

[Federal Register: July 25, 2006 (Volume 71, Number 142)]
[Notices]               
[Page 42139]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jy06-112]                         

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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: 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.), 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.
    Rule 15c3-4 (17 CFR 240.15c3-4) (the ``Rule'') under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) (the ``Exchange Act'') 
requires certain broker-dealers that are registered with the Commission 
as OTC Derivatives Dealers to establish, document, and maintain a 
system of internal risk management controls. The Rule sets forth the 
basic elements for an OTC Derivatives Dealer 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 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 must periodically review, in 
accordance with written procedures, the OTC Derivatives Dealer's 
business activities for consistency with its risk management 
guidelines.
    The staff estimates that the average amount of time an OTC 
Derivatives Dealer will spend implementing its risk management control 
system is 2,000 hours and that, on average, an OTC Derivatives Dealer 
will spend approximately 200 hours each year reviewing and updating its 
risk management control system. Currently, five firms are registered 
with the Commission as an OTC Derivatives Dealer. The staff estimates 
that approximately one additional OTC Derivatives Dealer may become 
registered within the next three years. Accordingly, the staff 
estimates the total cost burden for six OTC Derivatives Dealers to be 
1,200 hours annually.
    The staff believes that the cost of complying with Rule 15c3-4 will 
be approximately $205 per hour.\1\ This per hour cost is based upon the 
annual average hourly salary for a compliance manager, who would 
generally be responsible for initially establishing, documenting, and 
maintaining an OTC Derivatives Dealer's internal risk management 
control system. The total annual cost for all affected OTC Derivatives 
Dealers is estimated to be $136,700, based on one firm spending 2,000 
hours to implement an internal risk management control system at $205 
per hour within the next three years.
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    \1\ Based on the average annual salary for a Compliance Manager 
based inside New York City of about $69,000, as reflected in SIA 
Management and Professional Earnings for 2005, modified to account 
for a 1,800-hour work-year and multiplied by 5.35 to account for 
bonuses, firm size, employee benefits and overhead.
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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 agency, including whether the information will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the 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.
    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. Comments must be submitted 
to OMB within 60 days of this notice.

    Dated: July 17, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-11789 Filed 7-24-06; 8:45 am]

BILLING CODE 8010-01-P
