81 FR 525 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 3 (January 6, 2016)

Page Range		525-525
FR Document		2015-33214
Federal Register, Volume 81 Issue 3 (Wednesday, January 6, 2016)
[Federal Register Volume 81, Number 3 (Wednesday, January 6, 2016)]
[Notices]
[Page 525]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-33214]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-441, OMB Control No. 3235-0497]


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:
    Rule 15c3-4.

    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'') 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 
15c3-4 (17 CFR 240.15c3-4) (the ``Rule'') under the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.).
    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, four firms are registered with 
the Commission as OTC derivatives dealers. The staff estimates that 
approximately two additional entities may become registered as OTC 
derivatives dealers 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.
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    \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.
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    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\
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    \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.
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    The records required to be made by OTC derivatives dealers pursuant 
to the Rule and the results of the periodic reviews conducted under 
paragraph (d) of Rule 15c3-4 must be preserved under Rule 17a-4 of the 
Exchange Act (17 CFR 240.17a-4) for a period of not less than three 
years, the first two years in an easily accessible place. The 
Commission will not generally publish or make available to any person 
notice or reports received pursuant to the Rule. The statutory basis 
for the Commission's refusal to disclose such information to the public 
is the exemption contained in section (b)(4) of the Freedom of 
Information Act (5 U.S.C. 552), which essentially provides that the 
requirement of public dissemination does not apply to commercial or 
financial information which is privileged or confidential.
    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: (i) 
[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: December 30, 2015.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-33214 Filed 1-5-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / Notices 525

as an officer of the Commission (Public organizational level, and to define the affected OTC derivatives dealers is
Representative) in this proceeding to permitted scope of the dealer’s activities estimated to be $717,122.6
represent the interests of the general and level of risk. The Rule also requires The records required to be made by
public. that management of an OTC derivatives OTC derivatives dealers pursuant to the
3. Comments on the United States dealer or an ANC firm must periodically Rule and the results of the periodic
Postal Service’s FY 2015 Annual review, in accordance with written
reviews conducted under paragraph (d)
Compliance Report to the Commission procedures, the firm’s business
of Rule 15c3–4 must be preserved under
are due on or before February 2, 2016. activities for consistency with its risk
4. Reply comments are due on or management guidelines. Rule 17a–4 of the Exchange Act (17 CFR
before February 12, 2016. 240.17a–4) for a period of not less than
The staff estimates that the average
5. The Secretary shall arrange for three years, the first two years in an
amount of time a new OTC derivatives
publication of this order in the Federal easily accessible place. The Commission
dealer will spend establishing and
Register. documenting its risk management will not generally publish or make
control system is 2,000 hours and that, available to any person notice or reports
By the Commission.
on average, a registered OTC derivatives received pursuant to the Rule. The
Stacy L. Ruble,
dealer will spend approximately 200 statutory basis for the Commission’s
Secretary. refusal to disclose such information to
hours each year to maintain (e.g.,
[FR Doc. 2015–33192 Filed 1–5–16; 8:45 am] the public is the exemption contained in
reviewing and updating) its risk
BILLING CODE 7710–FW–P section (b)(4) of the Freedom of
management control system.1 Currently,
four firms are registered with the Information Act (5 U.S.C. 552), which
Commission as OTC derivatives dealers. essentially provides that the
SECURITIES AND EXCHANGE The staff estimates that approximately requirement of public dissemination
COMMISSION two additional entities may become does not apply to commercial or
[SEC File No. 270–441, OMB Control No. registered as OTC derivatives dealers financial information which is
3235–0497] within the next three years. Thus, the privileged or confidential.
estimated annualized burden would be An agency may not conduct or
Submission for OMB Review; 800 hours for the four OTC derivatives
Comment Request sponsor, and a person is not required to
dealers currently registered with the respond to, a collection of information
Commission to maintain their risk
Upon Written Request, Copies Available under the PRA unless it displays a
management control systems,2 1,334
From: Securities and Exchange currently valid OMB control number.
Commission, Office of FOIA Services, hours for the two new OTC derivatives
dealers to establish and document their The public may view background
100 F Street NE., Washington, DC documentation for this information
risk management control systems,3 and
20549–2736.
400 hours for the two new OTC collection at the following Web site:
Extension: derivatives dealers to maintain their risk www.reginfo.gov. Comments should be
Rule 15c3–4. management control systems.4 directed to: (i) Desk Officer for the
Notice is hereby given that pursuant Accordingly, the staff estimates the total Securities and Exchange Commission,
to the Paperwork Reduction Act of 1995 annualized burden associated with Rule Office of Information and Regulatory
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the 15c3–4 for the six OTC derivatives Affairs, Office of Management and
Securities and Exchange Commission dealers will be approximately 2,534 Budget, Room 10102, New Executive
(‘‘Commission’’) has submitted to the hours annually. Office Building, Washington, DC 20503,
Office of Management and Budget The staff believes that the internal or by sending an email to: (i)
(‘‘OMB’’) a request for approval of cost of complying with Rule 15c3–4 will Shagufta_Ahmed@omb.eop.gov; and (ii)
extension of the previously approved be approximately $283 per hour.5 This Pamela Dyson, Director/Chief
collection of information provided for in per hour cost is based upon an annual Information Officer, Securities and
Rule 15c3–4 (17 CFR 240.15c3–4) (the average hourly salary for a compliance Exchange Commission, c/o Remi Pavlik-
‘‘Rule’’) under the Securities Exchange manager who would be responsible for Simon, 100 F Street NE., Washington,
Act of 1934 (15 U.S.C. 78a et seq.). ensuring compliance with the DC 20549, or by sending an email to:
Rule 15c3–4 requires certain broker- requirements of Rule 15c3–4. PRA_Mailbox@SEC.gov. Comments
dealers that are registered with the Accordingly, the total annualized must be submitted to OMB within 30
Commission as OTC derivatives dealers, internal cost of compliance for all
or who compute their net capital days of this notice.
charges under Appendix E to Rule 1 This notice does not cover the hour burden Dated: December 30, 2015.
15c3–1 (17 CFR 240.15c3–1) (‘‘ANC associated with ANC firms, because the hour Jill M. Peterson,
firms’’), to establish, document, and burden for ANC firms is included in the Paperwork
Reduction Act collection for Rule 15c3–1, which Assistant Secretary.
maintain a system of internal risk requires ANC firms to comply with specific [FR Doc. 2015–33214 Filed 1–5–16; 8:45 am]
management controls. The Rule sets provisions of Rule 15c3–4 in Appendix E to Rule
BILLING CODE 8011–01–P
forth the basic elements for an OTC 15c3–1. See 17 CFR 240.15c3–1(a)(7)(iii), 17 CFR
derivatives dealer or an ANC firm to 240.15c3–1e(a)(1)(ii), and 17 CFR 240.15c3–
1e(a)(1)(viii)(C).
consider and include when establishing, 2 (200 hours × 4 firms) = 800.
mstockstill on DSK4VPTVN1PROD with NOTICES

documenting, and reviewing its internal 3 ((2,000 hours/3 years) × 2 firms) = 1,334.
risk management control system, which 4 (200 hours × 2 firms) = 400.
are designed to, among other things, 5 The $283 per hour salary figure for a compliance

ensure the integrity of an OTC manager is from SIFMA’s Management &
derivatives dealer’s or an ANC firm’s Professional Earnings in the Securities Industry
2013, modified by Commission staff to account for
risk measurement, monitoring, and an 1800-hour work-year and multiplied by 5.35 to
management process, to clarify account for bonuses, firm size, employee benefits
accountability at the appropriate and overhead. 6 2,534 hours × $283 per hour = $717,122.

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Document Created: 2016-01-06 04:02:20
Document Modified: 2016-01-06 04:02:20
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		81 FR 525