80 FR 31440 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 105 (June 2, 2015)

[Federal Register Volume 80, Number 105 (Tuesday, June 2, 2015)]
[Notices]
[Pages 31440-31441]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-13382]


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SECURITIES AND EXCHANGE COMMISSION

[Extension: Rule 17g-1; OMB Control No. 3235-0213, SEC File No. 270-
208]


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100F Street NE., Washington, DC 
20549-2736.

    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'') has submitted to the Office of 
Management and Budget a request for extension of the previously 
approved collection of information discussed below.
    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

[[Page 31441]]

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 x 2 hours = 6,638 hours).
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    \1\ Based 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.
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    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.
    The public may view the background documentation for this 
information collection at the following Web site: www.reginfo.gov. 
Comments should be directed to: (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 email to: 
[email protected]; and (ii) Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549. Or, commenters 
may send an email to: [email protected]. Comments must be submitted 
to OMB within 30 days of this notice.

    Dated: May 28, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-13382 Filed 6-1-15; 8:45 am]
 BILLING CODE 8011-01-P