

[Federal Register: July 3, 2007 (Volume 72, Number 127)]
[Notices]               
[Page 36528-36529]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03jy07-111]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Proposed Collection; Comment Request

Upon written request, copies available from: Securities and Exchange

[[Page 36529]]

Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension: Rule 206(4)-2; SEC File No. 270-217; OMB Control No. 
3235-0241.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collection of 
information summarized below. The Commission plans to submit this 
collection of information to the Office of Management and Budget 
(``OMB'') for extension and approval.
    Rule 206(4)-2 (17 CFR 275.206(4)-2) under the Investment Advisers 
Act of 1940 (15 U.S.C. 80b-1 et seq.) governs the custody of funds or 
securities of clients by Commission-registered investment advisers. 
Rule 206(4)-2 requires each investment adviser that has custody of 
client funds or securities to maintain those client funds or securities 
with a broker-dealer, bank or other ``qualified custodian.'' The rule 
also requires the adviser to promptly notify the clients as to the 
place and manner of custody, to send quarterly account statements to 
each client whose assets are in the adviser's custody, and to have an 
independent public accountant conduct an annual surprise examination of 
the custodied assets. If the qualified custodian sends monthly account 
statements directly to an adviser's clients, however, the adviser is 
relieved from sending its own account statements and undergoing an 
annual surprise examination. The rule exempts advisers from the rule 
with respect to clients that are registered investment companies. The 
rule also exempts advisers to limited partnerships and limited 
liability companies from the account statement delivery and annual 
surprise examination requirements if the limited partnerships or 
limited liability companies they advise are subject to annual audit by 
an independent public accountant.
    Advisory clients use this information to confirm proper handling of 
their accounts. The Commission's staff uses the information obtained 
through this collection in its enforcement, regulatory and examination 
programs. Without the information collected under the rule, the 
Commission would be less efficient and effective in its programs and 
clients would not have information valuable for monitoring an adviser's 
handling of their accounts.
    The respondents to this information collection are investment 
advisers registered with the Commission and have custody of clients' 
funds or securities. We estimate that 3352 advisers would be subject to 
the information collection burden under rule 206(4)-2. The number of 
responses under rule 206(4)-2 will vary considerably depending on the 
number of clients for which an adviser has custody of funds or 
securities. It is estimated that the average number of responses 
annually for each respondent would be 247.794, and the average time of 
.5 hour per response would remain the same. The annual aggregate burden 
for all respondents to the requirements of rule 206(4)-2 is estimated 
to be 415,303 hours.
    The estimated average burden hours are made solely for purposes of 
the Paperwork Reduction Act and are not derived from a comprehensive or 
even representative survey or study of the cost of Commission rules and 
forms.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the proposed collection of information; (c) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection 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 R. Corey Booth, Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or 
send an e-mail to: PRA_Mailbox@sec.gov.

    June 25, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-12781 Filed 7-2-07; 8:45 am]

BILLING CODE 8010-01-P
