80 FR 29376 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 98 (May 21, 2015)

Page Range		29376-29378
FR Document		2015-12285
Federal Register, Volume 80 Issue 98 (Thursday, May 21, 2015)
[Federal Register Volume 80, Number 98 (Thursday, May 21, 2015)]
[Notices]
[Pages 29376-29378]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12285]


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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 FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:

[[Page 29377]]

    Rule 17g-5, SEC File No. 270-581, OMB Control No. 3235-0649.

    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'') has submitted to the Office of Management 
and Budget (``OMB'') a request for approval of extension of the 
previously approved collection of information provided for in Rule 17g-
5 (17 CFR 240.17g-5) under the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) (``Exchange Act'').
    The Credit Rating Agency Reform Act of 2006 (Pub. L. 109-291) 
(``Rating Agency Act''), enacted on September 29, 2006, defines the 
term ``nationally recognized statistical rating organization,'' or 
``NRSRO'' and provides authority for the Commission to implement 
registration, recordkeeping, financial reporting, and oversight rules 
with respect to registered credit rating agencies. The Rating Agency 
Act added a new Section 15E, ``Registration of Nationally Recognized 
Statistical Rating Organizations'' (15 U.S.C. 78o-7) to the Exchange 
Act. Exchange Act Section 15E(h)(2) provides the Commission with 
authority to prohibit, or require the management and disclosure of, any 
potential conflict of interest relating to the issuance of credit 
ratings by an NRSRO (15 U.S.C. 78o-7(h)(2)).
    The Commission adopted, and subsequently amended, Rule 17g-5 
pursuant, in part, to Section 15E(h)(2) of the Exchange Act.\1\ Rule 
17g-5 requires the disclosure of and establishment of procedures to 
manage certain NRSRO conflicts of interest, prohibits certain other 
NRSRO conflicts of interest, and contains requirements regarding the 
disclosure of information in the case of the conflict of interest of an 
NRSRO issuing or maintaining a credit rating on an asset-backed 
security that was paid for by the issuer, sponsor, or underwriter of 
the security.
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    \1\ See Oversight of Credit Rating Agencies Registered as 
Nationally Recognized Statistical Rating Organizations, Exchange Act 
Release No. 55857 (June 5, 2007), 72 FR 33564, 33595-33599 (June 18, 
2007); Amendments to Rules for Nationally Recognized Statistical 
Rating Organizations, Exchange Act Release No. 59342 (Feb. 2, 2009) 
74 FR 6456, 6465-6469 (Feb. 9, 2009); and Amendments to Rules for 
Nationally Recognized Statistical Rating Organizations, Exchange Act 
Release No. 61050 (Nov. 23, 2009), 74 FR 63832, 63842-63850 (Dec. 4, 
2009).
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    On August 27, 2014, the Commission adopted amendments to Rule 17g-
5.\2\ The amendments modified the collection of information included in 
Rule 17g-5 in three ways. First, the Commission added paragraph 
(a)(3)(iii)(E) to Rule 17g-5 to require an NRSRO to obtain a 
representation from the issuer, sponsor, or underwriter of an asset-
backed security that the issuer, sponsor, or underwriter will post on 
the Web site referred to in paragraph (a)(3)(iii) of Rule 17g-5 (``Rule 
17g-5 Web site''), promptly after receipt, any executed Form ABS Due 
Diligence-15E delivered by a person employed to provide third-party due 
diligence services with respect to the security or money market 
instrument.
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    \2\ See Nationally Recognized Statistical Rating Organizations, 
Exchange Act Release No. 72936 (August 27, 2014), 79 FR 55078, 
55107-55194 (Sept. 15, 2014) (``Adopting Release'').
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    Second, the Commission added paragraph (c)(8) to Rule 17g-5 to 
prohibit an NRSRO from issuing or maintaining a credit rating where a 
person within the NRSRO who participates in determining or monitoring 
the credit rating, or developing or approving procedures or 
methodologies used for determining the credit rating, including 
qualitative and quantitative models, also: (1) Participates in sales or 
marketing of a product or service of the NRSRO or a product or service 
of an affiliate of the NRSRO; or (2) is influenced by sales or 
marketing considerations.
    Third, the Commission added paragraph (f) to Rule 17g-5, which 
provides that upon written application by an NRSRO the Commission may 
exempt, either unconditionally or on specified terms and conditions, 
the NRSRO from paragraph (c)(8) of Rule 17g-5 if the Commission finds 
that due to the small size of the NRSRO it is not appropriate to 
require the separation of the production of credit ratings from sales 
and marketing activities and the exemption is in the public interest.
    The collection of information obligation imposed by Rule 17g-5 is 
mandatory for credit rating agencies that are applying to register or 
are registered with the Commission as NRSROs. Registration with the 
Commission as an NRSRO is voluntary.
    Paragraph (a)(3) of Rule 17g-5 requires disclosures by NRSROs on a 
transaction by transaction basis. The Commission estimates that the 
total number of structured finance ratings issued by all NRSROs in a 
given year is approximately 2,436 and that it would take 1 hour per 
transaction to make the information publicly available. The Commission 
therefore estimates that the corresponding annual disclosure burden for 
NRSROs is approximately 2,436 hours industry-wide.
    Paragraph (a)(3) of Rule 17g-5 also requires arrangers to disclose 
certain information. The Commission previously estimated that there are 
approximately 200 arrangers subject to the rule. The Commission 
estimates that it would take approximately 300 hours to develop a 
system, as well as the policies and procedures, for the disclosures 
required by Rule 17g-5. In the Adopting Release, the Commission 
estimated that there are approximately 336 issuers, sponsors, or 
underwriters of asset-backed securities. Therefore, the one-time burden 
for the additional 136 respondents is approximately 40,800 hours. The 
Commission therefore estimates that, over a three-year period, the 
total industry-wide one-time burden would be approximately 13,600 hours 
per year when annualized over three years.
    Paragraph (a)(3) of Rule 17g-5 also requires disclosures by 
arrangers on a transaction by transaction basis. The Commission 
estimates that 336 arrangers would arrange approximately 20 new 
transactions per year and that it would take 1 hour per transaction to 
make the information publicly available, resulting in a total annual 
disclosure burden of approximately 6,720 hours.
    Paragraph (a)(3) of Rule 17g-5 also requires disclosure of 
information by arrangers on an ongoing basis that is used by an NRSRO 
to undertake credit rating surveillance on the structured finance 
product. The Commission estimates this disclosure would be required for 
approximately 125 transactions a month, and it would take each 
respondent approximately 0.5 hours per transaction to disclose the 
information. Therefore, the Commission estimates that it would take 
each respondent approximately 750 hours on an annual basis to disclose 
such information, for a total aggregate annual disclosure burden of 
252,000 hours.
    Paragraph (e) of Rule 17g-5 requires NRSROs to submit an annual 
certification to the Commission. The Commission estimates that it would 
take each NRSRO approximately 2 hours to complete the certification, 
resulting in a total industry-wide annual reporting burden for 10 
NRSROs of 20 hours.
    New paragraph (a)(3)(iii)(E) of Rule 17g-5 may require NRSROs to 
redraft the agreement templates they use with respect to obtaining 
representations from issuers, sponsors, or underwriters as required 
under Rule 17g-5. The Commission estimates that an NRSRO will spend 
approximately two hours on a one-time basis to redraft these templates 
with respect to each issuer, sponsor, or underwriter, for a total 
industry-wide one-time disclosure burden of approximately 6,720 hours. 
The Commission therefore estimates that the total one-time disclosure 
burden to redraft the templates would

[[Page 29378]]

be approximately 2,240 hours per year when annualized over three years.
    New paragraph (a)(3)(iii)(E) of Rule 17g-5 also requires issuers, 
sponsors, and underwriters to post on the Rule 17g-5 Web sites any 
executed Form ABS Due Diligence-15E delivered by a person employed to 
provide third-party due diligence services. The Commission estimates 
that issuers, sponsors, and underwriters will need to post 
approximately 715 Forms ABS Due Diligence-15E on Rule 17g-5 Web sites 
per year (in addition to the information that is already posted to the 
Web sites). The Commission estimates that it will take the issuer, 
sponsor, or underwriter approximately ten minutes to upload each form 
and post it to the Web site, for a total industry-wide annual 
disclosure burden of approximately 119 hours.
    As a consequence of the new absolute prohibition in paragraph 
(c)(8) of Rule 17g-5, the Commission believes that an NRSRO will need 
to update the written policies and procedures to address and manage 
conflicts of interest the NRSRO must establish, maintain, and enforce 
under Section 15E(h) of the Exchange Act and Rule 17g-5. The Commission 
estimates that updating the conflicts of interest policies and 
procedures would take an NRSRO an average of approximately 100 hours, 
for an industry-wide one-time reporting burden of approximately 1,000 
hours. In addition, Exhibit 7 to Form NRSRO requires an NRSRO to 
provide a copy of the written policies and procedures in the exhibit. 
Paragraph (e) of Rule 17g-1 requires an NRSRO to promptly file with the 
Commission an update of its registration on Form NRSRO when information 
on the form is materially inaccurate. The update of registration must 
be filed electronically on the Commission's EDGAR system. The 
Commission estimates that it would take an NRSRO an average of 
approximately twenty-five hours on a one-time basis to prepare and file 
the update of registration to account for the update of the NRSRO's 
written policies and procedures to address and manage conflicts of 
interest, for an industry-wide one-time reporting burden of 
approximately 250 hours. The Commission therefore estimates that the 
total one-time reporting burden to update the conflicts of interest 
policies and procedures and to prepare and file an update of 
registration to account for the update of the NRSRO's written policies 
and procedures would be 1,250 hours, or approximately 417 hours per 
year when annualized over three years.
    Finally, paragraph (f) of Rule 17g-5 permits an NRSRO to apply for 
an exemption from the prohibited conflict under paragraph (c)(8) of 
Rule 17g-5. The Commission estimated that an NRSRO would likely spend 
an average of approximately 150 hours to draft and submit the 
application to the Commission. If all 10 NRSROs apply for an exemption, 
this would result in a one-time industry-wide reporting burden of 1,500 
hours, or approximately 500 hours per year when annualized over 3 
years.
    Accordingly, the total estimated burden associated with Rule 17g-5 
is 50,270 hours on a one-time basis (40,800 + 6,720 + 1,250 +1,500 = 
50,270) and 261,295 hours on an annual basis (2,436 + 6,720 + 252,000 + 
20 +119 = 261,295).
    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.
    The public may view background documentation for this information 
collection 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: 
[email protected]; and (ii) Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or by sending an 
email to: [email protected]. Comments must be submitted to OMB within 
30 days of this notice.

    Dated: May 15, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12285 Filed 5-20-15; 8:45 am]
BILLING CODE 8011-01-P
29378 Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Notices

be approximately 2,240 hours per year exemption from the prohibited conflict Incident Period: 04/03/2015 through
when annualized over three years. under paragraph (c)(8) of Rule 17g–5. 04/05/2015.
New paragraph (a)(3)(iii)(E) of Rule The Commission estimated that an Effective Date: 05/14/2015.
17g–5 also requires issuers, sponsors, NRSRO would likely spend an average Physical Loan Application Deadline
and underwriters to post on the Rule of approximately 150 hours to draft and Date: 07/13/2015.
17g–5 Web sites any executed Form submit the application to the Economic Injury (EIDL) Loan
ABS Due Diligence-15E delivered by a Commission. If all 10 NRSROs apply for Application Deadline Date: 02/15/2016.
person employed to provide third-party an exemption, this would result in a ADDRESSES: Submit completed loan
due diligence services. The Commission one-time industry-wide reporting applications to: U.S. Small Business,
estimates that issuers, sponsors, and burden of 1,500 hours, or approximately Administration Processing and
underwriters will need to post 500 hours per year when annualized Disbursement Center, 14925 Kingsport
approximately 715 Forms ABS Due over 3 years. Road, Fort Worth, TX 76155.
Diligence-15E on Rule 17g–5 Web sites Accordingly, the total estimated FOR FURTHER INFORMATION CONTACT: A.
per year (in addition to the information burden associated with Rule 17g–5 is Escobar, Office of Disaster Assistance,
that is already posted to the Web sites). 50,270 hours on a one-time basis U.S. Small Business Administration,
The Commission estimates that it will (40,800 + 6,720 + 1,250 +1,500 = 50,270) 409 3rd Street SW., Suite 6050,
take the issuer, sponsor, or underwriter and 261,295 hours on an annual basis Washington, DC 20416.
approximately ten minutes to upload (2,436 + 6,720 + 252,000 + 20 +119 = SUPPLEMENTARY INFORMATION: Notice is
each form and post it to the Web site, 261,295).
for a total industry-wide annual hereby given that as a result of the
An agency may not conduct or President’s major disaster declaration on
disclosure burden of approximately 119 sponsor, and a person is not required to
hours. 05/14/2015, Private Non-Profit
respond to, a collection of information organizations that provide essential
As a consequence of the new absolute under the PRA unless it displays a
prohibition in paragraph (c)(8) of Rule services of governmental nature may file
currently valid OMB control number. disaster loan applications at the address
17g–5, the Commission believes that an The public may view background
NRSRO will need to update the written listed above or other locally announced
documentation for this information locations.
policies and procedures to address and collection at the following Web site:
manage conflicts of interest the NRSRO The following areas have been
www.reginfo.gov. Comments should be determined to be adversely affected by
must establish, maintain, and enforce directed to: (i) Desk Officer for the
under Section 15E(h) of the Exchange the disaster:
Securities and Exchange Commission,
Act and Rule 17g–5. The Commission Primary Counties: Boone; Cabell;
Office of Information and Regulatory
estimates that updating the conflicts of Lincoln; Logan; Mingo; Wayne.
Affairs, Office of Management and
interest policies and procedures would The Interest Rates are:
Budget, Room 10102, New Executive
take an NRSRO an average of
Office Building, Washington, DC 20503,
approximately 100 hours, for an Percent
or by sending an email to:
industry-wide one-time reporting
Shagufta_Ahmed@omb.eop.gov; and (ii) For Physical Damage:
burden of approximately 1,000 hours. In
Pamela Dyson, Director/Chief Non-Profit Organizations With
addition, Exhibit 7 to Form NRSRO
Information Officer, Securities and Credit Available Elsewhere ... 2.625
requires an NRSRO to provide a copy of
Exchange Commission, c/o Remi Pavlik- Non-Profit Organizations With-
the written policies and procedures in out Credit Available Else-
Simon, 100 F Street NE., Washington,
the exhibit. Paragraph (e) of Rule 17g– where ..................................... 2625
DC 20549, or by sending an email to:
1 requires an NRSRO to promptly file For Economic Injury:
with the Commission an update of its PRA_Mailbox@sec.gov. Comments must
Non-Profit Organizations With-
registration on Form NRSRO when be submitted to OMB within 30 days of
out Credit Available Else-
information on the form is materially this notice. where ..................................... 2.625
inaccurate. The update of registration Dated: May 15, 2015.
must be filed electronically on the Robert W. Errett, The number assigned to this disaster
Commission’s EDGAR system. The Deputy Secretary. for physical damage is 14317B and for
Commission estimates that it would take [FR Doc. 2015–12285 Filed 5–20–15; 8:45 am] economic injury is 14318B.
an NRSRO an average of approximately BILLING CODE 8011–01–P
twenty-five hours on a one-time basis to (Catalog of Federal Domestic Assistance
Numbers 59002 and 59008).
prepare and file the update of
registration to account for the update of
SMALL BUSINESS ADMINISTRATION James E. Rivera,
the NRSRO’s written policies and
Associate Administrator for Disaster
procedures to address and manage
[Disaster Declaration #14317 and #14318] Assistance.
conflicts of interest, for an industry-
[FR Doc. 2015–12372 Filed 5–20–15; 8:45 am]
wide one-time reporting burden of West Virginia Disaster #WV–00038
approximately 250 hours. The BILLING CODE 8025–01–P

Commission therefore estimates that the AGENCY: U.S. Small Business
total one-time reporting burden to Administration.
SMALL BUSINESS ADMINISTRATION
update the conflicts of interest policies ACTION: Notice.
and procedures and to prepare and file Administrator’s Line of Succession
tkelley on DSK3SPTVN1PROD with NOTICES

an update of registration to account for SUMMARY: This is a Notice of the Designation, No. 1–A, Revision 35
the update of the NRSRO’s written Presidential declaration of a major
policies and procedures would be 1,250 disaster for Public Assistance Only for This document replaces and
hours, or approximately 417 hours per the State of West Virginia (FEMA–4219– supersedes ‘‘Line of Succession
year when annualized over three years. DR), dated 05/14/2015. Designation No. 1–A, Revision 34.’’
Finally, paragraph (f) of Rule 17g–5 Incident: Sever Storms, Flooding, Line of Succession Designation No. 1–
permits an NRSRO to apply for an Landslides, and Mudslides. A, Revision 35: Effective immediately,

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Document Created: 2018-10-24 10:27:57
Document Modified: 2018-10-24 10:27:57
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 29376