83 FR 53690 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 206 (October 24, 2018)

Page Range		53690-53691
FR Document		2018-23207
Federal Register, Volume 83 Issue 206 (Wednesday, October 24, 2018)
[Federal Register Volume 83, Number 206 (Wednesday, October 24, 2018)]
[Notices]
[Pages 53690-53691]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-23207]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; 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, SEC File No. 270-441, OMB Control No. 3235-0497

    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 collection of 
information provided for in Rule 15c3-4 (17 CFR 240.15c3-4) under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission 
plans to submit this existing collection of information to the Office 
of Management and Budget (``OMB'') for extension and approval.
    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, three firms are registered 
with the Commission as OTC derivatives dealers. The staff estimates 
that approximately six additional OTC derivatives dealers may become 
registered within the next three years. Thus, the estimated annualized 
burden would be 600 hours for the three OTC derivatives dealers 
currently registered with the Commission to maintain their risk 
management control systems,\2\ 4,000 hours for the six new OTC 
derivatives dealers to establish and document their risk management 
control systems,\3\ and 1,200 hours for the six new OTC derivatives 
dealers to maintain their risk management control systems.\4\

[[Page 53691]]

Accordingly, the staff estimates the total annualized burden associated 
with Rule 15c3-4 for the six OTC derivatives dealers will be 
approximately 5,800 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 3 firms) = 600.
    \3\ ((2,000 hours/3 years) x 6 firms) = 4,000.
    \4\ (200 hours x 6 firms) = 1,200.
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    The staff believes that the internal cost of complying with Rule 
15c3-4 will be approximately $314 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 
$1,821,200.\6\
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    \5\ The $314 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\ 5,800 hours x $314 per hour = $1,821,200.
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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 Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
estimates of the burden of the proposed 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.
    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 OMB control number.
    Please direct your written comments to: Charles Riddle, Acting 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or send an 
email to: PRA_Mailbox@SEC.gov.

    Dated: October 19, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-23207 Filed 10-23-18; 8:45 am]
 BILLING CODE 8011-01-P
53690 Federal Register / Vol. 83, No. 206 / Wednesday, October 24, 2018 / Notices

aggregate annual burden of 500 hours would result in an aggregate cost each the Office of Management and Budget
(25 requests × 20 hours/request). year of $126,000 for the services of (‘‘OMB’’) for extension and approval.
The SEC estimates that the total costs outside attorneys (9 requests × 35 hours/ Rule 15c3–4 requires certain broker-
resulting from a submission under Rule request × $400). dealers that are registered with the
3a68–2 would be approximately $12,000 Written comments are invited on: (a) Commission as OTC derivatives dealers,
for outside attorneys to retrieve, review, Whether the proposed collection of or who compute their net capital
and submit the information associated information is necessary for the proper charges under Appendix E to Rule
with the submission. The SEC estimates performance of the functions of the SEC, 15c3–1 (17 CFR 240.15c3–1) (‘‘ANC
this would result in aggregate costs each including whether the information shall firms’’), to establish, document, and
year of $300,000 (25 requests × 30 have practical utility; (b) the accuracy of maintain a system of internal risk
hours/request × $400). the SEC’s estimates of the burden of the management controls. The Rule sets
Rule 3a68–4(c) establishes a process proposed collection of information; (c) forth the basic elements for an OTC
for persons to request that the ways to enhance the quality, utility, and derivatives dealer or an ANC firm to
Commissions issue a joint order clarity of the information to be consider and include when establishing,
permitting such persons (and any other collected; and (d) ways to minimize the documenting, and reviewing its internal
person or persons that subsequently burden of the collection of information risk management control system, which
lists, trades, or clears that class of mixed are designed to, among other things,
on respondents, including through the
swap) to comply, as to parallel ensure the integrity of an OTC
use of automated collection techniques
provisions only, with specified parallel derivatives dealer’s or an ANC firm’s
or other forms of information
provisions of either the Commodity risk measurement, monitoring, and
technology. Consideration will be given
Exchange Act (‘‘CEA’’) or the Securities management process, to clarify
to comments and suggestions submitted
Exchange Act of 1934 (‘‘Exchange Act’’), accountability at the appropriate
in writing within 60 days of this
and related rules and regulations organizational level, and to define the
publication.
(collectively ‘‘specified parallel permitted scope of the dealer’s activities
provisions’’), instead of being required An agency may not conduct or and level of risk. The Rule also requires
to comply with parallel provisions of sponsor, and a person is not required to that management of an OTC derivatives
both the CEA and the Exchange Act. respond to, a collection of information dealer or an ANC firm must periodically
The SEC expects ten requests under the PRA unless it displays a review, in accordance with written
pursuant to Rule 3a68–4(c) per year. currently valid OMB control number. procedures, the firm’s business
The SEC estimates that nine of these Please direct your written comments activities for consistency with its risk
requests will have also been made in a to: Charles Riddle, Acting Director/Chief management guidelines.
request for a joint interpretation Information Officer, Securities and The staff estimates that the average
pursuant to Rule 3a68–2, and one will Exchange Commission, c/o Candace amount of time a new OTC derivatives
not have been. The SEC estimates the Kenner, 100 F Street NE, Washington, dealer will spend establishing and
total burden for the one request for DC 20549, or send an email to: PRA_ documenting its risk management
which the joint interpretation pursuant Mailbox@sec.gov. control system is 2,000 hours and that,
to 3a68–2 was not requested would be Dated: October 19, 2018. on average, a registered OTC derivatives
30 hours, and the total burden dealer will spend approximately 200
Eduardo A. Aleman,
associated with the other nine requests hours each year to maintain (e.g.,
Assistant Secretary.
would be 20 hours per request because reviewing and updating) its risk
some of the information required to be [FR Doc. 2018–23206 Filed 10–23–18; 8:45 am]
management control system.1 Currently,
submitted pursuant to Rule 3a68–4(c) BILLING CODE 8011–01–P three firms are registered with the
would have already been submitted Commission as OTC derivatives dealers.
pursuant to Rule 3a68–2. The burden in The staff estimates that approximately
both cases is evenly divided between SECURITIES AND EXCHANGE six additional OTC derivatives dealers
the SEC and the CFTC. COMMISSION may become registered within the next
The SEC estimates that the total costs three years. Thus, the estimated
resulting from a submission under Rule Proposed Collection; Comment
Request annualized burden would be 600 hours
3a68–4(c) would be approximately for the three OTC derivatives dealers
$20,000 for the services of outside Upon Written Request, Copies Available currently registered with the
attorneys to retrieve, review, and submit From: Securities and Exchange Commission to maintain their risk
the information associated with the Commission, Office of FOIA Services, management control systems,2 4,000
submission of the one request for which 100 F Street NE, Washington, DC hours for the six new OTC derivatives
a request for a joint interpretation 20549–2736 dealers to establish and document their
pursuant to Rule 3a68–2 was not risk management control systems,3 and
previously made (1 request × 50 hours/ Extension:
Rule 15c3–4, SEC File No. 270–441, OMB
1,200 hours for the six new OTC
request × $400). For the nine requests derivatives dealers to maintain their risk
Control No. 3235–0497
for which a request for a joint management control systems.4
interpretation pursuant to Rule 3a68–2 Notice is hereby given that pursuant
was previously made, the SEC estimates to the Paperwork Reduction Act of 1995 1 This notice does not cover the hour burden

the total costs associated with preparing (44 U.S.C. 3501 et seq.) (‘‘PRA’’), the associated with ANC firms, because the hour
burden for ANC firms is included in the Paperwork
and submitting a party’s request Securities and Exchange Commission
amozie on DSK3GDR082PROD with NOTICES1

Reduction Act collection for Rule 15c3–1, which
pursuant to Rule 3a68–4(c) would be (‘‘Commission’’) is soliciting comments requires ANC firms to comply with specific
$6,000 less per request because, as on the collection of information provisions of Rule 15c3–4 in Appendix E to Rule
discussed above, some of the provided for in Rule 15c3–4 (17 CFR 15c3–1. See 17 CFR 240.15c3–1(a)(7)(iii), 17 CFR
240.15c3–1e(a)(1)(ii), and 17 CFR 240.15c3–
information required to be submitted 240.15c3–4) under the Securities 1e(a)(1)(viii)(C).
pursuant to Rule 3a68–4(c) already Exchange Act of 1934 (15 U.S.C. 78a et 2 (200 hours × 3 firms) = 600.

would have been submitted pursuant to seq.). The Commission plans to submit 3 ((2,000 hours/3 years) × 6 firms) = 4,000.

Rule 3a68–2. The SEC estimates this this existing collection of information to 4 (200 hours × 6 firms) = 1,200.

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Document Created: 2018-10-24 00:24:40
Document Modified: 2018-10-24 00:24:40
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		83 FR 53690