[Federal Register Volume 80, Number 212 (Tuesday, November 3, 2015)]
[Notices]
[Pages 67820-67821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27904]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC
20549-2736.
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.) (``PRA''), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information provided for in Rule 15c3-4 (17 CFR 240.15c3-4) under the
Securities Exchange Act of 1934 (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 15c3-4 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,
[[Page 67821]]
four firms are registered with the Commission as OTC derivatives
dealers. The staff estimates that approximately two additional OTC
derivatives dealers may become registered 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\ 1,334 hours for the
two new OTC derivatives dealers to establish and document their risk
management control systems,\3\ and 400 hours for the two 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 six OTC derivatives dealers
will be approximately 2,534 hours annually.
---------------------------------------------------------------------------
\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/3 years) x 2 firms) = 1,334.
\4\ (200 hours x 2 firms) = 400.
---------------------------------------------------------------------------
The staff believes that the internal cost of complying with Rule
15c3-4 will be approximately $283 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 internal cost of
compliance for all affected OTC derivatives dealers is estimated to be
$717,122.\6\
---------------------------------------------------------------------------
\5\ The $283 per hour salary figure for a compliance manager is
from SIFMA's Management & Professional Earnings in the Securities
Industry 2013, modified by Commission staff to account for an 1800-
hour work-year and multiplied by 5.35 to account for bonuses, firm
size, employee benefits and overhead.
\6\ 2,534 hours x $283 per hour = $717,122.
---------------------------------------------------------------------------
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 unless it displays a
currently valid OMB control number.
Please direct your written comments to: Pamela Dyson, 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].
Dated: October 28, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-27904 Filed 11-2-15; 8:45 am]
BILLING CODE 8011-01-P