[Federal Register Volume 77, Number 231 (Friday, November 30, 2012)]
[Notices]
[Page 71462]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28946]
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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 17a-12/Form X-17A-5IIB. OMB Control No. 3235-0498,
SEC File No. 270-442.
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 existing
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''). The
Commission plans to submit this existing collection of information to
the Office of Management and Budget (``OMB'') for extension and
approval.
Rule 17a-12 is the reporting rule tailored specifically for over-
the-counter (``OTC'') derivatives dealers registered with the
Commission, and Part IIB of Form X-17A-5, the Financial and Operational
Combined Uniform Single (``FOCUS'') Report, is the basic document for
reporting the financial and operational condition of OTC derivatives
dealers. Rule 17a-12 requires registered OTC derivatives dealers to
file Part IIB of the FOCUS Report quarterly. Rule 17a-12 also requires
that OTC derivatives dealers file audited financial statements
annually.
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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Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information shall
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the proposed collection of information; (c) ways to
enhance the quality, utility, and clarity of the information to be
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.
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.
Please direct your written comments to: 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].
Dated: November 26, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-28946 Filed 11-29-12; 8:45 am]
BILLING CODE 8011-01-P