Rule 204-5 under the Investment Advisers Act of 1940

Forms and Documents

Document	Type	Status	Availability
REVISED Rule 204-5 Supporting Statement 7-15-19.pdf	Supporting Statement A	Uploaded 2020-01-30	Available

IC Document Collections

IC ID	Collection	Type	Status	Form
231419	Rule 204-5 under the Investment Advisers Act of 1940		Modified

ICR Details

OMB Control No: 3235-0767	ICR Reference No: 201909-3235-018
Status: Active	Previous ICR Reference No: 201805-3235-017
Agency/Subagency: SEC	Agency Tracking No: IM-270-811
Title: Rule 204-5 under the Investment Advisers Act of 1940
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Approved with change	Conclusion Date: 01/30/2020
	Date Received in OIRA: 10/29/2019
Terms of Clearance: Comments: Supporting statement was updated to clarify OMB approval status, public comments uploaded to ROCIS, and ROCIS monetary burden updated.

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	01/31/2023	36 Months From Approved
Responses	65,662,318	0	0
Time Burden (Hours)	983,945	0	0
Cost Burden (Dollars)	61,003,406	0	0

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Abstract: On April 18, 2018, the Securities and Exchange Commission (the “Commission” or “SEC”) issued a release proposing, among other things, new rule 204-5 and amendments to Form ADV under the Investment Advisers Act of 1940. The proposal would require registered broker-dealers and registered investment advisers to provide a brief relationship summary to retail investors to inform them about certain aspects of the relationships and services the firm offers (the “relationship summary”). Proposed rule 204-5 would require that an investment adviser: (i) deliver the relationship summary to each retail investor before or at the time the adviser enters into an investment advisory agreement as well as to existing clients one time within a specified time period after the effective date of the proposed amendments; (ii) deliver the relationship summary to existing clients before or at the time (a) a new account is opened that is different from the retail investor’s existing account(s), or (b) changes are made to the retail investor’s existing account(s) that would materially change the nature and scope of the adviser’s relationship with the retail investor; (iii) post a current version of their relationship summary prominently on their public website (if they have one); and (iv) communicate any changes in an updated relationship summary to retail investors who are existing clients or customers of the firm within 30 days after the updates are required to be made and without charge. A firm would be permitted to deliver the relationship summary (including updates) electronically, consistent with the Commission’s guidance regarding electronic delivery.

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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-11(h) Name of Law: Investment Advisers Act of 1940
   US Code: 15 USC 80b-4 Name of Law: Investment Advisers Act of 1940
   PL: Pub.L. 111 - 203 913 Name of Law: Dodd-Frank Wall Street Reform and Consumer Protection Act
  

Citations for New Statutory Requirements: US Code: 15 USC 80b Name of Law: Investment Advisers Act of 1940

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
3235-AL27	Final or interim final rulemaking	84 FR 33492	07/12/2019

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? Yes

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

IC Title	Form No.	Form Name
Rule 204-5 under the Investment Advisers Act of 1940

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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	65,662,318	0	0	65,662,318	0	0
Annual Time Burden (Hours)	983,945	0	0	983,945	0	0
Annual Cost Burden (Dollars)	61,003,406	0	0	61,003,406	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: This is the first request for approval of the collection of information for this rule.

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Annual Cost to Federal Government:

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

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     No

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     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: 10/29/2019

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