81 FR 525 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 3 (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