Page:United States Statutes at Large Volume 110 Part 5.djvu/357

 PUBLIC LAW 104-290—OCT. 11, 1996 110 STAT. 3431 maintain and preserve such records (as defined in section 3(a)(37) of the Securities Exchange Act of 1934) for such period or periods as the Commission, by rules and regulations, may prescribe as necessary or appropriate in the public interest or for the protection of investors. Each investment adviser Regulations. that is not a majority-owned subsidiary of, and each depositor of any registered investment company, and each principal underwriter for any registered investment company other than a closed-end company, shall maintain and preserve for such period or periods as the Commission shall prescribe by rules and regulations, such records as are necessary or appropriate to record such person's transactions with such registered company. "(2) MINIMIZING COMPLIANCE BURDEN.—In exercising its authority under this subsection, the Commission shall take such steps as it deems necessary or appropriate, consistent with the public interest and for the protection of investors, to avoid unnecessary recordkeeping by, and minimize the compliance burden on, persons required to maintain records under this subsection (hereafter in this section referred to as 'subject persons'). Such steps shall include considering, and requesting public comment on— "(A) feasible alternatives that minimize the recordkeeping burdens on subject persons; "(B) the necessity of such records in view of the public benefits derived from the independent scrutiny of such records through Commission examination; "(C) the costs associated with maintaining the information that would be required to be reflected in such records; and "(D) the effects that a pro;;osed recordkeeping requirement would have on internal compliance policies and procedures. "(b) EXAMINATIONS OF RECORDS.— "(1) IN GENERAL. —Al l records required to be maintained and preserved in accordance with subsection (a) shall be subject at any time and from time to time to such reasonable periodic, special, and other examinations by the Commission, or any member or representative thereof, as the Commission may prescribe. "(2) AVAILABILITY. — For purposes of examinations referred to in paragraph (1), any subject person shall make available to the Commission or its representatives any copies or extracts from such records as may be prepared without undue effort, expense, or delay as the Commission or its representatives may reasonably request. "(3) COMMISSION ACTION. —The Commission shall exercise its authority under this subsection with due regard for the benefits of internal compliance policies and procedures and the effective implementation and operation thereof."; (2) by redesignating subsections (c) and (d) as subsections (e) and (f), respectively; (3) by inserting after subsection (b) the following new subsections: "(c) LIMITATIONS ON DISCLOSURE BY COMMISSION. — Notwithstanding any other provision of law, the Commission shall not be compelled to disclose any internal complismce or audit records,

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