[Federal Register Volume 71, Number 243 (Tuesday, December 19, 2006)]
[Notices]
[Pages 76003-76004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21587]


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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.

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


[[Page 76004]]


    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, (17 CFR 275.206(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 
(the ``Act'') (15 U.S.C. 80b-6(3)) 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 
that affect their advisory account. 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 necessary 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 693 respondents use the 
rule annually, necessitating about 32 responses per respondent each 
year, for a total of 22,176 responses. Each response requires an 
estimated 0.5 hours, for a total of 11,088 hours. The estimated average 
burden hours are made solely for the purposes of the Paperwork 
Reduction Act and are not derived from a comprehensive or 
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. 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.
    General 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 or e-mail to: [email protected]; 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: [email protected]. Comments must be submitted to OMB within 
30 days of this notice.

     Dated: December 11, 2006.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-21587 Filed 12-18-06; 8:45 am]
BILLING CODE 8011-01-P