[Federal Register Volume 78, Number 46 (Friday, March 8, 2013)]
[Notices]
[Pages 15056-15057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05420]
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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 15c3-4.
SEC File No. 270-441, OMB Control No. 3235-0497.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.) (the ``Paperwork
[[Page 15057]]
Reduction Act''), the Securities and Exchange Commission (the
``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 discussed below.
Rule 15c3-4 (17 CFR 240.15c3-4) (the ``Rule'') under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.) (the ``Exchange Act'')
requires certain broker-dealers that are registered with the Commission
as OTC derivatives dealers, or who compute their net capital charges
under Appendix E to Rule 15c3-1 (17 CFR 240.15c3-1) (``ANC firms''), to
establish, document, and maintain a system of internal risk management
controls. The Rule sets forth the basic elements for an OTC derivatives
dealer or an ANC firm to consider and include when establishing,
documenting, and reviewing its internal risk management control system,
which are designed to, among other things, ensure the integrity of an
OTC derivatives dealer's or an ANC firm's risk measurement, monitoring,
and management process, to clarify accountability at the appropriate
organizational level, and to define the permitted scope of the dealer's
activities and level of risk. The Rule also requires that management of
an OTC derivatives dealer or an ANC firm must periodically review, in
accordance with written procedures, the firm's business activities for
consistency with its risk management guidelines.
The staff estimates that the average amount of time a new OTC
derivatives dealer will spend establishing and documenting its risk
management control system is 2,000 hours and that, on average, a
registered OTC derivatives dealer will spend approximately 200 hours
each year to maintain (e.g., reviewing and updating) its risk
management control system.\1\ Currently, four firms are registered with
the Commission as OTC derivatives dealers. The staff estimates that
approximately four additional entities may become registered as OTC
derivatives dealers within the next three years. Thus, the estimated
annualized burden would be 800 hours for the four OTC derivatives
dealers currently registered with the Commission to maintain their risk
management control systems,\2\ 2,666 hours for the four new OTC
derivatives dealers to establish and document their risk management
control systems,\3\ and 400 hours for the four new OTC derivatives
dealers to maintain their risk management control systems.\4\
Accordingly, the staff estimates the total annualized burden associated
with Rule 15c3-4 for the eight OTC derivatives dealers will be
approximately 3,866 hours annually.
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\1\ This notice does not cover the hour burden associated with
ANC firms, because the hour burden for ANC firms is included in the
Paperwork Reduction Act collection for Rule 15c3-1, which requires
ANC firms to comply with specific provisions of Rule 15c3-4 in
Appendix E to Rule 15c3-1. See 17 CFR 240.15c3-1(a)(7)(iii), 17 CFR
240.15c3-1e(a)(1)(ii), and 17 CFR 240.15c3-1e(a)(1)(viii)(C).
\2\ (200 hours x 4 firms) = 800.
\3\ (2,000 hours x 1.333 firms) = 2,666.
\4\ (200 hours x 4 firms x / 2) = 400 {the number is divided by
two to show an average, since it is assumed that the four new OTC
derivatives dealers will register in even intervals over the three
years{time} .
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The staff believes that the cost of complying with Rule 15c3-4 will
be approximately $279 per hour.\5\ This per hour cost is based upon an
annual average hourly salary for a compliance manager who would be
responsible for ensuring compliance with the requirements of Rule 15c3-
4. Accordingly, the total annualized cost for all affected OTC
derivatives dealers is estimated to be $1,078,614.\6\
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\5\ The $279 per hour salary figure for a compliance manager is
from SIFMA's Management & Professional Earnings in the Securities
Industry 2011, modified to account for an 1800-hour work-year and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits and overhead.
\6\ 3,866 hours x $279 per hour = $1,078,614.
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The records required to be made by OTC derivatives dealers pursuant
to the Rule and the results of the periodic reviews conducted under
paragraph (d) of Rule 15c3-4 must be preserved under Rule 17a-4 of the
Exchange Act (17 CFR 240.17a-4) for a period of not less than three
years, the first two years in an easily accessible place. The
Commission will not generally publish or make available to any person
notice or reports received pursuant to the Rule. The statutory basis
for the Commission's refusal to disclose such information to the public
is the exemption contained in section (b)(4) of the Freedom of
Information Act, 5 U.S.C. 552, which essentially provides that the
requirement of public dissemination does not apply to commercial or
financial information which is privileged or confidential.
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 Paperwork Reduction Act that
does not display a valid OMB control number.
Background documentation for this information collection may be
viewed 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: (i) [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: March 4, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05420 Filed 3-7-13; 8:45 am]
BILLING CODE 8011-01-P