Existing Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Existing Collection; Comment Request

Upon written request, copies available from: Securities and Exchange

Commission, Office of Filings and Information Services, 450 5th

Street, N.W., Washington, D.C. 20549.

Extension: Rule 23c-3 and Form N-23c-3, SEC File No. 270-373, OMB

Control No. 3235-0422.

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

[[Page 10960]]

of Management and Budget (``OMB'') for extension and approval.

Rule 23c-3 under the Investment Company Act of 1940 [17 CFR

270.23c-3] permits certain closed-end investment companies (``closed-

end funds'' or ``funds'') periodically to offer to repurchase from

shareholders a limited number of shares at net asset value. The rule

includes several reporting and recordkeeping requirements. The fund

must send shareholders a notification that contains specified

information each time the fund makes a repurchase offer (on a

quarterly, semi-annual, or annual basis, or for certain funds, on a

discretionary basis not more often than every two years). The fund also

must file copies of the shareholder notification with the Commission

(electronically through the Commission's Electronic Data Gathering,

Analysis and Retrieval System (``EDGAR'') or by sending three paper

copies) attached to Form N-23c-3 [17 CFR 274.221], a cover sheet that

provides limited information about the fund and the type of offer the

fund is making.\1\ The fund must describe in its annual report to

shareholders to fund's policy concerning repurchase offers and the

results of any repurchase offers made during the reporting period. The

fund's board of directors must adopt written procedures designed to

ensure that the fund's investment portfolio is sufficiently liquid to

meet its repurchase obligations and other obligations under the rule.

The board periodically must review the composition of the fund's

portfolio and change the liquidity procedures as necessary. The fund

also must file copies of advertisements and other sales literature with

the Commission as if it were an open-end investment company subject to

section 24 of the Investment Company Act [15 U.S.C. 80a-24] and the

rules that implement section 24.\2\

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\1\ Form N-23c-3 requires the fund to state its registration

number, its full name and address, the date of the accompanying

shareholder notification, and the type of offer being made

(periodic, discretionary, or both).

\2\ Rule 24b-3 under the Investment Company Act [17 CFR 270.24b-

3], however, would generally exempt the fund from that requirement

when the materials are filed instead with the National Association

of Securities Dealers (``NASD''), as nearly always occurs under NASD

procedures, which apply to the underwriter of every fund.

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The requirement that the fund send a notification to shareholders

of each offer is intended to ensure that a fund provides material

information to shareholders about the terms of each offer, which may

differ from previous offers on such matters as the maximum amount of

shares to be repurchased (the maximum repurchase amount may range from

5% to 25% of outstanding shares). The requirement that copies be sent

to the Commission is intended to enable the Commission to monitor the

fund's compliance with the notification requirement. The requirement

that the shareholder notification be attached to Form N-23c-3 is

intended to ensure that the fund provides basic information necessary

for the Commission to process the notification and to monitor the

fund's use of repurchase offers. The requirement that the fund describe

its current policy on repurchase offers and the results of recent

offers in the annual shareholder report is intended to provide

shareholders current information about the fund's repurchase policies

and its recent experience. The requirement that the board approve and

review written procedures designed to maintain portfolio liquidity is

intended to ensure that the fund has enough cash or liquid securities

to meet its repurchase obligations, and that written procedures are

available for review by shareholders and examination by the Commission.

The requirement that the fund file advertisements and sales literature

as if it were an open-end investment company is intended to facilitate

the review of these materials by the Commission or the NASD to prevent

incomplete, inaccurate, or misleading disclosure about the special

characteristics of a closed-end fund that makes periodic repurchase

offers.

The Commission estimates that 10 funds currently rely upon the

rule. The Commission estimates that each fund spends approximately 80

hours annually in preparing, mailing, and filing shareholder

notifications for each repurchase offer, 4 hours annually in preparing

and filing Form N-23c-3, 6 hours annually in preparing disclosures in

the annual shareholder report concerning the fund's repurchase policy

and recent offers, 28 hours annually in preparing procedures to protect

portfolio liquidity, and 8 hours annually in performing subsequent

reviews of these procedures. The total annual burden of the rule's

paperwork requirements for all funds thus is estimated to be 1,260

hours. This represents an increase of 940 hours from the prior estimate

of 320 hours. The increase results primarily from the recognition that

sending notifications to shareholders and completing Form N-23c-3

imposes burdens in addition to the burden of preparing and filing the

shareholder notifications with the Commission.\3\ The remaining

increase results from a more accurate calculation of the component

parts of other previously combined information burdens.

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\3\ The Commission has not previously submitted to OMB a request

for approval under the Paperwork Reduction Act for the collection of

information in Form N-23c-3.

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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.

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 Michael E. Bartell,

Associate Executive Director, Office of Information Technology,

Securities and Exchange Commission, Mail Stop 0-4, 450 5th Street,

N.W., Washington, DC 20549.

Dated: February 25, 1998.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98-5727 Filed 3-4-98; 8:45 am]

BILLING CODE 8010-01-M