

[Federal Register: September 6, 2007 (Volume 72, Number 172)]
[Notices]               
[Page 51274]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06se07-105]                         


[[Page 51274]]

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SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

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'') has submitted to the Office of Management 
and Budget (``OMB'') a request for extension and revision of the 
previously approved collection of information discussed below.
    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 these collections 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. The staff estimates that 3352 advisers would be 
subject to the information collection burden under the 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.
    This collection of information is found at 17 CFR 275.206(4)-2 and 
is mandatory. Commission-registered investment advisers are required to 
maintain and preserve certain information required under rule 206(4)-2 
for five years. The long-term retention of these records is necessary 
for the Commission's examination program to ascertain compliance with 
the Investment Advisers Act.
    The estimated average burden hours are made solely for the purposes 
of Paperwork Reduction Act and are not derived from a comprehensive or 
even representative survey or study of the cost of Commission rules and 
forms. 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 Management and Budget, Room 10102, New Executive 
Office Building, Washington, DC 20503 or e-mail to: 
Alexander_T._Hunt@omb.eop.gov and (ii) 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. Comments must be submitted to OMB within 30 days 

of this notice.

    August 30, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-17585 Filed 9-5-07; 8:45 am]

BILLING CODE 8010-01-P
