View Information Collection Request (ICR) Package
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Please note that the OMB number and expiration date may not have been determined when this Information Collection Request and associated Information Collection forms were submitted to OMB. The approved OMB number and expiration date may be found by clicking on the Notice of Action link below.
View ICR - OIRA Conclusion
OMB Control No:
3235-0241
ICR Reference No:
202504-3235-016
Status:
Active
Previous ICR Reference No:
202205-3235-017
Agency/Subagency:
SEC
Agency Tracking No:
IM
Title:
Rule 206(4)-2, 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:
09/04/2025
Retrieve Notice of Action (NOA)
Date Received in OIRA:
08/01/2025
Terms of Clearance:
Inventory as of this Action
Requested
Previously Approved
Expiration Date
09/30/2028
36 Months From Approved
10/31/2025
Responses
33,514,391
0
24,133,429
Time Burden (Hours)
315,925
0
288,202
Cost Burden (Dollars)
176,577,000
0
174,367,000
Abstract:
Rule 206(4)-2 under the Investment Advisers Act of 1940 (17 CFR 275.206(4)-2) establishes comprehensive safekeeping requirements for registered investment advisers who have custody of client funds or securities. The rule mandates that such assets be maintained with qualified custodians in separate accounts, with advisers required to notify clients in writing of custodian information and account arrangements. Advisers must also ensure clients receive quarterly account statements from custodians and obtain annual independent verification of client assets by independent public accountants who must file Form ADV-E (17 CFR 279.8) with the Commission within 120 days and report any material discrepancies within one business day. Unless client assets are maintained with an independent public account, the adviser also must obtain an internal control report from an independent public accountant. The SEC needs this information to monitor compliance with client asset protection requirements, detect potential custody violations and fraud, assess the adequacy of adviser internal controls, and ensure proper segregation of client assets from adviser assets, using the collected data for regulatory examinations, enforcement actions, risk assessment, and systemic oversight of adviser custody practices. This regulation imposes third-party disclosure requirements on investment advisers, with information provided to clients (custodian notifications and account statements), independent public accountants (verification arrangements), qualified custodians (account management), and the SEC (Form ADV-E filings and discrepancy reports), while investors and the public benefit from enhanced asset protection, transparency, and regulatory oversight of adviser custody operations that safeguard trillions of dollars in client assets.
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: Investment Advisers Act of 1940
Citations for New Statutory Requirements:
None
Associated Rulemaking Information
RIN:
Stage of Rulemaking:
Federal Register Citation:
Date:
Not associated with rulemaking
Federal Register Notices & Comments
60-day Notice:
Federal Register Citation:
Citation Date:
90 FR 18720
05/01/2025
30-day Notice:
Federal Register Citation:
Citation Date:
90 FR 36204
08/01/2025
Did the Agency receive public comments on this ICR?
No
Number of Information Collection (IC) in this ICR:
1
IC Title
Form No.
Form Name
Rule 206(4)-2, Custody of Funds or Securities of Clients by Investment Advisers
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
33,514,391
24,133,429
0
0
9,380,962
0
Annual Time Burden (Hours)
315,925
288,202
0
0
27,723
0
Annual Cost Burden (Dollars)
176,577,000
174,367,000
0
0
2,210,000
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 288,202 hours. We now estimate that the total information collection hours is 315,925 hours. The primary cause of the increase is a result of (a) an increase in the estimated number of investors in pooled investment vehicles and (b) an increase in the estimated average number of clients of advisers that have custody of client assets. The currently approved annual burden under rule 206(4)-2 includes an aggregate cost estimate of $174,367,000. We now estimate that the annual cost burden under the rule would increase to $176,577,000, which is attributable to an increase in the number of advisers that will be subject to the surprise examination requirement with respect to 5% of their clients as well as inflation adjustments.
Annual Cost to Federal Government:
$0
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?
No
Agency Contact:
Jill Pritzker 202 551-5945
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:
08/01/2025
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