[Federal Register Volume 65, Number 152 (Monday, August 7, 2000)]
[Notices]
[Pages 48258-48259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19904]


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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 Filings and Information Services, 
Washington, DC 20549.
    Extensions: Rule 206(4)-3, SEC File No. 270-218, OMB Control No. 
3235-0242, and Rule 206(4)-4, SEC File No. 270-304, OMB Control No. 
3235-0345.

    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 a request for extension of the previously approved 
collections of information discussed below.
    Rule 206(4)-3, 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 services, 
the solicitor must, at the time of the solicitation, indicate to 
prospective clients that he is affiliated with the adviser. When the 
solicitor is not affiliated with the adviser and the adviser will 
provide individualized services, the solicitor must, at the time of the 
solicitation, provide the prospective client with a copy of the 
adviser's brochure and a disclosure document containing information 
specified in rule 206(4)-3. 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 they may 
consider the solicitor's potential bias, and to protect investors 
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 registered investment advisers. The Commission 
believes that approximately 1,588 of the 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 11,180 total 
burden hours (7.04 x 1,588) for all advisers.
    Rule 206(4)-4, which is entitled ``Financial and Disciplinary 
Information that Investment Advisers Must Disclose to Clients,'' 
requires advisers to disclose certain financial and disciplinary 
information to clients. The disclosure requirements in rule 206(4)-4 
are designed so that a client will have information about an adviser's 
financial condition and disciplinary events that may be material to an 
evaluation of the adviser's integrity or ability to meet contractual 
commitments to clients. We

[[Page 48259]]

estimate that approximately 1,118 advisers are subject to this rule. 
The rule requires approximately 7.5 burden hours per year per adviser 
and amounts to approximately 8,385 total burden hours (7.5 x 1,118) for 
all advisers.
    The disclosure requirements of rules 206(4)-3 and 206(4)-4 are 
mandatory. Information subject to the disclosure requirements of rules 
206(4)-3 and 206(4)-4 is not submitted to the Commission, so 
confidentiality is not an issue. 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.
    General comments regarding the above information should be directed 
to the following persons: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, New Executive Office Building, 
Washington, DC 20503; and (ii) Michael E. Bartell, Associate Executive 
Director, Office of Information Technology, Securities and Exchange 
Commission, 450 Fifth Street, NW, Washington, DC 20549. Comments must 
be submitted to OMB within 30 days of this notice.

    Dated: July 31, 2000.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-19904 Filed 8-4-00; 8:45 am]
BILLING CODE 8010-01-M