82 FR 20922 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 85 (May 4, 2017)

Page Range		20922-20923
FR Document		2017-08971
Federal Register, Volume 82 Issue 85 (Thursday, May 4, 2017)
[Federal Register Volume 82, Number 85 (Thursday, May 4, 2017)]
[Notices]
[Pages 20922-20923]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-08971]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-513, OMB Control No. 3235-0571]


Submission for OMB Review; Comment Request

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

Extension:
    Rule 206(4)-6

    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 of the previously approved collection 
of information discussed below.
    The title for the collection of information is ``Rule 206(4)-6'' 
under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) 
(``Advisers Act'') and the collection has been approved under OMB 
Control No. 3235-0571. The Commission adopted rule 206(4)-6 (17 CFR 
275.206(4)-6), the proxy voting rule, to address an investment 
adviser's fiduciary obligation to clients who have given the adviser 
authority to vote their securities. Under the rule, an investment 
adviser that exercises voting authority over client securities is 
required to: (i) Adopt and implement policies and procedures that are 
reasonably designed to ensure that the adviser votes securities in the 
best interest of clients, including procedures to address any material 
conflict that may arise between the interest of the adviser and the 
client; (ii) disclose to clients how they may obtain information on how 
the adviser has voted with respect to their securities; and (iii) 
describe to clients the adviser's proxy voting policies and procedures 
and, on request, furnish a copy of the policies and procedures to the 
requesting client. The rule is designed to assure that advisers that 
vote proxies for their clients vote those proxies in their clients' 
best interest and provide

[[Page 20923]]

clients with information about how their proxies were voted.
    Rule 206(4)-6 contains ``collection of information'' requirements 
within the meaning of the Paperwork Reduction Act. 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 collection is mandatory and responses to the disclosure 
requirement are not kept confidential.
    The respondents are investment advisers registered with the 
Commission that vote proxies with respect to clients' securities. 
Advisory clients of these investment advisers use the information 
required by the rule to assess investment advisers' proxy voting 
policies and procedures and to monitor the advisers' performance of 
their proxy voting activities. The information required by Advisers Act 
rule 204-2, a recordkeeping rule, also is used by the Commission staff 
in its examination and oversight program. Without the information 
collected under the rules, advisory clients would not have information 
they need to assess the adviser's services and monitor the adviser's 
handling of their accounts, and the Commission would be less efficient 
and effective in its programs.
    The estimated number of investment advisers subject to the 
collection of information requirements under the rule is 10,942. It is 
estimated that each of these advisers is required to spend on average 
10 hours annually documenting its proxy voting procedures under the 
requirements of the rule, for a total burden of 109,420 hours. We 
further estimate that on average, approximately 292 clients of each 
adviser would request copies of the underlying policies and procedures. 
We estimate that it would take these advisers 0.1 hours per client to 
deliver copies of the policies and procedures, for a total burden of 
319,506 hours. Accordingly, we estimate that rule 206(4)-6 results in 
an annual aggregate burden of collection for SEC-registered investment 
advisers of a total of 428,926 hours.
    Records related to an adviser's proxy voting policies and 
procedures and proxy voting history are separately required under the 
Advisers Act recordkeeping rule 204-2 (17 CFR 275.204-2). The standard 
retention period required for books and records under rule 204-2 is 
five years, in an easily accessible place, the first two years in an 
appropriate office of the investment adviser. OMB has previously 
approved the collection with this retention period.
    The public may view the background documentation for this 
information collection at the following Web site, www.reginfo.gov. 
Comments should be directed to: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503, or by sending an email to: 
[email protected]; and (ii) Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email 
to: [email protected]. Comments must be submitted to OMB within 30 
days of this notice.

    Dated: April 28, 2017.
Eduardo Aleman,
Assistant Secretary.
[FR Doc. 2017-08971 Filed 5-3-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 85 / Thursday, May 4, 2017 / Notices 20923

clients with information about how The public may view the background the Commission designated a longer
their proxies were voted. documentation for this information period for Commission action on the
Rule 206(4)–6 contains ‘‘collection of collection at the following Web site, proposed rule change.7 Subsequently,
information’’ requirements within the www.reginfo.gov. Comments should be the Commission received three
meaning of the Paperwork Reduction directed to: (i) Desk Officer for the additional comment letters regarding
Act. An agency may not conduct or Securities and Exchange Commission, the proposal: One from Virtu Financial,
sponsor, and a person is not required to Office of Information and Regulatory another from Bats responding to
respond to, a collection of information Affairs, Office of Management and Nasdaq’s Letter, and a third from
unless it displays a currently valid Budget, Room 10102, New Executive SIFMA.8 On November 30, 2016, the
control number. The collection is Office Building, Washington, DC 20503, Commission instituted proceedings to
mandatory and responses to the or by sending an email to: Shagufta_ determine whether to approve or
disclosure requirement are not kept Ahmed@omb.eop.gov; and (ii) Pamela disapprove the proposed rule change.9
confidential. Dyson, Director/Chief Information Thereafter, the Commission received
The respondents are investment Officer, Securities and Exchange comments from IEX, SIFMA, KCG
advisers registered with the Commission Commission, c/o Remi Pavlik-Simon, Holdings, and Citadel Securities 10
that vote proxies with respect to clients’ 100 F Street NE., Washington, DC 20549 regarding the proposed rule change and
securities. Advisory clients of these or send an email to: PRA_Mailbox@ Nasdaq responded to the comments and
investment advisers use the information sec.gov. Comments must be submitted to filed Amendment No. 1.11 On January
required by the rule to assess OMB within 30 days of this notice. 31, 2017, the Exchange filed
investment advisers’ proxy voting Dated: April 28, 2017. Amendment No. 2 to the proposed rule
policies and procedures and to monitor change.12 The Commission received two
Eduardo Aleman,
the advisers’ performance of their proxy comment letters one from Bats and
Assistant Secretary.
voting activities. The information another from IEX on the amended
[FR Doc. 2017–08971 Filed 5–3–17; 8:45 am] proposal.13 On April 3, 2017, the
required by Advisers Act rule 204–2, a BILLING CODE 8011–01–P
recordkeeping rule, also is used by the Exchange filed Amendment No. 3 to the
Commission staff in its examination and proposed rule change.14 On April 13,
oversight program. Without the 2017, the Exchange filed Amendment
SECURITIES AND EXCHANGE No. 4.15 On April 18, 2017, the
information collected under the rules, COMMISSION
advisory clients would not have
[Release No. 34–80558; File No. SR– Brent J. Fields, Secretary, Commission, dated
information they need to assess the October 4, 2016 (‘‘Nasdaq Letter I’’).
NASDAQ–2016–120]
adviser’s services and monitor the 7 See Securities Exchange Act Release No. 79049,
adviser’s handling of their accounts, and Self-Regulatory Organizations; The 81 FR 70452 (October 12, 2016).
the Commission would be less efficient Nasdaq Stock Market LLC; Notice of
8 See letters from Douglas A. Cifu, Chief

and effective in its programs. Executive Officer, Virtu Financial, dated October 6,
Filing of Amendments No. 1, 2, 3, 4, 2016 (‘‘Virtu Letter’’), Eric Swanson, General
The estimated number of investment and 5 and Order Granting Accelerated Counsel, Bats Global Markets, Inc., dated October
advisers subject to the collection of Approval of a Proposed Rule Change, 12, 2016 (‘‘Bats Letter II’’), and Melissa McGregor,
information requirements under the rule as Amended, To Establish the Third Managing Director and Associate General Counsel,
is 10,942. It is estimated that each of Securities Industry and Financial Markets
Party Connectivity Service Association (‘‘SIFMA’’), dated November 23, 2016
these advisers is required to spend on (‘‘SIFMA Letter I’’), to Brent J. Fields, Secretary,
average 10 hours annually documenting April 28, 2017. Commission.
its proxy voting procedures under the I. Introduction
9 See Securities Exchange Act Release No. 79431,

requirements of the rule, for a total 81 FR 87981 (December 6, 2016) (‘‘OIP’’).
burden of 109,420 hours. We further On August 16, 2016, the Nasdaq Stock 10 See letters from John Ramsay, Chief Market

estimate that on average, approximately Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) Policy Officer, IEX Group, Inc. (‘‘IEX’’), dated
filed with the Securities and Exchange December 9, 2016 (‘‘IEX Letter I’’), Melissa
292 clients of each adviser would McGregor, Managing Director and Associate
request copies of the underlying policies Commission (‘‘Commission’’), pursuant General Counsel, SIFMA, dated December 20, 2016
and procedures. We estimate that it to Section 19(b)(1) 1 of the Securities (‘‘SIFMA Letter II’’), John A. McCarthy, General
would take these advisers 0.1 hours per Exchange Act of 1934 (‘‘Act’’) 2 and Rule Counsel, KCG Holdings, Inc. (‘‘KCG Holdings’’),
19b–4 thereunder,3 a proposed rule dated December 23, 2016 (‘‘KCG Letter’’), and Adam
client to deliver copies of the policies C. Cooper, senior Managing Director and Chief
and procedures, for a total burden of change to establish the third party Legal Officer, Citadel Securities (‘‘Citadel’’), dated
319,506 hours. Accordingly, we connectivity service. The proposed rule December 27, 2016 (‘‘Citadel Letter’’), to Brent J.
estimate that rule 206(4)–6 results in an change was published for comment in Fields, Secretary, Commission.
11 See letter from T. Sean Bennett, Principal
annual aggregate burden of collection the Federal Register on September 2,
Associate General Counsel, Nasdaq Inc., to Brent J.
for SEC-registered investment advisers 2016.4 The Commission received one Fields, Secretary, Commission, dated January 26,
of a total of 428,926 hours. comment letter regarding the proposal 2017 (‘‘Nasdaq Letter II’’).
Records related to an adviser’s proxy on September 12, 2016.5 Nasdaq 12 Amendment No. 1 was missing a required

voting policies and procedures and responded to the comment letter on exhibit, therefore it was withdrawn and replaced by
October 4, 2016.6 On October 5, 2016, Amendment No. 2. See Amendment No. 2. The
proxy voting history are separately substance of Amendment No. 1 was the same as the
required under the Advisers Act 1 15
substance of Amendment No. 2.
U.S.C. 78s(b)(1). 13 See letters from Eric Swanson, Esq., General
recordkeeping rule 204–2 (17 CFR 2 15 U.S.C. 78a. Counsel, Bats Global Markets, Inc., dated February
pmangrum on DSK3GDR082PROD with NOTICES

275.204–2). The standard retention 3 17 CFR 240.19b–4.
6, 2017 (‘‘Bats Letter III’’) and John Ramsay, Chief
period required for books and records 4 See Securities Exchange Act Release No. 78713 Market Policy Officer, IEX, dated February 15, 2017
under rule 204–2 is five years, in an (August 29, 2016), 81 FR 60768 (‘‘Notice’’). (‘‘IEX Letter II’’) to Brent J. Fields, Secretary,
easily accessible place, the first two 5 See letter from Eric Swanson, Esq., General Commission.
years in an appropriate office of the Counsel, Bats Global Markets, Inc., to Brent J. 14 See Amendment No. 3. Amendment No. 3

Fields, Secretary, Commission, dated September 12, amended the filing to include the Assumption of
investment adviser. OMB has previously 2016 (‘‘Bats Letter I’’). Liability form.
approved the collection with this 6 See letter from Jeffrey S. Davis, Vice President 15 See Amendment No. 4 which was withdrawn

retention period. and General Counsel, Nasdaq Stock Market LLC, to and replaced by Amendment No. 5.

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Document Created: 2017-05-04 01:49:13
Document Modified: 2017-05-04 01:49:13
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 20922