

[Federal Register: March 28, 2006 (Volume 71, Number 59)]
[Notices]               
[Page 15497-15498]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28mr06-95]                         


[[Page 15497]]

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SECURITIES AND EXCHANGE COMMISSION

 
Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension: Regulation S-P; OMB Control No. 3235-0537; SEC File No. 
270-480.

    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 (``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.

 Regulation S-P--Privacy of Consumer Financial Information

    The Commission adopted Regulation S-P (17 CFR part 248) under the 
authority set forth in section 504 of the Gramm-Leach-Bliley Act (15 
U.S.C. 6804), sections 17 and 23 of the Securities Exchange Act of 1934 
(15 U.S.C. 78q, 78w), sections 31 and 38 of the Investment Company Act 
of 1940 (15 U.S.C. 80a-30(a), 80a-37), and sections 204 and 211 of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-4, 80b-11). Regulation 
S-P implements the requirements of Title V of the Gramm-Leach-Bliley 
Act (``Act''), which include the requirement that at the time of 
establishing a customer relationship with a consumer and not less than 
annually during the continuation of such relationship, a financial 
institution shall provide a clear and conspicuous disclosure to such 
consumer of such financial institution's policies and practices with 
respect to disclosing nonpublic personal information to affiliates and 
nonaffiliated third parties (``privacy notice''). Title V of the Act 
also provides that, unless an exception applies, a financial 
institution may not disclose nonpublic personal information of a 
consumer to a nonaffiliated third party unless the financial 
institution clearly and conspicuously discloses to the consumer that 
such information may be disclosed to such third party; the consumer is 
given the opportunity, before the time that such information is 
initially disclosed, to direct that such information not be disclosed 
to such third party; and the consumer is given an explanation of how 
the consumer can exercise that nondisclosure option (``opt out 
notice''). The privacy notices required by the Act are mandatory. The 
opt out notices are not mandatory for financial institutions that do 
not share nonpublic personal information with nonaffiliated third 
parties except as permitted under an exception to the statute's opt out 
provisions. Regulation S-P implements the statute's requirements with 
respect to broker-dealers, investment companies, and registered 
investment advisers (``covered entities''). The Act and Regulation S-P 
also contain consumer reporting requirements. In order for consumers to 
opt out, they must respond to opt out notices. At any time during their 
continued relationship, consumers have the right to change or update 
their opt out status. Most covered entities do not share nonpublic 
personal information with nonaffiliated third parties and therefore are 
not required to provide opt out notices to consumers under Regulation 
S-P. Therefore, few consumers are required to respond to opt out 
notices under the rule.
    Compliance with Regulation S-P is necessary for covered entities to 
achieve compliance with the consumer financial privacy notice 
requirements of Title V of the Act. The required consumer notices are 
not submitted to the Commission. Because the notices do not involve a 
collection of information by the Commission, Regulation S-P does not 
involve the collection of confidential information. Regulation S-P does 
not have a record retention requirement per se, although the notices to 
consumers it requires are subject to the recordkeeping requirements of 
Rules 17a-3 and 17a-4.
    Currently, there are approximately 20,434 covered entities 
(approximately 6,280 registered broker-dealers, 4,939 investment 
companies, and, out of a total of 10,210 registered investment 
advisers, 9,215 registered investment advisers that are not also 
registered broker-dealers) that must prepare or revise the annual and 
initial privacy notices they provide to their customers. To prepare or 
revise their privacy notices, each of the approximately 11,219 covered 
entities that is a broker-dealer or investment company requires an 
estimated 40 hours at a cost of $2,424 (32 hours of professional time 
at $70 per hour plus 8 hours of clerical or administrative time at $23 
per hour) and each of the approximately 9,215 covered entities that is 
an investment adviser but not also a broker-dealer requires an 
estimated 5 hours at a cost of $303 (4 hours of professional time at 
$70 per hour plus 1 hour of clerical or administrative time at $23 per 
hour). Thus, the total compliance burden per year is 494,835 hours (40 
hours for 11,219 broker-dealers and investment companies, and 5 hours 
for 9,215 investment advisers that are not also broker-dealers (40 x 
11,219 = 448,760, 5 x 9,215 = 46,075, and 448,760 + 46,075 = 494,835), 
and $29,987,001 ($2,424 x 11,219 = $27,194,856, $303 x 9,215 = 
$2,792,145, and $27,194,856 + $2,792,145 = $29,987,001).
    The wage estimates of $70 per hour for professional time and $23 
per hour for clerical or administrative time used in the foregoing 
calculations are based on estimated mean hourly wages of $68.23 for 
lawyers and $22.56 for all other legal support workers in the U.S. 
Department of Labor's Bureau of Labor Statistics' November 2004 
National Industry-Specific Occupational Employment and Wage Estimate, 
NAICS 523100--Securities and Commodity Contracts Intermediation and 
Brokerage (available online, as of March 2, 2006, at http://www.bls.gov/oes/current/naics4_523100.htm
) adjusted upward for 

inflation by 2.5% based on the percentage increase in the employment 
cost indexes for white collar workers and for administrative support, 
including clerical, workers from December 2004 to December 2005, as 
reported in the U.S. Department of Labor's Bureau of Labor Statistics' 
Employment Cost Index for wages and salaries for private industry 
workers by industry and occupational group (not seasonally adjusted) 
(available online, as of March 2, 2006, at http://www.bls.gov/news.release/eci.t06.htm
).

    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 shall 
have practical utility; (b) the accuracy of the agency's estimates of 
the burden of the proposed collection of information; (c) ways to 
enhance the quality, utility, and clarity of the information to be 
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 R. Corey Booth, Director/
Chief Information Officer, Securities and Exchange Commission, C/O 
Shirley Martinson, 6432 General Green Way, Alexandria, Virginia 22312 
or send an e-mail to: PRA_Mailbox@sec.gov.


[[Page 15498]]


    Dated: March 20, 2006.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-4431 Filed 3-27-06; 8:45 am]

BILLING CODE 8010-01-P
