2154 Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices 

1 17 CFR 240.15c3–3(o)(3)(i). 

2 In fact, the staff believes that most firms will 

have this process automated. To the extent that no 

person need be involved in the generation of this 

record, the burden will be very minimal. 

3The $290/hour figure for a financial reporting 

manager and the $354/hour figure for an attorney 

are derived from SIFMA’s Management & 

Professional Salaries in the Securities Industry 

2010, as modified by Commission staff to account 

for an 1,800 hour work-year and multiplied by 5.35 

to account for bonuses, firm size, employee benefits 

and overhead. 

4The $67/hour figure for a compliance clerk is 

derived from SIFMA’s Office Salaries in the 

Securities Industry 2010, modified by Commission 

staff to account for an 1,800 hour work-year and 

multiplied by 2.93 to account for bonuses, firm size, 

employee benefits and overhead. 

5 (((36,780 hours + 17 hours) × $290/hour) + (100 

hours × $354/hour) + (28,194 hours × $67/hour)). 

6 17 CFR 240.15c3–3(o)(2). 

7 17 CFR 240.15c3–3(o)(3)(ii). 

8Based on past conversations with industry 

representatives regarding other rule changes as 

adjusted to account for inflation and increased 

postage costs. 

1 ‘‘Investment company’’ refers to both investment 

companies registered under the Investment 

Company Act of 1940 and business development 

companies. 2 15 U.S.C. 77j(b). 

approximately 17 hours each year to 

comply with the notice requirement of 

Rule 15c3–3. 

Finally, a broker-dealer that effects 

transactions in SFPs for customers also 

will have paperwork burdens associated 

with the requirement in paragraph (o) of 

Rule 15c3–3 to make a record of each 

change in account type.1 More 

specifically, a broker-dealer that 

changes the type of account in which a 

customer’s SFPs are held must create a 

record of each change in account type 

that includes the name of the customer, 

the account number, the date the brokerdealer received the customer’s request 

to change the account type, and the date 

the change in account type took place. 

As of December 31, 2009, broker-dealers 

that were also registered as futures 

commission merchants reported that 

they maintained 35,242,468 customer 

accounts. The staff estimates that 8% of 

these customers may engage in SFP 

transactions (35,242,468 accounts × 8% 

= 2,819,397). Further, the staff estimates 

that 20% per year may change account 

type. Thus, broker-dealers may be 

required to create this record for up to 

563,879 accounts (2,819,397 accounts × 

20%). The staff believes that it will take 

approximately 3 minutes to create each 

record.2 Thus, the total annual burden 

associated with creating a record of 

change of account type will be 28,194 

hours (563,879 accounts × (3min/ 

60min)). 

Consequently, the staff estimates that 

the total annual burden hours associated 

with Rule 15c3–3 would be 

approximately 65,091 hours (36,780 

hours + 100 hours + 17 hours + 28,194 

hours). 

The staff estimates that a brokerdealer would have (1) A financial 

reporting manager make a record of its 

reserve computations and send the 

required notices to the Commission, (2) 

an attorney obtain the written 

notifications from banks where it has a 

Special Reserve Bank Account to 

evidence bank’s acknowledgement that 

assets deposited in the Account are 

being held by the bank for the exclusive 

benefit of customers, and (3) a 

compliance clerk create a record of each 

change in account type. The staff 

estimates that the hourly rate of a 

financial reporting manager and an 

attorney are $290 and $354, 

respectively,3 and the hourly rate of a 

compliance clerk is $67.4 Consequently, 

the total cost of the above-described 

hour burden would be $12,595,528.5

In addition, a broker-dealer that 

effects transactions in SFPs for 

customers also will have an annualized 

cost burden associated with the 

requirements in paragraph (o) of Rule 

15c3–3 to (1) provide each customer 

that plans to effect SFP transactions 

with a disclosure document containing 

certain information,6 and (2) send each 

SFP customer notification of any change 

of account type.7 Approximately 8% of 

the accounts held by broker-dealers that 

are also registered as FCMs, or 2,819,397 

accounts, may engage in SFP 

transactions. The staff estimates that the 

cost of printing and sending each 

disclosure document will be 

approximately $.15 per document sent.8

Thus, the staff estimates that the cost of 

printing and sending disclosure 

documents would be approximately 

$422,910 (2,819,397 accounts × $.15). In 

addition, approximately 563,879 

accounts (2,819,397 accounts × 20%) 

may change account type per year 

requiring that broker-dealers provide 

notification to those customers. The 

staff estimates that the cost of sending 

this notification to customers will be 

about $84,582 (563,879 accounts × $.15). 

Consequently, the staff estimates that 

the total annual cost associated with 

Rule 15c3–3 would be $507,492 

($422,910 + $84,583). 

Written comments are invited on: 

(a) Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

Please direct your written comments 

to: Thomas Bayer, Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

6432 General Green Way, Alexandria, 

Virginia 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. 

Dated: January 6, 2011. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–475 Filed 1–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor Education 

and Advocacy, Washington, DC 20549– 

0213. 

Extension: 

Rule 482; SEC File No. 270–508; OMB 

Control No. 3235–0565. 

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 (the 

‘‘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 (‘‘OMB’’) for 

extension and approval. 

Like most issuers of securities, when 

an investment company 1 (‘‘fund’’) offers 

its shares to the public, its promotional 

efforts become subject to the advertising 

restrictions of the Securities Act of 

1933, (15 U.S.C. 77) (the ‘‘Securities 

Act’’). In recognition of the particular 

problems faced by funds that 

continually offer securities and wish to 

advertise their securities, the 

Commission has previously adopted 

advertising safe harbor rules. The most 

important of these is rule 482 (17 CFR 

230.482) under the Securities Act, 

which, under certain circumstances, 

permits funds to advertise investment 

performance data, as well as other 

information. Rule 482 advertisements 

are deemed to be ‘‘prospectuses’’ under 

Section 10(b) of the Securities Act.2

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Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices 2155 

3See rule 24b–3 under the Investment Company 

Act (17 CFR 270.24b–3), which provides that any 

sales material, including rule 482 advertisements, 

shall be deemed filed with the Commission for 

purposes of Section 24(b) of the Investment 

Company Act upon filing with FINRA. 

Rule 482 contains certain 

requirements regarding the disclosure 

that funds are required to provide in 

qualifying advertisements. These 

requirements are intended to encourage 

the provision to investors of information 

that is balanced and informative, 

particularly in the area of investment 

performance. For example, a fund is 

required to include disclosure advising 

investors to consider the fund’s 

investment objectives, risks, charges and 

expenses, and highlighting the 

availability of the fund’s prospectus. In 

addition, rule 482 advertisements that 

include performance data of open-end 

funds or insurance company separate 

accounts offering variable annuity 

contracts are required to include certain 

standardized performance information, 

information about any sales loads or 

other nonrecurring fees, and a legend 

warning that past performance does not 

guarantee future results. Such funds 

including performance information in 

rule 482 advertisements are also 

required to make available to investors 

month-end performance figures via 

website disclosure or by a toll-free 

telephone number, and to disclose the 

availability of the month-end 

performance data in the advertisement. 

The rule also sets forth requirements 

regarding the prominence of certain 

disclosures, requirements regarding 

advertisements that make tax 

representations, requirements regarding 

advertisements used prior to the 

effectiveness of the fund’s registration 

statement, requirements regarding the 

timeliness of performance data, and 

certain required disclosures by money 

market funds. 

Rule 482 advertisements must be filed 

with the Commission or, in the 

alternative, Financial Industry 

Regulatory Authority (‘‘FINRA’’).3 This 

information collection differs from 

many other federal information 

collections that are primarily for the use 

and benefit of the collecting agency. 

As discussed above, rule 482 contains 

requirements that are intended to 

encourage the provision to investors of 

information that is balanced and 

informative, particularly in the area of 

investment performance. The 

Commission is concerned that in the 

absence of such provisions fund 

investors may be misled by deceptive 

rule 482 performance advertisements 

and may rely on less-than-adequate 

information when determining in which 

funds they should invest their money. 

As a result, the Commission believes it 

is beneficial for funds to provide 

investors with balanced information in 

fund advertisements in order to allow 

investors to make better-informed 

decisions. 

The Commission estimates that 

58,368 responses are filed annually 

pursuant to rule 482 by 3,540 

investment companies offering 

approximately 16,225 portfolios, or 

approximately 3.6 responses per 

portfolio annually. Respondents consist 

of all the investment companies that 

take advantage of the safe harbor offered 

by the rule for their advertisements. The 

burden associated with rule 482 is 

presently estimated to be 5.16 hours per 

response. The hourly burden is 

therefore approximately 301,179 hours 

(58,368 responses × 5.16 hours per 

response). 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules and forms. 

Cost burden is the cost of services 

purchased to comply with rule 482, 

such as for the services of computer 

programmers, outside counsel, financial 

printers, and advertising agencies. The 

Commission attributes no cost burden to 

rule 482. 

The provision of information under 

rule 482 is necessary to obtain the 

benefits of the safe harbor offered by the 

rule. The information provided is not 

kept confidential. 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 are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to Thomas Bayer, Chief Information 

Officer, Securities and Exchange 

Commission, C/O Remi Pavlik-Simon, 

6432 General Green Way, Alexandria, 

VA 22312; or send an e-mail to: 

PRA_Mailbox@sec.gov. 

Dated: January 5, 2011. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–449 Filed 1–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 206(4)–6; SEC File No. 270–513; OMB 

Control No. 3235–0571. 

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 (the 

‘‘Commission’’) is soliciting comments 

on the collections of information 

summarized below. The Commission 

plans to submit these existing 

collections of information to the Office 

of Management and Budget (‘‘OMB’’) for 

extension and approval. 

The title for the collection of 

information is ‘‘Rule 206(4)–6’’ under 

the Investment Advisers Act of 1940 (15 

U.S.C. 80b–1 et seq.) (‘‘Advisers Act’’) 

and the collection has been approved 

under OMB Control No. 3235–0571. The 

Commission adopted rule 206(4)–6 (17 

CFR 275.206(4)–6), the proxy voting 

rule, to address an investment adviser’s 

fiduciary obligation to clients who have 

given the adviser authority to vote their 

securities. Under the rule, an 

investment adviser that exercises voting 

authority over client securities is 

required to: (i) Adopt and implement 

policies and procedures that are 

reasonably designed to ensure that the 

adviser votes securities in the best 

interest of clients, including procedures 

to address any material conflict that 

may arise between the interest of the 

adviser and the client; (ii) disclose to 

clients how they may obtain 

information on how the adviser has 

voted with respect to their securities; 

and (iii) describe to clients the adviser’s 

proxy voting policies and procedures 

and, on request, furnish a copy of the 

policies and procedures to the 

requesting client. The rule is designed 

to assure that advisers that vote proxies 

for their clients vote those proxies in 

their clients’ best interest and provide 

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