Document ID: SEC-2015-1378-0003
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals: Rule 206(4)-3
Posted Date: 2022-01-20T05:00Z

[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Page 3130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01051]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-218, OMB Control No. 3235-0242]

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street, NE, Washington, DC 
20549-2736

Extension:
    Rule 206(4)-3

    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 a request for approval of extension of the previously 
approved collection of information discussed below.
    Rule 206(4)-3 (17 CFR 275.206(4)-3) under the Investment Advisers 
Act of 1940, which is entitled ``Cash Payments for Client 
Solicitations,'' provides restrictions on cash payments for client 
solicitations. The rule requires that an adviser pay all solicitors' 
fees pursuant to a written agreement. When an adviser will provide only 
impersonal advisory services to the prospective client, the rule 
imposes no disclosure requirements. When the solicitor is affiliated 
with the adviser and the adviser will provide individualized advisory 
services to the prospective client, the solicitor must, at the time of 
the solicitation or referral, indicate to the prospective client that 
he is affiliated with the adviser. When the solicitor is not affiliated 
with the adviser and the adviser will provide individualized advisory 
services to the prospective client, the solicitor must, at the time of 
the solicitation or referral, provide the prospective client with a 
copy of the adviser's brochure and a disclosure document containing 
information specified in rule 206(4)-3. Amendments to rule 206(4)-3, 
adopted in 2010 in connection with rule 206(4)-5, specify that 
solicitation activities involving a government entity, as defined in 
rule 206(4)-5, are subject to the additional limitations of rule 
206(4)-5. In December 2020, the Commission adopted a single marketing 
rule which merged certain existing provisions of rule 206(4)-3 into 
amendments to rule 206(4)-1. In light of these 2020 amendments, the 
Commission has rescinded rule 206(4)-3, effective November 2, 2022. 
Notwithstanding the rescission of rule 206(4)-3, the Office of 
Management and Budget (the ``OMB'') has requested that the Commission 
submit documents in connection with the extension of rule 206(4)-3 for 
the period covering February 28, 2022 to November 2, 2022, the 
effective date of the discontinuance of rule 206(4)-3.
    To the extent that the OMB has requested this collection of 
information, the information rule 206(4)-3 requires is necessary to 
inform advisory clients about the nature of the solicitor's financial 
interest in the recommendation so the prospective clients may consider 
the solicitor's potential bias, and to protect clients against 
solicitation activities being carried out in a manner inconsistent with 
the adviser's fiduciary duty to clients. Rule 206(4)-3 is applicable to 
all Commission registered investment advisers. The Commission believes 
that approximately 3,829 of these advisers have cash referral fee 
arrangements. The rule requires approximately 7.04 burden hours per 
year per adviser and results in a total of approximately 26,956 total 
burden hours (7.04 x 3,829) for all advisers.
    The disclosure requirements of rule 206(4)-3 do not require 
recordkeeping or record retention. The collections of information 
requirements under the rules are mandatory. Information subject to the 
disclosure requirements of rule 206(4)-3 is not submitted to the 
Commission. The disclosures pursuant to the rule are 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 OMB control number.
    The public may view the background documentation for this 
information collection at the following website, www.reginfo.gov. 
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 email to: 
[email protected]; and (ii) David Bottom, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o John R. 
Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to: 
[email protected]. Written comments and recommendations for the 
proposed information collection should be sent within 30 days of 
publication of this notice to www.reginfo.gov/public/do/PRAMain. Find 
this particular information collection by selecting ``Currently under 
30-day Review--Open for Public Comments'' or by using the search 
function.

    Dated: January 14, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01051 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P