[Federal Register Volume 69, Number 35 (Monday, February 23, 2004)]
[Notices]
[Pages 8240-8241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3773]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

    [Extension: Rule 206(3)-2, SEC File No. 270-216, OMB Control No. 
3235-0243.]

    Upon written request, copies available from: Securities and 
Exchange Commission, Office of Filings and Information Services, 
Washington, DC 20549.

    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 of the previously approved 
collection of information discussed below.
    Rule 206(3)-2, which is entitled ``Agency Cross Transactions for 
Advisory Clients,'' permits investment advisers to comply with section 
206(3) of the Investment Advisers Act of 1940 (``Advisers Act'') by 
obtaining a client's blanket consent to enter into agency cross 
transactions (i.e., a transaction in which an adviser acts as a broker 
to both the advisory client and the opposite party to the transaction). 
Rule 206(3)-2 applies to all registered investment advisers. In relying 
on the rule, investment advisers must provide certain disclosures to 
their clients; advisory clients can use the disclosures to monitor 
agency cross transactions. The Commission also uses the information 
required by rule 206(3)-2 in connection with its investment adviser 
inspection program to ensure that advisers are in compliance with the 
rule. Without the information collected under the rule, advisory 
clients would not have information available for monitoring their 
adviser's handling of their accounts and the Commission would be less 
efficient and effective in its inspection program.
    The information requirements of the rule consist of the following: 
(1) Prior to obtaining the client's consent, appropriate disclosure 
must be made to the client as to the practice of, and the conflicts of 
interest involved in, agency cross transactions; (2) at or before the 
completion of any such transaction, the client must be furnished with a 
written confirmation containing specified information and offering to 
furnish upon request certain additional information; and (3) at least 
annually, the client must be furnished with a written statement or 
summary as to the total number of transactions during the period 
covered by the consent and the total amount of commissions received by 
the adviser or its affiliated broker-dealer attributable to such 
transactions.
    The Commission estimates that approximately 780 respondents use the 
rule annually, necessitating about 32 responses per respondent each 
year, for a total of 24,960 responses. Each response requires about .5 
hours, for a total of 12,480 hours. The estimated average burden hours 
are made solely

[[Page 8241]]

for the 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.
    This collection of information is found at 17 CFR 275.206(3)-2 and 
is necessary in order for the investment adviser to obtain the benefits 
of rule 206(3)-2. 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. The collection of 
information requirements under the rule is mandatory. Information 
subject to the disclosure requirements of rule 206(3)-2 does not 
require submission to the Commission; and, accordingly, the disclosure 
pursuant to the rule is not kept confidential.
    Commission-registered investment advisers are required to maintain 
and preserve certain information required under rule 206(3)-2 for five 
(5) years. The long-term retention of these records is necessary for 
the Commission's inspection program to ascertain compliance with the 
Advisers Act.
    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.
    Written comments regarding the above information should be directed 
to the following persons: (1) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10202, New Executive Office 
Building, Washington, DC 20503; and (2) R. Corey Booth, Director/Chief 
Information Officer, Office of Information Technology, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. 
Comments must be submitted to OMB within thirty (30) days of this 
notice.

    Dated: February 13, 2004.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-3773 Filed 2-20-04; 8:45 am]
BILLING CODE 8010-01-P