Notice2023-28119
Submission for OMB Review; Comment Request; Extension: Rule 17g-1
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 21, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 244 (Thursday, December 21, 2023)</title>
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[Federal Register Volume 88, Number 244 (Thursday, December 21, 2023)]
[Notices]
[Page 88436]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-28119]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-208, OMB Control No. 3235-0213]
Submission for OMB Review; Comment Request; Extension: Rule 17g-1
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F 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 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 calculates that for each of the estimated 2,543
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 5,086 hours (2,543 funds x 2 hours = 5,086 hours). Commission staff
continues to estimate that the filing and reporting requirements of
rule 17g-1 do not entail any external cost burdens.
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\1\ Based on a review of fund filings for the three-year period
from January 1, 2020 to December 2022, Commission staff calculates
there are 2,186 funds (registered open- and closed-end funds, and
business development companies) that must comply with the
collections of information under rule 17g-1, and which collectively
submit an estimated 2,543 filings on Form 17G annually.
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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 background documentation for this information
collection at the following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
by January 22, 2024 to (i) <a href="/cdn-cgi/l/email-protection#773a352f59383a3559383e253659243234281312041c281811111e14120537181a155912180759101801"><span class="__cf_email__" data-cfemail="7439362c5a3b39365a3b3d26355a2731372b1011071f2b1b12121d171106341b19165a111b045a131b02">[email protected]</span></a>
and (ii) David Bottom, Director/Chief Information Officer, Securities
and Exchange Commission, c/o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an email to: <a href="/cdn-cgi/l/email-protection#732321322c3e121a1f111c0b330016105d141c05"><span class="__cf_email__" data-cfemail="da8a889b8597bbb3b6b8b5a29aa9bfb9f4bdb5ac">[email protected]</span></a>.
Dated: December 18, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-28119 Filed 12-20-23; 8:45 am]
BILLING CODE 8011-01-P
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