[Federal Register Volume 78, Number 25 (Wednesday, February 6, 2013)]
[Notices]
[Pages 8599-8600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02565]
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SECURITIES AND EXCHANGE COMMISSION
Submission for OMB Review; Comment Request
Upon Written Request Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Extension:
Rule 17a-12 and Form X-17A-5IIB; SEC File No. 270-442, OMB
Control No. 3235-0498.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.) (``PRA''), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of an extension of the
previously approved collection of information provided for in Rule 17a-
12 (17 CFR 240.17a-12) and Part IIB of Form X-17A-5 (17 CFR 249.617)
under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
(``Exchange Act'').
Rule17a-12 requires OTC derivatives dealers to file quarterly
Financial and Operational Combined Uniform Single Reports (``FOCUS''
reports) on Part IIB of Form X-17A-5, the basic document for reporting
the financial and operational condition of over-the-counter (``OTC'')
derivatives dealers. Rule 17a-12 also requires that OTC derivatives
dealers file audited financial statements annually. The reports
required under Rule 17a-12 provide the Commission with information used
to monitor the operations of OTC derivatives dealers and to enforce
their compliance with the Commission's rules. These reports also enable
the Commission to review the business activities of OTC derivatives
dealers and to anticipate, where possible, how these dealers may be
affected by significant economic events.
There are currently four registered OTC derivatives dealers. The
staff expects that one additional firm will register as an OTC
derivatives dealer within the next three years. The staff estimates
that the average amount of time necessary to prepare and file the
quarterly reports required by the rule is eighty hours per OTC
derivatives dealer \1\ and that the average amount of time to prepare
and file the annual audit report is 100 hours per OTC derivatives
dealer per year, for a total reporting burden of 180 hours per OTC
derivatives dealer annually. Thus the staff estimates that the total
industry-wide reporting burden to comply with the requirements of Rule
17a-12 is 900 hours per year (180 x 5). Further, the Commission
estimates that the total internal compliance cost associated with this
requirement is approximately $250,000 per year.\2\ The Commission
previously estimated that there were no external annualized costs
associated with Rule 17a-12. However, the cost associated with an
independent accountant's examination of the financial statements OTC
derivatives dealers file with the Commission should have been included
in prior submissions. For purposes of the reporting burden for Rule
17a-5 under the Exchange Act (17 CFR 240.17a-5), the Commission
estimated that the average annual reporting cost per broker-dealer for
an independent public accountant to examine the financial statements
was approximately $46,300 per broker-dealer. Based on this estimate,
the total industry-wide annual reporting cost would be approximately
$231,500 ($46,300 x 5).
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\1\ Based upon an average of 4 responses per year and an average
of 20 hours spent preparing each response.
\2\ Based on staff experience, an OTC derivatives dealer likely
would have a Compliance Manager gather the necessary information and
prepare and file the quarterly reports and annual audit report and
supporting schedules. According to the Securities Industry and
Financial Markets Association Report on Management and Professional
Earnings in the Securities Industry dated October 2011, which
provides base salary and bonus information for middle-management and
professional positions within the securities industry, the hourly
cost of a compliance manager, which the Commission staff has
modified to account for an 1800-hour work year and multiplied by
5.35 to account for bonuses, firm size, employee benefits, and
overhead, is approximately $279/hour. $279 times 900 hours =
$251,100.
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The Commission may not conduct or sponsor a collection of
information unless it displays a currently valid OMB control number. No
person shall be subject to any penalty for failing to comply with a
collection of information subject to the PRA that does not display a
valid OMB control number.
[[Page 8600]]
The public may view background documentation for this information
collection at the following Web site: www.reginfo.gov. Please direct
your written comments 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) Thomas Bayer, Director/Chief Information
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria, Virginia 22312, or send an email to
[email protected]. Comments must be submitted to OMB within 30 days
of this notice.
Dated: January 31, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02565 Filed 2-5-13; 8:45 am]
BILLING CODE 8011-01-P