Rule 206(4)-2 under the Investment Advisers Act of 1940--Custody of Funds or Securities of Clients by Investment Advisers

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
Supporting Statement.(6-09).doc	Supporting Statement A	Uploaded 2009-09-16	Available

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
34671	Rule 206(4)-2 under the Investment Advisers Act of 1940--Custody of Funds or Securities of Clients by Investment Advisers		Modified

ICR Details

OMB Control No: 3235-0241	ICR Reference No: 200906-3235-002
Status: Historical Inactive	Previous ICR Reference No: 200703-3235-004
Agency/Subagency: SEC	Agency Tracking No: IM-270-217
Title: Rule 206(4)-2 under the Investment Advisers Act of 1940--Custody of Funds or Securities of Clients by Investment Advisers
Type of Information Collection: Revision of a currently approved collection	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Preapproved	Conclusion Date: 09/16/2009
	Date Received in OIRA: 06/02/2009
Terms of Clearance: Pre-approval contingent upon no substantive changes to this collection after adoption of the final rule. Otherwise this collection should be re-submitted to OMB for review.

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	09/30/2012	36 Months From Approved	12/31/2010
Responses	565,215	0	830,605
Time Burden (Hours)	218,578	0	415,303
Cost Burden (Dollars)	170,557,500	0	281,000

---

Abstract: Rule 206(4)-2 under the Investment Advisers Act of 1940 requires advisers to protect the assets that their advisory clients have entrusted to their custody.

---

Authorizing Statute(s): US Code: 15 USC 80b-6(4) Name of Law: Investment Advisers Act of 1940
   US Code: 15 USC 80b-11(a) Name of Law: null
  

Citations for New Statutory Requirements: None

---

Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
3235-AK32	Proposed rulemaking	74 FR 25354	05/27/2009

---

Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

---

Number of Information Collection (IC) in this ICR: 1

table that charts list of burden

IC Title	Form No.	Form Name
Rule 206(4)-2 under the Investment Advisers Act of 1940--Custody of Funds or Securities of Clients by Investment Advisers

---

ICR Summary of Burden

table that charts list of burden

	Total Request	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	565,215	830,605	0	-265,390	0	0
Annual Time Burden (Hours)	218,578	415,303	0	191,265	-387,990	0
Annual Cost Burden (Dollars)	170,557,500	281,000	0	170,276,500	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Changing Regulations

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: We estimate that the annual hour burden will decrease by 196,725 hours because of 1) an increase of 191,265 hours due to proposed amendments to the custody rule under the Investment Advisers Act, and 2) a decrease of 387,990 hours due to an adjustment in our estimates of annual burden related to investment advisers' distribution of audited financial statements to investors in pooled investment vehicles. We estimate that the cost burden will increase by $170,276,500 due to proposed amendments to the custody rule under Investment Advisers Act. The proposed amendments would, among other things, (1) increase the number of advisers subject to the surprise examination, (2) require certain advisers to obtain an internal control report prepared by an independent public accountant, (3) clarify audit requirements for advisers to pooled investment vehicles relying on the annual audit exception, and (4) require advisers to send a notice to clients urging them to compare account statements from the qualified custodian and the adviser.

---

Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Is the Supporting Statement intended to be a Privacy Impact Assessment required by the E-Government Act of 2002? No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? Uncollected

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? Uncollected

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? Uncollected

---

Common Form ICR:  No

---

On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 06/02/2009

---