Document ID: SEC-2012-1125-0001
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals: Rule 206(4)-3
Posted Date: 2012-07-13T04:00Z

[Federal Register Volume 77, Number 135 (Friday, July 13, 2012)]
[Notices]
[Page 41461]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17073]

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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 Investor Education and Advocacy, Washington, DC 
20549-0213.

Extension:
    Rule 206(4)-3; SEC File No. 270-218; OMB Control No. 3235-0242.

    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. 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 4,159 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 29,279 total 
burden hours (7.04 x 4,159) 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 background documentation for this information 
collection at the following Web site, www.reginfo.gov. 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 email to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Director/Chief Information 
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 
6432 General Green Way, Alexandria, VA 22312; or send an email to: 
PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days 
of this notice.

     Dated: July 9, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-17073 Filed 7-12-12; 8:45 am]
BILLING CODE 8011-01-P