Notices. SECURITIES AND EXCHANGE COMMISSION
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/register/2000/12/19/00-32278A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 6325-01-P 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, D.C. 20549. *Extension:* Rule 30d-2, SEC File No. 270-437, OMB Control No. 3235-0494. Notice is hereby given that, under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), 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.
Section 30(e) of the Investment Company Act of 1940 [15 U.S.C. 80a-29(e)] (the “Investment Company Act” or “Act”) and rule 30d-2 1 thereunder [17 CFR 270.30d-2] require unit investment trusts (“UITs”) that invest substantially all of their assets in securities of a management investment company (“fund”) to send a report to shareholders at least semi-annually containing financial information on the underlying fund. 2 Rule 30d-2 requires that the reports contain the financial statements that are required by rule 30d-1 [17 CFR 270.30d-1] to be included in the report of the underlying fund for the same fiscal period.
Rule 30d-1 requires that the reports contain the financial statements required by a fund's registration form. Rule 30d-2, however, permits, under certain conditions, delivery of a single shareholder report to investors who share an address (“housholding”) to satisfy the delivery requirements of the rule. The purpose of the householding provisions of the rule is to reduce the amount of duplicative reports delivered to investors sharing the same address. 1 The Commission has proposed that rule 30d-2 be redesignated as rule 30e-2. *See* Role of Independent Directors of Investment Companies.
Securities Act Rel. No. 7754; Exchange Act Rel. No. 42007; Investment Company Act Rel. No. 24082 (Oct. 14, 1999) [64 FR 59826 (Nov. 3, 1999)]. The proposal has not been adopted as of the date of this notice. 2 Management investment companies are defined in section 4(3) of the Investment Company Act as any investment company other than a face-amount certificate company or a unit investment trust, as those terms are defined in sections 4(1) and 4(2) of the Investment Company Act. *See * 15 U.S.C. 80a-4.
Rule 30d-2 permits householding of annual and semi-annual reports by UITs to satisfy the delivery requirements of rule 30d-2 if, in addition to the other conditions set forth in the rule, the UIT has obtained from each investor written or implied consent to the householding of shareholder reports. The rule requires UITs that wish to household shareholder reports with implied consent to send a notice to each investor stating that the investors in the household will receive one report in the future unless the investors provide contrary instructions.
In addition, at least once a year, UITs relying on the rule for householding must explain to investors who have provided written or implied consent how they can revoke their consent. Preparing and sending the initial notice and the annual explanation of the right to revoke are collections of information. The rule requires UITs that invest substantially all of their assets in securities of a fraud to transmit to shareholders at least semi-annually reports containing financial statements and certain other information in order to apprise current shareholders of the operational and financial condition of the UIT.
Absent the requirement to disclose all material information in reports, investors would be unable to obtain accurate information upon which to base investment decisions and consumer confidence in the securities industry might be adversely affected. Requiring the submission of these reports to the Commission permits us to verify compliance with securities law requirements. Rule 30d-2 allows UITs to household shareholder reports if certain conditions are met. Among the conditions with which a UIT must comply are providing notice to each investor that only one report will be sent to the household and providing to each investor that consents to householding an annual explanation of the right to revoke consent to the delivery of a single shareholder report to multiple investors sharing an address.
The purpose of the notice and annual explanation requirements associated with the householding provisions of the rule is to ensure that investors who wish to receive individual copies of shareholder reports are able to do so. The Commission estimates that as of December 1999, approximately 655 UITs were subject to the provisions of rule 30d-2. The Commission further estimates that the annual burden associated with rule 30d-2 is 121 hours for each UIT, including an estimated 20 hours associated with the notice requirement for householding and an estimated 1 hour associated with the explanation of the right to revoke consent to householding, for a total of 79,255 burden hours.
The estimate of average burden hours is made solely for the purpose 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. In addition to the burden hours, the Commission estimates that the cost of contracting for outside services associated with complying with rule 30d-2 is $12,000 per respondent (80 hours times $150 per hour for independent auditor services), for a total of $7,860,000 ($12,000 per respondent times 655 respondents).
Compliance with the collection of information requirements relating to the transmittal of shareholder reports required by the rule is mandatory. Compliance with the collection of information requirements relating to the householding provisions of the rule is necessary to obtain the benefit of providing only one shareholder report to a household containing more than one investor. Responses to the collections of information will not be kept confidential. The rule does not require these reports or notices 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. Comments must be submitted to OMB within 30 days after this notice. Dated: December 11, 2000. Margaret H. McFarland, Deputy Secretary. [FR Doc. 00-32278 Filed 12-18-00; 8:45 am]
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- 44 USC 3501-3520
- 17 CFR 270.30
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