

[Federal Register: September 25, 2006 (Volume 71, Number 185)]
[Notices]               
[Page 55811-55812]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25se06-52]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; 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'') has submitted to the Office of Management 
and Budget a request for extension of the previously approved 
collection of information discussed below.
    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 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 hour 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 an 
annual average hourly salary for a compliance manager who would be 
responsible for ensuring compliance with the requirements of Rule 15c3-
4. The total annual cost for all affected OTC Derivatives Dealers is 
estimated to be $246,000, based on 1,200 hours at $205 per hour.
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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 an 1,800-hour work-year and multiplied by 5.35 to account for 
bonuses, firm size, employee benefits and overhead.
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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 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 unless it displays a 
currently valid control number.
    Comments should be directed to (i) the Desk Officer for the SEC, 
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 e-mail to: David_Rostker@omb.eop.gov;

[[Page 55812]]

and (ii) 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 30 days of this notice.

    Dated: September 18, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. 06-8136 Filed 9-22-06; 8:45 am]

BILLING CODE 8010-01-P
