Document ID: SEC-2012-0712-0001
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals: Rule 206(4)-3
Posted Date: 2012-05-08T04:00Z

[Federal Register Volume 77, Number 89 (Tuesday, May 8, 2012)]
[Notices]
[Page 27102]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11004]

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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)-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'') 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 for extension and approval.
    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.
    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. The Commission may not conduct or sponsor a 
collection of information unless it displays a currently valid OMB 
number. No person shall be subject to any penalty for failing to comply 
with a collection of information subject to the PRA that does not 
display a valid OMB number.
    Please direct your written comments to 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.

    Dated: May 2, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11004 Filed 5-7-12; 8:45 am]
BILLING CODE 8011-01-P