend Payments by Management Companies,'' 
sets forth specific requirements for the information that must be 
included in statements made pursuant to section 19(a) by or on behalf 
of management companies.\1\ The rule requires that the statement 
indicate what portions of distribution payments are made from net 
income, net profits and paid-in capital. When any part of the payment 
is made from net profits, rule 19a-1 also requires that the statement 
disclose certain other information relating to the appreciation or 
depreciation of portfolio securities. If an estimated portion is 
subsequently determined to be significantly inaccurate, a correction 
must be made on a statement made pursuant to section 19(a) or in the 
first report to shareholders following the discovery of the inaccuracy.
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    \1\ Section 4(3) of the Act [15 U.S.C. 80a-4(3)] defines 
``management company'' as ``any investment company other than a face 
amount certificate company or a unit investment trust.''
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    The purpose of rule 19a-1 is to afford fund shareholders adequate 
disclosure of the sources from which distribution payments are made. 
The rule is intended to prevent shareholders from confusing income 
dividends with distributions made from capital sources. Absent rule 
19a-1, shareholders might receive a false impression of fund gains.
    Based on a review of filings made with the Commission, the staff 
estimates that approximately 3,000 portfolios of registered investment 
companies that are management companies may be subject to rule 19a-1 
each year, and that each portfolio on average mails two statements per 
year to meet the requirements of the rule.\2\ The staff further 
estimates that the time needed to make the determinations required by 
the rule and to prepare the statement required under the rule is 
approximately 1.5 hours per statement. The total annual burden for all 
portfolios therefore is estimated to be approximately 9,000 burden 
hours.
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    \2\ A few portfolios make monthly distributions from sources 
other than net income, so the rule requires them to send out a 
statement 12 times a year. Other portfolios never make such 
distributions.
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    The staff estimates that approximately one-third of the total 
annual burden (3,000 hours) would be incurred by a senior 
administrative officer with an average hourly wage rate of 
approximately $158 per hour, and approximately two-thirds of the annual 
burden (6,000 hours) would be incurred by senior clerical staff with an 
average hourly wage rate of $25 per hour.\3\ The staff therefore 
estimates that the aggregate annual cost of complying with the 
paperwork requirements of the rule is approximately $624,000 ((3,000 
hours x $158) + (6,000 hours x $25)).
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    \3\ All hourly rates in this Supporting Statement are derived 
from the average annual salaries reported for employees outside of 
New York City in Securities Industry Association, Management and 
Professional Earnings in the Securities Industry (2003) and 
Securities Industry Association, Office Salaries in the Securities 
Industry (2003).
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    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. Compliance with the collection of information 
required by rule 19a-1 is mandatory for management companies that make 
statements to shareholders pursuant to section 19(a) of the Act. 
Responses 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 invited on: (a) Whether the collections of 
information are necessary for the proper performance of the functions 
of the Commission, including whether the information has practical 
utility; (b) the accuracy of the Commission's estimate of the burdens 
of the collections of information; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burdens of the collections 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 R. Corey Booth, Director/
Chief Information Officer, Office of Information Technology, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549.

    Dated: January 31, 2006.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-1622 Filed 2-6-06; 8:45 am]

BILLING CODE 8010-01-P