Federal Register / Vol. 75, No. 40 / Tuesday, March 2, 2010 / Notices 9453 

1 (2000 notices × 15 minutes) = 30,000 minutes/ 

60 minutes = 500 hours. 

1Status of Investment Advisory Programs Under 

the Investment Company Act of 1940, Investment 

Company Act Release No. 22579 (Mar. 24, 1997) (62 

FR 15098 (Mar. 31,1997)) (‘‘Adopting Release’’). In 

addition, there are no registration requirements 

under section 5 of the Securities Act of 1933 for 

these programs. See 17 CFR 270.3a–4, introductory 

note. 

requirements in Regulation R, Rule 701 

are 500 1 hours for brokers or dealers. 

Please note that 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. 

Comments should be directed to: (i) 

Desk Officer for the Securities and 

Exchange Commission, Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

Room 10102, New Executive Office 

Building, Washington, DC 20503 or by 

sending an e-mail to: 

Shagufta_Ahmed@comb.eop.gov; and 

(ii) Charles Boucher, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312 or send an email to PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: February 19, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4239 Filed 3–1–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Form N–Q; SEC File No. 270–519; OMB 

Control No. 3235–0578. 

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’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Form N–Q (17 CFR 249.332 and 

274.130) is a combined reporting form 

that is used for reports of registered 

management investment companies 

(‘‘funds’’), other than small business 

investment companies registered on 

Form N–5, under Section 30(b) of the 

Investment Company Act of 1940 (15 

U.S.C. 80a–1 et seq.) (‘‘Investment 

Company Act’’) and Section 13(a) or 

15(d) of the Securities Exchange Act of 

1934 (15 U.S.C. 78a et seq.). Pursuant to 

Rule 30b1–5 under the Investment 

Company Act, funds are required to file 

with the Commission quarterly reports 

on Form N–Q not more than 60 days 

after the close of the first and third 

quarters of each fiscal year containing 

their complete portfolio holdings. 

Form N–Q contains collection of 

information requirements. The 

respondents to this information 

collection are management investment 

companies subject to Rule 30b1–5 under 

the Investment Company Act. 

Approximately 8,000 portfolios are 

required to file reports on Form N–Q, 

which is estimated to require an average 

of 21 hours per portfolio per year to 

complete. The estimated annual burden 

of complying with the filing 

requirement is approximately 168,000 

hours. The estimates of average burden 

hours are made solely for the purposes 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) and are not 

derived from a comprehensive or even 

representative survey or study of the 

cost of Commission rules and forms. 

The collection of information under 

Form N–Q is mandatory. The 

information provided by the form 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. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or send an e-mail to Shagufta Ahmed at 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher, Director/CIO, 

Securities and Exchange Commission, 

C/O Shirley Martinson, 6432 General 

Green Way, Alexandria, VA 22312; or 

send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: February 19, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4238 Filed 3–1–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 3a–4; SEC File No. 270–401; OMB 

Control No. 3235–0459. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 350l–3520), the Securities 

and Exchange Commission (the 

‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 3a–4 (17 CFR 270.3a–4) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a) (‘‘Investment Company 

Act’’ or ‘‘Act’’) provides a nonexclusive 

safe harbor from the definition of 

investment company under the Act for 

certain investment advisory programs. 

These programs, which include ‘‘wrap 

fee’’ and ‘‘mutual fund wrap’’ programs, 

generally are designed to provide 

professional portfolio management 

services to clients who are investing less 

than the minimum usually required by 

portfolio managers but more than the 

minimum account size of most mutual 

funds. Under wrap fee and similar 

programs, a client’s account is typically 

managed on a discretionary basis 

according to pre-selected investment 

objectives. Clients with similar 

investment objectives often receive the 

same investment advice and may hold 

the same or substantially similar 

securities in their accounts. Some of 

these investment advisory programs 

may meet the definition of investment 

company under the Act because of the 

similarity of account management. 

In 1997, the Commission adopted rule 

3a–4, which clarifies that programs 

organized and operated in a manner 

consistent with the conditions of rule 

3a–4 are not required to register under 

the Investment Company Act or comply 

with the Act’s requirements.1 These 

programs differ from investment 

companies because, among other things, 

they provide individualized investment 

advice to the client. The rule’s 

provisions have the effect of ensuring 

that clients in a program relying on the 

rule receive advice tailored to the 

client’s needs. 

Rule 3a–4 provides that each client’s 

account must be managed on the basis 

of the client’s financial situation and 

investment objectives and consistent 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

9454 Federal Register / Vol. 75, No. 40 / Tuesday, March 2, 2010 / Notices 

2For purposes of rule 3a–4, the term ‘‘sponsor’’ 

refers to any person who receives compensation for 

sponsoring, organizing or administering the 

program, or for selecting, or providing advice to 

clients regarding the selection of, persons 

responsible for managing the client’s account in the 

program. 3Clients specifically must be allowed to designate 

securities that should not be purchased for the 

account or that should be sold if held in the 

account. The rule does not require that a client be 

able to require particular securities be purchased for 

the account. 

4The sponsor also must provide a means by 

which clients can contact the sponsor (or its 

designee). 

with any reasonable restrictions the 

client imposes on managing the 

account. When an account is opened, 

the sponsor 2 (or its designee) must 

obtain information from each client 

regarding the client’s financial situation 

and investment objectives, and must 

allow the client an opportunity to 

impose reasonable restrictions on 

managing the account.3 In addition, the 

sponsor (or its designee) must contact 

the client annually to determine 

whether the client’s financial situation 

or investment objectives have changed 

and whether the client wishes to impose 

any reasonable restrictions on the 

management of the account or 

reasonably modify existing restrictions. 

The sponsor (or its designee) must also 

notify the client quarterly, in writing, to 

contact the sponsor (or its designee) 

regarding changes to the client’s 

financial situation, investment 

objectives, or restrictions on the 

account’s management.4

The program must provide each client 

with a quarterly statement describing all 

activity in the client’s account during 

the previous quarter. The sponsor and 

personnel of the client’s account 

manager who know about the client’s 

account and its management must be 

reasonably available to consult with the 

client. Each client also must retain 

certain indicia of ownership of all 

securities and funds in the account. 

The requirement that the sponsor (or 

its designee) obtain information about 

each new client’s financial situation and 

investment objectives when their 

account is opened is designed to ensure 

that the investment adviser has 

sufficient information regarding the 

client’s unique needs and goals to 

enable the portfolio manager to provide 

individualized investment advice. The 

sponsor is required to contact clients 

annually and provide them with 

quarterly notices to ensure that the 

sponsor has current information about 

the client’s financial status, investment 

objectives, and restrictions on 

management of the account. 

Maintaining current information enables 

the portfolio manager to evaluate each 

client’s portfolio in light of the client’s 

changing needs and circumstances. The 

requirement that clients be provided 

with quarterly statements of account 

activity is designed to ensure each client 

receives an individualized report, which 

the Commission believes is a key 

element of individualized advisory 

services. 

The Commission staff estimates that 

3,109,671 clients participate each year 

in investment advisory programs relying 

on rule 3a–4. Of that number, the staff 

estimates that 220,805 are new clients 

and 2,888,866 are continuing clients. 

The staff estimates that each year 

investment advisory program sponsors 

staff engage in 1.5 hours per new client 

and 0.75 hours per continuing client to 

prepare, conduct and/or review 

interviews regarding the client’s 

financial situation and investment 

objectives as required by the rule. 

Furthermore, the staff estimates that 

each year investment advisory program 

staff spends 1 hour per client to prepare 

and mail quarterly client account 

statements, including notices to update 

information. Based on the estimates 

above, the Commission estimates that 

the total annual burden of the rule’s 

paperwork requirements is 5,607,528 

hours. 

The total annual hour burden of 

5,607,528 hours represents an increase 

of 1,158,112.5 hours from the prior 

estimate of 4,449,415.5 hours. This 

increase principally results from an 

increase in the number of continuing 

clients, but also reflects an increase in 

the estimated burden hours associated 

with several of the collections of 

information required under the rule. 

The increase in estimated burden hours 

per collection of information results 

from an increase in burden hours 

reported by representatives of 

investment advisers that rely on rule 

3a–4 that Commission staff surveyed. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act. The estimate 

is not derived from a comprehensive or 

even a representative survey or study of 

the costs of Commission rules and 

forms. 

Compliance with the collection of 

information requirements of the rule is 

necessary to obtain the benefit of relying 

on the rule’s safe harbor. Nevertheless, 

rule 3a–4 is a nonexclusive safe harbor, 

and a program that does not comply 

with the rule’s collection of information 

requirements does not necessarily meet 

the Investment Company Act’s 

definition of investment company. 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 OMB control 

number. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or send an e-mail to Shagufta Ahmed at 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher, Director/CIO, 

Securities and Exchange Commission, 

C/O Shirley Martinson, 6432 General 

Green Way, Alexandria, VA 22312; or 

send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: February 19, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4237 Filed 3–1–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, March 4, 2010 at 2 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Aguilar, as duty 

officer, voted to consider the items 

listed for the Closed Meeting in a closed 

session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, March 

4, 2010 will be: 

Institution and settlement of 

injunctive actions; institution and 

settlement of administrative 

proceedings; and other matters relating 

to enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES