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

Forms and Documents

Document	Type	Status	Availability
Rule_206(4)-2_Supporting_Statement (FINAL).pdf	Supporting Statement A	Uploaded 2016-02-03	Available

IC Document Collections

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: 201510-3235-020
Status: Historical Active	Previous ICR Reference No: 201211-3235-015
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: Extension without change of a currently approved collection	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Approved without change	Conclusion Date: 04/05/2016
	Date Received in OIRA: 02/03/2016
Terms of Clearance:

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	04/30/2019	36 Months From Approved	04/30/2016
Responses	35,707,240	0	32,531,290
Time Burden (Hours)	816,285	0	518,275
Cost Burden (Dollars)	147,440,000	0	152,905,000

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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.

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

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
	Not associated with rulemaking

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Federal Register Notices & Comments
60-day Notice:	Federal Register Citation:	Citation Date:
	80 FR 67820	11/02/2015
30-day Notice:	Federal Register Citation:	Citation Date:
	81 FR 541	01/06/2016
Did the Agency receive public comments on this ICR? No

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

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

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ICR Summary of Burden

	Total Approved	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	35,707,240	32,531,290	0	0	3,175,950	0
Annual Time Burden (Hours)	816,285	518,275	0	0	298,010	0
Annual Cost Burden (Dollars)	147,440,000	152,905,000	0	0	-5,465,000	0

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

Burden Increase Due to:

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

Burden Reduction Due to:

Short Statement: The current annual burden approved by OMB for rule 206(4)-2 is 518,275 hours. We now estimate that the total information collection hours is 816,285 hours. The primary cause of such increase is an increase in the total number of investment advisers that reported having custody on Form ADV. The currently approved annual burden under rule 206(4)-2 includes an aggregate cost estimate of $152,905,000. We now estimate that the annual cost burden under the rule would decrease to $147,440,000, which is primarily caused by a decrease in the estimated number of investment advisers subject to a surprise examination with respect to all of their clients and a decrease in the estimated number of investment advisers required to obtain or receive an internal control report, based on data from Form ADV.

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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]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

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

Is this ICR related to the Pandemic Response? Uncollected

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Common Form ICR:  No

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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: 02/03/2016

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