[Federal Register Volume 83, Number 177 (Wednesday, September 12, 2018)]
[Notices]
[Pages 46166-46170]
[FR Doc No: 2018-19742]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-N-1960]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; MedWatch: The Food
and Drug Administration Medical Products Reporting Program

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995.

DATES: Fax written comments on the collection of information by October
12, 2018.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
Fax:<PHONE_NUMBER>, or emailed to [email protected]. All
comments should be identified with the OMB control number 0910-0291 and
title ``MedWatch: The Food and Drug Administration Medical Products
Reporting Program.'' Also include the FDA docket number found in
brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Domini Bean, Office of Operations,
Food and Drug Administration, Three White Flint North, 10A-12M, 11601
Landsdown St., North Bethesda, MD 20852,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

MedWatch: The FDA Medical Products Reporting Program

OMB Control Number 0910-0291--Revision

    This information collection supports FDA's MedWatch safety
information and adverse event reporting program. Members of the public
use FDA's MedWatch system to report adverse events, product problems,
errors with the use of a human medical product, or when evidence of
therapeutic failure is suspected or identified in clinical use.

To ensure the marketing of safe and effective products, it is critical
that postmarketing adverse outcomes and product problems are reported
for all FDA-regulated human healthcare products, including drugs
(prescription and nonprescription), biologics, medical devices, dietary
supplements, and other special nutritional products (e.g. infant
formula and medical foods), and cosmetics. To facilitate reporting on
human medical products (except vaccines) during their postapproval and
marketed lifetimes, we have developed three forms (collectively known
as the MedWatch forms). Form FDA 3500 is intended to be used for
voluntary (i.e., not mandated by law or regulation) reporting by
healthcare professionals; Form FDA 3500A is used for mandatory
reporting (i.e., required by law or regulation); and Form FDA 3500B is
written in plain language and is intended to be used for voluntary
reporting (i.e., not mandated by law or regulation) by consumers (i.e.,
patients and their caregivers). Information collected by the forms is
used to assess and evaluate risks associated with FDA-regulated
products, enabling us to take appropriate action to reduce, mitigate,
or eliminate the public's exposure to the risk through regulatory and
public health interventions.

I. Background

A. Authorizing Statutes and Codified Regulations

    The Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C.
353b, 355, 360i, 360l, and 393) and the Public Health Service Act (42
U.S.C. 262) require FDA to collect mandatory adverse event reports from
regulated industry on medical products once they have been approved for
marketing, enabling the Agency to monitor the safety of drugs,
biologics, medical devices, and dietary supplements. Postmarket
reporting for medical foods, infant formula, cosmetics, and tobacco
products is done voluntarily.
    Requirements regarding mandatory reporting of adverse events or
product problems are codified at parts 310, 314, 600, and 803 (21 CFR
parts 310, 314, 600, and 803), specifically Sec. Sec.  310.305, 314.80,
314.98, 600.80, 803.30, 803.50, 803.53, 803.56, and specified in
sections 503B, 760, and 761 of the FD&C Act (21 U.S.C. 353b, 379aa, and
379aa-1). Mandatory reporting of adverse reactions for human cells,
tissues, and cellular- and tissue-based products (HCT/Ps) is codified
at Sec.  1271.350 (21 CFR 1271.350).

B. Voluntary Reporting: Form FDA 3500

    Voluntary reporting of adverse events is completed using Form FDA
3500 and may be used by healthcare professionals to submit all reports
not mandated by Federal law or regulation. Individual health
professionals are not required by law or regulation to submit reports
to the Agency or the manufacturer with the exception of Childhood
Vaccine Injury Act of 1986 (42 U.S.C. 300aa-1). Reports for vaccines
are not submitted via MedWatch or MedWatch forms, but are submitted to
the Vaccines Adverse Event Reporting System, which is jointly
administered by FDA and the Centers for Disease Control and Prevention
and approved under OMB control number 0910-0308.
    Hospitals are not required by Federal law or regulation to submit
reports associated with drug products, biological products, or special
nutritional products. However, hospitals and other user facilities are
required by Federal law to report medical device-related deaths and
serious injuries. Under Federal law and regulation, section 761(b)(1)
of the FD&C Act, a dietary supplement manufacturer, packer, or
distributor whose name appears on the label of a dietary supplement
marketed in the United States is required to submit to FDA any serious
adverse event report it receives regarding use of the dietary
supplement in the United States. However, FDA bears the burden to
gather and review evidence that a dietary supplement may be adulterated
under section 402 of the FD&C Act (21 U.S.C. 342) after that product is
marketed. Therefore, the Agency depends on the voluntary reporting by
health professionals, and especially by consumers, of suspected serious
adverse events and product quality problems associated with the use of
dietary supplements. All dietary supplement reports were previously
received by the Agency on paper versions of Form FDA 3500 (or Form FDA
3500B) (by mail or Fax). Currently, electronic reports may be sent to
the Agency via an online submission route called the Safety Reporting
Portal (https://www.safetyreporting.hhs.gov/ approved under OMB control
number 0910-0645). In that case, Form FDA 3500 (or Form FDA 3500B) is
not used.
    Form FDA 3500 may be used to report to the Agency serious adverse
events, product problems, and product use errors and therapeutic
failures. The form is provided in both paper and electronic formats.
Reporters may mail or Fax paper forms to the Agency (a fillable PDF
version of the form is available at https://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Forms/UCM163919.pdf) or reporters may
electronically submit a report via the MedWatch Online Voluntary
Reporting Form (https://www.accessdata.fda.gov/scripts/medwatch/).
Reporting is supported for drugs, non-vaccine biologicals, medical
devices, special nutritional products, cosmetics, and non-prescription
(over-the-counter (OTC)) human drug products marketed without an
approved application. The paper form may also be used to submit reports
about tobacco products and dietary supplements. Electronic reports for
tobacco products and dietary supplements may be submitted to the Agency
via an online submission route called the Safety Reporting Portal
(https://www.safetyreporting.hhs.gov/).

C. Mandatory Reporting: Form FDA 3500A

1. Drug and Biological Products
    In sections 505(b) and (j), 503B, and 704 (21 U.S.C. 355(b) and
(j), 353B, and 374) of the FD&C Act, Congress has required that
important safety information relating to all human drug products be
made available to FDA so that it can take appropriate action to protect
the public health when necessary. Section 702 of the FD&C Act (21
U.S.C. 372) authorizes investigational powers to FDA for enforcement of
the FD&C Act. These statutory requirements regarding mandatory
reporting have been codified by FDA under parts 310 and 314 (drugs) and
600 (biological products). Mandatory reporting of adverse reactions for
HCT/Ps has been codified in Sec.  1271.350.
2. OTC Monograph Drug Products and Dietary Supplements
    Section 760 of the FD&C Act provides for mandatory safety reporting
for non-prescription human drug products marketed without an approved
application as described in the Dietary Supplement and Nonprescription
Drug Consumer Protection Act (Pub. L. 109-462), which became law on
December 22, 2006. The law requires manufacturers, packers, and
distributors of nonprescription, OTC human drug products marketed
without an approved application (OTC monograph drug products) to submit
reports of adverse experiences from domestic sources. The law also
requires reports of serious adverse events to be submitted to FDA by
manufacturers of dietary supplements.

3. Postmarketing Safety Reports--Changes in Format Starting in June
2018
    Current requirements specify that postmarketing adverse experience
reports must be submitted on paper on Form FDA 3500A (or the CIOMS)
(Council for International Organizations of Medical Sciences) I form
for serious, unexpected adverse experiences from a foreign source). For
the last several years the Agency has accepted electronic submissions
in lieu of the paper Form FDA 3500A on the condition they are submitted
in a manner that the Agency can process, review, and archive. On June
10, 2014, the Agency issued a final rule entitled ``Postmarketing
Safety Reports for Human Drug and Biological Products; Electronic
Submission Requirements'' (79 FR 33072) that requires electronic
submission of all mandatory postmarketing safety reports, including
individual case safety reports. Entities with mandatory reporting
obligations under parts 310 and 314 (drugs) and 600 (biological
products) and specified under section 760 of the FD&C Act must
implement this rule within 1 year of the issuance date (by June 10,
2015). For more information see: https://www.gpo.gov/fdsys/pkg/FR-2014-06-10/pdf/2014-13480.pdf.
4. Medical Device Products
    Section 519 of the FD&C Act (21 U.S.C. 360i) requires manufacturers
and importers of devices intended for human use to establish and
maintain records, make reports, and provide information, as the
Secretary of Health and Human Services may, by regulation, reasonably
be required to provide assurance that such devices are not adulterated
or misbranded and to otherwise assure its safety and effectiveness. The
Safe Medical Devices Act of 1990 (Pub. L. 101-629), signed into law on
November 28, 1990, amends section 519 of the FD&C Act. The amendment
requires that user facilities such as hospitals, nursing homes,
ambulatory surgical facilities, and outpatient treatment facilities
report deaths related to medical devices to FDA and to the
manufacturer, if known. Serious illnesses and injuries are to be
reported to the manufacturer or to FDA if the manufacturer is not
known. These statutory requirements regarding mandatory reporting have
been codified by FDA under part 803. Part 803 mandates the use of Form
FDA 3500A for reporting to FDA on medical devices. The Medical Device
User Fee and Modernization Act of 2002 (MDUFMA) (Pub. L. 107-250),
signed into law October 26, 2002, amended section 519 of the FD&C Act.
The MDUFMA amendment (section 303) required FDA to revise the MedWatch
forms to facilitate the reporting of information relating to
reprocessed single-use devices, including the name of the reprocessor
and whether the device has been reused.

D. Voluntary Reporting by Consumers: Form FDA 3500B

    Form FDA 3500B was developed for voluntary reporting by consumers
(i.e. patients and their caregivers) to submit reports not mandated by
Federal law or regulation. Individual patients or their caregivers are
not required by law or regulation to submit reports to the Agency or
the manufacturer.
    FDA supports and encourages direct reporting to the Agency by
consumers and healthcare professionals of suspected serious adverse
outcomes and other product problems associated with human medical
products, (https://www.fda.gov/Safety/ReportaProblem/default.htm). FDA
has further encouraged voluntary reporting by requiring inclusion of
the MedWatch toll-free phone number or the MedWatch internet address on
all outpatient drug prescriptions dispensed, as mandated by section 17
of the Best Pharmaceuticals for Children Act (Pub. L. 107-109).
    On March 25, 2008, section 906 of the Food and Drug Administration
Amendments Act of 2007 (Pub. L. 110-85) amended section 502(n) of the
FD&C Act (21 U.S.C. 352(n)) and mandated that published direct-to-
consumer advertisements for prescription drugs include the following
statement printed in conspicuous text (this includes vaccine products):
``You are encouraged to report negative side effects of prescription
drugs to the FDA. Visit https://www.fda.gov/safety/medwatch, or call 1-
800-FDA-1088.''
    Most private vendors of consumer medication information, the drug
product-specific instructions dispensed to consumers at outpatient
pharmacies, remind patients to report ``side effects'' to FDA and
provide contact information to permit reporting via the MedWatch
process. For this reporting FDA has created Form FDA 3500B, a modified
version of Form FDA 3500 tailored for consumers and written in plain
language (in conformance with the Plain Writing Act of 2010 (Pub. L.
111-274), https://www.gpo.gov/fdsys/pkg/PLAW-111publ274/pdf/PLAW-111publ274.pdf).
    Form FDA 3500B evolved from several iterations of draft versions,
with input from human factors experts, from other regulatory agencies,
and with extensive input from consumer advocacy groups and the general
public. Form FDA 3500B may be used to report to the Agency adverse
events, product problems, and product use errors. The form is provided
in both paper and electronic formats. Reporters may mail or Fax paper
forms to the Agency (a fillable PDF version of the form is available at
https://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Forms/UCM349464.pdf) or electronically submit a report via the MedWatch
Online Voluntary Reporting Form (https://www.accessdata.fda.gov/scripts/medwatch/, approved under OMB control number 0910-0645).
Reporting is supported for drugs, non-vaccine biologicals, medical
devices, special nutritional products, cosmetics, and non-prescription
OTC human drug products marketed without an approved application. The
paper form may also be used to submit reports about tobacco products
and dietary supplements. Electronic reports for tobacco products and
dietary supplements may be submitted to the Agency via an online
submission route called the Safety Reporting Portal (https://www.safetyreporting.hhs.gov/, approved under OMB control number 0910-
0645).

II. Proposed Modification to Existing Forms FDA 3500, 3500A, and 3500B

A. General Changes

    The proposed modifications to Form FDA 3500 and Form FDA 3500A
reflect changes that will bring the form into conformity, since the
previous OMB authorization in 2015, with current regulations, rules,
and guidances and fall into three categories: (1) Regulatory driven
revisions, (2) work improvements for the Center, and (3) report
processing improvements. We also welcome comments about translation of
Form FDA 3500B (consumer) into Spanish and other languages. Lastly,
formatting modifications are being proposed to several fields to
enhance the quality, utility, and clarity of the information.

B. Changes Proposed for Form FDA 3500

    In section A, we are revising the heading of A3 to ``Current
Gender'' followed by check boxes next to the following options
``Female'', ``Male'', ``Intersex'', ``Transgender'', ``Prefer not to
disclose.''
    In section B, we are revising B1 to ``Type of Report (check all
that apply)''. In section B2, we are removing ``(Devices)'' from the
last option. We are also splitting section B6 into two

questions: ``B6.a. Relevant Test (please included dates)'' and ``B6.b.
Relevant Laboratory Data (please included dates).''
    In section C, we are adding question C2 ``Do you have a picture of
the product?''
    In section D1, we are adding the question ``Does this report
involve cosmetics, dietary supplements or food?'' followed by a
checkbox for ``Yes.'' In section D4, we are adding the question ``Is
therapy still on-going?'' This question is important for
pharmacovigilance and the current form does not allow the reporter to
be specific. The current form does not allow the reporter to be
specific. It is proposed to combine boxes D6 and D7 and change the
title to ``Product Type'' (check all that apply).
    In section E, we are adding question E9 ``Was this device serviced
by a third-party servicer?'' followed by a checkbox for ``Yes'' and a
checkbox for ``No.''

C. Changes Proposed for Form FDA 3500A

    In section A, we are revising the heading of A3 to ``Current
Gender'' followed by check boxes next to the options ``Female'',
``Male'', ``Intersex'', ``Transgender'', ``Prefer not to disclose''.
    In section B, we are revising the heading for BI to now read ``Type
of Report (check all that apply)''. In section B2, we are removing
``(Devices)'' from the last option. Section B6 is being split into two
questions: ``B6.a. Relevant Test (please include dates)'' and ``B6.b.
Relevant Laboratory Data (please include dates),''
    In section C, we are combining boxes C6 and C7 and changing the
title to ``Product Type'' (check all that apply).
    In section D, we are adding a new question ``Was this device
serviced by a third party?'' followed by a checkbox for ``Yes'' and a
checkbox for ``No.''
    In section F, we are changing the revising the heading of F10 to
``Adverse Event Problem'' and splitting the ``Patient Code'' box into
two fields entitled ``Patient Outcome Code'' and ``Patient Severity
Code.'' We are also splitting the ``Device Code'' field into two fields
entitled ``Device Code'' and ``Component Code.''
    In section G, question G1 will now include ``or Compounding
Outsourcing Facility'' after (and Manufacturing Site for Devices.)'' In
section G5, we are adding two new options entitled ``PreANDA'' and
``Compounded Product'' followed by a check box for ``Yes,'' and making
consistent changes within section G6 by replacing ``If IND,'' to ``Give
Protocol #.''
    In section H1, we are adding a check box to indicate whether a
summary report is included followed by a field in which to indicate
``Number of Events Summarized'' and an open field in which to add text.
We are renaming section H6 to ``Adverse Event Problem'' and splitting
``Patient Code'' into two fields entitled ``Patient Outcome Code'' and
``Patient Severity Code.'' We are also splitting ``Device Code'' into
two fields entitled ``Device Code'' and ``Component Code.'' In section
H6, we are renaming the headings as follows: (1) ``Method'' to ``Type
of Investigation'' (2) ``Results'' to ``Investigation Findings'' and
(3) ``Conclusions'' to ``Investigation Conclusion.'' Finally, H10 is
becoming a field entitled ``Additional Manufacturer Narrative,'' and we
are adding field H11 entitled ``Corrected Data.''

D. Changes Proposed for Form FDA 3500B

    On page 1, we are removing the text ``nutrition products, such as
vitamins and minerals, herbal remedies, infant formulas, and medical
foods.'' We are also going to number each of the questions included.
    In section A, for the question ``Did any of the following happen?''
we are removing ``Devices)'' from the last option. We are also revising
the question ``List any relevant tests or laboratory data if you know
them. (Include dates)'' as two separate questions: ``List any relevant
tests (Include dates)''; and ``List any relevant laboratory data
(Include dates)'' with corresponding date fields for ``relevant tests''
and ``laboratory data.''
    In section B, we are asking whether respondents have a picture of
the product. Also in section B, we are adding the questions ``Does this
report involve cosmetics, dietary supplements, or food?'' and ``Is
therapy still on-going?'' These questions pertain to pharmacovigilance
and the current form does not allow for such specificity. We are also
adding the question, ``Was the product compounded by a pharmacy or an
outsourcing facility?'' Following the question, ``Is the Product
Compounded?'' we are adding a check box for ``Yes'' and a checkbox for
``No.'' We are also adding checkboxes within the field ``Product Type
(check all that apply)'' to correspond with selections for ``Over-the-
Counter, Generic and Biosimilar.'' Finally, we are revising ``Name of
the . . .'' to ``Name(s) of the . . .'' for clarity.
    In section C, we are separating ``Other identifying information''
into two fields; hoping this improves reporting. New fields will be
entitled (1) ``Model number'' (2) ``Catalog number'' (3) ``Lot number''
(4) Serial number'' (5) ``UDI Number and (6) ``Expiration Date.''
    In section D we are changing the terminology from ``Sex'' to
``Current Gender'' followed by corresponding check boxes next to the
options ``Female'', ``Male'', ``Intersex'', ``Transgender'', ``Prefer
not to disclose''.
    In section E, we are revising the question ``If you do NOT want
your identity disclosed to the manufacturer, place an `X' in this
box:'' to read ``If you do NOT want your identity disclosed to the
manufacturer/compounder, place an `X' in this box:''

III. Public Comment

    In the Federal Register of March 16, 2018 (83 FR 11756), we
published a 60-day notice requesting public comment on the proposed
collection of information. A number of comments were received and are
discussed in the following paragraphs.
    General comments included suggestions that the MedWatch program be
better advertised to physicians and other medical healthcare
professionals as well as patients. Also, that the forms use terminology
more familiar to healthcare providers and consumers. For example, using
`Medication error' or `Medication error/product use error' instead of
`Product use error' to ensure respondents are aware that MedWatch forms
can be used to report medication errors. Other comments suggested
revisions that might improve or otherwise clarify instructions.
Finally, some comments pertained to the advantages of electronic
reporting.
    More specific comments included a suggestion to add a question to
section A of Form FDA 3500 related to pregnancy. While we agree that
documenting pregnancy status is important, we do not plan on adding an
additional checkbox for pregnancy at this time. Previously (in 2005),
we proposed adding checkboxes for both ``Product Used During
Pregnancy'' and ``Product Used During Breast Feeding.'' However we
received comments expressing concern that these new data fields
introduced divergence from International Council on Harmonisation
standards and appeared to duplicate information usually provided in the
narrative section and in coded adverse event terms. At the same time,
we ask readers to note that pregnancy status can be captured in field
B7 under ``other relevant history.''
    Another comment suggested adding ``Physician Assistant'' to the
drop down ``Occupation'' menu in section G of Form FDA 3500. We
appreciate this

suggestion and will implement the revision.
    We also received comment that some users have experienced ``timing
out'' while completing Form FDA 3500B online and requested that any
time limit for completing online forms be extended. We were not aware
of this issue and will investigate to see whether it relates to the
online functionality of the form. If so, we will make the necessary
adjustments.
    While we are especially appreciative of the comments received in
response to our notice, we continue to welcome feedback at all times
regarding ways we might improve the MedWatch Program and the associated
forms. In addition to the revisions discussed previously, on our own
initiative we are now including burden associated with written
submissions under Sec.  329.100(c)(2) (21 CFR 329.100(c)(2)) that
request a temporary waiver from the electronic reporting requirements
associated with postmarket adverse drug events under section 760 of the
FD&C Act. While we expect few such waiver requests, we retain a
placeholder for one respondent annually, and we estimate it takes 1
hour to complete the request.
    We therefore estimate the burden for the information collection as
follows.

                                                     Table 1--Estimated Annual Reporting Burden \1\
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                                                                   Number of
 FDA center or 21 CFR section and/or FDA form      Number of     responses per   Total annual          Average burden per response          Total hours
                                                  respondents     respondent       responses
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Center for Biologics Evaluation and Research/
 Center for Drug Evaluation and Research:
    Form 3500.................................          14,727               1          14,727  0.66 (40 minutes).......................           9,720
    Form 3500A (Sec.  Sec.   310.305, 314.80,              599              98          58,702  1.21....................................          71,029
     314.98, 600.80, and 1271.350).
    Form 3500A (Sec.   310.305 outsourcing                  50               2             100  1.21....................................             121
     facilities).
Center for Devices and Radiological Health:
    Form 3500.................................           5,233               1           5,233  0.66 (40 minutes).......................           3,454
    Form 3500A (part 803).....................           2,277             296         673,992  1.21....................................         815,530
Center for Food Safety and Applied Nutrition:
    Form 3500.................................           1,793               1           1,793  0.66 (40 minutes).......................           1,183
    Form 3500A................................           1,659               1           1,659  1.21....................................           2,007
Center for Tobacco Products:
    Form 3500.................................              39               1              39  0.66 (40 minutes).......................              26
All Centers:
    Form 3500B................................          13,750               1         13, 750  0.46 (28 minutes).......................           6,325
Written requests for temporary waiver under                  1               1               1  1.......................................               1
 Sec.   329.100(c)(2):
                                               ---------------------------------------------------------------------------------------------------------
    Total.....................................  ..............  ..............  ..............  ........................................         909,396
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    While we retain the currently approved estimate for the information
collection, as noted previously we have added burden associated with
written submissions under Sec.  329.100.

    Dated: September 4, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-19742 Filed 9-11-18; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Notices]
[Pages 33219-33220]
[FR Doc No: 2022-11663]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-217, OMB Control No. 3235-0241]

Proposed Collection; Comment Request; Extension: Rule 206(4)-2

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

    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'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
collection of information to the Office of Management and Budget
(``OMB'') for extension and approval.
    Rule 206(4)-2 (17 CFR 275.206(4)-2) under the Investment Advisers
Act of 1940 (15 U.S.C. 80b-1 et seq.) governs the custody of funds or
securities of clients by Commission-registered investment advisers.
Rule 206(4)-2 requires each registered investment adviser that has
custody of client funds or securities to maintain those client funds or
securities with a broker-dealer, bank or other ``qualified custodian.''
\1\ The rule requires the adviser to promptly notify clients as to the
place and manner of custody, after opening an account for the client
and following any changes.\2\ If an adviser sends account statements to
its clients, it must insert a legend in the notice and in subsequent
account statements sent to those clients urging them to compare the
account statements from the custodian with those from the adviser.\3\
The adviser also must have a reasonable basis, after due inquiry, for
believing that the qualified custodian maintaining client funds and
securities sends account statements directly to the advisory clients at
least quarterly, identifying the amount of funds and of each security
in the account at the end of the period and setting forth all
transactions in the account during that period.\4\ The client

funds and securities of which an adviser has custody must undergo an
annual surprise examination by an independent public accountant to
verify client assets pursuant to a written agreement with the
accountant that specifies certain duties.\5\ Unless client assets are
maintained by an independent custodian (i.e., a custodian that is not
the adviser itself or a related person), the adviser also is required
to obtain or receive a written report of the internal controls relating
to the custody of those assets from an independent public accountant
that is registered with and subject to regular inspection by the Public
Company Accounting Oversight Board (``PCAOB'').\6\
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    \1\ Rule 206(4)-2(a)(1).
    \2\ Rule 206(4)-2(a)(2).
    \3\ Rule 206(4)-2(a)(2).
    \4\ Rule 206(4)-2(a)(3).
    \5\ Rule 206(4)-2(a)(4).
    \6\ Rule 206(4)-2(a)(6).
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    The rule exempts advisers from the rule with respect to clients
that are registered investment companies. Advisers to limited
partnerships, limited liability companies and other pooled investment
vehicles are excepted from the account statement delivery and deemed to
comply with the annual surprise examination requirement if the limited
partnerships, limited liability companies or pooled investment vehicles
are subject to annual audit by an independent public accountant
registered with, and subject to regular inspection by the PCAOB, and
the audited financial statements are distributed to investors in the
pools.\7\ The rule also provides an exception to the surprise
examination requirement for advisers that have custody solely because
they have authority to deduct advisory fees from client accounts,\8\
and advisers that have custody solely because a related person holds
the adviser's client assets (or has any authority to obtain possession
of them) and the related person is operationally independent of the
adviser.\9\
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    \7\ Rule 206(4)-2(b)(4).
    \8\ Rule 206(4)-2(b)(3).
    \9\ Rule 206(4)-2 (b)(6).
---------------------------------------------------------------------------

    Advisory clients use this information to confirm proper handling of
their accounts. The Commission's staff uses the information obtained
through this collection in its enforcement, regulatory and examination
programs. Without the information collected under the rule, the
Commission would be less efficient and effective in its programs and
clients would not have information valuable for monitoring an adviser's
handling of their accounts.
    The respondents to this information collection are investment
advisers registered with the Commission and have custody of clients'
funds or securities. We estimate that 8,057 advisers would be subject
to the information collection burden under rule 206(4)-2. The number of
responses under rule 206(4)-2 will vary considerably depending on the
number of clients for which an adviser has custody of funds or
securities, and the number of investors in pooled investment vehicles
that the adviser manages. It is estimated that the average number of
responses annually for each respondent would be 6,830, and an average
time of 0.00524 hour per response. The annual aggregate burden for all
respondents to the requirements of rule 206(4)-2 is estimated to be
288,202 hours.
    The estimated average burden hours are made solely for purposes of
the Paperwork Reduction Act and are not derived from a comprehensive or
even representative survey or study of the cost of Commission rules and
forms.
    Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimates of the burden of the proposed collection of information; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology.
Consideration will be given to comments and suggestions submitted in
writing within 60 days of this publication by August 1, 2022.
    Please direct your written comments to David Bottom, Director/Chief
Information Officer, Securities and Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington, DC 20549; or send an email to:
[email protected].

    Dated: May 25, 2022
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-11663 Filed 5-31-22; 8:45 am]
BILLING CODE 8011-01-P