83 FR 53690 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 206 (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: [email protected].

    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