[Federal Register Volume 86, Number 241 (Monday, December 20, 2021)]
[Notices]
[Pages 71934-71935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27498]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-218, OMB Control No. 3235-0242]


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

Extension:
    Rule 206(4)-3

    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 
existing collection of information to the Office of Management and 
Budget for extension and approval.

[[Page 71935]]

    Rule 206(4)-3 (17 CFR 275.206(4)-3) under the Investment Advisers 
Act of 1940, which is entitled ``Cash Payments for Client 
Solicitations,'' provides restrictions on cash payments for client 
solicitations. The rule requires that an adviser pay all solicitors' 
fees pursuant to a written agreement. When an adviser will provide only 
impersonal advisory services to the prospective client, the rule 
imposes no disclosure requirements. When the solicitor is affiliated 
with the adviser and the adviser will provide individualized advisory 
services to the prospective client, the solicitor must, at the time of 
the solicitation or referral, indicate to the prospective client that 
he is affiliated with the adviser. When the solicitor is not affiliated 
with the adviser and the adviser will provide individualized advisory 
services to the prospective client, the solicitor must, at the time of 
the solicitation or referral, provide the prospective client with a 
copy of the adviser's brochure and a disclosure document containing 
information specified in rule 206(4)-3.
    Amendments to rule 206(4)-3, adopted in 2010 in connection with 
rule 206(4)-5, specify that solicitation activities involving a 
government entity, as defined in rule 206(4)-5, are subject to the 
additional limitations of rule 206(4)-5. In December 2020, the 
Commission adopted a single marketing rule which merged certain 
existing provisions of rule 206(4)-3 into amendments to rule 206(4)-1. 
In light of these 2020 amendments, the Commission has rescinded rule 
206(4)-3, effective November 2, 2022. Notwithstanding the rescission of 
rule 206(4)-3, the Office of Management and Budget (the ``OMB'') has 
requested that the Commission submit documents in connection with the 
extension of rule 206(4)-3 for the period covering February 28, 2022 to 
November 2, 2022, the effective date of the discontinuance of rule 
206(4)-3.
    To the extent that the OMB has requested this collection of 
information, the information rule 206(4)-3 requires is necessary to 
inform advisory clients about the nature of the solicitor's financial 
interest in the recommendation so the prospective clients may consider 
the solicitor's potential bias, and to protect clients against 
solicitation activities being carried out in a manner inconsistent with 
the adviser's fiduciary duty to clients. Rule 206(4)-3 is applicable to 
all Commission-registered investment advisers. The Commission believes 
that approximately 3,829 of these advisers have cash referral fee 
arrangements. The rule requires approximately 7.04 burden hours per 
year per adviser and results in a total of approximately 26,956 total 
burden hours (7.04 x 3,829) for all advisers.
    Please direct your written comments within 60 days to David Bottom, 
Director/Chief Information Officer, Securities and Exchange Commission, 
C/O John R. Pezzullo, 100 F Street NE, Washington, DC 20549; or send an 
email to: [email protected].

    Dated: December 1, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-27498 Filed 12-17-21; 8:45 am]
BILLING CODE 8011-01-P


