[Federal Register Volume 79, Number 38 (Wednesday, February 26, 2014)]
[Notices]
[Pages 10847-10848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-04131]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Extension: Rule 17g-7, SEC File No. 270-600, OMB Control No. 3235-
0656.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the existing
collection of information provided for in Rule 17g-7, (17 CFR 240.17g-
7), under the Securities Exchange Act of 1934 (``Exchange Act'') (15
U.S.C. 78a et seq.). The Commission plans to submit this existing
collection of information to the Office of Management and Budget
(``OMB'') for extension and approval.
Rule 17g-7 requires nationally recognized statistical rating
organizations (``NRSROs'') to include in any report accompanying a
credit rating with respect to an asset-backed security (``ABS'') (as
that term is defined in Section 3(a)(77) of the Exchange Act) a
description of the representations, warranties and enforcement
mechanisms available to investors and a description of how they differ
from the representations, warranties and enforcement mechanisms in
issuances of similar securities. Rule 17g-7 potentially applies to each
of the 10 NRSROs currently registered with the Commission.\1\
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\1\ When the Commission first adopted rules under the Credit
Rating Agency Reform Act of 2006, it estimated that approximately 30
credit rating agencies ultimately would be registered as NRSROs. See
Oversight of Credit Rating Agencies Registered as Nationally
Recognized Statistical Rating Organizations, Release No. 34-55857
(Jun. 5, 2007), 72 FR 33564, 33607 (Jun. 18, 2007). Accordingly, the
Commission used 30 respondents for purposes of calculating its PRA
burden estimates when it adopted Rule 17g-7. See Disclosure for
Asset-Backed Securities Required by Section 943 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act, Release No. 33-9175;
34-63741 (Jan. 20, 2011), 76 FR 4489, 4506 (Jan. 26, 2011) (``Rule
17g-7 Adopting Release''). Since that time, 10 credit rating
agencies have registered with the Commission as NRSROs. This number
has remained constant for several years. Consequently, when the
Commission last proposed rules regarding the oversight of NRSROs, it
stated that it believed it to be more appropriate to use the actual
number of NRSROs for purposes of the PRA. See Proposed Rules for
Nationally Recognized Statistical Rating Organizations, Release No.
34-64514 (May 18, 2011), 76 FR 33420, 33499 (Jun. 8, 2011) (stating
that ``while the Commission expects several more credit rating
agencies may become registered as NRSROs over the next few years,
the Commission preliminarily believes that the actual number of
NRSROs should be used for purposes of the PRA.'').
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Commission staff estimates that the 10 currently-registered NRSROs
would each spend an average of approximately 100 hours per year
reviewing and updating benchmarks for various types of securities for
purposes of comparing representations, warranties, and enforcement
mechanisms, resulting in an annual industry-wide reporting burden of
1,000 hours (10 respondents x 100 hours/respondent). On a deal-by-deal
basis, Commission staff estimates that it would take each NRSRO an
average of approximately: (i) One hour to review each ABS transaction
to review the relevant disclosures prepared by an issuer, which an
NRSRO would review as part of the rating process, and convert those
disclosures into a format suitable for inclusion in any report to be
issued by an NRSRO, and (ii) 10 hours per ABS transaction to compare
the terms of the current deal to those of similar securities. When the
Commission adopted Rule 17g-7, it estimated the average annual number
of ABS offerings to be 2,067 and the average number of credit ratings
per issuance of ABS to be four, resulting in 8,268 annual responses.\2\
Commission staff believes that these estimates continue to be valid
and, accordingly, estimates that the total industry-wide annual
reporting burden of complying with the disclosure requirements under
Rule 17g-7 is 90,948 hours (8,268 responses x 11 hours/response). As a
result, Commission staff estimates a total aggregate burden of 91,948
hours per year for complying with the rule (1,000 hours for reviewing
and updating benchmarks + 90,948 hours for complying with disclosure
requirements).
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\2\ See Rule 17g-7 Adopting Release, 76 FR at 4508.
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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.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
Please direct your written comments to: Thomas Bayer, Director/
Chief Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email
to: [email protected].
[[Page 10848]]
Dated: February 19, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-04131 Filed 2-25-14; 8:45 am]
BILLING CODE 8011-01-P