430 Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices

Filing of Appeal letter

December 27, 1996

Commission Notice and Order of Filing of

Appeal

January 17, 1997

Last day of filing of petitions to intervene

[see 39 CFR § 3001.111(b)]

January 27, 1997

Petitioners’ Participant Statement or Initial

Brief [see 39 CFR § 3001.115 (a) and (b)]

February 18, 1997

Postal Service’s Answering Brief [see 39

CFR § 3001.115(c)]

March 5, 1997

Petitioners’ Reply Brief should Petitioner

choose to file one [see 39 CFR

§ 3001.115(d)]

March 12, 1997

Deadline for motions by any party

requesting oral argument. The

Commission will schedule oral argument

only when it is a necessary addition to

the written filings [see 39 CFR

§ 3001.116]

April 22, 1997

Expiration of the Commission’s 120-day

decisional schedule [see 39 U.S.C.

§ 404(b)(5)]

[FR Doc. 96–30 Filed 1–2–97; 8:45 am]

BILLING CODE 7710–FW–M

SECURITIES AND EXCHANGE

COMMISSION

Submission for OMB Review;

Comment Request

Proposed New Rules

Rule 203A–2; SEC File No. 270–431;

OMB Control No. 3235-new.

Rule 203A–5; SEC File No. 270–432;

OMB Control No. 3235-new.

Proposed Amendments

Rule 203–1 and Form ADV: SEC File

No. 270–39; OMB Control No. 3235–

0049.

Rule 204–1; SEC File No. 270–41; OMB

Control No. 3235–0048.

Rule 204–2; SEC File No. 270–315; OMB

Control No. 3235–0278.

Upon Written Request, Copies

Available From: Securities and

Exchange Commission, Office of Filings

and Information Services, Washington,

D.C. 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

requests for approval of the following

proposed rules and forms.

On October 11, 1996 President

Clinton signed into law the National

Securities Markets Improvement Act of

1996 (‘‘1996 Act’’). Title III of the 1996

Act, the Investment Advisers

Supervision Coordination Act

(‘‘Coordination Act’’), amended the

Investment Advisers Act of 1940 to,

among other things, reallocate the

responsibilities for regulating

investment advisers between the

Commission and the securities

regulatory authorities of the states. The

most significant of these amendments

reallocates federal and state

responsibilities for the regulation of the

approximately 22,500 investment

advisers currently registered with the

Commission. These amendments will

become effective on April 9, 1997.

Based on information provided by

advisers, the Commission estimates that

approximately 72 percent of the

advisers currently registered with the

Commission will not be eligible for

Commission registration after April 9,

1997.

The Commission has published for

comment new rules and rule

amendments to implement

Congressional intent to reallocate

regulatory responsibilities for

investment advisers between the

Commission and state securities

authorities. The Commission is also

revising several of its rules that

currently apply to all investment

advisers to make such rules applicable

only to advisers registered or required to

be registered with the Commission. The

proposed rules would establish the

process by which certain advisers

would withdraw from Commission

registration, exempt certain advisers

from the prohibition on Commission

registration, and define certain terms.

The proposed amendments to rules

under the Advisers Act would reflect

the changes made by the Coordination

Act. Certain provisions of the proposed

rules and rule amendments contain

‘‘collection of information’’

requirements within the meaning of the

Paperwork Reduction Act of 1995 (44

U.S.C. 3501 et seq,). Those provisions

are summarized below.

Rule 203A–2(d)

Proposed rule 203A–2(d) would

exempt from the prohibition on

Commission registration a newly formed

adviser that has a reasonable

expectation that it will be eligible for

Commission registration within 90 days,

provided certain conditions are met.

Proposed rule 203A–2(d) contains two

related collection of information

requirements. The collection of

information would be necessary to

determine the eligibility of certain

investment advisers to rely on the

proposed ‘‘reasonable expectation’’

exemption from the prohibition on

Commission registration, and to

implement that exemption. It is

anticipated that this collection of

information would be found at 17 CFR

275.203A–2(d). An adviser relying on

the exemption provided by proposed

rule 203A–2(d) would be required to file

a short written undertaking on Schedule

E to Form ADV, indicating that the

adviser will withdraw from registration

if on the 90th day after registering with

the Commission the adviser does not

meet the eligibility requirements for

registration under section 203A of the

Advisers Act and rules thereunder. At

the end of the 90-day period, the adviser

also would be required to file an

amended Schedule I to Form ADV. If

the adviser indicates on the amended

Schedule I that it has not become

eligible to register with the Commission,

the adviser would be required to file a

Form ADV–W concurrently with the

Schedule I, thereby withdrawing its

registration with the Commission. The

likely respondents to this information

collection are newly formed investment

advisers that are not currently registered

with the Commission or with the states.

The Commission estimates that there

would be 100 such respondents per

year, and that each respondent would

respond one time per year. The

weighted average total annual time

burden for each respondent is estimated

to be 57.5 minutes. This figure is based

upon the following estimates: (i) 45

minutes for the approximately 90

advisers that advise registered

investment companies, that do not need

to calculate assets under management to

complete Schedule I, or that need to

calculate assets under management but

do so as part of their normal business

operations; (ii) 2 hours for the

approximately 10 advisers that must

calculate assets under management for

the sole purpose of filing Schedule I;

and (iii) 5 minutes for all respondents

to prepare the undertaking required on

Schedule E to Form ADV. The

Commission estimates that the aggregate

annual burden for all respondents

would be 95.83 hours. Providing this

information would be mandatory to

qualify for the exemption under

proposed rule 203A–2(d), and responses

would not be kept confidential.

Rule 203A–5 and Form ADV–T

Proposed rule 203A–5 and Form

ADV–T contain collection of

information requirements. This

collection of information is necessary

for the Commission to determine

whether advisers meet the proposed

eligibility criteria for Commission

registration set forth in section 203A of

the Advisers Act and rules thereunder,

and to provide for the orderly

withdrawal from Commission
Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices 431

registration for advisers that are no

longer eligible. It is anticipated that this

collection of information would be

found at 17 CFR 275.203A–5 and 17

CFR 279.3. Under proposed rule 203A–

5 and 17 CFR 279.3. Under proposed

rule 203A–5, all advisers registered with

the Commission on April 9, 1997 would

be required to file a completed Form

ADV–T no later than that date. Form

ADV–T would require each adviser to

declare whether it remains eligible for

Commission registration. For an adviser

that declares itself not eligible for

Commission registration, Form ADV–T

would serve as a request for withdrawal

of the adviser’s registration as of April

9, 1997. The likely respondents to this

information collection are all

investment advisers registered with the

Commission on April 9, 1997. The

Commission estimates that there would

be 22,500 such respondents to this

collection of information. Each

respondent would respond once. The

weighted average annual time burden

for each respondent is estimated to be

53.33 minutes. This figure is based upon

the following estimates: (i) 45 minutes

for the approximately 20,000 advisers

that advise registered investment

companies, that do not need to calculate

assets under management to complete

Form ADV–T, or that need to calculate

assets under management but do so as

part of their normal business operations;

(ii) 2 hours for the approximately 2,500

advisers that must calculate assets

under management for the sole purpose

of filing Form ADV–T. The aggregate

annual burden for all 22,500 advisers is

estimated to be 19,998 hours. Providing

the information would be mandatory,

and responses would not be kept

confidential.

Rule 203–1 and Form ADV

Rule 203–1 and Form ADV, including

the proposed new Schedule I to Form

ADV, contain information collection

requirements. Form ADV is required by

rule 201–1 to be filed by every applicant

for registration with the Commission as

an investment adviser, is mandatory,

and responses are not kept confidential.

This collection of information is found

at 17 CFR 275.203–1 and 17 CFR 279.1.

The Commission in the past received

approximately 3,500 applications for

registration on Form ADV in one year.

The weighted average burden hours for

completing Form ADV is currently

9.0063, and the total annual burden

hours currently approved by OMB for

this form is 31, 522 hours.

The Commission is proposing to

amend Form ADV to include a new

Schedule I. The Commission is not

proposing to amend rule 203–1.

Schedule I would require an applicant

to declare whether it is eligible for

Commission registration. This new

requirement is necessary for the

Commission to determine whether

advisers meet the eligibility criteria for

Commission registration set forth in

section 203A of the Advisers Act and

rules thereunder. The likely

respondents to this information

collection would be all applicants for

registration with the Commission after

April 9, 1997. Based on the

Commission’s experience in processing

adviser applications, and the percentage

of applicants in the past without assets

under management, the Commission

estimates that after April 9, 1997 the

number of applicants for registration

will decrease from approximately 3,500

to between 500 and 1000 annually. The

weighted average total annual time

burden for each applicant to complete

Schedule I on average is estimated to be

52.5 minutes. This figure is based upon

the following estimates. Compliance

with the requirement to complete

Schedule I imposes a total burden per

applicant of approximately 45 minutes

for the approximately 90 percent of

applicants that advise registered

investment companies, that do not need

to calculate assets under management to

complete Schedule I, or that need to

calculate assets under management but

do so as a part of their normal business

operations. For the approximately 10

percent of applicants that must calculate

assets under management for Schedule

I, however, this burden would be 2

hours. Providing this information would

be mandatory. Amending Form ADV to

include new Schedule I is estimated to

increase the weighted average burden

hours for applicants completing Form

ADV to 9.8813 hours. As a result of the

new Schedule I, together with the

reduction of the number of investment

advisers registered with the

Commission, the annual aggregate

burden for all respondents for

completing amended Form ADV is

estimated to be between 4,940.65 and

9,881.3 hours.

Rule 204–1

Rule 204–1, including the proposed

amendment to the rule, includes

collection of information requirements.

Rule 204–1 sets forth the circumstances

requiring the filing of an amendment to

Form ADV, the form that must be filed

with the Commission to register as an

investment adviser. This collection of

information is found at 17 CFR 275.204–

1, is mandatory, and responses are not

kept confidential. The total annual

burden currently approved by OMB for

rule 204–1 is approximately 21,438

hours for the 20,088 advisers registered

with the Commission in 1994.

The proposed amendments to rule

204–1 would require an adviser to file

an amended Schedule I to Form ADV

annually within 90 days of the end of

the adviser’s fiscal year. Schedule I

would require an adviser to declare

whether it remains eligible for

Commission registration. The new

requirement is necessary for the

Commission to determine whether

advisers continue to meet the eligibility

criteria for Commission registration set

forth in section 203A of the Advisers

Act and rules thereunder. The likely

respondents to this information

collection are all investment advisers

registered with the Commission after

April 9, 1997. The Commission

estimates that there would be 6,300

such respondents to this collection of

information (28% of the approximately

22,500 registered investment advisers as

of April 9, 1997). Each respondent

would respond one time per year. The

total annual time burden for each

respondent is estimated to be 52.14

minutes. This figure is based upon the

following estimates. Compliance with

the requirement to file an amended

Schedule I would impose a total annual

burden per adviser of approximately 45

minutes for the approximately 5,700

advisers that advise registered

investment companies, that do not need

to calculate assets under management to

complete Schedule I, or that need to

calculate assets under management but

do so as part of their normal business

operations. For the approximately 600

advisers that must calculate assets

under management for Schedule I,

however, this burden would be 2 hours.

Providing the information would be

mandatory and responses would not be

kept confidential. Based on the

Commission’s experience under rule

204–1, and taking into account the new

requirement to annually amend

Schedule I, the Commission anticipates

that each adviser eligible for

Commission registration after April 9,

1997 will respond to the information

collection requirements of rule 204–1,

as proposed to be amended, an average

of 1.5 times annually. The Commission

estimates that the annual aggregate

burden for all respondents under rule

204–1 will be 18,297.09 hours.

Rule 204–2

Section 204 of the Advisers Act

provides that investment advisers

required to register with the

Commission must make and keep for

prescribed periods such records, and

furnish such copies thereof, and make

and disseminate such reports as the
432 Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices

Commission, by rule, may prescribe as

necessary or appropriate in the public

interest or for the protection of

investors. Rule 204–2 sets forth

requirements for keeping, maintaining

and preserving specified books and

records by investment advisers. This

collection of information is found at 17

CFR 275.204–2, is mandatory, is used by

the Commission staff in its oversight

program, and generally is kept

confidential. See section 210(b) of the

Advisers Act [15 U.S.C. 80b–10(b)].

Currently, compliance with the rule

requires approximately 235.47 hours

each year per Commission-registered

investment adviser, for a total of

5,180,340 hours for all 22,000 advisers

registered last year.

The proposed amendments to rule

204–2 would clarify the application of

the rule’s recordkeeping requirements to

advisers that register with the

Commission after having been registered

with the states. The proposed

amendments are necessary (i) to make

the books and recordkeeping

requirements of that rule applicable

only to advisers registered with the

Commission, and (ii) to clarify the rule’s

application to investment advisers that

transfer from state to Commission

registration after April 9, 1997. The

Commission is proposing to amend rule

204–2 to make the rule’s books and

recordkeeping requirements applicable

only to advisers registered with the

Commission after the Coordination

Act’s effective date. This amendment

would relieve the approximately 16,200

of the 22,500 advisers currently

registered that will not be eligible for

Commission registration after April 9,

1997 from the recordkeeping burdens

imposed by this rule.

The Commission is also proposing to

amend rule 204–2 to require an adviser

that registers with the Commission after

April 9, 1997 to preserve any books and

records that the adviser was previously

required to maintain under state law.

These books and records would be

required to be maintained in the manner

and for the period of time as the other

books and records required to be

maintained under rule 204–2(a). This

collection of information would be

found at 17 CFR 275.204–2. The likely

respondents to this information

collection are all investment advisers

registered with the Commission after

April 9, 1997. The Commission

estimates that there would be 6,300

such respondents to this collection of

information. Each respondent would

retain records on an ongoing basis. The

total annual time burden for each

respondent is estimated to be 235.47

hours. The proposed amendments

would not change the burden last

reported to the OMB. As a result of the

reduction of the number of investment

advisers registered with the

Commission, the annual aggregate

burden for all respondents to the

recordkeeping requirements under rule

204–2 is estimated to be 1,483,461

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 even

representative survey or study of the

cost of SEC rules and forms.

General comments regarding the

estimated burden hours should be

directed to the Desk Officer for the

Securities and Exchange Commission at

the address below. Any comments

concerning the accuracy of the

estimated average burden hours for

compliance with Commission rules and

forms should be directed to Michael E.

Bartell, Associate Executive Director,

Office of Information Technology,

Securities and Exchange Commission,

450 Fifth Street NW., Washington, DC

20549 and Desk Officer for the

Securities and Exchange Commission,

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Room 3208, New Executive

Office Building, Washington, DC 20503.

Dated: December 20, 1996.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–21 Filed 1–2–97; 8:45 am]

BILLING CODE 8010–01–M

Submission for OMB Review;

Comment Request

Approval of Existing Collections

Rule 9b–1; SEC File No. 270–429; OMB

Control No. 3235–New.

Rule 15c2–8; SEC File No. 270–421;

OMB Control No. 3235–New.

Extensions

Rule 12f–1; SEC File No. 270–139; OMB

Control No. 3235–0128.

Rule 12f–2 and Form 27; SEC File No.

270–140; OMB Control No. 3235–

0248.

Rule 12f–3 and Form 28; SEC File No.

270–141; OMB Control No. 3235–

0249.

Rule 12a–5 and Form 26; SEC File No.

270–85; OMB Control No. 3235–0079.

Rule 15Aj–1, Form X–15AJ–1 and Form

X–15AJ–2; SEC File No. 270–25; OMB

Control No. 3235–0044.

Rule 15c2–11; SEC File No. 270–196;

OMB Control No. 3235–0202.

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

requests for approval of existing

collections without OMB approval and

extension on previously approved

collections of information:

Rule 9b–1 sets forth the categories of

information required to be disclosed in

an options disclosure document (ODD)

and requires the options markets to file

an ODD with the Commission 60 days

prior to the date it is distributed to

investors. In addition, Rule 9b–1

provides that the ODD must be amended

if the information in the document

becomes materially inaccurate or

incomplete and that amendments must

be filed with the Commission 30 days

prior to the distribution to customers.

Finally, Rule 9b–1 requires a brokerdealer to furnish to each customer and

ODD and any amendments, prior to

accepting an order to purchase or sell an

option on behalf of that customer.

There are 5 options markets that must

comply with Rule 9b–1, These 5

respondents work together to prepare a

single ODD covering options traded on

each market, as well as amendments to

the ODD. These respondents file no

more than one amendment per year,

which requires approximately 8 hours

per year for each respondent. Thus, the

total compliance burden for options

markets per year is 40 hours. The

approximate cost per hour is $100,

resulting in a total cost of compliance

for these respondents of $4,000 per year

(40 hours @ $100).

In addition, approximately 2,000

broker-dealers must comply with Rule

9b–1. Each of these respondents will

process an average of three new

customers for options each week and,

therefore, will have to furnish

approximately 156 ODDs per year. The

postal mailing or electronic delivery of

the ODD takes respondents no more

than 30 seconds to complete for an

annual compliance burden for each of

these respondents of 78 minutes, or 1.3

hours. Thus, the total compliance

burden per year is 2,600 hours (2,000

broker-dealers × 1.3 hours). The

approximate cost per hour to these

respondents is $10 per hour, resulting in

a total cost of compliance for these

respondents of $26,000 per year (2,600

hours @ 1.3 hours).

The total compliance burden for all

respondents under this rule (both