[Federal Register Volume 66, Number 17 (Thursday, January 25, 2001)]
[Notices]
[Pages 7820-7822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2240]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. PA-31; File No. S7-02-01]


Privacy Act of 1974: Notice of Modifications to a System of 
Records and Establishment of a New System of Records

AGENCY: Securities and Exchange Commission.

ACTION: Notice of intended modifications to an existing system of 
records and the establishment of a new system of records.

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SUMMARY: The Securities and Exchange Commission (SEC or the Commission) 
proposes to modify an existing system of records by excluding 
investment adviser registration forms, forms withdrawing registration 
by investment advisers, and related investment adviser records. The 
Commission further proposes to add a new system of records consisting 
of these registration forms, withdrawal notices, and related records. 
This proposal is precipitated by the development of a new Internet-
based system for the registration of investment advisers called the 
Investment Adviser Registration Depository (IARD). NASD Regulation, 
Inc. (NASDR) will operate the IARD.

DATES: Comments must be received by February 26, 2001. The proposed 
changes and the new system of records will take effect March 6, 2001 
unless the Commission receives comments that would require a different 
determination.

ADDRESSES: Please send three copies of your comments to Jonathan G. 
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, 
NW, Washington, DC 20549-0609. You may also send your comments 
electronically to the following electronic address: [email protected]. All comments should refer to File No. S7-02-01 and, 
if sent electronically, should include this file number on the subject 
line. Comment letters will be available for public inspection and 
copying at our Public Reference Room, 450 Fifth Street, NW, Washington, 
DC 20549. If sent electronically, comment letters will also be 
available on our Web site (http://www.sec.gov).

FOR FURTHER INFORMATION CONTACT: Elizabeth T. Tsai, Privacy Act Staff 
Attorney (202) 942-4326, Office of Filings and Information Services, 
SEC, Operations Center, 6432 General Green Way, Alexandria, VA 22312-
2413.

SUPPLEMENTARY INFORMATION: The Commission gives notice of major changes 
to ``Applications for Registration or Exemption under the Investment 
Advisers Act of 1940 and the Investment Company Act of 1940' (SEC-2), 
which results in the establishment of a new system--``Investment 
Adviser Records'' (SEC-50).

SEC-2

    Currently, the Commission treats paper and microfiche copies of 
applications for registration by investment advisers (Form ADV) and 
their related amendments and withdrawal notices as agency records 
subject to the Privacy Act. Accordingly, the Commission has published 
and

[[Page 7821]]

periodically updated a system of records notice for these records, 
designated as SEC-2. These records contain names of individuals and 
information about those individuals, such as disciplinary information. 
However, the current Privacy Act notice does not address the electronic 
filing of such forms and new ways of maintaining and retrieving them 
through any SEC or non-SEC system. The Commission is therefore 
proposing to transfer investment adviser records, whether in paper, 
microfiche, or electronic format from SEC-2 to ``Investment Adviser 
Records'' (SEC-50), a new Privacy Act records system.

SEC-50

    On September 12, 2000, the Commission adopted amendments to rules 
30-5 and 30-11 of the SEC's Organization and Program Management rules 
(17 CFR 200.30-5 and 200.30-11), new rule 203-3 and Form ADV-H; adopted 
amendments to rules 0-2, 0-7, 203-1, 203-2, 203A-1, 203A-2, and 204-1 
(17 CFR 275.0-2, 275.0-7, 275.203-1, 275.203-2, 275.203A-1, 275.203A-2, 
and 275.204-1); and Form ADV, Form ADV-W, and Form 4-R (17 CFR 279.1, 
279.2, and 279.4) under the Investment Advisers Act of 1940 (15 U.S.C. 
80b-1) (the Advisers Act or the Act).\1\ The Commission also withdrew 
rule 204-5 (17 CFR 275.204-5) and Forms 5-R, 6-R, 7-R, and ADV-Y2K (17 
CFR 279.5, 279.6, 279.7, and 279.9) under the Advisers Act.\2\
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    \1\ Investment Advisers Act Release No. 1897 (Sept. 12, 2000) 
(65 FR 57438 (Sept. 22, 2000)).
    \2\ Id.
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    These amendments require investment advisers to submit all Form ADV 
applications for registration, Form ADV amendments, and Form ADV-W 
withdrawal requests electronically through the IARD. As a result of 
these amendments, NASDR, which is responsible for the operation and 
maintenance of the IARD system, effectively will be the custodian of 
investment adviser registration records filed electronically through 
the IARD after January 1, 2001. Under 5 U.S.C. 552a(m), the SEC and the 
NASDR intend to enter into a Memorandum of Understanding, under which 
the NASDR will assume, among other things, responsibilities for 
compliance with the Privacy Act with respect to those records and 
further will maintain those records in accordance with federal 
recordkeeping requirements.\3\
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    \3\ 36 CFR part 1220, Federal Records--General; 36 CFR part 
1222, Creation and Maintenance of Federal Records; and 36 CFR part 
1234, Electronic Records Management.
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    All investment adviser records on paper and microfiche, received by 
the SEC before January 1, 2001, will remain in its custody and control 
and their routine uses are unchanged by the development of the IARD. 
All investment adviser records received by the SEC after January 1, 
2001 that are on paper or microfiche also will be in the SEC's custody 
and control.
    As 5 U.S.C. 552a(r) requires, the SEC has submitted its reports of 
the new and the altered systems of records to the Congress and the 
Office of Management and Budget. This complies with Appendix I to OMB 
Circular A-130, ``Federal Agency Responsibilities for Maintaining 
Records About Individuals,'' as amended on February 20, 1996.\4\ 
Accordingly, the SEC proposes to amend SEC-2 and establish SEC-50, to 
read as follows:
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    \4\ 61 FR 6428, 6435-39.
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SEC-2

System name:
    Applications for Registration or Exemption under the Investment 
Company Act of 1940.

System location:
    SEC, 450 Fifth Street, NW, Washington, DC 20549.

Categories of individuals covered by the system:
    Officers, directors, and other individuals related to investment 
companies.

Categories of records in the system:
    Name, date of birth, address, telephone numbers, social security 
number, education, past and present employment, disciplinary history, 
business relationships, and similar information.

Authority for maintenance of the system:
    15 U.S.C. 77f, 77g, 77h, 77j, 80a-6, and 80a-8.

Purpose(s):
    To help the SEC staff process applications for registration or 
exemption, registration statements, and related forms under the 
Investment Company Act of 1940 and implement the Federal securities 
laws and rules.

Routine uses of records maintained in the system, including categories 
of users and the purposes of such uses:
    In addition to the conditions of disclosure under 5 U.S.C. 552a(b), 
the SEC staff may provide these records to:
    (1) Any member of the general public upon request;
    (2) Any Federal, state, local, or foreign government authority or 
securities self-regulatory organization that is investigating a 
violation or potential violation of a statute, rule, regulation, or 
order;
    (3) Any Federal, state, local, or foreign bar association or 
similar licensing authority responsible for possible disciplinary 
action;
    (4) Any Federal, state, or local government or governmental 
authority that is deciding to hire or retain an individual, sign a 
contract, or issue a license, grant, or benefit;
    (5) Any individual or entity appointed by a court of competent 
jurisdiction or agreed upon by the parties to a pending court action or 
administrative proceeding alleging a violation of the Federal 
securities laws or rules; and
    (6) Any contractor that performs, on the SEC's behalf, services 
requiring the use of these records.

Policies and practices for storing, retrieving, accessing, retaining, 
and disposing of records in the system:
Storage:
    These records are maintained on paper, microfilm, or magnetic tape 
and in a computer system.

Retrievability:
    These records are retrievable by the name of, or a file number 
assigned to, the registrant. Individual name access to these records is 
available through the SEC's Name-Relationship Search Index.

Safeguards:
    Non-computer records are maintained in a central records facility 
that only authorized individuals may access. The facility is locked, 
with security cameras and a 24-hour security guard. Computer records, 
which are subject to data integrity controls, require passcodes for 
database access.

Retention and disposal:
    These records are transferred to the Federal Records Center 
periodically for storage. They are controlled by file number and 
retained under 17 CFR 200.80f.

System manager(s) and address:
    Records Officer, SEC, Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

Notification procedure:
    Requests to determine whether this system of records contains a 
record pertaining to the requesting individual should be sent to the 
Privacy Act Officer, SEC Operations Center, 6432

[[Page 7822]]

General Green Way, Alexandria, VA 22312-2413.

Records access procedures:
    Persons wishing to access or contest these records should contact 
the Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

Contesting record procedures:
    See Records Access Procedures, above.

Record source categories:
    Applications for registration or exemption and related forms filed 
with the SEC under the Investment Company Act of 1940.

Exemptions claimed for the system:
    None.
SEC-50

System name:
    Investment Adviser Records.

System location:
    Records filed before January 1, 2001 and paper records filed after 
January 1, 2001: SEC, 450 Fifth Street, NW, Washington, DC 20549; and 
Form ADV applications for registration, Form ADV Amendments, and Form 
ADV-W withdrawal notices filed electronically on IARD after January 1, 
2001: NASDR, 9509 Key West Avenue, Rockville, MD 20850.

Categories of individuals covered by the system:
    Registrants and officers, directors, principal shareholders, or 
other individuals related to them.

Categories of records in the system:
    Name, address, telephone number, social security number, education, 
past and present employment, disciplinary history, business 
relationships, and similar information.

Authority for maintenance of the system:
    15 U.S.C. 80b-3 and 80b-6a.

Purpose(s):
    To help the SEC staff process applications for registration or 
exemption and related forms under the Investment Advisers Act of 1940 
and implement the Federal securities laws and rules.

Routine uses of records maintained in the system, including categories 
of users and the purposes of such uses:
    In addition to the conditions of disclosure under 5 U.S.C. 552a(b), 
the SEC staff may provide these records to:
    (1) Any member of the general public upon request;
    (2) Any Federal, state, local, or foreign government authority or 
securities or commodities self-regulatory organization that is 
investigating a violation or potential violation of a statute, rule, 
regulation, or order;
    (3) Any Federal, state, local, or foreign bar association or 
similar licensing authority responsible for possible disciplinary 
action;
    (4) Any Federal, state, or local government or governmental 
authority that is deciding to hire or retain an individual, sign a 
contract, or issue a license, grant, or benefit;
    (5) Any individual or entity appointed by a court of competent 
jurisdiction or agreed upon by the parties to a pending court action or 
administrative proceeding alleging a violation of the Federal 
securities laws or rules; and
    (6) Any contractor that performs, on the SEC's behalf, services 
requiring the use of these records.

Policies and Practices for Storing, Retrieving, Accessing, Retaining, 
and Disposing of Records in the System:
Storage:
    Records filed before January 1, 2001 and paper records filed after 
January 1, 2001 in the SEC's custody are maintained on paper, 
microfilm, or magnetic tape and in a computer system.
    Form ADV applications for registration, Form ADV amendments and 
Form ADV-W notices of withdrawal filed electronically on the IARD after 
January 1, 2001 in the NASDR's custody are maintained in electronic 
format (IARD).

Retrievability:
    These records are retrievable by the name of, or a file number 
assigned to, the registrant. Individual name access to these records is 
available through the SEC's Name-Relationship Search Index.

Safeguards:
    Non-computer records in the SEC's custody are maintained in a 
central records facility that only authorized individuals may access. 
The facility is locked, with security cameras and a 24-hour security 
guard. Computer records, which are subject to data integrity controls, 
require passcodes for database access.

Retention and Disposal:
    The records in the SEC's custody are transferred to the Federal 
Records Center periodically for storage. They are controlled by file 
number and retained under 17 CFR 200.80f.

System manager(s) and Address:
    Records filed before January 1, 2001 and paper records filed after 
January 1, 2001--Records Officer, SEC Operations Center, 6432 General 
Green Way, Alexandria, VA 22312-2413.
    Form ADV applications for registration, Form ADV amendments and 
Form ADV-W notices of withdrawal filed electronically on IARD after 
January 1, 2001--NASDR, 9509 Key West Avenue, Rockville, MD 20850.

Notification Procedure:
    Requests to determine whether this system of records contains a 
record pertaining to the requesting individual should be sent to the 
Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

Records Access Procedures:
    Persons wishing to access or contest these records should contact 
the Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

Contesting Record Procedures:
    See Records Access Procedures, above.

Record Source Categories:
    Registrations and related forms filed with the SEC under the 
Investment Advisers Act of 1940.

Exemptions Claimed for the System:
    None.

    Dated: January 19, 2001.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-2240 Filed 1-24-01; 8:45 am]
BILLING CODE 8010-01-P