[Federal Register: April 30, 2008 (Volume 73, Number 84)]
[Rules and Regulations]
[Page 23328-23333]
[DOCID:fr30ap08-9]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 249 and 274

[Release Nos. 34-57711; IC-28254; File No. S7-02-08]
RIN 3235-AK05

Disclosure of Divestment by Registered Investment Companies in
Accordance With Sudan Accountability and Divestment Act of 2007

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is adopting amendments
to its forms under the Securities Exchange Act of 1934 and the
Investment Company Act of 1940 that will require disclosure by a
registered investment company that divests, in accordance with the
Sudan Accountability and Divestment Act of 2007, from securities of
issuers that the investment company determines, using credible
information that is available to the public, conduct or have direct
investments in certain business operations in Sudan. The Sudan
Accountability and Divestment Act limits civil, criminal, and
administrative actions that may be brought against a registered
investment company that divests itself from such securities, provided
that the investment company makes disclosures in accordance with
regulations prescribed by the Commission.

DATES: April 30, 2008.

FOR FURTHER INFORMATION CONTACT: Devin F. Sullivan, Attorney, Office of
Disclosure Regulation, Division of Investment Management, at (202) 551-
6784, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-5720.

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission
(``Commission'') is adopting amendments to Form N-CSR \1\ and Form N-
SAR \2\ under the Securities Exchange Act of 1934 (``Exchange Act'')
\3\ and the Investment Company Act of 1940 (``Investment Company
Act'').\4\
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    \1\ 17 CFR 294.331 and 274.128.
    \2\ 17 CFR 294.330 and 274.101.
    \3\ 15 U.S.C. 78a et seq.
    \4\ 15 U.S.C. 80a-1 et seq.
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I. Discussion

    On December 31, 2007, the President signed the Sudan Accountability
and Divestment Act of 2007 (``Sudan Divestment Act'') into law.\5\
Among other things, the Sudan Divestment Act provides that no person
may bring any civil, criminal, or administrative action against any
registered investment company, or any employee, officer, director, or
investment adviser of the investment company, based solely upon the
investment company divesting from, or avoiding investing in, securities
issued by persons that the investment company determines, using
credible information that is available to the public, conduct or have
direct investments in certain business operations in Sudan.\6\ This
limitation on actions does not apply to a registered investment
company, or any of its employees, officers, directors, or investment
advisers, unless the investment company makes disclosures about the
divestments in accordance with regulations prescribed by the
Commission.\7\ To that end, the Sudan Divestment Act requires us to
prescribe regulations not later than 120 days after enactment that
require disclosure by each registered investment company that divests
itself of securities in accordance with the Act. The Sudan Divestment
Act states that these rules shall require this disclosure to be
included in the next periodic report filed under Section 30 of the
Investment Company Act following the divestment.\8\
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    \5\ Pub. L. 110-174, 121 Stat. 2516 (2007).
    \6\ Section 4(a) of the Sudan Divestment Act [to be codified at
15 U.S.C. 80a-13(c)(1)].
    \7\ Section 4(a) of the Sudan Divestment Act [to be codified at
15 U.S.C. 80a-13(c)(2)(B)].
    \8\ Section 4(b) of the Sudan Divestment Act.
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    To implement the Sudan Divestment Act, we proposed amendments to
Form N-CSR and Form N-SAR that would require disclosure by a registered
investment company that divests, in accordance with the Sudan
Divestment Act, from securities of issuers that the investment company
determines conduct or directly invest in certain business operations in
Sudan.\9\ We received two comment letters in response to our
proposals.\10\ The commenters generally supported the proposals, while
recommending several changes. We are adopting the proposed amendments
with certain modifications suggested by the commenters.
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    \9\ Investment Company Act Release No. 28148 (Feb. 11, 2008) [73
FR 8976 (Feb. 15, 2008)] (``Proposing Release'').
    \10\ Letter of Calvert Group, Ltd. (Mar. 14, 2008) (``Calvert
letter''); Letter of Investment Company Institute (Mar. 10, 2008)
(``ICI letter'').
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A. Amendments

    To implement the Sudan Divestment Act, we are requiring each
registered investment company that divests securities in accordance
with the Sudan Divestment Act to disclose the divestment on the next
Form N-CSR or Form N-SAR that it files following the divestment.
Management investment companies will provide the disclosure on Form N-
CSR, and unit investment trusts will provide the disclosure on Form N-
SAR.\11\ We are requiring disclosure of information that will identify
the securities divested and the magnitude of the divestment. This
includes the issuer's name; exchange ticker symbol; Committee on
Uniform Securities Identification Procedures (``CUSIP'') number; total
number of shares or, for debt securities, principal amount divested;
and dates that the securities were divested.\12\ In addition, if the
registered investment company continues to hold any securities of the
divested issuer, it will be required to disclose the exchange ticker
symbol; CUSIP number; and total number of shares or, for debt
securities, principal amount of such securities, held on the date of
filing.\13\ We believe that this disclosure is in the public interest
and protects investors.
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    \11\ Item 6(b) of Form N-CSR; Item 133 of Form N-SAR.
    \12\ Item 6(b)(1)-(5) of Form N-CSR; Item 133.A.-E. of Form N-
SAR. We are also adopting technical amendments to Form N-SAR to
change cross-references to Item 132 to reflect the addition of Item
133.
    \13\ Item 6(b)(6) of Form N-CSR; Item 133.F. of Form N-SAR.
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    One commenter suggested that the Commission require disclosure of
divestments in accordance with the Sudan Divestment Act in shareholder
reports, as well as in Form N-CSR and Form N-SAR, in order to bring
more prominence to the issue and make the information more easily
accessible by shareholders.\14\ Consistent with the Sudan Divestment
Act, which directs the Commission to prescribe regulations that
``require the disclosure to be included in the next periodic report
filed with the Commission,'' (emphasis added) \15\ we are not making
the requested change. We have concluded that disclosure of divestments
under the Sudan Divestment Act in Form N-CSR and Form N-SAR, coupled
with existing requirements for complete quarterly portfolio holdings
disclosure in semi-annual shareholder reports and on Form N-Q filed
with the Commission, will provide shareholders with ready access to
information about such divestments.
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    \14\ Calvert letter at 3.
    \15\ Section 4(b) of the Sudan Divestment Act.
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    We also received comment recommending that, rather than requiring
disclosure of divestment of

securities in accordance with the Sudan Divestment Act on the next Form
N-CSR or Form N-SAR filed following such divestment, we should instead
require disclosure of divestments made during the period covered by the
financial information included with the Form N-CSR or Form N-SAR (i.e.,
the prior semi-annual fiscal period).\16\ Under this recommendation, a
divestment made between the close of a semi-annual fiscal period and
the filing of the Form N-CSR or Form N-SAR for that period would not be
disclosed in that Form but would be disclosed on the next succeeding
Form N-CSR or Form N-SAR. Disclosure of a divestment made shortly after
the close of a semi-annual fiscal period would be delayed for
approximately 10 months. Consistent with the Sudan Divestment Act,\17\
we are not adopting that recommendation but instead are adopting the
rule as proposed. We are requiring the disclosure to be included in the
next periodic report filed with the Commission,\18\ which will help to
reduce extended delays between divestments and the associated
disclosure to investors.
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    \16\ ICI letter at 2-3.
    \17\ Section 4(b) of the Sudan Divestment Act.
    \18\ As proposed, a registered investment company that divests
securities in accordance with the Sudan Divestment Act during the
period that begins on the fifth business day before the date of
filing a Form N-CSR or Form N-SAR and ends on the date of filing may
disclose the divestment in either that filing or an amendment
thereto. The registered investment company must file the amendment
not later than five business days after the date of filing the Form
N-CSR or Form N-SAR. Instruction 2. to Item 6(b) of Form N-CSR;
Instructions to Item 133 of Form N-SAR.
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    One commenter recommended that the amendments not require
disclosure of the exchange ticker symbol and CUSIP number of securities
divested in accordance with the Sudan Divestment Act.\19\ We are
retaining this requirement, which we believe will help to more
precisely identify the specific securities for which a registered
investment company may claim the benefit of the limitation on actions
provided by the Sudan Divestment Act.
    Both commenters addressed the proposed requirement that a
registered investment company disclose information about continued
holdings of securities of a divested issuer. One commenter supported it
as enhancing investment company accountability to shareholders.\20\ The
other commenter opposed it on the grounds that the Sudan Divestment
Act's limitation on actions only requires disclosure made in connection
with a decision to divest and that this additional disclosure is
unnecessary because registered investment companies are already
required to disclose their portfolio holdings.\21\ We are retaining
this requirement because we believe that it will help assure that
investors do not confuse a registered investment company's divestment
from a portion of its holdings of a particular issuer's securities with
divestment from all of its holdings of that issuer's securities. The
disclosure of portfolio holdings that is currently required will not
necessarily prevent such confusion because that disclosure is required
as of the end of each fiscal quarter, which often will not coincide
with the date of a divestment.
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    \19\ ICI letter at 2.
    \20\ Calvert letter at 3.
    \21\ ICI letter at 3.
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    We are adopting, as proposed, Instructions to Form N-CSR and Form
N-SAR clarifying that while a registered investment company is not
required to disclose divestments of securities of an issuer that
conducts or has direct investments in certain business operations in
Sudan, the limitation on actions provided in the Sudan Divestment Act
does not apply with respect to a divestment that is not disclosed.\22\
We are also adopting, as proposed, Instructions to Form N-CSR and Form
N-SAR providing that, for purposes of determining when a divestment
should be reported, if a registered investment company divests its
holdings in a particular security in a related series of transactions,
the company may deem the divestment to occur at the time of the final
transaction in the series.\23\ We received no comments on these
Instructions.
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    \22\ Instruction 1. to Item 6(b) of Form N-CSR; Instructions to
Item 133 of Form N-SAR.
    \23\ Instruction 3. to Item 6(b) of Form N-CSR; Instructions to
Item 133 of Form N-SAR.
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B. Termination Provision

    The provisions of the Sudan Divestment Act concerning registered
investment company divestments terminate 30 days after the President
certifies to Congress that the Government of Sudan has undertaken
certain actions.\24\ We are adopting a termination provision in order
to clarify that the new disclosure requirements will not apply to
divestitures occurring after the investment company provisions of the
Sudan Divestment Act terminate. Both Form N-CSR and Form N-SAR will
provide for termination of the amendments we are adopting one year
after the date on which the related provisions of the Sudan Divestment
Act terminate pursuant to the terms of the Act. The termination
provision responds to commenters' requests that we include a provision
terminating the amendments to the forms that is parallel to the
termination provision of the Sudan Divestment Act.\25\ We have provided
that the amendments terminate one year after termination pursuant to
the Sudan Divestment Act to allow sufficient time for disclosure, after
termination of the Act's provisions, of divestments that occur prior to
termination of the Act's provisions.\26\
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    \24\ Section 12 of the Sudan Divestment Act.
    \25\ Calvert letter at 3; ICI letter at 3-4.
    \26\ Item 6(b) of Form N-CSR; Item 133 of Form N-SAR.
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C. Effective Date

    The amendments to the Commission's forms are effective immediately,
in accordance with the Administrative Procedure Act, which permits
rules to become effective less than 30 days after publication as
``provided by the agency for good cause found and published with the
rule.'' \27\ The Commission finds that good cause exists for immediate
effectiveness in light of the statutory requirement that the Commission
prescribe regulations not later than 120 days after the date of the
enactment of the Sudan Divestment Act.\28\
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    \27\ 5 U.S.C. 553(d)(3).
    \28\ Section 4(b) of the Sudan Divestment Act.
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D. Transition Period

    We solicited comment on whether our amendments should address
divestments that occur after the enactment of the Sudan Divestment Act
and before the effective date of our amendments. As suggested by a
commenter,\29\ the Rule permits a registered investment company that
makes a divestment in accordance with the Sudan Divestment Act between
December 31, 2007 (the date of enactment), and April 30, 2008 (the
effective date of the form amendments), and that filed a Form N-CSR or
Form N-SAR after the divestment but before April 30, 2008, to disclose
the divestment on an amendment to that Form N-CSR or Form N-SAR filed
no later than May 14, 2008. This provision will permit registered
investment companies, and their employees, officers, directors, and
investment advisers, to rely on the Sudan Divestment Act's limitation
on actions for divestments that occurred after enactment but before the
effective date of our form amendments. The period between April 30,
2008, the effective date of our form amendments, and May 14, 2008, the
latest permitted transition filing date, should provide registered
investment companies with a reasonable opportunity to review the form

amendments and make any necessary filing.
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    \29\ ICI letter at 3.
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II. Paperwork Reduction Act

    The form amendments contain ``collection of information''
requirements within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\30\ The titles for the collections of information are ``Form
N-CSR under the Investment Company Act of 1940 and Securities Exchange
Act of 1934, Certified Shareholder Report,'' and ``Form N-SAR under the
Investment Company Act of 1940, Semi-Annual Report for Registered
Investment Companies.'' We published notice soliciting comments on the
collection of information requirements in the release proposing the
amendments \31\ and submitted the proposed collections of information
to OMB for review and approval in accordance with 44 U.S.C. 3507(d) and
5 CFR 1320.11. We received no comments on the collection of information
requirements. OMB has approved the collections of information.
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    \30\ 44 U.S.C. 3501 et seq.
    \31\ See Proposing Release, supra note 9, 73 FR at 8978.
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    Form N-CSR (OMB Control No. 3235-0570) under the Exchange Act and
the Investment Company Act \32\ is used by registered management
investment companies filing certified shareholder reports. Form N-SAR
(OMB Control No. 3235-0330) under the Exchange Act and the Investment
Company Act \33\ is used by registered investment companies to file
periodic reports with the Commission. 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 OMB control number.
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    \32\ 17 CFR 249.331 and 17 CFR 274.128.
    \33\ 17 CFR 249.330 and 17 CFR 274.101.
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A. Summary of Amendments

    The Sudan Divestment Act, enacted on December 31, 2007, requires
the Commission to prescribe regulations not later than 120 days after
enactment that require disclosure by each registered investment company
that divests itself of securities in accordance with the Act.\34\ The
Sudan Divestment Act states that these rules shall require this
disclosure to be included in the next periodic report filed under
Section 30 of the Investment Company Act following the divestment.\35\
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    \34\ Section 4(b) of the Sudan Divestment Act.
    \35\ Id.
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    To implement the Sudan Divestment Act, we are requiring each
registered investment company that divests securities in accordance
with the Sudan Divestment Act to disclose the divestment on the next
Form N-CSR or Form N-SAR that it files following the divestment.
Management investment companies will provide the disclosure on Form N-
CSR, and unit investment trusts will provide the disclosure on Form N-
SAR.\36\ We are requiring disclosure of information that will identify
the securities divested and the magnitude of the divestment. This
includes the issuer's name; exchange ticker symbol; CUSIP number; total
number of shares or, for debt securities, principal amount divested;
and dates that the securities were divested.\37\ In addition, if the
registered investment company continues to hold any securities of the
divested issuer, it is required to disclose the exchange ticker symbol;
CUSIP number; and total number of shares or, for debt securities,
principal amount of such securities, held on the date of filing.\38\
Compliance with the form amendments is necessary to obtain the benefit
of the limitation on civil, criminal, and administrative actions
provided in the Sudan Divestment Act. The information provided will not
be kept confidential.
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    \36\ Item 6(b) of Form N-CSR; Item 133 of Form N-SAR.
    \37\ Item 6(b)(1)-(5) of Form N-CSR; Item 133.A.-E. of Form N-
SAR.
    \38\ Item 6(b)(6) of Form N-CSR; Item 133.F. of Form N-SAR.
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B. Reporting and Cost Burden Estimates

    The compliance burden estimates for the collections of information
are based on several assumptions. The compliance burden for the
amendments to Form N-CSR and Form N-SAR will be the reporting burden of
collecting information necessary to make the disclosures under new Item
6(b) of Form N-CSR and new Item 133 of Form N-SAR. We estimate that the
new collections of information will result in an increase of one-half
burden hour per filing. Further, we believe that the number of
registered investment companies that hold securities in companies
conducting or directly investing in certain business operations in
Sudan, and that will divest from these securities in accordance with
the Sudan Divestment Act, will be relatively small. We estimate that
approximately 15% of all registered investment company portfolios have
an objective of investing internationally.\39\ Based on a conservative
assumption that each of these portfolios will make a divestment in
accordance with the Sudan Divestment Act prior to each filing it makes
on Form N-CSR or Form N-SAR, we estimate that approximately 15% of the
filings on Form N-CSR and Form N-SAR will include disclosures of
divestments in accordance with the Sudan Divestment Act.
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    \39\ This estimate is based on analysis done by the Division of
Investment Management staff of publicly available data.
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    Based on a burden hour estimate of one-half hour per filing for
each respondent that makes disclosures under the amendments, we
estimate that registered management investment companies filing Form N-
CSR will incur approximately 510 annual burden hours,\40\ and unit
investment trusts will incur approximately 10 annual burden hours,\41\
to comply with the form amendments.
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    \40\ 6,743 annual and semi-annual filings on Form N-CSR x 15% of
filings on Form N-CSR x \1/2\ burden hour = approximately 510 total
burden hours (rounded to the nearest 10).
    \41\ 90 filings on Form N-SAR x 15% of filings on Form N-SAR x
\1/2\ burden hour = approximately 10 total burden hours (rounded to
the nearest 10).
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    The total annual burden hours for Form N-CSR, revised to include
the burden hours expected from the form amendments, are estimated to be
138,662.5 burden hours, an increase of 510 burden hours from the
current annual burden of 138,152.5 hours. The total annual burden hours
for Form N-SAR, revised to include the burden hours expected from the
form amendments, are estimated to be 107,213 burden hours, an increase
of 10 burden hours from the current annual burden of 107,203 hours.

III. Cost/Benefit Analysis

    The Commission is sensitive to the costs and benefits imposed by
its rules. Our amendments to Form N-CSR and Form N-SAR require each
registered investment company that divests securities in accordance
with the Sudan Divestment Act to disclose the divestment on the next
Form N-CSR or Form N-SAR that it files following the divestment. In the
release proposing form amendments under the Sudan Divestment Act, we
requested comments on our cost/benefit analysis. We received no
comments in response.

A. Benefits

    In adopting these form amendments, we are implementing the Sudan
Divestment Act's mandate for rulemaking by the Commission. The
amendments meet the Sudan Divestment Act's directive that the
Commission ``prescribe regulations, in the public interest and for the
protection of investors, to require disclosure by each registered
investment company that divests itself of securities in accordance with
section 13(c) of the Investment Company Act of 1940.'' \42\

Disclosure under the form amendments will make applicable to a
registered investment company, and its employees, officers, directors,
and investment advisers, the limitation on actions provided by the
Sudan Divestment Act. The amendments also will make important
information about divestments in accordance with the Sudan Divestment
Act available to investors, including information identifying the
securities divested, the dates of divestment, and any securities of the
issuer that the registered investment company continues to hold.
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    \42\ Section 4(b) of the Sudan Divestment Act.
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B. Costs

    While the form amendments may lead to some additional costs for
registered investment companies, we believe that these costs should be
minimal. We are requiring each registered investment company that
divests securities in accordance with the Sudan Divestment Act to
disclose the divestment on the next Form N-CSR or Form N-SAR that it
files following the divestment. Registered investment companies retain
records of securities transactions that, we believe, will permit them
to readily identify and disclose, for divestments made in accordance
with the Sudan Divestment Act, the securities divested, the dates of
divestment, and any securities of the issuer retained by the investment
company. Further, to ease the burden of information collection and
disclosure, we have included an instruction in Form N-CSR and Form N-
SAR stating that a registered investment company that divests
securities in accordance with the Sudan Divestment Act during the
period that begins on the fifth business day before the date of filing
a Form N-CSR or Form N-SAR and ends on the date of filing may disclose
the divestment in either that filing or an amendment thereto that is
filed not later than five business days after the date of filing the
Form N-CSR or Form N-SAR.\43\ We believe that this flexibility may
lessen the compliance burdens associated with reporting divestments
that occur shortly before a registered investment company files a Form
N-CSR or Form N-SAR.
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    \43\ Instruction 2. to Item 6(b) of Form N-CSR; Instructions to
Item 133 of Form N-SAR.
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    For purposes of the PRA, we estimate that it will take
approximately 510 annual burden hours \44\ to comply with the
amendments to Form N-CSR and approximately 10 annual burden hours \45\
to comply with the amendments to Form N-SAR, for an aggregate of
approximately 520 total annual burden hours to comply with the form
amendments. We estimate that this additional burden will equal total
costs of approximately $145,000 annually.\46\ We believe that the
incremental costs of disclosing divestments in accordance with the
Sudan Divestment Act on Form N-CSR and Form N-SAR are justified by the
fact that such disclosures will make applicable to a registered
investment company, and its employees, officers, directors, and
investment advisers, the limitation on actions provided by the Sudan
Divestment Act. These disclosures also will make important information
about divestments in accordance with the Sudan Divestment Act available
to investors, including information identifying the securities
divested, the dates of divestment, and any securities of the issuer
that the registered investment company continues to hold.
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    \44\ See supra note 40.
    \45\ See supra note 41.
    \46\ This cost increase is estimated by multiplying the total
annual hour burden (520 hours) by the estimated hourly wage rate of
$279.50 and rounding to the nearest 1,000. The estimated wage figure
is based on published rates for compliance attorneys and senior
programmers, modified to account for an 1800-hour work-year and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead, yielding effective hourly rates of $270 and
$289, respectively. See Securities Industry Association, Report on
Management & Professional Earnings in the Securities Industry 2007
(Sept. 2007). The estimated wage rate is further based on the
estimate that attorneys and programmers would divide time equally,
resulting in a weighted wage rate of $279.50 (($270 x .50) + ($289 x
.50)).
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IV. Consideration of Burden on Competition; Promotion of Efficiency,
Competition, and Capital Formation

    Section 23(a)(2) of the Exchange Act \47\ requires us, when
adopting rules under the Exchange Act, to consider the impact that any
new rule will have on competition. Section 23(a)(2) also prohibits us
from adopting any rule that will impose a burden on competition not
necessary or appropriate in furtherance of the purposes of the Exchange
Act. In addition, Section 2(c) of the Investment Company Act,\48\
Section 2(b) of the Securities Act of 1933,\49\ and Section 3(f) of the
Exchange Act \50\ require the Commission, when engaging in rulemaking
that requires it to consider or determine whether an action is
necessary or appropriate in the public interest, to consider, in
addition to the protection of investors, whether the action will
promote efficiency, competition, and capital formation. In the release
proposing form amendments under the Sudan Divestment Act, we requested
comments on whether the proposed amendments, if adopted, would promote
efficiency, competition, and capital formation and whether they would
impose a burden on competition. We received no comments in response.
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    \47\ 15 U.S.C. 78w(a)(2).
    \48\ 15 U.S.C. 80a-2(c).
    \49\ 15 U.S.C. 77b(b).
    \50\ 15 U.S.C. 78c(f).
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    The form amendments implement the Sudan Divestment Act's
requirement that we prescribe regulations not later than 120 days after
enactment that require disclosure by each registered investment company
that divests itself of securities in accordance with the Act.
Disclosure provided in response to the amendments will make applicable
to a registered investment company, and its employees, officers,
directors, and investment advisers, the limitation on actions provided
by the Sudan Divestment Act. These disclosures also will make important
information about divestments in accordance with the Sudan Divestment
Act available to investors, including information identifying the
securities divested, the dates of divestment, and any securities of the
issuer that the registered investment company continues to hold.
    These amendments may improve efficiency. Disclosure provided in
response to the amendments could increase efficiency at registered
investment companies by making applicable to a registered investment
company, and its employees, officers, directors, and investment
advisers, the limitation on actions provided by the Sudan Divestment
Act. These disclosures also could promote efficiency because they make
important information about divestments in accordance with the Sudan
Divestment Act available to investors, including information
identifying the securities divested, the dates of divestment, and any
securities of the issuer that the registered investment company
continues to hold. Making such information available to investors may
enable them to make more informed investment decisions.
    The amendments may promote competition. We anticipate that our form
amendments may promote competition because they may make it easier for
registered investment companies to choose whether or not to offer
portfolios that include holdings in companies that conduct or directly
invest in certain business operations in Sudan. Thus, the form
amendments may facilitate competition by making it easier for
registered investment companies to offer different types of portfolios
that appeal to different investors. We do not anticipate that the
amendments will impose a measurable burden on competition. We also do
not anticipate that the form amendments

will have a significant impact on capital formation.

V. Final Regulatory Flexibility Analysis

    This Final Regulatory Flexibility Analysis (``Analysis'') has been
prepared in accordance with the Regulatory Flexibility Act.\51\ It
relates to the Commission's form amendments under the Exchange Act and
the Investment Company Act that require each registered investment
company that divests securities in accordance with the Sudan Divestment
Act to disclose the divestment on the next Form N-CSR or Form N-SAR
that it files following the divestment. We published in the release
proposing these amendments an Initial Regulatory Flexibility Analysis
(``IRFA''), which we prepared in accordance with the Regulatory
Flexibility Act.
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    \51\ 5 U.S.C. 601 et seq.
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A. Need for the Form Amendments

    The purpose of the form amendments is to implement the Sudan
Divestment Act's requirement that the Commission adopt rules requiring
disclosure of divestments made in accordance with the Act. Disclosure
provided in response to the amendments will make applicable to a
registered investment company, and its employees, officers, directors,
and investment advisers, the limitation on actions provided by the
Sudan Divestment Act. These disclosures also will make important
information about divestments in accordance with the Sudan Divestment
Act available to investors, including information identifying the
securities divested, the dates of divestment, and any securities of the
issuer that the registered investment company continues to hold.

B. Significant Issues Raised by Public Comment

    In the IRFA for the proposed amendments, we requested comment on
any aspect of the IRFA, including the number of small entities that
would be affected by the proposed amendments, the likely impact of the
proposal on small entities, the nature of any impact, and providing any
empirical data supporting the extent of the impact.\52\ We received no
comment letters aaddressing the IRFA.
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    \52\ See Proposing Release, supra note 9, 73 FR at 8981.
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C. Small Entities Subject to the Rule

    The form amendments will affect registered investment companies
that are small entities. For purposes of the Regulatory Flexibility
Act, an investment company is a small entity if it, together with other
investment companies in the same group of related investment companies,
has net assets of $50 million or less as of the end of its most recent
fiscal year.\53\ Approximately 160 registered investment companies
currently meet this definition.\54\
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    \53\ 17 CFR 270.0-10.
    \54\ This estimate is based on analysis by the Division of
Investment Management staff of publicly available data.
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D. Projected Reporting, Recordkeeping, and Other Compliance
Requirements

    The amendments to Form N-CSR and Form N-SAR require each registered
investment company that divests securities in accordance with the Sudan
Divestment Act to disclose the divestment on the next Form N-CSR or
Form N-SAR that it files following the divestment.
    For purposes of the PRA, we estimate that it will take
approximately 510 annual burden hours to comply with the amendments to
Form N-CSR and approximately 10 annual burden hours to comply with the
amendments to Form N-SAR, for an aggregate of approximately 520 total
annual burden hours to comply with the form amendments. We estimate
that this additional burden will equal total costs of approximately
$145,000 annually.

E. Agency Action To Minimize the Effect on Small Entities

    The Regulatory Flexibility Act directs us to consider significant
alternatives that would accomplish our stated objective, while
minimizing any significant adverse impact on small issuers. In
connection with the amendments, the Commission considered the following
alternatives: (1) The establishment of differing compliance or
reporting requirements or timetables that take into account the
resources available to small entities; (2) the clarification,
consolidation, or simplification of compliance and reporting
requirements under the amendments for small entities; (3) the use of
performance rather than design standards; and (4) an exemption from
coverage of the amendments, or any part thereof, for small entities.
    The Commission believes that special compliance or reporting
requirements for small entities, or an exemption from coverage for
small entities, would not be appropriate or consistent with investor
protection or the requirements of the Sudan Divestment Act. Disclosure
provided in response to the amendments will make applicable to a
registered investment company, and its employees, officers, directors,
and investment advisers, the limitation on actions provided by the
Sudan Divestment Act. These disclosures also will make important
information about divestments in accordance with the Sudan Divestment
Act available to investors, including information identifying the
securities divested, the dates of divestment, and any securities of the
issuer that the registered investment company continues to hold.
Different disclosure requirements or different timetables for
registered investment companies that are small entities would not be
consistent with the requirements of the Sudan Divestment Act. Finally,
in this rulemaking, we do not consider using performance rather than
design standards to be consistent with the statutory requirement that
we adopt rules for the protection of investors.
    We have endeavored through the amendments to minimize the
regulatory burden on all registered investment companies, including
small entities, while meeting the requirements of the Sudan Divestment
Act. Small entities should benefit from the Commission's reasoned
approach to the amendments to the same degree as other registered
investment companies.

VI. Statutory Authority

    The Commission is adopting amendments to Form N-SAR and Form N-CSR
pursuant to authority set forth in Sections 10(b), 13, 15(d), 23(a),
and 36 of the Exchange Act [15 U.S.C. 78j(b), 78m, 78o(d), 78w(a), and
78mm], and Sections 8, 13(c), 24(a), 30, and 38 of the Investment
Company Act [15 U.S.C. 80a-8, 80a-13(c), 80a-24(a), 80a-29, and 80a-
37].

List of Subjects

17 CFR Part 249

    Reporting and recordkeeping requirements, Securities.

17 CFR Part 274

    Investment companies, Reporting and recordkeeping requirements,
Securities.

Text of Form Amendments

0
For the reasons set out in the preamble, the Commission amends Title
17, Chapter II, of the Code of Federal Regulations as follows.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
1. The authority citation for part 249 continues to read in part as
follows:

    Authority: 15 U.S.C. 78a et seq., 7202, 7233, 7241, 7262, 7264,
and 7265; and 18 U.S.C. 1350, unless otherwise noted.
* * * * *

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

0
2. The authority citation for part 274 continues to read in part as
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-8, 80a-24, 80a-26, and 80a-29, unless otherwise
noted.
* * * * *

0
3. Form N-SAR (referenced in Sec. Sec.  249.330 and 274.101) is amended
by:
0
a. Revising the reference ``132'' in Item 6 to read ``133'';
0
b. Adding new Item 133;
0
c. Revising the reference ``132'' in the fifth paragraph of General
Instruction A to read ``133''; and

0
d. Adding an instruction to new Item 133.
    The additions read as follows:

    Note: The text of Form N-SAR does not, and these amendments will
not, appear in the Code of Federal Regulations.

Form N-SAR

* * * * *
    133. If the Registrant has divested itself of securities in
accordance with Section 13(c) of the Investment Company Act of 1940
following the filing of its last report on Form N-SAR and before filing
of the current report, disclose the following information for each such
divested security:
    A. Name of the issuer;
    B. Exchange ticker symbol;
    C. CUSIP number;
    D. Total number of shares or, for debt securities, principal amount
divested;
    E. Date(s) that the securities were divested; and
    F. If the Registrant holds any securities of the issuer on the date
of filing, the exchange ticker symbol; CUSIP number; and the total
number of shares or, for debt securities, principal amount held on the
date of filing.
    This item 133 shall terminate one year after the date on which the
provisions of Section 4 of the Sudan Accountability and Divestment Act
of 2007 terminate pursuant to Section 12 of that Act.
* * * * *

Instructions to Specific Items

* * * * *

Item 133: Divestment of Securities in Accordance With the Sudan
Accountability and Divestment Act of 2007

    This item may be used by a Registrant that divested itself of
securities in accordance with Section 13(c) of the Investment Company
Act, which was added by the Sudan Accountability and Divestment Act of
2007. A Registrant is not required to include disclosure under this
item; however, the limitation on civil, criminal, and administrative
actions under Section 13(c) of the Investment Company Act does not
apply with respect to a divestment that is not disclosed under this
item.
    If a Registrant divests itself of securities in accordance with
Section 13(c) of the Act during the period that begins on the fifth
business day before the date of filing a Form N-SAR and ends on the
date of filing, it may disclose the divestment in either the Form N-SAR
or an amendment thereto that is filed not later than five business days
after the date of filing the Form N-SAR.
    For purposes of determining when a divestment should be reported
under this item, if a Registrant divests its holdings in a particular
security in a related series of transactions, the Registrant may deem
the divestment to occur at the time of the final transaction in the
series. In that case, the Registrant should report each transaction in
the series on a single Form N-SAR, but should separately state each
date on which securities were divested and the total number of shares
or, for debt securities, principal amount divested, on each such date.
* * * * *
0
4. Form N-CSR (referenced in Sec. Sec.  249.331 and 274.128) is amended
by:
0
a. Revising the reference ``Schedule of Investments.'' in the caption
to Item 6 to read ``Investments.'';
0
b. Designating the undesignated paragraph in Item 6 as paragraph (a);
0
c. Revising the reference ``Instruction.'' in Item 6 to read
``Instruction to paragraph (a).''; and
0
d. Adding new paragraph (b) and new Instructions 1, 2, and 3 to
paragraph (b) to Item 6.
    The additions read as follows:

    Note: The text of Form N-CSR does not, and these amendments will
not, appear in the Code of Federal Regulations.

Form N-CSR

* * * * *

Item 6. Investments

    (a) * * *
    (b) If the registrant has divested itself of securities in
accordance with Section 13(c) of the Investment Company Act of 1940
following the filing of its last report on Form N-CSR and before filing
of the current report, disclose the following information for each such
divested security:
    (1) Name of the issuer;
    (2) Exchange ticker symbol;
    (3) Committee on Uniform Securities Identification Procedures
(``CUSIP'') number;
    (4) Total number of shares or, for debt securities, principal
amount divested;
    (5) Date(s) that the securities were divested; and
    (6) If the registrant holds any securities of the issuer on the
date of filing, the exchange ticker symbol; CUSIP number; and the total
number of shares or, for debt securities, principal amount held on the
date of filing.
    This Item 6(b) shall terminate one year after the date on which the
provisions of Section 4 of the Sudan Accountability and Divestment Act
of 2007 terminate pursuant to Section 12 of that Act.
    Instructions to paragraph (b).
    1. This Item may be used by a registrant that divested itself of
securities in accordance with Section 13(c) of the Investment Company
Act, which was added by the Sudan Accountability and Divestment Act of
2007. A registrant is not required to include disclosure under this
Item; however, the limitation on civil, criminal, and administrative
actions under Section 13(c) of the Investment Company Act does not
apply with respect to a divestment that is not disclosed under this
Item.
    2. If a registrant divests itself of securities in accordance with
Section 13(c) of the Act during the period that begins on the fifth
business day before the date of filing a Form N-CSR and ends on the
date of filing, it may disclose the divestment in either the Form N-CSR
or an amendment thereto that is filed not later than five business days
after the date of filing the Form N-CSR.
    3. For purposes of determining when a divestment should be reported
under this Item, if a registrant divests its holdings in a particular
security in a related series of transactions, the registrant may deem
the divestment to occur at the time of the final transaction in the
series. In that case, the registrant should report each transaction in
the series on a single Form N-CSR, but should separately state each
date on which securities were divested and the total number of shares
or, for debt securities, principal amount divested, on each such date.

    Dated: April 24, 2008.

    By the Commission.
Nancy M. Morris,
Secretary.
 [FR Doc. E8-9410 Filed 4-29-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 86, Number 138 (Thursday, July 22, 2021)]
[Notices]
[Pages 38732-38733]
[FR Doc No: 2021-15623]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4502-DR; Docket ID FEMA-2021-0001]

District of Columbia; Amendment No. 5 to Notice of a Major
Disaster Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the District of Columbia (FEMA-4502-DR), dated March 29, 2020, and
related determinations.

DATES: This change occurred on July 6, 2021.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA) hereby gives notice that pursuant to the authority vested in the
Administrator, under Executive Order 12148, as amended, MaryAnn
Tierney, of FEMA is appointed to act as the Federal Coordinating
Officer for this disaster.
    This action terminates the appointment of Janice P. Barlow as

Federal Coordinating Officer for this disaster.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2021-15623 Filed 7-21-21; 8:45 am]
BILLING CODE 9111-23-P