Submission for OMB Review; Comment Request: Extension: Rule 206(4)-2, 48049-48050 [2022-16848]

Download as PDF Federal Register / Vol. 87, No. 150 / Friday, August 5, 2022 / Notices Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2022–040, and should be submitted on or before August 26, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–16763 Filed 8–4–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–217, OMB Control No. 3235–0241] lotter on DSK11XQN23PROD with NOTICES1 Submission for OMB Review; Comment Request: Extension: Rule 206(4)–2 Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 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 (‘‘OMB’’) a request for extension and revision of the previously approved collection of information discussed below. The title for the collection of information is ‘‘Rule 206(4)–2 under the Investment Advisers Act of 1940— Custody of Funds or Securities of Clients by Investment Advisers.’’ Rule 206(4)–2 (17 CFR 275.206(4)–2) under the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) governs the custody of funds or securities of clients 19 17 CFR 200.30–3(a)(12), (59). VerDate Sep<11>2014 17:20 Aug 04, 2022 Jkt 256001 by Commission-registered investment advisers. Rule 206(4)–2 requires each registered investment adviser that has custody of client funds or securities to maintain those client funds or securities with a broker-dealer, bank or other ‘‘qualified custodian.’’ 1 The rule requires the adviser to promptly notify clients as to the place and manner of custody, after opening an account for the client and following any changes.2 If an adviser sends account statements to its clients, it must insert a legend in the notice and in subsequent account statements sent to those clients urging them to compare the account statements from the custodian with those from the adviser.3 The adviser also must have a reasonable basis, after due inquiry, for believing that the qualified custodian maintaining client funds and securities sends account statements directly to the advisory clients at least quarterly, identifying the amount of funds and of each security in the account at the end of the period and setting forth all transactions in the account during that period.4 The client funds and securities of which an adviser has custody must undergo an annual surprise examination by an independent public accountant to verify client assets pursuant to a written agreement with the accountant that specifies certain duties.5 Unless client assets are maintained by an independent custodian (i.e., a custodian that is not the adviser itself or a related person), the adviser also is required to obtain or receive a written report of the internal controls relating to the custody of those assets from an independent public accountant that is registered with and subject to regular inspection by the Public Company Accounting Oversight Board (‘‘PCAOB’’).6 The rule exempts advisers from the rule with respect to clients that are registered investment companies. Advisers to limited partnerships, limited liability companies and other pooled investment vehicles are excepted from the account statement delivery and deemed to comply with the annual surprise examination requirement if the limited partnerships, limited liability companies or pooled investment vehicles are subject to annual audit by an independent public accountant registered with, and subject to regular inspection by the PCAOB, and the audited financial statements are 1 Rule 206(4)–2(a)(1). 206(4)–2(a)(2). 3 Rule 206(4)–2(a)(2). 4 Rule 206(4)–2(a)(3). 5 Rule 206(4)–2(a)(4). 6 Rule 206(4)–2(a)(6). 2 Rule PO 00000 Frm 00093 Fmt 4703 distributed to investors in the pools.7 The rule also provides an exception to the surprise examination requirement for advisers that have custody solely because they have authority to deduct advisory fees from client accounts,8 and advisers that have custody solely because a related person holds the adviser’s client assets (or has any authority to obtain possession of them) and the related person is operationally independent of the adviser.9 Advisory clients use this information to confirm proper handling of their accounts. The Commission’s staff uses the information obtained through these collections in its enforcement, regulatory and examination programs. Without the information collected under the rule, the Commission would be less efficient and effective in its programs and clients would not have information valuable for monitoring an adviser’s handling of their accounts. The respondents to this information collection are investment advisers registered with the Commission and have custody of clients’ funds or securities. We estimate that 8,057 advisers would be subject to the information collection burden under rule 206(4)–2. The number of responses under rule 206(4)–2 will vary considerably depending on the number of clients for which an adviser has custody of funds or securities, and the number of investors in pooled investment vehicles that the adviser manages. It is estimated that the average number of responses annually for each respondent would be 6,830, and an average time of 0.00524 hour per response. The annual aggregate burden for all respondents to the requirements of rule 206(4)–2 is estimated to be 288,202 hours. This collection of information is found at 17 CFR 275.206(4)–2 and is mandatory. Responses to the collection of information are not kept confidential. Commission-registered investment advisers are required to maintain and preserve certain information required under rule 206(4)–2 for five years. The long-term retention of these records is necessary for the Commission’s examination program to ascertain compliance with the Investment Advisers Act. The estimated average burden hours are made solely for the purposes of Paperwork Reduction Act and are not derived from a comprehensive or even representative survey or study of the cost of Commission rules and forms. An 7 Rule 206(4)–2(b)(4). 206(4)–2(b)(3). 9 Rule 206(4)–2(b)(6). 8 Rule Sfmt 4703 48049 E:\FR\FM\05AUN1.SGM 05AUN1 48050 Federal Register / Vol. 87, No. 150 / Friday, August 5, 2022 / Notices 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. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice by September 6, 2022. To (i) MBX.OMB.OIRA.SEC_desk_ officer@omb.eop.gov and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@ sec.gov. Date: August 1, 2022. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–16848 Filed 8–4–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–504, OMB Control No. 3235–0561] lotter on DSK11XQN23PROD with NOTICES1 Submission for OMB Review; Comment Request: Extension: Rule 12d3–1 Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 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 (‘‘OMB’’) a request for extension of the previously approved collection of information discussed below. Rule 12d3–1 (17 CFR 270.12d3–1) under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) (‘‘Investment Company Act’’) permits a fund to invest up to five percent of its assets in securities of an issuer deriving more than fifteen percent of its gross revenues from securities-related businesses (subject to certain limitations), notwithstanding the general prohibition in Section 12(d)(3) of the Investment Company Act of a registered investment company (‘‘fund’’) VerDate Sep<11>2014 17:20 Aug 04, 2022 Jkt 256001 and companies controlled by the fund purchasing securities issued by a registered investment adviser, broker, dealer, or underwriter (‘‘securitiesrelated businesses’’). A fund may, however, rely on an exemption in rule 12d3–1 to acquire securities issued by its subadvisers in circumstances in which the subadviser would have little ability to take advantage of the fund, because it is not in a position to direct the fund’s securities purchases. This exemption in rule 12d3–1 is available if: (i) the subadviser is not, and is not an affiliated person of, an investment adviser that provides advice with respect to the portion of the fund that is acquiring the securities; and (ii) the advisory contracts of the subadviser, and any subadviser that is advising the purchasing portion of the fund, prohibit them from consulting with each other concerning securities transactions of the fund, and limit their responsibility in providing advice to providing advice with respect to discrete portions of the fund’s portfolio.1 Based on an analysis of fund filings, Commission staff estimates that approximately 285 funds enter into such new subadvisory agreements each year, and that it will require approximately 3 attorney hours to draft and execute additional clauses in new subadvisory contracts in order for funds and subadvisers to be able to rely on the exemptions in rule 12d3–1. Because these additional clauses are identical to the clauses that a fund would need to insert in their subadvisory contracts to rely on rules 10f–3 (17 CFR 270.10f–3), 17a–10 (17 CFR 270.17a–10), and 17e– 1 (17 CFR 270.17e–1), and because we believe that funds that use one such rule generally use all of these rules, we apportion this 3 hour time burden equally to all four rules. Therefore, we estimate that the burden allocated to rule 12d3–1 for this contract change would be 0.75 hours. Assuming that all 285 funds that enter into new subadvisory contracts each year make the modification to their contract required by the rule, we estimate that the rule’s contract modification requirement will result in 214 burden hours annually, with an associated time cost of approximately $90,950. 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. Complying with this collection of information requirement is necessary to 1 See PO 00000 17 CFR 270.270.12d3–1(c)(3). Frm 00094 Fmt 4703 Sfmt 4703 obtain the benefit of relying on rule 12d3–1. Responses will not be 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. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice by September 6, 2022 to (i) MBX.OMB.OIRA.SEC_desk_officer@ omb.eop.gov and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/ o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Dated: August 1, 2022. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–16847 Filed 8–4–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [TM–270–650; OMB Control No. 3235–0700] Proposed Collection; Comment Request; Extension: Rule 18a–4 Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the existing collection of information provided for in Rule 18a–4 (17 CFR 240.18a–4), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (‘‘Exchange Act’’). The Commission plans to submit this existing collection of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Rule 18a–4 establishes segregation requirements for cleared and noncleared security-based swap transactions, which applies to nonbroker-dealer security-based swap dealers (‘‘SBSDs’’) (i.e., bank SBSDs and nonbank stand-alone SBSDs), as well as notification requirements for non- E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 87, Number 150 (Friday, August 5, 2022)]
[Notices]
[Pages 48049-48050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16848]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-217, OMB Control No. 3235-0241]


Submission for OMB Review; Comment Request: Extension: Rule 
206(4)-2

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

    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 (``OMB'') a request for extension and revision of the 
previously approved collection of information discussed below.
    The title for the collection of information is ``Rule 206(4)-2 
under the Investment Advisers Act of 1940--Custody of Funds or 
Securities of Clients by Investment Advisers.'' Rule 206(4)-2 (17 CFR 
275.206(4)-2) under the Investment Advisers Act of 1940 (15 U.S.C. 80b-
1 et seq.) governs the custody of funds or securities of clients by 
Commission-registered investment advisers. Rule 206(4)-2 requires each 
registered investment adviser that has custody of client funds or 
securities to maintain those client funds or securities with a broker-
dealer, bank or other ``qualified custodian.'' \1\ The rule requires 
the adviser to promptly notify clients as to the place and manner of 
custody, after opening an account for the client and following any 
changes.\2\ If an adviser sends account statements to its clients, it 
must insert a legend in the notice and in subsequent account statements 
sent to those clients urging them to compare the account statements 
from the custodian with those from the adviser.\3\ The adviser also 
must have a reasonable basis, after due inquiry, for believing that the 
qualified custodian maintaining client funds and securities sends 
account statements directly to the advisory clients at least quarterly, 
identifying the amount of funds and of each security in the account at 
the end of the period and setting forth all transactions in the account 
during that period.\4\ The client funds and securities of which an 
adviser has custody must undergo an annual surprise examination by an 
independent public accountant to verify client assets pursuant to a 
written agreement with the accountant that specifies certain duties.\5\ 
Unless client assets are maintained by an independent custodian (i.e., 
a custodian that is not the adviser itself or a related person), the 
adviser also is required to obtain or receive a written report of the 
internal controls relating to the custody of those assets from an 
independent public accountant that is registered with and subject to 
regular inspection by the Public Company Accounting Oversight Board 
(``PCAOB'').\6\
---------------------------------------------------------------------------

    \1\ Rule 206(4)-2(a)(1).
    \2\ Rule 206(4)-2(a)(2).
    \3\ Rule 206(4)-2(a)(2).
    \4\ Rule 206(4)-2(a)(3).
    \5\ Rule 206(4)-2(a)(4).
    \6\ Rule 206(4)-2(a)(6).
---------------------------------------------------------------------------

    The rule exempts advisers from the rule with respect to clients 
that are registered investment companies. Advisers to limited 
partnerships, limited liability companies and other pooled investment 
vehicles are excepted from the account statement delivery and deemed to 
comply with the annual surprise examination requirement if the limited 
partnerships, limited liability companies or pooled investment vehicles 
are subject to annual audit by an independent public accountant 
registered with, and subject to regular inspection by the PCAOB, and 
the audited financial statements are distributed to investors in the 
pools.\7\ The rule also provides an exception to the surprise 
examination requirement for advisers that have custody solely because 
they have authority to deduct advisory fees from client accounts,\8\ 
and advisers that have custody solely because a related person holds 
the adviser's client assets (or has any authority to obtain possession 
of them) and the related person is operationally independent of the 
adviser.\9\
---------------------------------------------------------------------------

    \7\ Rule 206(4)-2(b)(4).
    \8\ Rule 206(4)-2(b)(3).
    \9\ Rule 206(4)-2(b)(6).
---------------------------------------------------------------------------

    Advisory clients use this information to confirm proper handling of 
their accounts. The Commission's staff uses the information obtained 
through these collections in its enforcement, regulatory and 
examination programs. Without the information collected under the rule, 
the Commission would be less efficient and effective in its programs 
and clients would not have information valuable for monitoring an 
adviser's handling of their accounts.
    The respondents to this information collection are investment 
advisers registered with the Commission and have custody of clients' 
funds or securities. We estimate that 8,057 advisers would be subject 
to the information collection burden under rule 206(4)-2. The number of 
responses under rule 206(4)-2 will vary considerably depending on the 
number of clients for which an adviser has custody of funds or 
securities, and the number of investors in pooled investment vehicles 
that the adviser manages. It is estimated that the average number of 
responses annually for each respondent would be 6,830, and an average 
time of 0.00524 hour per response. The annual aggregate burden for all 
respondents to the requirements of rule 206(4)-2 is estimated to be 
288,202 hours.
    This collection of information is found at 17 CFR 275.206(4)-2 and 
is mandatory. Responses to the collection of information are not kept 
confidential. Commission-registered investment advisers are required to 
maintain and preserve certain information required under rule 206(4)-2 
for five years. The long-term retention of these records is necessary 
for the Commission's examination program to ascertain compliance with 
the Investment Advisers Act.
    The estimated average burden hours are made solely for the purposes 
of Paperwork Reduction Act and are not derived from a comprehensive or 
even representative survey or study of the cost of Commission rules and 
forms. An

[[Page 48050]]

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.
    The public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
by September 6, 2022.
    To (i) [email protected] and (ii) David 
Bottom, Director/Chief Information Officer, Securities and Exchange 
Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, 
or by sending an email to: [email protected].

    Date: August 1, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-16848 Filed 8-4-22; 8:45 am]
BILLING CODE 8011-01-P
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