81 FR 14151 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 51 (March 16, 2016)

[Federal Register Volume 81, Number 51 (Wednesday, March 16, 2016)]
[Notices]
[Pages 14151-14152]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-05858]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-549, OMB Control No. 3235-0610]


Proposed Collection; Comment Request

Upon Written Request, Copy Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:
    Rule 248.30.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (the ``Commission'') is soliciting comments on the 
collection of information summarized below. The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget for extension and approval.
    Rule 248.30 (17 CFR 248.30), under Regulation S-P is titled 
``Procedures to Safeguard Customer Records and Information; Disposal of 
Consumer Report Information.'' Rule 248.30 (the ``safeguard rule'') 
requires brokers, dealers, investment companies, and investment 
advisers registered with the Commission (``registered investment 
advisers'') (collectively ``covered institutions'') to adopt written 
policies and procedures for administrative, technical, and physical 
safeguards to protect customer records and information. The safeguards 
must be reasonably designed to ``insure the security and 
confidentiality of customer records and information,'' ``protect 
against any anticipated threats or hazards to the security and 
integrity'' of those records, and protect against unauthorized access 
to or use of those records or information, which ``could result in 
substantial harm or inconvenience to any customer.'' The safeguard 
rule's requirement that covered institutions' policies and procedures 
be documented in writing constitutes a collection of information and 
must be maintained on an ongoing basis. This requirement eliminates 
uncertainty as to required employee actions to protect customer records 
and information and promotes more systematic and organized reviews of 
safeguard policies and procedures by institutions. The information 
collection also assists the Commission's examination staff in assessing 
the existence and adequacy of covered institutions' safeguard policies 
and procedures.
    We estimate that as of the end of 2015, there are 4,176 broker-
dealers, 4,041 investment companies, and 11,956 investment advisers 
registered with the Commission, for a total of 20,173 covered 
institutions. We believe that all of these covered institutions have 
already documented their safeguard policies and procedures in writing 
and therefore will incur no hourly burdens related to the initial 
documentation of policies and procedures.
    Although existing covered institutions would not incur any initial 
hourly burden in complying with the safeguards rule, we expect that 
newly registered institutions would incur some hourly burdens 
associated with documenting their safeguard policies and procedures. We 
estimate that approximately 1200 broker-dealers, investment companies, 
or investment advisers register with the Commission annually. However, 
we also expect that approximately 70% of these newly registered covered 
institutions (840) are affiliated with an existing covered institution, 
and will rely on an

[[Page 14152]]

organization-wide set of previously documented safeguard policies and 
procedures created by their affiliates. We estimate that these 
affiliated newly registered covered institutions will incur a 
significantly reduced hourly burden in complying with the safeguards 
rule, as they will need only to review their affiliate's existing 
policies and procedures, and identify and adopt the relevant policies 
for their business. Therefore, we expect that newly registered covered 
institutions with existing affiliates will incur an hourly burden of 
approximately 15 hours in identifying and adopting safeguard policies 
and procedures for their business, for a total hourly burden for all 
affiliated new institutions of 12,600 hours. We expect that half of 
this time would be incurred by inside counsel at an hourly rate of 
$380, and half would be by a compliance officer at an hourly rate of 
$334, for a total cost of $4,498,200.
    Finally, we expect that the 360 newly registered entities that are 
not affiliated with an existing institution will incur a significantly 
higher hourly burden in reviewing and documenting their safeguard 
policies and procedures. We expect that virtually all of the newly 
registered covered entities that do not have an affiliate are likely to 
be small entities and are likely to have smaller and less complex 
operations, with a correspondingly smaller set of safeguard policies 
and procedures to document, compared to other larger existing 
institutions with multiple affiliates. We estimate that it will take a 
typical newly registered unaffiliated institution approximately 60 
hours to review, identify, and document their safeguard policies and 
procedures, for a total of 21,600 hours for all newly registered 
unaffiliated entities. We expect that half of this time would be 
incurred by inside counsel at an hourly rate of $380, and half would be 
by a compliance officer at an hourly rate of $334, for a total cost of 
$7,711,200.
    Therefore, we estimate that the total annual hourly burden 
associated with the safeguards rule is 34,200 hours at a total hourly 
cost of $12,209,400. We also estimate that all covered institutions 
will be respondents each year, for a total of 20,173 respondents.
    These estimates of average burden hours are made solely for the 
purposes of the Paperwork Reduction Act. 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 control number. The 
safeguard rule does not require the reporting of any information or the 
filing of any documents with the Commission. The collection of 
information required by the safeguard rule is mandatory.
    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 will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the 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.
    Please direct your written comments to Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, C/O Remi 
Pavlik-Simon, 100 F St. NE., Washington DC, 20549 to: 
[email protected].

    Dated: March 10, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-05858 Filed 3-15-16; 8:45 am]
 BILLING CODE 8011-01-P